Supreme Court Weighs In on Spider Man Toy Patent Royalties Issue
The Supreme Court may be weighing in on a patent issue regarding whether an inventor can continue to collect royalties after a patent expires.
Inventor, Stephen Kimble patented a web-blaster toy that lets children shoot foam string from a glove, much like the Spider Man super hero. He sold his patent in 2001 to comic book giant, Marvel Entertainment (a division of Walt Disney Co.) for $6 million in royalties. Marvel stopped makign payments after the patent expired in 2010.
Kimble filed suit and a federal appeals court "reluctantly" held that it was bound by the high court's "unconvincing" 1964 case, Brulotte v. Thys Co., which forbids royalty payments after a patent has expired. The case is now before the Supreme Court.
Kimble's lawyer, Roman Melnik, urged the Supreme Court justices to overrule the case because it is based on "outdated and misguided" assumptions, stifles competition and discourages innovation in the form of flexible licensing agreements.
Below are some of the Justices' responses:
Justice Ruth Bader Ginsburg: Stated that it is well-known that licensing agreements can get around the restriction by making clear that any payments are for the period before a patent was granted.
Justice Elena Kagan: Suggested the parties could form a joint venture to get around the problem. She said Kimble had not provided any "special justification" for overturning precedent, such as that it is "unworkable" or "utterly out of kilter."
Justices Anthony Kennedy and Sonia Sotomayor both suggested it would be wiser to let Congress change patent laws.
Chief Justice John Roberts: Took the seemingly least reluctant view to overturning precedent in the 1964 case by looking to several 1960s cases that the Supreme Court has reversed. He noted that economists "are almost unanimous in saying this is a very bad rule."
The attorneys for both parties, Kimble and Marvel each responded to the Justice's opinions in differing ways. Kimble's attorney argued that universities and other nonprofits are not always able to negotiate such agreements, especially when it is unclear how valuable early-stage technology will be in later years. Marvel's attorney, Thomas Saunders argued that "Congress would be the appropriate institution" to change the law and balance competing interests.
The final weigh in was the Justice Department lawyer, Malcolm Stewart, representing the Obama administration. Stewart argued that the case should remain untouched because it favors "unrestricted public access to unpatented and previously patented inventions."
The Supreme Court should be issuing a ruling by June. The case is Kimble v. Marvel Enterprises, 13-720.