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To: mauser96 who wrote (2658)6/16/1999 9:17:00 AM
From: Mike Buckley  Respond to of 54805
 
Lucius,

If you get royalties from an oil well on your property, you still don't control how the well is drilled.

True. But for me, that's not a viable analogy. The royalty in that example is simply a method of determining the rental payments for the property.

To expand on your analogy, let's assume I own the software that makes the oil well work more efficiently (less costly) and at the same time produce more oil. Instead of asking for royalties based on the amount of oil that is produced, I simply license the software technology to you. Or I let another competitor license it to you, in which case I collect a royalty.

Every time you add my software to one of your oil wells, I get a licensing fee or a royalty. Without my software, you don't produce as much oil and you spend more money producing it. I've got total control of my product even though I'm not manufacturing the oil well.

--Mike Buckley