Attorneys React To Supreme Court Patent Royalties Case

June 22, 2015 – In The News

Gerard P. Norton was featured in the Law360 article, “Attorneys React To Supreme Court Patent Royalties Case.” Full text can be found in the June 22, 2015, issue, but a synopsis is below.

The U.S. Supreme Court recently ruled in Kimble vs. Marvel Enterprises that a half-century-old rule, which prohibits royalty agreements that continue after the expiration of patents, still stands.

When asked why this is significant, Gerard P. Norton said, “The Supreme Court’s ruling [Monday] in Kimble v. Marvel upholding the court’s 1964 decision in Brulotte provides clarity to those involved in transactional work regarding existing and future licensing agreements involving a patent component. Prior to today, the practitioner would likely mutter, 'I know of Brulotte, I understand Brulotte — an almost excruciatingly simple holding stating that collection of royalties from a licensee post-patent expiration is "unlawful per se" — but I wonder, given the general disdain for Brulotte in numerous lower courts, whether some 50 years later this basic concept would pass muster of Supreme Court review.' Today, the court put any such apprehension to rest. At the end of the day, a 6-3 majority resolved that the doctrine of stare decisis required Brulotte to stand, with the majority concluding that there was no compelling reason to disturb the earlier ruling (and in fact noting several well-heeded examples which allow the parties licensing flexibility with Brulotte in mind), instead placing any such future action regarding Brulotte at the doorstep of Congress. For better or worse, at least we have clarity — maybe for another 50 years.”