By DeForest McDuff
In recent years, courts have excluded economic experts for improperly using “rules of thumb” for profit sharing in reasonable royalty analyses. Common examples are the 25% Rule and improper application of the Nash Bargaining Solution (sometimes cynically, yet inappropriately, referred to as the “50% rule of thumb”). Such rules have, in the past, been popular in certain expert circles due to ease of implementation and purported wide applicability. However, courts have recently excluded blind application of rules of thumb for failing to tie such methodologies to the specific facts of a given case.1 As a result, many experts have been left with a dilemma for how to approach profit sharing between licensor and licensee in a consistent manner while still accounting for the specific facts and circumstances of each case.
Full articles are available only to LESI Members. Please login to view the PDF of this Les Nouvelles Article.
Not an LESI member? Find out how to join your regional LES society and gain access to all that your LES society and LESI has to offer.