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Q: licensing deals within the auto industry ( Answered 5 out of 5 stars,   1 Comment )
Subject: licensing deals within the auto industry
Category: Miscellaneous
Asked by: bbasch-ga
List Price: $200.00
Posted: 28 Mar 2005 14:57 PST
Expires: 27 Apr 2005 15:57 PDT
Question ID: 501603
i have just recieved a patent for an innovative car alarm. i am going
to be negotiating with car companies for a licensing deal and i would
like to know of 2-3 people who have negotiated successfully with
automobile companies and how much they recieved as a royalty. this way
i have the information as a tool for leverage.
Subject: Re: licensing deals within the auto industry
Answered By: jbf777-ga on 06 Apr 2005 15:54 PDT
Rated:5 out of 5 stars
Hello -

Thank you for your question.

If you need any additional information, please don't hesitate to ask.

Four real-world royalty examples specifically related to the
automotive industry and alarm/sensing technology are listed below,
courtesy of the RoyaltySource Intellectual Property Database, a
service of AUS Consultants.  Dozens more are available for a fee
through this firm: see; contact Dave
Weiler at 856.234.1199 ext. 203.  The firm also offers a benchmarking
service which determines the most applicable royalty amount for your
project.  Also, accoring to AUS, the national average royalty for
licenses is about 4.6%.

Licensee:                      Sense Technologies Inc
Licensee Business:             Metal mining
Licensor:                      (undisclosed)
Licensor Business:             --
Royalty Rate, % (low range):   6.00
Royalty Rate, % (high range):  6.00
Upfront Fee:                   $575,000

Licensed Property:
By an Assignment Agreement dated April 30, 1992 and amendments thereto
dated May 27, 1992, July 14, 1992, April 5, 1993, August 13, 1993,
March 10, 1997, May 29, 1997 and February 25, 1999 the company has
been assigned the right, title, interest and obligations in a Licence
Agreement dated January 16, 1992 to manufacture, market and distribute
a microwave radar collision avoidance device for motor vehicles from
an undisclosed Licensor.

The Guardian Alert Backup System that was acquired through the License
Agreement is a back-up obstacle detection/collision warning system. 
This system is capable of warning a driver in the event that there is
an obstacle in a predefined zone directly behind a rearwardly moving
vehicle that could present an accident threatening circumstance.  
Drivers of motor vehicles have always had a certain degree of
difficulty backing up due to their inability to see all obstacles
while operating their vehicles in reverse.

The Guardian Alert Backup System is comprised of a transceiver, an
antenna, an intermediate frequency amplifier, and an audio-visual
alarm.  The components are mounted in an environmentally sealed, high
impact, plastic housing.  The unit is adapted for mounting at the
rearward end of the vehicle in order to direct its wave output
rearwardly.  The internal working components of the Guardian Alert
Backup System are smaller than a pack of cigarettes.  The proposed
unit does not materially alter the exterior design of the vehicle. 
The circuit of the device is adapted for electrical connection to the
back-up light circuit of a vehicle for activation only when the
vehicle transmission is engaged in reverse gear.

Compensation Detail:	
Upfront Fee: The payment of $575,000 for a licensing fee
Royalty: Various royalty payments to the licensors: a) US$6.50 per
unit on the first one million units sold; b) Thereafter, the greater
of US$4.00 per unit sold or 6% of the wholesale selling price on units
sold; c) 50% of any fees paid to the company in consideration for
tooling, redesign, technical or aesthetic development or, should the
licensors receive a similar fee, the licensors will pay 50% to the


Licensee:                     Control Devices Inc
Licensee Business:            Electronic components & accessories
Licensor:                     Dennis J. Hegyi
Licensor Business:            Individual
Royalty Rate, % (low range):  1.00
Royalty Rate, % (high range): 5.00
Upfront Fee:                  $225,000

Licensed Property:
This License Agreement was entered into on April 3, 1995.  The
Licensor granted a worldwide exclusive license under the Licensed
Patents and/or Know-How to make, use, sell or otherwise dispose of
Royalty Product(s).  Licensed Patents refer to a system consisting of,
without limitation, a light detector and a diffuser which has an
overall spectral response like that of the human eye that may be used
to control the headlights of vehicles, e.g., a type of twilight
sensor, and has developed designs and related know-how to sense
ambient light levels.  In September 1996, the Company commenced
shipping its twilight sensor to GM.  The Company's twilight sensor
signals the vehicle's headlight system to switch from low intensity to
full intensity in twilight conditions and was developed for use in
Daytime Running Lamp ("DRL") program. Invention means the method and
apparatus which (i) was discovered by an individual, (ii) pertains to
a diffuser with a characteristic spectral response which controls the
spectrum of radiation that is incident on a photodetector, and (iii)
the electrical signal from the photodetector is characteristic of the
response of the human eye to light. Invention further includes any
methods, processes, electrical circuits, devices, apparatuses,
designs, equipment, and/or structures for such a system or for use in
connection therewith.

