September 27, 2024

The U.S. Supreme Court in Brulotte v. Thys Co., 379 U.S. 29 (1964), held that patent holders cannot contract for royalties on the use of a patented invention that occurs after the patent expires.  In Kimble v. Marvel Entertainment, LLC, 576 U.S. 446 (2015), while the Court declined to overrule Brulotte, it clarified Brulotte’s scope. Id. at 453-54 (observing that “all [Brulotte] bars are royalties for using an invention after it has moved into the public domain” and explaining that “post-expiration royalties are allowable so long as tied to a non-patent right—even when closely related to a patent”).

Ares Trading S.A. v. Dyax Corp., 114 F.4th 123 (3rd Cir. Aug. 14, 2024), and C.R. Bard v. Atrium Medical Corp., 112 F.4th 1182 (9th Cir. Aug. 23, 2024), address contractual language providing for post-expiration royalty payments under circumstances that were not found barred by Brulotte or Kimble.  The analyses in these decisions provide guidance for assessing when post-patent expiration royalty payments are permissible under Brulotte and Kimble.