At a Glance: RoyaltyStat

Basics

Content Category: Intellectual Property

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RoyaltyStat is a first-to-market company offering a dataset of normalized royalty rates extracted from license agreements filed as exhibits with the U.S. Securities & Exchange Commission (SEC) and other sources. This database contains over 15,500 unique records of curated license agreements, with approximately 100 new records added per month.

With over 20 years of experience, RoyaltyStat is a comprehensive, up-to-date, and reliable source for royalty rates in the market, covering 40+ industries, 100+ countries, and including a variety of intellectual property types, such as copyrights, know-hows, patents, software, technology, trademarks and trade names.

The RoyaltyStat database of royalty rates contains a large corpus of curated license agreements available to the public from which they provide non-traditional SEC monetary and related value-added information, such as the name of the licensor and licensee, applicable royalty rate(s), exclusive or non-exclusive attributes, duration of the license, and a structured field (abstract) describing the intellectual property or mineral rights under license.

Data Overview

Asset Class: Public and Private Companies

Data Frequency: Event-driven; Records are added at the time of a royalty filing

Delivery Frequency: Daily

History: Royalty filings back to 1966

Data Methodology

RoyaltyStat’s main source for license agreements is the U.S. Securities & Exchange Commission (SEC). Since mid-August 1996, they’ve parsed and classified over 16.5 million SEC exhibits, from which over 15,500 unredacted license agreements were identified. While the primary source of royalties provided by RoyaltyStat are exhibits filed with the SEC, the database also includes over 3,800 license agreements obtained from the Freedom of Information Act (FOIA) requests. This FOIA corpus is a key advantage of the dataset as these requests are performed by RoyaltyStat.

To ensure the data can be leveraged in a quantitative fashion, RoyaltyStat extracts and normalizes a variety of key elements from raw royalty information, including exclusivity, territory, royalty rate (i.e., percentage of the licensee’s net sales), and duration (i.e., the number of years in which a license is effective). In addition to these key fields, RoyaltyStat also provides valuable flags to identify if a patent is involved in the agreement or if the agreement is between related parties. For those that have been identified to have patent or patents associated, the patent number is also included.

Use Cases

Licensing; Valuing Technologies and Intangible Assets

Leverage RoyaltyStat to value a company’s intangible assets such as copyrights, patents, trademarks, software, and technology.

• RoyaltyStat provides royalty rates, the primary source for valuing intangible assets, normalized to a percentage of the licensee’s net sales. Technical research on using royalty rates for valuing these assets can be found here.
• With territory, industry, duration, patents, exclusivity, and agreement details, RoyaltyStat makes it easy to discern the relevance of agreements in the feed—and use that to create comparable agreements for a target company or asset. The royalty rates can then be used as a proxy to value the target company's intangible assets. 

Determining Reasonable or Arm's-Length Royalty Rates to Support the Licensing of Intellectual Property

• Transfer pricing, or the rules and methods associated with pricing transactions within and between related companies, is often associated with the transfer of intangible assets such as patents and trademarks. According to the arms-length standard, the price of these assets must align with the price that would be paid on the open market.
• Leverage RoyaltyStat's normalized royalty rates to support the arms-length standard and use its flags to easily identify when there is an agreement between related parties. 

The details provided above are as of February 2020.

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