…and not just any court. The Supreme Court.
Just this morning, the U.S. Supreme Court agreed to review an intellectual property case between Stanford University and Roche, a company that focuses on diagnostics and drugs for infectious diseases.
The case, entitled “Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc.,” will profoundly influence the way America assesses patent rights with regard to university and government funding.
The controversy stems from developments in HIV testing using polymerase chain reaction (PCR) technology conducted by Stanford fellow Mark Holodniy in the late 1980s. Holodniy’s team relied substantially upon generous research grants provided by Stanford University and the National Institutes of Health, a federal agency. When Holodniy joined Stanford as a Research Fellow in the Department of Infectious Disease in 1988, he signed a “Copyright and Patent Agreement” (“CPA”) that obligated him to assign his inventions to the university. The next year, Holodniy began collaborations with local biotech company Cetus Corp.
Things got complicated when Holodniy signed a “Visitor’s Confidentiality Agreement” with Cetus which stipulated that he would “assign to CETUS, [his] right, title, and interest in each of the ideas, inventions and improvements” that he may devise “as a consequence of” his work at Cetus. Acknowledging the mutual benefits of collaboration, Stanford and Cetus, in conjunction with Holodniy’s research group, signed multiple “Materials Transfer Agreements” that permitted Stanford to use certain PCR-related materials and information supplied by Cetus. Complicated? Yes. But everything was going swimmingly until….
Things got really messy when Cetus’ PCR division was bought out by Roche in 1991, and Stanford started applying for patent rights to Holodniy’s developments in 1992.
Who gets the rights? The Court will decide and has agreed to hear arguments starting in the first half of next year. In the meantime, tensions are flaring up as Stanford and Roche both seek rights to a ubiquitous technology that represents massive research investments.
Roche has accused Stanford of a “desire for private monetary gain” that thwarts “bringing valuable scientific discoveries to the public” and would “reduce opportunities for the public to benefit from the invention.”
On the other hand, Holodniy is sticking by Stanford as one of its two Counterclaim Defendants. (Stanford did provide the bulk of the hundreds of billions of dollars of research funding that went into the PCR development, after all.) In the appeal, the Stanford representative argued that a ruling in favor of Roche would “[discourage] federally funded inventions and impose massive costs on research institutions.”
For now, we can only wait to follow the proceedings and anticipate the Supreme Court’s final rulings. One thing, however, is certain: it is in the best interest of both researchers and the institutions they represent to use precise contractual language in assigning intellectual property claims. To the great minds of Stanford, consider this a warning.
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