Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc., No. 2008-1509 (Fed. Cir. Sept. 30, 2009).

Researchers at the patentee collaborated in developing the patented technology with a third-party under a series of written agreements. The alleged infringer then acquired the third-party’s business in the technology including its agreements with the patentee and the inventor. The patentee sued for infringement of the resulting patents. The alleged infringer pleaded an ownership right in the patents as a counterclaim, an affirmative defense, and a challenge to the patentee’s standing to sue for infringement. The district court construed the alleged infringer’s pleading as a counterclaim but not an affirmative defense and rejected the counterclaim as barred by the statute of limitations. The district court entered a final judgment that the asserted claims of the patents-in-suit were invalid for obviousness. The patentee appealed the obviousness finding, and the alleged infringer cross-appealed on the affirmative defense of ownership. The Federal Circuit reversed on the affirmative defense of ownership and vacated the finding of obviousness with instructions to dismiss the patentee’s action.

Regardless of how it was pled, the district court erred in not adjudicating the alleged infringer’s affirmative defense. While the statute of limitations applies to preclude the alleged infringer from obtaining a judgment of ownership in the patents through a counterclaim, the alleged infringer is not prevented from asserting the patentee’s lack of a complete ownership interest in the patents as a defense.

The court found the inventor’s agreement with the patentee containing the contract language “‘agree to assign’ reflects a mere promise to assign rights in the future, not an immediate transfer of expectant interests.” In the agreement between the inventor and the third-party, the “language of ‘do hereby assign’ effected a present assignment of [the inventor’s] future inventions to [the third-party].” The inventor’s subsequent assignment to the patentee during patent prosecution was negated because the inventor’s legal title had vested in the third-party at the time of invention. The patentee argued that it was a bona fide purchaser under 35 U.S.C. § 261 to overcome the defective chain of title, but the court found the patentee had constructive notice of its employee’s agreements with the third-party. Therefore, the patentee could not establish ownership over an inventor’s interest and lacked standing to assert claims of infringement against the alleged infringer. Accordingly, the court vacated the finding of obviousness for lack of standing.

A copy of the opinion can be found here.