Supreme Court Quotes Spiderman's 'Great Power, Great Responsibility' Line In Rejecting Royalties On Expired Patent

from the good-news dept

Mon, Jun 22nd 2015 10:33am — Mike Masnick

Earlier this year, we noted that the Supreme Court was hearing an important case on the public domain in Kimble v. Marvel, concerning whether or not Marvel/Disney needed to keep paying royalties to the patent holder of an invention to make a Spider-Man toy that could shoot webs. Marvel had purchased the patent from the inventor, with an agreement to pay royalties back to him. After the patent expired, Marvel stopped paying. The inventor argued that the contract had no such stipulation. Marvel/Disney argued that you don't have to pay royalties for something that is in the public domain. Yes, this was a case where Disney was arguing in favor of a stronger public domain, odd as that may be.

The Supreme Court ruled on the case today and did, in fact, protect the public domain, saying that Marvel doesn't need to pay. Specifically, the Court rejected a request to overturn a previous ruling (the "Brulotte" case) that said that you cannot charge royalties on an expired patent. The majority decision was written by Justice Kagan (who has shown, in the past, to understand these issues pretty clearly). It was a 6 to 3 ruling, with Alito, Roberts and Thomas dissenting.

As Kagan notes:

Patents endow their holders with certain superpowers, but only for a limited time. In crafting the patent laws, Congress struck a balance between fostering innovation and ensuring public access to discoveries. While a patent lasts, the patentee possesses exclusive rights to the patented article—rights he may sell or license for royalty payments if he so chooses.... But a patent typically expires 20 years from the day the application for it was filed.... And when the patent expires, the patentee’s prerogatives expire too, and the right to make or use the article, free from all restriction, passes to the public.

In the end, the ruling more or less comes down to the fact that the Supreme Court already ruled one way in Brulotte and there is no compelling reason to overturn that ruling. And, more importantly, in the wake of Brulotte, Congress had many opportunities to change the law if it felt the Court got things wrong -- and did not. And that leads to Kagan's closing line, in which she cites Spider-Man itself:

What we can decide, we can undecide. But stare decisis teaches that we should exercise that authority sparingly. Cf. S. Lee and S. Ditko, Amazing Fantasy No. 15: “Spider-Man,” p. 13 (1962) (“[I]n this world, with great power there must also come—great responsibility”). Finding many reasons for staying the stare decisis course and no "special justification" for departing from it, we decline Kimble’s invitation to overrule Brulotte.

Of course, that "great power, great responsibility" argument could also be applied directly to the patent system itself, but so few people actually recognize that. The dissent argument is really kind of bizarre. It argues that the majority is engaging in "policymaking" — but then most of its own argument is entirely in the policy realm, itself. It focuses on the claim that allowing licenses to go beyond patent expiry could be a good thing, since it could lower patent licensing fees by extending them over a longer period of time. That's not really an issue for the Supreme Court to be discussing, though, and is purely a policy question.

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Filed Under: brulotte, kimble, patent expiration, patents, public domain, supreme court
Companies: disney, marvel

28 Comments

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RD, 22 Jun 2015 @ 10:40am

Not odd at all
"Marvel/Disney argued that you don't have to pay royalties for something that is in the public domain. Yes, this was a case where Disney was arguing in favor of a stronger public domain, odd as that may be. "

Dude, I don't know how you can state that as odd at all. It is *always* supported when it is in favor of Disney. God forbid and the world would end if it was the other way around, however. Then the Patent and Contract Hammer of Justice would be rammed so far up the ass of the common plebe who had the audacity to challenge The Big Mouse that he would become a permanent example of Do Not Fuck With The Mouse to all those who would dare to challenge the house that Roy built.
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Anonymous Coward, 22 Jun 2015 @ 10:50am

Have not read the opinion yet, but how do they get around the contract issue, regardless of the patent issue.
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Ratbaiter, 22 Jun 2015 @ 10:53am

Dog Bites Man. Masnick Startled, Decides Most Important Story He Could Write.
Masnick is even startled that Marvel always acts in its own interests, by here arguing for patents to expire.
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Anonymous Coward, 22 Jun 2015 @ 10:54am

Re:
because unless otherwise stipulated, the contract had an implicit built in end date, the expiry of the patent.
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Ratbaiter, 22 Jun 2015 @ 10:55am

Dog Bites Man. Masnick Startled, Decides Most Important Story He Could Write.
Masnick is even startled that Marvel always acts in its own interests, by here arguing for patents to expire.
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any moose cow word, 22 Jun 2015 @ 10:55am

The dissent argument is really kind of bizarre. It argues that the majority is engaging in "policymaking" — but then most of its own argument is entirely in the policy realm, itself.

