The determination of patent royalties depends on many factors, including: (1) the expenses incurred by the patentee in patent research and development; (2) the economic benefits that the licensee can obtain by using the patent; (3) Types, implementation methods and time limits of patent licensing; (four) the way and time for the licensee to pay the royalties. In addition, whether there are alternative technologies in the market, the pioneers of technological improvement and the bargaining power of both parties are also factors that affect patent fees.
According to the provisions of Article 325 of the Contract Law on the determination of patent licensing royalties, the payment method of royalties shall be agreed by the parties concerned, which may be lump-sum payment or lump-sum payment or lump-sum installment payment, as well as royalties or additional advance entry fees. If the royalty payment is agreed, the royalty may be paid according to a certain proportion of the product price, new output value after the patent is implemented, profit or product sales. It can also be calculated in other agreed ways. The proportion of royalty payment can be fixed, increasing year by year or decreasing year by year. Where royalty payment is agreed, the parties shall stipulate in the contract the method of consulting relevant accounting accounts.
Finally, the two methods have their own advantages and disadvantages. Finally, the patentee gets the money early and the risk is small, but it may need to pay more taxes, and if the product sells well in the future, the patentee will not get additional benefits. Of course, if the future products can't reach the expected sales volume, this method will bring risks to the licensee. If royalties are paid in installments, the licensee will bear less risk. However, if the sales of products are very good in the future, the patentee can get higher royalties. In many cases, royalties are paid by combining admission fees with royalties.
How to determine the patent license fee
Patent licensing fees are mainly determined according to the following circumstances:
(1) expenses incurred by the patentee in patent research and development;
(2) the economic benefits that the licensee can obtain by using the patent;
(3) Types, implementation methods and time limits of patent licensing;
(four) the way and time for the licensee to pay the royalties.
In addition, whether there are alternative technologies in the market, the bargaining power of both parties is also a factor affecting the use fee.