Welcome to the RoyaltySource® IP Data Guide

At RoyaltySource®, we maintain a database of intangible property licenses that report a royalty rate. These benchmarks are used in valuation, license negotiations, and transfer pricing assignments. Here in the RoyaltySource IP Data Guide, we will offer some insight, frequently asked questions, and proposed solutions offered over the past 20 years from RoyaltySource.
Questions

  • What type of agreements are included in the RoyaltySource database?
  • Do public companies have to disclose their royalty deals?
  • What is the source of RoyaltySource information?
  • Why are most license agreements dated?
  • Does the database include agreements from around the world?
  • Do all transactions in the database report a royalty rate and what is the definition of Royalty Base?
  • What is a tiered royalty and why is there a tiered royalty structure?
  • What is royalty rate upfront fee?
  • Does RoyaltySource report if the parties to the agreements are related or unrelated?
  • What is the difference in rates/values between exclusive and non-exclusive royalty rates charged in technology/software industries?
  • Can you identify licenses in the database for patented and unpatented technology?
  • Can you use franchise agreements as a guide to gain insight into trademark royalty rates?
  • Does RoyaltySource have general royalty rates industry data?
  • Why RoyaltySource doesn't focus on SIC number but instead on the description of the licensed IP?
  • What is the 25% Rule?
  • How do I perform a RoyaltySource online database search?

    • Why are some licensing agreements dated?
    We understand that many of the licenses are dated. However, from our constant review of license agreements, it appears that royalty rates do not change much over time. Industry profit margins also move in a narrow band and influence royalty rates. However, rest assured that we are searching for license agreements every day.

    Please recall that an SEC reporting company only has to release the license agreement if it has a material impact on the business. For example, we do not see many GE licenses. Most likely no license would be material to their business. Some reporting companies can also request confidential treatment and redact the royalty payment information. We do go after those redacted license agreements (after five years) on a regular basis using a FOIA request.

    EXAMPLE: FOIA Redacted version of the Source- https://www.sec.gov/Archives/edgar/data/1319197/000119312505088310/dex1030.htm and Unredacted version of the Source- https://royaltysource.com/FOIASource/pdf/ocr_18-06126-E.pdf

    Note also while we search daily for transactions, we sometimes come across older licenses that were just reported to the public or perhaps they may have been reported earlier but we just found them in our searching and include them in the database. In addition, for some licenses where we originally did not have enough detail to include them in the database, we were subsequently able to gather more information about the licensed property and then add them to the database.