Kimble v. Marvel Entertainment, LLC

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KIMBLE et al. v. MARVEL ENTERTAINMENT, LLC, successor to MARVEL ENTERPRISES, INC.

certiorari to the united states court of appeals for the ninth circuit No. 13–720. Argued March 31, 2015—Decided June 22, 2015 Respondent Marvel Entertainment's corporate predecessor agreed to pur- chase petitioner Stephen Kimble's patent for a Spider-Man toy in ex- change for a lump sum plus a 3% royalty on future sales. The agree- ment set no end date for royalties. As the patent neared the end of its statutory 20-year term, Marvel discovered Brulotte v. Thys Co., 379 U. S. 29, in which this Court held that a patentee cannot continue to receive royalties for sales made after his patent expires. Marvel then sought a declaratory judgment in federal district court confirming that it could stop paying Kimble royalties. The district court granted relief, and the Ninth Circuit affirmed. Kimble now asks this Court to over- rule Brulotte. Held: Stare decisis requires this Court to adhere to Brulotte. Pp. 451–465. (a) A patent typically expires 20 years from its application date. 35 U. S. C. § 154(a)(2). At that point, the unrestricted right to make or use the article passes to the public. See Sears, Roebuck & Co. v. Stiffel Co., 376 U. S. 225, 230. This Court has carefully guarded the significance of that expiration date, declining to enforce laws and contracts that restrict free public access to formerly patented, as well as unpatentable, inven- tions. See, e. g., id., at 230–233; Scott Paper Co. v. Marcalus Mfg. Co., 326 U. S. 249, 255–256. Brulotte applied that principle to a patent licensing agreement that provided for the payment of royalties accruing after the patent's expira- tion. 379 U. S., at 30. The Court held that the post-patent royalty provision was “unlawful per se,” id., at 30, 32, because it continued “the patent monopoly beyond the [patent] period,” id., at 33, and, in so doing, conflicted with patent law's policy of establishing a “post-expiration . . . public domain,” ibid. The Brulotte rule may prevent some parties from entering into deals they desire, but parties can often find ways to achieve similar outcomes. For example, Brulotte leaves parties free to defer payments for pre- expiration use of a patent, tie royalties to non-patent rights, or make non-royalty-based business arrangements. Contending that such alter- natives are not enough, Kimble asks this Court to abandon Brulotte's

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bright-line rule in favor of a case-by-case approach based on antitrust law's “rule of reason.” Pp. 451–455. (b) The doctrine of stare decisis provides that today's Court should stand by yesterday's decisions. Application of that doctrine, though “not an inexorable command,” is the “preferred course.” Payne v. Ten- nessee, 501 U. S. 808, 828, 827. Overruling a case always requires “spe- cial justification”—over and above the belief “that the precedent was wrongly decided.” Halliburton Co. v. Erica P. John Fund, Inc., 573 U. S. 258, 266. Where, as here, the precedent interprets a statute, stare decisis carries enhanced force, since critics are free to take their objec- tions to Congress. See, e. g., Patterson v. McLean Credit Union, 491 U. S. 164, 172–173. Congress, moreover, has spurned multiple opportu- nities to reverse Brulotte, see Watson v. United States, 552 U. S. 74, 82– 83, and has even rebuffed bills that would have replaced Brulotte's per se rule with the standard Kimble urges. In addition, Brulotte im- plicates property and contract law, two contexts in which considerations favoring stare decisis are “at their acme,” Payne, 501 U. S., at 828, be- cause parties are especially likely to rely on such precedents when or- dering their affairs. Given those good reasons for adhering to stare decisis in this case, this Court would need a very strong justification for overruling Bru- lotte. But traditional justifications for abandoning stare decisis do not help Kimble here. First, Brulotte's doctrinal underpinnings have not eroded over time. The patent statute at issue in Brulotte is essentially unchanged. And the precedent on which the Brulotte Court primarily relied, like other decisions enforcing a patent's cut-off date, remains good law. Indeed, Brulotte's close relation to a whole web of prece- dents means that overruling it could threaten others. Second, nothing about Brulotte has proved unworkable. See Patterson, 491 U. S., at 173. To the contrary, the decision itself is simple to apply—particularly as compared to Kimble's proposed alternative, which can produce high litigation costs and unpredictable results. Pp. 455–460. (c) Neither of the justifications Kimble offers gives cause to overrule Brulotte. Pp. 460–465. (1) Kimble first argues that Brulotte hinged on an economic error— i. e., an assumption that post-expiration royalties are always anticompet- itive. This Court sees no error in Kimble's economic analysis. But even assuming Kimble is right that Brulotte relied on an economic mis- judgment, Congress is the right entity to fix it. The patent laws are not like the Sherman Act, which gives courts exceptional authority to shape the law and reconsider precedent based on better economic analy- sis. Moreover, Kimble's argument is based not on evolving economic

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theory but rather on a claim that the Brulotte Court simply made the wrong call. That claim fails to clear stare decisis's high bar. In any event, Brulotte did not even turn on the notion that post-patent royal- ties harm competition. Instead, the Brulotte Court simply applied the categorical principle that all patent-related benefits must end when the patent term expires. Kimble's real complaint may go to the merits of that principle as a policy matter. But Congress, not this Court, gets to make patent policy. Pp. 460–463. (2) Kimble also argues that Brulotte suppresses technological inno- vation and harms the national economy by preventing parties from reaching agreements to commercialize patents. This Court cannot tell whether that is true. Brulotte leaves parties free to enter alternative arrangements that may suffice to accomplish parties' payment deferral and risk-spreading goals. And neither Kimble nor his amici offer any empirical evidence connecting Brulotte to decreased innovation. In any event, claims about a statutory precedent's consequences for innova- tion are “more appropriately addressed to Congress.” Halliburton, 573 U. S., at 277. Pp. 463–465. 727 F. 3d 856, affirmed.

Kagan, J., delivered the opinion of the Court, in which Scalia, Ken- nedy, Ginsburg, Breyer, and Sotomayor, JJ., joined. Alito, J., filed a dissenting opinion, in which Roberts, C. J., and Thomas, J., joined, post, p. 465.

