In a 7-2 vote, the Supreme Court rejected Stanford’s argument that the Bayh-Dole Act over-rode the normal workings of the US Patent System under which the inventor, not the inventor’s employer, applies for and initially owns any patent applications they file. AUTM and six other academic organizations had filed an amicus brief supporting Stanford’s position. The Solicitor General also supported Stanford’s position.
The decision was narrow. It didn’t weaken Bayh-Dole in any way. At its heart, this was a contractual dispute. In Stanford’s form of inventor agreement, the professor promised they would assign any inventions they subsequently made when they made them. In the visiting scientists agreement that Holodniy later signed to allow him to work in Cetus’s (now Roche’s) facilities, he said “I do hereby assign any inventions I make” to Roche.
As Justice Breyer and Ginsburg pointed out in their dissent, these two conflicting agreements established competing equitable interests in Holodniy’s inventions. Up until the Federal Circuit’s FilmTec decision in 1991, Stanford’s equitable interest would have prevailed, because it was entered into earlier. After the FilmTec decision, Roche prevailed. Justice Sotomayor, while concurring with the majority, opened up the possibility of this issue being taken up in the future.
Many U.S. universities may have used the problematic Stanford language in employment contracts and invention disclosure forms and are planning to, or already have, address the matter. Depending on your institution’s consulting/outside employment/visiting scientist policies, our members should also consider additional education to faculty, departments and colleges about the risks of IP assignments in these types of agreements.
While the decision leaves open the possibility that title could be called into question to inventions made and assigned under “promise to assign” language, the fact remains that the Holodniy invention is the only case in which there have been dueling assignments in almost 250,000 invention disclosures submitted over 30 years.
BIO, which had argued against Stanford’s position, issued a joint
statement together with AUTM, AAU, COGR, APLU and ACE stating that all the organizations are united in their desire to ensure that the U.S. technology transfer system continues to generate public benefits through the robust provisions of the Bayh-Dole statute.