NEWS

The "25% Rule" of Patent Evaluation in the United States"

Release time:

2016-08-08 16:38

Nanjing Hua News: After years of trading practice, some industries in the United States have adopted a simple method of calculating patent license fees, that is, manufacturers selling patented products must pay the patentee 25% of the total proceeds from the patented technology as a license fee. This is the Law of 25%, sometimes referred to as the 25%-33% Rule.

The theoretical basis of this method is: product realization profit is divided into four links, research and development, productization, production, sales, research and development accounted for one of them, so get 25%, some people will research and development and productization test cooperation as a stage, so research and development accounted for 33%.

This method is obviously too bold. First of all, this method does not take into account product profitability in addition to technical factors, but also requires various costs such as marketing and promotion, which are sometimes more important than patent groups; in addition, the market risk factors in each field are also very different. Secondly, how to determine the total revenue or product profit is one of the focal points of the dispute. In general, cost savings and the creation of new profits are benefits from patents. Third, the patent jungle largely undermines this law. The difference between patent rights is ignored, and the contribution rate of specific patents to product production is not considered. In the era of patent portfolios, nine hundred thousand patents were used for each product, which made the 25% law impossible to implement.

According to foreign research results, license fees vary by industry, generally ranging from 1% to 5% of the total sales of products or services produced using the patent.

Nanjing Huaxun U.S. patent experts believe that the use of this method requires the establishment of an audit system, especially the benefits of cost-saving patents, the use of this method is more like a cost-sharing principle than a value assessment principle.

This evaluation method is more useful for various method patents than product patents.