Roman Melnik argued the cause for petitioners. With him on the briefs were Kenneth Weatherwax, Flavio M. Rose, and Antonio R. Durando. Thomas G. Saunders argued the cause for respondent. With him on the brief were Seth P. Waxman, Matthew Gua- nieri, and Paul R. Q. Wolfson. Malcolm L. Stewart argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Solicitor General Verrilli, Acting Assistant Attorney General Mizer, Curtis E. Gannon, Mark R. Free- man, and Katherine Twomey Allen.*

*Briefs of amici curiae urging reversal were filed for Biotime, Inc., by Robert H. Stier, Jr.; for the Center for Intellectual Property Research of the Indiana University Maurer School of Law et al. by Mark D. Janis; for the Intellectual Property Owners Association by Robert P. Taylor, Philip

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Justice Kagan delivered the opinion of the Court. In Brulotte v. Thys Co., 379 U. S. 29 (1964), this Court held that a patent holder cannot charge royalties for the use of his invention after its patent term has expired. The sole question presented here is whether we should overrule Bru- lotte. Adhering to principles of stare decisis, we decline to do so. Critics of the Brulotte rule must seek relief not from this Court but from Congress.

I In 1990, petitioner Stephen Kimble obtained a patent on a toy that allows children (and young-at-heart adults) to role- play as “a spider person” by shooting webs—really, pressur- ized foam string—“from the palm of [the] hand.” U. S. Patent No. 5,072,856, Abstract (filed May 25, 1990).1 Re- spondent Marvel Entertainment, LLC (Marvel) makes and markets products featuring Spider-Man, among other comic- book characters. Seeking to sell or license his patent, Kim-

S. Johnson, and Kevin H. Rhoads; for the Memorial Sloan Kettering Can- cer Center et al. by Harvey M. Stone and Richard H. Dolan; for the New York Intellectual Property Law Association by Jeffrey I. D. Lewis, Scott B. Howard, Anthony Lo Cicero, Charles R. Macedo, and David F. Ryan; and for the University of Massachusetts Biologic Laboratories by Donald R. Ware. Briefs of amici curiae urging affirmance were filed for Nautilus, Inc., by David Lieberworth; for Public Knowledge by Charles Duan; for the Washington Legal Foundation by Richard A. Samp; and for the William Mitchell College of Law Intellectual Property Institute by R. Carl Moy. Briefs of amici curiae were filed for the American Intellectual Property Law Association by Paul M. Smith, Joshua M. Segal, and Sharon A. Is- rael; for the Association of the Bar of the City of New York by Fiona Schaeffer and Aaron L. Pereira; for the Intellectual Property Law Associ- ation of Chicago by David L. Applegate, Charles W. Shifley, and Donald W. Rupert; for the Licensing Executives Society (U. S. A. and Canada), Inc., by Brian P. O'Shaughnessy and Brian S. Seal; and for Robin Feld- man et al. by Ms. Feldman, pro se. 1 Petitioner Robert Grabb later acquired an interest in the patent. For simplicity, we refer only to Kimble.

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ble met with the president of Marvel's corporate predecessor to discuss his idea for web-slinging fun. Soon afterward, but without remunerating Kimble, that company began mar- keting the “Web Blaster”—a toy that, like Kimble's patented invention, enables would-be action heroes to mimic Spider- Man through the use of a polyester glove and a canister of foam. Kimble sued Marvel in 1997 alleging, among other things, patent infringement. The parties ultimately settled that lit- igation. Their agreement provided that Marvel would pur- chase Kimble's patent in exchange for a lump sum (of about a half-million dollars) and a 3% royalty on Marvel's future sales of the Web Blaster and similar products. The parties set no end date for royalties, apparently contemplating that they would continue for as long as kids want to imitate Spider-Man (by doing whatever a spider can). And then Marvel stumbled across Brulotte, the case at the heart of this dispute. In negotiating the settlement, neither side was aware of Brulotte. But Marvel must have been pleased to learn of it. Brulotte had read the patent laws to prevent a patentee from receiving royalties for sales made after his patent's expiration. See 379 U. S., at 32. So the decision's effect was to sunset the settlement's royalty clause.2 On making that discovery, Marvel sought a declara- tory judgment in federal district court confirming that the company could cease paying royalties come 2010—the end of Kimble's patent term. The court approved that relief, holding that Brulotte made “the royalty provision . . . un- enforceable after the expiration of the Kimble patent.” 692 F. Supp. 2d 1156, 1161 (Ariz. 2010). The Court of Appeals for the Ninth Circuit affirmed, though making clear that it

2 In Brulotte, the patent holder retained ownership of the patent while licensing customers to use the patented article in exchange for royalty payments. See 379 U. S., at 29–30. By contrast, Kimble sold his whole patent to obtain royalties. But no one here disputes that Brulotte covers a transaction structured in that alternative way.

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was none too happy about doing so. “[T]he Brulotte rule,” the court complained, “is counterintuitive and its rationale is arguably unconvincing.” 727 F. 3d 856, 857 (2013). We granted certiorari, 574 U. S. 1058 (2014), to decide whether, as some courts and commentators have suggested, we should overrule Brulotte.3 For reasons of stare decisis, we demur. II Patents endow their holders with certain superpowers, but only for a limited time. In crafting the patent laws, Con- gress struck a balance between fostering innovation and en- suring public access to discoveries. While a patent lasts, the patentee possesses exclusive rights to the patented arti- cle—rights he may sell or license for royalty payments if he so chooses. See 35 U. S. C. § 154(a)(1). But a patent typi- cally expires 20 years from the day the application for it was filed. See § 154(a)(2). And when the patent expires, the patentee's prerogatives expire too, and the right to make or use the article, free from all restriction, passes to the public. See Sears, Roebuck & Co. v. Stiffel Co., 376 U. S. 225, 230 (1964). This Court has carefully guarded that cut-off date, just as it has the patent laws' subject-matter limits: In case after case, the Court has construed those laws to preclude meas- ures that restrict free access to formerly patented, as well as unpatentable, inventions. In one line of cases, we have

3 See, e. g., Scheiber v. Dolby Labs., Inc., 293 F. 3d 1014, 1017–1018 (CA7 2002) (Posner, J.) (Brulotte has been “severely, and as it seems to us, with all due respect, justly criticized . . . . However, we have no authority to overrule a Supreme Court decision no matter how dubious its reasoning strikes us, or even how out of touch with the Supreme Court's current thinking the decision seems”); Ayres & Klemperer, Limiting Patentees' Market Power Without Reducing Innovation Incentives: The Perverse Benefits of Uncertainty and Non-Injunctive Remedies, 97 Mich. L. Rev. 985, 1027 (1999) (“Our analysis . . . suggests that Brulotte should be overruled”).

