There’s talk that the Stanford v. Roche decision somehow forces a change in university practice from using promises to assign in patent agreements to present assignments of future inventions.
This is nonsense. The same loons who could not read Bayh-Dole cannot read court decisions either. No surprises here. I am not being any more gracious to these folks now than I was last week or two years ago.
The Supreme Court made clear that Bayh-Dole does not vest title to inventions with universities. Universities have to get that title the old fashioned way, by written assignment. No surprises here, either, except for the loons, who must be shocked.
The case hinged on a Stanford post doc assigning his future invention rights during consulting to a company, and then coming back to Stanford to continue working on exactly that area of research. Stanford knows the deal. They know what the post doc signed. The post doc’s supervisor was on the company’s scientific advisory board, and the post doc notified Stanford of the agreement he had signed. Stanford also signed MTAs granting Cetus rights in future inventions. It is all perfectly acceptable, normal, visible, approved. People made repeated, consistent, deliberate choices. When a dispute arose over ownership of the invention that the post doc had co-invented, the assignment to the company was held to be valid and operated to prevent Stanford from having standing to sue the company for infringement.
It makes no difference *how* Cetus gets its assignment. If they had not used a present assignment, then they would have had to be diligent and followed up the disclosure of the invention with an assignment to convey legal title. Either way, the point is: Cetus obtained ownership. Stanford waived its future claims under its patent agreement and policy by encouraging (even facilitating) the consulting and approving the deal with Cetus.
You have to see the asymmetry. Cetus knows Stanford’s IP policy and knows that Stanford has waived its future interest. Cetus is doing things perfectly properly in asking for a future interest in inventions arising out of the access to technology, data, facilities, and expertise at Cetus. And there is no question that the inventions in dispute made after the post doc returns to Stanford arose directly out of that access. Stanford knows about the post doc’s Cetus agreement. The post doc does not have to return to Stanford, does not have to be assigned to federally funded research. Stanford has no standing to re-impose its assignment policy, regardless of how it requires the assignment, whether arising from a promise to assign or a present assignment of future inventions. It has waived that requirement. Even if Stanford does try to re-impose the policy, it still has to deal with 35 USC 261, which says that a later assignment is not valid over a prior one concerning which the later assignee has knowledge. The later assignment would not be valid. That’s the asymmetry: Stanford waives its scope of claim, while Cetus does not. Stanford knows that Cetus has not waived its scope of claim, while Cetus knows that Stanford has.
What do we learn from this? Pay attention to the agreements that research personnel make in their consulting if one wants exclusive title to inventions. But even that doesn’t teach us anything we didn’t already know. Universities work every day with the real expectation that they won’t necessarily have exclusive title. It comes with running open labs, which is one of their great world-class virtues, their distinctive contribution to innovation in society, the genius behind Vannevar Bush’s conception of federal funding x university faculty.
Universities have no general trade secret limitations on research, no post-employment covenants, no censorship of publication, no approvals needed to call someone up or have someone visit the lab. It is obvious that in university environments, a lot of stuff will come out, be jointly invented, move informally to industry and be improved (with more inventions) there. So an even better lesson for universities is to build toward success in each circumstance and do not make your process, and especially acquisition of monopoly positions, more important than the outcomes. This goes for technology transfer offices, sponsored research offices, industry affiliates programs, development offices, and economic development offices.
In the Stanford case, there was a productive research collaboration. It led to federal funding for the university, and a commercial product for a company. This is all the stuff of wild success. The point of Bayh-Dole is exactly this—collaboration between universities and industry, support for small companies, promotion of competition without undue problems for further research, commercial product on the market. It’s 100% Bayh-Dole, but for the university popping off and suing.
What we also then may learn is that it’s really tough to work with innovation, but with lawyers and a lot of money, one can readily screw up success.