US Supreme Court’s Ruling in the Stanford v Roche -- Will It Impact the Licensing of IP from Universities-Thomas E. Duley-08/16/2011 - 8:30am

Event Information
Event Topic: 
US Supreme Court’s Ruling in the Stanford v Roche -- Will It Impact the Licensing of IP from Universities
Event Date: 
08/16/2011 - 8:30am
Event Location: 
Sunnyvale City Council Chambers, 456 West Olive Ave., Sunnyvale, CA
Speaker Information
Event Speaker: 
Thomas E. Duley
Event Speaker Title: 
Of Counsel
Event Speaker Company: 
Event Speaker Bio: 

Thomas E. Duley is Of Counsel with DLA Piper LLP. Mr. Duley represents life sciences companies and institutions in licensing and partnering deals and other strategic and commercial transactions, including asset acquisitions, M&A transactions, and distribution, manufacturing and clinical trial agreements. Earlier in his career, Mr. Duley was Senior Corporate Counsel for PDL BioPharma, Inc., where his responsibilities included overseeing all of the company's intellectual property transactions and the patent litigation involving its widely-licensed humanized antibody technology. Mr. Duley's background includes representing companies in a variety of patent and commercial litigation matters.

Event Details
Event Details: 

Tom Duley will present an overview and discussion of the US Supreme Court ruling in the Stanford v Roche case (attached), which will impact the licensing of IP from universities. This case has received wide attention, including in the mainstream media:

In a nutshell, a member of Stanford's faculty spent time at Cetus (now Roche) and signed a document at the Cetus reception desk assigning to Cetus any inventions he made while at Cetus. While there, he invented tests for the HIV virus. He returned to Stanford to continue the work, and Stanford later patented his inventions as part of research funded by the federal government. Roche commercialized the HIV test, and Stanford sued Roche for patent infringement.

The issue before the Court was whether the Bayh-Dole Act automatically vests title to federally-funded inventions in the University that received the funds, such that the assignment by the faculty member to Roche would be invalid. The Court said No; thus, the invention that Stanford thought it owned was instead owned (or at least co-owned) by Roche.

"Although the decision is based on a literal reading of a poorly drafted initial agreement between Stanford and the researcher, it is likely to have a broader effect. It could change the culture of research universities by requiring them to be far more vigilant in obtaining ironclad assignments from faculty members and monitoring any contracts between researchers and private companies. Relationships between the university and its faculty are likely to become more legalistic and more mercantile."

As a practical matter for industry, this case -- even before the Supreme Court's decision -- had altered the willingness of universities to represent and warrant that they own the IP that they license to industry. For example, in a recent license I negotiated with a university, the university took an extremely hard line (because of the Roche case) and refused to make any representation or warranty that it owned the IP it was licensing. The university said it could not make the reps/warranties about ownership because it could not be sure the faculty-inventor had not assigned rights to some other company. As a result of this position, the industry licensee has to pay for IP that the university cannot even say that it owns -- the risk is borne entirely by the industry licensee.