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struck down state statutes with that consequence. See, e. g., id., at 230–233; Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U. S. 141, 152, 167–168 (1989); Compco Corp. v. Day-Brite Lighting, Inc., 376 U. S. 234, 237–238 (1964). By virtue of federal law, we reasoned, “an article on which the patent has expired,” like an unpatentable article, “is in the public domain and may be made and sold by whoever chooses to do so.” Sears, 376 U. S., at 231. In a related line of decisions, we have deemed unenforceable private contract provisions limiting free use of such inventions. In Scott Paper Co. v. Marcalus Mfg. Co., 326 U. S. 249 (1945), for ex- ample, we determined that a manufacturer could not agree to refrain from challenging a patent's validity. Allowing even a single company to restrict its use of an expired or invalid patent, we explained, “would deprive . . . the consum- ing public of the advantage to be derived” from free exploita- tion of the discovery. Id., at 256. And to permit such a result, whether or not authorized “by express contract,” would impermissibly undermine the patent laws. Id., at 255–256; see also, e. g., Edward Katzinger Co. v. Chicago Me- tallic Mfg. Co., 329 U. S. 394, 400–401 (1947) (ruling that Scott Paper applies to licensees); Lear, Inc. v. Adkins, 395 U. S. 653, 668–675 (1969) (refusing to enforce a contract re- quiring a licensee to pay royalties while contesting a pat- ent's validity). Brulotte was brewed in the same barrel. There, an inven- tor licensed his patented hop-picking machine to farmers in exchange for royalties from hop crops harvested both be- fore and after his patents' expiration dates. The Court (by an 8-1 vote) held the agreement unenforceable—“unlawful per se”—to the extent it provided for the payment of royal- ties “accru[ing] after the last of the patents incorporated into the machines had expired.” 379 U. S., at 30, 32. To arrive at that conclusion, the Court began with the statutory provi- sion setting the length of a patent term. See id., at 30 (quot- ing the then-current version of § 154). Emphasizing that a

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patented invention “become[s] public property once [that term] expires,” the Court then quoted from Scott Paper: Any attempt to limit a licensee's post-expiration use of the inven- tion, “whatever the legal device employed, runs counter to the policy and purpose of the patent laws.” 379 U. S., at 31 (quoting 326 U. S., at 256). In the Brulotte Court's view, contracts to pay royalties for such use continue “the patent monopoly beyond the [patent] period,” even though only as to the licensee affected. 379 U. S., at 33. And in so doing, those agreements conflict with patent law's policy of estab- lishing a “post-expiration . . . public domain” in which every person can make free use of a formerly patented product. Ibid. The Brulotte rule, like others making contract provisions unenforceable, prevents some parties from entering into deals they desire. As compared to lump-sum fees, royalty plans both draw out payments over time and tie those pay- ments, in each month or year covered, to a product's commer- cial success. And sometimes, for some parties, the longer the arrangement lasts, the better—not just up to but beyond a patent term's end. A more extended payment period, cou- pled (as it presumably would be) with a lower rate, may bring the price the patent holder seeks within the range of a cash-strapped licensee. (Anyone who has bought a prod- uct on installment can relate.) See Brief for Memorial Sloan Kettering Cancer Center et al. as Amici Curiae 17. Or such an extended term may better allocate the risks and re- wards associated with commercializing inventions—most no- tably, when years of development work stand between licens- ing a patent and bringing a product to market. See, e. g., 3 R. Milgrim & E. Bensen, Milgrim on Licensing § 18.05, p. 18– 9 (2013). As to either goal, Brulotte may pose an obstacle. Yet parties can often find ways around Brulotte, enabling them to achieve those same ends. To start, Brulotte allows a licensee to defer payments for pre-expiration use of a pat- ent into the post-expiration period; all the decision bars are

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royalties for using an invention after it has moved into the public domain. See 379 U. S., at 31; Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U. S. 100, 136 (1969). A li- censee could agree, for example, to pay the licensor a sum equal to 10% of sales during the 20-year patent term, but to amortize that amount over 40 years. That arrangement would at least bring down early outlays, even if it would not do everything the parties might want to allocate risk over a long timeframe. And parties have still more options when a licensing agreement covers either multiple patents or addi- tional non-patent rights. Under Brulotte, royalties may run until the latest-running patent covered in the parties' agree- ment expires. See 379 U. S., at 30. Too, post-expiration royalties are allowable so long as tied to a non-patent right— even when closely related to a patent. See, e. g., 3 Milgrim on Licensing § 18.07, at 18–16 to 18–17. That means, for ex- ample, that a license involving both a patent and a trade secret can set a 5% royalty during the patent period (as com- pensation for the two combined) and a 4% royalty afterward (as payment for the trade secret alone). Finally and most broadly, Brulotte poses no bar to business arrangements other than royalties—all kinds of joint ventures, for exam- ple—that enable parties to share the risks and rewards of commercializing an invention. Contending that such alternatives are not enough, Kimble asks us to abandon Brulotte in favor of “flexible, case-by- case analysis” of post-expiration royalty clauses “under the rule of reason.” Brief for Petitioners 45. Used in antitrust law, the rule of reason requires courts to evaluate a practice's effect on competition by “taking into account a variety of factors, including specific information about the relevant business, its condition before and after the [practice] was im- posed, and the [practice's] history, nature, and effect.” State Oil Co. v. Khan, 522 U. S. 3, 10 (1997). Of primary impor- tance in this context, Kimble posits, is whether a patent holder has power in the relevant market and so might be

