Invotex Group Intellectual Property IP Royalty Audits


Royalty Audits & Compliance Services home Representative Engagements Clients Key Contacts: Debora R. Stewart Managing Director Judy A. Byrd Director Karen H. Wang Director	Royalty Audits

	Invotex’s experience with auditing royalty streams spans many industries and types of licensee/licensor relationships, including competitor to competitor, inventor to commercial entity and university to commercial entity. Each license is thoroughly analyzed to obtain a complete understanding of the reporting requirements. It is then compared to royalty reports and the licensee’s royalty reporting systems and procedures for completeness and accuracy. Our audits include an historical analysis, and we also explore the critical conditions that must be addressed to ensure ongoing licensee compliance. Through our experience in reviewing hundreds of license agreements and auditing the related royalty streams, Invotex has consistently uncovered instances of inaccurate reporting that have resulted in the underpayment of millions of dollars of royalty revenue to licensors. We are experts in ascertaining the reporting requirements of a licensee and identifying obstacles to accurate reporting, including new products, revised product codes, incorrect pricing and complex sublicense agreements, to name a few. While such reporting errors typically are not intended to create misleading reports, Invotex is prepared to assist clients if instances of fraud are detected. Invotex provides its Royalty Audit services under a variety of fee structures, including fixed fee, success (contingent) fee, hourly consulting fee or a combination thereof, depending on the project and the client’s needs. Historically Consistent Offenders Several types of reporting errors appear regularly in our audit results. The majority each account for only a small amount of money, but three types of errors account for more than 80% of unreported or underreported royalties. The chart below illustrates variances between royalties originally reported and our examination results. This chart represents the underreporting magnitude based on total royalty dollars uncovered through audits. Findings by Total $ Misreported