The US Supreme Court [official website, JURIST news archive] ruled [opinion, PDF] Monday in Board of Trustees of Stanford University v. Roche Molecular Systems [Cornell LII backgrounder] that federal law does not automatically vest title of inventions from federally funded research in the university through which the research is being conducted. The 7-2 opinion written by Chief Justice John Roberts held that the Bayh-Doyle Act [35 USC §§ 200-212], which vests patent rights to universities for inventions from federally funded research, did not give Stanford University [academic website] superior rights to the invention of its employee and thus, the employee could transfer his invention rights to a third party. Dr. Mark Holodniy, while employed by Stanford, began working with a company now owned by Roche Molecular Systems [official website] to develop a method to test for HIV in an individual's blood stream. As part of his agreement to work with the company he transferred title to his inventions to the company. Roche marketed the method but Stanford argued that it infringed on its patents. The Court interpreted § 202 of the Act saying federal contractors may "elect to retain title" to mean that the Stanford must have already had an interest in the invention, and that the Act could not be used to acquire such a title from the inventor. The Court said that the Act was not meant to override pre-existing patent law premised on the principle that rights to an invention belong to the inventor. It said Stanford's construction would allow it to claim title over inventions that were conceived before the employee began working for the university or allow it to claim title as long as 1 dollar of federal funding went toward the invention.
Stanford argued during oral arguments [JURIST report] that since Dr. Holodniy was an employee of Stanford and working on a project partially funded with federal money that he was precluded from being able to sign away his rights to the invention. accepted assertion that while the Bayh-Dole Act purported to put patents into the market, it did not change the long-standing rule "that title to an invention vests in the inventor, subject to assignment, not in the inventor's employer." However, counsel for Stanford further argued that the Bayh-Dole act should be read straight-forwardly, and not in relation to the general rule. Roche responded that, "Congress worked a highly transformative change in the law of patent ownership and assignment and did it in a very obscure and indirect way ... [creating] this brand-new vesting rule." The US Court of Appeals for the Federal Circuit [official website] held [opinion, PDF] that Roche possesses an ownership interest in the patents at issue, depriving Stanford's standing to sue.