AVR-DOS is written as a BASCOM-AVR add-on library by a developer in Europe. It comes in 2 flavors ( including the source code ):
In either case, there are no royalties. Just the initial price of the library. The idea is that when a company earns money because of using the code, the developer can have a small fee by selling the library code.
This way he is rewarded for his work, and for his support. He also made support for FAT32 after the initial FAT16.