Patents provide inventors with time-limited monopolies in exchange for disclosing their inventions to the public. In order to prevent a patent owner from abusing this relationship and creating an unfair advantage in the marketplace, courts have relied upon the judicial doctrine of patent misuse. Patent misuse places a limit on how far outside the patent grant a patent owner can go. Fifty years ago, in Brulotte v. Thys (1964), the U.S. Supreme Court decided that a licensing agreement extending beyond the term of the patent constitutes patent misuse and is unenforceable after the patent’s expiration. Now the Court is reviewing this decision in the recently argued case Kimble v. Marvel Enterprises, in which it will determine whether it should overrule Brulotte. While this case has received ample attention from scholars and patent owners, careful drafting may render the ruling inconsequential.

The Background

Thys, a farming equipment manufacturer, owned patents describing methods and machines for picking hops. The company sold a hop-picking machine to Brulotte, a farmer, for a flat sum, and then issued a license to operate the machine at an annual royalty rate of the greater of $500 or $10 for every 600 pounds of dried hops harvested by the machine. The licensing agreement ran for 17 years from the date of sale, extending beyond the patent term. Brulotte eventually refused to pay the royalty, and Thys then sued.

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