hi all -
i’m new to the discussion board here, although i’ve been imbibing on core77’s news section everyday for a few years now. so as to fill in a little bit more, i’m actually an architect by training and by practice, so parts of the design world are familiar, parts are not.
reason i’m posting is to see if there is anyone who might have some insight into a situation we’re currently in: four years ago, while working on a project, we stumbled onto (or into) a packaging idea which seemed really strong, as well as completely unconnected with the work at hand. so, we put it aside but over time would come back and work on the ideas, eventually getting a reasonably broad method developed that would improve the sustainablity features for whole classes of product types. we did more research than should be allowed, realized no one had patents on work even close to this, and, thus, we consulted with attorneys, filed utility and design patents over all the key components and features, etc.
in the meantime, we started trying to figure out how to capitalize on this and who to begin approaching all this with. we’ve started out with the biggest we could find and, lo and behold, they were indeed interested. very interested.
my question is this then - we’re just about at the point where we’re going to the final contract (beyond nda’s, development agreements, etc.) and, for all the research we’ve been able to do, we (our team) are having a hard time determining a metric for royalty payments. mostly, this is due to the sheer quantities involved - this company along produces almost 1B of a single packaging type, globally, each year. and we may do 2-5 lines of their packaging over time.
setting a % royalty on gross sales is impossible since they produce the packaging for their own use (for other goods they produce). setting it on a per-unit basis makes some sense, but since each package only costs 8-9C to produce, the amounts would have to be really small (say 1/10th’s of a cent) to make any sense, at least from their perspective. i’m sure they would be thrilled to set a ‘fixed’ licensing agreement of ‘x’ amount per year to produce as much or little as they like, if that ‘x’ is smaller than what any royalty agreement would produce.
anyone have any experience something of this kind? this is completely different metrics from what my day job does, as well as completely different from anything i’m familiar with (furniture, etc. - larger priced pieces, smaller quantity runs). the company is rock solid, blue-chip and, while they’re way too savvy to overpay, they have a very long, deep history of appreciating what design can bring to their equation and, seemingly from everyone we’ve talked to who’s worked with them, are ‘fair’ in their dealings.
thanks in advance (and no, this isn’t some kind of fantasy scenario - it’s really happening and it’s the craziest, most wonderful thing to happen in my long career).