Financial Terms in License Agreements

Jorge L. Contreras, Intellectual Property Licensing and Transactions: Theory and Practice (2021, Forthcoming)

University of Utah College of Law Research Paper No. 404

51 Pages Posted: 1 Dec 2020 Last revised: 2 Jan 2021

See all articles by Jorge L. Contreras

Jorge L. Contreras

University of Utah - S.J. Quinney College of Law

Date Written: November 7, 2020

Abstract

This chapter in the forthcoming casebook Intellectual Property Licensing and Transactions: Theory and Practice (2020, forthcoming), discusses the financial terms of IP licensing agreements including fixed payments, running royalties, sublicensing income, milestone payments, equity compensation and cost reimbursement, as well as most-favored and audit clauses. Numerous areas of recent controversy are addressed including the establishment of royalty rates through the entire market value rule (EMVR) versus the smallest salable patent practicing unit (SSPPU) rule, royalties for bundled rights, rules of thumb discredited by the courts, royalty escalation clauses and more. Examples are drawn primarily from biotechnology, high-tech and copyright licensing practice.

Keywords: royalty, patent, copyright, milestone, SSPPU

Suggested Citation

Contreras, Jorge L., Financial Terms in License Agreements (November 7, 2020). Jorge L. Contreras, Intellectual Property Licensing and Transactions: Theory and Practice (2021, Forthcoming), University of Utah College of Law Research Paper No. 404, Available at SSRN: https://ssrn.com/abstract=3726748

Jorge L. Contreras (Contact Author)

University of Utah - S.J. Quinney College of Law ( email )

383 S. University Street
Salt Lake City, UT 84112-0730
United States

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