New York Times

Supreme Court Lets Stand Past Decision in Toy Case

June 23, 2015

by Adam Liptak

WASHINGTON — Writing for the majority in a patent case about a Spider-Man toy, Justice Elena Kagan concluded her decision with a quotation from a 1962 Spider-Man comic book: “In this world, with great power there must also come — great responsibility.”

The lesson, Justice Kagan wrote, is that the Supreme Court should use its power cautiously when it is asked to overrule a precedent. “What we can decide, we can undecide,” she wrote. “But stare decisis” — Latin for “to stand by things decided” — “teaches that we should exercise that authority sparingly.”

That led the court to leave in place, by a 6-to-3 vote, a widely criticized 1964 decision and to rule against an inventor who had unwittingly signed an unfavorable contract.

The invention was a toy made up of a glove with a valve and a canister of pressurized foam. It allowed “children (and young-at-heart adults) to role-play as ‘a spider person’ by shooting webs — really, pressurized foam string — ‘from the palm of the hand,’” Justice Kagan wrote.

The toy’s inventor, Stephen Kimble, met with a representative of an affiliate of Marvel Entertainment, which markets products featuring Spider-Man, “to discuss his idea for web-slinging fun,” Justice Kagan wrote. Marvel did not bite, but it soon started selling a similar toy.

Mr. Kimble sued, and the two sides settled. The settlement included a licensing agreement that called for royalty payments to Mr. Kimble from the sale of the competing toy, with no end date.

But the agreement ran afoul of the 1964 decision, Brulotte v. Thys Company, which said that royalty payments after the expiration of a patent were unlawful. Neither side had been aware of the decision when they struck their deal, but Marvel later argued that the decision spared it from having to pay Mr. Kimble after 2010, when his patent expired.

“Patents endow their holders with certain superpowers,” Justice Kagan wrote, “but only for a limited time.”

She said the Brulotte decision might be based on an outdated understanding of economics that hinders competition and innovations. But, she added, “respecting stare decisis means sticking to some wrong decisions.”

That is especially true, she said, when the decision in question did not involve the Constitution, about which the court has the last word, but rather the interpretation of a statute, which may be altered by Congress. “As against this superpowered form of stare decisis,” she wrote, “we would need a superspecial justification to warrant reversing Brulotte.”

Justices Antonin Scalia, Anthony M. Kennedy, Ruth Bader Ginsburg, Stephen G. Breyer and Sonia Sotomayor joined the majority opinion.

In dissent, Justice Samuel A. Alito Jr. said the majority had gone badly wrong.

“The decision interferes with the ability of parties to negotiate licensing agreements that reflect the true value of a patent, and it disrupts contractual expectations,” he wrote. “Stare decisis does not require us to retain this baseless and damaging precedent.”

The Brulotte decision was, he wrote, “a bald act of policy making.”

“It was not simply a case of incorrect statutory interpretation,” Justice Alito wrote. “It was not really statutory interpretation at all.”

“In the end,” he added, “Brulotte’s only virtue is that we decided it. But that does not render it invincible. Stare decisis is important to the rule of law, but so are correct judicial decisions.”

Chief Justice John G. Roberts Jr. and Justice Clarence Thomas joined the dissent in the case, Kimble v. Marvel Entertainment, No. 13-720.

Justice Alito said he held out little hope that Congress would effectively overrule the Brulotte decision. “Passing legislation,” he wrote, “is no easy task.”