In Search of Commercial Success

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In Schott Gemtron Corporation v. SSW Holdings Company, Inc., IPR2014-00367, Paper 20 (August 13, 2014), the Board denied patent owner’s motion for additional discovery relating to commercial success.  The Board noted the legislative history of the AIA makes clear that additional discovery should be confined to “particular limited situations, such as minor discovery that PTO finds to be routinely useful, or to discovery that is justified by the special circumstances of the case,” and as the justification for being conservative in authorizing additional discovery.

The Board found the patent owner had not met its burden to demonstrate that discovery of the requested financial information is necessary in the interest of justice, failing to show that the sales level of Petitioner’s constituted commerical success, and a nexus between the claimed inventions and any commercial success of Petitioner’s products. While a conclusive showing of either is not necessary at this stage, some evidence is needed to establish that there is more than a mere possibility that Patent Owner’s request would uncover something useful.

About the nexus the Board said that a patent owner must offer “proof that the sales [of the product] were a direct result of the unique characteristics of the claimed invention—as opposed to other economic and commercial factors unrelated to the quality of the patented subject matter.” In re Huang, 100 F.3d 135, 140 (Fed. Cir. 1996). In addition, “if the commercial success is due to an unclaimed feature of the device,” or “if the feature that creates the commercial success was known in the prior art, the success is not pertinent.” Ormco, 463 F.3d at 1312; see also In re Kao, 639 F.3d 1057, 1070 (Fed. Cir. 2011) (requiring a determination of “whether the commercial success of the embodying product resulted from the merits of the claimed invention as opposed to the prior art or other extrinsic factors”).

Topics:  America Invents Act, Discovery, Discovery Rule, Patent Litigation, Patents

Published In: Civil Procedure Updates, Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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