Check Your Technology License: Payments May Be Unenforceable

Expiration of a patent also terminates the rights to collect royalties on that patent – even if a license contract says otherwise. All businesses are reminded to check the termination date of any patent licensed to the business for use of underlying technology. While the license may remain valid, the licensor's right to collect royalties may be invalid.

According to a recent U.S. Supreme Court case, a party licensing or selling its patent rights cannot receive royalties after a patent expires, regardless of whether or not the contract allows for the payment of such royalties. See Kimble v. Marvel Entertainment, LLC, 576 U.S. ___ (2015). However, parties can still work around the prohibition to achieve similar goals.