In the Wake of Giant Nortel and Google-Motorola Deals, Licensing Executives Society (U.S.A. and Canada) to Release New Data on High Tech Industry Deal Terms and Royalty Rates
In the Wake of Giant Nortel and Google-Motorola Deals, Licensing Executives Society (U.S.A. and Canada) to Release New Data on High Tech Industry Deal Terms and Royalty Rates
SAN DIEGO--(BUSINESS WIRE)--Recent bombshell deals like the Nortel auction and Google’s purchase of Motorola Mobility have shined a white-hot spotlight on the power of intellectual property (IP) transactions. But specifics on high technology deals have not been available -- until now. The Licensing Executives Society (U.S.A. & Canada), Inc will release preliminary results from its inaugural High Technology Sector Royalty Rates and Deal Terms Survey during a special mini-plenary session at its Annual Meeting, October 16-18 in San Diego.
“This is the first survey of its kind in the high tech space”
For years, in this industry that relies on successful collaborations, alliances and deal-making, there have been major gaps in deal data to help inform, teach and guide professionals in future negotiations. LES (USA & Canada) has addressed this gap with a broad-reaching ‘Royalty Rate and Deal Terms Survey’ initiative that is gathering deal term data by industry sector. To date the society has completed similar surveys looking at deal term and royalty rate data in the life sciences/health care sector and the chemicals/energy/environmental and materials sector.
“This is the first survey of its kind in the high tech space,” said Allen Vaughn, LES (USA & Canada) High Technology Sector Chair. “Our data will provide members with highly valuable specifics on negotiation trends and benchmarks for deal-making across the industry.”
The survey data was gathered from academic institutions, operating companies, lawyers, and other licensing organizations in the high technology industry and looked at fixed percentage and per unit royalties, tiered royalties, financial and non- financial components in each deal. A detailed analysis of the preliminary survey findings will be discussed during a mini-plenary session at the upcoming LES Annual Meeting where Survey Committee Co-Chairs will share key findings and highlights from the survey, including:
- The Survey received responses from 52 companies for the period from 2008 through 2011, with a total of 228 complete deals being submitted. The following major high technology fields were reported: aerospace, software, clean technology, communication, semiconductor, consumer products and electronics, computer, etc., 76% of which involved patents.
- 86% of respondents were licensors, with more than half of them entering the deal for monetary gain in addition to a strategic relationship.
- Deals with flat percentage rate royalties were weighted more towards licensees with annual sales revenue <$25M.
- Deals containing lump sum payments were heavily weighted towards licensees with annual sales revenue >$500M.
- Almost an equal split between exclusive and non-exclusive deals.
- Average sales-based flat percentage rate was 6%, but, the average rate within specific industries varied widely. This topic will be reviewed in-depth at the October LES meeting.
The aggregate survey data was analyzed by the LES Survey Committee, which also provided industry context. The survey itself was conducted by the independent research firm of Veris Consulting to ensure confidentiality of the participants.
A comprehensive Survey Report with all of the findings and related analysis will be made available in December exclusively to LES members. In addition, expanded executive summaries of previously released Royalty Rate and Deal Terms surveys will be made available exclusively to LES 2011 Annual Meeting attendees.
For more information on the Royalty Rate and Deal Terms surveys, please contact LES (USA & Canada) at info@les.org or 703.836.3106. Join LES before September 16th and receive a $25 American Express gift card in addition to the $300 member savings on Annual Meeting registration fees. To take advantage of this special offer, go to www.lesusacanada.org/join. For more info and to register for the meeting, go to www.les2011.org.