Few principles in drafting patent licenses are so pervasive as the one that royalties cannot extend beyond the expiration of the patent. To do so is patent misuse and can lead to the invalidation of the patent. This rule plays a significant role in all licensing and franchise contracts that include patent rights. However, a Spider-Man toy, or more accurately the inventor of a Spider-Man toy, may be about to change this intractable rule of patent law.
The principle was first set by the U.S. Supreme Court in Brulotte v. Thys (1964). In Brulotte, the plaintiff owned 12 patents on a machine for picking hops.The plaintiff entered into a deal with the defendant selling some machines and licensing others. The license, by its terms, continued for 17 years from the date the machine was sold, which extended beyond 1957, when the last of the seven patents embodied in the machine expired. When the defendant refused to make a royalty payment, the lawsuit ensued.
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