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High court deals blow to Stanford's bid for HIV test patent

In a closely watched case, justices rule that inventors, not their universities, have first rights to their discoveries.

June 07, 2011|By David G. Savage, Los Angeles Times

Reporting from Washington — The Supreme Court ruled that inventors — and not the universities that employ them — have the first right to patent and profit from their discoveries, dealing a defeat to Stanford University and its bid for full patent rights for the diagnostic test used worldwide for detecting HIV.

"Since 1790, the patent law has operated on the premise that rights in an invention belong to the inventor," Chief Justice John G. Roberts Jr. said.

Roberts and the court majority, in a 7-2 decision Monday, rejected Stanford's claim that a 1980 federal law changed that rule and gave universities the rights to all inventions that were funded in part with federal money.

Roberts wrote for the majority that the 1980 law, known as the Bayh-Dole Act, said only that federal contractors, including universities, may "elect to retain title" to discoveries. It "does not vest title" automatically in the universities, he said.

Now and in the future, he said, universities may require their scientists to sign contracts that "assign" all rights to future discoveries to the universities. But in the first instance, this right belongs to the inventor, not the employer, he said.

The case has been closely watched, particularly in the world of biotech research because of the hundreds of billions of dollars generated by discoveries that emerge from America's research universities.

Although the decision clarifies the law, some lawyers said it was unlikely to have a broad effect because it arose from an unusual situation in which a university scientist signed two conflicting contracts. In one, he promised Stanford the rights to his future inventions. The other assigned his rights to a private off-campus lab where he did research.

But the conflict led to a long legal battle that ended Monday.

In 2005, Stanford had sued Roche Molecular Systems, alleging patent infringement and contending the HIV test kits sold by Roche arose from research conducted in part by Dr. Mark Holodniy when he was at Stanford in the late 1980s.

But during the same period, Holodniy worked off campus at a private lab owned by Cetus, later acquired by Roche, to develop a blood testing system. He signed a contract agreeing to assign to Cetus the rights to his "ideas, inventions and improvements."

Stanford lost its patent case in the Court of Appeals for the Federal Circuit in Washington and again at the Supreme Court.

In dissent, Justices Stephen G. Breyer, a Stanford graduate, and Ruth Bader Ginsburg said the 1980 law intended to give federal contractors the title to discoveries that arise from this work.

Although the case decided an important legal issue, the outcome may have turned on the loose wording in a contract.

Holodniy had signed a routine contract at Stanford stating he "agreed to assign" to the university the rights for any future inventions. By contrast, his contract at Cetus said he "hereby assigned" his rights to the private lab.

The judges on the patent appeals court said Cetus' contract carried the day because it covered current work, while Stanford's applied only to future inventions.

Donald Ayer, a lawyer for Stanford, said the decision "creates uncertainty" about who owns the patents that were based on research done several years ago. "You don't know what was assigned away in the past," he said.

david.savage@latimes.com

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