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A Journal of University-Industry-Government Innovation and Entrepreneurship

Table 7 Computation of RICV

From: Assessing economic impact of research and innovation originating from public research institutions and universities—case of Singapore PRIs

RICV =   Actual recurrent commercial value from royalty-bearing IP licensesa
   + Actual licensing revenue from end-user licensing agreements (EULAs)b
   + Actual licensing revenue from sale of equity in lieu of upfront payment in spin-offsc
   + Estimated commercial revenue from upfront and one-off licensing deals by licensee from product/services incorporating the licensed IPd
  1. aThis is easily derived from the revenue statement submitted by the licensees as part of the licensing agreements. It is the actual revenue derived from their sales of product/services incorporating the IP(s) licensed
  2. bThis is computed based on the actual licensing revenue from EULAs, which are usually simple licenses such as software or productivity tools for improving process and work efficiency
  3. cTo mitigate the cash flow demands in the initial years for spin-offs, it is typical to take equity in lieu of upfront, and/or even royalty payments. The quality of the spin-off is best reflected by its sales price. The portion allotted in lieu of upfront and/or royalty payments would be taken in as RICV in the year of transaction
  4. dOften, we deal in (a) one-time payments or (b) upfront and royalty-bearing payments. The licensees offering one-time payments avoid paying royalties or licensing for defensive reasons, while the others making upfront and royalty-bearing payments hope to increase their upside as their sales are expected to be robust