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Supreme Court Weighs Overruling a 1964 Patent Decision

WASHINGTON — The dispute before the Supreme Court on Tuesday concerned a toy made up of a glove with a valve and a canister of pressurized foam. It was designed, Marvel Enterprises told the court in its brief, “to evoke Spider-Man, Marvel’s iconic superhero renowned for his spider superpowers and web-slinging.”

But no lawyer or justice discussed that toy, created and patented by an inventor named Stephen Kimble, or a similar one from Marvel, called a “Web Blaster,” that prompted Mr. Kimble in 1997 to sue for patent infringement.

Instead, in a dry and halting argument in Kimble v. Marvel Enterprises, No. 13-720, the justices considered whether they should overrule a 1964 decision that, to Mr. Kimble’s surprise and dismay, had limited a 2001 settlement agreement he reached with Marvel Enterprises, which made the Web Blaster.

The agreement, which called for royalty payments to Mr. Kimble from the sale of the competing toy, had no end date. But the 1964 decision, Brulotte v. Thys Co., 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.

In its brief, Marvel said it had paid Mr. Kimble and his lawyer more than $6 million even though “there is no evidence that the patent had any commercial value at all unless combined with Marvel’s own Spider-Man intellectual property.”

Justice Ruth Bader Ginsburg suggested that the case might not be terribly significant, as good lawyers should be able to structure licensing and other agreements in ways that circumvent the Brulotte decision.

Roman Melnik, a lawyer for Mr. Kimble, urged the court to overrule Brulotte, which he said “is widely recognized as an outdated and misguided decision that prohibits royalty arrangements that are frequently socially beneficial.”

Several justices seemed to agree — to a point. Justice Elena Kagan said, for instance, that the decision might have been based on “naïve economics” and had “some bad real-world consequences.” But she added that a decision must be more than wrong to warrant overruling, particularly when it was based on statutory interpretation.

“It’s Congress that’s better positioned to assess the real-world impact,” Justice Kagan said, “and it’s Congress that’s better positioned to say whether these economic theories are indeed so naïve.”

Justice Sonia Sotomayor echoed the point. “Why don’t we just let Congress fix it?” she asked.

Last year, in Halliburton v. Erica P. John Fund, Chief Justice John G. Roberts Jr. wrote the majority opinion refusing to overrule a 1988 securities-fraud precedent on those grounds.

“Before overturning long-settled precedent,” he wrote, “we require special justification, not just an argument that the precedent was wrongly decided.”

He said the principle of “stare decisis” — Latin for “to stand by things decided” — had special force in cases involving the interpretation of statutes. If Congress is dissatisfied with the Supreme Court’s interpretation of a law, he said, it can address the matter with legislation.

Thomas G. Saunders, a lawyer for Marvel, pressed the point on Tuesday. “This case should begin and end with stare decisis,” he said. “Brulotte remains correctly decided and serves an important public interest grounded in patent law. But at this point, were any change needed, Congress would be the appropriate institution to balance the competing arguments.”

But Chief Justice Roberts suggested that the court might have a role to play.

“The economists are almost unanimous that this is a very bad rule,” he said of the Brulotte decision, and he listed a number of precedents that the Supreme Court had overruled. “Those are all cases from the mid-1960s, just like this one was,” he said. “It’s a problem with the ’60s.”

A version of this article appears in print on  , Section B, Page 3 of the New York edition with the headline: Justices Reconsider 1964 Ruling on a Patent. Order Reprints | Today’s Paper | Subscribe

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