Is Commercial Success Still A Central Component Of The Test For Obviousness

A pair of recent court decisions have cast doubt on the long-accepted principle that commercial success is a factor that may be considered when assessing the obviousness or non-inventiveness of a patent.

For decades it has been understood that, though it is not conclusive, commercial success is a secondary consideration on the issue of the obviousness or non-inventiveness of a patent. Even the Supreme Court of Canada has contributed to this principle.1

Background

In Garford Pty Ltd. v. Dywidag Systems International, Canada, Ltd., an action alleging both patent infringement and breach of the Competition Act, a prothonotary had bifurcated the issue of liability from the issues of damages or accounting for profits.

On appeal to a judge, a number of arguments for setting aside the Bifurcation Order were rejected, but one was accepted.2 The judge ruled that the prothonotary should have considered the potential for overlap between the financial information that would be necessary to calculate damages or accounting for profits and that necessary to prove the claim for lessening of competition under the Competition Act. The judge was of the view that this overlap undercut the whole rationale for bifurcation and set aside the Bifurcation Order.

However, the claim under the Competition Act was later summarily dismissed, leaving only patent infringement in issue. Therefore, when the Federal Court of Appeal came to consider the appeal on the setting aside of the Bifurcation Order, the judge's reasoning for overruling the prothonotary no longer applied. The Appeal Court was therefore required to consider the other arguments made against the Bifurcation Order, which had been rejected by the judge.

Relevance of commercial success to obviousness

One of the arguments considered was that there would be overlap between financial documents relevant to the issue of commercial success and those relevant to calculating damages or accounting for profits. Commercial success was in issue because of an allegation that the patent in suit was invalid for obviousness.

Though commercial success is not conclusive evidence of inventiveness, the Federal Court of Appeal had as recently as 2007 cited it as a secondary factor.3 However, in rejecting the commercial success overlap argument, the lower court judge said:

The plaintiff's submission that the financial information is required with respect to the defence of obviousness is unconvincing. "Commercial success" is no...