What is a reasonable royalty rate?

September 18, 2007 on 10:39 am | In Independent Inventors, Weblogs |

As usual, “it depends.”  However, the Patent Baristas blog has an excellent answer to that question.

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2 Comments

  1. I have licensed several inventions to toy, tool, kitchen products and eyewear companies. The normal royalty is 3% to 5%. You may find higher, but that is the average rate.

    Comment by Roger Brown — September 20, 2007 #

  2. I would say 2%-10%. A higher volume, low-cost item would warrant a smaller royalty and vice versa. Don’t get stuck into fixed-royalty thinking either. You might want to structure the deal where your royalty percentage DECREASES with sales volume to give your licensee incentive to sell more. Alternatively, you might give them a break on royalty percentages upfront to stimulate sales.

    Comment by Michael Croix — September 30, 2007 #

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