Texas parents may be familiar with the Spider-Man wrist band toy that shoots foam string. Recently, the creator of that toy asked the United States Supreme Court to reverse an unpopular patent law precedent that does not allow the owner of a patent to receive royalties beyond the life of a patent. Despite the criticism surrounding the precedent, the U.S. Supreme Court refused to reverse the 50-year-old ruling.
Marvel has paid the toy's creator somewhere in the neighborhood of $6 million in royalties over the years. However, when the company discovered that the patent expired, they discontinued payments. This prompted the patent's owner to file a lawsuit.
The inventor's appeals made it all the way to the U.S. Supreme Court because of his insistence that the precedent be overturned. Most patents expire at the 20-year mark. In contrast, royalty agreements between private parties will often not include an expiration date. Under the half-century old ruling, the expiration of the patent releases the party paying the royalties from any further obligation to pay.
Texas inventors -- both individuals and businesses alike -- may want to keep this in mind when registering a patent and/or entering into royalty agreements. Keeping abreast of court decisions in the field of patent law is an important part of doing business. Before entering into any agreements regarding the use of a patent, it would be beneficial to have the situation and the contract reviewed to ensure that the individual or company's rights are protected.
Source: USA Today, "Supreme Court cuts the string on Spider-Man toy inventor's patent", Richard Wolf and Brad Heath, June 22, 2015