Industrial Technology Development Program enables the recipient to set up technology infrastructure and to facilitate technology diffusion. In return, government charges royalty from the program recipient. However, the current royalty system is not in the effective form. This study analyzes the various aspects of royalty collection methods applied to the Industrial Technology Development Program and recommend the following: (1) employ the combination of fixed amount royalty and running royalty with predetermined portion of revenue generated, (2) adjust the royalty collection duration by applying product life cycle, and (3) devise new program to link extra-gain from royalty collection with commercialization and other means to increase the effectiveness of research and development activities.