A royalty payment is a payment made by one party to another that owns a particular asset, for the right to ongoing use of that asset. Royalties are typically agreed upon as a percentage of gross or net revenues derived from the use of an asset or a fixed price per unit sold of an item of such, but there are also other modes and metrics of compensation. A royalty interest is the right to collect a stream of future royalty payments.
123-603: A license agreement defines the terms under which a resource or property are licensed by one party to another, either without restriction or subject to a limitation on term, business or geographic territory, type of product, etc. License agreements can be regulated, particularly where a government is the resource owner, or they can be private contracts that follow a general structure. However, certain types of franchise agreements have comparable provisions. A landowner with petroleum or mineral rights to their property may license those rights to another party. In exchange for allowing
246-403: A lease or other contract). The simplest definition is "A license is a promise not to sue", because a license usually either permits the licensed party to engage in an illegal activity, and subject to prosecution, without the license (e.g. fishing , driving an automobile , or operating a broadcast radio or television station ), or it permits the licensed party to do something that would violate
369-598: A severance tax on the unrenewable natural resources extracted or severed from within their authority. The Federal Government receives royalties on production on federal lands, managed by the Bureau of Ocean Energy Management, Regulation and Enforcement , formerly the Minerals Management Service. An example from Canada's northern territories is the federal Frontier Lands Petroleum Royalty Regulations. The royalty rate starts at 1% of gross revenues of
492-464: A severance tax on the unrenewable natural resources extracted or severed from within their authority. The Federal Government receives royalties on production on federal lands, managed by the Bureau of Ocean Energy Management, Regulation and Enforcement , formerly the Minerals Management Service. An example from Canada's northern territories is the federal Frontier Lands Petroleum Royalty Regulations. The royalty rate starts at 1% of gross revenues of
615-418: A term , territory , renewal provisions, and other limitations deemed vital to the licensor. Term: many licenses are valid for a particular length of time. This protects the licensor should the value of the license increase, or market conditions change. It also preserves enforceability by ensuring that no license extends beyond the term of the agreement. Territory: a license may stipulate what territory
738-405: A 10% royalty on book sales. Some photographers and musicians may choose to publish their works for a one-time payment. This is known as a royalty-free license. All book-publishing royalties are paid by the publisher, who determines an author's royalty rate, except in rare cases in which the author can demand high advances and royalties. For most cases, the publishers advance an amount (part of
861-405: A 10% royalty on book sales. Some photographers and musicians may choose to publish their works for a one-time payment. This is known as a royalty-free license. All book-publishing royalties are paid by the publisher, who determines an author's royalty rate, except in rare cases in which the author can demand high advances and royalties. For most cases, the publishers advance an amount (part of
984-433: A 16-year period an average royalty rate of 7% with a range from 0% to 50%. All of these agreements may not have been at "arms length". In license negotiation, firms might derive royalties for the use of a patented technology from the retail price of the downstream licensed product. In Muslim (Arab) countries, a royalty as a percentage of sales may not be appropriate, because of the prohibition of usury (see riba ), and
1107-430: A 16-year period an average royalty rate of 7% with a range from 0% to 50%. All of these agreements may not have been at "arms length". In license negotiation, firms might derive royalties for the use of a patented technology from the retail price of the downstream licensed product. In Muslim (Arab) countries, a royalty as a percentage of sales may not be appropriate, because of the prohibition of usury (see riba ), and
1230-490: A U.S. federal well with a 25% royalty, the U.S. government receives $ 25. The U.S. government does not pay and will only collect revenues. All risk and liability lie upon the operator of the well. Royalties in the lumber industry are called " stumpage ". Landowners who host wind turbines are often paid wind royalties, and those nearby may be paid nuisance payments to compensate for noise and flicker effects. Wind royalties are usually paid quarterly, semi-annually, or annually, and
1353-490: A U.S. federal well with a 25% royalty, the U.S. government receives $ 25. The U.S. government does not pay and will only collect revenues. All risk and liability lie upon the operator of the well. Royalties in the lumber industry are called " stumpage ". Landowners who host wind turbines are often paid wind royalties, and those nearby may be paid nuisance payments to compensate for noise and flicker effects. Wind royalties are usually paid quarterly, semi-annually, or annually, and
SECTION 10
#17327724417991476-586: A case by case right (under clause 22/23 of the Act) to refuse consent to the usage of the right by the appointed collection society and/or make their own collection arrangements. Details of the Australian scheme can be gotten from the website of the sole appointed Australian agency; The "Copyright Agency Limited". The UK scheme is in the context of common-law countries an oddity; No other common-law country has mandated an individual economic right where actual usage of
1599-477: A case by case right (under clause 22/23 of the Act) to refuse consent to the usage of the right by the appointed collection society and/or make their own collection arrangements. Details of the Australian scheme can be gotten from the website of the sole appointed Australian agency; The "Copyright Agency Limited". The UK scheme is in the context of common-law countries an oddity; No other common-law country has mandated an individual economic right where actual usage of
1722-655: A computer. Typically, a license is associated with a unique code, that when approved grants the end user access to the software in question. Under a typical end-user license agreement, the user may install the software on a limited number of computers. The enforceability of end-user license agreements is sometimes questioned . As of 2020, there are various ways to license software with different kinds of licensing models, which allow software vendors to profit from their product offerings in flexible ways. Like other intellectual property, patent owners may grant permission to others to engage in conduct that would otherwise be within
