Marvel Heads to the Supreme Court March 31
Marvel and Stephen Kimble are getting their day in court, as Stephen Kimble, et al., Petitioners v. Marvel Enterprises, Inc. will be heard before the Supreme Court on March 31. It’s one of two cases before the court that day.
The case involves toys and whether the petitioner is getting the correct royalties for the design concerning a Spider-Man webshooter toy. It involves a 50-year-old rule about how inventors can profit off of their patent.
The question before the court, directly from their website is:
Petitioners are individuals who assigned a patent and conveyed other intellectual property rights to Respondent. The court of appeals “reluctantly” held that Respondent, a large business concern, was absolved of its remaining financial obligations to Petitioners because of “a technical detail that both parties regarded as insignificant at the time of the agreement.” App. 2-3; 23. Specifically, because royalty payments under the parties’ contract extended undiminished beyond the expiration date of the assigned patent, Respondent’s obligation to pay was excused under Brulotte v. Thys Co., 379 U.S. 29, 32 (1964), which had held that “a patentee’s use of a royalty agreement that projects beyond the expiration date of the patent is unlawful per se.”
A product of a bygone era, Brulotte is the most widely criticized of this Court’s intellectual property and competition law decisions. Three panels of the courts of appeals (including the panel below), the Justice Department, the Federal Trade Commission, and virtually every treatise and article in the field have called on this Court to reconsider Brulotte, and to replace its rigid per se prohibition on post–expiration patent royalties with a contextualized rule of reason analysis.
The short version, should the Supreme Court overrule Brulotte v. Thys Co., 379 U.S. 29, 32 (1964). We’ll continue to follow the case closely.
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