Kimble v. Marvel Entertainment — Post-Expiration Patent Royalties Remain Unenforceable

Background

Stephen Kimble invented a Spider-Man toy — a glove that shoots foam string simulating the hero’s web. He patented it and later settled a dispute with Marvel by selling the patent and entering into a licensing agreement requiring Marvel to pay a royalty of 3% of sales with no end date. The patent expired in 2010, but Marvel sought a court ruling that it no longer owed royalties once the patent expired.

The dispute put at issue the Supreme Court’s 1964 decision in Brulotte v. Thys Co., which held that a patentee cannot collect royalties for use of an invention after the patent term has ended. Kimble argued Brulotte was wrongly decided and should be overruled. The Ninth Circuit upheld Brulotte and ruled for Marvel, and the Supreme Court agreed to hear the case.

The Court’s Holding

Justice Kagan, writing for a six-Justice majority, declined to overrule Brulotte and reaffirmed that post-expiration royalty agreements are unenforceable per se. The Court rested heavily on stare decisis, noting that Brulotte had been on the books for over 50 years and that Congress had repeatedly amended the Patent Act without disturbing it.

The Court acknowledged that some economists view Brulotte as economically misguided, but held that such policy debates are for Congress, not courts, to resolve. The majority also noted that creative licensing arrangements — such as running royalties tied to non-patent rights, or royalties that simply begin after a patent expires — may allow parties to achieve some commercial goals without running afoul of Brulotte.

Key Takeaways

• Brulotte stands: a license requiring royalty payments for use of a patented invention beyond the patent’s expiration date is unenforceable.
• Parties can structure deals to survive Brulotte by tying post-expiration payments to non-patent rights such as trade secrets, trademarks, or know-how.
• Long-settled rules with legislative acquiescence are very difficult to overturn at the Supreme Court, even when the underlying policy is contested.
• Patent licensors and licensees should audit existing agreements to confirm that royalty terms do not inadvertently extend beyond patent expiration without a legitimate non-patent basis.

Why It Matters

For anyone negotiating patent licenses, Kimble is a practical reminder that you cannot simply agree to collect royalties forever. The moment the patent clock runs out, so does your right to charge for patent-protected use. Structuring a licensing deal to capture value beyond the patent term requires careful legal planning: tying future payments to trade secrets, brand licenses, or other non-patent rights.

The case also illustrates the Supreme Court’s reluctance to act as a roving economic policy board. Even when a legal rule may be economically suboptimal, if it has been in place for decades and Congress has not changed it, the Court will generally leave reform to the legislature.