High Court Rulings On Spider-Man Toy, Rap Lyrics

Justice Kagan noted in her majority opinion that Kimble and Marvel set no ending date when they signed their licensing agreement that set a 3% royalty fee on sales of Kimble's device. It was only later that Marvel “stumbled across” the Brulotte precedent. Marvel went to court to end Kimble's royalties by 2010 ' the year when his patent would expire. The district court and the U.S. Court of Appeals for the Ninth Circuit sided with Marvel, and the high court affirmed. The ruling means Marvel will not have to pay further royalties to Kimble.

“This is a strong reminder that these [license] details have huge implications for clients,” Case Collard, a partner in Dorsey & Whitney's Denver office, said about the Supreme Court's decision. “There are many creative and legal ways to extend payments past the expiration of the patent, but they cannot be based on patent royalties.” (See, “Awaiting Supreme Court's Ruling on Hybrid Licenses,” in the June issue of Entertainment Law & Finance'for an article on the Kimble and Brulotte cases in the context of hybrid licenses, which occur when different rights are included in a single license and one of those rights extends the revenue time past the enforceable term of the other licensed right.)

Justice Kagan acknowledged that “parties can often find ways around Brulotte,” for example by stretching out royalty payments for use of the patent before it expires, or by signing other non-royalty arrangements like joint ventures.

But Supreme Court dissenters led by Justice Samuel Alito Jr. said those alternatives are no substitute for a licensing agreement with royalties that extends beyond the patent expiration date. “Parties are not always aware of the prohibition ' as this case amply demonstrates,” Justice Alito said.

During oral argument before the high court for Marvel, Thomas Saunders of Wilmer Cutler Pickering Hale and Dorr said in contending that the Brulotte precedent should be preserved, “This issue has been off the table for 50 years.” In numerous revisions of patent law, Saunders said, Congress had never felt the need to overturn Brulotte.

The majority opinion amounted to a paean to stare decisis ' the principle of standing by precedent ' even if Brulotte has been criticized as an outmoded rule. “Finding many reasons for staying the stare decisis course and no 'special justification' for departing from it, we decline Kimble's invitation to overrule Brulotte,” Justice Kagan wrote. She also quoted from a Spider-Man comic to bolster her opinion: “In this world, with great power there must also come great responsibility.”

Richard Samp, chief counsel for the Washington Legal Foundation, which sided with Marvel in the case, said in a statement about the Supreme Court's Kimble ruling: “In a world where patent trolls and rampant litigation funding thrive, 'zombie' litigation ' in which long-expired licenses are dredged up for new rounds of litigation ' would have been an all-too-likely result of a decision overturning Brulotte.”

Elonis v. U.S.

In the second recent U.S. Supreme Court decision watched closely by the entertainment industry, the court mentioned rappers or rap music nine times in ruling on the prosecution of threats posted on Facebook. The Supreme Court even cited “the well-known performer Eminem” for the first time in its history. But the high court did not give a First Amendment embrace either to rap music or to Facebook postings that mimic the genre. Instead, the court avoided the First Amendment altogether in Elonis v. U.S., No. 13-983, much to the chagrin of speech advocates who hoped the justices would give wide berth to the range of expression in modern-day media, social and otherwise.

“Elonis was a great opportunity missed, both to clarify what constitutes an unprotected threat in First Amendment jurisprudence and to suggest how threats conveyed on social media may be different,” said Clay Calvert, a mass communications professor at the University of Florida and lawyer who filed a brief in the case asking the court to protect rap artists.

In a narrow opinion for a 7-2 majority, Chief Justice John Roberts Jr. said the federal law against threats requires the government to prove more than the mere fact that a defendant was negligent in making threatening remarks, or that a reasonable person would regard the statements as a threat. Anthony Elonis had been prosecuted for angry Facebook posts that the government said constituted threats against his estranged wife and others because a “reasonable person” would have viewed them as such.

Lawyers for Elonis, represented by John Elwood of Vinson & Elkins in the high court, argued that the First Amendment requires a higher level of proof ' an intent to threaten or a criminal state of mind ' or else a range of edgy expression, including some rap lyrics, could be chilled for fear of prosecution.