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able to curtail competition. See Brief for Petitioners 47–48; Illinois Tool Works Inc. v. Independent Ink, Inc., 547 U. S. 28, 44 (2006) (“[A] patent does not necessarily confer market power”). Resolving that issue, Kimble notes, entails “a full- fledged economic inquiry into the definition of the market, barriers to entry, and the like.” Brief for Petitioners 48 (quoting 1 H. Hovenkamp, M. Janis, M. Lemley, & C. Les- lie, IP and Antitrust § 3.2e, p. 3–12.1 (2d ed., Supp. 2014) (Hovenkamp)). III Overruling precedent is never a small matter. Stare deci- sis—in English, the idea that today's Court should stand by yesterday's decisions—is “a foundation stone of the rule of law.” Michigan v. Bay Mills Indian Community, 572 U. S. 782, 798 (2014). Application of that doctrine, although “not an inexorable command,” is the “preferred course because it promotes the evenhanded, predictable, and consistent devel- opment of legal principles, fosters reliance on judicial deci- sions, and contributes to the actual and perceived integrity of the judicial process.” Payne v. Tennessee, 501 U. S. 808, 827–828 (1991). It also reduces incentives for challenging settled precedents, saving parties and courts the expense of endless relitigation. Respecting stare decisis means sticking to some wrong de- cisions. The doctrine rests on the idea, as Justice Brandeis famously wrote, that it is usually “more important that the applicable rule of law be settled than that it be settled right.” Burnet v. Coronado Oil & Gas Co., 285 U. S. 393, 406 (1932) (dissenting opinion). Indeed, stare decisis has consequence only to the extent it sustains incorrect decisions; correct judgments have no need for that principle to prop them up. Accordingly, an argument that we got something wrong— even a good argument to that effect—cannot by itself justify scrapping settled precedent. Or otherwise said, it is not alone sufficient that we would decide a case differently now than we did then. To reverse course, we require as well

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what we have termed a “special justification”—over and above the belief “that the precedent was wrongly decided.” Halliburton Co. v. Erica P. John Fund, Inc., 573 U. S. 258, 266 (2014). What is more, stare decisis carries enhanced force when a decision, like Brulotte, interprets a statute. Then, unlike in a constitutional case, critics of our ruling can take their ob- jections across the street, and Congress can correct any mis- take it sees. See, e. g., Patterson v. McLean Credit Union, 491 U. S. 164, 172–173 (1989). That is true, contrary to the dissent's view, see post, at 471 (opinion of Alito, J.), regard- less whether our decision focused only on statutory text or also relied, as Brulotte did, on the policies and purposes ani- mating the law. See, e. g., Bilski v. Kappos, 561 U. S. 593, 601–602 (2010). Indeed, we apply statutory stare decisis even when a decision has announced a “judicially created doctrine” designed to implement a federal statute. Halli- burton, 573 U. S., at 274. All our interpretive decisions, in whatever way reasoned, effectively become part of the statu- tory scheme, subject ( just like the rest) to congressional change. Absent special justification, they are balls tossed into Congress's court, for acceptance or not as that branch elects. And Congress has spurned multiple opportunities to re- verse Brulotte—openings as frequent and clear as this Court ever sees. Brulotte has governed licensing agreements for more than half a century. See Watson v. United States, 552 U. S. 74, 82–83 (2007) (stating that “long congressional acqui- escence,” there totaling just 14 years, “enhance[s] even the usual precedential force we accord to our interpretations of statutes” (internal quotation marks omitted)). During that time, Congress has repeatedly amended the patent laws, in- cluding the specific provision (35 U. S. C. § 154) on which Brulotte rested. See, e. g., Uruguay Round Agreements Act, § 532(a), 108 Stat. 4983 (1994) (increasing the length of the patent term); Act of Nov. 19, 1988, § 201, 102 Stat. 4676

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(limiting patent-misuse claims). Brulotte survived every such change. Indeed, Congress has rebuffed bills that would have replaced Brulotte's per se rule with the same antitrust-style analysis Kimble now urges. See, e. g., S. 1200, 100th Cong., 1st Sess., Tit. II (1987) (providing that no patent owner would be guilty of “illegal extension of the patent right by reason of his or her licensing practices . . . unless such practices . . . violate the antitrust laws”); S. 438, 100th Cong., 2d Sess., § 201(3) (1988) (same). Congress's continual reworking of the patent laws—but never of the Bru- lotte rule—further supports leaving the decision in place. Nor yet are we done, for the subject matter of Brulotte adds to the case for adhering to precedent. Brulotte lies at the intersection of two areas of law: property (patents) and contracts (licensing agreements). And we have often recog- nized that in just those contexts—“cases involving property and contract rights”—considerations favoring stare decisis are “at their acme.” E. g., Payne, 501 U. S., at 828; Khan, 522 U. S., at 20. That is because parties are especially likely to rely on such precedents when ordering their affairs. To be sure, Marvel and Kimble disagree about whether Brulotte has actually generated reliance. Marvel says yes: Some par- ties, it claims, do not specify an end date for royalties in their licensing agreements, instead relying on Brulotte as a default rule. Brief for Respondent 32–33; see 1 D. Epstein, Eckstrom's Licensing in Foreign and Domestic Operations § 3.13, p. 3–13, and n. 2 (2014) (noting that it is not “necessary to specify the term . . . of the license” when a decision like Brulotte limits it “by law”). Overturning Brulotte would thus upset expectations, most so when long-dormant licenses for long-expired patents spring back to life. Not true, says Kimble: Unfair surprise is unlikely, because no “meaningful number of [such] license agreements . . . actually exist.” Reply Brief 18. To be honest, we do not know (nor, we sus- pect, do Marvel and Kimble). But even uncertainty on this score cuts in Marvel's direction. So long as we see a reason-

