On June 6, 2011, the United States Supreme Court ruled that the Small Business Patent Procedures Act of 1980 (a/k/a the Bayh-Dole Act)1 does not displace the centuries-old maxim that "rights in an invention belong to the inventor." Board of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Sys., 563 U.S. ---, 2011 WL 2175210, at *4 (June 6, 2011). "Although much in intellectual property law has changed in the 220 years since the first Patent Act, the basic idea that inventors have the right to patent their inventions has not." Id. at *6. "[U]nless there is an agreement to the contrary, an employer does not have rights to an invention which is the original conception of the employee alone." Id. at *7. This rings true even when the Federal Government is footing the bill.
In 1985, scientists at Cetus Corp. developed a revolutionary method that allows billions of copies of DNA sequences to be made from a small initial blood sample. This technique became known as the polymerase chain reaction or PCR. In 1988, Dr. Mark Holodniy, a professor at Stanford University, sought to work with Cetus to use the PCR method in an effort to develop a method for quantifying HIV levels in patient blood samples. As a condition of accessing Cetus' facilities and methodology, Holodniy signed a Visitor's Confidentiality Agreement ("VCA"), which stated that Holodniy "will assign and do[es] hereby assign" to Cetus his "right, title and interest in each of the ideas, inventions and improvements" made "as a consequence of [his] access" to Cetus.
Upon returning to Stanford, Holodniy disclosed his new method of quantifying HIV to Stanford and Stanford filed a series of patent applications. In 1991, Roche Molecular Systems acquired Cetus's PCR-related assets, including the rights Cetus obtained through the VCA signed by Holdoniy. Roche subsequently developed and commercialized the procedure. Standford then filed suit against Roche contending that Roche's HIV test kits infringed Stanford's patents. In response, Roche claimed that it was a co-owner of Holdoniy's inventions based on Holdoniy's assignment of rights in the VCA, while Stanford argued that it had superior rights to Holodniy's inventions under the Bayh-Dole Act. The District Court agreed with Stanford, finding that although "the VCA effectively assigned any rights that Holodniy had in the patented invention to Cetus, . . . Holodniy had no interest to assign" because of the operation of the Bayh-Dole Act. Id. at *5 (internal quotation marks and citation omitted). The Court of Appeals for the Federal Circuit, however, disagreed. The court determined (1) that the Bayh-Dole Act "does not automatically void ab initio the inventors' rights in the government-funded inventions and (2) that Holodniy's assignment to Roche, with the "hereby assigns" language, trumped the one he made earlier to Stanford's because Stanford's assignment stated that Holodniy "agree[d] to assign" to Stanford his "right, title and interest in" inventions resulting from his employment at Stanford. Id. at *1, *6 (internal quotation marks and citation omitted). Stanford appealed, arguing that the Bayh-Dole Act gave Stanford superior rights.
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