Level of Market

Refers to the economic level at which transactions are carried out, for example subcomponent supplier, component supplier, manufacturer, importer, distributor, sub-distributor, retailer, or reseller. Identifying a level of market is important in licensing and litigation, as the royalty base (which may establishing infringement damages) will vary by market level, increasing say as components are incorporated into finished goods or as each level adds its profit margin, but at the same time sales may become more fragmented and dispersed among the usually larger number of market participants at lower (closer to consumer) levels.  See Entire Market Value Rule.

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