Appraisal Economics has conducted a transfer pricing study and determined the arm’s length royalty rates for intellectual property licensed between U.S. and Canadian entities. We determined separate royalty rates for trademarks, patents, and unpatented proprietary technology (trade secrets). The licensee is generally allowed a tax deduction for royalties paid, and the licensor generally reports the royalties received as taxable income. It is therefore necessary for related parties to fairly apportion taxable earnings in each tax jurisdiction. We reviewed market data for fair rates of return on intellectual property, as well as internal financial data that helped quantify the economic benefits of each class of the IP portfolio. Our concluded royalty rate for each category of intellectual property was supported by independent research of third-party data and a reasonable allocation of the profit margin among licensor and licensee (referred to as a “profit split”). The results of our analysis were used for tax reporting in the United States and Canada.