Software License, Technology Contract and Royalty Audits
Patent license and software agreements are vitally important to many companies. Yet many company’s do not follow-through to ensure the success of these agreements and their objectives are met. ATL prides itself on producing outstanding reports and obtaining recoveries as large as $21 million for its clients.
Technology Recovery Audits
Many government entities and companies of all sizes needlessly and improperly pay for technologies, solutions and consulting services that fail to deliver.
Every contract has an objective and scope. Software and technology projects which do not meet their objectives may be subject to audits both prior to and after a client pays a contractor.
Often, we find that our clients have sufficient documentation in their possession to conduct an audit of a failed technology and support a refusal to pay or a demand to recover payments without obtaining additional documentation from the contractor.
The audit of failed technology contracts may:
- Be conducted without the cooperation of the contractor
- Be negotiated under conditions of making remaining payment
- Be used as a basis to stop further payments
- Include a wide range of evidence and information
- Be conducted to reach a known or unknown conclusion
Timeliness is important. For major programs that have failed to meet objectives, it is important to conduct a timely project audit to preserve the your entity’s own records and statements of your own personnel as to the actual activity observations of the contractor.
Royalty Recovery Audits
Most patent license agreements contain provisions for an audit, usually annually. But most licensors do not conduct audits, resulting in substantial lost revenues. Invariably, royalty audit programs pay for themselves.
Royalty audits recoveries are highly profitable since the recovery is bottom-line profit. After the costs of the audit the money recovered is not subject to offsetting overhead costs.
Audits of a licensee’s records can be efficient and inexpensive., With the advent of standardized enterprise accounting systems with relevant accounts that can be easily queried and inventory can be traced in highly efficient manner. After the audit, the licensees reporting practices may improve in result increased revenues in subsequent years.
In many license agreements, the licensor bears the cost of the audit unless underreporting beyond a certain threshold.
A regular audit program ensures future compliance. A licensee will be more careful with reporting and payments if regular audits are being conducted. A licensee is less likely to underreport they known your company conducts routine audits.