Managing Licensing Compliance

About the Course:

According to some industry veterans, 99% of licensees underreport royalties. In some industries, more than 90% of licensees are underreporting royalties by more than 20%. Further, in excess of 80% of licensees commit non-monetary contract violations. This session presents real-world examples of royalty auditing tales such as:

• How failing to base royalties on units produced can present significant challenges for licensors when warehouses mysteriously burn down the night before a royalty audit is to be conducted.
• How failing to delineate what constitutes acceptable advertising expenditures can enable licensees to classify nocturnal entertainment as a legitimate advertising expense as required by the licensing agreement.
• The fine line that royalty auditors must walk when conducting royalty audits in Asia: One the one hand, royalty auditors must socialize–after-hours and with alcohol–with licensees to gain access to the books and records. On the other hand, they cannot allow this socializing to get in the way of performing their duties on behalf of the client.