While everyone was focused on Marvel‘s possible legal battle before the Supreme Court concerning the rights of Jack Kirby, Marvel had another case that actually is making it before the high court tomorrow.
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.
To get the scoop as to what we might expect, we got to talk to Mike Fein of the intellectual property group of Eckert Seamans Cherin & Mellott LLC about the court case.
Mike Fein is a member of the intellectual property group of Eckert Seamans Cherin & Mellott LLC, which is co-chaired by Roberta Jacobs-Meadway. Along with his colleagues, Mr. Fein has extensive experience advising clients about patent scope, validity and enforceability, as well as in obtaining and litigating patents. He is also well versed and experienced in representing licensors and licensees of patents and related antitrust laws, both in the U.S. and internationally. Mr. Fein earned his law degree from Rutgers University School of Law and his undergraduate degree at the University of Pennsylvania.
But, before the actual Q&A, here’s a bit of a disclaimer.
This article is intended to keep readers current about a topic in intellectual property law, and is not intended to be legal advice nor to create an attorney-client relationship. The article expresses the personal opinion and views of the author. If you have questions, please contact the Philadelphia office of Eckert Seamans Cherin & Mellott, LLC, at 215.851.8400.
Graphic Policy: The court decision that’s being debated is the previous decision in Brulotte v Thys Co. What was that court case? Can you sum up for us what the case is about in layman’s terms?
Mike Fein: Whether this Court should overrule Brulotte v. Thys Co., which held that “a patentee’s use of a royalty agreement that projects beyond the expiration date of the patent is unlawful per se.”
GP: In the description of the case before the Court, they said that decision was “a product of a bygone era” and “the most widely criticized” of the Court’s intellectual property and competition law decisions. How often does this case come up and why is it so criticized?
MF: In the decision being appealed, the 9th Circuit Court of Appeals contrasted the Brulotte rule with Aronson v. Quick Point Pencil Co., 440 U.S. 257, 262-66, 99 S.Ct. 1096, 59 L.Ed.2d 296 (1979), in which the Supreme Court found that patent law did not preclude the enforcement of an agreement to provide royalty payments indefinitely where no patent had issued. The Court of Appeals said that “the Brulotte rule in this case arguably deprives Kimble of part of the benefit of his bargain based upon a technical detail that both parties regarded as insignificant at the time of the agreement.” They quoted the following criticism from a 7th Circuit in an earlier opinion which said
The Supreme Court’s majority opinion reasoned that by extracting a promise to continue paying royalties after expiration of the patent, the patentee extends the patent beyond the term fixed in the patent statute and therefore in violation of the law. That is not true. After the patent expires, anyone can make the patented process or product without being guilty of patent infringement. The patent can no longer be used to exclude anybody from such production. Expiration thus accomplishes what it is supposed to accomplish. For a licensee in accordance with a provision in the license agreement to go on paying royalties after the patent expires does not extend the duration of the patent either technically or practically, because … if the licensee agrees to continue paying royalties after the patent expires the royalty rate will be lower. The duration of the patent fixes the limit of the patentee’s power to extract royalties; it is a detail whether he extracts them at a higher rate over a shorter period of time or a lower rate over a longer period of time.
GP: Are there any recent cases the Supreme Court has heard that might give us an idea on how they might rule?
MF: Recent Supreme Court decisions have been anti-patent and have caused tremendous upheaval and invalidation of thousands of previously-thought to be valid patents in the biotech and computer-assisted method fields. They are usually influenced by the Solicitor General’s amicus briefs. The Solicitor filed one in the Kimble v. Marvel urging the court to affirm the decision below and uphold the Brulotte rule since it is not anti-competitive.
GP: What are you expecting from the judges when they hear the case?
MF: They will ask questions as usual, except for Justice Thomas.
GP: There were quite a few amicus curiae filed, some in support of neither party. Have any of them stood out to you?
MF: Just the Solicitor’s, as mentioned above.
GP: How far and wide would the impact be if Marvel were to decide the case for Kimble? Seems like it’d be pretty wide reaching and have a massive impact on things.
MF: I don’t think the impact would be that great. Know how agreements can be in perpetuity. There are other ways around Brulotte if the parties really bargain for post patent expiration royalties.
GP: This is one of two cases Marvel could have had before the court, the other being the lawsuit concerning Jack Kirby. In your opinion, which of the two was more perilous for Marvel?
MF: The Jack Kirby case involved the Spider-Man and X-Man copyrights, much more valuable than the toy involved in the Kimble case.
GP: Any guesses on how they might rule in Kimble v Marvel?
MF: I guess they’ll affirm.