The 2016 Royalty Rate Industry Summary is an annual analysis of royalty rates from the RoyaltySource® database. It provides benchmarks for licensing rates covering 15 industries from over 30 years of data. Average and median royalty rates (based on a percent of sales) by industry are presented as part of this Report.
This Report also contains interquartile range (IQR) measures. These measures are often considered when testing inter-company pricing — using the “arm’s length” standard under the United States Transfer Pricing Regulations (Section 482 of the Internal Revenue Code).
6,667 selected observations from 15 industries were analyzed. There are fewer transactions in the summary than the total number of transactions in the RoyaltySource® database for several reasons. First, only technology licenses from public sources are included and trademark license transactions are eliminated. Second, some transactions do not fit in the 15 industry groupings chosen to report. In other words, the totality of RoyaltySource® transactions cover more industries than the 15 reported. Other transactions are eliminated because they have a royalty base of something other than a variation of sales. Also, transactions are occasionally moved from one category to another as additional information is obtained and the database is refined.
Disclaimer: The information gathered from RoyaltySource® database was sourced from the U.S. Securities and Exchange Commission EDGAR Filings and other public records. While we believe the sources to be reliable, this does not guarantee the accuracy or completeness of the information provided. Further, the information is supplied as general guidance and is not intended to represent or be a substitute for a detailed analysis or professional judgment. This information is for private use only and may not be resold or reproduced without permission.