On Monday, the United States Supreme Court Audrey-Millemann-03_webupheld the longstanding case law that prohibits a patent owner from receiving royalties after a patent has expired. In Kimble v. Marvel Entertainment, LLC (June 22, 2015) 2015 U.S. LEXIS 4067, the Court ruled in favor of Marvel, the licensee of a patent for a Spiderman web-shooting toy.

The plaintiff, Stephen Kimble, had patented the web-shooting toy. Kimble had talked to Marvel about licensing his patent, but Marvel declined to take a license. Shortly thereafter, Marvel began selling a suspiciously similar web-shooting toy.

Kimble sued Marvel for patent infringement. The parties settled. Pursuant to the settlement, Marvel bought the patent from Kimble for a lump sum and a three-percent royalty on future sells of the toys.

Marvel later filed a declaratory judgement action in the district court, seeking a judgment that Marvel could stop paying Kimble royalties when the patent expired in 2010. Marvel relied on Brulotte v. Thys Co., 379 U.S. 29 (1964), in which the Supreme Court had held that a patent owner could not receive royalty payments after the patent had expired, and that agreements that provided for post-term patent royalties were per se unlawful.

Continue Reading Everything Old is New Again: Post-Expiration Patent Royalties are a Bad Idea!