Intellectual Property License Agreement

This is not legal advise either. With respect, in my humble opinion and experience ventures which establish pricing solely or mainly as a function of return on investment or costs are missing the fundamental issue of pricing acceptance and elasticity in the market, i.e. what customers will pay. Studies show that over-pricing once corrected takes a long time to purge from customer reaction. Established conventional practice of course suggests a royalty in percentage of sales or per unit which must be market-driven. Accordingly pricing sensitivity analysis and customer testing are more useful than internal ROI.