Supreme Court to decide issue of patent ownership

Universities contend licensing revenues and sponsored research are at risk

Brandeis and 53 fellow members of the Association of American Universities (AAU) are urging the Supreme Court to reverse an appeals court decision granting Roche Molecular Systems rights to federally funded research that was done at Stanford University.

The case started in a federal district court in California, where the judge ruled for Stanford. Roche went to the Federal Appeals Court in Washington, DC, that hears patent cases, which reversed the California court and found for Roche.

Now it’s on to the Supreme Court.

“If [the Supreme Court] didn’t think there was an issue, it would just leave the appeals court decision standing as it does in a vast majority of situations,” said Judith R. Sizer, senior vice president and general counsel at Brandeis.

In December of 2010 Brandeis joined in an amicus brief filed with the Supreme Court arguing that if the decision favoring Roche were not reversed it could have profound negative consequences for the way federally funded research at universities is commercialized. Brandeis had also joined in an earlier AAU amicus brief urging the Supreme Court to hear the case, an effort that was ultimately successful.

At stake is the disposition of patent rights under the historic Bayh-Dole Act of 1980, which allows universities and other non-profit institutions to own the discoveries resulting from federally funded research.

In the Stanford-Roche case, the high court has agreed to review whether a university’s right to own patents in inventions arising from federally-funded research can be terminated unilaterally by an individual faculty inventor’s assignment of his rights to a third party. The faculty member  in question, then a post-doc, had spent several months as an unpaid visiting scientist at a Roche predecessor company to learn about certain scientific techniques. He had signed a visitor confidentiality agreement that included an assignment of rights to future inventions. The question is whether Bayh-Dole essentially negates that assignment with respect to the faculty researcher’s later federally-funded inventions at Stanford.

The filing date for amicus briefs was December 23rd 2010; Roche Molecular Systems will file sometime this month (January 2011), the argument in Supreme Court will take place in early spring, and a decision is expected by the end of June.

 “The Bayh-Dole Act has been one of the most successful economic development laws ever passed,” said Irene Abrams, executive director of Brandeis’ Office of Technology Licensing, when the amicus brief was filed in December. According to Ropes and Gray, a Boston law firm that filed the amicus brief, university patent licensing from 1996 to 2007 contributed an estimated $187 billion to U.S. gross domestic product. The legislation was created to leverage the public benefit of taxpayer funded university research through technology transfer.

The Bayh-Dole legislation has encouraged patent activity in many areas at Brandeis. The university earned approximately $1.5 million in patent royalties in FY10, which ended June 30th, said Abrams. Currently, the university has nearly 300 active patents and 53 active license agreements. The Smart Balance brand of products, which uses technology developed by lipid expert K. C. Hayes and research scientist Dan Perlman, is the largest single source of patent royalties.

Two years ago, Hayes entered into a $1 million sponsored research agreement with Smart Balance, Inc. Such industry-sponsored research would be in grave jeopardy, according to Abrams, if it were unclear who owned the patent rights to university intellectual property. Overall, Brandeis enjoys about $8 million in industry-sponsored research based on existing patents. Biologist Larry Wangh, whose lab developed a new and improved method of DNA testing, has a long-standing relationship with U.K.-based Smiths Detection, which has supported Wangh’s efforts to develop methods of detecting infectious and other diseases in humans and animals.

“Outside companies will be reluctant to invest in university-owned intellectual property if it isn’t clear who owns the patent rights,” said Abrams. “And that means beneficial university-based inventions and technologies won’t get to market.”

Categories: General, Research

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