COMMODITY ROYALTY RATE APPROACH This approach is easiest to apply when one gets lucky enough to have the technology and/or product under consideration already being licensed or sold to others at known rates. Utilizing such comparable royalty rates is a standard practice in the industry. Using such royalty rates is typical for a franchise licensing program. .
PROXY ROYALTY RATE APPROACH Exact royalty rates are very difficult to get because patent technologies are unique. To solve this problem comparable royalty rates for similar technologies and products that are known to professional societies and commercial providers are accessed. Royalty rate information is typically redacted in these databases so the individuals valuing the patent have to make sure that the royalty rates used are indeed for similar products and uses. This practice is typical and a standard practice in the pharmaceutical industry..