Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc. - Oral Argument - February 28, 2011

Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc.

Media for Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc.

Audio Transcription for Opinion Announcement - June 06, 2011 in Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc.

Audio Transcription for Oral Argument - February 28, 2011 in Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc.

John G. Roberts, Jr.:

We will hear argument next this morning in Case 09-1159, the Board of Trustees of Stanford v. Roche Molecular Systems.

Mr. Ayer.

Donald B. Ayer:

Thank you, Mr. Chief Justice, and may it please the Court:

The Bayh-Dole Act sets forth a comprehensive disposition of rights in inventions made by nonprofit organizations and small business organizations under Federal funding agreements.

That disposition specifically defines the rights of inventors and it puts them in the third position behind the contractor, the nonprofit contractor, and behind the government, and specifically says that the inventor may only receive rights -- that is to say, take title -- when the -- when the contractor has declined to take title or defaulted in some respect, and the government itself has -- has likewise declined to take title.

In this case Roche's sole claim rests on an assignment from an inventor who was at that time I think without question a Stanford employee who was working on a project under a Federal funding agreement.

Sonia Sotomayor:

What if the inventor had not been an employee?

If it had been an independent contractor who was working in combination with the university, how does this automatic vesting--

Donald B. Ayer:

Well, Your Honor, the act deals specifically with independent contractors, and -- the regulations at least do.

And they indicate that the -- that the contractor in that instance, if in fact working on a Federally funded project, would step into the shoes of the contractor.

But I don't believe it would affect the outcome in terms of whether it would be a Bayh-Dole invention.

The -- the critical fact here is that the inventor was working on a project that was already funded, his work at Cetus was part of that project.

And then that result was--

Ruth Bader Ginsburg:

That seems to be a factual dispute, so maybe you can be clear on that.

According to Cetus or Roche, at the time that this scientist came to Cetus to work, there was no Federal funding; that that Federal funding for this project, the Stanford project, came about after the scientist had spent his 9 months at Cetus.

At least that's the picture that -- that they draw, that the Federal -- that they got their assignment from the scientist at a time when there was no Federally funded project.

Donald B. Ayer:

--That's what they say, Your Honor, and I would submit that is plainly not correct.

We deal with this at pages 21 and 22 of our yellow brief, and we specifically talk about the fact -- there's several critical facts here.

One is that the article which was written about the work at Cetus, the JID article at page 135 of the joint appendix, specifically has a footnote indicating that the work reported on -- that is the work at Cetus on the assay -- was funded by the two specific grants in issue.

Dr. Merigan, who is the head of the lab at Stanford that Dr. Holodniy worked in, talks in his declaration at 98 and 99 of the joint appendix -- specifically talks about how Dr. Holodniy's work was part of the AIDS research center at Stanford and part of an AIDS clinical trial at Stanford, and all of that work was federally funded.

Antonin Scalia:

Just -- just as a hypothetical, suppose -- suppose it was as Justice Ginsburg suggested; or indeed suppose this individual even before he was employed by Stanford at all, much less employed by a Stanford project funded by the Federal Government, entered into this kind of an agreement with somebody that he had been working for.

How -- how would it--

Donald B. Ayer:

Well, I think you have to look very carefully at the facts, and I don't want to speak loosely and categorically about the facts, but what -- what I will say is that in a situation where -- and this is very clearly true -- in a situation where prior work is done by persons who are, to start with a clearer set of facts, not affiliated with the university, and they -- let's say that person conceives of an invention, and that later the university takes that conception of an invention and reduces it to practice.

The conception by a person who is not a university employee, if -- if there's no university person involved in the conception, then it can't be an invention of the contractor, because you can't be an inventor without being part of the conception.

So that's a variation on Your Honor's -- on Your Honor's question, but it's a -- it's a clear example where Bayh-Dole would not apply.

Antonin Scalia:

--How does that change when you -- when you alter the hypothetical so that he was already an employee of Stanford, but was not working as an employee of Stanford when he was at this other company?

You could still say that -- that Stanford was not the inventor.

Donald B. Ayer:

Well, you would -- you -- I think you are now in a zone where one of the things that has to be considered is the equitable character of any assignment of a future interest, that is to say a future invention.

Because if in fact what was assigned was, as here, the possibility that there might at some future time be an invention, then equitable considerations come into play; and one of the equitable considerations we think the one that is of paramount significance, is the fact that the Congress of the United States has said in the context of Bayh-Dole that when the United States invests money in research, it wants certain things to happen that are very carefully set out in the -- in the Bayh-Dole Act.

Anthony M. Kennedy:

Could you tell me, assume no Federal act, let's just talk about two -- or parties that are not involved with the Federal Government.