Sunday 6 January 2013

Rules of Thumb and Standard Royalty Rates: wrong, or just misunderstood?

On the cards ... royalty rules OK
The IPKat recently posted an item expressing a state of less-than-happiness about the utility of rules of thumb in calculating IP royalty rates ("Rule of thumb, rule of paw: royalty fix or something more?", here). The same author expressed similar sentiments on IP Finance too, at the end of 2012 ("Royalty rate guides: how helpful are they?", here).

I'm pleased to say that there has now followed an excellent post by Mark Anderson on IP Draughts ("Standard Royalty Rates? Ain't No Such Thing", here) and the ever-helpful Mary-Ellen Field has pointed me towards two pieces which are well worth reading:

  • "The Classic 25% Rule and the Art of Intellectual Property Licensing", by the rule's grandfather, Robert Goldscheider (Les Nouvelles, September 2011)
  • "Simply Wrong: the 15% Rule Examined" by Douglas G. Kidder and Vincent E. O'Brien (Les Nouvelles, December 2011)

Readers are invited to draw their own conclusions.

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