Who should pay the patent royalties
It can be negotiated and settled, depending on who owns the patent. The owner pays patent fees.
If the original company has obtained the exclusive right to use it, there is no need to pay patent fees. It depends on how the patent usage contract you originally implemented is stipulated. If the scope of usage does not involve branches, it is recommended to negotiate first.
Two separate companies can negotiate on their own or jointly negotiate with the foreign company to determine how to pay the patent royalties. If there is no negotiation, then Both parties need to pay royalties.
The responsibility for this usage fee depends on the license contract you signed. On the premise that there is no contract, a preliminary analysis is made: when a company is split, the creditor's rights and debts of the original company will be borne by the new company. Therefore, the patent license fee should be shared by the two companies after the split. Both companies bear joint and several liability. The foreign company can Claim all patent licensing fees from any one of them or both at the same time; as for the internal sharing ratio of the two companies after the separation, the two companies will agree on their own. Again, the above analysis is made without seeing the contract. It is recommended to hire a lawyer to make an explanation after understanding the relevant situation in detail.
The two companies can negotiate who will pay, but the two companies bear joint and several liability to the outside world, and the foreign company can demand payment from any one of them. This is only a preliminary judgment, and the specifics will depend on the contractual agreements between the foreign company and these two companies.
How to pay patent royalties
1. One-time settlement, including lump-sum payment and installment payment Two specific ways. This refers to the total amount of royalties stipulated in the contract that the licensee shall pay to the licensor.
① For the patentee, a one-time royalty can be obtained, and the economic interests are effectively guaranteed. Even if the licensee cannot realize economic benefits, it does not matter. However, if the licensee implementsThe benefits of the patented technology are very good. When the profits are huge, the patentee cannot share them. What's more, when determining the total royalties, the value may not be discovered and the valuation is low, resulting in a huge loss of profits.
② For the licensee, although after a one-time payment, all future profits belong to him, but if he pays the royalties before realizing the profits, the licensee People are under great financial pressure. In addition, since patent implementation has certain risks, if certain benefits cannot be produced, the licensee will suffer a large investment loss, but the patentee has already obtained the royalties and no longer shares the risks with the patentee, and may no longer care about the licensee. Xu*fang’s production and operation. Therefore, one-time settlement is disadvantageous to the licensee and should not be adopted under normal circumstances.
2. Commission payment means that the patentee withdraws royalties in a certain proportion from the licensee's income after implementing the patent.
① For the patentee, after licensing others to implement, they cannot immediately receive royalties, and past investments and expenses cannot be recovered immediately. The realization of its benefits depends on the implementation of the licensee, so it is also unstable, and the income from the patent right depends on the production performance of the licensee. This requires the patentee to inspect and supervise its accounting accounts, which also increases the difficulty and instability of the patentee's ability to obtain royalties, and increases the workload of the patentee. Therefore, this method of payment is not suitable for the patentee to adopt.
② It is very beneficial to the licensee. Not only does it not have to invest larger funds before implementation, it reduces its financial burden, but also encourages the patentee to Care about the production and operation of the company and provide guidance and assistance in all aspects of technology and sales. Some companies can also reduce the calculation base for calculating commission fees through accounting processing (of course this is illegal).
3. The entry fee plus commission is the best way to coordinate the interests of both parties in the contract and is the most common practice in patent implementation licensing contracts. The entry fee is part of the royalties paid by the licensee to the patentee when the contract takes effect. It generally includes all the expenses paid by the patentee to obtain the patent right and maintain the validity of the patent right, the patentee's appropriate remuneration and profits, so that the patent right After licensing others to exploit a patent, a person can have a stable income regardless of the implementation situation, so as to ensure his interests without making it unbearable for the licensor. Commission is another part of the royalties that the patentee withdraws in accordance with the proportion agreed in the contract.
If you have other questions, you can consult the lawyers at our Legal Savior Network.
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