01-2466 Scheiber v. Dolby Laboratories, Inc.

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“[A]s we have pointed out, charging royalties beyond the term of the patent does not lengthen the patentee’s monopoly; it merely alters the timing of royalty payments. … However, we have no authority to overrule a Supreme Court decision no matter how dubious its reasoning strikes us.

“In Aronson v. Quick Point Pencil Co., 440 U.S. 257 (1979), a case decided some years after Brulotte, the Supreme Court upheld a superficially similar arrangement: a patent applicant granted a license for the invention it hoped to patent to a firm that agreed, if a patent were not granted, to pay the inventor-applicant royalties for as long as the firm sold products embodying the invention. The Court was careful to distinguish Brulotte, and not a single Justice suggested that any cloud had been cast over the earlier decision. Since no patent was granted, the doctrine of patent misuse could not be brought into play, and there was no other federal ground for invalidating the license. The Court emphasized that Brulotte had been based on the ‘leverage’ that the patent had granted the patentee to extract royalties beyond the date of expiration, 440 U.S. at 265, and that leverage was of course missing in Aronson.

“If Aronson and Brulotte were inconsistent with each other and the Court had not reaffirmed Brulotte in Aronson, then we would have to follow Aronson, the later opinion, since to follow Brulotte in those circumstances would be to overrule Aronson. But the reaffirmation of Brulotte in Aronson tells us that the Court did not deem the cases inconsistent, and so, whether we agree or not, we have no warrant for declaring Brulotte overruled.”

Affirmed.

Appeal from the United States District Court for the Southern District of Indiana, Godich, Mag. J., Posner, J.