Intellectual Property License Agreement

With a few exceptions, lawyers are not very good in answering business questions related to finance. They may give you a rule of thumb, or different calculation methods without telling you which one to use.
From the business perspective, whenever you do an investment, you have to compare it with other investments that have a similar risk level, even though the risk profile may be different, and look at the profit those other investments would give you. If this investment doesn't give you more profit, you shouldn't consider it. In the case your profit needs to come from a license agreement, you need to know what volume the licensee expects to sell, and how certain he/she is that this sales expectation is realistic and not a total pipe dream (here is part of your risk level, plus the risk that your development will cost you more than you thought). Based on this you can determine your per unit royalty. Maybe it should not be a percentage, but a dollar amount. Sales people can be incredibly good in enthusiastically describing a modest house as the finest imperial castle you can imagine, so you have to be careful with the predicted volume, and when this volume is achieved. And make the licensee commit to his/her promises. That is where you need the lawyer.