Intelectual Property: Why you should care about Stanford vs. Roche

The Supreme Court will now decide who owns what.

The Supreme Court has agreed to hear Stanford v Roche. In this case, the federal circuit in September 2009 ruled against the university's claim of rights over an invention that measures the effectiveness of HIV treatments. Even though the inventor did research under a National Institutes of Health grant to Stanford, he also was working for a company later acquired by Roche and made an agreement assigning his rights to that company. Stanford claimed title to the invention under the Bayh-Dole Act of 1980, and in 2005 sued Roche, asserting the company was infringing its patent in its marketing of HIV detection kits. The circuit court ruled that Roche "possesses an ownership interest" and rejected Stanford's claim.

Why should you care about any of this? Here are two good reasons:

Because if you are an employee of a healthcare organization, your employer might make you sign an employment agreement assigning your intellectual property rights as a condition of employment

For example, when I started working for the Univeristy of Colorado, I did not sign an employment agreement. Under common law and case law surrounding Bayh-Dole, the 1980 act that gave univeristies the IP rights to research funded by federal grants, I was asked to assign my IP rights to the University as part of the inventions disclosure and patent process after the fact. But, forget academic faculties. In 2001, about 20% of US doctors were not self-employed. In my specialty, only about 5-6% of the approximately 9500 otolaryngologists in the US are academics.

The number of doctors working in wage and salary situations continues to increase. Physicians and surgeons held about 661,400 jobs in 2008; approximately 12 percent were self-employed. About 53 percent of wage–and-salary physicians and surgeons worked in offices of physicians, and 19 percent were employed by hospitals. Others practiced in Federal, State, and local governments, educational services, and outpatient care centers.Physicians and surgeons held about 661,400 jobs in 2008; approximately 12 percent were self-employed. About 53 percent of wage–and-salary physicians and surgeons worked in offices of physicians, and 19 percent were employed by hospitals. Others practiced in Federal, State, and local governments, educational services, and outpatient care centers. http://www.bls.gov/oco/ocos074.htm

Regardless of how the Supremes rule, the case has muddied the waters leading employers of knowledge workers to tighten the reigns.

Because now it might be harder for you to get money for your idea.

Investors, like VC's, hate uncertainty. In an amicus brief filed with the Court, the American Venture Capital Assn pointed out that the Federal Circuit’s decision would tend to discourage venture capitalists and established companies from committing the “risk capital necessary to develop [federally funded] inventions to the point of commercial application".

If you are interested in bioentrepreneurship and are an employee, whether you are in an academic or non-academic setting, keep your eyes on Stanford v Roche.