Patent law has seen many twists and turns over the last several decades, but the long-standing principle that it is unlawful to require patent royalty payments after a patent has expired has remained unmoved and untouched during this time. Or has it?
This per se rule, known as the Brulotte doctrine, is rarely a topic for debate or discussion. But, as a recent case in the Ninth Circuit (which the Supreme Court declined to review) has highlighted, perhaps it should be. The litigation between C.R. Bard and Atrium Medical Corp. relating to vascular graft technology used in stents, shows that while the core principle remains intact, its application can be more uncertain depending on the circumstances. Given the current state of the caselaw, companies and their counsel should think strategically about how royalty arrangements are structured and drafted. The financial impact could be substantial for all involved.
