__ U.S. __ (2015), 13-720, Kimble v. Marvel Entertainment, LLC

Docket Nº13-720
Citation__ U.S. __, 135 S.Ct. 2401, 192 L.Ed.2d 463, 83 U.S.L.W. 4531
Opinion JudgeKAGAN, JUSTICE.
Party NameStephen Kimble, et al., Petitioners v. Marvel Entertainment, LLC, Successor To Marvel Enterprises, Inc
AttorneyRoman Melnik argued the cause for petitioner. Malcolm L. Stewart argued the cause for petitioner as amicus curiae, by special leave of court. Thomas G. Saunders argued the cause for respondents.
Judge PanelKAGAN, J., delivered the opinion of the Court, in which SCALIA, KENNEDY, GINSBURG, BREYER, and SOTOMAYOR, JJ., joined. ALITO, J., filed a dissenting opinion, in which ROBERTS, C. J., and THOMAS, J., joined. JUSTICE ALITO, with whom THE CHIEF JUSTICE and JUSTICE THOMAS join, dissenting.
Case DateJune 22, 2015
CourtUnited States Supreme Court

Page __

__ U.S. __ (2015)

135 S.Ct. 2401, 192 L.Ed.2d 463, 83 U.S.L.W. 4531, 25 Fla.L.Weekly Fed. S 405

Stephen Kimble, et al., Petitioners

v.

Marvel Entertainment, LLC, Successor To Marvel Enterprises, Inc

No. 13-720

United States Supreme Court

June 22, 2015

[135 S.Ct. 2402] Argued March 31, 2015.

Editorial Note:

This opinion is uncorrected and subject to revision before publication in the printed official reporter.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

727 F.3d 856, affirmed.

SYLLABUS

[135 S.Ct. 2403] [192 L.Ed.2d 465] Respondent Marvel Entertainment's corporate predecessor agreed to purchase petitioner Stephen Kimble's patent for a Spider-Man toy in exchange for a lump sum plus a 3% royalty on future sales. The agreement set no end date for royalties. As the patent neared the end of its statutory 20-year term, Marvel discovered Brulotte v. Thys Co., 379 U.S. 29, 85 S.Ct. 176, 13 L.Ed.2d 99, in which this Court held that a patentee cannot continue to receive royalties for sales made after his patent expires. Marvel [192 L.Ed.2d 466] then sought a declaratory judgment in federal district court confirming that it could stop paying Kimble royalties. The district court granted relief, and the Ninth Circuit affirmed. Kimble now asks this Court to overrule Brulotte.

Held : Stare decisis requires this Court to adhere to Brulotte. Pp. 3-18.

(a) A patent typically expires 20 years from its application date. 35 U.S.C. § 154(a)(2). At that point, the unrestricted right to make or use the article passes to the public. See Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 230, 84 S.Ct. 784, 11 L.Ed.2d 661, 1964 Dec. Comm'r Pat. 425. This Court has carefully guarded the significance of that expiration date, declining to enforce laws and contracts that restrict free public access to formerly patented, as well as unpatentable, inventions. See, e.g., id., at 230-233, 84 S.Ct. 784, 11 L.Ed.2d 661; Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249, 255-256, 66 S.Ct. 101, 90 L.Ed. 47, 1946 Dec. Comm'r Pat. 616.

[135 S.Ct. 2404] Brulotte applied that principle to a patent licensing agreement that provided for the payment of royalties accruing after the patent's expiration. 379 U.S., at 30, 85 S.Ct. 176, 13 L.Ed.2d 99. The Court held that the post-patent royalty provision was " unlawful per se," id., at 30, 32, 85 S.Ct. 176, 13 L.Ed.2d 99, because it continued " the patent monopoly beyond the [patent] period," id., at 33, 85 S.Ct. 176, 13 L.Ed.2d 99, and, in so doing, conflicted with patent law's policy of establishing a " post-expiration . . . public domain," ibid.

The Brulotte rule may prevent some parties from entering into deals they desire, but parties can often find ways to achieve similar outcomes. For example, Brulotte leaves parties free to defer payments for pre-expiration use of a patent, tie royalties to non-patent rights, or make non-royalty-based business arrangements. Contending that such alternatives are not enough, Kimble asks this Court to abandon Brulotte 's bright-line rule in favor of a case-by-case approach based on antitrust law's " rule of reason." Pp. 3-7.

