We were engaged by a gaming software company (the “licensor”) to perform a royalty audit and contract compliance examination of its relationship with a publicly traded gaming equipment company (the “licensee”), pursuant to a patent license agreement. The engagement covered a seven-year period, during which the licensee manufactured, sold, placed, and leased both land-based and online gaming machines that potentially incorporated the licensor’s patented technology.

Our work involved a comprehensive forensic analysis of the licensee’s royalty reporting under multiple calculation structures set forth in the patent license agreement, covering both domestic and international activity. We examined detailed inventory and sales data, third-party reports, and operational records; performed independent research of public filings; reconciled reported information to supporting documentation; and tested data through targeted sampling. We also conducted interviews with the licensee to clarify reporting processes and data sources.

Through these procedures, we identified approximately $100 million in potential underpaid royalties and interest. We presented our findings in a formal report, participated in follow-up discussions with both parties, and remained available as they negotiated. Our work ultimately supported the parties in reaching a favorable agreement regarding the royalty calculations at issue.