1845-452: A copy of a work is not to be regarded as a work unless the copy is one of a limited number made by the artist or under the artist's authority. In the UK the resale of a work bought directly from the artist and then resold within 3 years for a value of €10,000 or less is not affected by the royalty. License agreement A license ( American English ) or licence ( Commonwealth English )
1968-408: A court as a remedy for patent infringement. In patent infringement lawsuits, where the court determines an injunction to be inappropriate in light of the case's circumstances, the court may award "ongoing" royalties, or royalties based on the infringer's prospective use of the patented technology, as an alternative remedy. In the old days, US courts often used so-called "entire market rule" or "25% of
2091-406: A court as a remedy for patent infringement. In patent infringement lawsuits, where the court determines an injunction to be inappropriate in light of the case's circumstances, the court may award "ongoing" royalties, or royalties based on the infringer's prospective use of the patented technology, as an alternative remedy. In the old days, US courts often used so-called "entire market rule" or "25% of
2214-437: A fixed fee per unit sold. When negotiating rates, one way companies value a trade mark is to assess the additional profit they will make from increased sales and higher prices (sometimes known as the "relief from royalty") method. Trade mark rights and royalties are often tied up in a variety of other arrangements. Trade marks are often applied to an entire brand of products and not just a single one. Because trade mark law has as
2337-437: A fixed fee per unit sold. When negotiating rates, one way companies value a trade mark is to assess the additional profit they will make from increased sales and higher prices (sometimes known as the "relief from royalty") method. Trade mark rights and royalties are often tied up in a variety of other arrangements. Trade marks are often applied to an entire brand of products and not just a single one. Because trade mark law has as
2460-437: A flat fee may be preferred instead. Trade marks are words, logos, slogans, sounds, or other distinctive expressions that distinguish the source, origin, or sponsorship of a good or service (in which they are generally known as service marks ). Trade marks offer the public a means of identifying and assuring themselves of the quality of the good or service. They may bring consumers a sense of security, integrity, belonging, and
2583-436: A flat fee may be preferred instead. Trade marks are words, logos, slogans, sounds, or other distinctive expressions that distinguish the source, origin, or sponsorship of a good or service (in which they are generally known as service marks ). Trade marks offer the public a means of identifying and assuring themselves of the quality of the good or service. They may bring consumers a sense of security, integrity, belonging, and
SECTION 20
#17327724417992706-410: A franchise, the agreement must be a composite of the items: One of the above three items must not apply for the franchise agreement to be considered a trade mark agreement (and its laws and conventions). In a franchise, for which there is no convention, laws apply concerning training, brand support, operating systems/support and technical support in a written format ("Disclosure"). Copyright law gives
2829-409: A franchise, the agreement must be a composite of the items: One of the above three items must not apply for the franchise agreement to be considered a trade mark agreement (and its laws and conventions). In a franchise, for which there is no convention, laws apply concerning training, brand support, operating systems/support and technical support in a written format ("Disclosure"). Copyright law gives
2952-405: A license does not require consideration, a license can be created with or without it. Moreover, whether an agreement is held to be a "license" and not a lease will depend on three essential characteristics of a license: (1) a clause allowing the licensor to revoke "at will"; (2) the retention by the licensor of absolute control over the premises; and (3) the licensor's supplying to the licensee all of
3075-404: A particular geographic region, just for a certain period of time or merely for a stage in the value chain . Moreover, there are different types of fees within the trademark and brand licensing. The first form demands a fee independent of sales and profits , the second type of license fee is dependent on the productivity of the licensee. For example, McDonald's licenses their trademark such as
3198-471: A patented method. Patent rights may be divided and licensed out in various ways, on an exclusive or non-exclusive basis. The license may be subject to limitations as to time or territory. A license may encompass an entire technology or it may involve a mere component or improvement on a technology. In the United States, "reasonable" royalties may be imposed, both after-the-fact and prospectively, by
3321-408: A patented method. Patent rights may be divided and licensed out in various ways, on an exclusive or non-exclusive basis. The license may be subject to limitations as to time or territory. A license may encompass an entire technology or it may involve a mere component or improvement on a technology. In the United States, "reasonable" royalties may be imposed, both after-the-fact and prospectively, by
3444-408: A payment to employ a trade mark licence is a royalty, it is accompanied by a "guided usage manual", the use of which may be audited from time to time. However, this becomes a supervisory task when the mark is used in a franchise agreement for the sale of goods or services carrying the reputation of the mark. For a franchise, it is said, a fee is paid, even though it comprises a royalty element. To be
3567-408: A payment to employ a trade mark licence is a royalty, it is accompanied by a "guided usage manual", the use of which may be audited from time to time. However, this becomes a supervisory task when the mark is used in a franchise agreement for the sale of goods or services carrying the reputation of the mark. For a franchise, it is said, a fee is paid, even though it comprises a royalty element. To be
3690-476: A permission to a licensee to copy and distribute copyrighted works such as "art" (e.g., Thomas Kinkade 's painting Dawn in Los Gato ) and characters (e.g., Mickey Mouse ). With such license, a licensee need not fear a claim of copyright infringement brought by the copyright owner. Artistic license is, however, not related to the aforementioned license. It is a euphemism that denotes freedom of expression,
