The U.S. Supreme Court has granted the appeal of a Federal Circuit decision that rejected on standing grounds a university’s claim to patents that arose out of an NIH-financed research project involving technology for detecting HIV levels in a patient’s blood. Bd. of Trustees of Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., No. 09-1159 (U.S., cert. granted November 1, 2010). The issue raised on appeal is stated as: “Whether a federal contractor university’s statutory right under the Bayh-Dole Act, 35 U.S.C. §§ 200-212, in inventions arising from federally funded research can be terminated unilaterally by an individual inventor through a separate agreement purporting to assign the inventor’s rights to a third party.”

The case involves three patents obtained between 1999 and 2006, all of which were purportedly assigned to Stanford. One of the inventors also assigned the rights to his inventions to a company that he regularly visited to learn the polymerase chain reaction (PCR) technique used in the patented HIV-detection methods. The company and Stanford entered several agreements relating to materials used in the research and licenses to the technology developed by Stanford’s researchers. Later, Stanford and the company’s successor were unable to reach a licensing agreement involving the patents, and Stanford sued the successor for infringement when the company started selling kits for PCR detection of HIV RNA to assess the efficacy of antiretroviral therapy.

A federal district court ruled that the successor’s assertion of ownership rights was barred by the statute of limitations and that it did not have a license to the technology because it failed to obtain the patent holder’s—Stanford’s—consent. Still, the court determined that the three patents were invalid for obviousness.

The Federal Circuit determined that the lower court erred by failing to consider the successor’s ownership claims because it had raised the issue of Stanford’s standing and this matter was not foreclosed by the statute of limitations. Looking at the language of the inventor’s various assignments of rights, the court concluded that he made “a mere promise to assign rights in the future” to the university, but effected an immediate transfer of rights which he still held to the company when assigning his rights to it. The Federal Circuit ruled that the successor’s ownership interest in the patents defeated Stanford’s standing to sue for infringement The Federal Circuit rejected the university’s interpretation of the Bayh-Dole Act, finding no authority or persuasive reason “why its election of title under Bayh-Dole had the power to void any prior, otherwise valid assignments of patent rights.” Apparently, Stanford notified the government about its intention to elect to retain title to the patents more than six years after the inventor assigned his rights to the company. Stanford argues that the Bayh-Dole Act limits an inventor to a contingent right that vests only if the university does not elect to retain title within a reasonable period of time. Because the university made that election, it argues that the inventor’s contingent right was extinguished.