Chief Justice Roberts agreed that something more is needed, but as a matter of statutory interpretation, not because of the First Amendment. “Given our disposition, it is not necessary to consider any First Amendment issues,” he wrote.

Vanderbilt University Law School professor Suzanna Sherry said about the Elonis ruling: “Certainly this is very narrow. Not only did they not decide any constitutional issue, they didn't even decide what level of criminal intent is necessary ' just that negligence is not enough.”

But the Elonis ruling still won praise because it raised the bar of proof needed in threat cases, making it less likely that social-media posters will be punished for messages that were meant as a joke, satire or even rap lyrics. Anthony Elonis had pointed to an Eminem song in which he fantasized about killing his ex-wife as an inspiration for Elonis's own postings.

“The decision certainly is a victory for rappers who are prosecuted under the threat law. No longer do they need to worry about how a fictitious reasonable person would understand the lyrics,” said the University of Florida's Calvert. “That was always a huge concern ' just what is the mythical reasonable person supposed to know about the conventions of rap music? What is disappointing is that the decision only applies to this one federal statute,” 18 U.S.C. '875(c), which bars “any communication containing any threat ' to injure the person of another.” Rappers can still be prosecuted under state threat laws, Calvert noted.

New Jersey radio “shock jock” Hal Turner said the Elonis ruling gives him hope that he can erase his own conviction under a similar federal threat statute. He was convicted under the law in 2010 because of his online suggestion that three federal Seventh Circuit judges “deserved to be killed” for a ruling that upheld a handgun ban.

The impact of the Supreme Court's ruling on Elonis himself is uncertain. He served his 44-month prison term and was released in February 2014. Elonis was recently arrested on assault charges and is in jail in Northampton County, PA.

Tony Mauro covers the U.S. Supreme Court for ALM Media, the parent company of Law Journal Newsletters.

In one of two recent U.S. Supreme Court rulings in cases the entertainment industry has followed, the High Court decided that the inventor of a Spider-Man web-shooting device cannot extend his reach for royalties beyond the expiration of his patent. Kimble v. Marvel Enterprises, 13- 720. Justice Elena Kagan, writing for the court majority, invoked the 1964 ruling Brulotte v. Thys, 379 U.S. 29 (1964), holding that a patentee may not continue to receive royalties beyond the ending date of the patent.

Kimble v. Marvel

Stephen Kimble had obtained a patent in 1991 for a toy allowing users to shoot foam “string” from a glove ' just as Spider-Man would. Kimble met with Marvel and reached an agreement that if Marvel used his concept in a product, he would be compensated. Marvel later told Kimble that it was not interested, but then created a “Web Blaster” toy with similar attributes.

Justice Kagan noted in her majority opinion that Kimble and Marvel set no ending date when they signed their licensing agreement that set a 3% royalty fee on sales of Kimble's device. It was only later that Marvel “stumbled across” the Brulotte precedent. Marvel went to court to end Kimble's royalties by 2010 ' the year when his patent would expire. The district court and the U.S. Court of Appeals for the Ninth Circuit sided with Marvel, and the high court affirmed. The ruling means Marvel will not have to pay further royalties to Kimble.

“This is a strong reminder that these [license] details have huge implications for clients,” Case Collard, a partner in Dorsey & Whitney's Denver office, said about the Supreme Court's decision. “There are many creative and legal ways to extend payments past the expiration of the patent, but they cannot be based on patent royalties.” (See, “Awaiting Supreme Court's Ruling on Hybrid Licenses,” in the June issue of Entertainment Law & Finance'for an article on the Kimble and Brulotte cases in the context of hybrid licenses, which occur when different rights are included in a single license and one of those rights extends the revenue time past the enforceable term of the other licensed right.)

Justice Kagan acknowledged that “parties can often find ways around Brulotte,” for example by stretching out royalty payments for use of the patent before it expires, or by signing other non-royalty arrangements like joint ventures.

But Supreme Court dissenters led by Justice Samuel Alito Jr. said those alternatives are no substitute for a licensing agreement with royalties that extends beyond the patent expiration date. “Parties are not always aware of the prohibition ' as this case amply demonstrates,” Justice Alito said.

During oral argument before the high court for Marvel, Thomas Saunders of Wilmer Cutler Pickering Hale and Dorr said in contending that the Brulotte precedent should be preserved, “This issue has been off the table for 50 years.” In numerous revisions of patent law, Saunders said, Congress had never felt the need to overturn Brulotte.

