Why have an IP Royalty Audit?
Due to the complexity of license agreements and trade practices, the calculation of royalties due on such agreements can result in costly mistakes, resulting in loss of royalty income.
Costly mistakes that can occur:
- Understated royalty rates
- Unreported sales units / money
- Overstated expenses deducted from royalties
- Excessive free goods, reducing royalties paid
- Unpaid royalty rate ‘bumps’ for gold and platinum sales
- Accounting system errors resulting in underpaid / unpaid royalties
Such mistakes can result in the accrual of penalty clauses, misunderstandings and litigation.
Who should be interested in an IP audit?
Anyone who is either a producer (licensor) or rights or beneficiary (licensee) of rights:
- Record companies
- Venture Capital (VC) and other Investors
- Computer games companies
- Copyright societies
- Book Publishers