Thinking Economically about Commercial Success

By DeForest McDuff, Ryan Andrews, Matt Brundage

©2017. Published in Landslide, Vol. 9, No. 4, March/April 2017, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

Economic experts frequently evaluate commercial success as a secondary consideration of the obviousness of a patented invention.1 While other common economic inquiries are often based on widely recognized methodologies (e.g., the Panduit factors for lost profits, the Georgia-Pacific factors for reasonable royalties), experts often base analysis of commercial success on a layperson’s notion of “success,” without appreciation of its purpose. For example, an expert may conclude that a product is a commercial success because sales and profits are “large” or “substantial,” appealing to preconceived notions of success in other contexts (“sales of $100 million a year? . . . sounds like a success to me!”).

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