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able possibility that parties have structured their business transactions in light of Brulotte, we have one more reason to let it stand. As against this superpowered form of stare decisis, we would need a superspecial justification to warrant reversing Brulotte. But the kinds of reasons we have most often held sufficient in the past do not help Kimble here. If anything, they reinforce our unwillingness to do what he asks. First, Brulotte's statutory and doctrinal underpinnings have not eroded over time. When we reverse our statutory interpretations, we most often point to subsequent legal de- velopments—“either the growth of judicial doctrine or fur- ther action taken by Congress”—that have removed the basis for a decision. Patterson, 491 U. S., at 173 (calling this “the primary reason” for overruling statutory precedent). But the core feature of the patent laws on which Brulotte relied remains just the same: Section 154 now, as then, draws a sharp line cutting off patent rights after a set number of years. And this Court has continued to draw from that leg- islative choice a broad policy favoring unrestricted use of an invention after its patent's expiration. See supra, at 451– 452. Scott Paper—the decision on which Brulotte primarily relied—remains good law. So too do this Court's other deci- sions refusing to enforce either state laws or private con- tracts constraining individuals' free use of formerly patented (or unpatentable) discoveries. See supra, at 451–452. Bru- lotte, then, is not the kind of doctrinal dinosaur or legal last- man-standing for which we sometimes depart from stare decisis. Cf., e. g., Alleyne v. United States, 570 U. S. 99, 119– 121 (2013) (Sotomayor, J., concurring). To the contrary, the decision's close relation to a whole web of precedents means that reversing it could threaten others. If Brulotte is out- dated, then (for example) is Scott Paper too? We would pre- fer not to unsettle stable law.4 4 The only legal erosion to which Kimble gestures is a change in the treatment of patent tying agreements—i. e., contracts conditioning a li- censee's right to use a patent on the purchase of an unpatented prod-

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And second, nothing about Brulotte has proved unwork- able. See, e. g., Patterson, 491 U. S., at 173 (identifying un- workability as another “traditional justification” for overrul- ing precedent). The decision is simplicity itself to apply. A court need only ask whether a licensing agreement provides royalties for post-expiration use of a patent. If not, no prob- lem; if so, no dice. Brulotte's ease of use appears in still sharper relief when compared to Kimble's proposed alterna- tive. Recall that he wants courts to employ antitrust law's rule of reason to identify and invalidate those post-expiration royalty clauses with anticompetitive consequences. See supra, at 454–455. But whatever its merits may be for de- ciding antitrust claims, that “elaborate inquiry” produces no- toriously high litigation costs and unpredictable results. Arizona v. Maricopa County Medical Soc., 457 U. S. 332, 343 (1982). For that reason, trading in Brulotte for the rule of reason would make the law less, not more, work- able than it is now. Once again, then, the case for sticking with long-settled precedent grows stronger: Even the most

uct. See Brief for Petitioners 43. When Brulotte was decided, those agreements counted as per se antitrust violations and patent misuse; now, they are unlawful only if the patent holder wields power in the relevant market. See Act of Nov. 19, 1988, § 201, 102 Stat. 4676 (adding the market power requirement in the patent-misuse context); Illinois Tool Works Inc. v. Independent Ink, Inc., 547 U. S. 28, 41–43 (2006) (relying on that legisla- tive change to overrule antitrust decisions about tying and to adopt the same standard). But it is far from clear that the old rule of tying was among Brulotte's legal underpinnings. Brulotte briefly analogized post- expiration royalty agreements to tying arrangements, but only after relat- ing the statutory and caselaw basis for its holding and “conclud[ing]” that post-patent royalties are “unlawful per se.” 379 U. S., at 32. And even if that analogy played some real role in Brulotte, the development of tying law would not undercut the decision—rather the opposite. Congress took the lead in changing the treatment of tying agreements and, in doing so, conspicuously left Brulotte in place. Indeed, Congress declined to enact bills that would have modified not only tying doctrine but also Brulotte. See supra, at 457 (citing S. 1200, 100th Cong., 1st Sess. (1987), and S. 438, 100th Cong., 2d Sess. (1988)). That choice suggests congressional acquies- cence in Brulotte, and so further supports adhering to stare decisis.

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usual reasons for abandoning stare decisis cut the other way here. IV Lacking recourse to those traditional justifications for overruling a prior decision, Kimble offers two different ones. He claims first that Brulotte rests on a mistaken view of the competitive effects of post-expiration royalties. He con- tends next that Brulotte suppresses technological innovation and so harms the nation's economy. (The dissent offers ver- sions of those same arguments. See post, at 465–468.) We consider the two claims in turn, but our answers to both are much the same: Kimble's reasoning may give Congress cause to upset Brulotte, but does not warrant this Court's doing so.

A According to Kimble, we should overrule Brulotte because it hinged on an error about economics: It assumed that post- patent royalty “arrangements are invariably anticompeti- tive.” Brief for Petitioners 37. That is not true, Kimble notes; indeed, such agreements more often increase than in- hibit competition, both before and after the patent expires. See id., at 36–40. As noted earlier, a longer payment period will typically go hand-in-hand with a lower royalty rate. See supra, at 453. During the patent term, those reduced rates may lead to lower consumer prices, making the pat- ented technology more competitive with alternatives; too, the lesser rates may enable more companies to afford a li- cense, fostering competition among the patent's own users. See Brief for Petitioners 38. And after the patent's expira- tion, Kimble continues, further benefits follow: Absent high barriers to entry (a material caveat, as even he would agree, see Tr. of Oral Arg. 12–13, 23), the licensee's continuing obli- gation to pay royalties encourages new companies to begin making the product, figuring that they can quickly attract customers by undercutting the licensee on price. See Brief for Petitioners 38–39. In light of those realities, Kimble

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concludes, “the Brulotte per se rule makes little sense.” Id., at 11. We do not join issue with Kimble's economics—only with what follows from it. A broad scholarly consensus supports Kimble's view of the competitive effects of post-expiration royalties, and we see no error in that shared analysis. See id., at 13–18 (citing numerous treatises and articles critiquing Brulotte). Still, we must decide what that means for Bru- lotte. Kimble, of course, says it means the decision must go. Positing that Brulotte turned on the belief that post- expiration royalties are always anticompetitive, he invokes decisions in which this Court abandoned antitrust precedents premised on similarly shaky economic reasoning. See Brief for Petitioners 55–56 (citing, e. g., Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U. S. 877 (2007); Illinois Tool Works, 547 U. S. 28). But to agree with Kimble's con- clusion, we must resolve two questions in his favor. First, even assuming Kimble accurately characterizes Brulotte's basis, does the decision's economic mistake suffice to over- come stare decisis? Second and more fundamentally, was Brulotte actually founded, as Kimble contends, on an analy- sis of competitive effects? If Brulotte were an antitrust rather than a patent case, we might answer both questions as Kimble would like. This Court has viewed stare decisis as having less-than-usual force in cases involving the Sherman Act. See, e. g., Khan, 522 U. S., at 20–21. Congress, we have explained, intended that law's reference to “restraint of trade” to have “chang- ing content,” and authorized courts to oversee the term's “dynamic potential.” Business Electronics Corp. v. Sharp Electronics Corp., 485 U. S. 717, 731–732 (1988). We have therefore felt relatively free to revise our legal analysis as economic understanding evolves and ( just as Kimble notes) to reverse antitrust precedents that misperceived a prac- tice's competitive consequences. See Leegin, 551 U. S., at 899–900. Moreover, because the question in those cases was

