The 25 Percent Rule Is Dead — Now What?

Law360, New York (January 26, 2011, 2:37 PM EST) -- “This court now holds as a matter of Federal Circuit law that the 25 percent rule of thumb is a fundamentally flawed tool for determining a baseline royalty rate in a hypothetical negotiation.” Uniloc USA Inc. and Uniloc Singapore Private Ltd. v. Microsoft Corp., Nos. 2010-1035,-1055 (Fed. Cir. Jan. 4, 2011), slip op at 41.

With this finding, the Court of Appeals for the Federal Circuit at long last struck down the 25 percent rule of thumb — the underpinning of numerous reasonable-royalty analyses. Many are...
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