Medical Device Royalty Agreement

As far as the determination of royalties is concerned, it happens that in many sectors, from medical equipment to electronics to foodstuffs, negotiations will often result in a fee of 5-6% of net turnover. For example, a recent study concluded that the “average royalty across all sectors was 4.5 per cent.” 6 (this ranged from a low of 2.8% in the food industry to a peak of 8% in media and entertainment.) 7 Therefore, when in doubt, one can often think that a royalty in this area will be appropriate.8 Many medical devices become technically more complex, require many different technologies, often protected by hundreds of patents, and, as a result, many devices have to go through the complex approval processes of regulatory authorities.

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