The Gold Seal of Ownership: Stanford v. Roche and Ownership of Federally Funded Research


Mary Hess Eliason, an Associate of Birch, Stewart, Kolasch an Birch, sent in this article she wrote discussing the Stanford v. Roche case.  Eliason highlights the issues being brought before the Supreme Court and the possible effects of this case if Stanford prevails.

When an invention is conceived, it is generally presumed to be owned by the inventor under U.S. patent law. [1] The case of Stanford v. Roche demonstrates that this may not be true in the context of federally funded research.  The issue being brought before the Supreme Court is whether, in the context of federally funded research, the ownership of the invention first arises with the federal contractor (i.e., Stanford) or with the inventor under the Bayh-Dole Act 35 U.S.C. §§ 200-212 and whether the inventor can interfere with that right by assigning the invention to a third party.[2]                                                    

The facts of Stanford v. Roche show a commonly occurring relationship between inventors, research institutions and collaborators, especially in the biotechnological field. [3]In 1988, inventor Holodniy joined a laboratory at Stanford University as a research fellow.  Upon joining the laboratory, Holodniy signed an agreement stating “I agree to assignor confirm in writing to Stanford . . . right, title and interest in . . . such inventions as required by Contracts or Grants”.  Holodniy went to a local corporation, Cetus to develop the techniques which eventually resulted in at least part of the method used in the invention. [4]  While there, Holodniy signed another agreement stating that he “will assign and do[es] hereby assign to Cetus, [his] right, title, and interest in each of the ideas, inventions and improvements” that he might devise “as a consequence of” his work at Cetus. 

At least some of the work Holodniy performed for Stanford was under federally provided funds from National Institutes of Health (NIH).  However, it is disputed whether the work which conceived or first reduced the invention to practice was done at Cetus “in the performance of work under a funding agreement” under the Bayh-Dole Act.

Patents claiming diagnostic methods for evaluating the effectiveness of treatments for HIV were eventually filed by Stanford and granted.  In the meantime, Cetus’ interests in the HIV diagnostics were acquired by Roche.  Relying on these patents, Stanford sued Roche for infringing the diagnostic method by selling a detection kit for HIV. 

Affirming the California District Court, the Federal Circuit ruled that the first agreement Holodniy signed was not a present assignment of rights, and thus Roche was an owner of the invention in the disputed patents. [5]  Stanford appealed to the Supreme Court and a writ or certiorari was granted on November 1, 2010.

In its’ brief on the merits, Stanford argues that title to the invention never vested in Holodniy at all.  That is, Stanford asserts that that Holodniy had no ownership interest to convey to Cetus.  Instead, Stanford argues that the rights in the invention vested in it, because by following the election provisions of Bayh-Dole, it had elected to “retain title” to the invention.  Stanford assures the Court that the language of the statute, the history of the statute and the policies underlying promoting innovation support the position that title to the invention vested in Stanford as the contractor, rather than the inventor. 

One intriguing argument is that if title to the invention vested in the inventors, the contractors (the entities receiving the Federal funds) would never be able to establish that they had “clear title” to the invention as required by Bayh-Dole because it would require the contractors to prove that there were no hidden agreements with third parties.  Amici for Stanford second this proposition, indicating that “[b]y assuring that the contractors would have clear title, the Bayh-Dole Act also benefits private sector developers to minimize the costs of due diligence concerning ownership interests.” [6]

Roche responds by arguing that the Bayh-Dole Act has no automatic “vesting” provisions and also focuses on whether the invention was made “in the performance of work under a funding agreement” under the Bayh-Dole Act.  

The possible effects of this case if Stanford prevails leads one to question whether federal funding will be interpreted by potential licensees as a “gold seal” ensuring that “perfect title” is owned by the contractor/research organization.  There are undoubtedly policy considerations which suggest that contractor/research organizations are not equipped to undergo the same due diligence investigations that every other inventor or company must undertake.  However, if Stanford prevails, it appears that challenging whether the patent was “conceived or first reduced to practice” “in the performance of work under a funding agreement” will become the next trendy litigation tactic to divest contractors/research organizations of their rights to an invention.  To avoid endless discovery, having a doctrine which relies on a written record (i.e.,contract law) would lead to more certainty than the purely factual inquiry presented by this next iteration of litigation under Bayh-Dole.

[1] See 35 U.S.C. § 101, “[w]hoever invents or discovers a new and useful [invention] may obtain a patent therefore,” 35 U.S.C. § 261, patent applications are “assignable in law by an instrument in writing,” see also 37 C.F.R. § 3.73(a) “The inventor is presumed to be the owner of a patent application, and any patent that may issue therefrom, unless there is an assignment.”

[2]The U.S. Supreme Court has accepted certiorari in Bd. of Trustees of Leland Stanford Jr. University v. Roche Molecular Systems, No. 09-1159 (Supreme Court 2010) filed based on the issue of “[w]hether a federal contractor university’s [Stanford’s] statutory right under the Bayh-Dole Act, 35 U.S.C. §§ 200-212, in inventions arising from federally funded research can be terminated unilaterally by an individual inventor through a separate agreement purporting to assign the inventor’s rights to a third party [Roche].”  Grant of Cert. November 1, 2010. 

[3] The National Institutes of Health alone invest over $ 31.2 billion annually in medical research which is awarded through almost 50,000 competitive grants to more than 325,000 researchers in over 3,000 research institutions.  Of those grants awarded, “between 1982 and 2006, one-third of all drugs and nearly 60 percent of promising new molecular entities approved by the FDA cited either an NIH-funded publication or an NIH patent.”  NIH in the 21st Century: the Director’s Perspective, Testimony before the Subcommittee on Health Committee on Energy and Commerce United States House of Representatives, 17 (June 15, 2010) (Francis S. Collins, M.D., Ph.D., dir. of NIH) (Available at:

[4]Compare Brief for Petitioners at 19, “each of the PCR steps of the assay Dr. Holodniy developed [at Cetus] was publically available at the time” with Brief for Respondents, pages 5-6 “[t]he district court ruled that the invention claimed in the patents-in-suit . . . was fully conceived while Holodniy was at Cetus”.

[5] Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc., 583 F.3d 832 (2010).

[6]Brief from former Senator Birch Bayh as Amicus Curiae Supporting Petitioners, Stanford v. Roche No. 09-1159 at 24, see alsoBrief of the National Venture Capital Association as Amici Curiae Supporting Petitioners, Stanford v. Roche, No. 09-1159 at 13.

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2 Responses to “The Gold Seal of Ownership: Stanford v. Roche and Ownership of Federally Funded Research”

  1. […] world…. earlier today, the Supreme Court issued it’s decision in Stanford v. Roche. The issue in the case was, in the context of federally funded research, the ownership of the invention first arises with the […]

  2. […] of Stanford v. Roche reinforces this maxim in the context of federally funded research.  The issue brought before the Supreme Court was, in the context of federally funded research, whether the ownership of the invention […]

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