Domestic Arbitration Involving Royalties on Licensed Products
This matter involved a complex web of agreements between numerous parties that governed whether the definitions of “licensing revenue” and “sublicensing revenue” were triggered on the downstream sale of certain pharmaceutical products and whether and when royalties thereon became payable in the chain.
CHS was retained by Counsel for the Respondent to review the Claimant’s expert’s methodology and conclusions regarding royalties claimed. We determined that the Claimant’s expert had overstated the mathematical components by 20%. We also summarized the historical recording and presentation of revenues earned and royalties paid/payable in the Respondent’s accounting records, audited financial statements, and MD&A (Management’s Discussion and Analysis) in its Annual Reports. We summarized the above to assist the Arbitrator’s assessment of whether such disclosures impacted the determination of whether the defined revenues were triggered.