Legal Definitions - established royalty

Established royalty refers to a payment made to an author or inventor for each copy of their work or article sold under a copyright or patent. It is a royalty that is set at an agreed-on price.

For example, if an author writes a book and agrees to receive $1 for every copy sold, that is an established royalty. In the absence of an established royalty, a court will determine a remedy for infringementbased on what a reasonable royalty would have been.

A reasonable royalty is a royalty that a licensee would be willing to pay the holder of the thing's intellectual-property rights while still making a reasonable profit from its use. The reasonable-royalty standard often serves as the measure of damages in a claim of patent, copyright, or trademark infringement, or for misappropriation of trade secrets.

For instance, if a company uses a patented technology without permission, the patent holder can sue for damages. The court will then determine what a reasonable royalty would have been for the use of that technology and award damages accordingly.

In summary, established royalty is a set payment for the use of intellectual property, while reasonable royalty is a payment that would be considered fair and reasonable in the absence of an established royalty.