IMPACT OF STANFORD v. ROCHE DECISION ON INTELLECTUAL PROPERTY TRANSFER AND OWNERSHIP
On June 6, 2011, the Supreme Court decided Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc., et al., No. 09-1159. The case involved an academic institution that received federal funding from National Institutes of Health to support its research. In a 7-2 decision delivered by Chief Justice Roberts, the Court held that the Bayh-Dole Act, 35 U.S.C. § 200, et seq. does not automatically vest title in federal contractors (such as Stanford) to federally funded inventions or authorize contractors to unilaterally take title to such inventions.
Based on the Court’s holding—absent an express grant of intellectual property ownership to the federal contractor—intellectual property created by researchers employed by the federal contractor belongs to those researchers. The dissenting opinion delivered by Justice Breyer argued that the majority opinion does not address the actual intent of the Bayh-Dole Act, which leaves open a strong possibility of further challenges down the road based on other specific fact patterns.
Read the full text of the opinion.
What this Decision Means for MedTech Companies
The narrowly crafted opinion has immediate implications for the MedTech industry, including agreements related to the transfer of intellectual property rights from academic institutions and other federal contractors to MedTech companies as well as clinical trial agreements between MedTech companies and academic institutions. Consequently, MedTech companies should ensure that their agreements with academic institutions, employees, consultants, and other parties expressly grant intellectual property ownership to the company. In particular, any intellectual property assignment should state that the inventor of intellectual property "will assign and does hereby assign" to the company all right, title, and interest in each of the ideas, inventions and improvements made as a result of the inventor’s relationship with the company. In addition, companies should verify in all contractual arrangements that their employees, consultants and other parties have not previously assigned any intellectual property the company is hiring those parties to develop.
For further discussion of these developments and other matters related to the medical technology industry, clients may contact a member of Oppenheimer's Medical Technology Team.
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