(b) The doctrine of stare decisis provides that today's Court should stand by yesterday's decisions. Application of that doctrine, though " not an inexorable command," is the " preferred course." Payne v. Tennessee, 501 U.S. 808, 828, 827, 111 S.Ct. 2597, 115 L.Ed.2d 720. Overruling a case always requires " special justification" --over and above the belief " that the precedent was wrongly decided." Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S. __, __, 134 S.Ct. 2398, 189 L.Ed.2d 339 at 349. Where, as here, the precedent interprets a statute, stare decisis carries enhanced force, since critics are free to take their objections to Congress. See e.g., Patterson v. McLean Credit Union, 491 U.S. 164, 172-173, 109 S.Ct. 2363, 105 L.Ed.2d 132. Congress, moreover, has spurned multiple opportunities to reverse Brulotte, see Watson v. United States, 552 U.S. 74, 82-83, 128 S.Ct. 579, 169 L.Ed.2d 472, and has even rebuffed bills that would have replaced Brulotte 's per se rule with the standard Kimble urges. In addition, Brulotte implicates property and contract law, two contexts in which considerations favoring stare decisis are " at their acme," Payne, 501 U.S., at 828, 111 S.Ct. 2597, 115 L.Ed.2d 720, because parties are especially likely to rely on such precedents when ordering their affairs.

[192 L.Ed.2d 467] Given those good reasons for adhering to stare decisis in this case, this Court would need a very strong justification for overruling Brulotte. But traditional justifications for abandoning stare decisis do not help Kimble here. First, Brulotte's doctrinal underpinnings have not eroded over time. The patent statute at issue in Brulotte is essentially unchanged. And the precedent on which the Brulotte Court primarily relied, like other decisions enforcing a patent's cut-off date, remains good law. Indeed, Brulotte 's close relation to a whole web of precedents means that overruling it could threaten others. Second, nothing about Brulotte has proved unworkable. See Patterson, 491 U.S., at 173, 109 S.Ct. 2363, 105 L.Ed.2d 132. To the contrary, the decision itself is simple to apply-- particularly as compared to Kimble's proposed alternative, which can produce high litigation costs and unpredictable results. Pp. 7-12.

(c) Neither of the justifications Kimble offers gives cause to overrule Brulotte. Pp. 12-18.

(1) Kimble first argues the Brulotte hinged on an economic error-- i.e., an assumption that post-expiration royalties are always anticompetitive. This Court sees no error in Kimble's economic analysis. But even assuming Kimble is right that Brulotte relied on an economic misjudgment, Congress is the right entity to fix it. The patent laws are not like the Sherman [135 S.Ct. 2405] Act, which gives courts exceptional authority to shape the law and reconsider precedent based on better economic analysis. Moreover, Kimble's argument is based not on evolving economic theory but rather on a claim that the Brulotte Court simply made the wrong call. That claim fails to clear stare decisis 's high bar. In any event, Brulotte did not even turn on the notion that post-patent royalties harm competition. Instead, the Brulotte Court simply applied the categorical principle that all patent-related benefits must end when the patent term expires. Kimble's real complaint may go to the merits of that principle as a policy matter. But Congress, not this Court, gets to make patent policy. Pp. 12-16.

(2) Kimble also argues that Brulotte suppresses technological innovation and harms the national economy by preventing parties from reaching agreements to commercialize patents. This Court cannot tell whether that is true. Brulotte leaves parties free to enter alternative arrangements that may suffice to accomplish parties' payment deferral and risk-spreading goals. And neither Kimble nor his amici offer any empirical evidence connecting Brulotte to decreased innovation. In any event, claims about a statutory precedent's consequences for innovation are " more appropriately addressed to Congress." Halliburton, 573 U.S., at __, 134 S.Ct. 2398, 189 L.Ed.2d at 356. Pp. 16-18.

727 F.3d 856, affirmed.

Roman Melnik argued the cause for petitioner.

Malcolm L. Stewart argued the cause for petitioner as amicus curiae, by special leave of court.

Thomas G. Saunders argued the cause for respondents.

KAGAN, J., delivered the opinion of the Court, in which SCALIA, KENNEDY, GINSBURG, BREYER, and SOTOMAYOR, JJ., joined. ALITO, J., filed a dissenting opinion, in which ROBERTS, C. J., and THOMAS, J., joined.

OPINION

[192 L.Ed.2d 468] KAGAN, JUSTICE.

In Brulotte v. Thys Co., 379 U.S. 29, 85 S.Ct. 176, 13 L.Ed.2d 99 (1964), this Court held that a patent holder cannot charge royalties for the use of his invention after its patent term has expired. The sole question presented here is whether we should overrule Brulotte. Adhering to principles of stare decisis, we decline to do so. Critics of the Brulotte rule must seek relief not from this Court but from Congress.

I

In 1990, petitioner Stephen Kimble obtained a patent on a toy that allows children (and young-at-heart adults) to role-play as " a spider person" by shooting webs--really, pressurized foam string--" from the palm of [the] hand." U.S. Patent No. 5,072,856, Abstract (filed May 25, [135 S.Ct. 2406] 1990). 1 Respondent Marvel Entertainment, LLC (Marvel) makes and markets products featuring Spider-Man, among other comic-book characters. Seeking to sell or license his patent, Kimble met with the president of Marvel's corporate predecessor to discuss his idea for web-slinging fun. Soon afterward, but without remunerating Kimble, that company began marketing the " Web Blaster" --a toy that, like Kimble's patented invention, enables would-be action heroes to mimic Spider-Man through the use of a polyester glove and a canister of foam.

