Every 144 Listerine Bottles Sold Is Good News for This Group

Unusual 1881 royalties deal still pays off for those who own shares in the trust
By John Johnson,  Newser Staff
Posted Aug 13, 2022 7:45 AM CDT
Unusual 1881 Deal Still Pays Off in Listerine Royalties
A supermarket display of Listerine.   (AP Photo/Gene J. Puskar)

Investors have all kinds of investment vehicles to choose from, but the Hustle takes a deep dive into one that is obscure, lucrative, and legally strange—Listerine royalties. Shares of this royalty trust become available through private auction every now and then, but deep pockets are required. A partial share sold for $561,000 in 2020. The reason investors want in: "For every 2,016 ounces of Listerine sold (equivalent to 144 14-oz. bottles), Johnson & Johnson pays a total of $6 to Listerine’s royalty holders," writes Michael Waters. In 2014, for example, J&J paid out a total of $24 million to royalty holders. Chris Christie, for one, owns part of a share that earned him about $24,000 in 2015, the last year he disclosed his tax returns.

The story digs into the fascinating tale of how the trust came to be and has managed to remain in place: In 1881, Listerine inventor Joseph Joshua Lawrence licensed his poorly selling antiseptic formula to Baltimore pharmacist Jordan Wheat Lambert with the stipulation that Lambert pay Lawrence's heirs $20 for every 144 bottles (a gross) sold. A subsequent change in Lawrence's stake dropped that to $6 per gross. Crucially, the men "never specified an end date for the royalty payments," writes Waters. At the time, that didn't seem to matter much. Then Listerine began to be marketed as a mouthwash in the late 19th century, and its sales exploded. The $6 per gross deal remains in place to this day, as upheld in a landmark New York court case in 1959. (Read the full story for more on the particulars.)

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