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Supreme Court Upholds 50-Year-Old Ban on Patent Royalties in Marvel Case

In a highly watched case, the United States Supreme Court this week sided with Marvel Enterprises, Inc. in a legal battle over patent royalties on a now defunct Spider-Man toy patent. Their decision upholds to a 50-year-old rule barring royalty agreements that continue after a patent expires.

The case centered on rights to a toy Spider-Man glove that shoots foam from the wearer's palm, creating a "spider-like web for amusement purposes." Patent protection for the toy was granted to Stephen Kimble in 1990 and, after an initial court fight, Kimble and Marvel reached a licensing agreement that allowed Marvel to market the toy for royalty payments to Kimble. However, the licensing and royalty contract did not specify an end date, so when the patent expired, Marvel continued to sell the toy, but stopped sending royalties to Kimble.

Attorneys for Marvel argued precedent based on a 1964 case referred to as Brulotte, which held that royalty payments cannot exceed the life of a patent. Supreme Court Justices agreed. With a quick look at the US Patent and Trademark Office's website, you'll see that patent protection does, indeed, eventually run out. Utility and plant patents generally last for 20 years from the date the patent is granted, subject to maintenance fees and may be extended for a limited number of reasons. A design patent is generally granted protection for 14 years measured from the date the design patent is granted.

"Patents endow their holders with certain superpowers, but only for a limited time," wrote Justice Elena Kagan for the majority. "In crafting the patent laws, Congress struck a balance between fostering innovation and ensuring public access to discoveries … And when the patent expires, the patentee's prerogatives expire too, and the right to make or use the article, free from all restriction, passes to the public."

If you are seeking patent protection for your invention, it's critical that you know all the applicable laws, understand how to keep a granted patent in force and how to craft patent licensing contracts to assure you'll get the most out of the life of your patent. These can be complex issues, so your best bet for success is to enlist the help of an attorney-y experienced in securing, assigning and licensing patents. Contact Florida's Daniel Law Offices at 866-37PATENT.

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