Kimble sued Marvel in 1997 alleging, among other things, patent infringement. The parties ultimately settled that litigation. Their agreement provided that Marvel would purchase Kimble's patent in exchange for a lump sum (of about a half-million dollars) and a 3% 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 kids want to imitate Spider-Man (by doing whatever a spider can).

And then Marvel stumbled across Brulotte, the case at the heart of this dispute. In negotiating the settlement, neither side was aware of Brulotte. But Marvel must have been pleased to learn of it. Brulotte had read the patent laws to prevent a patentee from receiving royalties for sales made after his patent's expiration. See 379 U.S., at 32, 85 S.Ct. 176, 13 L.Ed.2d...

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169 practice notes
  • 395 F.Supp.3d 617 (D.Md. 2019), C. A. TDC-15-1356, De Simone v. VSL Pharmaceuticals, Inc.
    • United States
    • Federal Cases United States District Courts 4th Circuit United States District Court (Maryland)
    • 20 Junio 2019
    ...asserts that De Simone’s unjust enrichment claims necessarily fail under Kimble v. Marvel Entertainment, LLC, __ U.S. __, 135 S.Ct. 2401, 2415, 192 L.Ed.2d 463 (2015), in which the Supreme Court revisited and reaffirmed its holding in Brulotte v. Thys Co., 379 U.S. 29, 8......
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    • United States
    • Federal Cases United States District Courts 9th Circuit United States District Courts. 9th Circuit. District of Nevada
    • 14 Septiembre 2020
    ...for guidance when interpreting identical contract language. See, e.g., Kimble v. Marvel Entertainment, LLC, 576 U.S. 446, 457, 135 S.Ct. 2401, 2410 (2015) (recognizing that in “cases involving property and contract rights, considerations favoring stare decisis are a......
  • 795 S.E.2d 81 (Ga.App. 2016), A16A1090, George v. Hercules Real Estate Services, Inc.
    • United States
    • Georgia United States Court of Appeals (Georgia)
    • 18 Noviembre 2016
    ...decisions; correct judgments have no need for that principle to prop them up." Kimble v. Marvel Entm't, LLC, __ U.S. __ (135 S.Ct. 2401, 2409, 192 L.Ed.2d 463) (2015). For that reason, " it is not alone sufficient that we would decide a case differently now tha......
  • 964 F.3d 1 (D.C. Cir. 2020), 17-1098, Allegheny Defense Project v. Ferc
    • United States
    • Federal Cases United States Courts of Appeals United States Court of Appeals (District of Columbia)
    • 30 Junio 2020
    ..."the idea that today's [c]ourt should stand by yesterday's decisions[,]" Kimble v. Marvel Entm't, LLC, 576 U.S. 446, 135 S.Ct. 2401, 2409, 192 L.Ed.2d 463 (2015). Both contend that, because past decisions allowed the Commission's use of tolling orders, stare......
  • Request a trial to view additional results
122 cases
  • 395 F.Supp.3d 617 (D.Md. 2019), C. A. TDC-15-1356, De Simone v. VSL Pharmaceuticals, Inc.
    • United States
    • Federal Cases United States District Courts 4th Circuit United States District Court (Maryland)
    • 20 Junio 2019
    ...asserts that De Simone’s unjust enrichment claims necessarily fail under Kimble v. Marvel Entertainment, LLC, __ U.S. __, 135 S.Ct. 2401, 2415, 192 L.Ed.2d 463 (2015), in which the Supreme Court revisited and reaffirmed its holding in Brulotte v. Thys Co., 379 U.S. 29, 8......
  • Rimini Street, Inc. v. Oracle International Corp., 091420 NVDC, 2:14-cv-01699-LRH-DJA
    • United States
    • Federal Cases United States District Courts 9th Circuit United States District Courts. 9th Circuit. District of Nevada
    • 14 Septiembre 2020
    ...for guidance when interpreting identical contract language. See, e.g., Kimble v. Marvel Entertainment, LLC, 576 U.S. 446, 457, 135 S.Ct. 2401, 2410 (2015) (recognizing that in “cases involving property and contract rights, considerations favoring stare decisis are a......
  • 795 S.E.2d 81 (Ga.App. 2016), A16A1090, George v. Hercules Real Estate Services, Inc.
    • United States
    • Georgia United States Court of Appeals (Georgia)
    • 18 Noviembre 2016
    ...decisions; correct judgments have no need for that principle to prop them up." Kimble v. Marvel Entm't, LLC, __ U.S. __ (135 S.Ct. 2401, 2409, 192 L.Ed.2d 463) (2015). For that reason, " it is not alone sufficient that we would decide a case differently now tha......
