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Stanford loses patent rights because one of its researchers signed a partner company’s visitor agreement

Stanford University has found itself not owning all the rights in one of its patents for methods for quantifying HIV in human blood samples. As a result, the university appears to be unable to sue Roche for infringement. That’s because one of the inventors on the patent, visiting a predecessor of Roche, then a partner company of the university, had signed a “Visitor’s Confidentiality Agreement” (VCA) in which one of the inventors of the patent had transferred his rights to the company. See Stanford University v. Roche Molecular Systems, Inc., No. 2008-1509, -1510 (Fed. Cir. revised Oct. 1, 2009), especially at pp. 2-3 and pp. 11-12.

[Update 2011-06-07: Yesterday the U.S. Supreme Court affirmed the Federal Circuit decision, but only on the sole ground appealed to the high court, namely that the federal Bayh-Dole Act did not negate the inventor’s transfer of rights to the company.]

The Roche predecessor company’s agreement stated that the signer “will assign and do[es] hereby assign to CETUS [Roche’s predecessor], my right, title, and interest in each of the ideas, inventions and improvements” that the researcher might devise “as a consequence of” his work at Cetus. (Emphasis added.)

The researcher’s invention-assignment agreement with Stanford, on the other hand, contained only a future commitment in which he “agree[d] to assign” his rights to Stanford at an unspecified future time — and under Stanford’s patent policy, the researcher might never have to assign his rights to the university . (Emphasis added.)

The U.S. Court of Appeals for the Federal Circuit — which is normally the final authority in most all patent cases — held that the Roche assignment trumped the Stanford agreement-to-assign.

  • Under the Roche VCA language, the researcher’s rights in the invention were immediately and automatically assigned to Roche at least by the time the patent application was filed.
  • The researcher subsequently signed an assignment document, transferring his rights in the invention to Stanford.
  • But, according to the appeals court, that document was of no effect — because the researcher had signed the Roche VCA, he had no rights in the invention to transfer.

[Added 2009-10-26:] The Federal Circuit previously held that:

… [W]hether an assignment of patent rights in an agreement such as the one in this case is automatic, requiring no further act on the part of the assignee, or merely a promise to assign depends on the contractual language.

If the contract expressly grants rights in future inventions, no further act [is] required once an invention [comes] into being, and the transfer of title [occurs] by operation of law.

Contracts that merely obligate the inventor to grant rights in the future, by contrast, may vest the promi-see with equitable rights in those inventions once made, but do not by themselves vest legal title to pa-tents on the inventions in the promisee.

DDB Technologies, L.L.C. v. MLB Advanced Media, L.P., No. 07 1211, 517 F.3d 1284, slip op. at 9 (Fed. Cir. 2008) (affirming determination that, if patents in suit were within scope of employment agreement, they would have been automatically assigned to employer by operation of law with no further act required by employer) (citations and internal quotation marks omitted; bold-faced emphasis and extra paragraphing added).

Lesson learned

Be very careful about signing another company’s visitor agreement — there might be more to it than you think.

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