Payment method of patent royalties

1. One-time payment includes two specific ways: one-time payment and installment payment. This refers to the total amount of royalties that the licensee should pay to the licensor as stipulated in the contract. (1) For the patentee, the royalty can be obtained at one time, and the economic benefits can be effectively guaranteed. Even if the licensee can't realize the economic benefits, it doesn't affect it. However, if the benefits of the licensee's patented technology are very good and the profits are huge, the patentee can't share them, not to mention the value may not be found when determining the total royalties, and the valuation is low, and its interests will suffer great losses. (2) For the licensee, although the future profit will be his own after one payment, the licensee is under great economic pressure before the profit is realized. In addition, because there are certain risks in the implementation of the patent, if there is no certain income, the licensee's investment loss will be even greater, and the patentee won't bear the risks with him, and may no longer care about the production and operation of the licensee. Therefore, in the end, it is unfavorable to the licensee and generally should not be adopted.

2. Royalty refers to the patentee's extraction of royalties from the licensee's income after the patent is implemented through a certain proportion. (1) For the patentee, after licensing others to implement it, you can't get the royalties immediately, and the previous investment and expenses can't be recovered immediately. The realization of its benefits depends on the implementation of the licensee, so it is also unstable, and the income of the patent right depends on the production performance of the licensee. This requires the patentee to check and supervise its accounting accounts, which increases the difficulty and instability of the patentee in obtaining the royalties and increases the workload of the patentee. Therefore, this payment method is not suitable for the patentee. (2) It is very beneficial to the licensee. Not only does it not need to invest more money to reduce its economic burden before implementation, but it can also encourage the patentee to care about the production and operation of the enterprise and give guidance and help in technology and sales. Some enterprises can also reduce the calculation base for calculating commission fees through accounting treatment (of course, this is illegal).

3. Entry fee plus commission is the best way to coordinate the interests of both parties to the contract, and it is also the most common practice in patent licensing contract practice. The entry fee is a part of the royalties paid by the licensee to the patentee when the contract comes into effect, which generally includes all the expenses paid by the patentee for obtaining the patent right and maintaining the validity of the patent right. The proper remuneration and profits of the patentee enable the patentee to have a stable income after licensing others to exploit the patent, regardless of the implementation situation, which not only guarantees its interests, but also makes it unbearable for the licensor. The patent fee is another part of the royalties extracted by the patentee according to the proportion agreed in the contract. Commission may be divided into: ① fixed proportion commission, that is, the production quantity, sales volume and profit of the contract products are fixed at a certain amount, which is extracted within the proportion and commission period agreed in the contract; (2) Sliding proportion commission, as stipulated in the contract, is a certain proportion of the actual annual output, sales or profit of the contract products, which may increase year by year or decrease gradually. In practice, in order to realize the interests of both parties fairly, the second method should be adopted, that is, based on the actual output or sales of the contract products, the commission should be made according to the agreed proportion, so that the interests of both parties are consistent.