Royalty Audit & Contract Compliance

Why Are Royalty Audit & Contract Compliance Services Important?

When third parties determine how much to pay pursuant to an agreement, regulation or otherwise, there are numerous factors that can cause underpayments. Many reporting errors stem from benign reasons, while some do not. Reporting errors are commonly caused by improper contractual interpretations, poor accounting systems and controls, inadequate resources, personnel turnover, common mistakes, rapid growth and acquisitions. Often royalty systems do not get updated to reflect contractual amendments and sometimes they are not sophisticated enough to deal with a variety of contractual terms. Having to administer numerous complex royalty and license agreements with unique terms increases the likelihood that reporting errors will occur.

Reporting errors can also result from aggressive accounting, data manipulation, failure to adhere to the terms of the agreement and financial pressures. Furthermore, improper exploitation by licensees can have a detrimental impact on the value and integrity of your intellectual properties. Unexploited and underexploited rights reduce royalty revenue by failing to fully capitalize on opportunities, resulting in lost profits and a devaluation of your IP.

Regardless of the reason(s) for reporting errors, you are entitled to be paid in accordance with the governing agreement, license, statute or regulation. The most effective approach to determine if you have been paid properly and to help protect your intellectual properties is by conducting a royalty audit or contract compliance examination.

Why Use Prager Metis?

Prager Metis’ royalty audit and contract compliance audit services identify and quantify reporting issues, recover underpaid royalties and fees, identify untapped opportunities, and increase royalties prospectively resulting in increased profits and value of your IP. This process also provides essential information on the activities of your licensee or partner enabling clients to determine:

  • Whether they have appropriate resources, systems and controls to properly report to you.
  • The manner in which they report to you and whether its correct.
  • If they are exploiting all of the rights granted to them.
  • Whether they are protecting your properties.

This information will help you make business decisions and determine whether you have a trusted partner.

Our royalty compliance services are also designed to present the licensor’s position regarding how the agreement should be interpreted and fix reporting errors resulting in monetary recoveries and increased payments going forward. Not only does our audit approach take into consideration the importance of the relationship between the parties, it takes into consideration the big picture, as opposed to just focusing on the numbers, enabling us to deliver added value to our clients including enhancing their agreement and royalty statement templates.

Prager Metis has been conducting royalty and contract compliance audits since its origins over 90 years ago. The firm pioneered these services and continues to deliver value to its clients.

Our Reach, Experience and Personnel:

Prager Metis’ Royalty Audit & Contract Compliance Division personnel are located in our New York, Los Angeles, and London offices. Our royalty compliance personnel possess years of experience in this specialized field and are fully dedicated to providing royalty audit and contract compliance services. Additionally, as an independent member of the Geneva Group International, we have access to resources around the world enabling us to service clients globally. We have vast experience and expertise with copyrights, trademarks, brands, patents, and franchises to service a variety clients in numerous industries.

Entertainment Royalty Audits
Trademark & Brand Licensing Audits and Desk Reviews

Patent Licensing Audits
Profit Participation and Joint Venture Audits

Franchisee Compliance Audits
Certifications of Annual Statements of Account

Distribution Audits
IP Valuation

Financial Due Diligence Reviews
Litigation Services and Expert Witness Testimony

Other Royalty Related Consultation & Advisory