3813-589: A person who holds a licentiate. In English, the degree has never been called a license. In France, the licence is the first degree awarded in Universities. In Sweden , Finland, and in some other European university systems, a 'licentiate' is a postgraduate degree between the master's degree and the doctorate. The licentiate is a popular choice in those countries where a full doctoral degree would take five or more years to achieve. A license to driving certain vehicles has been applied to many countries around
Royalty payment - Misplaced Pages Continue
3936-478: A probation officer and only living at an approved address, in exchange for their early release. If they break the conditions of the licence, they can be "recalled" (returned to prison). Offenders serving determinate sentences are released automatically at a set point in their sentence, whereas prisoners serving indeterminate sentences (e.g. life imprisonment ) can only be released by the parole board . Patent licensing has been studied in formal economic models in
4059-485: A public interest goal of the protection of a consumer, in terms of getting what they are paying for, trade mark licences are only effective if the company owning the trade mark also obtains some assurance in return that the goods will meet its quality standards. When the rights of trade mark are licensed along with a know-how, supplies, pooled advertising, etc., the result is often a franchise relationship. Franchise relationships may not specifically assign royalty payments to
4182-485: A public interest goal of the protection of a consumer, in terms of getting what they are paying for, trade mark licences are only effective if the company owning the trade mark also obtains some assurance in return that the goods will meet its quality standards. When the rights of trade mark are licensed along with a know-how, supplies, pooled advertising, etc., the result is often a franchise relationship. Franchise relationships may not specifically assign royalty payments to
4305-524: A result, rather than paying royalties based on a percentage of a book's cover price, publishers preferred to pay royalties based on their net receipts. According to The Writers' and Artists' Yearbook of 1984, under the new arrangement, "appropriate [upward] adjustments are of course made to the royalty figure and the arrangement is of no disadvantage to the author." Despite this assurance, in 1991, Frederick Nolan , author and former publishing executive, explained that "net receipts" royalties are often more in
4428-523: A result, rather than paying royalties based on a percentage of a book's cover price, publishers preferred to pay royalties based on their net receipts. According to The Writers' and Artists' Yearbook of 1984, under the new arrangement, "appropriate [upward] adjustments are of course made to the royalty figure and the arrangement is of no disadvantage to the author." Despite this assurance, in 1991, Frederick Nolan , author and former publishing executive, explained that "net receipts" royalties are often more in
4551-470: A strong linkage to individuals – composers (score), songwriters (lyrics) and writers of musical plays – in that they can own the exclusive copyright to created music and can license it for performance independent of corporates. Recording companies and the performing artists that create a "sound recording" of the music enjoy a separate set of copyrights and royalties from the sale of recordings and from their digital transmission (depending on national laws). With
4674-470: A strong linkage to individuals – composers (score), songwriters (lyrics) and writers of musical plays – in that they can own the exclusive copyright to created music and can license it for performance independent of corporates. Recording companies and the performing artists that create a "sound recording" of the music enjoy a separate set of copyrights and royalties from the sale of recordings and from their digital transmission (depending on national laws). With
4797-416: A type of activity, and to allow them to set conditions and limitations. A licensor may grant a license under intellectual property laws to authorize a use (such as copying software or using a patented invention) to a licensee, sparing the licensee from a claim of infringement brought by the licensor. A license under intellectual property commonly has several components beyond the grant itself, including
4920-476: A variety of intangible appeals. The value that inures to a trade mark in terms of public recognition and acceptance is known as goodwill. A trade mark right is an exclusive right to sell or market under that mark within a geographic territory. The rights may be licensed to allow a company other than the owner to sell goods or services under the mark. A company may seek to license a trade mark it did not create to achieve instant name recognition rather than accepting
5043-476: A variety of intangible appeals. The value that inures to a trade mark in terms of public recognition and acceptance is known as goodwill. A trade mark right is an exclusive right to sell or market under that mark within a geographic territory. The rights may be licensed to allow a company other than the owner to sell goods or services under the mark. A company may seek to license a trade mark it did not create to achieve instant name recognition rather than accepting
Royalty payment - Misplaced Pages Continue
5166-456: Is a payment made by one party to another that owns a particular asset, for the right to ongoing use of that asset. Royalties are typically agreed upon as a percentage of gross or net revenues derived from the use of an asset or a fixed price per unit sold of an item of such, but there are also other modes and metrics of compensation. A royalty interest is the right to collect a stream of future royalty payments. A license agreement defines
5289-431: Is an official permission or permit to do, use, or own something (as well as the document of that permission or permit). A license is granted by a party (licensor) to another party (licensee) as an element of an agreement between those parties. In the case of a license issued by a government, the license is obtained by applying for it. In the case of a private party, it is by a specific agreement, usually in writing (such as
5412-464: Is based on computer technologies. (200 pp Book) Hardback royalties on the published price of trade books usually range from 10% to 12.5%, with 15% for more important authors. On paperback it is usually 7.5% to 10%, going up to 12.5% only in exceptional cases. All the royalties displayed below are on the "cover price". Paying 15% to the author can mean that the other 85% of the cost pays for editing and proof-reading , printing and binding, overheads, and
5535-464: Is based on computer technologies. (200 pp Book) Hardback royalties on the published price of trade books usually range from 10% to 12.5%, with 15% for more important authors. On paperback it is usually 7.5% to 10%, going up to 12.5% only in exceptional cases. All the royalties displayed below are on the "cover price". Paying 15% to the author can mean that the other 85% of the cost pays for editing and proof-reading , printing and binding, overheads, and
