Monday, February 28, 2011

Poor analysis of Stanford patent case by San Jose Mercury News

The San Jose Mercury wrote of the Stanford-Roche tussle before the Supreme Court:

The question is this: Do patents on inventions that arise from federally funded research go to the university where the inventor worked? That is Stanford's assertion.

Or is that claim trumped by a side agreement between an inventor and a private company? That is the argument made by Roche, whose lucrative test flowed from the Stanford's professor's research.

The decision, expected in June, will clarify a landmark 1980 law that allocates patent rights among the government, investors and research institutions. These inventions arise from hundreds of billions of dollars in federally funded research projects -- and generate much more in profits.

This is not a correct discussion of the issue. Inventions, under US patent law, belong to inventors. If they are under an obligation to assign their rights at the time of invention, then ownership passes to the assignee. Stanford did not have the proper wording in their assignment, and did not create an obligation to assign at the time of invention. Stanford's back up plan is that the government (via the Bayh-Dole Act) owned the invention. Cetus (succeeded by Roche) had an assignment in the proper form. Is it trumped by government ownership via the Bayh-Dole Act?

Elsewhere in the article:

Stanford argues that Holodniy's ability to sign away Stanford's rights is constrained by the Bayh-Dole Act. Essentially, Holodniy had no patent rights to assign to Cetus, because the university retained title to the inventions under the act, Stanford contends.

Because a "protective order" issued by the court shields Roche's financial information, Stanford has not calculated the potential royalties.

But Stanford's senior university counsel, Patrick H. Dunkley, said the dispute is not about money.

"The reality is that the matter before the Supreme Court has nothing to do with the amount Stanford could receive if it wins the case," Dunkley said.

"The issue we are pursuing in the Supreme Court is really an attempt to right a wrong by the federal Circuit Court of Appeals that, if left uncorrected, would jeopardize intellectual property rights for inventors, universities and the federal government in any federally funded research subject to the Bayh-Dole Act," he said.

Agreeing with Stanford, Bayh-Dole Act co-sponsor former U.S. Sen. Birch Bayh wrote that "Congress did not provide for individual inventors to have transferable ownership interests in patentable inventions created with federal funding."

IPBiz notes that if Stanford had given Holodniy a proper form to fill out, none of this would have happened, and, as long as proper forms are used, there is no jeopardy to intellectual property rights for inventors, universities and the federal government.



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