RESPONDENT:Roche Molecular Systems, Inc., Roche Diagnostics Corp., and Roche Diagnostics Operation Inc.
LOCATION: Stanford University
DOCKET NO.: 09-1159
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT: United States Court of Appeals for the Federal Circuit
CITATION: 563 US 776 (2011)
GRANTED: Nov 01, 2010
ARGUED: Feb 28, 2011
DECIDED: Jun 06, 2011
Donald B. Ayer – for the petitioner
Mark C. Fleming – for the respondents
Malcolm L. Stewart – Deputy Solicitor General, Department of Justice, for the United States as amicus curiae, supporting the petitioner
Facts of the case
The case arose over a licensing dispute between Stanford University and pharmaceutical firm Roche Molecular System over the ownership of patents used in the company’s HIV test kits. Stanford School of Medicine professor Mark Holodniy developed the technology behind the kits. As a researcher at the university, patents from his work would normally be automatically assigned to Stanford. The 1980 Bayh-Dole Act allows universities to retain the rights to research funded by federal grants. But Holodniy also signed a contract with Cetus Corp., a company that later sold its line of business to Roche, that give the company the patent to anything that resulted from their collaboration. In February 2009, the U.S. Court of Appeals for the Federal Circuit held that the university lacked standing to maintain patent infringement claims against Roche.
Must patents on inventions that arise from federally-funded research go to the university where the inventor worked?
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.
John A. Campbell:
This case is about an invention, a new procedure for testing blood samples to determine the amount of HIV in a patient’s blood.
The issue is who owns the patent rights to this invention, the inventor, the university where he conducted his research or the Federal Government which funded part of the research through a grant to the university.
The inventor here is Dr. Mark Holodniy.
Other people were involved as well but I’m going to simplify things quite a bit.
He was a researcher at Stanford and while there to help move his research along and with Stanford’s blessing, he went to Cetus, a small research company.
When he did that, he signed an agreement saying that the right to anything he invented based on his research at Cetus was assigned to Cetus.
Now, after his stint at Cetus, Holodniy returned to Stanford where he perfected the new technique and Stanford patented it.
Meanwhile, Cetus was bought by Roche Molecular Systems, a medical company.
Roche thought it had the rights to Holodniy’s invention because of the prior assignment to Cetus.
Roche turned that invention into a usable product and marketed it and the product is now used around the world to treat AIDS.
Stanford sued Roche for infringing its patent.
Roche pointed out that Holodniy had assigned the rights to whatever he invented from his research at Cetus to Cetus and thus to Roche.
Stanford thought it had a similar assignment of its own from Holodniy but the courts below ruled that it did not and that ruling is not before us.
But Stanford had another argument, it’s said Holodniy had no rights to assign to Cetus in the first place because if a federal law called the Bayh-Dole Act after Senators Bayh and Dole.
Stanford argued that under the Bayh-Dole Act, it was entitled to the rights to the invention all along because it was developed with federal funds and Stanford was the grantee of those funds.
So we had to decide whether under this federal statute, the Bayh-Dole Act, rights to an invention developed in part with federal funds belong with the Federal Government, the contractor, Stanford, or the inventor, Holodniy or by assignment, Roche.
The answer turns on complicated issues of statutory interpretation and those are spelled out in our opinion.
I won’t go through all the nuances of that analysis here.
But a couple of things are interesting.
First, the owner is not the Federal Government.
Everybody including the Federal Government pretty much agrees with that.
The Government gets a full license to use whatever is invented but none of the ideas — but one of the ideas behind the Bayh-Dole Act is that others involved in federally funded research would do a better job of commercializing their inventions for the good of everyone.
The other interesting thing is that there is a very old and established principle in this area that an inventor owns his invention even if he invents it in the course of employment by another.
Now that’s obviously not the normal employment rule.
Somebody on an assembly line doesn’t own the car he helps make, the employer does.
But it’s a different rule under the patent law and always has been.
Without getting into the details, we don’t think that Congress changed that rule in the Bayh-Dole Act.
We think that if it meant to, it surely would’ve made such a dramatic change very clear and it certainly didn’t do that in the Bayh-Dole Act.
So the rights to Holodniy’s invention were Holodniy’s and by assignment Roche’s.
Now, as a practical matter most of these issues have been and will be resolved by assignments.
John A. Campbell:
Universities and research companies will make researcher signed clear assignment agreements.
And when researchers go from a university to a research company and back again, the university and the research company will have cross assignments to help sort out issues that might arise.
But all that will be done against the background rule that we hold was not affected by the federal statute at issue here.
As Congress said 220 years ago in the very first Patent Act, “whoever invents or discovers any new and useful process, machine, manufacture or composition of matter may obtain a patent therefore.”
And as we said in an old decision, an invention “remains the property of him who conceived it”.
We affirmed the judgment of the Court of Appeals for the Federal Circuit.
Justice Sotomayor has filed a concurring opinion.
Justice Breyer filed a dissenting opinion in which Justice Ginsburg joined.