Don't confuse the 25% rule with the midpoint of bargaining range

Dr. Christine Siegwarth Meyer and Dr. David Blackburn, NERA Economic Consulting, collaborated to make sure damages pros understand Uniloc’s dismissal of the 25%-of-profit rule-of-thumb for damages has NO impact on the midpoint of the bargaining range methodology.

In their words, “… the model is one in which the two parties alternate making offers and counteroffers until an agreement is reached and in which there is no advantage to being the first to make an offer… the midpoint of the bargaining range does provide a reasonable and economically grounded starting point for an analysis of where, within that range, the reasonable royalty falls.”

The authors cite Sanofi-Aventis Deutschland GmbH et al. v. Glenmark Pharmaceuticals Inc., USA et. al.), in which the District Court of New Jersey denied a motion to exclude reasonable royalty expert testimony that relied on the midpoint of the bargaining range.  Rationale? This methodology is based on the specific facts of the case, whereas the 25-percent rule acts independently of the “incremental value of the technology embodied in [a] patent.”