Simply Wrong: The 25% Rule Examined

Douglas G. Kidder
OSKR, LLC, Partner Emeryville, CA, USA

Vincent E. O’Brien
DBA, OSKR, Managing Partner Emeryville, CA, USA

While there have been numerous articles citing the 25% Rule, there are none that provide any sound empirical or theoretical basis for the rule. On the contrary, there are significant theoretical problems with the rule and attempts to justify it empirically fall flat. The normative arguments (that the 25% Rule is used by some licensing professionals) may be individually correct, but it does not raise the 25% Rule to the level of science or explain why the same patents licensed to multiple companies are generally licensed at the same royalty rates.


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