U.S. Supreme Court Holds the Bayh-Dole Act Only Lets Employers Keep What They Already Have

Earlier this week, the U.S. Supreme Court held that the University and Small Business Patent Procedures Act of 1980 (the Bayh-Dole Act), which allocates rights in a federally-funded invention between the federal government and a federal contractor, does not automatically vest title to an invention in the contractor (or authorize the contractor to unilaterally take title to the invention) when the contractor has elected to retain title to the invention under the Act. Instead, the Bayh-Dole Act merely allows the contractor to retain rights that were obtained from the inventor(s) under an assignment agreement or other applicable law. Unless such an assignment is procured or another law conveys title to the contractor, the inventor retains ownership of the invention.

In Stanford v. Roche, 563 U. S. __ (2011) (found here), Dr. Mark Holodniy, a research fellow employed by Stanford University, conducted research at Cetus to develop a method of quantifying HIV levels in blood, using a Nobel Prize winning technique, a polymerase chain reaction (PCR), developed at Cetus. After developing a PCR-based HIV quantification procedure, Dr. Holodniy returned to Stanford where the technique was tested. Stanford subsequently obtained three patents for the procedure.

When Dr. Holodniy was hired by Stanford, he signed an agreement stating he “agree[d] to assign” to Stanford his “right, title and interest in” inventions resulting from his employment at Stanford. However, to gain access to Cetus, Dr. Holodniy also signed a Visitor’s Confidentiality Agreement that stated he “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. In other words, Dr. Holodniy had executed both an agreement to assign inventions to Stanford University resulting from his employment at Stanford University, and an agreement presently assigning inventions to Cetus made as a consequence of his access to Cetus.