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whether the challenged activity restrained trade, the Court's rulings necessarily turned on its understanding of economics. See Business Electronics Corp., 485 U. S., at 731. Accord- ingly, to overturn the decisions in light of sounder economic reasoning was to take them “on [their] own terms.” Halli- burton, 573 U. S., at 271. But Brulotte is a patent rather than an antitrust case, and our answers to both questions instead go against Kimble. To begin, even assuming that Brulotte relied on an economic misjudgment, Congress is the right entity to fix it. By con- trast with the Sherman Act, the patent laws do not turn over exceptional law-shaping authority to the courts. Accord- ingly, statutory stare decisis—in which this Court interprets and Congress decides whether to amend—retains its usual strong force. See supra, at 456. And as we have shown, that doctrine does not ordinarily bend to “wrong on the merits”-type arguments; it instead assumes Congress will cor- rect whatever mistakes we commit. See supra, at 455–456. Nor does Kimble offer any reason to think his own “the Court erred” claim is special. Indeed, he does not even point to anything that has changed since Brulotte—no new empirical studies or advances in economic theory. Cf., e. g., Halliburton, 573 U. S., at 270–274 (considering, though finding insufficient, recent economic research). On his argument, the Brulotte Court knew all it needed to know to determine that post-patent royalties are not usually anticompetitive; it just made the wrong call. See Brief for Petitioners 36–40. That claim, even if itself dead-right, fails to clear stare decisis's high bar. And in any event, Brulotte did not hinge on the mistake Kimble identifies. Although some of its language invoked economic concepts, see n. 4, supra, the Court did not rely on the notion that post-patent royalties harm competition. Nor is that surprising. The patent laws—unlike the Sherman Act—do not aim to maximize competition (to a large extent, the opposite). And the patent term—unlike the “restraint

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of trade” standard—provides an all-encompassing bright-line rule, rather than calling for practice-specific analysis. So in deciding whether post-expiration royalties comport with pat- ent law, Brulotte did not undertake to assess that practice's likely competitive effects. Instead, it applied a categorical principle that all patents, and all benefits from them, must end when their terms expire. See Brulotte, 379 U. S., at 30– 32; supra, at 452–453. Or more specifically put, the Court held, as it had in Scott Paper, that Congress had made a judgment: that the day after a patent lapses, the formerly protected invention must be available to all for free. And further: that post-expiration restraints on even a single li- censee's access to the invention clash with that principle. See Brulotte, 379 U. S., at 31–32 (a licensee's obligation to pay post-patent royalties conflicts with the “free market vis- ualized for the post-expiration period” and so “runs counter to the policy and purpose of the patent laws” (quoting Scott Paper, 326 U. S., at 256)). That patent (not antitrust) policy gave rise to the Court's conclusion that post-patent royalty contracts are unenforceable—utterly “regardless of a demon- strable effect on competition.” 1 Hovenkamp § 3.2d, at 3–10. Kimble's real complaint may go to the merits of such a patent policy—what he terms its “formalis[m],” its “rigid- [ity],” and its detachment from “economic reality.” Brief for Petitioners 27–28. But that is just a different version of the argument that Brulotte is wrong. And it is, if anything, a version less capable than the last of trumping statutory stare decisis. For the choice of what patent policy should be lies first and foremost with Congress. So if Kimble thinks pat- ent law's insistence on unrestricted access to formerly pat- ented inventions leaves too little room for pro-competitive post-expiration royalties, then Congress, not this Court, is his proper audience. B Kimble also seeks support from the wellspring of all pat- ent policy: the goal of promoting innovation. Brulotte, he

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contends, “discourages technological innovation and does sig- nificant damage to the American economy.” Brief for Peti- tioners 29. Recall that would-be licensors and licensees may benefit from post-patent royalty arrangements because they allow for a longer payment period and a more precise allocation of risk. See supra, at 453. If the parties' ideal licensing agreement is barred, Kimble reasons, they may reach no agreement at all. See Brief for Petitioners 32. And that possibility may discourage invention in the first instance. The bottom line, Kimble concludes, is that some “breakthrough technologies will never see the light of day.” Id., at 33. Maybe. Or, then again, maybe not. While we recognize that post-patent royalties are sometimes not anticompetitive, we just cannot say whether barring them imposes any mean- ingful drag on innovation. As we have explained, Brulotte leaves open various ways—involving both licensing and other business arrangements—to accomplish payment defer- ral and risk-spreading alike. See supra, at 453–454. Those alternatives may not offer the parties the precise set of bene- fits and obligations they would prefer. But they might still suffice to bring patent holders and product developers to- gether and ensure that inventions get to the public. Neither Kimble nor his amici have offered any empirical evidence connecting Brulotte to decreased innovation; they essentially ask us to take their word for the problem. And the United States, which acts as both a licensor and a licensee of pat- ented inventions while also implementing patent policy, vig- orously disputes that Brulotte has caused any “significant real-world economic harm.” Brief for United States as Amicus Curiae 30. Truth be told, if forced to decide that issue, we would not know where or how to start. Which is one good reason why that is not our job. Claims that a statutory precedent has “serious and harmful conse- quences” for innovation are (to repeat this opinion's refrain) “more appropriately addressed to Congress.” Halliburton,

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573 U. S., at 277. That branch, far more than this one, has the capacity to assess Kimble's charge that Brulotte sup- presses technological progress. And if it concludes that Brulotte works such harm, Congress has the prerogative to determine the exact right response—choosing the policy fix, among many conceivable ones, that will optimally serve the public interest. As we have noted, Congress legislates ac- tively with respect to patents, considering concerns of just the kind Kimble raises. See supra, at 456–457. In adher- ing to our precedent as against such complaints, we promote the rule-of-law values to which courts must attend while leaving matters of public policy to Congress.

