How to Set Royalty Rate of Intellectual
Property;Intellectual Property Valuation;Technology Transfer;Licensing
Strategies;MTA;Venture Agreements;Medical Devices;Pharmaceuticals
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What is the "right" Royalty Rate for your
new technology, product?
Unless
you have the required competence, we recommend that you hire an expert
who could help you with the following:
- Establish,
quantitatively or semi-quantitatively, how well your technology fits
into the prospective company's strategic plan. This requires
complete understanding of current market size and its trend,
competitive situation, environmental and regulatory trends, the
strength of your patented (?) technology or other barrier to entry,
the prospective company's return on investment (ROI.)
- Establish the relative
ease for transforming your technology into a manufacturable product.
- Establish the
customer's acceptance of your new product. Be careful if it requires
major user re-educating or is quite a bit ahead of its time.
- Remember that royalty
rates will be significantly higher if your technology is in the
pharmaceuticals, biotech markets and much lower if it is aimed at
highly cost competitive markets (mass production businesses with
practically no entry barriers.)
- Recognize that today
the life cycle of every product has been severely compressed,
especially in hot, highly competitive markets.
- You should have as goal
to receive a royalty rate in the one to five percent (1 to 5) %
range of annual sales. That is our experience, but every situation
is different.
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Tel.:
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Fax: 908.387.0447 Email
Home
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Who We Are
Unique Strengths
Our Services
Projects Resume
Your Next Step
Write Us
What's New
Articles
Ask
SolvWizSM For FREE
TechnoBusiness
Solutions
403 Christie Ct.,
Stewartsville, NJ 08886 USA
Costas B. Chantzis,
CEO
Tel.:
908.387.9276
Fax: 908.387.0447 Email
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