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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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June 8, 2011

Roche Prevails Over Stanford

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Posted by Derek

The Supreme Court has ruled on the Roche - Stanford case that I blogged about here. In short, the dispute centered on the Bayh-Dole act (on commercializing academic research) and sought to clarify under what circumstances university collaborators signed over the rights to their discoveries. (That makes the case sound quite calm and removed from worldly concerns, but you'll see from that earlier post that it was actually nothing of the sort!)

As I and many others had predicted, Roche prevailed. The justices upheld the ruling (7 to 2) from the Court of Appeals for the Federal Circuit that the Stanford researcher(s) involved had indeed signed over rights to Roche, and that this assignment was compatible with existing law. Here's the decision (PDF). Among the key points:

1. Stanford contended that if an invention had been realized with federal funding (NIH, etc.), that the Bayh-Dole Act automatically assigned it to the university involved. The Court noted that there are, in fact, situations where patent rights are treated this way, but that this language is conspicuously missing from Bayh-Dole. Accordingly, the invention belongs to the inventor, until the inventor assigns the rights to it. And in this case, like it or not, the Stanford post-doc involved signed things over to Cetus (as was). This inventorship business goes for industry as well, of course - one of the key pieces of paper that you sign when you join a drug company assigns the rights to whatever inventions you come up with (on company time, and with its resources) to the company. If you don't sign, you don't have a job. And on the flip side, just being employed is not enough for a company to claim an invention - there has to be an explicit statement to that effect.

Here's Justice Roberts on this point:

Stanford’s contrary construction would permit title to an employee’s inventions to vest in the University even if the invention was conceived before the inventor became an employee, so long as the invention’s reduction to practice was supported by federal funding. It also suggests that the school would obtain title were even one dollar of federal funding applied toward an invention’s conception or reduction to practice. It would be noteworthy enough for Congress to supplant one of the fundamental precepts of patent law and deprive inventors of rights in their own inventions. To do so under such unusual terms would be truly surprising. . .

You might be wondering if this argument bears on the contentions of people who claim that hey, it's all NIH money in the end, so drug companies do nothing but leech off public money, right? Why yes, yes it does. Justice Breyer (joined by Justice Ginsberg) dissents, saying that the intent of Bayh-Dole is to commercialize research, and not having title automatically assign to the university (or other recipient of federal funding) undercuts this substantially. There's a lot of talk in the dissent about the background of the act, about its real intentions, and about how it's supposed to work. And I can see the force of those arguments - but to me, they don't overcome the fact that if Congress wanted Bayh-Dole to work that way, they could have written it that way. And, in fact, they still can, if they decide that this decision illuminates a flaw that they'd like to address. Until then, though, I feel safer with the statutory language that's in there already, and how it compares to other, similar laws.

Comments (3) + TrackBacks (0) | Category: Academia (vs. Industry) | Patents and IP


COMMENTS

1. Random Chemist on June 8, 2011 1:03 PM writes...

Whatever! As if Stanford needs the extra money. However, I believe that academic researchers need better training on how to draft licensing terms and business agreements. The skills of technology transfer offices very greatly from university to university.

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2. Hap on June 9, 2011 9:10 AM writes...

I'm not really seeing Justice Breyer's (and Ginsburg's) point. Other than the structure and wording of the law (which seems to argue persuasively against Stanford's interpretation), I don't see why giving universities and other funding recipients total control over inventions made with federal money will lead to them being commercialized more rapidly.

If universities were spending their own money, then uncertainty over investment would make them more hesitant to spend money on research, but they aren't - they're spending someone else's money, for whom the profit from the invention doesn't matter (and who is already paying the universities pretty handsomely). In addition, universities having complete control over patents means that they can charge what they want, which tends to decelerate commercialization (stem cells? metathesis? Noyori hydrogenation?), not accelerate it. There is also the bonus (noted in the majority opinion) that the Breyer/Ginsburg position treats anyone who works at a company that receives government funding (and has an invention in the area of that funding) as an employee of the federal government with respect to their lack of patent rights, while affording them no protection on that basis. That doesn't seem sane.

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3. Anonymous on June 11, 2011 11:53 PM writes...

Roche is non-sense..just look at that eyesore in Nutley NJ...bulldoze the bugger and put in some new retail off route 3!!! Jobs, jobs, jobs...

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