V What we can decide, we can undecide. But stare decisis teaches that we should exercise that authority sparingly. Cf. S. Lee & S. Ditko, Amazing Fantasy No. 15: Spider-Man! p. 11 (1962) (“[I]n this world, with great power there must also come—great responsibility”). Finding many reasons for staying the stare decisis course and no “special justifica- tion” for departing from it, we decline Kimble's invitation to overrule Brulotte. For the reasons stated, the judgment of the Court of Ap- peals is affirmed. It is so ordered.

Justice Alito, with whom The Chief Justice and Jus- tice Thomas join, dissenting. The Court employs stare decisis, normally a tool of re- straint, to reaffirm a clear case of judicial overreach. Our decision in Brulotte v. Thys Co., 379 U. S. 29 (1964), held that parties cannot enter into a patent licensing agreement that provides for royalty payments to continue after the term of the patent expires. That decision was not based on any- thing that can plausibly be regarded as an interpretation of the terms of the Patent Act. It was based instead on an

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economic theory—and one that has been debunked. The de- cision interferes with the ability of parties to negotiate licensing agreements that reflect the true value of a pat- ent, and it disrupts contractual expectations. Stare decisis does not require us to retain this baseless and damaging precedent. I A The Patent Act provides that a patent grants certain ex- clusive rights to the patentee and “his heirs or assigns” for a term of 20 years. 35 U. S. C. §§ 154(a)(1) and (2). The Act says nothing whatsoever about post-expiration royalties. In Brulotte, however, the Court held that such royalties are per se unlawful. The Court made little pretense of finding support for this holding in the language of the Act. Instead, the Court reasoned that allowing post-expiration royalties would subject “the free market visualized for the post- expiration period . . . to monopoly influences that have no proper place there.” 379 U. S., at 32–33. Invoking anti- trust concepts, the decision suggested that such arrange- ments are “an effort to enlarge the monopoly of the patent by t[y]ing the sale or use of the patented article to the pur- chase or use of unpatented ones.” Id., at 33. Whatever the merits of this economic argument, it does not represent a serious attempt to interpret the Patent Act. A licensing agreement that provides for the pay- ment of royalties after a patent's term expires does not enlarge the patentee's monopoly or extend the term of the patent. It simply gives the licensor a contractual right. Thus, nothing in the text of the Act even arguably for- bids licensing agreements that provide for post-expiration royalties. Brulotte was thus a bald act of policymaking. It was not simply a case of incorrect statutory interpretation. It was not really statutory interpretation at all.

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B Not only was Brulotte based on policymaking, it was based on a policy that is difficult to defend. Indeed, in the inter- vening 50 years, its reasoning has been soundly refuted. See, e. g., 10 P. Areeda & H. Hovenkamp, Antitrust Law: An Analysis of Antitrust Principles and Their Application ¶1782c.3, pp. 554–556 (3d ed. 2011); See & Caprio, The Trou- ble with Brulotte: The Patent Royalty Term and Patent Mo- nopoly Extension, 1990 Utah L. Rev. 813, 846–851; Scheiber v. Dolby Labs., Inc., 293 F. 3d 1014, 1017 (CA7 2002); Brief for Petitioners 23–25, and n. 11 (collecting sources); ante, at 451, n. 3. Brulotte misperceived the purpose and effect of post- expiration royalties. The decision rested on the view that post-expiration royalties extend the patent term by means of an anticompetitive tying arrangement. As the Court un- derstood such an arrangement, the patent holder leverages its monopoly power during the patent term to require pay- ments after the term ends, when the invention would other- wise be available for free public use. But agreements to pay licensing fees after a patent expires do not “enlarge the monopoly of the patent.” 379 U. S., at 33. Instead, “[o]nce the patent term expires, the power to exclude is gone,” and all that is left “is a problem about optimal contract design.” Easterbrook, Contract and Copyright, 42 Hous. L. Rev. 953, 955 (2005). The economics are simple: Extending a royalty term al- lows the parties to spread the licensing fees over a longer period of time, which naturally has the effect of reducing the fees during the patent term. See ante, at 453. Re- stricting royalty payments to the patent term, as Brulotte requires, compresses payment into a shorter period of higher fees. The Patent Act does not prefer one approach over the other. There are, however, good reasons why parties sometimes prefer post-expiration royalties over upfront fees, and why

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such arrangements have procompetitive effects. Patent holders and licensees are often unsure whether a patented idea will yield significant economic value, and it often takes years to monetize an innovation. In those circumstances, deferred royalty agreements are economically efficient. They encourage innovators, like universities, hospitals, and other institutions, to invest in research that might not yield marketable products until decades down the line. See Brief for Memorial Sloan Kettering Cancer Center et al. as Amici Curiae 8–12. And they allow producers to hedge their bets and develop more products by spreading licensing fees over longer periods. See ibid. By prohibiting these arrange- ments, Brulotte erects an obstacle to efficient patent use. In patent law and other areas, we have abandoned per se rules with similarly disruptive effects. See, e. g., Illinois Tool Works Inc. v. Independent Ink, Inc., 547 U. S. 28 (2006); Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U. S. 877 (2007). The majority downplays this harm by insisting that “par- ties can often find ways around Brulotte.” Ante, at 453. But the need to avoid Brulotte is an economic inefficiency in itself. Parties are not always aware of the prohibition—as this case amply demonstrates. And the suggested alterna- tives do not provide the same benefits as post-expiration roy- alty agreements. For instance, although an agreement to amortize payments for sales during the patent term would “bring down early outlays,” the Court admits that such an agreement might not reflect the parties' risk preferences. Ante, at 454. Moreover, such an arrangement would not necessarily yield the same amount of total royalties, particu- larly for an invention or a medical breakthrough that takes decades to develop into a marketable product. The sort of agreements that Brulotte prohibits would allow licensees to spread their costs, while also allowing patent holders to capi- talize on slow-developing inventions.

