Economic Significance

1Though the courts have not directly dealt with economic significance of an invention as a consideration in determining its inventiveness, there have been discussions on the commercial success of an invention and its evidential value in determining inventiveness. In certain cases, the courts have tried to keep the element of commercial requirement outside the scope of the inventive step. It has been held that obviousness refers to technical obviousness and not commercial obviousness. (See Hallen Co v Brabantia (UK) Ltd (1989) RPC 307, p 327.) There may be cases where the evidence of commercial success of the invention may lead to an investigation into the reasons for the success. It is quite possible that the commercial reasons for the success of an invention were unrelated to whether the invention was or was not obvious in the past. (See Mölnlycke AB v Procter & Gamble Ltd (1994) RPC 49, p 113.) Success in the market place does not have anything to do with the patented development or in determining whether it was or was not the obvious thing to do. (See Haberman v Jackel International Ltd [1999] FSR 683, p 699.) The case laws on the point indicate that if economic significance or commercial success is to be regarded as a consideration for determining inventiveness, it can, at best, be a secondary consideration in determining inventiveness.

2In considering inventive step at the interlocutory stage, the Madras High Court had factored sales figures into consideration. In Bajaj Auto v TVS Motor Company (2008) the Madras High Court held that “prima facie it can be held safely that it has achieved economic significance as one of the ingredients of the term ‘inventive step’ under Section 2(ja) of the Patents Act, 1970, especially when the factum of sale of such large number of products is not under dispute” (para 60).

3On a relative scale, inventions are bound to vary in their technical advancement and economic significance. The definition of inventive step under the Patents Act reiterates the existing requirement of technical advance, ie, the invention not being technically obvious and makes an additional requirement ’economic significance’ over and above the traditional requirement of obviousness as determined by a person skilled in the art.

4It is submitted that defining ‘inventive step’ as including ’economic significance’ is bound to confound the standards of obviousness developed and applied thus far. The expressions ’technical advance’ and ’economic significance’ are mutually exclusive concepts. In any case, as s 2(1)(ja) of the Patents Act makes ’economic significance’ a disjunctive requirement along with ’technical advance as compared to the existing knowledge’, and as the latter expression forms an inherent part of ‘inventive step’ without satisfying which, no patent will be granted, the effect of the introduction of the expression ’economic significance’ seems nugatory.

5In Ab Initio Technology v Controller of Patents (2025) the Madras High Court held that “As a result of the use of the disjunctive ‘or’ before ‘having economic significance’, it is evident that ’technical advance over existing knowledge’ is not an essential pre-requisite and that economic significance may be established instead; subject, however, to the overarching requirement of the feature of the invention not being obvious to a PSITA” (para 44).

6It would also appear that the requirement of an invention to have ’economic significance’ is inbuilt in the expression ‘capable of industrial application’ which again is an existing requirement under the Patents Act. (Patents Act 1970, s 2(1)(j).) The introduction of ’economic significance’ as an ingredient of inventive step may lead to difficulties in determining obviousness.