SRR helps organizations realize the full value of their IP by ensuring compliance with existing license agreements. As many as 90% of licensees fail to accurately report royalties and many of these inaccuracies take the form of under payments which range, on average, from 10% to 25%. Given the significant impact licensing revenue can have on a company’s bottom line, it is not surprising to see companies pay more attention to the full realization of this existing stream of revenue. A company that chooses to perform a royalty audit over its licensed IP assets by utilizing an independent, third-party can realize significant increases to its profitability.
SRR’s professionals offer unique capabilities to assist and counsel clients in attaining the full realization of their licensed IP assets. A non-exhaustive list of our services includes:
Forensic accounting and investigative audits
Royalty reporting/system audits
Evaluation of license agreements
Development of a royalty compliance and monitoring program
Review of an existing royalty compliance and monitoring program
Our experts bring to bear a level of expertise unparalleled by other firms by consistently identifying the misreporting of royalties. A non-exhaustive list of some of the most common findings follows:
- Misinterpretation of the agreement
- Clerical errors
- Incorrect foreign exchange conversion rates
- Improper deductions from gross sales
- Unaccounted for returns
- Unapproved discounts
- Incorrect royalty rates
- Misallocation of sales price among bundled products
- Missing inventory
- Untimely royalty reports
In addition, there are benefits beyond recovering underpaid royalties. For example, a proactive royalty audit can enhance the business relationship between licensor and licensee by: 1) putting the licensee on notice that the terms of the license agreement will be enforced and monitored; 2) providing increased transparency between the parties that can be used as a tool for identifying weaknesses in the license agreement prior to any significant disagreements; 3) demonstrating to external auditors compliance with Sarbanes Oxley and other regulations; and 4) providing increased knowledge and information flow to both parties which can only help to enhance the ongoing business relationship and working environment.
Our IP team has served across a wide range of industries and technologies, view the comprehensive list.