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Valuing A License Agreement

The most important aspect of the CUP method is the identification of comparable IP licensing agreements that will be analyzed. With a royalty database like RoyaltyRange, this step is simple. Companies can indicate their search criteria and comparability requirements, and RoyaltyRange`s transfer pricing experts prepare a detailed report on the most appropriate latest licensing agreements between independent parties. Using a database absorbs much of the work and gives companies the certainty that they are analyzing the most reliable data. If you`re setting transfer pricing, doing a transfer pricing analysis, evaluating intellectual property assets, conducting a business valuation, creating a license agreement, or dealing with a case of infringement, you need to understand intellectual property. In this guide, we cover everything related to intellectual property and how it is protected, right down to transfer pricing, valuation, licensing and litigation. We also explain how you can use a royalty database to find market data and set benchmarks for the latest IP licenses. As soon as there is a meeting of the chiefs on royalties, a license agreement can be prepared and executed by the parties. Here are the main sections of a patent license agreement. A number of valuation approaches are available for IP valuation. The most appropriate method depends on the circumstances of the intellectual property to be valued. It can be useful to perform analyses with several methods and check the results of each. If you enter into a license agreement or enter into a license agreement, you must set fair royalties for the intellectual property granted.

This ensures that both parties benefit equitably from the intellectual property rights granted to the licensee. If the royalty is too high, the licensee pays too much for the intellectual property and may refuse the license agreement. If the royalty is too low, the licensor is not fairly compensated for the expertise and time that has been paid to the development of the intellectual property. The rate must be calculated accurately. The term “intellectual property rights” refers to the right to use intellectual property. Where an asset is protected by intellectual property rights, it may only be used by the parties holding the intellectual property rights. This may be the person or organization that created the intellectual property or another party to whom the rights were assigned. Intellectual property rights are often sold in license agreements or transferred to other parties. In cases of counterfeiting, professionals often calculate a “reasonable license rate”.

This is the license fee that a licensee would pay for the rights to the patented invention in a hypothetical proceeding. If you want to learn more about reasonable royalties for intellectual property and patent infringement cases, read our article on 3 brief facts about reasonable royalties….

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