Tuesday, June 3, 2014

U.S. Supreme Court Requests Views of Solicitor General Re Post-Expiration Royalties

Yesterday the U.S. Supreme Court invited the U.S. Solicitor General to file a brief expressing the views of the United States in Kimble v. Marvel Enterprises, Inc., Case No. 13-720.  The petition for certiorari poses the following question:
Petitioners are individuals who assigned a patent and conveyed other intellectual property rights to Respondent. The court of appeals “reluctantly” held that Respondent, a large business concern, was absolved of its remaining financial obligations to Petitioners because of “a technical detail that both parties regarded as insignificant at the time of the agreement.” App. 2-3; 23. Specifically, because royalty payments under the parties’ contract extended undiminished beyond the expiration date of the assigned patent, Respondent’s obligation to pay was excused under Brulotte v. Thys Co., 379 U.S. 29, 32 (1964), which had held that “a patentee’s use of a royalty agreement that projects beyond the expiration date of the patent is unlawful per se.”
A product of a bygone era, Brulotte is the most widely criticized of this Court’s intellectual property and competition law decisions. Three panels of the courts of appeals (including the panel below), the Justice Department, the Federal Trade Commission, and virtually every treatise and article in the field have called on this Court to reconsider Brulotte, and to replace its rigid per se prohibition on postexpiration patent royalties with a contextualized rule of reason analysis.
The question presented is: Whether this Court should overrule Brulotte v. Thys Co., 379 U.S. 29 (1964).
The respondent's brief is available here and the reply brief here.  I signed off on an amicus brief arguing for reversal of Brulotte, filed by the Center for Intellectual Property Research of the Indiana University Maurer School of Law and available here.  I'm also aware of two other amicus briefs in support of the petitioners, one from the Sloan-Kettering Cancer Center and others, and another from the Intellectual Property Law Association of Chicago.   

I should mention that the Supreme Court also decided two patent cases yesterday, neither having any direct connection to the subject of patent remedies.  In Nautilus, Inc. v. Biosig Instruments, Inc., the Court held that "insolubly ambiguous" is not the correct standard for determining when a patent claim is indefinite, and that the correct standard is whether the "claims, viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty"; and in Limelight Networks, Inc. v. Akamai Technologies, Inc. the Court held that a defendant may not "be liable for inducing infringement of a patent under 35 U. S. C. §271(b) when no one has directly infringed the patent under §271(a) or any other statutory provision."

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