The U.S. Supreme Court ruled that federal contractors do not automatically receive patent rights to inventions developed with government funding. The Court determined that the Bayh-Dole Act allows contractors to elect to retain ownership of intellectual property from federally-funded research, but they must actively secure those rights, rather than the rights being automatically conferred. The ruling affirms that the inventor, not the contractor, initially retains rights to federally-funded inventions, and can assign those rights to another party such as a company. This decision impacts how universities and other contractors secure ownership of inventions developed through government grants.

1. U.S. SUPREME COURT CONFIRMS INVENTORS’ RIGHTS IN
June 7, 2011 GOVERNMENT-FUNDED INTELLECTUAL PROPERTY AND DENIES
UNIVERSITY’S TITLE
IP CLIENT ALERT
The U.S. Supreme Court issued a decision June 6, 2011 holding that federal contractors
This Alert provides only are not automatically entitled to patent rights in federally-funded inventions. The Court
general information and determined that the Bayh-Dole Act, which allows universities, nonprofits and small-
should not be relied upon as business contractors to retain rights to government-funded intellectual property, does not
legal advice. For more confer title on contractors to these inventions. Instead, an inventor retains rights in an
information, contact your
invention and can assign those rights to a third party. The Act serves to clarify this
Patton Boggs LLP attorney or
priority of rights.
one of the authors listed
The Court’s ruling affirms a Federal Circuit decision (September 30, 2009) finding that
below.
Stanford University lacked standing to sue Roche Molecular Systems Inc. for patent
infringement. Stanford claimed it had a right under Bayh-Dole to certain HIV testing
technology developed by one of its researchers. The university researcher, however,
Kevin M. Bell had assigned his rights in the invention to Cetus Corp. (which later became part of
703.744.8065 Roche) during his nine months as a visiting researcher at Cetus. While working at Cetus,
kbell@pattonboggs.com
the inventor signed a visitor confidentiality agreement which contained the words “do
Scott A.M. Chambers, Ph.D. hereby assign.” This agreement trumped a copyright and patent agreement he had
703.744.8085 previously signed with Stanford that contained the words “agree to assign.” The Federal
schambers@pattonboggs.com Circuit interpreted the Cetus agreement as a proper assignment, rather than a promise
to assign future inventions.
Caroline Maxwell
214.758-6664
cmaxwell@pattonboggs.com The Supreme Court confirmed that the Bayh-Dole Act merely gives contractors the
ability to “elect to retain” ownership, implying that they must actively secure it in the first
Richard J. Oparil place. This ruling has significant impact on universities and other federal contractors
202.457.6494
roparil@pattonboggs.com
(including foreign universities that receive U.S. grants), who seek title to their federally-
funded inventions. Title is not conferred automatically and, in some instances,
assignment and employment agreements and employment handbooks may be trumped
by later-signed agreements.
As a result of the decision, universities, non-profits and contractors should have counsel
review their assignment agreements, employee agreements and employee handbooks
and consider modifications.
A copy of the decision in Board of Trustees of the Leland Stanford Junior University v.
Roche Molecular Systems, Inc., et al. (No. 09-1159) may be found at
http://www.supremecourt.gov/opinions/10pdf/09-1159.pdf.
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