What is A Royalty ?

Royalty is a lawful restricted payment made to the owner in exchange for the right to use his/her intellectual property or asset. Royalties are paid by the party purchasing the property’s rights to the party that owns it. The party that owns the property is known as a “Licensor” (or the owner), and the party that purchases the rights is known as a "Licensee". In other words, licencing is when someone who keeps the possession of a property gets royalties from somebody who uses that property.

These royalties are bound by agreements, and they permit others to utilize the property, giving the proprietor the advantage of revenue. Besides, royalties shield the buyer from claims by the proprietor for inappropriate use.


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