Recently, the U.S. Supreme Court confirmed a lower court ruling for Marvel Entertainment relating to a patent royalty dispute for a Spider-Man toy. The majority, written by Justice Kagen, found that Marvel did not have to pay the agreed to royalties to the inventor of a web-shooting toy after the patent term expired. “Patents endow their holders with certain superpowers,” Kagan wrote, “but only for a limited time.”
The decision is a loss for the Spider-Man toy inventor Stephen Kimble. Mr. Kimble obtained the patent in 1990 for a toy that shoots foam string from a gloved hand, imitating the web spun by a spider person. Kimble sought to market the toy to Marvel’s predecessor, which at the time made its own “Web Blaster” toy without paying Kimble.
In 1997, Kimble sued Marvel and the parties settled for a fixed payment to Kimble, along with a 3 percent royalty on sales of the toy with no cutoff date. Marvel later sought a declaratory judgment that it no longer needed to pay royalties after the end of the patent term in 2010.
What’s the take away here? If you are entering into a license agreement for intellectual property rights, be sure to fully understand your obligations as well as your rights. Capitalizing on innovative developments is critical to any organization. Having the right person to help you make those decisions is important. The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game. The first telephone consultation is free. Email us at email@example.com.