Is it true that if there is a rip off company, like a company that makes fake Gucci clothing, they have to pay some “royalty fee” to Gucci?
In: Economics
Royalty fees apply when some company allows another company to use something of theirs in exchange for some cut of the money they make.
So say some company wants to make Gucci branded merchandise. So this company wants to use the name and logo which belongs to Gucci. Gucci might agree to let them do that in exchange for say 5% of the profits. That’s a royalty fee.
If a company makes fake Gucci clothes that means they’re doing it without Gucci’s permission, which is illegal. Gucci could sue them and demand the money they made from it as compensation. This isn’t really the same as a royalty fee.
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