The majority opinion amounted to a paean to stare decisis ' the principle of standing by precedent ' even if Brulotte has been criticized as an outmoded rule. “Finding many reasons for staying the stare decisis course and no 'special justification' for departing from it, we decline Kimble's invitation to overrule Brulotte,” Justice Kagan wrote. She also quoted from a Spider-Man comic to bolster her opinion: “In this world, with great power there must also come great responsibility.”

Richard Samp, chief counsel for the Washington Legal Foundation, which sided with Marvel in the case, said in a statement about the Supreme Court's Kimble ruling: “In a world where patent trolls and rampant litigation funding thrive, 'zombie' litigation ' in which long-expired licenses are dredged up for new rounds of litigation ' would have been an all-too-likely result of a decision overturning Brulotte.”

Elonis v. U.S.

In the second recent U.S. Supreme Court decision watched closely by the entertainment industry, the court mentioned rappers or rap music nine times in ruling on the prosecution of threats posted on Facebook. The Supreme Court even cited “the well-known performer Eminem” for the first time in its history. But the high court did not give a First Amendment embrace either to rap music or to Facebook postings that mimic the genre. Instead, the court avoided the First Amendment altogether in Elonis v. U.S., No. 13-983, much to the chagrin of speech advocates who hoped the justices would give wide berth to the range of expression in modern-day media, social and otherwise.

“Elonis was a great opportunity missed, both to clarify what constitutes an unprotected threat in First Amendment jurisprudence and to suggest how threats conveyed on social media may be different,” said Clay Calvert, a mass communications professor at the University of Florida and lawyer who filed a brief in the case asking the court to protect rap artists.

In a narrow opinion for a 7-2 majority, Chief Justice John Roberts Jr. said the federal law against threats requires the government to prove more than the mere fact that a defendant was negligent in making threatening remarks, or that a reasonable person would regard the statements as a threat. Anthony Elonis had been prosecuted for angry Facebook posts that the government said constituted threats against his estranged wife and others because a “reasonable person” would have viewed them as such.

Lawyers for Elonis, represented by John Elwood of Vinson & Elkins in the high court, argued that the First Amendment requires a higher level of proof ' an intent to threaten or a criminal state of mind ' or else a range of edgy expression, including some rap lyrics, could be chilled for fear of prosecution.

Chief Justice Roberts agreed that something more is needed, but as a matter of statutory interpretation, not because of the First Amendment. “Given our disposition, it is not necessary to consider any First Amendment issues,” he wrote.

Vanderbilt University Law School professor Suzanna Sherry said about the Elonis ruling: “Certainly this is very narrow. Not only did they not decide any constitutional issue, they didn't even decide what level of criminal intent is necessary ' just that negligence is not enough.”

But the Elonis ruling still won praise because it raised the bar of proof needed in threat cases, making it less likely that social-media posters will be punished for messages that were meant as a joke, satire or even rap lyrics. Anthony Elonis had pointed to an Eminem song in which he fantasized about killing his ex-wife as an inspiration for Elonis's own postings.

“The decision certainly is a victory for rappers who are prosecuted under the threat law. No longer do they need to worry about how a fictitious reasonable person would understand the lyrics,” said the University of Florida's Calvert. “That was always a huge concern ' just what is the mythical reasonable person supposed to know about the conventions of rap music? What is disappointing is that the decision only applies to this one federal statute,” 18 U.S.C. '875(c), which bars “any communication containing any threat ' to injure the person of another.” Rappers can still be prosecuted under state threat laws, Calvert noted.

New Jersey radio “shock jock” Hal Turner said the Elonis ruling gives him hope that he can erase his own conviction under a similar federal threat statute. He was convicted under the law in 2010 because of his online suggestion that three federal Seventh Circuit judges “deserved to be killed” for a ruling that upheld a handgun ban.

The impact of the Supreme Court's ruling on Elonis himself is uncertain. He served his 44-month prison term and was released in February 2014. Elonis was recently arrested on assault charges and is in jail in Northampton County, PA.

Tony Mauro covers the U.S. Supreme Court for ALM Media, the parent company of Law Journal Newsletters.