5658-485: Is essentially selling books to itself, at discounted rates, upon which it then calculates the author's royalty, and then Harper Collins shares in the extra profit when the book is resold to the consumer by the foreign affiliates, without paying the author any further royalty.") This forced a "class action" readjustment for thousands of authors contracted by HarperCollins between November 1993 and June 1999. Unlike other forms of intellectual property , music royalties have
5781-483: Is essentially selling books to itself, at discounted rates, upon which it then calculates the author's royalty, and then Harper Collins shares in the extra profit when the book is resold to the consumer by the foreign affiliates, without paying the author any further royalty.") This forced a "class action" readjustment for thousands of authors contracted by HarperCollins between November 1993 and June 1999. Unlike other forms of intellectual property , music royalties have
5904-423: Is made of the "royalties"; Half of the money collected is redistributed to fund public programs. The New Zealand and Canadian governments have not proceeded with any sort of artist resale scheme. The Australian scheme does not apply to the first resale of artworks purchased prior to the schemes enactment( June 2010) and individual usage of the right (by Australian artists) is not compulsory. In Australia artists have
6027-423: Is made of the "royalties"; Half of the money collected is redistributed to fund public programs. The New Zealand and Canadian governments have not proceeded with any sort of artist resale scheme. The Australian scheme does not apply to the first resale of artworks purchased prior to the schemes enactment( June 2010) and individual usage of the right (by Australian artists) is not compulsory. In Australia artists have
6150-459: Is necessary to complete the act. Another key distinction between a license and a lease is that leases are generally required to be in writing, where the statute of frauds requires it, while licenses can be made orally. A license is generally created by an express or implied agreement. The licensor must agree to the license which can be shown in writing or the licensors acquiescence in its exercise. Furthermore, unlike many other contractual agreements,
6273-551: Is one reason why publishers prefer "net receipts" contracts....Among the many other advantages (to the publisher) of such contracts is the fact that they make possible what is called a 'sheet deal'. In this, the (multinational) publisher of that same 10,000 copy print run, can substantially reduce his printing cost by 'running on' a further 10,000 copies (that is to say, printing but not binding them), and then further profit by selling these 'sheets' at cost-price or even lower if he so chooses to subsidiaries or overseas branches, then paying
SECTION 50
#17327724417996396-551: Is one reason why publishers prefer "net receipts" contracts....Among the many other advantages (to the publisher) of such contracts is the fact that they make possible what is called a 'sheet deal'. In this, the (multinational) publisher of that same 10,000 copy print run, can substantially reduce his printing cost by 'running on' a further 10,000 copies (that is to say, printing but not binding them), and then further profit by selling these 'sheets' at cost-price or even lower if he so chooses to subsidiaries or overseas branches, then paying
6519-608: Is restricted to Europe, Australia and the American state of California. For example, in May 2011 the European commissions ec.europa webpage on Resale royalty stated that, under the heading 'Indicative list of third countries (Article 7.2)' : 'A letter was sent to Member States on 1 March 2006 requesting that they provide a list of third countries which meet these requirements and that they also provide evidence of application. To date
6642-447: Is restricted to Europe, Australia and the American state of California. For example, in May 2011 the European commissions ec.europa webpage on Resale royalty stated that, under the heading 'Indicative list of third countries (Article 7.2)' : 'A letter was sent to Member States on 1 March 2006 requesting that they provide a list of third countries which meet these requirements and that they also provide evidence of application. To date
6765-475: Is statutorily required prior to the commencement of any special proceeding to recover possession of the property (e.g., in NY that requirement is 10 days). Mass distributed software is used by individuals on personal computers under license from the developer of that software. Such license is typically included in a more extensive end-user license agreement (EULA) entered into upon the installation of that software on
6888-507: The Recording Artists' Coalition to repeal supposedly "technical revisions" to American copyright statutes which would have classified all "sound recordings" as "works for hire", effectively assigning artists' copyrights to record labels. Book authors may sell their copyright to the publisher. Alternatively, they might receive as a royalty a certain amount per book sold. It is common in the UK for example, for authors to receive
7011-438: The Recording Artists' Coalition to repeal supposedly "technical revisions" to American copyright statutes which would have classified all "sound recordings" as "works for hire", effectively assigning artists' copyrights to record labels. Book authors may sell their copyright to the publisher. Alternatively, they might receive as a royalty a certain amount per book sold. It is common in the UK for example, for authors to receive
7134-402: The " Golden Arches " or the " Big Mac ", but the licenses gives McDonald's a right to impose strict quality standards to their franchisees as they can take back the right to the trademark if they do not meet McDonald's standards. When a licensor grants permission to a licensee to not only distribute, but manufacture a patented product, it is known as licensed production . A licensor may grant
7257-425: The UK, the scheme was, in early 2012, extended to all artists still in copyright. In most European jurisdictions the right has the same duration as the term of copyright. In California law, heirs receive royalty for 20 years. The royalty applies to any work of graphic or plastic art such as a ceramic, collage, drawing, engraving, glassware, lithograph, painting, photograph, picture, print, sculpture, tapestry. However,
7380-425: The UK, the scheme was, in early 2012, extended to all artists still in copyright. In most European jurisdictions the right has the same duration as the term of copyright. In California law, heirs receive royalty for 20 years. The royalty applies to any work of graphic or plastic art such as a ceramic, collage, drawing, engraving, glassware, lithograph, painting, photograph, picture, print, sculpture, tapestry. However,
