Licensing Royalty Rates, 2023 Edition

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Licensing Royalty Rates, 2023 Edition

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The essential reference for both beginning and more experienced licensing professionals.

Knowing the "going" royalty rate for virtually any product is as simple as reaching for the newly published Licensing Royalty Rates, 2023 Edition.

Setting a royalty rate too high can scare away potential licensees, while accepting a lower rate can cost licensors hundreds of thousands of dollars. Licensing Royalty Rates, 2023 Edition provides all the information you need to calculate the right rate every time.

The data in Licensing Royalty Rates is compiled using information from the U.S. Patent and Trademark Office. After careful review by a blue-ribbon panel of expert licensing consultants uniquely qualified to know what the appropriate rate range is for specific properties in each licensing category, the information is organized into four time-saving sections that give researchers fast access to comprehensive statistical and analytical data:
- Royalty rate listing alphabetically by licensed product —provides a detailed alphabetical listing of products and their suggested rate range across all product categories.
- Royalty rate listing by international trademark class—lets you quickly identify subtle royalty rate differences between similar products within specific international trademark classes.
- Checklist of licensed products and services—offers a quick-reference to products with a high potential for licensing.
- Comprehensive list of licensed products and services—presents a detailed list of all surveyed products and services within a trademark class for preparing intent-to-use trademark applications.
Written in conjunction with a field of advisors, this study represents the twenty-first in an annual series of royalty rate studies in the merchandising and trademark licensing area. While these changes are generally subtle, should you find yourself in the negotiation of a multi-year license agreement for a hot property, a half-point difference in royalty rates over a five-year period can mean millions of dollars in additional (or decreased) royalty income. Seemingly minor changes can have substantial consequences.

In addition to the table of royalty rates that we have provided in years past, the 2023 Edition has important features that should be of interest to our readers:
- The survey shows that FOB royalty rates are typically between 2-3 percentage points higher than the comparable wholesale rate. Thus, if the wholesale royalty rate charged for a particular property for a particular product was 12%, the FOB rate for that item would be tween 14% and 15%.
- Updated royalty rate surveys with product categories listed alphabetically and by trademark class.
- Survey charts have been completely revamped to include a range of typical royalty rates for each product category, as well as the industry average royalty rate for each particular product.
- An updated listing of the top franchises from 2022.
- Updated content detailing the state of the licensing industry, with updated survey and statistical information on worldwide licensing revenues by property type and product category, as well as the latest information on the top properties and agents in the industry.
- Updated listing of licensing agents and consultants actively working in the industry.
- New Appendix containing the latest reported court decisions with respect to royalty rates in all facets of the industry, including consumer products, computer technology, telecommunications, plant patents, biotechnology, video games, music, and reasonable royalty rates.
Section 1: The Role of Royalty Rates in the Merchandise Licensing Process

§1.01 Introduction

§1.02 Common Methods for Valuing Intellectual Property
- A. Types of Valuation Techniques
§1.03 Establishing the Royalty Rates
- A. Preliminary Considerations
- B. Establishing the Right Royalty Rate
- C. Differing Types of Royalty Rates
§1.04 The Compensation Provisions in the License Agreement
- A. Typical Compensation Provisions
- B. Accounting and Audit Provisions
Section 2: Royalty Rate Survey 2010: Alphabetical Listing by Licensed Product

Section 3: Royalty Rate Survey 2010: Listing by International Trademark Class

Section 4: Publicly Available Information on Royalty Rates

§4.01 Introduction

§4.02 Franchising Fundamentals and the Role of Royalty Rates
- A. Introduction
- B. Determining Fees and Other Pricing Issues in Franchising
Section 5: Trends in Royalty Rates

§5.01 Introduction
- A. Licensing Agents
- B. Major Licensors
- C. Top Retailers
- D. Size of the Licensing Industry
- E. Impact of the Size of the Industry on Royalty Rates
§5.02 Changes in the Survey Results Since 1996
- A. General Trends
- B. Art Properties
- C. Celebrity Properties
- D. Character/Entertainment Properties
- E. Collegiate Properties
- F. Corporate/Brand Properties
- G. Designer/Fashion Properties
- H. Event Properties
- I. Sports Properties
Section 6: Checklist of Licensed Products and Services

Section 7: Comprehensive List of Licensed Products and Services

Section 8: Directory of Licensing Agents and Consultants

Section 9: Glossary of Terms

Section 10: Royalty Rate Trends and Valuation in Patent and Technology Licensing

§10.01 Introduction

§10.02 The Entire Market Value Rule and a Potential Shift in Assessing Reasonable Royalty Damages
- A. Introduction
- B. The Georgia-Pacific Factors
- C. Apportionment of Profits and EMVR
- D. Base and Rate
- E. Historical Foundations of the Entire Market Value Rule
- F. The Entire Market Value Rule in the 20th Century
- G. Cornell and Lucent
- H. Conclusion
§10.03 A New Approach to Valuing Patented Intellectual Property: The Heat of the Company Assessment
- A. Introduction
- B. Background
- C. The Heart of the Company Assessment
§10.04 VALUATION OF INTELLECTUAL PROPERTY
- A. Identification of Assets
- B. Value Determination
Gregory J. Battersby holds an A.B. (chemistry and biology) from Seton Hall University and a J.D. from Fordham University School of Law. He is a member of the New York and Connecticut Bars and is admitted to practice as a patent attorney before the United States Patent and Trademark Office.

After practicing together for more than 30 years, Messrs. Battersby and Grimes now head their own law firms, The Battersby Law Group, LLC in Westport, CT and Grimes LLC in Norwalk, CT. Each specialize in patent, trademark, copyrights, unfair competition, antitrust and corporate law and licensing with a particular emphasis on the merchandising, multimedia, entertainment, edutainment, toy, animation and publishing industries.

Mr. Battersby remains a guest lecturer at the Franklin Pierce Law School Advanced Licensing Institute, is counsel to the International Licensing Industry Merchandisers' Association (“LIMA”), and has been an officer and a member of the Board of Directors of The New York Intellectual Property Law Association.

Charles W. Grimes holds a B.S. (engineering mechanics) from Pennsylvania State University and a J.D. from the University of Denver School of Law. He is a member of the Illinois, New York and Connecticut Bars and is admitted to practice as a patent attorney before the United States Patent and Trademark Office.

After practicing together for more than 30 years, Messrs. Battersby and Grimes now head their own law firms, The Battersby Law Group, LLC in Westport, CT and Grimes LLC in Norwalk, CT. Each specialize in patent, trademark, copyrights, unfair competition, antitrust and corporate law and licensing with a particular emphasis on the merchandising, multimedia, entertainment, edutainment, toy, animation and publishing industries.

Mr. Grimes is a former Adjunct Professor at Sacred Heart University where he teaches intellectual property law and served on the Editorial Board of The Trademark Reporter. He has moderated the legal seminar at the International Licensing Expo for many years and continues to lecture and write on a variety of intellectual property issues.