We started our research with the expectation of finding many technology licenses detailing royalty payments in areas such as aerospace, combat, marine and information technology systems. Upon further research this was not the case. The majority of the technology licenses primarily involved combat-based technologies, such as personnel systems and equipment. There is market evidence that innovation in the defense industry continues in many areas such as medical, information systems and electronics.
In this report, we identified 23 licenses from the RoyaltySource® database related to defense technology. These licenses focus primarily in areas such as personnel equipment, power generation equipment, electronics and communications.
About IPSCIO/RoyaltySource® Reports
Many times experts need to have broad royalty rate benchmarks to help guide in the valuation and licensing of Intellectual Property (”IP”) and Intangible Assets (“IA”). Knowing the boundaries of market based royalty rates and deal terms, prior to a more in-depth search and analysis, gives support for various challenges. These are detailed below.
- Transactions – Licensing and purchase/sale of IP transactions. Licensing executives can quickly control compensation expectations by establishing a playing field, or a range of royalty rates/values, prior to and during negotiation.
- Litigation – Infringement damage litigation has become so expensive that the parties to the matter can quickly assess possible damage awards before moving forward to make sure the choice to litigate or settle is economically feasible.
- Financial Reporting – Experts performing purchase price allocations under IFRS 3/ US GAAP ASC 805 need to select a royalty rate when using the relief-from-royalty approach to value IP and IA. Selection of a comparable royalty rate begins with assembling supporting documentation for the selection of a royalty rate. A broad view of target IP and IA benchmarks and a follow-up custom search to make a judgement will strengthen the analysis and supporting documentation under audit review.
- Taxation – Transfer Pricing experts can quickly test intercompany agreements by using benchmark royalty rate data and the interquartile range.
We have developed IPSCIO/RoyaltySource® reports to meet these challenges. This resource summarizes actual license contract data to give the greatest insight possible. In addition to the license contracts, we have insightful directional information that can also be found in our online searchable database.
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.