7503-475: The United States are set by the Library of Congress ' Copyright Royalty Board . Performance rights to recordings of a performance are usually managed by one of several performance rights organizations . Payments from these organizations to performing artists are known as residuals and performance royalties. Royalty-free music provides more direct compensation to the artists. In 1999, recording artists formed
SECTION 60
#17327724417997626-421: The United States are set by the Library of Congress ' Copyright Royalty Board . Performance rights to recordings of a performance are usually managed by one of several performance rights organizations . Payments from these organizations to performing artists are known as residuals and performance royalties. Royalty-free music provides more direct compensation to the artists. In 1999, recording artists formed
7749-399: The ability to make the subject appear more engaging or attractive, by fictionalizing part of the subject. A licentiate is an academic degree that traditionally conferred the license to teach at a university or to practice a particular profession. The term survived despite the fact that nowadays a doctorate is typically needed in order to teach at a university. The term is also used for
7872-472: The advent of pop music and major innovations in technology in the communication and presentations of media, the subject of music royalties has become complex. Art Resale Royalty is a right to a royalty payment upon resales of art works, that applies in some jurisdictions. Whilst there are currently approximately 60 countries that have some sort of Resale Royalty on their statute books, evidence of resale schemes that can be said to be actually operating schemes
7995-472: The advent of pop music and major innovations in technology in the communication and presentations of media, the subject of music royalties has become complex. Art Resale Royalty is a right to a royalty payment upon resales of art works, that applies in some jurisdictions. Whilst there are currently approximately 60 countries that have some sort of Resale Royalty on their statute books, evidence of resale schemes that can be said to be actually operating schemes
8118-625: The artist can invoke resale rights (usually the hammer price or price). Some countries prescribe and others such as Australia, do not prescribe, the maximum royalty that can be received. Most do prescribe the calculation basis of the royalty. Some country's make the usage of the royalty compulsory. Some country's prescribe a sole monopoly collection service agency, while others like the UK and France, allow multiple agencies. Some schemes involve varying degrees of retrospective application and other schemes such as Australia's are not retrospective at all. In some cases, for example Germany, an openly tax-like use
8241-625: The artist can invoke resale rights (usually the hammer price or price). Some countries prescribe and others such as Australia, do not prescribe, the maximum royalty that can be received. Most do prescribe the calculation basis of the royalty. Some country's make the usage of the royalty compulsory. Some country's prescribe a sole monopoly collection service agency, while others like the UK and France, allow multiple agencies. Some schemes involve varying degrees of retrospective application and other schemes such as Australia's are not retrospective at all. In some cases, for example Germany, an openly tax-like use
8364-468: The author 10 percent of 'net receipts' from that deal. The overseas subsidiaries bind up the sheets into book form and sell at full price for a nice profit to the Group as a whole. The only one who loses is the author. In 2003 two American authors Ken Englade and Patricia Simpson sued HarperCollins (USA) successfully for selling their work to its foreign affiliates at improperly high discounts ("Harper Collins
8487-415: The author 10 percent of 'net receipts' from that deal. The overseas subsidiaries bind up the sheets into book form and sell at full price for a nice profit to the Group as a whole. The only one who loses is the author. In 2003 two American authors Ken Englade and Patricia Simpson sued HarperCollins (USA) successfully for selling their work to its foreign affiliates at improperly high discounts ("Harper Collins
8610-405: The authority to act on another's land, when such action would typically amount to trespass absent that license. A key distinction between licenses and leases is that a license grants the licensee a revocable non-assignable privilege to act upon the land of the licensor, without granting any possessory interest in the land. Once a license is agreed upon, the licensee may occupy the land only so far as
8733-469: The author—definition of cover price, the retail price, "net price", the discounts on the sale, the bulk sales on the POD ( publish on demand ) platform, the term of the agreement, audit of the publishers accounts in case of impropriety, etc. which an agent can provide. The following illustrates the income to an author on the basis chosen for royalty, particularly in POD, which minimizes losses from inventory and
8856-420: The author—definition of cover price, the retail price, "net price", the discounts on the sale, the bulk sales on the POD ( publish on demand ) platform, the term of the agreement, audit of the publishers accounts in case of impropriety, etc. which an agent can provide. The following illustrates the income to an author on the basis chosen for royalty, particularly in POD, which minimizes losses from inventory and
8979-403: The commission has not been supplied with evidence for any third country which demonstrates that they qualify for inclusion on this list .' [The emphasis is from the European commission web page.] Apart from placing a levy on the resale of some art-like objects, there are few common facets to the various national schemes. Most schemes prescribe a minimum amount that the artwork must receive before
9102-402: The commission has not been supplied with evidence for any third country which demonstrates that they qualify for inclusion on this list .' [The emphasis is from the European commission web page.] Apart from placing a levy on the resale of some art-like objects, there are few common facets to the various national schemes. Most schemes prescribe a minimum amount that the artwork must receive before
9225-401: The cost and risk of entering the market under its own brand that the public does not necessarily know or accept. Licensing a trade mark allows the company to take advantage of already-established goodwill and brand identification. Like patent royalties, trade mark royalties may be assessed and divided in a variety of different ways, and are expressed as a percentage of sales volume or income, or
9348-401: The cost and risk of entering the market under its own brand that the public does not necessarily know or accept. Licensing a trade mark allows the company to take advantage of already-established goodwill and brand identification. Like patent royalties, trade mark royalties may be assessed and divided in a variety of different ways, and are expressed as a percentage of sales volume or income, or
