An agreement to assign one’s patent rights is not the same as a patent assignment. To most patent practitioners, this conclusion is obvious. But the Supreme Court granted certiorari in Board of Trustees of Leland Stanford Junior University v. Roche Molecular, 131 S.Ct. 2188 (2011) to answer the question of whether an agreement to assign one’s patent rights was the same as a patent assignment when applied to the Bayh-Dole Act.
While some commentary about the details of this case is necessary, the ultimate holding of the Supreme Court was that the Bayh-Dole Act does not change the axiom that an agreement to assign one’s patent rights is not the same as a patent assignment. In going through the history of the Bayh-Dole Act, the Supreme Court confirmed that federal funded inventions are, absent a patent assignment, owned by the inventor and nothing in the Bayh-Dole Act changes this conclusion.
The primary facts of this case centered on ownership of a series of patents directed to procedures for calculating the amount of HIV in a patient’s blood. If Stanford owned the patents, then Roche was liable for infringement and would have to pay damages. If Roche owned the patents, then Roche was not liable for infringement.
Stanford had an employment agreement executed by the inventor stating that he “agree[d] to assign” to Stanford his “right, title, and interest in” inventions resulting from his employment at Stanford. Later, the inventor signed an agreement with a Roche acquisition stating that he “will assign and do[es] hereby assign” to Roche his “right, title and interest in . . . the ideas, inventions, and improvements” made “as a consequence of [his] access” to Roche. After that, Stanford filed the patent applications and obtained assignments of patent rights from the inventor. The Federal Circuit characterized Stanford’s employment agreement as a promise by the inventor to assign rights in the future, and Roche’s agreement as a present assignment of patent rights. Thus, even though the Stanford employment agreement was signed first, the assignment under the Roche agreement occurred first, at the inventor’s conception of the invention. Stanford did not receive an actual assignment until the inventor’s assignment at the time of filing the patent applications. The Federal Circuit found Roche owned the patents and the inventor had no further rights to assign to Stanford when the assignments were signed at the time of patent filing.
Due to this interpretation of the relevant assignment agreements, Stanford was forced to rely on receiving ownership of these patents under the Bayh-Dole Act, which it argued automatically vested – by itself – title to federally funded inventions created at Stanford. The Supreme Court did not review the Federal Circuit’s interpretation of the relevant assignment agreements. Based on the lack of explicit language in the Bayh-Dole Act, the Supreme Court would not overturn the general rule that rights in an invention belong to the inventor until the inventor assigns those rights to a third party. .
Hence, the practice pointer: make sure relevant employment agreements include the language “employee hereby assigns” his/her patent rights, and not just the language “employee agrees to assign” his/her patent rights. The former language is a present assignment of patent rights, while the latter language is a mere promise to assign patent rights in the future. If your employment agreement only obligates your employee to agree to assign his/her patent rights, you may find yourself in Stanford’s position (without any patent rights) if the employee actually assigns his/her patent rights to a third party before he/she actually assigns them to you.
For more information about this issue, please contact Ryan Willis or any member of Taft's Intellectual Property Practice Group.