Stanford loses patent case

Supreme court votes 7-2 in favor of Roche

By John A. Hawkinson Jun. 10, 2011

Stanford lost its patent dispute with Roche on Tuesday.

The Supreme Court of the United States voted 7-2 in favor of Roche Molecular Systems, resolving a patent dispute over the licensing ownership of patents that are in part the result of federally funded research. The case was Stanford v. Roche.

MIT had sided with Stanford in the case, filing an amicus curiae brief with the court, but does not expect the case’s outcome to seriously affect its research.

Mark Holodniy, a postdoc at Stanford developing a PCR test for HIV, executed an agreement with Stanford saying he did “agree to assign” any inventions arising out of his work to Stanford. But he also arranged to be a visiting scientist at Cetus, a company later purchased by Roche and also specializing in PCR. As a visiting scientist, he signed an agreement saying he “will assign and do[es] hereby assign” rights in his inventions to Cetus.

Stanford later patented Holodniy’s PCR-based HIV assay, and Roche began marketing a product based on the work. Stanford sued Roche for patent infringement, and the district court found for Stanford, but the decision was reversed on appeal. Stanford appealed to the Supreme Court, where they lost.

Stanford had argued that the Bayh-Dohl Act, a 1980 technology transfer law governing federally funded research, trumped the contractual language of Holodniy’s agreement with Cetus/Roche.

Lita L. Nelsen ’64, director of MIT’s Technology Licensing Office (TLO), said in an email that MIT has “already taken ‘preventative measures’ by slightly changing the wording of our ‘Inventions and Proprietary Information Agreement.’ … I don’t think we’ll be doing much more.”

MIT changed its wording from “agree to assign” to “hereby assign” in April of last year, as the case was making its way to the Supreme Court.

The Supreme Court agreed as much: writing for the majority, Chief Justice John G. Roberts wrote that with a minor tweak to wording, the existing process will continue to work just fine: “With effective assignments, federally funded inventions become ‘subject inventions’ and the Act as a practical matter works pretty much the way Stanford says it should.”

Justices Stephen G. Breyer and Ruth Bader Ginsburg dissented from the majority, writing that there were several unresolved issues. The dissenting justices would have returned the case to a lower court for further argument.

John D. Murnane and Jamar W. Tyndale published an article in Intellectual Property Today arguing that the court should dismiss the case as “improvidently granted.”

MIT does not frequently file Supreme Court briefs. Before Stanford v. Roche, it last did so in 2003. At the time of MIT’s filing, R. Gregory Morgan, MIT’s General Counsel, explained that “we thought this was an important case.”

But the TLO, which administers the day-to-day of these license agreements, does not seem concerned, even though Stanford — and by extension, its peer universities — lost.

Nelsen said that similar disputes could possibly arise at MIT, “but they certainly won’t be common. It would require a coincidence of the infringer being someone with whom our inventor had signed such an agreement.”

On the other hand, Nelsen says, “I’m not capable of guessing how courts will act. I thought this current case was a ‘slam dunk’ based on government rights — but I was wrong.”