CALL US: 206.533.3854
CALL US  206.533.3854

Spider Senses Expiration

Court of Appeals won’t
Enforce Spider-Man patent
In IP bundle

In a case involving competing Spider-Man web-shooter toys, the Ninth Circuit Court of Appeals has refused to enforce a hybrid intellectual property agreement involving a bundle of patent, trade secret, and other IP rights.

The case is Kimble v. Marvel Enterprises Inc., No. 11-15605 (9th Cir. July 16, 2013).

Around 1990, Stephen Kimble invented a toy that allowed users to emulate Spider-Man with a web-shooter that used foam string. His US Patent No. 5,072,856 expired in 2010.

Also in 1990, Kimble met with the president of Marvel’s predecessor company to discuss the then-pending ‘856 patent. The president expressed a lack of interest in the web-shooter, but Marvel later introduced a similar toy.

In 1997, Kimble sued Marvel for patent infringement. In 2001, the parties agreed to settle the case while appeals were still pending. The settlement agreement included 3% of “net product sales” of the Marvel web-shooter, and Marvel eventually paid Kimble more than $6 million in royalties.

When disputes arose over royalty payments, Marvel reasserted its view that its product didn’t infringe the ‘856 patent. It also contended that it wasn’t obligated to pay royalties after the ‘856 patent expired. The Arizona district court found that the settlement agreement was a “hybrid” rights agreement and that royalty payments could not be collected after the patent expired.

The Ninth Circuit agreed, citing the US Supreme Court’s decision in Brullote v. Thys Co., 379 U.S. 29 (1964) that charging patent royalties beyond the date a patent expires is “unlawful per se.”

The Supreme Court in Brullote had viewed post-expiration royalties as an impermissible attempt to extend the term of the legal patent monopoly. It rejected the argument that post-expiration royalties were deferred payments for a license during the term of the patent.

However, the Ninth Circuit wasn’t happy about the result, noting that it arguably deprived Kimble of the benefit of his bargain based on a technicality, and that he would have sought a higher royalty rate had be known of the impact of Brulotte at the time he entered into the settlement with Marvel.

Related Articles

Jury Awards Netlist $118 Million in Second Samsung Patent Infringement Case

A federal jury in Texas has awarded Netlist $118 million in damages for patent infringement by Samsung. Netlist, founded in 2000, is a Delaware company ...
Read More

AEON Law Founder Adam Philipp Once Again Chosen to IAM Strategy 300 Global Leaders

Adam Philipp, the founder of AEON Law, is listed among the IAM Strategy 300 Global Leaders for the second year in a row. Published annually ...
Read More

WIPO Members Approve Riyadh Design Law Treaty

Member states of the World Intellectual Property Organization (WIPO) have approved the Riyadh Design Law Treaty. The treaty is designed to “make it easier, faster ...
Read More

Let's work together.

Contact us to set up a meeting with an attorney or team member.

Stay Informed

Sign up to receive Patent Poetry—a monthly roundup of key IP issues in our signature haiku format. Four articles (only 68 syllables); zero hassle.

SECTORS

HIGH
TECHNOLOGY

Artificial Intelligence

Blockchain & Cryptocurrency

Computer Technology & Software

Consumer Electronics

Electrical Devices

MECHANICAL
& PRODUCTS​

Cleantech

Mechanical Devices

Consumer & Retail Products

Hardware & Tools

Toys & Games

LIFE SCIENCES
& CHEMISTRY​

Biotechnology

Chemical Compounds

Digital Health

Healthcare Products

Pharmaceuticals

BRANDING
& CREATIVE​

Books & Publications

Brand Creation

Luxury Products

Photography & Video

Product Design

call us  206.533.3854