Regression Models for Determining the Patent Royalty Rates using Infringement Damage Awards and Inter-Partes Review Cases

Dong Hong Yang, Gunseog Kang, Sung-Chul Kim


This study suggested quantitative models to calculate a royalty rate as an important input factor of the relief from royalty method which has the characteristics of income approach method and market approach method that are generally used in the valuation of intangible assets.

This study built a royalty rate regression model by referring to the patent infringement damages cases based on royalties, i.e., by using the royalty rates as a dependent variable and the patent indexes of the corresponding patent right as independent variables. Then, a logistic regression model was constructed by referring to inter-partes review cases of patent rights, i.e. by using not-unpatentable results as a dependent variable and the patent indexes of the corresponding patent right as independent variables.

A final royalty rate was calculated by matching the royalty rate from the royalty rate regression model with a not-unpatentable probability from the logistic regression model. The suggested royalty rate was compared with the royalty rate obtained by the traditional methods to check its reliability.

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