Board of Trustees v. Roche Molecular Systems Inc.: Negotiating the Web of Competing Ownership Claims to Inventions Arising from Government-Funded Academic-Industry Collaboration
Margo E. K. Reder
Boston College - Carroll School of Management
November 2, 2010
44 Business Law Review 211-234 (2011)
In Board of Trustees v. Roche, the Supreme Court ruled on the disposition of rights to inventions arising out of academic-industry collaborations funded in part by U.S. government research grants covered by the Bayh-Dole Act (BDA). Central to this case was the contentious issue over multiple and inconsistent assignments of patent rights by an inventor working for both Stanford University and Cetus, a biotech company in whose labs crucial aspects of the invention were developed. Resolving competing claims by Stanford and Cetus, the Court in a 7-2 decision ruled in Cetus’s favor, affirming that patent rights vest first in inventors and therefore the employee’s clear and present assignment to Cetus superseded other inconsistent assignments. The Court confirmed that under U.S. law patent rights belong to inventors, having priority over others’ claims unless there is an agreement to the contrary. Despite Stanford’s assertion that the BDA re-ordered the priority of claims in favor of government contractors, the majority found no evidence that Congress unambiguously meant to divest inventors of their rights even as to employee-inventors of universities that are grant recipients and under government contract to invent and commercialize this research.
According to the dissent however, important public policy goals and the legislative histories of both the Patent and Bayh-Dole Acts, create a presumption that the government-contractor’s rights take precedence over employee-inventors that cannot be defeated by minor linguistic differences in assignments. Patenting and commercializing inventions paid for by the federal government are a means to an end – to promote the progress of science and thereby benefit the general public. To hold otherwise according to this view, is to privatize publicly-funded inventions thereby creating a risk that such research will not achieve its maximum utility to the general public.
This case speaks to collaborations and joint ventures between universities and businesses, in which employees, researchers and independent contractors along with the technology and know-how flow freely, financing for which is partly based on federal research grants. The ruling implicates public policy goals including: recent government policy initiatives supporting innovation and invention, academic entrepreneurship along with its associated economic and competitiveness consequences. This case significantly impacts universities that seek to commercialize federally funded inventions conceived of on campus with public and private resources. It further highlights universities’ risk exposure in relation to employees and exposes the tensions as to control and ownership of inventions inherent in complex projects, pointing to another thicket of complications for universities’ faculty and researcher relationships as they attempt to capture all the work produced with university resources. The BDAs main purpose was to incent invention and innovation through commercialization of government-funded research. Its stunning success has had the effect of converting billions taxpayer dollars for basic research into commercial applications, jobs, companies and wealth. While the BDA language focuses mainly on allocating and tiering rights of contractor-universities and the government, it lacks clarity in crucial respects. This case speaks to the need for universities and their joint venture partners to clarify rights and record assignments of rights in a way that is coherent and transparent to ensure that all parties are clear as to rights and ownership of inventions in order to best leverage these investments in research and development.
Number of Pages in PDF File: 25
Keywords: Patent, Bayh-Dole, Stanford, Cetus, Roche, Holodniy, Merigan, Pharmaceutical, Industry, Supreme Court, Federal Circuit, Court of Appeals, Rights, material transfer, Agreement, Contract, Research, Academic, Collaboration, Intellectual Property, biotech, assignment, invention, innovation,
JEL Classification: K10, K12, K30, K39
Date posted: November 2, 2010 ; Last revised: November 10, 2012