University Rights to Patents Negated by Supreme Court

In June 2011, the U.S. Supreme Court clarified the reach of university-owned patents (as interpreted under the Bayh-Dole Act) and distinguished between a promise to assign a patent, and an actual assignment. (Board of Trustees of the Leland Stanford University v. Roche Molecular.)

In a case involving Stanford University and the Roche pharmaceutical company, the Court was faced with two agreements signed by a university scientist: one in which he promised to assign rights to the university; and another in which he actually assigned rights to a company that was later purchased by Roche. The Supreme Court ruled that the agreement in which rights were actually assigned took precedence over the agreement in which rights were promised.

Stanford's position was that the inventor's rights automatically vested in the university under the Bayh-Dole Act. The Bayh-Dole Act, enacted in 1980, permits universities to claim patent rights in inventions created with federal funding at a university. The university may then license these discoveries to private industrya practice some critics have likened to corporate welfare. Curiously, one of the prerequisites for the university to claim these rights is that the university must have written agreements with its faculty and technical staff requiring disclosure and assignment of inventions.

Bottom line: The ruling won't invalidate past assignments. But problems may occur in cases like this one, where two assignments appear to conflict. In addition, you can expect that universities will stop using language in which inventors promise to assign and instead use language that automatically assigns inventions.