3:34pm PT by Eriq Gardner
Supreme Court Will Review Case About Spider-Man Toy
The U.S. Supreme Court has been caught in Spider-Man's web, agreeing on Friday to review a case concerning royalty payments to the inventor of a Spider-Man toy called the Web Blaster.
It was less than three months ago that the high court dodged another Spider-Man battle when the estate of comic book legend Jack Kirby arrived at a settlement agreement with Marvel to resolve rights over the character. But given the chance to weigh in on a different intellectual property dispute involving the famous comic book character, the Supreme Court is all in.
This case involves patents.
Stephen Kimble is the inventor of the Web Blaster, a toy that has a trigger that shoots out foam string. The invention was patented in 1990, and Kimble approached Marvel to license rights. Marvel passed, and when another company began manufacturing a similar toy, Kimble sued for patent infringement and breach of an implied contract to pay him for use of his idea.
By 2001, the parties settled. Marvel purchased patent rights and gave him 3 percent of product sales. This amounted to about $6 million by the time the patent expired in 2010. But by 2006, when Marvel licensed the rights to the Web Blaster to Hasbro, a disagreement over royalties erupted. Kimble made claims of how the toys were packaged with other role-play items like Spider-Man masks, and Marvel filed counterclaims.
Eventually, the dispute went up to the 9th Circuit Court of Appeals, which, in July 2013, gave Marvel a victory and relief from ongoing royalty payments thanks to Brulotte v. Thys Co., a 1964 Supreme Court decision, which forbids patent holders from collecting royalties after the expiration date of the patent.
In his petition for cert, Kimble wanted the Supreme Court to directly address this past decision, potentially overruling it as unsound, the "product of a bygone era."
Now that the Supreme Court has chosen — over the solicitor general's advice — to take the review, it will be considering whether preventing patent holders from collecting post-patent royalties makes sense. The standard was originally adopted so that patent holders couldn't extend a monopoly by using their leverage in the early years of a patent's issuance.
As much as the case entails the Hollywood cash machine known as merchandising, and as exciting as it is (for some lawyers) to consider progress standards in having limited intellectual property terms, the case could become a vehicle for the justices to debate whether shifting times necessitate an overhaul of past decisions. Marvel has argued that Brulotte was a "narrow rule," that criticisms don't warrant 50 years of settled patent misuse law and that justifications for reconsideration don't warrant a departure from previous precedent. The Supreme Court will consider that. Then again, the justices might just be fond of Spider-Man.