The inventor of a popular Spider-Man web-shooting toy can't keep reeling in royalties after his patent ran out, the Supreme Court of the United States ruled Monday.
The justices ruled 6-3 against Stephen Kimble in his long-running dispute with Marvel Entertainment over a Web Blaster toy that shoots foam string from a glove.
Kimble sold his patent on the toy to Marvel in 2001 and has earned more than $6 million in royalties under terms of a settlement agreement. Marvel stopped making payments in 2010 once the patent expired.
Kimble had urged the high court to overrule a half-century-old case that says a licensing agreement cannot pay royalties once a patent ends.
Kimble argued that the 1964 ruling in Brulotte v. Thys Co. relied on outdated and misguided assumptions and stifles competition. The case reasoned that an agreement to pay royalties after a patent expires would be an improper way to extend the life of the patent.
The case has been widely criticized by economists and antitrust experts who say it relies on outdated market assumptions. Critics say a licensing agreement doesn't actually extend patent rights or prevent anyone else from using or selling a similar product.
But Justice Elena Kagan, writing for the court, said the court is reluctant to overrule established precedent, a principle known as "stare decisis," even if it means "sticking to some wrong decisions."
"An argument that we got something wrong — even a good argument to that effect — cannot by itself justify scrapping settled precedent," Kagan said. She said there was no "special justification" for overruling a case that has governed licensing agreements for more than half a century.
She was joined by Justices Antonin Scalia, Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor.
Marvel argued that Congress has declined to change the ruling's impact on patent law, even as it has made other reforms to the law. And the Obama administration said the case should remain intact because it favors "unrestricted public access to unpatented and previously patented inventions."
Kagan noted that Congress has had many chances to update patent laws, but each time declined to tinker with the rule in Brulotte. She said it should be up to Congress to change patent laws.
In dissent, Justice Alito said the practice of not overturning precedents "does not require us to retain this baseless and damaging precedent." He said it was not based on the Patent Act, but on an economic theory "that has been debunked."
Alito was joined in dissent by Chief Justice John Roberts and Justice Clarence Thomas.