On June 6, 2011, the Supreme Court, in Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc., 563 U.S. ____ (June 6, 2011), held that universities and small businesses engaged in federally funded research do not automatically own inventions made by employees performing the research. The consequence is that all entities, including universities and small businesses, must continue to meet the narrow technical requirements — discussed below — imposed by the Federal Circuit for employee invention assignments.

In the holding of the case, the Supreme Court concluded that the University and Small Business Patent Procedures Act of 1980 (the "Bayh-Dole Act") "does not confer title to federally funded inventions" on universities and small businesses or authorize them "to unilaterally take title to those inventions" from the inventors. Rather, the Bayh-Dole Act merely assures universities and small businesses that "they may keep title to whatever it is they already have." The Court's reasoning largely rested on the longstanding principle that title to inventions initially vests in an employee, not an employer...