Intellectual property licensing generates $144 BILLION in retail sales annually in the U.S. and Canada alone. With so much money flowing between licensees and licensors and all of the contractual and payment complexities involved, a value leak from an IP system can be invisible–and costly.
What’s Inside a Leaky IP System?
Outbound Payments and Fees
- Incomplete information flowing to IP rights departments such as about license expiry dates, territory restrictions, and restrictions on asset usage
- Potential legal liability for accidental licensing and usage violations
- Difficulty in understanding timing, terms, and rates of royalty payments, commonly leading to deliberate overpayment of royalties to avoid disputes
Revenues from Incoming Royalties
Lack of visibility into data from the licensee, leading to:
- Inaccurate tracking or reporting of sales
- Inability to enforce proper royalties and rates
- Underpayment of inbound royalties
License violations overlooked due to complex terms and lack of information flowing to IP rights departments.
Accounting and legal costs of contract reviews, dispute resolution, and litigation.
As much as 70% of self-reporting on licensing contracts is inaccurate.
Financial Analysis and Forecasting
- Time and cost of manual processing of royalty payments
- Inaccurate accounting and reporting to shareholders and regulators
- Poor forecasting of future costs and revenues, not what-if forecasts
- Negotiating disadvantages in future deals caused by lack of timely and accurate IP financial data
Failure to truly understand IP asset performance due to:
- Failure to capture sales-level data
- Inability to break down data into useful categories
Missed growth opportunities due to lack of insight into how IP assets are performing.