Royalty / licence payments

Raw material costs Energy input costs Royalty and licence payments... 

If the process used has not been developed exclusively by the operating company, royalties and licence fees may be payable. These may be paid as a lump sum, included in the fixed capital, or as an annual fee or payments based on the amount of product sold. 

An exclusive, worldwide licence to Product X in perpetuity with the right to manufacture and develop the product further for a payment of 10 million and a following royalty of 5 per cent of net sales for 10 years. ... 

This could lead Company B to respond that they would agree to an exclusive world licence to Product X but would retain manufacturing and development rights and want a payment of 25 million and a 15 per cent royalty for 20 years on gross sales. 

Possible variations of licence contracts are lump sum payments (the licence is sold for a single, larger payment), royalties on sales, and combinations of up-front payments or option payments in certain intervals with royalties. 

The UK Cookson Group s, Cookson Electronics subsidiary has negotiated licences with the patent holders of various lead-free solders. These enable it to manufacture globally and supply them as a patent holder, making royalty payments on sales. The alloys concerned are Senju Sn/Ag/Cu (Senju-... 

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