9471-424: The country issuing the patent for the term of the patent . The right may be enforced in a lawsuit for monetary damages and/or imprisonment for violation on the patent. In accordance with a patent license, royalties are paid to the patent owner in exchange for the right to practice one or more of the basic patent rights: to manufacture, to use, to sell, to offer for sale, or to import a patented product, or to perform
9594-424: The country issuing the patent for the term of the patent . The right may be enforced in a lawsuit for monetary damages and/or imprisonment for violation on the patent. In accordance with a patent license, royalties are paid to the patent owner in exchange for the right to practice one or more of the basic patent rights: to manufacture, to use, to sell, to offer for sale, or to import a patented product, or to perform
9717-421: The current establishment of wealthy occupants that they decrease the supply of such occupations, which raises prices for the average consumer. Libertarians and the anti-authoritarian left ( anarcho-communists ) view competing guilds and other voluntary communes as being more beneficial for disseminating the skills and education required to perform a specified career. Reasonable royalty A royalty payment
9840-486: The death of either the licensee or licensor will terminate the agreement. If a license is revocable at will by the licensor, courts will be unable to grant specific performance in favor of the licensee. A licensee would be unsuccessful in bringing forcible entry claims or a detainer proceeding because the licensee was never granted any possessory interest. The Licensee would also not be able to recover damages for money spent unless they are able to show detrimental reliance on
9963-428: The essential services required for the licensee's permitted use of the premises. Under a pure licensing agreement, the licensor, under its terms and by common-law, can cancel the agreement at will and without cause, unless it is coupled with an interest or made irrevocable by contract. A license that has been coupled with an interest is not revocable by the licensor without exposure to liability and potential damages. In
10086-400: The event a license is coupled with an interest, the licensor must provide reasonable time for the licensee to remove that interest from the property prior to termination. Additionally, because a license does not confer any possessory interest in the licensee, in the event of a sale of the property, the license is terminated and cannot be enforced against the new owners of that property. Moreover,
10209-432: The field of industrial organization . In particular, Katz and Shapiro (1986) have explored the optimal licensing strategy of a research lab selling to firms who are competitors on the product market. It turns out that (compared to the welfare-maximizing solution) the licensor's incentives to develop innovations may be excessive, while the licensor's incentives to disseminate the innovation are typically too low. Subsequently,
10332-415: The field of industrial electronics). Often, patent owners will require a licensee to pay money in exchange for granting a patent license. Such payments are referred to as royalty payments and come primarily in two forms: lump sum or running royalty. A lump sum royalty involves an upfront, one-time payment, while a running royalty typically involves periodic payments ( e.g., quarterly or annual) based on
10455-436: The first 18 months of commercial production and increases by 1% every 18 months to a maximum of 5% until initial costs have been recovered, at which point the royalty rate is set at 5% of gross revenues or 30% of net revenues . In this manner risks and profits are shared between the government of Canada (as resource owner) and the petroleum developer. This attractive royalty rate is intended to encourage oil and gas exploration in
10578-436: The first 18 months of commercial production and increases by 1% every 18 months to a maximum of 5% until initial costs have been recovered, at which point the royalty rate is set at 5% of gross revenues or 30% of net revenues . In this manner risks and profits are shared between the government of Canada (as resource owner) and the petroleum developer. This attractive royalty rate is intended to encourage oil and gas exploration in
10701-491: The following order of importance: At least one study analyzing a sample of 35 cases in which a court awarded an ongoing royalty has found that ongoing royalty awards "exceed by a statistically significant amount the jury-determined reasonable royalty damages". In 2007, patent rates within the United States were: In 2002, the Licensing Economics Review found in a review of 458 licence agreements over
10824-409: The following order of importance: At least one study analyzing a sample of 35 cases in which a court awarded an ongoing royalty has found that ongoing royalty awards "exceed by a statistically significant amount the jury-determined reasonable royalty damages". In 2007, patent rates within the United States were: In 2002, the Licensing Economics Review found in a review of 458 licence agreements over
10947-428: The interest of publishers than authors: It makes sense for the publisher to pay the author on the basis of what he receives, but it by no means makes it a good deal for the author. Example: 10,000 copies of a $ 20 book with a 10 percent cover-price royalty will earn him $ 20,000. The same number sold but discounted at 55 percent will net the publisher $ 90,000; the author's ten percent of that figure yields him $ 9,000. Which
11070-428: The interest of publishers than authors: It makes sense for the publisher to pay the author on the basis of what he receives, but it by no means makes it a good deal for the author. Example: 10,000 copies of a $ 20 book with a 10 percent cover-price royalty will earn him $ 20,000. The same number sold but discounted at 55 percent will net the publisher $ 90,000; the author's ten percent of that figure yields him $ 9,000. Which
11193-409: The lease agreement. The revenue decimal, or royalty interest that a mineral owner receives, is calculated as a function of the percentage of the total drilling unit to which a specific owner holds the mineral interest, the royalty rate defined in that owner's mineral lease, and any tract participation factors applied to the specific tracts owned. As a standard example, for every $ 100 bbl of oil sold on
11316-408: The lease agreement. The revenue decimal, or royalty interest that a mineral owner receives, is calculated as a function of the percentage of the total drilling unit to which a specific owner holds the mineral interest, the royalty rate defined in that owner's mineral lease, and any tract participation factors applied to the specific tracts owned. As a standard example, for every $ 100 bbl of oil sold on
