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Kimble v. Marvel Entertainment, LLC
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Kimble v. Marvel Entertainment, LLC
Kimble v. Marvel Entertainment, LLC, 576 U.S. 446 (2015), is a significant decision of the United States Supreme Court for several reasons. One is that the Court turned back a considerable amount of academic criticism of both the patent misuse doctrine as developed by the Supreme Court and the particular legal principle at issue in the case. Another is that the Court firmly rejected efforts to assimilate the patent misuse doctrine to antitrust law and explained in some detail the different policies at work in the two bodies of law. Finally, the majority and dissenting opinions informatively articulate two opposing views of the proper role of the doctrine of stare decisis in US law.
The narrow issue in Kimble v. Marvel was whether the Court should overrule the 50-year-old proposition in Brulotte v. Thys Co., 379 U.S. 29 (1964), that a patent license agreement requiring royalties for the period beyond the life of the licensed patent was unenforceable under the Supremacy Clause, state contract law notwithstanding, because it involved a misuse of patent rights. The Supreme Court in the Kimble case refused to overrule Brulotte and its doctrine against post-expiry royalties.
In 1964 the Supreme Court decided Brulotte v. Thys Co., in which it held that a contract to pay patent royalties beyond the expiration of the patent was unenforceable. The decision was widely criticized in academic circles and by the patent bar, as well as in lower court decisions. The thrust of the criticism was that the patent misuse doctrine should be based on antitrust law principles, and that conduct without a significant anticompetitive effect should not be proscribed.
In its opinion in the Kimble case, the Supreme Court listed some of the criticism suggesting that the Brulotte decision was wrong and should be overruled:
Other criticism of Brulotte includes the following:
Other commentators, however, have rejected adoption of an antitrust lens for analysis of patent misuse:
In 1990, plaintiff Stephen Kimble obtained U.S. Patent No. 5,072,856 on a toy that allows children and other persons interested in role-playing as "Spider-Man" to shoot a spider web—really, pressurized foam string—"from the palm of [the] hand."
Defendant Marvel Entertainment, LLC makes and markets products featuring Spider-Man. Kimble sought to sell or license his patent to Marvel's corporate predecessor and met with its president to negotiate a contract. But the company instead began marketing the "Web Blaster"—a toy that, like Kimble's patented invention, enables users to mimic Spider-Man by shooting foam string. Kimble sued Marvel in 1997, alleging breach of contract and patent infringement. The parties settled that litigation and Marvel agreed to purchase Kimble's patent in exchange for a lump sum (of about a half-million dollars) and a 3% running royalty on Marvel's future sales of the Web Blaster and similar products. The parties set no end date for royalties, apparently contemplating that they would continue for as long as customers wanted to buy the product.
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Kimble v. Marvel Entertainment, LLC
Kimble v. Marvel Entertainment, LLC, 576 U.S. 446 (2015), is a significant decision of the United States Supreme Court for several reasons. One is that the Court turned back a considerable amount of academic criticism of both the patent misuse doctrine as developed by the Supreme Court and the particular legal principle at issue in the case. Another is that the Court firmly rejected efforts to assimilate the patent misuse doctrine to antitrust law and explained in some detail the different policies at work in the two bodies of law. Finally, the majority and dissenting opinions informatively articulate two opposing views of the proper role of the doctrine of stare decisis in US law.
The narrow issue in Kimble v. Marvel was whether the Court should overrule the 50-year-old proposition in Brulotte v. Thys Co., 379 U.S. 29 (1964), that a patent license agreement requiring royalties for the period beyond the life of the licensed patent was unenforceable under the Supremacy Clause, state contract law notwithstanding, because it involved a misuse of patent rights. The Supreme Court in the Kimble case refused to overrule Brulotte and its doctrine against post-expiry royalties.
In 1964 the Supreme Court decided Brulotte v. Thys Co., in which it held that a contract to pay patent royalties beyond the expiration of the patent was unenforceable. The decision was widely criticized in academic circles and by the patent bar, as well as in lower court decisions. The thrust of the criticism was that the patent misuse doctrine should be based on antitrust law principles, and that conduct without a significant anticompetitive effect should not be proscribed.
In its opinion in the Kimble case, the Supreme Court listed some of the criticism suggesting that the Brulotte decision was wrong and should be overruled:
Other criticism of Brulotte includes the following:
Other commentators, however, have rejected adoption of an antitrust lens for analysis of patent misuse:
In 1990, plaintiff Stephen Kimble obtained U.S. Patent No. 5,072,856 on a toy that allows children and other persons interested in role-playing as "Spider-Man" to shoot a spider web—really, pressurized foam string—"from the palm of [the] hand."
Defendant Marvel Entertainment, LLC makes and markets products featuring Spider-Man. Kimble sought to sell or license his patent to Marvel's corporate predecessor and met with its president to negotiate a contract. But the company instead began marketing the "Web Blaster"—a toy that, like Kimble's patented invention, enables users to mimic Spider-Man by shooting foam string. Kimble sued Marvel in 1997, alleging breach of contract and patent infringement. The parties settled that litigation and Marvel agreed to purchase Kimble's patent in exchange for a lump sum (of about a half-million dollars) and a 3% running royalty on Marvel's future sales of the Web Blaster and similar products. The parties set no end date for royalties, apparently contemplating that they would continue for as long as customers wanted to buy the product.