Legal Question in Intellectual Property in Texas

Allocation of Royalties

Once a product is developed using other patenable products, how does one go about determining and allocating royalties on that particular product? That is, do I pay everyone inovolved equal royalty amounts for their contribution, or is one part, perhaps, more significant than the others. I am needing information on how this is done, preferrably documented information, and any cases that might touch on the subject as well. If any one knows of a court case in which royalties were allocaated based on the overall development of a product, that would be great!


Asked on 6/02/99, 12:04 pm

1 Answer from Attorneys
Bruce Burdick Burdick Law Firm

Re: Allocation of Royalties

Royalties are not allocated in that way. Each owner of each patent which you infringe can stop you entirely. You have to work out something with each one, probably independently of each other unless they are commonly owned, and then allocation is normally irrelevant. You can't just produce your product and expect to just pay a royalty. The patent owner may well decide not to license you and instead get an injunction and shut you down entirely. What you ought to be doing is designing around the patents and getting your own patent so that you, not they, are in control of your destiny. Get an experienced patent attorney to help you in this effort, if you can afford it, as he or she will know best what it will take to get around the claimns of the patents and can give you the opinions that may avoid findings of willful infringement and can help you know what it will take to get your own patent.

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Answered on 6/03/99, 8:50 pm


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