Licensures depend on proactively protecting intellectual property and the royalty streams it generates. Organizations usually agree to licensing, distribution, tolling, manufacturing, or profit-sharing terms. These financial terms are based on numbers controlled by the party making the payments.
These complex agreements normally include the right to audit. This clause allows the recipient of payment to examine the accounting records. This audit can help expose any possible underpayments.
CIAPI’s experienced Private Investigators can help clients with such royalty audits to help find any possible issues and determine underpayments. Once that is determined, we can assist in obtaining the payments. This service not only helps with payments, but can also protect the brand, reputation, intellectual property, and relationships. This service is not limited to one type of business, but various industries within the U.S and even internationally.
Underpayments can happen for a variety of reasons, including but not limited to:
- Processes and control
- Ineffective systems
- Errors
- Contractual misinterpretations
- Personnel turnover
- Rapid growth
- Aggressive account practices
- Fraudulent account practices
A royalty compliance audit will focus first on tangible outcomes, such as recovering underpayments as well as reestablish the contact’s guidelines. We then support the relationship between licensure and licensee and establish the shared interests in order to keep it profitable for both parties. Next, we will provide market insight that will allow our client to gain business while also protecting their intellectual property.
The benefits to obtaining a royalty compliance audit include, but are not limited to:
- Increasing royalties prospectively
- Identifying underreported revenue
- Increasing shareholder value through enhanced compliance
- Identifying and resolving issues before they become material
- Achieving non-monetary goals, such as brand protection and business intelligence
Disclaimer: Every effort has been made to ensure the accuracy of this publication at the time it was written. It is not intended to provide legal advice or suggest a guaranteed outcome. Individual situations will differ and the law may have changed since publication. Readers considering legal action should consult with an attorney to understand current laws and how they may affect a case.