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Contract & Commercial Law vocabulary · Intellectual Property

Royalty

Meaning in contract & commercial law, with examples

/ˈrɔɪəlti/nounCommon term

In contract & commercial law, royalty means: A payment made to the owner of a right, such as a patent, brand, book or song, usually calculated as a percentage of sales or a fee per unit sold.

In Turkish: lisans bedeli, telif ücreti, royalti

How it is used

Usually plural: 'royalties'. License and franchise agreements set the royalty rate, the reporting period and audit rights. A 'minimum royalty' guarantees the owner a fixed income even if sales are low.

Example sentences

  1. The licensee pays a royalty of 4% on net sales.

  2. Royalties are reported and paid every quarter.

Common collocations

  • royalty rate
  • pay royalties
  • minimum royalty
  • royalty-free
  • royalty report
  • licensePermission from the owner of a right, such as a patent, trademark or software, allowing someone else to use it under agreed conditions, often in return for payment.
  • franchiseA business arrangement in which the owner of a brand and business system lets others run outlets using its name, methods and support in return for fees.
  • patentAn exclusive right, granted by the state for a limited period, to make, use and sell an invention in exchange for publicly disclosing how it works.
  • intellectual propertyLegal rights over creations of the mind, such as inventions, brands, designs, software and written works; the main types are patents, trademarks, copyright and designs.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Intellectual Property

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This page explains English vocabulary for learners. It is not legal advice.