High Technology Royalty Survey: Economic and Econometric Analysis on Major Issues in Survey

Chapter 6, 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 presents the economic and econometric analysis on the lump sum payments and the flat running royalty rates expressed as percentages of sales. The study first compares and contrasts the adoption of sales-based royalty rate and lump sum payment, and then highlights the important role of the technology transfer from academic entities, mainly universities and federal labs. Econometric analysis also reveals further insights into royalty pricing, in royalty premium or discount, by licensor type, licensee size, industry, the numbers and types of IP licensed, exclusivity, and non-practicing entities (NPEs), among various other characteristics.

Keywords: high tech, royalty survey, running royalty rate, lump sum payment, technology transfer, royalty premium, royalty discount, dummy variable regression

JEL Classification: O32, O34, C13

Suggested Citation

Lu, Jiaqing, High Technology Royalty Survey: Economic and Econometric Analysis on Major Issues in Survey (April 15, 2012). Chapter 6, 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=2040417

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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