Some people are capable of great cognitive dissidence; none of them should be a justice on the Supreme Court. I'd think that appointees to the highest court should be required to be sane and rational, but that will never happen as long as we instead make it about political gamesmanship.
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DannyB (profile), 22 Jun 2015 @ 11:21am

It is astonishing that there would even be any dissent
I find it astonishing that there would be any dissent that you can charge someone to use something that is in the public domain.

Any contract regarding payments for LIMITED TIME monopolies, such as patents and copyrights, should always be interpreted as having an end date once that monopoly ends.
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Michael, 22 Jun 2015 @ 11:22am

Next up: Supreme court sued for copyright infringement by Marvel.
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Violynne (profile), 22 Jun 2015 @ 11:23am

Yes, this was a case where Disney was arguing in favor of a stronger public domain, odd as that may be.

Fair enough, until Disney makes an animated movie with catchy songs over this case, promptly locking the "toy shooter" under copyright protection for the end of time + 70 years.

And nobody lived happily ever after.
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Edward Teach, 22 Jun 2015 @ 11:35am

Re: Not odd at all
I, too, was going to point out that at the very least, the majority was probably composed of a few Justices that went with The Law and logic, and a few Justices that went with "Big Corporations Own Everything", rather than keeping and enlarging the Public Domain.

It's telling that Roberts voted with Alito and (ugh!) Thomas on this one, and that the dissent was so non-sensical. Kind of amazing that Scalia didn't vote with the loonies.
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cpt kangarooski, 22 Jun 2015 @ 11:37am

Re: It is astonishing that there would even be any dissent
I find it astonishing that there would be any dissent that you can charge someone to use something that is in the public domain.

Oh, you can certainly charge. Go to any bookstore and you can buy a copy of a public domain book; go to the Conan Doyle estate and they'll happily charge you a licensing fee to reprint A Study in Scarlet.

But once the work is in the public domain, the former rightsholder lacks the ability to stop someone from undercutting them. So you can download public domain books for free and reprint them at will, and help others do the same.
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AH2014 (profile), 22 Jun 2015 @ 11:42am

Good decision, but why quote Spiderman when the original quote is Voltaire?
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Max (profile), 22 Jun 2015 @ 11:44am

High five!
...because, of course quoting the practically identical "great power involves great responsibility" line from a person who actually existed - a president, no less (FDR, http://www.presidency.ucsb.edu/ws/?pid=16602) - would just not cut it these days. After all, who's a president compared to frikkin' SPIDER MAN...?!?
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avideogameplayer, 22 Jun 2015 @ 11:46am

Response to: AH2014 on Jun 22nd, 2015 @ 11:42am
Because it's a case that involves Marvel and Spider Man is their 'spokescharacter'...
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Anonymous Coward, 22 Jun 2015 @ 11:55am

Alito, Roberts and Thomas

Moe, Larry and Shemp
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JoeCool (profile), 22 Jun 2015 @ 12:08pm

Re: Re: It is astonishing that there would even be any dissent
Not the same thing at all. A bookstore can sell a PD book because you're paying for the dead tree and ink, plus labor. Patent licenses include nothing but a description of the patent, filed with the government. You get nothing for your money except for the right to sell something based on the patent while the patent is still enforce. Once it expires, there is really NOTHING to pay for.
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JoeCool (profile), 22 Jun 2015 @ 12:10pm

Re: High five!
The Office of the President of the US just WISHES they had the kind of respect Spiderman pulls! :)
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Anonymous Coward, 22 Jun 2015 @ 12:14pm

Re: Re:
...the contract had an implicit built in end date...

Most courts - at least in my area - do not like contracts that have no end date or condition(s) and usually judge against them. Non-compete clauses are the most common - courts have only enforced such clauses when there's an end date and a distance specification.
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Andrew D. Todd, 22 Jun 2015 @ 12:57pm

Tying Expired Patents to Unexpired Copyrights.
An intelligent argument along Justice Allioto's lines would run as follows. No matter what agreement Licensee A makes, and no matter what the extent to which Licensee A alienates his public domain rights, Non-licensee B is not bound by it, and if Non-licensee B subsequently exercises his public domain rights in such a way as to undercut Licensee A, and drive him out of business, the public interest is protected, and the fate of Licensee A is not an evil with which the court has to concern itself. Now, of course, in this argument, Justice Allioto would be assuming perfect competition. The weakness of this argument is the absence of perfect competition, and the risk that people would not be able to set up new companies to effectually exercise public domain rights.

