In 1964 the U.S. Supreme Court issued its decision in Brulotte v. Thys Co., interpreting the Patent Act in a way that made "a patentee's use of a royalty agreement that projects beyond the expiration date of the patent" unlawful. In other words, under Brulotte you cannot continue to collect royalties after your patent expires. This has been the law for 50 years.
But in 2013, a case called Kimble v. Marvel Entertainment made its way to the Supreme Court, asking the Court to reconsider its decision in Brulotte. In short, Marvel had entered into an agreement with Stephen Kimble, who had patented a design that Marvel used to create Spider-Man toys that enabled kids to shoot foam string from their wrists -- like Spider-Man, of course. But the contract included an agreement to pay royalties indefinitely. So, when the parties fell into a dispute, Marvel took the position that, under Brulotte, the royalty agreement was no longer enforceable, because Kimble's patent had expired. And in response -- perhaps because he didn't have a lot of options -- Kimble took the position that Brulotte was wrongly decided and should be overruled.
The Ninth Circuit Court of Appeals was bound by Brulotte and had to rule in Marvel's favor -- but it made sure to note how "reluctant" it was to do so, citing the criticism that Brulotte had suffered since 1964. In other words, Kimble was trying to enforce his agreement with Marvel, and the Ninth Circuit wanted to help him, but Brulotte was standing in the way. Or, more precisely, a legal doctrine called "stare decisis" was standing in the way.
Stare decisis is legalese for the concept of "precedent" -- that is, it's the legal doctrine that says previous decisions are authoritative and binding on future cases that involve similar issues. The Latin term "stare decisis" is short for the maxim "stare decisis et non quieta movere" -- "to stand by decisions and not disturb the undisturbed."
In other words, by asking the Supreme Court to overrule Brulotte, Kimble was asking the Court to ignore stare decisis. And the Court doesn't do that very often.
Nevertheless, when the Supreme Court granted Kimble's cert petition, many thought it was to give Kimble what he was asking for by overruling Brulotte. After all, if the Court wanted to leave Brulotte in place, it could just deny Kimble's cert petition and let the Ninth Circuit's decision stand. Granting the cert petition seemed to suggest that Brulotte's days were numbered. Thus, it came as a surprise to many when, earlier this week, the Court issued a 6-3 decision reaffirming Brulotte as good law.
What does this mean? It means Kimble v. Marvel Entertainment is not a very important case for patent law, because it doesn't say anything new: it just says the law under Brulotte hasn't changed. You still can't collect royalties after your patent expires.
But Kimble is a fascinating case -- and potentially a very important one -- for its discussion and affirmation of stare decisis. (Starting in section III of the majority opinion.) Justice Kagan wrote for a 6-justice majority, talking about the "enhanced force" of stare decisis when it comes to decisions that interpret statutes, because those decisions "become part of the statutory scheme" that businesses and individuals rely upon in their decisionmaking. This "superpowered form" of stare decisis cannot be easily set aside, writes Kagan. Not without without "superspecial justification."
This playful elevation of past decisions to superhero status is sure to be cited in all kinds of future cases, where challenges are brought against other statutes and the prior cases that interpret them. Thus, the impact of Kimble -- as a precedent for the power of precedent -- could be wide-ranging. Indeed, in a weird twist, Kimble could turn out to be the most important IP case from the 2014 Term, even while it is simultaneously the least important IP case for IP law.