Authored by: Samuel McMahon, 2015 Summer Associate
In Kimble v. Marvel Entertainment, LLC, No. 13-720 (U.S. June 22, 2015), the Supreme Court, in a 6-3 decision with Justice Kagan writing for the majority, upheld its 1964 decision in Brulotte v. Thys, 379 U.S. 29, reaffirming that a patent owner cannot charge royalties for use of the patent after the patent term expires.
Stephen Kimble patented a device that allows the user to shoot pressurized foam string from the palm of the hand, like Spider-Man shooting web. He pitched his idea to Marvel, and the company’s representatives apparently liked it but nonetheless declined to engage Kimble in a licensing agreement. Kimble sued for patent infringement when Marvel began manufacturing and selling its own “Web Blaster” toy. Pursuant to a settlement agreement, Marvel purchased the patent for a lump sum and agreed to pay Kimble a 3 percent royalty on future sales. The parties did not negotiate an end date for the royalty payments, but before the patent term expired, Marvel asked for and received from federal district court in Arizona a declaratory judgment that it could avoid the royalty payments upon expiration of the patent. Relying on Brulotte, the district court held that the agreement to pay royalties was unenforceable after expiration of the patent term. The Ninth Circuit affirmed, and Kimble appealed. Continue Reading