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  Who Owns Patents Generated By Federal Dollars? Make a comment
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Date: 24 February 2011

On Monday, the US Supreme Court will hear this debate, which involves a dispute between Roche and Stanford University over the rights to HIV test kits (see here). The case is expected to clarify the implications of a 1980 law that allocates patent rights among the government, investors and institutions that receive federal funding.

Heres the background: Stanford sued Roche in 2005 for patent infringement over technology to detect HIV levels blood using PCR, or polymerase chain reaction. The underlying discovery was made years earlier by a Stanford researcher, Mark Holodniy, who also worked with a company called Cetus that was later bought by Roche. However, the initial funding came from the federal government.

At issue is whether Holodniy had the right to assign his interest to Cetus or whether the rights belonged to Stanford under the auspices of the Bayh-Dole Act, which established a framework for determining ownership interests in federally funded inventions. In 2009, a federal appeals court ruled that Stanford lacked standing to sue Roche for patent infringement.

Stanford argues the appeals court decision raised uncertainty about patents that were generated by hundreds of billions of dollars in research. The US Solicitor General, by the way filed an amicus brief that sides with the university and is expected to appear before the court on Monday as well. Similarly, the American Association of 
Universities, among others, has also filed such a brief in support of Stanford, while BIO has lined up behind Roche with this brief.

In its own brief, Roche argued this: The governments assertion that the patented process was developed by researchers at (Stanford) using federal funds is wrong. The invention was conceived and the assay completed at Cetus before Stanford performed any work using federal funds?.The governments proposed resolution of the question it urges on the Court is both unsupported by the Bayh-Dole Act and misguided as a matter of policy?

The Bayh-Dole Act governs funding agreements between the government and federally-funded research institutions; it does not confiscate intellectual property rights from non-funded entities whose private 
resources and expertise lead to the conception of inventions. The governments rule would chill collaboration between universities and private research firms; indeed, it would put privately-funded firms in a worse position than entities who take federal funds? (here is the first Roche brief).

In a more recent brief, Roche added: Hundreds of billions of dollars  of private investment flow annually to innovative research in this country without need for a federal statute vesting ownership in anyone but the inventor, and the Bayh-Dole Act itself has operated for 30 years without any suggestion (before this case) that it vested title. If anything, it is Stanfords position that would harm innovation by upsetting contractual expectations and discouraging private firms from collaborating with the academy (here is the brief).

Keywords: Roche / Stanford / Patents / HIV / US / Supreme Court