A benchmarking study is a detailed comparison of publicly available licence agreements and royalty rates in order to determine the arm’s length (market) royalty rate range for specific products or services. Following the search criteria provided by the client, we conduct a CUP analysis to determine an arm’s length (market) range of royalty rates for the intellectual property licensing in this sector.

The search is performed in the RoyaltyRange proprietary database. Each report is supplemented with original non-redacted agreements, as well as filings and other types of documents from which the data is gathered.

The search process consists of the following stages, which are documented in the benchmarking study report in detail:

• Quantitative screening – The search process yields a list of potentially comparable reports.
• Qualitative screening – The sample is manually reviewed and the final set of reports is selected.
• Financial analysis – The range of royalty rates for third-party licensing agreements, an interquartile arm’s length (market) royalty rate range, and a median are calculated.

Our benchmarking study includes:

• A benchmarking study report presentation containing the description of the search, steps of the analysis and calculation of an arm’s length royalty rate range.
• An appendix with a list of all primary reports used during the quantitative screening and a list of all final reports used during the qualitative screening.
• PDF sources of the original agreements used in the calculation of the royalty rate range.

The term for the preparation of one benchmarking study is about four working days after the payment.

For our clients who have a constant need for benchmarking studies for transactions involving intellectual property based on the CUP method, we offer special discounts for acquiring sets of several benchmarking studies.

The presentation of the results can be tailored to the specific needs and formats of our clients and can follow their standard practice.

Interested in our services? Click here for more information and to place your request.