Licensing Royalty Rates
Intellectual property royalty rates for licensing a product or invention







Find in depth information about royalty rates including lists of Invention royalties, royalty rates, licensing royalty rates, royalty rates comparisons and typical or average royalty rates by industry or for specific product categories published in top-selling books on the topic. See the latest edition of Licensing Royalty Rates.





15% to 20%. Royalty rate for Beatles’ products. “Beatles' products ‘have the highest royalty rate, but they sell well,’ Apple demands somewhere in the neighborhood of 15 percent to 20 percent in royalties on licensed products.’” The Beatles. Music royalty rates. (Peter Miniaci, owner of The Beatlemania Shoppe in Toronto quoted in Dan Higgins, “Beatles fans obtain rare license to offer product,” Albany Times Union, Albany, NY, April 13, 2005) Beatlemania products. Discover more detailed information about music royalties, music royalty rates and music intellectual property and how intellectual property law impacts musical creativity and the music business.



15% or more. Software licensing royalty rate paid by Dell Computers for highly marketable products. "Francine Segars, strategic commodity manager who negotiates software licensing agreements for Dell Computers [800-289-3355] in Austin, Texas, asserts that it's not unusual for an inventor to receive 15% or more in royalties for a highly marketable product." Software license royalty rates. License agreement royalty rates. (Williams-Harold, Bevolyn, “You've got it made! (developing invention ideas),” Black Enterprise, June 1, 1999)



Up to 15%. Licensing royalty rates paid for video game inventions. “The industry average for licensing is about 3 percent, but if the product has a patent, the inventor can ask for a higher royalty, [Bob DeMatteis, author of From Patent to Profit] said. It also varies by market potential. For example, he said, the rate for a plastic flip top might be a fraction of a percentage point, but a video game could be up to 15 percent.” Fliptop. Video game inventions. Video game successes. (Bob DeMatteis quoted in Thuy-Doan Le, “Entrepreneurial spirit starts to pay off for Sacramento, Calif.-area inventor,” The Sacramento Bee, December 12, 2004) View the latest in newly released video game products.


10% to 12%. Royalty rates offered small webcasters. “Record labels also offered small webcasters -- those with revenue of less than $1.25 million annually -- a flat royalty rate of 10 percent to 12 percent of revenue.” Music royalty rate. “Online Radio Fears for Its Future Over Royalty Fees for Record Labels,” San Diego Union-Tribune, August 31, 2007)





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If you are, you're in the right place,. Inventors Workshop (IWI), one of the nation's oldest nonprofit inventor assistance associations, may be able to help you out. IWI specializes in helping inventors license their inventions and providing personal mentoring and one-on-one counseling. You can contact them at Invention-Licensing-Help.org, Or call them at 805-735-7261





Up to 10% of wholesale sales for toy inventions. “Although royalty arrangements vary greatly, the most a toy inventor can realistically expect by the time negotiations are complete is 10% (5% is more typical) of wholesale sales.” Toy royalty rate. Royalty on a toy invention. What percentage does an inventor make? (Caryne Brown, “Making money making toys: how black inventors are bringing innovative ideas to the toy market”, Black Enterprise, November 1, 1993) Discover more information about Toy Inventors and Toy Inventions.



10% for Kinderdoos educational game. “[Donna Williamson, inventor of Kinderdoos, a colorful educational game that helps children get ready for school and bedtime while teaching them independence] has a licensing agreement with Pockets of Learning, a Rhode Island-based toy distributor that specializes in heirloom-quality toys and games, that will expire in January [2008]. Until then, Pockets of Learning will manufacture, market and sell the game for Williamson, who will get 10 percent of all royalties. The suggested retail price of Kinderdoos is $24.95.” Product license. (David Benda, “Necessity spurred Redding woman to create educational game,” Redding Record Searchlight,” Monday, November 26, 2007) Which educational game would you pick as a bestseller?





Ever ask yourself "How much do inventors make?" Ever wonder "How much money inventors make?" Or what an inventor's patent license income is? Discover more statistics about inventor income.





