Protecting Your Royalty Payments Using Audit Clauses in Licence Agreements

Abstract

How do licensors know if they are receiving all the royalties they are entitled to? How do licensors reduce the likelihood of disputes with the licensees over what is covered by a royalty? Licensors need to spend extra time and effort thinking about what happens in a licensing agreement after the deal has been signed, particularly in relation to reporting. This article provides several ideas on how to diminish the prospect of royalty disputes and provides suggested clauses for inclusion in agreements.