les Nouvelles - September 2006

Fair and Reasonable Royalty Rate Determination – When is the 25% Rule Applicable?

Ove Granstrand

Professor of Industrial Management and Economics, Chalmers University of Technology

What is fair and reasonable in royalty rate determination is not clear despite a longstanding debate and maybe because of it. As often in complex uncertain situations simple rules of thumb then tend to emerge and over time set some standard rule of reason and fairness.

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