University asks employees to sign new patent agreement

You may soon be asked to sign some more legal papers, that is if you work for the university.

Due to an obscure patent case that Stanford University lost, the University of California is now scrambling to have its employees sign a new amendment.

“Our patent policy hasn’t changed. We have always required all faculty and staff to sign a patent acknowledgment or agreement at the time they are hired,” said UC spokesperson Dianne Klein.

Though the patent policy didn’t change, a 2011 U.S. Supreme Court ruling forced UC to reevaluate the language used in its hiring contracts.

In the patent case, Stanford v. Roche Molecular Systems, Stanford University sued Roche for patent infringement. The controversy arose when Stanford fellow Mark Holodniy signed an agreement saying he would “agree to assign” inventions arising from his employment with Stanford. With the permission of Stanford, Holodniy collaborated with Cetus, a private firm, to develop a new HIV blood test. Cetus also had Holodniy sign an agreement stating, “I will assign and do hereby assign” all rights to Cetus.

The company was later acquired by Roche, which turned the invention into a HIV test kit that is now distributed worldwide. Stanford subsequently sued Roche for patent infringement, asserting Holodniy had no rights to assign, given his prior agreement with Stanford. A lower court ruled that the Stanford agreement had been a promise to assign rights in the future after an invention, while the Cetus agreement assigned rights upon invention.

Stanford appealed the ruling to the U.S. Supreme Court, citing the Bayh-Dole Act of 1980, which grants rights of an invention to universities when there is federal funding involved, as was the case with the HIV blood test.

Chief Justice John Roberts said that based on the language of the two contracts, Roche would win because the language of the Cetus agreement gave rights upon invention while the language of the Stanford agreement gave rights in the future. Therefore, the U.S. Supreme Court only had to contend with the Bayh-Dole Act.

“Rights in an invention belong to the inventor. Nowhere in the act are inventors deprived of their interest in federally funded inventions,” Roberts wrote. Thus, the court in a 7-2 decision ruled in favor of Roche, thereby validating the agreement signed with Cetus and making Roche a co-owner of the patent with Stanford.

With a vested interest in protecting its current and future patents, the University of California didn’t want to see a repeat of the Stanford case and thus opted to issue an amendment to clarify the university’s patent policy. According to the Office of the President, since 1980, the university has successfully entered into 5,000 licensing agreements that have generated over $2.1 billion in revenue for the institution.

“The clarification will ensure that the university owns inventions that are made using university resources and facilities, thus meeting its legal obligations to properly manage these assets and meet its responsibilities as a public trust under the state constitution,” Klein said.

A total of 225,000 e-mails went out asking UC employees to sign the amendment.

“All faculty and staff are required to sign the patent acknowledgment, so it is already in effect,” Klein said.

RICHARD CHANG can be reached at campus@theaggie.org.

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