Federal Government Contractors and Grantees Should Take Steps To Protect Their Patent Rights After the U.S. Supreme Court Decision in Stanford v. Roche

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On June 6, 2011, the U.S. Supreme Court decided Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc., et al., 563 U.S. ___ (2011) (the "Stanford v. Roche decision"), settling a patent infringement dispute involving conflicting interpretations of the University and Small Business Patent Procedures Act of 1980, Pub. L. No. 96-517, 94 Stat. 3015 (codified as amended at 35 U.S.C. §§ 200-212) (the "Bayh-Dole Act"). In relevant part, the Bayh-Dole Act establishes rights of the federal contractor and the federal government in connection with a federally funded invention, and allows certain federal contractors to retain title to federally funded inventions. As explained below, this Supreme Court decision has significant implications for federal government contractors and grantees, and requires them to take certain steps to protect their rights in federally funded inventions.

In Stanford v. Roche, the Supreme Court affirmed the U.S. Court of Appeals for the Federal Circuit decision that allowed a Stanford University employee inventor to transfer title to a federally funded invention to a third party, Roche Molecular Systems, Inc., rather than find that title had vested in either Stanford University as the federal contractor performing the research, or the federal government. Stanford received federal funding for its Human Immunodeficiency Virus ("HIV") research through its contract with the National Institutes of Health ("NIH"). The Stanford employee inventor involved in this research had signed a "Copyright and Patent Agreement" agreeing to assign rights in future inventions to Stanford. Subsequently, the same employee signed a "Visitors Confidentiality Agreement" ("VCA") making a present assignment to Cetus (which was later purchased by Roche Molecular Systems) of rights in future inventions that might arise during his collaboration with Cetus as a Stanford employee. As a result of that research, Stanford notified the NIH pursuant to the Bayh-Dole Act that it intended to retain title to its inventions, and then subsequently obtained three patents.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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