US Supreme Court to consider web of patent law in Spider-Man case
The US Supreme court will hear arguments today (March 31) between entertainment company Marvel and inventor Stephen Kimble over a Spider-Man toy, in a case that should clarify for how long royalty payments based on patent use should be paid.
In Kimble v Marvel Enterprises, the court will provide a final ruling on a dispute that has been raging for 20 years and has seen both a district and an appeals courts rule in favour of Marvel.
Marvel, the licence holder for comics and films related to several superheroes including Spider-Man, and Kimble have been arguing over a Spider-Man themed toy and the royalty payments resulting from its sales.
In 1990, Kimble created and patented a toy that allowed users to shoot web-like material from the palm of their hands, mimicking the comic book hero’s spider-like qualities.
Marvel rejected Kimble’s subsequent proposal for the company to sell the toy and began producing and selling a similar product known as the Web Blaster.
In 1997, Kimble sued Marvel for patent infringement at the US District Court for the District of Arizona. Although unsuccessful on infringement grounds, Kimble won a contractual claim and was awarded royalties worth 3.5% on past, present and future sales.
Four years later, following an appeal from both parties, a settlement was made. Marvel obtained the patent for more than $500,000 and offered Kimble royalties worth 3%
But the Web Blaster was then expanded into further products after Marvel licensed it to toy producer Hasbro. Believing a contract had been breached, Kimble sued Marvel again at the same district court.
In response, Marvel claimed that royalties would no longer be due after the patent expired in 2010.
The court agreed with Marvel and, in July last year, the US Court of Appeals for the Ninth Circuit rejected Kimble’s appeal against the ruling. In December last year, WIPR reported that the Supreme Court had then agreed to hear the dispute after Kimble appealed further.
The case bears relevance to the 1964 US Supreme Court ruling in Brulotte v Thys Co, which centred on royalty payments on sales of a hop harvesting machine.
In that case, the court ruled that royalty payments to the patent owner were no longer due once the patents expired.
Michael Sandonato, partner at law firm Fitzpatrick, Cella, Harper & Scinto in New York, told WIPR that the Supreme Court’s consideration in the latest case will be significant because it will be reviewing a rule of law “that has been criticised—and adhered to only reluctantly—for many years.
“Brulotte’s holding that post-expiration royalties are unlawful per se was called … ‘counter-intuitive’ by the ninth circuit in the Kimble decision.
“It will be interesting to see whether the court is now willing to abandon, or at least back a bit away from, its holding in Brulotte,” he said.
