throbber
CHAPTER 9D
`
`Commercial Success:
`Economic Principles Applied
`Litigation
`
`Jesse Davio
`
`NERA Economic Consulting
`
`Marion B, STEWART
`NERA Economic Consulting
`
`A party accused ofinfringing a patent may contend that the aserted patentis invalid
`
`because of obviousness. To help ewaluate that issue, court. may consider whether the patented
`invention is a “commercial success.” Determining whether an invention has, or has not,
`been a commercial success & primarily an economic exercise, and econcmists increasingly
`assist Courts in evaluating this issue, Case law indicates that courts have traditionally
`(1) looked at such factors as increasing revenues, gain in market share, and public acclaim
`in an attempt to determine whether a product has been a commercial success and (2) con-
`sidered whether the patent holder has established a “nexus” between the claimed inven-
`tion and the product’s commercial success.
`Im this chapter we discuss these tests and
`consider them alongside another test suggested by economic principles, namely, whether
`the patented invention has earned or can be expected to carn a positive net return on
`invested capital after accounting for all the relevant costs associated with developing and
`commercializing the product, We analyze the commercial success standard in the context
`of two recent cases in which we applied these principles,
`
`INTRODUCTION
`
`A party accused of infringing a patent may contend that the asserted patent ts invalid
`because of obviousness, That contention may be rebutted by a showing that the patented
`‘
`:
`‘
`‘
`:
`be
`:
`a
`5
`2
`4
`Invention 1 a" comunercial success —one of several ‘secondary considera (3015
`that COUrES
`
`Mylan Ex.1074
`Mylan v. Sanofi - IPR2018-01675
`
`|so
`
`Mylan Ex.1074
`Mylan v. Sanofi - IPR2018-01675
`
`

`

`\60 ECeonoeice OF PATENT DAMAGES
`
`look to for identifying the differences between the patented invention and the prior art.
`These secondary considerations—known as objective indicia of nonobviowsness—also
`include such factors as copying, long felt but unsolved need, failure of others, andlicensing.~
`Determining Whether an invention has, or has nor, been a commercial success is pri-
`marily an economic exercise, and economists increasingly assist courts in evaluating this
`isue, Case law indicates that courts have traditionally looked for such characteristics as
`increasing revenues, gain in share in an appropriately defined market, and public acelaim
`in an attempt to determine whether a product has been a commercial success. Courts have
`also comsidered whether the patent holder has established a “nexus” between the claimed
`mnvention and the product's comumercial success
`—that is, whether the commercial success,
`if evident, is due to the patented feature as opposed to some other characteristic of the
`product or mode of selling employed by the manufacturer.
`From an economic perspective, commercial success could in principle be defined by a
`single criterion: Does the patented invention earn a positive net return (risk-adjusted) on
`invested capital after accounting for all relevant costs associated with developing and com-
`mercializing the patent as well as any alternatives available to the patent holder? Patents
`exist to protect the human and financial investment used to develop new products, serv-
`ices, or processes, This investment, however, is beneficial, from a social perspective, only if
`consumers are willing to purchase an embodiment of the invention at such a price as to
`fully compensate the inventor for all costs incurred in bringing the product to market,” Put
`simply, patents are not needed to protect inventors from making poor investment decisions,
`The courts’ use of the previously mentionedfactors ts not necessarily in conflict with
`this definition, and many—perhaps most—previous decisions made by courts are likely
`to have been consistent with it. Given the limitations onavailable data, it is entirely rea-
`sonable that an analysis of commercial success should consider and place significant weight
`on the traditional measures such as market share or revenuc growth. However, under cer-
`tain circumstances, rapid sales growth and gains in market share will not mecessarily reflect
`a profitable underlying Invention, Moorncovver, calculating the proper measure of profit-
`abiliey can be a complicated task and should be considered in an appropriate context —
`for example, relative to an appropriate benchmark or alternative. Consequently, it is our
`opinion that courts should look more deeply into the economic characteristics of the
`product before arriving at a determination of the commercial success of the patent.
`In this chapter we consider whether the tests traditionally used by the courts are consis-
`tent with the criterion suggested by economic principles, We then analyze the commercial
`success standard in the context of two recent cases in which we applied these principles.
`
`SUMMARY OF THE Case Law
`
`In Grofam Jolin Deere Co. (1966), the seminal case identifying commercial success as a
`relevant “secondary consideration”in a determination of patent validity, the LS. Supreme
`Court cited a University of Pennsylornia LowReview article that focused on the consumer
`perspective for evaluating the commercial success of a patent. The article stated that “|t|he
`
`Mylan Ex.1074
`Mylan v. Sanofi - IPR2018-01675
`
`Mylan Ex.1074
`Mylan v. Sanofi - IPR2018-01675
`
`

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge
throbber

Still Working On It

This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.

Give it another minute or two to complete, and then try the refresh button.

throbber

A few More Minutes ... Still Working

It can take up to 5 minutes for us to download a document if the court servers are running slowly.

Thank you for your continued patience.

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Your document is on its way!

If you do not receive the document in five minutes, contact support at support@docketalarm.com.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Refresh this Document
Go to the Docket

We are unable to display this document.

Refresh this Document
Go to the Docket