Do You Have The Right To Sue: Understanding Contract Provisions In The Context Of Litigation

Written by Michael Davitz, Partner at Axinn, Veltrop & Harkrider and Practice Center Contributor, and his associates Josephine Liu and Tara Rahemba.

A patent grants the patentee the right to exclude others from making, using, selling, offering to sell or importing the patented invention into the United States.  35 U.S.C. § 271(a).  It follows that when this right to exclude is violated by an infringer, the “patentee” has the right to bring a “civil action for infringement of [its] patent,” i.e., standing to sue for patent infringement.  35 U.S.C.  § 281.

Recently, the identity of the “patentee” as defined, has been called into question.  The Federal Circuit has made it clear that nuances in the provisions and language used in patent licensing and assignment agreements can be critical in determining whether or not an inventor, licensee or assignee has standing to sue another party for patent infringement.  Slight imperfections or even subtle deviations from what was actually intended or desired by the parties can have a profound impact on their right to sue over the patent.  It is therefore imperative that practitioners are knowledgeable about the effects particular language and provisions have on a standing determination in order to ensure that their clients, whether individual inventors or corporations, licensors or licensees, preserve their right to sue for patent infringement. (more…)

He Who Pays the Piper Calls the Tune. Or Does He? The Supreme Court to Decide Who Owns Patent Rights to Inventions Produced in Federally Funded Projects?

The following alert was written by our friends at Kilpatrick Stockton, Charles W. Calkins and Wendy A. Choi.

The Supreme Court granted certiorari on November 1, 2010, in Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc. (09-1159), involving the ownership of inventions made with federal funding under the 1980 Bayh-Dole Act. The issue is whether a federal contractor university’s statutory right under the Bayh-Dole Act in inventions arising from federally funded research can be terminated (or superceded)unilaterally by an individual inventor through a separate agreement purporting to assign the inventor’s rights in a future invention to a third party.

The three patents in this case involve methods for using PCR techniques to measure HIV concentration in blood plasma to determine the effectiveness of AIDS treatment. Stanford scientists invented the methods while subject to a contractual duty to assign any inventions to Stanford. After agreeing to assign rights, but prior to making the invention, one of the inventors, Dr. Mark Holodniy, who was working on a collaboration between the university and Cetus, assigned his rights in his future inventions to Cetus, whose PCR business was later acquired by Roche. Dr. Holodniy promised to assignrights to Stanford but had actually assigned his rights to Cetus. Stanford filed for a patent and then demanded a royalty from Roche for the sale of its HIV test. The Federal Circuit has held that Roche could not be liable for infringement because it held ownership rights based on Dr. Holodniy’s purported assignment, which was contrary to his promise to Stanford. (more…)