Supreme Court reaffirms rule prohibiting royalties for expired patents

By Dan Larsen
June 24, 2015

Nearly 50 years ago, the United States Supreme Court held in Brulotte v. Thys Co. that a patent holder may not collect royalty payments from a licensee after the date on which the patent expires. Since that time, the so-called Brulotte rule has survived despite criticism and attacks by lower federal courts.   

In 2013, the Ninth Circuit begrudgingly applied the Brulotte rule in Kimble v. Marvel Enterprises, Inc., to void an agreement between a patent holder and Marvel. In that case, the court held that the agreement was unlawful because it required Marvel to pay royalties for patents and other know-how without a reduction in price after expiration of the patent.  According to the court, "a license for inseparable patent and non-patent rights involving royalty payments that extends beyond a patent term is unenforceable for the post-expiration period unless the agreement provides a discount for the non-patent rights from the patent-protected rate."  However, at the same, the court complained that the Brulotte rule is "counterintuitive" and "its rationale is arguably unconvincing." 

The Supreme Court then granted review, and on Tuesday the Court affirmed, declining to abrogate a half century of case law.  Accordingly, Brulotte is alive and well, and patent holders may not receive royalties for patent rights that have expired.  When licensing hybrid intellectual property rights, such as a combination of patent rights and trade secrets or know-how, the parties must agree to a reduction of royalty payments at the end of the patent term.

Caitlyn Jenner, Formerly Bruce Jenner, Spotlights Transgender Issues

By Leslie Bottomly
June 8, 2015

Given the awkward questions, gossip, and perhaps outright discrimination that may occur when an individual comes out as transgender on the job, it would be understandable if an individual decided to resign rather than continue working through the transition.  

With Caitlyn Jenner's public announcement that she is transgender, it is possible employees will be more comfortable transitioning without changing jobs. This means employers may increasingly grapple with how to accommodate an employee undergoing a transition. In some workplaces, the issues may not be particularly sticky. In others, such as workplaces in which the employees and/or customers are conservative, or in which many different cultures and religions are represented, where employees wear sex-specific uniforms, where employees share locker rooms, and where the employee bathrooms contain multiple semi-private stalls, the issues will be more numerous and more difficult.

In Oregon, transgender employees are protected from discrimination in employment. Specifically, employers cannot discriminate based on sexual orientation. Sexual orientation is defined as including gender expression (meaning the manner in which an individual's gender identity is expressed, including, but not limited to, through dress, appearance, manner, or speech, whether or not that expression is different from that traditionally associated with the individual's assigned sex at birth) and gender identity (meaning an individual's gender-related identity, whether or not that identity is different from that traditionally associated with the individual's assigned sex at birth, including, but not limited to, a gender identity that is transgender or androgynous). ORS 659A.030; OAR 839-005-0003.

One of the most sensitive issues arises with bathroom use. In Oregon, it's pretty clear. Individuals must be allowed to use the bathroom consistent with their expressed gender.  OAR 839-005-0003. At times, transgender employees would prefer to make other arrangements (such as using  a private bathroom (assuming one is available) for a period of time). Employers may enforce valid dress codes provided they make reasonable accommodation of an individual based on the health and safety needs on a case by case basis. It seems likely that the Oregon Bureau of Labor & Industries will require an employer to allow a transgender employee to wear the uniform consistent with the gender they are presenting.

There are many resources available on the internet to assist employers and employees in the process of accommodating a transgender employee.

Typically these resources recommend a meeting or two with the individual to come up with a  plan of communication with co-workers and a date to announce the change. The employer may need to conduct training on diversity issues, including transgender transition, in order to proactively address concerns that may arise. Foreign language translators may be needed to convey complex issues.

It is advisable as part of this training to address some of the most common questions co-workers and manager may have, such as "What if I call him/her by the incorrect pronoun?" (It's understandable if it happens a few times - but not if it becomes routine. It's appropriate to apologize on-the-spot for doing it automatically out of habit). "My religion sees this as a sin, I cannot condone it" (what you believe in is up to you - we focus on behaviors in the workplace). "What if a customer makes a rude comment"? (Make note of the interaction and let your manager know immediately. We cannot allow customers to create a hostile environment).  "Is he or she undergoing sex reassignment surgery" (Sorry, as with any other medical issue, that is private). Stressing that joking and teasing are not tolerated is particularly important. Of course, checking in with the transgender employee from time to time is also helpful.

The Federal Government's own guide on accommodating an employee's transition is an example available to employers approaching this question for the first time.  View the guide here.

Some employers have been accommodating transgender employees in the workplace for years. Others are more recently being asked to help an employee stay on the job through this important life transition. Employers that are new to this process should seek out educational materials, consultants, and of course, their legal counsel, to ensure compliant and positive transition for all.

This blog post has been prepared for clients and friends of Ater Wynne LLP and should not be relied upon as legal advice. For more information please contact Leslie Bottomly, Partner, Ater Wynne Labor and Employment Group.  

1 The issue of whether transgender individuals qualify as "disabled" for purposes of accommodation under the Americans with Disabilities Act and the similar Oregon disability law, and issues pertaining to insurance coverage for medical treatment associated with sex reassignment are complex and beyond the scope of this article.