In particular: (1) in what chronological order did the Stanford University Assignment Obligation and the Cetus Assignment Clause occur?
My original view was that the title to the “subject inventions” (i.e., those resulting from federally sponsored research) initially resided with the organization (e.g., Stanford University) which carried out the sponsored research.
I now confess that I, like Stanford University, overstated how Bayh-Dole works with regard to title to “subject inventions.” In affirming the Federal Circuit, a majority of the Supreme Court (6 Justices) later ruled that Bayh-Dole “does not automatically vest title to federally funded inventions in federal contractors or authorize contractors to unilaterally take title to such inventions.” See head notes to the Supreme Court’s slip opinion.
And no amount of “silence” on the part of those 6 Justices as the impact of this “do hereby assign” issue can necessarily be construed as an “affirmation” that the Federal Circuit “got it right” in , as Justices Sotomayor and Breyer both clearly pointed out.
(Sotomayor concurred with those 6 Justices solely on the basis that Stanford University, in essence, “waived” that issue.) Even in dissent, Justice Breyer (who I will admit is one of my least favorite Justices, especially when it comes to interpreting patent law issues) said he would “likely agree” with the 6 Justices that Bayh-Dole doesn’t cause an automatic transfer of invention rights to the federal contractor/grantee.
But I do give him significant credit in recognizing that Bayh-Dole does evidence a “scheme,” or as he calls it, “a hierarchy,” for how ownership of invention/patent rights is (or should be) allocated for federally funded research: (1) first, to the funded organization; (2) next, to the federal government; and (3) last, to the employee/researcher.
In other word, Bayh-Dole provides a “pecking order” for who gets the first claim to ownership of those rights, similar to a “right of first refusal” in a license agreement.That’s not a new view by me, but one previously expressed in my earlier article cited above, in particular with respect to frustrating what is obviously intended by 35 USC § 202(c)(7).35 USC § 202(c)(7) rule now “opens the door” to “sham” transfers of invention rights in federally funded research by universities to entities which are otherwise prohibited by 35 USC § 202(c)(7) without prior federal agency approval.Assignment of an interest occurs only by an "instrument in writing".The statute also permits recording an assignment with the United States Patent and Trademark Office, but recording is not required except to protect against "any subsequent purchaser or mortgagee for a valuable consideration, without notice...." A security agreement is a conditional transfer of patent ownership when patents are used as collateral for a loan.I, like Justices Sotomayor and Breye r/ Ginsburg, also suggest that knowing the exact factual record relative to these three points is crucial in resolving (or at least addressing) the question of what happens when there are multiple assignments (or obligations to assign) future invention rights, such as the Stanford University Assignment Obligation and the Cetus Assignment Clause.(A fourth and crucial point not addressed by even Justice Sotomayor’s concurring opinion, as well as Justice Breyer’s dissenting opinion, is whether Holodniy had the authority or at least blessing of Stanford University to sign Cetus’ VCA containing the Cetus Assignment Clause.) As best, all that this factual record from the Supreme Court / Federal Circuit decisions (and mainly from the Federal Circuit decision) tells us is the following: (a) the patented technology involved methods for quantifying the Human Immunodeficiency Virus (“HIV”) by using polymerase chain reaction (“PCR”) to measure ribonucleic acid (“RNA”) from HIV in the blood plasma of infected humans who are taking drugs such as zidovudine (AZT) (hereafter referred to as the “HIV RNA assay invention”) and that Holodniy was one of the inventors listed on the patents for this HIV RNA assay invention; (b) the HIV RNA assay invention was developed in the late 1980s and early 1990s by researchers at Stanford University and Cetus; (c) Holodniy joined Stanford University in 1988; (d) Holodniy signed the agreement containing the Stanford University Assignment Obligation at a time not clearly specified but which may appears to be as early as 1988 when he joined Stanford University; (e) in February 1989, Holodniy began regular visits to Cetus over several months to learn PCR and to develop a PCR-based assay for HIV and signed Cetus’s VCA containing the Cetus Assignment Clause; (f) in December 1991, Roche purchased Cetus’ PCR business, including Cetus’ agreements with Stanford University; (g) after this purchase, Roche began manufacturing HIV detection kits employing RNA assays; (h) in May 1992, Stanford filed the patent application for the HIV RNA assay invention which resulted in the patents on which Holodniy was listed as an inventor; (i) Stanford University received government funding for its HIV research through the National Institutes of Health (“NIH”); on June 24, 1992, Stanford filed an invention disclosure for the HIV RNA assay with the NIH; and (j) on April 6, 1995, Stanford formally notified the Government that it elected to retain title under the Bayh-Dole Act to the HIV RNA assay invention described in the invention disclosure.As Breyer saw it, the Cetus Assignment Clause, as well as the Stanford University Assignment Obligation, “would give rise only to equitable interests” in the HIV RNA assay invention.And “as two claims in equity,” because the Stanford University Assignment Obligation came chronologically before the Cetus Assignment Clause, and because Stanford University had subsequently obtained an assignment of the HIV RNA assay invention from Holodniy after it existed, that “should have meant that Stanford [University], not Cetus, would receive the [invention] rights.” (It’s not exactly clear from Justice Breyer’s dissent whether he was postulating this statement based on the Stanford University Assignment Obligation being “factually” first in time, or “theoretically” first in time, relative to the Cetus Assignment Clause).The borrower will agree to transfer ownership of the patents to the lender if the borrow defaults on the loan.Security agreements on patents in the US are registered with the United States Patent and Trademark Office.