Oscar Javier Gutierrez Salcedo, Group 02, 09 april 2024
Mathematical Formulas
Income approach method
This method involves making reasonable assumptions about the amount of revenue the new technology could generate. Then, the proportion of benefits that each party should obtain is calculated and a formula for a licensing agreement is found.
Value Creation
It is important to generate variants or create alternatives to achieve a mutually beneficial agreement. A possible variant is to reduce the royalty rate as business volume increases or over time. This could be calculated on an annual or cumulative basis. The objective pursued through this approach is to incentivize the licensee to increase production and, consequently, the royalties payable to the licensor.
Companies can create value through innovation by developing technologies that generate additional revenue or by improving efficiency to reduce costs. A successful technology licensing agreement for the licensee implies an increase in benefits derived from the use of a technology. technology protected by intellectual property rights. This indicates that innovation can create value by allowing companies to generate more revenue and profits.