Profits as Commercial Success
University of Maryland Francis King Carey School of Law
January 1, 2008
Courts often use the extent of a patented invention’s commercial success as crucial nontechnical proof of the patent’s validity. Relying on misguided economic reasoning, most courts use revenue as the primary yardstick for commercial success. This Note argues that courts instead should use profits as the proper measure of an invention’s commercial success. Current jurisprudence’s use of revenue reflects the flawed premise that firms maximize revenues rather than maximizing profits. As a result, courts will often find commercial success when the financial data suggest otherwise and vice versa. This Note finds the accounting and economic issues involved to be insubstantial, while requiring a threshold profit showing could materially further judicial economy.
Number of Pages in PDF File: 37
Keywords: patent, commercial success, secondary considerations, prospect theory, law and economicsworking papers series
Date posted: February 21, 2011
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