Wednesday, June 8, 2011

Does Ruling Mean University Doesn't Own Rights?

Dear Rich: I read that the Supreme Court ruled that universities can't claim ownership of inventions? Is this ruling retroactive or does it only affect inventions that occur after the ruling? We think you may have misinterpreted things. If you're one of the thousands of scientists, professors, or instructors who have assigned rights to a university, we're sorry to have to break it to you but the Supreme Court's recent ruling doesn't change the landscape quite as much as the headlines seem to promise (BTW, the latter link is one of the better explanations of the case).
What Happened? In a case involving Stanford University and the Roche pharmaceutical company, the Court was faced with two agreements signed by a university scientist: one in which he promised to assign rights to the university; and another in which he actually assigned rights to a company that was later purchased by Roche. The Supreme Court ruled that the agreement in which rights were actually assigned took precedence over the agreement in which rights were promised.
The Bayh-Dole Act. Stanford's position was that the inventor's rights automatically vested in the university under the Bayh-Dole Act. The Bayh-Dole Act, enacted in 1980, permits universities to claim patent rights in inventions created with federal funding at a university. The university may then license these discoveries to private industry—a practice some critics have likened to corporate welfare. Curiously, one of the prerequisites for the university to claim these rights is that the university must have written agreements with its faculty and technical staff requiring disclosure and assignment of inventions. The ruling won't invalidate past assignments. But problems may occur in cases like this one, where two assignments appear to conflict. In addition, you can expect that universities will stop using language in which inventors promise to assign and instead automatically assign inventions. That seems like a silly distinction to the rest of the world but there has to be some justification for patent lawyer fees.