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The subsidiary, in turn, charges "royalties" that allows it to capture billions of dollars in what otherwise would be taxable profits in the United States.
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Can't HMRC block Facebook from charging royalties to its UK arm?
Sarnoff believed that RCA should only charge royalties -- never pay them.
He also said Microsoft ought to be able to charge royalties for the intellectual property included in its software.
But now universities, where most NIH-sponsored work is carried out, can patent and license their discoveries, and charge royalties.
Under the 2004 ruling, Microsoft is allowed to charge royalties for sharing the protocols, based on the level of innovation in the technology.
Last year, McDonald's main UK business earned revenues of £1.53bn from its restaurants, but was also charged royalties of £123m – equivalent to a third of its operating profit.
The search engine giant is using Ireland as a conduit for European revenues but in turn the Irish subsidiary is being charged royalties for its intellectual property – use of the brand and technology such as Google's algorithms.
Is that 100% free, or will they charge royalties a la Unreal (who charges 5% on every dollar after $3,000)?
"There was a consent decree against RCA that said not only do you have to license everything, but in domestic markets you can't charge royalties," Chandler says.
Just the same, the new cut-and-paste sites will naturally increase awareness of the higher-end online graphics market for which the companies charge royalties.
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