CASE STUDY
Challenging estimation of a patent royalty
Client: Leader in the packaging business
Issue: Royalty estimation needed to reflect the changes in the patents covered, ruling out a simple external CUP method.
Why it worked
The economic analysis did not rely on an external CUP method, but on a tailor-made approach combining TP qube's economic expertise and data engineering.
Both approaches were conclusive and grounded in the company's figures. The framework enables differentiated rates between products, and the methodologies clearly highlight the benefit derived from the patent and its impact on the company's financials.
The analysis, results, and supporting report were convincing, leading to approval in the tax audit.
Inputs
Exchange with management to understand the business specificities
Exchange with R&D professionals to analyse the benefit of the patented technology
ERP data extraction and analysis to measure the technology's impact on financials
Two Approaches
1
Analysis of the increased turnover compared to a counterfactual
2
Allocation of margin relying on Shapley values across the key success factors
Outputs
Valuation of the patent royalty rate deeply rooted in the business, technology and company financials
Tax Audit Approved