Patent Value Guide – Part I

In our intellectual property valuation practice, we are often asked by patentees how they can get a proverbial back-of-the-envelope assessment of the value of their patents. What at first blush sounds like a reasonable request, its proper answer is not as easy as most would like to think.

The 25% Rule is legally inadequate — CAFC

Yesterday, the Court of Appeals for the Federal Circuit (“CAFC”) issued a precedential ruling to the effect that, among other issues in the Uniloc v. Microsoft case, as a matter of Federal Circuit law the 25 percent rule of thumb is a fundamentally flawed tool for determining a baseline royalty rate in a hypothetical negotiation. Evidence relying on the 25 percent rule of thumb is thus inadmissible under Daubert and the Federal Rules of Evidence, because it fails to tie a reasonable royalty base to the facts of the case at issue.

Patent value of business methods and software at the SCOTUS

The future of software and business method patents still hangs in the balance, after oral arguments were heard by a Supreme Court with significant unknown factors as far as Intellectual Property law is concerned.
At the hearing held Monday, most Justices expressed signs of skepticism about the patentability of pure business methods like those claimed by the Bilski patents on financial hedging strategies. Significant uncertainties remain, however, over the leanings of most justices regarding the status of software patents.