  • 964 F.3d 1 (D.C. Cir. 2020), 17-1098, Allegheny Defense Project v. Ferc
    • United States
    • Federal Cases United States Courts of Appeals United States Court of Appeals (District of Columbia)
    • 30 Junio 2020
    ..."the idea that today's [c]ourt should stand by yesterday's decisions[,]" Kimble v. Marvel Entm't, LLC, 576 U.S. 446, 135 S.Ct. 2401, 2409, 192 L.Ed.2d 463 (2015). Both contend that, because past decisions allowed the Commission's use of tolling orders, stare......
  • Request a trial to view additional results
11 firm's commentaries
  • 2015年美国重要专利法判决(英文版)
    • United States
    • Mondaq United States
    • 23 Mayo 2016
    ...intent and Supreme Court precedent counseling in favor of the opposite approach.65 Remedies Kimble v. Marvel Entertainment, LLC, 135 S. Ct. 2401 (2015). Kimble reconsidered—and ultimately reaffirmed—a 51-year-old Supreme Court precedent on the topic of patent royalties. The Supreme Court de......
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    • United States
    • Mondaq United States
    • 11 Marzo 2021
    ...2021 WL 77248 (U.S. Jan. 8, 2021). 4 MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007). 5 See, e.g., Kimble v. Marvel Entm't, LLC, 135 S. Ct. 2401 (2015), Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313 (1971), and Edward Katzinger Co. v. Chi. Metallic Mfg. Co., 329 U......
  • CAFC Upholds Same Day Continuation Applications
    • United States
    • JD Supra United States
    • 23 Junio 2016
    ...law are often strong. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 739 (2002); see Kimble v. Marvel Entm’t, LLC, 135 S. Ct. 2401, 2410 The Federal Circuit also is careful to point out that “[t]his is not a case … where the language of the statute actually contradicts t......
  • Litigation & Dispute Resolution 2019 – Eighth Edition - U.S. Chapter
    • United States
    • JD Supra United States
    • 6 Septiembre 2019
    ...of “stare decisis”, which is “the idea that today’s Court should stand by yesterday’s decisions”. Kimble v. Marvel Entm’t, LLC, 135 S. Ct. 2401, 2409 (2015). The rationale behind this rule of law is that it “promotes the evenhanded, predictable, and consistent development of legal principle......
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35 books & journal articles
  • The Trade Secret-Contract Interface
    • United States
    • Iowa Law Review Nbr. 103-4, May 2018
    • 1 Mayo 2018
    ...that bolster constraints on licensing” and critiquing this “skepticism” towards IP licensing); see, e.g., Kimble v. Marvel Entm’t, LLC, 135 S. Ct. 2401, 2415 (2015) (holding that a patent license requiring royalty payments past the patent term is unenforceable); Quanta Comput., Inc. v. LG E......
  • Beyond Brooke Group: Bringing Reality to the Law of Predatory Pricing.
    • United States
    • Yale Law Journal Vol. 127 Nbr. 7, May 2018
    • 1 Mayo 2018
    ...Group does not apply broadly). (42.) 549 U.S. 312, 315 (2007). (43.) 555 U.S. 438, 448-55 (2009). (44.) Kimble v. Marvel Entm't, LLC, 135 S. Ct. 2401, 2412-13 (2015); see also State Oil Co. v. Khan, 522 U.S. 3, 21 (1997) (switching from per se liability to the rule of reason for maximum res......
  • OVERTURNING A CATCH-22 IN THE KNICK OF TIME: KNICK V TOWNSHIP OF SCOTT AND THE DOCTRINE OF PRECEDENT.
    • United States
    • Fordham Urban Law Journal Vol. 47 Nbr. 3, April 2020
    • 1 Abril 2020
    ...note 14, at 391. (18.) Antonin Scalia, A Matter of Interpretation: Federal Courts and the Law 139 (1997). (19.) Kimble v. Marvel Entm't, 135 S. Ct. 2401, 2409 (20.) One of the authors has written about these issues in greater detail in an earlier article. See Somin, Knick, supra note 2, at ......
  • THE SUPREME COURT BAR AT THE BAR OF PATENTS.
    • United States
    • Notre Dame Law Review Vol. 95 Nbr. 3, January 2020
    • 1 Enero 2020
    ...originate in the Federal Circuit and hence is not included in my dataset, a good example would be Kimble v. Marvel Entertainment, LLC, 135 S. Ct. 2401, 2405 (2015) (holding unenforceable contracts charging royalties after a patent expires). (52) A paradigmatic example is Oracle America, Inc......
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