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C On top of that, Brulotte most often functions to upset the parties' expectations. This case illustrates the point. No one disputes that, when “negotiating the settlement, neither side was aware of Brulotte.” Ante, at 450. Without knowledge of our per se rule, the parties agreed that Marvel would pay 3% in royal- ties on all of its future sales involving the Web Blaster and similar products. If the parties had been aware of Brulotte, they might have agreed to higher payments during the pat- ent term. Instead, both sides expected the royalty pay- ments to continue until Marvel stopped selling toys that fit the terms of the agreement. But that is not what happened. When Marvel discovered Brulotte, it used that decision to nullify a key part of the agreement. The parties' contrac- tual expectations were shattered, and petitioners' rights were extinguished. The Court's suggestion that some parties have come to rely on Brulotte is fanciful. The Court believes that there is a “reasonable possibility that parties have structured their business transactions in light of Brulotte.” Ante, at 457– 458. Its only support for this conclusion is Marvel's self- serving and unsupported assertion that some contracts might not specify an end date for royalties because the par- ties expect Brulotte to supply the default rule. To its credit, the Court stops short of endorsing this unlikely pre- diction, saying only that “uncertainty on this score cuts in Marvel's direction.” Ante, at 457. But there is no real uncertainty. “[W]e do not know” if Marvel's assertion is correct because Marvel has provided no evidence to support it. Ibid. And there are reasons to believe that, if parties actually relied on Brulotte to supply a default rule, courts would enforce the contracts as the par- ties expected. See, e. g., 27 R. Lord, Williston on Contracts § 70:124 (4th ed. 2003). What we know for sure, however, is

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that Brulotte has upended the parties' expectations here and in many other cases. See, e. g., Scheiber, 293 F. 3d, at 1016; Boggild v. Kenner Products, 853 F. 2d 465, 466–467 (CA6 1988); Pitney Bowes, Inc. v. Mestre, 701 F. 2d 1365, 1367, 1373 (CA11 1983). These confirmed problems with retaining Brulotte clearly outweigh Marvel's hypothetical fears.

II In the end, Brulotte's only virtue is that we decided it. But that does not render it invincible. Stare decisis is important to the rule of law, but so are correct judicial deci- sions. Adherence to prior decisions “ `promotes the even- handed, predictable, and consistent development of legal principles, fosters reliance on judicial decisions, and contrib- utes to the actual and perceived integrity of the judicial process.' ” Pearson v. Callahan, 555 U. S. 223, 233 (2009) (quoting Payne v. Tennessee, 501 U. S. 808, 827 (1991)). But stare decisis is not an “inexorable command.” Id., at 828; Washington v. W. C. Dawson & Co., 264 U. S. 219, 238 (1924) (Brandeis, J., dissenting). “Revisiting precedent is particu- larly appropriate where, as here, a departure would not upset expectations, the precedent consists of a judge-made rule . . . , and experience has pointed up the precedent's shortcomings.” Pearson, supra, at 233. Our traditional approach to stare decisis does not require us to retain Brulotte's per se rule. Brulotte's holding had no basis in the law. Its reasoning has been thoroughly dis- proved. It poses economic barriers that stifle innovation. And it unsettles contractual expectations. It is not decisive that Congress could have altered Bru- lotte's rule. In general, we are especially reluctant to over- turn decisions interpreting statutes because those decisions can be undone by Congress. See, e. g., John R. Sand & Gravel Co. v. United States, 552 U. S. 130, 139 (2008); Patter- son v. McLean Credit Union, 491 U. S. 164, 172–173 (1989). The Court calls this a “superpowered form of stare decisis”

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that renders statutory interpretation decisions nearly imper- vious to challenge. Ante, at 458. I think this goes a bit too far. As an initial matter, we do not give super-duper protection to decisions that do not actually interpret a statute. When a precedent is based on a judge-made rule and is not grounded in anything that Congress has enacted, we cannot “properly place on the shoulders of Congress” the entire bur- den of correcting “the Court's own error.” Girouard v. United States, 328 U. S. 61, 69–70 (1946). On the contrary, we have recognized that it is appropriate for us to correct rules of this sort. See, e. g., Leegin, supra, at 899–900; State Oil Co. v. Khan, 522 U. S. 3, 20–21 (1997). The Court says that it might agree if Brulotte were an antitrust precedent because stare decisis has “less-than- usual force in cases involving the Sherman Act.” Ante, at 461. But this distinction is unwarranted. We have been more willing to reexamine antitrust precedents because they have attributes of common-law decisions. I see no reason why the same approach should not apply where the prece- dent at issue, while purporting to apply a statute, is actually based on policy concerns. Indeed, we should be even more willing to reconsider such a precedent because the role im- plicitly assigned to the federal courts under the Sherman Act has no parallel in Patent Act cases. Even taking the Court on its own terms, Brulotte was an antitrust decision masquerading as a patent case. The Court was principally concerned with patentees improperly leveraging their monopoly power. See 379 U. S., at 32–33. And it expressly characterized post-expiration royalties as anticompetitive tying arrangements. See id., at 33. It makes no sense to afford greater stare decisis protection to Brulotte's thinly veiled antitrust reasoning than to our Sher- man Act decisions. The Court also places too much weight on Congress' fail- ure to overturn Brulotte. We have long cautioned that “[i]t

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is at best treacherous to find in congressional silence alone the adoption of a controlling rule of law.” Girouard, supra, at 69. Even where Congress has considered, but not adopted, legislation that would abrogate a judicial ruling, it cannot be inferred that Congress' failure to act shows that it approves the ruling. See Central Bank of Denver, N. A. v. First Interstate Bank of Denver, N. A., 511 U. S. 164, 187 (1994). “ `[S]everal equally tenable inferences may be drawn from such inaction.' ” Ibid. (quoting Pension Benefit Guar- anty Corporation v. LTV Corp., 496 U. S. 633, 650 (1990)). Passing legislation is no easy task. A federal statute must withstand the “finely wrought” procedure of bicameral- ism and presentment. INS v. Chadha, 462 U. S. 919, 951 (1983); Clinton v. City of New York, 524 U. S. 417, 440 (1998); see U. S. Const., Art. I, § 7. Within that onerous process, there are additional practical hurdles. A law must be taken up for discussion and not passed over in favor of more press- ing matters, and Senate rules require 60 votes to end debate on most legislation. And even if the House and Senate agree on a general policy, the details of the measure usually must be hammered out in a conference committee and re- passed by both Houses. * * * A proper understanding of our doctrine of stare decisis does not prevent us from reexamining Brulotte. Even the Court does not defend the decision on the merits. I would reconsider and overrule our obvious mistake. For these reasons, I respectfully dissent.