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Will the Supreme Court Remove <i>Brulotte</i>'s Shadow Over Patent Licensing?

BY Sean Gates
January 31, 2015

Part One, last month, set the stage for a possible overruling by the U.S. Supreme Court of its 1964 ruling in Brulotte v. Thys Co. that the collection of royalties after a patent's expiration constitutes per se patent misuse by looking at the case's critics and its impact on licensing over the last 50 years. In Part Two, the authors continue that discussion and look at the arguments made to the Supreme Court for and against overruling the case.

Hybrid Licenses

Courts have also struggled in dealing with post-expiration royalty provisions in so-called “hybrid” licenses ' package licenses for issued patent rights and non-patent rights, such as trade secrets and know-how. The Eleventh Circuit, for instance, has held that a hybrid license constitutes misuse under Brulotte where: 1) the rights granted under the license agreement applied equally before and after the patents' expiration; and 2) the agreement required the licensee to pay royalties at the same rate and on the same basis both before and after the patents' expiration. See, Pitney Bowes, Inc. v. Mestre, 701 F.2d 1365, 1373 (11th Cir. 1983).

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