HopefullyInLawSchool
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LSDefine
Simple English definitions for legal terms
shut-in royalty
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A quick definition of shut-in royalty:
A shut-in royalty is a type of payment made to an author or inventor when their work or invention is not being used or sold. It's like getting paid for something that's just sitting on a shelf. This type of royalty is usually agreed upon beforehand and is paid to ensure that the author or inventor is compensated for their work, even if it's not currently being used.
A more thorough explanation:
A shut-in royalty is a type of royalty payment made to an author or inventor for each copy of their work or article that is not sold or used. This means that even if the work or article is not being actively distributed or used, the author or inventor still receives a payment for the potential use or sale of their intellectual property.
For example, if a book author receives a shut-in royalty of $1 per book, and 1000 copies of their book are printed but only 500 are sold, the author would still receive $500 for the remaining 500 unsold copies.
Shut-in royalties are often included in contracts for intellectual property rights, such as patents or copyrights, to ensure that the creator of the work or invention is compensated for its potential value even if it is not actively being used or sold.