Issue link: https://htpgraphics.uberflip.com/i/246988
Payment Provisions Section 6 Currency Conversion Remember that licences will often be international in nature and may involve currencies other than the pound and the Euro. Where royalties are calculated in a currency other than that in which they are to be paid, the question arises as to which party bears the risk of loss in currency conversion. A licensee in a strong bargaining position may insist a licensor should be satisfied with whatever is the spot rate of exchange offered by a nominated bank on, for example, the last day of each royalty period or the date of actual payment. Complications can arise where exchange control regulations in a particular country make it difficult or impossible for a licensee to pay the requisite royalties. Unless you can impose an alternative payment mechanism, or it is possible for the royalties to be paid from elsewhere, you should seriously consider whether you should be entering into the agreement at all. Withholding Tax There may also be legal obligations in the country where the licensee is based to withhold tax from royalties before they are paid to you or your institution. There are treaties dealing with what is known as double taxation and so advice should be sought on this. Monitoring When putting together the payment provisions for your licence, you must also think about how you would want to be able to check that your licensee is complying with them and actually paying what is due. Figure 7 illustrates some suggestions. 46