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Fee for Structural Design on Manufacture

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I think that a fee (substantial) for your initial design services plus a 
*licensing fee* per product *shipped* (not sold) would be appropriate.  As 
far as what the licensing fee would be would be dependent on the number of 
products that may be shipped ---  are they going to ship 10,000 products a 
day or 2 products a year?  For the former, I would suggest a licensing fee of 
1% of billings would be appropriate.  For the latter, I would walk away.

Consult a good lawyer experienced in these types of agreements.  Probably 
should have a clause that no modification of the product can be made by 
others without your approval.

A. Roger Turk, P.E.(Structural)
Tucson, Arizona

Fountain Conner wrote:

>>I've been approached to design the housing and mounting brackets for a
product that will be manufactured.

The design effort is modest (3 days, tops).  But the continuing liability
on *all* those products is giving me pause.

My inclination is to propose a continuing fee (for perhaps 3 years) based
on a percentage of sales of this product.

Do you think this is the correct approach?  If so, any ideas on percentage?
 If not, any other suggestions?


Fountain E. Conner, P.E.<<