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Supreme Court hesitant to extend Spider-Man toy royalties

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(Reuters) — A Spider-Man toy that shoots out webs of foam was at the center of a U.S. Supreme Court hearing on Tuesday, with the justices appearing little inclined to overturn a half-century-old legal precedent to allow more royalty fees to go to its inventor.

The nine justices heard more than an hour of oral arguments in the case pitting the inventor, Stephen Kimble, against Walt Disney Co.'s Marvel Entertainment.

Mr. Kimble is asking the court to overrule the precedent, which said royalty payments generally do not need to be made after a patent has expired, as is the case with the Spider-Man Web Blaster toy. Marvel, which has paid Mr. Kimble more than $6 million over the years to use the patent in the toy, says the precedent set in a 1964 Supreme Court ruling should stand.

On Tuesday, Chief Justice John Roberts, part of the conservative wing of the court, told Marvel lawyer Thomas Saunders that economists say the prohibition on royalties after patent expiry is a "very bad rule."

Some lower courts and legal experts have also said the precedent should be overturned to allow more flexibility in licensing patents.

But most of the questions, especially from the liberal justices, suggested little appetite on the court to upend established law. Justice Stephen Breyer challenged Mr. Kimble's side to reconcile their wish with a fundamental basis of patent law — that patent protection is time-limited.

"After 20 years, people can use that intellectual property for free," Justice Breyer said.

Justice Elena Kagan said there needs to be a good reason to overturn the precedent, and wondered whether Mr. Kimble had one.

"There's nothing incredibly weird and anomalous about it," Justice Kagan said.

Mr. Kimble obtained a patent for his web-shooting glove in 1991, later assigning it to Marvel in return for a royalty fee.

After Mr. Kimble in 2008 claimed breach of contract, Marvel argued that the 1964 Supreme Court ruling in the case Brulotte v. Thys Co. involving a harvesting machine meant it would not be required to pay the royalties once the patent expired in 2010.

A federal judge in Arizona agreed, and in 2013, the San Francisco-based 9th U.S. Circuit Court of Appeals upheld the decision, saying it was bound by the Supreme Court precedent.

The high court is expected to rule by the end of June.

The case is Kimble v. Marvel, U.S. Supreme Court, No. 13-720.