Originally posted on December 6, 2011 by Adam Burgasser, Assistant Professor Hellman Fellow, University of California, San Diego – Department of Physics
Stanford vs. Roche Case Causes University Reaction
On December 1st, a university-wide email was sent to all faculty demanding that we sign a Patent Amendment of the 1997 UC Patent Agreement. The Amendment is in response to a recent Supreme Court decision regarding the case of Stanford vs. Roche, which centered around a patent dispute over a common HIV test developed by Prof. Mark Holodniy while working at Stanford and Roche's predecessor company, Cetus.
Holodniy signed Stanford's patent agreement, in which he "agree[d] to assign" to the university his "right, title and interest in" inventions resulting from his employment there. To work at Cetus, Holodniy also signed an agreement that he "will assign and do[es] hereby assign" to Cetus his "right, title and interest in . . . .the ideas, inventions, and improvements" made "as a consequence of [his] access" to facilities at that company. The HIV test grew out of work at both Stanford and Cetus, whereas Stanford filed three patents on the measurement process used for the test. Meanwhile, Roche acquired Cetus, won FDA approval for the test, and commercialized it.
Stanford sued Roche, claiming it had infringed on its patent. Roche claimed co-ownership given Holodniy's signed agreement. Some of the work done to develop the test was made under an NIH grant, and following provisions of the Bayh-Dole Act of 1980, Stanford elected "to retain title to any subject invention", namely the measurement methods for the HIV test. Stanford thus claimed it had "superior rights under the Bayh-Dole Act".
While the District Court agreed with Stanford, both the Court of Appeals for the Federal Circuit and the Supreme Court (on June 6, 2011) held in favor of Roche, by 7-2, holding that: "The Bayh-Dole Act does not automatically vest title to federally funded inventions in federal contractors or authorize contractors to unilaterally take title to such inventions."
[See this blog article from Patentlyo for more discussion on the issues in Stanford vs. Roche.]
"Do Hereby Assign"
It should be of no surprise then that the UC Patent Amendment adds after "my obligation to assign" the words "and do hereby assign" to the 1997 Patent Agreement, to force the automatic assignation of patent ownership to the University and (in the words of the Patent Acknowledgement FAQ) to address "the problem created by the Supreme Court decision". Three other wording changes add additional, minor clarifications to the Patent Agreement. It is the "do hereby assign" that we should be most concerned about.
The University is being exceptionally stern in its requirement to sign this amendment. In addition to its all-caps email subject line, we are told that these changes are necessary "to meet our legal obligations to sponsors of research and licensees of UC" and that "even federal contracts and grants impose invention obligations." We are also told that "As a condition of employment or visitor status, you are also required to sign additional documents requested by the University for the purpose of confirming the University's rights regarding intellectual property you create." Finally, the veiled threat: "If you are a visitor, you are also required to sign the Amendment as a condition of your access to University research facilities or contracts, grants or other funds through the University." Sign now, or you're out!
Let's look at these points in turn:
- "Meeting our legal obligations"
- "You are required to sign additional documents"
- "You are required to sign as a condition of your access to University research facilities, grants or other funds".
1. "Meeting our legal obligations"
With regard to federal funding, the University's claim here sounds like overreach. The Stanford vs. Roche case involved a federally-funded project, and the Supreme Court clearly stated that the Bayh-Dole Act wasn't an issue. So what "legal obligations" were at stake in this case? It certainly does not appear that Stanford has been penalized by NIH, having received $413,486,858 in 2010, the 12th-highest institution in total funding that year (note: UCSD was 9th). Now, there may be behind-the-scenes agreements between UC and private donors that would constitute failure to meet a legal obligation, but shouldn't we know about these anyways? In short, the University does not make an adequate case that it would fail to meet its legal obligations without the Amendment.