High Technology Royalty Survey Financial Terms: Descriptive Statistics and Analysis

Chapter 5, 2011 High Technology Sector Deal Term & Royalty Rate Survey Report, the Licensing Executives Society (U.S.A. and Canada), March 30, 2012.

Posted: 16 Apr 2012

See all articles by Jack Lu

Jack Lu

Intellectual Property Market Advisory Partners(IPMAP), LLC

Date Written: April 15, 2012

Abstract

The High Technology Sector of the Licensing Executives Society (U.S.A. and Canada) conducted the first deal term and royalty survey in 2011. A total of 228 licensing transactions were reported, and 220 of them included various forms of royalty payments. This article analyzes the descriptive statistics of the lump sum payments and the flat running royalty rates expressed as percentages of sales. The average of 119 transactions with sales-based percentage rates is about 6%, and the median is 5%. Lump sum payments vary drastically across transactions, and the median is about half million. The analysis further tabulates descriptive statistics by characteristics of licensor/licensee, performance of licensed products, number and type of IP licensed, field of use, technology type and development stage, and certain licensing terms such as exclusivity, co-marketing, and auxiliary payments.

Keywords: High tech, royalty survey, average royalty rate, median royalty rate, license term, running royalty rate, lump sum payment

JEL Classification: O32, O34, C13

Suggested Citation

Lu, Jiaqing, High Technology Royalty Survey Financial Terms: Descriptive Statistics and Analysis (April 15, 2012). Chapter 5, 2011 High Technology Sector Deal Term & Royalty Rate Survey Report, the Licensing Executives Society (U.S.A. and Canada), March 30, 2012.. Available at SSRN: https://ssrn.com/abstract=2040336

Jiaqing Lu (Contact Author)

Intellectual Property Market Advisory Partners(IPMAP), LLC ( email )

13785 Research Blvd,
Suite 125
Austin, TX 78750
United States
(512)238-3088 (Phone)

HOME PAGE: http://www.ipmapllc.com

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