Zimmer v. Insall: The Power of Arbitration Agreements in Patent Royalty Disputes

by Dennis Crouch

In the recent case of Zimmer Biomet Holdings, Inc. v. Insall, No. 23-1888 (7th Cir.  July 12, 2024), the Seventh Circuit affirmed an arbitration award requiring Zimmer to continue paying royalties to the estate of Dr. John Insall even after the expiration of the underlying patents.  This decision highlights the significant deference afforded to arbitration agreements and the limited ability of courts to vacate arbitral awards, even when they conflict with Supreme Court precedent.

The key precedents underlying the dispute in Zimmer v. Insall are Brulotte v. Thys Co., 379 U.S. 29 (1964) and Kimble v. Marvel Entertainment, LLC, 576 U.S. 446 (2015). In Brulotte, the Supreme Court held that "a patentee's use of a royalty agreement that projects beyond the expiration date of the patent is unlawful per se."