(A) Compensation that is determined by taking a percentage of revenue or sales. Used frequently in the licensing of intellectual property such as patent and copyright. (B) A compulsory payment per statute where a licensee who wishes to use the property must pay a royalty, at the compulsory rate, for its use.
Law Dictionary – Alternative Legal Definition
A payment reserved by the grantor of a patent, lease of a mine, or similar right, and payable proportionately to the use made of the right by the grantee. Royalty also sometimes means a payment which is made to an author or composer by an assignee or licensee in respect of each copy of his work which is sold, or to an inventor in respect of each article sold under the patent Sweet.