8% to 12% of sales for well-known brands. “Attorneys who deal with licensing issues said most companies that license well-known brands pay a royalty rate of 8 percent to 12 percent of sales. That would put TRG's [TRG Accessories] nine-month sales of the Swiss Army brand luggageSwiss Army brand luggage at $8.1 million to $12.1 million.” Royalty percentage paid. (Margie Manning, “Brothers market 'James Bond' of luggage,” St. Louis Business Journal, February 23, 2001)



7% licensing royalty rate for Donna Karan International jeans wear. “[In] September 1996, Donna Karan International granted Designer Holdings Ltd. a thirty-year license to produce, sell and distribute DKNY men's and women's jeanswear. In return Donna Karan International received $60 million plus an annual 7 percent royalty on total sales and an additional 2 percent on international sales.” Royalty rate statistics. (Glenn DeSouza, “Royalty methods for intellectual property,” Business Economics, April 1, 1997)



5.7% licensing royalty rate for the Blackberry. In May 2003, the U.S. District Court for the Eastern District of Virginia ruled that the royalties paid by Blackberry maker, Research In Motion to Chicago inventor Thomas Campana, Jr., through his holding company, NTP, be increased to 8.55 percent, up from the 5.7 percent rate. This ruling was issued in November 2002, when a jury ruled that Research In Motion had “willfully infringed on NTP patents on wireless communications in e-mail systems.” (Stuart Weinberg, “BlackBerry maker's stock falls after patent case ruling Company must pay more damages, higher royalties to inventor,” Chicago Sun-Times, May 28, 2003)



Which Blackberry products do you think are the most highly rated by customers?





Find more detailed information about what experts have to say about music licensing and music licensing agreements. View examples of music licensing agreements available in pdf format.





5% to 10% standard patent royalty rates for toy inventions. “[I]ndependent inventors represent a rich, yet relatively inexpensive, creative resource. By dealing with established independent inventors, toy companies can cull promising ideas from around the world, while paying only royalties of 5-10 percent for their use and development.” Royalty payouts for inventions. Standard royalty rate paid to toy inventors. (Milt Schulman, “Toy inventors assume greater role,” Playthings, November 1, 1992) Discover more information about Toy Inventorstoy inventors and Toy Inventionstoy inventions.


5% of the product manufacturing cost. What is the average royalty rate paid to inventors? "'The average royalty is 5 percent of the manufacturing cost of the product.' The manufacturer should give the inventor an upfront fee to show it is working in good faith. That may be anywhere from $5,000 to $150,000. 'The highest one I had was $3.1 million,' …That's part of the negotiation. Have them make you an offer, which puts you in a counter-offering position.'" Average invention royalty rate. Royalties paid inventors. Patent licensing statistics. (Pamela H. Riddle, chief executive of Innovative Product Technologies quoted in Marcia Heroux Pounds, “Licensing Offer Inventors A Safe Path to Production,” Knight Ridder/Tribune Business News, November 10, 1998) Order Pamela H. Riddle Bird's book, Inventing for Dummies. Find information on the advantages of licensing and the disadvantages of licensing compared to the advantages of manufacturing and the disadvantages of manufacturing.



5% of sales. Licensing royalty share Inventors' Publishing and Research allocates to inventors. “[Elaine] Montoya [San Francisco-based Inventors' Publishing and Research (IP&R)], like all the company's inventor-clients, gets 5% of sales for royalties, and absolutelyNEW gets 1%.” What is the average royalty paid to inventors? Standard patent licensing deal percentage. (Jeffrey Gangemi, “Prototyping Gives Inventions a Boost,” Business Week, November 13, 2006) Review IP&R CEO Steve Barbarich’s book, How to Make Big Money from Your Inventions and Patents.



5%. Royalty rate earned by the inventor the antihistamine Benadryl. George Rieveschl was the inventor of the antihistamine Benadryl. “Benadryl is commonly used to treat allergy symptoms such as hay fever, rashes and hives. … Parke, Davis and Co. - now part of Pfizer Inc. - started marketing Benadryl in May 1946. It is now sold over the counter under the Benadryl brand name and its generic name, diphenhydramine hydrochloride.The invention paid [Rieveschl] a 5 percent royalty for 17 years, the length of the patent. Sales had risen to about $6 million a year by the early 1960s.” (Author unknown, “Inventor of Benadryl dead at 91,” The Cincinnati Post, Friday, September 28, 2007) Peruse publications by George Rieveschl.





Looking for information about royalty rates in the pharmaceutical and biotech industries? Find more detailed information about what experts have to say about biotechnology and pharmaceutical licensing royalty rates. View examples of pharmaceutical licensing agreements available in pdf format.





