Intellectual Property (IP) rights, in the form of patents, trademarks, and copyrights, are often an organization’s most valuable asset. For many, enforcing their IP rights is essential to maintaining the value of their businesses. However, every year, millions of dollars in royalty revenue go uncollected because companies, educational and research institutions, inventors, scientists, writers, producers, actors, and agents fail to be proactive in managing their license agreements. Whether you are a licensee or licensor, a once straight-forward process is now complicated by increasingly complex arrangements compounded with the lack of resources, employee turnover and high volumes of data from multiple sources. Many are left wondering whether they are actually collecting or paying what is owed.
At Withum, our Intellectual Property and Royalty Audit Service specialists can assist you to fully realize the value of your IP assets. We can guide you through the intricate reporting process and help create a comprehensive plan to determine the amount of any unpaid royalties, reclaim any lost fees and prevent future losses. Our professionals have extensive experience working with clients for over 40 years in a variety of industries, and our clients have benefited greatly from our knowledge and resources.
Licensors lose out and receive underpayments from their royalties due to the licensees’ poor internal controls, misunderstanding of licensing agreements or fraudulent mismanagement and miscalculations. In order to protect yourself, it is important to work with an accounting firm who has the know-how and extensive experience working with multiple licensors and their intellectual property attorneys.
At Withum, our team is skilled in the IP auditing process and will take the time to critically review all aspects of your agreement. Through highly sophisticated data mining tools, we can query the items or process that are relevant to the contract and the amount of data that can be queried is virtually limitless. This enables us to detect and address issues and expose underpayment of royalties, unauthorized sub-licenses, errors in the calculation and fraud.
The most common issue facing licensees is a failure to review their contract and vendor programs. Most contractual obligations of licensees are reported and policed in-house, leading to questions in ownership, contracts without proper audit clauses, a failure to detect overcharges and revenue leaks and misconceptions about the program.
Withum has gathered a group of highly trained professionals who understand the nuances of complex royalty agreements. These professionals have a unique blend of technical, forensic accounting, investigative and licensing skills to mitigate ricks and protect your rights. Using data mining tools and industry knowledge, our team can help you deal with multiple licensors and their attorneys on equal terms. Our people speak their language and can help implement a solid contract risk and compliance program that will foster open communications among all parties, define goals and lay the foundation for future compliance. Withum will:
Frequently, the underpayment of revenue, can be significant and often the recovery far exceeds the fee for the services by uncovering both intentional and unintentional underreported and unreported revenue streams, aggressive cost assumptions, misunderstanding of the terms of the agreement, human error in the calculation and poor internal reporting and controls by the licensee. Our team will aide in the establishing of sound reporting and business processes to ensure that prospective royalty income is maximized.