Supreme Court to Hear Case on Universities' Rights to Own Faculty Inventions

November 01, 2010

The U.S. Supreme Court, siding with Stanford University and a host of other research universities, has agreed to hear a case that could solidify the legal grounds for universities to claim ownership of faculty inventions derived from federally sponsored research.

The universities and several academic groups had urged the high court to take the case and clarify that the intellectual-property rights granted to universities under the 1980 Bayh-Dole Act supersede any "side agreements between individuals and third parties."

The Obama administration had also urged the court to take up the case, known as Stanford v. Roche.

The case arose from a 2005 patent dispute between Stanford and a company now owned by Roche Holdings AG. Stanford had sued the company for patent infringement, alleging that the university owned the rights to a test used in the treatment of AIDS because the work was financed in part with federal grants and the inventor, following standard practice, had assigned his rights to any inventions that might arise to the university.

But a federal appeals court in 2009 said that Stanford could not sue because the researcher, Mark Holodniy, who was also consulting for a company called Cetus, had given that company ownership rights. Cetus was later acquired by Roche.

Stanford, along with many research institutions and associations, said leaving the appeals-court ruling unchallenged would create a cloud of doubt over the ownership of thousands of university inventions.

The acting solicitor general in the Obama administration, Neal K. Katyal, echoed those sentiments in a friend-of-the-court brief filed in October, which said the appeals-court ruling undermined the intent of the Bayh-Dole Act and "turns the act's framework on its head."