3% to 5%. Licensing royalty rates range offered by Parents of Invention for infant and toddler baby products. “[Many] parents have ideas for new ways to make caring for baby a wee bit easier. So [entrepreneur Laine Caspi] not only started selling baby wraps, but she also founded Parents of Invention …which brings other people's concepts for new infant and toddler products to market. The company pays royalties ranging from 3-5 percent of the item's sales to parents whose ideas are selected.” Invention submission. Baby product submission. (No author, “Meet Laine Caspi,” Ladies Who Launch, no date)



3% industry average licensing royalty rate for inventions. “The industry average for licensing is about 3 percent, but if the product has a patent, the inventor can ask for a higher royalty, [Bob DeMatteisBob DeMatteis, author of From Patent to Profit] said. It also varies by market potential. For example, he said, the rate for a plastic flip top might be a fraction of a percentage point, but a video game could be up to 15 percent.” Video game product licensing deals. Royalty rates percentage. What royalty rate should I expect to receive for my patent? Common royalty rate percentages. (Thuy-Doan Le, “Entrepreneurial spirit starts to pay off for Sacramento, Calif.-area inventor,” The Sacramento Bee, December 12, 2004) Review a sample licensing royalty agreement.


2% to 20% of sales. “Licensing is a process that permits a manufacturer to produce your invention. In return you receive a royalty that typically ranges from 2 to 20 percent of sales.” What royalty percentage should a manufacturing company pay to an inventors? (Courtney Price, “Inventors need good strategy to sell products,” Denver Rocky Mountain News, March 29, 1998)



1% to 4% of sales. “Many companies routinely license patents from individual inventors in exchange for a share of the revenue these products generate. Royalties usually will range between 1 and 4 percent of sales. While that may not sound like much, when you consider the resources a large company can put behind a product launch -- manufacturing, marketing, distribution -- it's not a bad deal.” (E. Patrick Ellisen, “Disputes over IP rights can prove costly for all involved,” Silicon Valley / San Jose Business Journal, September 3, 2004)



Less than 1% to up to 8% of net sales. “Royalty rates typically range from less than 1 percent of net sales up to about 8 percent, depending on the industry and the innovation's commercial potential. For example, a research reagent (e.g. expression vector, cell culture, media supplements) may garner between 1 percent and 5 percent rates, while a therapeutic product (e.g. monoclonal antibodies, cloned factors) may garner between 5 percent and 10 percent rates.” Technology transfer information. (Gabor Garai and John M. Garvey, partners at the Boston office of Foley & Lardner LLP, “Negotiating payment options in technology transfer deals,” Mass High Tech: The Journal of New England Technology, June 29, 2007)








28.3% of royalty payments awarded to Stanford University inventors. “At Stanford [University] the Office of Technology Licensing takes 15 percent off the top, and remaining royalties are split into equal thirds between the inventor, the university and the inventor's department.” (Chris Rauber, “Dr. Strange Glove,” San Francisco Business Times, December 5, 1997)



25% to 33% of net profits to investor backers. “[Y]ou might want to give some thought to getting a backer. Not a partner, a backer. In exchange for funding the legal and miscellaneous costs, the backer receives a portion of the net profits. The angel is not a partner — it’s your invention, and you call the shots. The percentage for the backer [of an invention] is negotiable. If I were doing it, I’d offer my backer 25 percent, and I’d be willing to go up to a third. That’s purely subjective, and your input is as valid as mine. The backer would be investing in you the same way an angel invests in a Broadway show.” (Harvey Reese, How to License Your Million Dollar Idea, Second Edition, John Wiley & Sons, Inc., New York, 2002, p. 77) Discover more books by Harvey Reese. Listen to Harvey Reese Tells You How It's Done.



Up to 25% of a product's profit. Licensing fees can account for up to 25% or more of a product’s profit. "Inventors who try to license their inventions to other companies traditionally have a difficult time," said [Thomas E. Ciotti], an intellectual-property specialist [with Morrison Foerster]. In part that's because licensing fees, which vary by industry, can gobble up a quarter or more of the profit an item generates. Unless big profits are a sure bet, many companies will be wary.” (Cyndia Zwahlen, Los Angeles Times, Wednesday February 10, 1999, p. 5)



10 to 20% of sales to university sponsor. “Under a licensing agreement with the school, Environmental Robotics gives 10 to 20 percent of its sales to UNM [University of New Mexico]. [Mohsen] Shahinpoor is looking for help in expanding his company, and says that other states have approached him about moving his operation, although he declines to name them.” (Mohsen Shahinpoor cited in Dennis Domrazalski, NMBW Staff “Albuquerque inventor revolutionizes the field of robotics,” New Mexico Business Weekly, May 28, 2004) Order robotics engineering books by Mohsen ShahinpoorMohsen Shahinpoor.





Do you need help licensing your invention? Do you have questions about how to license a product? If so, contact Inventors Workshop at Invention-Licensing-Help.org, one of the oldest and most trusted nonprofit inventor support organizations in the U.S. -- providing inventor help services for 40 years. 805-879-1729





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