In particular, this patent, #5,072,856, covers the means of simulating the behavior of a particular cartoon character, Spiderman, whose characteristic behavior amounts to emulating a spider. Issues could arise over the tying of expired patents to copyrights, eg. the position of someone who wants to make silly string in a glove toys, but cannot get a license for the Spiderman character. One can argue about whether Spiderman's behavior is copyrightable, or not, but in practice, there is only one comic book superhero who emulates a spider. Others emulate bats or wolves, or whatever. Other factors besides copyright have traditionally tended to restrict entry into the comic book market, eg. the unwillingness of news-stand proprietors to carry more than a certain amount of merchandise, from a certain number of suppliers. In practice, cartoon characters are reasonably well spaced-out. I had a look through an old paper Fantagraphics catalog, to get an idea of what the edgier underground cartoonist might have come up with, and about the closest I could find was a samurai rabbit character Stan Sakai's "Usagi Yojimbo". Most of the underground cartoonists were not interested in Superheroes, and found their personal virtue oppressive. Robert Crumb's "Fritz the Cat" is not a Superhero.

The patent is probably invalid on post-KSR v.Teleflex immediate obviousness grounds. People have concealed so many things in gloves, up to and including bona fide firearms, that merely concealing a "silly string" dispenser would not create "inventive step." The predecessors of the CIA and MI6 developed all kinds of clever gadgets for assassinations.

http://www.google.com/patents/US5072856
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Edward Teach, 22 Jun 2015 @ 1:19pm

Re: Scalia?
How does Scalia fit into this scheme? As "Curly Joe DiRita" or as just plain "Curly"?
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Anonymous Coward, 22 Jun 2015 @ 5:38pm

Funny how out_of_the_blue will go to any lengths to fellate a corporation "enforcing" their "copyright", but turns tail and runs when they lose.
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Lurker Keith, 22 Jun 2015 @ 9:07pm

Re: Re: High five!
I know right? J. Jonah Jameson constantly calling you a criminal & distorting the truth against you would still net you a better reputation than current Politicians have.
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Klaus, 23 Jun 2015 @ 2:27am

Re: Re: Not odd at all
"Roberts voted with Alito and (ugh!) Thomas"

I'm sure politics doesn't play a part, but all three of the dissenters are Bush Family nominees...
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Richard (profile), 23 Jun 2015 @ 3:46am

Re:
Hmm - when I read this I thought - surely, since the patent has expired - anyone could now make such a toy. The I realised - Marvel/Disney owns the Spiderman copyright - and they will use that to prevent competition.
Maybe the inventor should have argued that the contract effectively exchanged a share of the patent with a share of the copyright - and hence the contract should not expire until BOTH had ended.

If he didn't wite the contract that way then hwe should have.
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Richard (profile), 23 Jun 2015 @ 3:51am

Re: Tying Expired Patents to Unexpired Copyrights.
See my comment above on this topic:
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Anonymous Coward, 23 Jun 2015 @ 4:56am

Why is everyone ignoring the fact that the patent was SOLD to Marvel? Marvel was not paying royalties on an expired patent they were paying off the purchase of the patent.

Once the contract was signed Marvel became the owner of the patent. This was not a case about patent royalties.
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Anonymous Coward, 23 Jun 2015 @ 5:33am

Re:
Because the first paragraph of the Syllabus states "Respondent Marvel Entertainment’s corporate predecessor agreed to purchase petitioner Stephen Kimble’s patent for a Spider-Man toy in exchange for a lump sum plus a 3% royalty on future sales."
Making the case about patent royalties.
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Anonymous Coward, 1 Jul 2015 @ 4:24am

Re: Re: Re: It is astonishing that there would even be any dissent
What you're getting is the right to use it before the patent/copyright expires, except instead of paying a large amount now you pay a small amount in perpetuity. It isn't entirely insane: the same sort of thing gets used to extract royalties for items produced and sold in countries where the patents aren't valid, for example (although the EU has indicated that they'll treat that as anticompetitive behaviour with the associated high fines).

I do agree about the implicit end date, however.
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