intm 467180 - Establishing the arm's length price: gathering your own evidence
Searching the internet
For any particular industry sector you will find companies and organisations which will provide up to date information on what is happening within that sector - merger and acquisition activity, new products, licences granted, collaboration agreements entered into, joint ventures undertaken.
Some organisations can provide useful information on licence agreements that are entered into by independent parties. You are unlikely to find a direct comparable. Also the information is likely to be incomplete - however good the sources are, they won't receive access to all the details of a particular licence agreement. These sources can however provide general information which might help indicate whether your work on trying to establish an arm's length price is reasonable. The absence of any information on the type of licence agreements or business transactions you are looking for comparisons with might suggest that the intra-group transactions you are looking at do not happen in the commercial world between independent parties.
Information on new licence agreements can come from a number of sources, e.g. press releases from the parties involved, details returned to the Securities and Exchange Commission ('SEC') in the US, contacts from within industry, conferences and symposiums. The organisations offering information services draw together data from all these sources and present them in an accessible form. The returns that US corporations are required to make to the SEC have to contain details in certain circumstances of new licence agreements, joint ventures, collaborative agreements, etc. However they are allowed to blank out key information, such as royalty rates. It may be possible to fill gaps in understanding from other information sources.
These organisations invariably supply this information in the form of articles and reports, and in almost all cases are now available on-line. Searching the internet using key words such as the industry type, 'licence agreement', 'royalty', 'intellectual property', 'brand', etc. may well provide you with details of such organisations. Sometimes these sites will have links to other web pages that serve that particular industry. An hour’s search may yield several useful sites.
The Large Business Service (LBS) may have subscriptions to particular information sources. The LBS site on the Intranet will give details of which offices deal with particular industry sectors. Those individual offices will be able to let you know if they have any useful information. Shares and Assets Valuation have an extensive library and may well have access to online information sources.