11439-433: The legal system, be stopped if the intellectual property owner wanted to do so. Intellectual property licensing plays a major role in business, academia and broadcasting. Business practices such as franchising , technology transfer , publication and character merchandising entirely depend on the licensing of intellectual property. Land licensing (proprietary licensing) and IP licensing. A license provides one party with
11562-415: The license. In certain cases, however, licenses can be made irrevocable, and specific performance may be granted. Where a license is made with a set term period and valid consideration is transferred, revocation of the license prior to the terms expiration may raise breach of contract claims that could provide damages against the licensor. Furthermore, once the licensor terminates or revokes the license, notice
11685-432: The licensee is the only person or entity that is allowed to sell, make, use, offer to sell, or import the patented invention) or non-exclusive ( i.e., the licensee is simply one of several entities who has rights under the patent). Finally, any rights given under the agreement may be limited to a particular "field of use" ( e.g., a licensee may be able to practice an invention in the field of consumer electronics, but not in
11808-404: The number of patented products sold or imported. A licensor may grant permission to a licensee to distribute products under a trademark . With such a license, the licensee may use the trademark without fear of a claim of trademark infringement by the licensor. The assignment of a license often depends on specific contractual terms . The most common terms are, that a license is only applicable for
11931-493: The optimal number of licenses in a signalling model. The provision of licenses and the agencies that mandate them are often criticised by American libertarians like Milton Friedman for creating an anticompetitive environment for occupations, which creates a barrier to entry for more qualified and skilled individuals who may not have the resources to obtain the necessary licences. According to Friedman, licenses and permits have become so burdensome due to legislation that favors
12054-443: The other party to extract the resources, the landowner receives either a resource rent , or a "royalty payment" based on the value of the resources sold. When a government owns the resource, the transaction often has to follow legal and regulatory requirements. In the United States, fee simple ownership of mineral rights is possible and payments of royalties to private citizens occurs quite often. Local taxing authorities may impose
12177-442: The other party to extract the resources, the landowner receives either a resource rent , or a "royalty payment" based on the value of the resources sold. When a government owns the resource, the transaction often has to follow legal and regulatory requirements. In the United States, fee simple ownership of mineral rights is possible and payments of royalties to private citizens occurs quite often. Local taxing authorities may impose
12300-498: The owner the right to prevent others from copying, creating derivative works , or using their works. Copyrights, like patent rights, can be divided in many different ways, by the right implicated, by specific geographic or market territories, or by more specific criteria. Each may be the subject of a separate license and royalty arrangements. Copyright royalties are often very specific to the nature of work and field of endeavor. With respect to music, royalties for performance rights in
12423-498: The owner the right to prevent others from copying, creating derivative works , or using their works. Copyrights, like patent rights, can be divided in many different ways, by the right implicated, by specific geographic or market territories, or by more specific criteria. Each may be the subject of a separate license and royalty arrangements. Copyright royalties are often very specific to the nature of work and field of endeavor. With respect to music, royalties for performance rights in
12546-474: The profits (if any) to the publisher. The publishing company pays no royalty on bulk purchases of books since the buying price may be a third of the cover price sold on a singles basis. Unlike the UK, the United States does not specify a "maximum retail price" for books that serves as base for calculation. Methods of calculating royalties changed during the 1980s, due to the rise of retail chain booksellers, which demanded increasing discounts from publishers. As
12669-474: The profits (if any) to the publisher. The publishing company pays no royalty on bulk purchases of books since the buying price may be a third of the cover price sold on a singles basis. Unlike the UK, the United States does not specify a "maximum retail price" for books that serves as base for calculation. Methods of calculating royalties changed during the 1980s, due to the rise of retail chain booksellers, which demanded increasing discounts from publishers. As
12792-419: The profits" rule. However, this practice was rejected by a federal appeals court in 1971. Instead, the courts are required now to use a holistic approach according to Georgia-Pacific Corp. v. United States Plywood Corp. decision. The decision established 15 Georgia-Pacific factors , to be considered, when determining reasonable royalty as a civil remedy (monetary compensation) for patent infringement, in
12915-415: The profits" rule. However, this practice was rejected by a federal appeals court in 1971. Instead, the courts are required now to use a holistic approach according to Georgia-Pacific Corp. v. United States Plywood Corp. decision. The decision established 15 Georgia-Pacific factors , to be considered, when determining reasonable royalty as a civil remedy (monetary compensation) for patent infringement, in
13038-539: The remote Canadian frontier lands where costs and risks are higher than other locations. In many jurisdictions in North America, oil and gas royalty interests are considered real property under the NAICS classification code and qualify for a 1031 like-kind exchange. Oil and gas royalties are paid as a set percentage on all revenue, less any deductions that may be taken by the well operator as specifically noted in
13161-422: The remote Canadian frontier lands where costs and risks are higher than other locations. In many jurisdictions in North America, oil and gas royalty interests are considered real property under the NAICS classification code and qualify for a 1031 like-kind exchange. Oil and gas royalties are paid as a set percentage on all revenue, less any deductions that may be taken by the well operator as specifically noted in
13284-495: The right is compulsory for the individual right holder. Whether the common law conception of an individual economic right as an "individual right of control of usage" is compatible with the Code Civil origins of droit de suite is open to question. The UK is the largest art resale market where a form of ARR is operating, details of how the royalty is calculated as a portion of sale price in the UK can be accessed here DACS In