Compensation Detail:	
Upfront Fee: CONTROL DEVICES shall pay HEGYI two hundred and
twenty-five thousand dollars ($225,000) within fifteen (15) business
days of the reaching of any agreement

Royalty: CONTROL DEVICES agrees to pay HEGYI royalties on Sales by
CONTROL DEVICES, Affiliates and sublicensees anywhere in the world at
a rate equal to five percent (5%) of the Net Selling Price of Royalty
Products covered by one or more Valid Claims; and as to Royalty
Products not covered by one or more Valid Claims, CONTROL DEVICES
agrees to pay HEGYI royalties on Sales by CONTROL DEVICES, Affiliates,
and sublicensees in accordance with the following schedule, except as
described in Paragraph (b) below: (i) Five percent (5%) of the Net
Selling Price for the three years beginning January 1, following the
first sale of Royalty Products in commercial quantities; (ii) Three
percent (3%) of the Net Selling Price for next three years beginning
January 1; and (iii)	One percent (1%) of the Net Selling Price for the
final three years beginning January 1, after which CONTROL DEVICES
shall have a paid-up royalty-free license on such Royalty Products not
covered by one or more Valid Claims.  Such paid-up license shall
become non-exclusive if and at such time as any license to CONTROL
DEVICES under Licensed Patents is terminated.  CONTROL DEVICES agrees
to pay HEGYI an annual minimum royalty.

Form S-1 CONTROL DEVICES INC: EXHIBIT 10.12, 8/1/1996

Licensee:                      Detektor Tracking Systems Ltd
Licensee Business:             --
Licensor:                      Lo-Jack Corp
Licensor Business:             Communications equipment, nec
Royalty Rate, % (low range):   3.00
Royalty Rate, % (high range):  5.00
Upfront Fee:                   $1,250,000

Licensed Property:
The Company granted an exclusive license rights as defined below
relating to the manufacture, assembly, and commercial operation of a
system for the recovery of stolen vehicles; exclusive license to use
the Trademarks in the Territory - October 1, 1995.

Compensation Detail:	
Upfront Fee: The Licensee shall pay to the Licensor a royalty in the
sum of $1,250,000 (United States Dollars ("USDs")
Royalty: The Licensee shall in respect of each Quarter during the rest
of the Royalty Period pay to the Licensor a Royalty on any Product it
manufactures of a sum equal to that percentage shown in the first
column of the Gross Sales Price actually invoiced by the Licensee
during each such Quarter in respect to each sale of the aggregate
numbers of Royalty Products manufactured by the Licensee shown in the
second column below:

    Column l         Column 2
    ????????????     ????????????
    5 percent        1 to 50,000 per annum;
    4 percent        50,001 to 75,000 per annum;
    3 percent        75,00l and over per annum


Licensee:                      Raytheon Co
Licensee Business:             Search and navigation equipment
Licensor:                      Reba Mansell (Don Mansell)
Licensor Business:             Individual
Royalty Rate, % (low range):   4.00
Royalty Rate, % (high range):  4.00

Licensed Property:
November 2003:  A court decision will force a U.S. corporation to make
good on it's contract to pay royalties on licensed technology related
to a motor vehicle tracking system.  The licensee will have to pay the
owed royalties for the last 10 years relative to an invention that
uses global-positioning satellite technology to track automobiles.  
The orginial inventor died in 1993 and his widow took the corporation
to court to force them to make good on the contract.  This royatly
case involves a string of companies that owned the technology created
by Don Mansell, who died in 1993.  Six months later, Mrs. Mansell sold
the family business, Auto-Trac Inc., to E-Systems Inc.  In 1995, a
large corporation bought E-Systems, and in 1999 it sold a business
unit including Auto-Trac to Virginia-based Orbital Sciences Corp.

Compensation Detail:	
Royalty: On Thursday, a Dallas federal district court jury awarded
Reba Mansell $ 6.8 million, agreeing that Raytheon was obligated to
pay her 4 percent royalties over the last 10 years for the invention,
which used global positioning satellite technology.

The Dallas Morning News SECTION: BUSINESS; Pg. 3D, 11/1/2003

Search strategy:
  Licensing Executives Society

Google Answers
bbasch-ga rated this answer:5 out of 5 stars and gave an additional tip of: $50.00
thank you very much for giving me even more info that i requested.and
showing me how to get even more examples if i like. i couldnt be
happier with the service and job that you did.i am sure to use this
wonderful tool again.
thank you,
Robert Baschnagel

Subject: Re: licensing deals within the auto industry
From: jbf777-ga on 06 Apr 2005 17:49 PDT
Thank you for the kind words, rating, and tip!  All the best with your project!


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