It’s a sad fact: TTOs are letting millions in royalty revenue slip away simply because they don’t perform audits!
While it’s true that good partnerships are built on trust, it’s equally true that neglecting to establish effective controls and monitoring systems is tantamount to inviting licensees to make their own royalty calculations — and you can bet their interpretation will not be impartial. Think your licensees are different? Study after study point to an incredible percentage — 80% — of post-license under-reporting, and 50% of that involves significant under-statement of revenue — at least 10% below what the license agreement calls for. You do the math — if you could recover 10% in underpayments for each $1 million in reported royalties, would an audit process be worth your time and effort? For a TTO with a $10 million annual royalty stream, that’s an extra million.
Under-reporting may be due to honest mistakes, vague revenue and cost sharing definitions, differences in interpretation, sublicense issues, and dozens of other possibilities given the complexity of most agreements. But one this is clear: It’s up to you to make sure licensees are keeping up their end of the bargain.
Here’s your chance to get the practical know-how you need to begin an audit program, bolster your existing efforts, and recoup tens of thousands — even millions — of dollars your university is rightfully due. Listen to this audioconference recording that offers what may well be the biggest ROI of any TTO initiative:
Royalty Audits: Are You Getting What You Bargained For?
Enroll in this revealing session and you’ll walk away with dozens of how-to strategies for identifying licensees ripe for an audit. You’ll also gain a deeper understanding of the most common and hard-to-spot areas where under-reporting occurs, how the audit process works, and how to proceed once you’ve received the results and identified discrepancies. Spend just $197 and 90 minutes of your time, and reap huge returns in the form of tighter post-license management and full payment of the royalties you worked so hard to negotiate.
Join Technology Transfer Tactics‘ Distance Learning Division and royalty audit expert Dan Burns of Daniel Burns Associates and you’ll learn:
- Which license agreements deserve to be audited and why
- Best practices for spotting red flags and evaluating royalty reports
- Common warning signs for royalty under-reporting — and some not-so-common ones
- Proven techniques for performing self-audits and drafting licensee questionnaires
- The TTO’s role in supporting the royalty auditor
- Typical engagement fees and timelines
- How to successfully work through confidentiality issues
- How to use the audit report as a road map to resolution, and as evidence
- Plus: Tips on avoiding problems before they start: defining audit rights, licensed products, net sales, sublicensing and other issues in the license agreement
Daniel Burns leads multi-disciplinary teams in projects involving economic, accounting and financial issues in valuation, dispute resolution, and forensic investigations. He has extensive experience in many industries, including pharmaceuticals, medical devices, biotechnology, semiconductors, semiconductor capital equipment, communications, software, energy, and the internet. His clients include universities, leading corporations, law firms, and U.S. government laboratories. Mr. Burns has performed technology and enterprise valuations in the context of M&A, financing arrangements, license agreements, and liquidations. He has reviewed intellectual property (IP) portfolios to generate additional cash flows from underutilized IP and has participated in many significant IP litigation matters as well as compliance investigations of technology license, publishing, plant license, and mineral lease agreements, and regularly consults with clients regarding the structure and strategic goals of their licensing programs. Mr. Burns was formerly a partner in an international consulting firm dedicated to assisting clients with complex economic, accounting, and financial needs. Previously, he held the title of Director in the San Francisco Intellectual Asset Management practice of a “Big 5” accounting and consulting firm. Daniel regularly speaks to various leadership forums on IP matters and has appeared on numerous occasions as an expert witness at trial, arbitration, and in deposition.