Royalties

Royalties are usually paid on net sales. They may be based on a percentage of sales, a per unit cost, an annual fee or as a one-time paid-up license. While royalities will depend on many factors, here are a few examples:

Toys:	5% - 10%
Software:	15% - 20%
Tools:	3% - 7%
Automotive:	2% - 5%
Baby goods:	5% - 7%
Michael Jordan:	17.5%
Strong patent protection:	3% or more
weak patent protection:	0%
invention promotion companies:	0%

If there is any mean number for a royalty rate it would be about 3%. However, keep in mind that most highly profitable inventions have very low royalty rates. That's what allows it to be competitive in industry and readily received by licensees.

Last, inentions with weak patent protection will not be licensed at all. Also, since we know of no patents licensed by invention promotion companies that produced credible results, they are listed at 0%.