Profits as Commercial Success

37 Pages Posted: 21 Feb 2011 Last revised: 11 Jun 2014

Andrew Blair-Stanek

University of Maryland Francis King Carey School of Law

Date Written: January 1, 2008

Abstract

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.

Keywords: patent, commercial success, secondary considerations, prospect theory, law and economics

Suggested Citation

Blair-Stanek, Andrew, Profits as Commercial Success (January 1, 2008). Yale Law Journal, Vol. 117, No. 4, 2008. Available at SSRN: https://ssrn.com/abstract=1763516 or http://dx.doi.org/10.2139/ssrn.1763516

Andrew Blair-Stanek (Contact Author)

University of Maryland Francis King Carey School of Law ( email )

500 West Baltimore Street
Baltimore, MD 21201-1786
United States

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