When something sells well, does that necessarily prove it’s an inventive product that consumers have been clamoring for? Or just that it’s a good deal?
For Hubbell Inc., commercial success wasn’t enough to convince the Federal Circuit that its weatherproof electrical outlets should be patented. Especially considering that Hubbell was selling the outlets for a fraction of a competitor’s price.
This week, the court decided (In re Hubbell Inc., No. 2015-1222, 2016 BL 109362 (Fed. Cir. Apr. 7, 2016)) that strong sales couldn’t overcome a base case that Hubbell’s patents were invalid for obviousness.
And it had a pretty good reason for ignoring Hubbell’s evidence, noting that the weatherproof outlets were “priced significantly lower than” a competitor’s unpatented product. In fact, you could buy Hubbell’s patented products for less than half the price of an unpatented one.
Given Hubbell’s pricing strategy, it takes a certain amount of chutzpah to argue that higher unit sales prove that a related invention isn’t obvious.
It’s not that sales can’t ever figure in a patent’s favor. Four years ago, the Federal Circuit emphasized (Mintz v. Dietz & Watson, Inc., 679 F.3d 1372, 102 U.S.P.Q.2d 1897 (Fed. Cir. 2012) that “secondary considerations” such as commercial success can best prove nonobviousness “where the invention is less technologically complex.”
“Less technologically complex” would certainly seem to fit in the Hubbell case, given that one of the prior art patents used to build the case for obviousness was issued in 1925. But the Hubbell court noted that price and “a myriad of other factors” might be behind a product’s commercial success. That didn’t reverse any precedent but is still pretty far removed from its comment in Mintz.
Of course, the burden is still on an alleged infringer to rebut evidence of commercial success. Surely, those defenders can be expected to build up their lists of “myriad” factors in the next few years.
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