Posts Tagged: "Royalty Payment"

In traditional music recording, artists have had to choose to license their music through major music industry organizations like ASCAP and BMI. In the age of streaming music through Spotify, Pandora and other services what is the purpose of these organizations? The licensing groups have served as clearinghouses for smaller players in the music industry who cannot feasibly deal with multitudes of licensees on their own. But with Taylor Swift and other “major” artists choosing to deal—or not deal—with the streaming services that opens the question about blanket music performance licenses.

The debate on royalty payments for standard essential patents has a surprisingly emotional, sometimes even hostile, undertone. Companies selling standards-based products have an obvious commercial interest in lower royalty rates, but for some participants in the debate the hostility goes deeper. Some people find the idea of having to pay royalties for the use of any standard objectionable and unreasonable.

The U.S. Supreme Court’s recent decision in Kimble v. Marvel Entertainment, LLC (2015) rejuvenates a 50-year-old rule that limits collecting patent royalties after a patent expires. On June 22, 2015, the Court upheld its per se Brulotte rule that bars a patent licensor’s collection of royalties for the use of a claimed invention beyond the expiration date of the underlying patent. The Court directly addressed criticisms of this rule, which originated in its Brulotte v. Thys Co. (1964) decision, and foreclosed any speculation about the continued viability of Brulotte’s bright-line rule in current practice.