13407-436: The right is compulsory for the individual right holder. Whether the common law conception of an individual economic right as an "individual right of control of usage" is compatible with the Code Civil origins of droit de suite is open to question. The UK is the largest art resale market where a form of ARR is operating, details of how the royalty is calculated as a portion of sale price in the UK can be accessed here DACS In
13530-412: The rights of the licensing party (e.g. make copies of a copyrighted work ), which, without the license, the licensed party could be sued, civilly, criminally, or both. In particular, a license may be issued by authorities, to allow an activity that would otherwise be forbidden. It may require paying a fee or proving a capability (or both). The requirement may also serve to keep the authorities informed on
13653-533: The rights pertain to. For example, a license with a territory limited to "North America" (Mexico/United States/Canada) would not permit a licensee any protection from actions for use in Japan. Again, a shorthand definition of a license is "a promise by the licensor not to sue the licensee". That means without a license any use or exploitation of intellectual property by a third party would amount to copying or infringement. Such copying would be improper and could, by using
13776-551: The royalty can be a flat rate or variable payment based on production or a combination of both. Unlike oil and gas royalties, which typically decline over time, wind royalties often have an escalation clause, making them more valuable over time. Because there is not yet a robust body of law regarding wind royalties, the legal implications of severing wind rights are still unknown. Several states, including Colorado, Kansas, Oklahoma, North Dakota, South Dakota, Nebraska, Montana, and Wyoming, have enacted anti-severance statutes, preventing
13899-551: The royalty can be a flat rate or variable payment based on production or a combination of both. Unlike oil and gas royalties, which typically decline over time, wind royalties often have an escalation clause, making them more valuable over time. Because there is not yet a robust body of law regarding wind royalties, the legal implications of severing wind rights are still unknown. Several states, including Colorado, Kansas, Oklahoma, North Dakota, South Dakota, Nebraska, Montana, and Wyoming, have enacted anti-severance statutes, preventing
14022-417: The royalty) which can constitute the bulk of the author's total income plus whatever little flows from the "running royalty" stream. Some costs may be attributed to the advance paid, which depletes further advances to be paid or from the running royalty paid. The author and the publisher can independently draw up the agreement that binds them or alongside an agent representing the author. There are many risks for
14145-417: The royalty) which can constitute the bulk of the author's total income plus whatever little flows from the "running royalty" stream. Some costs may be attributed to the advance paid, which depletes further advances to be paid or from the running royalty paid. The author and the publisher can independently draw up the agreement that binds them or alongside an agent representing the author. There are many risks for
14268-452: The scope of a patent. For example, a patent owner may authorize a licensee to make, use, sell, offer for sale, or import a patented product. Such agreements are typically referred to as a patent license agreement or a covenant not to sue . These agreements can last for a specific period of time (such as five years) or for the entire life of the patent ( i.e., until the patent expires). Patent license agreements may also be exclusive ( i.e.,
14391-509: The seminal work of Katz and Shapiro (1986) has been extended in several directions. For example, Bhattacharya, Glazer, and Sappington (1992) have taken into account that the firms acquiring licenses must make further investments in order to develop marketable products. Schmitz (2002, 2007) has shown that asymmetric information due to adverse selection or moral hazard may lead the research lab to sell more licenses than it would do under complete information. Antelo and Sampayo (2017) have studied
14514-574: The terms under which a resource or property are licensed by one party to another, either without restriction or subject to a limitation on term, business or geographic territory, type of product, etc. License agreements can be regulated, particularly where a government is the resource owner, or they can be private contracts that follow a general structure. However, certain types of franchise agreements have comparable provisions. A landowner with petroleum or mineral rights to their property may license those rights to another party. In exchange for allowing
14637-503: The trade mark licence, but may involve monthly fees and percentages of sales, among other payments. In a long-running dispute in the United States involving the valuation of the DHL trade mark of DHL Corporation , it was reported that experts employed by the IRS surveyed a wide range of businesses and found a broad range of royalties for trade mark use from a low of 0.1% to a high of 15%. While
14760-405: The trade mark licence, but may involve monthly fees and percentages of sales, among other payments. In a long-running dispute in the United States involving the valuation of the DHL trade mark of DHL Corporation , it was reported that experts employed by the IRS surveyed a wide range of businesses and found a broad range of royalties for trade mark use from a low of 0.1% to a high of 15%. While
14883-407: The wind estate from being severed from the surface. Regardless, the ownership of wind royalties and compensation payments can be transferred from the landowner to another party. Over time, wind royalties will be fractioned similarly to oil and gas royalties. An intangible asset such as a patent right gives the owner an exclusive right to prevent others from practicing the patented technology in
15006-406: The wind estate from being severed from the surface. Regardless, the ownership of wind royalties and compensation payments can be transferred from the landowner to another party. Over time, wind royalties will be fractioned similarly to oil and gas royalties. An intangible asset such as a patent right gives the owner an exclusive right to prevent others from practicing the patented technology in
15129-480: The world. Being allowed to drive a certain vehicle requires a specific driving license, the type of license depending on the type of vehicle. In the United Kingdom prisoners serving a determinate sentence (a fixed time in prison) will be released prior to the completion of their full sentence "on licence". The licence is the prisoner's agreement to maintain certain conditions, such as periodic reporting in to
#798201