Kimble v. Marvel Enter., Inc.

Plaintiff sued Marvel for patent infringement and breach of contract, claiming that it had used his ideas in developing a Spider-Man role-playing toy called the "Web Blaster" without compensating him. The parties subsequently agreed to settle the case while appeals were pending and executed a Settlement Agreement. Thereafter, Marvel entered into a licensing agreement with Hasbro giving it the right to produce the Web Blaster. At issue was the calculation of royalties for subsequent iterations of the Web Blaster. The court joined its sister circuits in holding, pursuant to Brulotte v. Thys Co., that a so-called "hybrid" licensing agreement encompassing inseparable patent and non-patent rights was unenforceable beyond the expiration date of the underlying patent, unless the agreement provided a discounted rate for the non-patent rights or some other clear indication that the royalty at issue was in no way subject to patent leverage. Accordingly, the court affirmed the district court's grant of summary judgment in favor of Marvel, concluding that plaintiff could not recover royalties under the Settlement Agreement beyond the expiration date of the patent at issue. View "Kimble v. Marvel Enter., Inc." on Justia Law