Universities pushing for the Supreme Court to strengthen the presumption that a 30-year-old law gives them the right to own inventions that arise from billions of dollars of federally financed research were hit with some pointed challenges to that interpretation during oral arguments on Monday in a case known as Stanford v. Roche.
The court gave no clear indication on how it might decide. But several justices offered spirited resistance to a more explicitly expansive interpretation of that 1980 Bayh-Dole Act, which is being sought by Stanford University and the dozens of fellow research institutions and academic organizations that back it.
And one, Chief Justice John G. Roberts Jr., also took a jab at the universities’ assertion that they were arguing this interpretation of the law because it was in the federal government’s best interests. “You’re cloaking yourself in the interests of the United States,” Justice Roberts said to the lawyer representing Stanford. If a different patent-ownership deal could help attract a star researcher, he asked skeptically, “wouldn’t you be willing to sell the interests of the United States down the river?”
In the case, which stems from a dispute over patent infringement, Stanford maintains that the Bayh-Dole Act gives universities, as federal contractors conducting government-financed research, the right to retain ownership of any inventions that result as long as they obtain agreement for title to the inventions from the inventors.
In this instance, Stanford says it did that with the faculty member, Mark Holodniy, an AIDS researcher. But a federal appeals court said the document Dr. Holodniy signed at Stanford, in which he agreed to assign ownership of patents to the university, was not as precise as an agreement Dr. Holodniy later signed with a company called Cetus where he worked for nine months as a consultant. Roche Molecular Systems Inc., an arm of the Swiss pharmaceutical giant, later acquired the assets of Cetus. Stanford has sued Roche for patent infringement over the widely used HIV detection kit it sells, but Roche maintains that its agreement with Dr. Holodniy gives it rightful ownership to the patents, too.
During the hourlong oral argument Monday, several of the justices seemed sympathetic to the intent of the Bayh-Dole Act. It was designed to encourage the commercialization of taxpayer-financed research by giving universities, rather than the federal government, the opportunity to manage and profit from patents.
Associate Justices Anthony M. Kennedy and Stephen G. Breyer spoke explicitly about the value to society of having patents from federally financed research assigned to the universities that conducted the work, rather than allowing companies or other third parties to gain ownership through side contracts or other deals. With universities involved, the government’s right to a royalty-free license on the patents is assured.
But Chief Justice Roberts and Associate Justice Antonin Scalia questioned whether there was any need to broaden the interpretation of the law—which Justice Scalia described as “a huge change,"—to ensure the intent of Bayh-Dole is carried out.
“Why can’t the federal government just say, ‘We’re not going to fund this project unless you get an assignment’?” of patent rights from employees, said Justice Scalia. “Certainly you could condition your grants of funds on that.”
Three of the justices, Ruth Bader Ginsburg, Samuel A. Alito Jr., and Elena Kagan, focused most of their questions and comments on the Cetus and Stanford agreements, suggesting they might be reluctant to expand the meaning of the Bayh-Dole Act simply because of a weakness in the wording of Stanford’s standard assignment agreement.
In the 30 years since Bayh-Dole’s passage, asked Justice Alito, have universities “been very careful in getting assignments from their employees?”
Justice Ginsburg was more direct. If Stanford had written its agreement differently, she said, “there would be no case.” She said universities and the government could protect their own and the public interest “simply by changing their contracts.”
But the lawyer for Stanford, Donald B. Ayer, said a blanket policy requiring all faculty members to assign all future invention rights to the university might be unfair to researchers and raise other legal issues.
The court is expected to rule on the case by July.