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      Library of Congress Cataloging-in-Publication Data: ISBN 978-1-119-35621-9 (main edition) ISBN 978-1-119-63973-2 (supplement) ISBN 978-1-119-63974-9 (ePDF) ISBN 978-1-119-63972-5 (ePub)

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ABOUT THE AUTHOR

      Russell L. Parr is President of IPRA, Inc. He is an expert at determining the value and royalty rate pricing of intellectual property.

      For over 30 years, Russell has completed complex consulting assignments involving the valuation and pricing of patents, trademarks, copyrights, and other intangible assets. His opinions are used to accomplish licensing transactions, acquisitions, transfer pricing, litigation support, collateral-based financing, and joint ventures. Russell also has served as an expert witness regarding patented technology infringement damages and has testified at trial or deposition over 70 times. Past assignments have included the valuation of the Dr. Seuss copyrights and the patent portfolio of AT&T. Russell has also conducted valuations and royalty rate studies for pharmaceuticals, semiconductor process and product technology, agricultural technology, automotive battery technology, biotechnology, camera technology, chemical formulations, communications technology, computer software, cosmetics, consumer and corporate trademarks, drug delivery systems, flowers, incinerator feed systems, lasers, medical instrument technology, and motivational book copyrights.

      Russell has authored or co-authored 10 books published by John Wiley & Sons. His books have been translated into Japanese, Korean, Italian, Chinese, Romanian, and Russian. His flagship book is Intellectual Property: Valuation, Exploitation and Infringement Damages, fifth edition.

      Russell also publishes, through IPRA, Inc., three royalty rate resource books, which have been sold all over the world. These books are dedicated to reporting detailed information about the economic aspects of intellectual property transactions including licensing. The titles are Royalty Rates for Technology, sixth edition; Royalty Rates for Trademarks & Copyrights, fifth edition; and Royalty Rates for Pharmaceuticals & Biotechnology, eighth edition.

Russell has a master's in business administration from Rutgers University (1981) and a bachelor of science in electrical engineering from Rutgers University (1976). His professional designations include Chartered Financial Analyst (CFA), Accredited Senior Appraiser (ASA), and Certified Licensing Professional (CLP). He is a member of the Licensing Executives Society and on the advisory board of three professional publications, Licensing Economics Review, IP Litigator, and The Licensing Journal. Russell is also an Advisory Board Member of Innovation Asset Group, a company developing enterprise software for intellectual property management. He also served on the Intangible Asset Valuation Standards Committee of the American Society of Appraisers.

PREFACE

      This is the 2020 cumulative supplement to the fifth edition of Intellectual Property: Valuation, Exploitation, and Infringement Damages. It contains the following chapters.

CHAPTER 2A—SCANDALOUS TRADEMARKS

A new category of trademarks has emerged from the courts. Section 2(a) of the Lanham Act says that the USPTO may refuse to register any trademark that “consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute.” Recently, the U.S. Supreme Court struck down the Lanham Act's disparagement clause as unconstitutional in Matal v. Tam.¹

CHAPTER 3A—ASSEMBLED WORK FORCES ARE VALUABLE BUT MAYBE NOT THE CHIEF EXECUTIVE OFFICER

      Chief executive officers (CEOs) are the most expensive employee at a company. Their pay packages can include pay, bonuses, shares of stock, and stock options. Boards of Directors try to tie CEO compensation to company and share price performance but the results do not always work out. This new section presents evidence that CEOs are often over-rewarded for marginal company performance. When valuing an assembled workforce, special considerations are needed when considering the CEO.

CHAPTER 16A—ROYALTY RATES FOR LICENSING, DATA SOURCES

      This chapter provides information about resources that are available for discovering royalty rate data that can serve as guidance for use in licensing agreements.

NEW CHAPTER 16B—ROYALTY RATE PRIMER PRESENTATION

      Royalty rates and licensing are common knowledge to intellectual property experts like IP lawyers, licensing executives, and IP consultants, but for many others the basics of royalty rates are elusive. This new chapter outlines royalty rate fundamentals that IP executives can present to other key players of management who need to understand what the licensing executives are talking about. This chapter is provided in response to many requests from within the intellectual property world for a primer tool they can use to gain buy-in from others in their organization. It is written in the first person.

CHAPTER 27A—EXMARK ESTABLISHES NEW DAMAGES MODEL

      In Exmark Manufacturing Company v. Briggs & Stratton Power, the U.S. Court of Appeals for the Federal Circuit approved a reasonable royalty damages theory based on the total value of an accused product, even though the patented invention was only part of a multicomponent product. Previously, apportionment was handled at the royalty base. Now, the entire value of the product can be used as the base and apportionment can be handled with an appropriate royalty rate.

APPENDIX C-1—FOOD & BEVERAGE INDUSTRY ROYALTY RATES AND SUPPORT FROM THE 25% RULE

      Royalty rate data from Royalty Rates for Trademarks & Copyrights, published by IPRA, Inc., is reported along with a discussion of the state of the food and beverage industry. Generally, the food and beverage industry is very competitive, resulting in thin profit margins, and royalty rates for food and beverage trademarks reflect the low profit margins with low royalty rates. This supplemental chapter presents a discussion about the stresses in the food and beverage industry along with royalty