In 1990, Stephen Kimble invented a Spider-Man toy that allowed a child to “role play” as Spider-Man by mimicking Spider-Man’s webshooting abilities with foam string. Kimble filed a patent for his invention and, around the same time, met with Marvel to discuss licensing his patent and other ideas. Kimble and Marvel did not have a written agreement but Kimble claims that Marvel agreed to compensate him if any ideas were used. Marvel subsequently told Kimble that it was not interested in his ideas. Despite its supposed lack of interest, Marvel began manufacturing a similar Spider-Man role-playing toy. In the meantime, Kimble's patent application issued and Kimble sued Marvel for patent infringement and breach of contract. The parties settled in 2001 and Marvel bought the patent from Kimble for a lump sum and a 3% running royalty based on net sales.
Peace reigned until 2006, when a royalty dispute resulted in Kimble filing a new lawsuit for breach of contract. Marvel counterclaimed for a declaration that it was no longer obligated to pay Kimble based on the sale of products after the expiration of his patent. The Ninth Circuit reluctantly agreed with Marvel, finding that a Brulotte v. Thys Co., a 1964 Supreme Court decision forbidding patent holders from collecting royalties after the expiration date of the patent controls. Many judges and scholars have criticized Brulotte as making little economic sense. But unless the Supreme Court revisits its earlier precedent, Mr. Kimble's stream of web-shooting royalties has run out. Check out a commercial for the toy here:
Peace reigned until 2006, when a royalty dispute resulted in Kimble filing a new lawsuit for breach of contract. Marvel counterclaimed for a declaration that it was no longer obligated to pay Kimble based on the sale of products after the expiration of his patent. The Ninth Circuit reluctantly agreed with Marvel, finding that a Brulotte v. Thys Co., a 1964 Supreme Court decision forbidding patent holders from collecting royalties after the expiration date of the patent controls. Many judges and scholars have criticized Brulotte as making little economic sense. But unless the Supreme Court revisits its earlier precedent, Mr. Kimble's stream of web-shooting royalties has run out. Check out a commercial for the toy here:
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