Legal Question in Business Law in California

Royalties for Engineered Tooling
I am a home based tool design engineer and consultant. Most of my business comes from creating a solution to a clients tooling problem, then manufacturing the tooling and billing the customer for time/material.

I have a proposition from a tooling wholesaler and manufacturer (we compete in some, but not many markets) to do some design work for them, and they will provide me with royalties on the tooling of my design that they will have manufactured off-shore, marketed and sell.

I cannot find a legal type form to draft this up on... Any advise?

Asked on 5/20/02, 9:55 pm

2 Answers from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

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Re: Royalties for Engineered Tooling

There are a few model royalty agreements floating around in the business law world, but any of them would require a degree of customization. As a starting point you might want to visit your county law library and ask the librarian for books of specimen or model business contracts. You might find something under patents, trade secrets or know-how headings. If the amount of prospective revenue or the value of the information you will be imparting is significant you should get professional assistance from a lawyer with intellectual property contract-drafting experience. Remember in addition to the possibility of disputes over how much you are owed there is the possibility of liability for design errors.

Answered on 5/20/02, 10:15 pm

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