In 1964, the U.S. Supreme Court issued an opinion in the case Brulotte v. Thys. Co.holding that a patentee cannot charge royalties for the use of his invention after the patent term has expired. Years later, Kimble, a patent owner, entered into an agreement with Marvel Entertainment for his patent where Marvel agreed to pay Kimble a royalty on future sales. The agreement had no termination date. When the patent expired, Marvel sought a declaratory judgment that it could cease paying royalties. Based on the ruling in Brulotte, the district court granted the declaratory judgment, which was affirmed by the Ninth Circuit Court of Appeals. Kimble appealed and asked the U.S. Supreme Court to overrule Brullote. In a 6-3 decision, the U.S. Supreme Court affirmed its previous Brulotteholding that a patentee cannot collect royalties on an expired patent because there was no compelling reason to modify this rule. Kimble v. Marvel Entertainment, LLC (June 22, 2015).
A patentee has the exclusive right to practice the claimed invention. The government grants the patentee this right only if the patentee then dedicates his invention to the public when the patent expires. In Brulotte, the Supreme Court believed that a patentee collecting royalties on an expired patent would violate this policy so it banned collection of royalties from expired patents. Kimble argued that the court should overturn Brulotte because it interfered with the freedom of parties to enter into contracts with whatever terms they think are appropriate, it suppressed technology because it makes people less likely to patent their inventions, and it is based on mistaken economic views. The Supreme Court acknowledged that the economic reasoning of Brulotte may no longer be well accepted, but it did not find any substantial changes in law or economics since 1964 that compelled it to reconsider its ruling in Brulotte. There needs to be a significant and compelling change in either law or facts for the Supreme Court to overrule a prior case. Absent such a change, the only way to overrule a prior case would be for Congress to write new legislation.