Stanford v. Roche, the CREATE Act, and the AIA

AuthorElizabeth Rodriguez - Sean Solberg
Gregory C. Brown1
Inventors initially hold the patent rights in their inventions.2 Like other types of property
rights, the ownership rights in patents and patent applications include the right of trans-
ferability.3 “[T]he mere existence of an employer-employee relationship does not of itself
entitle the employer to an assignment of any inventions which the employee devises dur-
ing the employment.”4 An employer may claim the patent rights in inventions created by
its employees, either while they were acting in the scope of their employment or during
the term of employment, or using the employer’s resources, only if the employee-inven-
tor had effectively assigned the rights to the employer. These are foundational principles
of American patent law. But when applied to colleges and universities and the creation
of inventions by their faculty employees, they present novel legal challenges. American
colleges and universities face signicant impediments to claiming patent rights that are
unique to higher education.
These impediments arise principally out of the cultural norms and practices common
at research-intensive American colleges and universities. They differ markedly from those
of American industry. Commercial entities generally require individuals hired to perform
research and development and others who are likely to create patentable inventions to
1. Gregory C. Brown is the Associate General Counsel at the University of Minnesota and Adjunct Professor of
Law at the University of Minnesota Law School. This chapter was not intended to, and may not, reect the views,
opinions, or practices of the University of Minnesota or its Board of Regents, administration, faculty, or staff.
2. See Beech Aircraft Corp. v. EDO Corp., 990 F.2d 1237, 1248 (Fed. Cir. 1993).
3. 35 U.S.C. § 261 (2013).
4. Univ. Patents, Inc. v. Kligman, 762 F. Supp. 1212, 1219 (E.D. Pa. 1991) (citing United States v. Dubilier
Condenser Corp., 289 U.S. 178 (1933)).
Chapter 6
Stanford v. Roche, the CREATE
Act, and the AIA
The Challenges of Universities Claiming Patent Rights
sign a “bare” assignment,
an assignment of the individuals’ patent rights in future inven-
tions. American colleges and universities usually do not. Many universities do not require,
or even request, newly hired faculty or other research professionals to sign a bare assign-
ment even now, after the 2011 U.S. Supreme Court decision in Stanford v. Roche.6 They
continue to justify their ownership claims by citing the intellectual property provisions
in their academic policies and procedures.
Many universities encourage their faculty to “moonlight.” By permitting them to consult
with private, commercial companies and to grant to industry patent rights in inventions
rst conceived or reduced to practice in the consulting relationship, this university practice
further undermines universities’ capture of patent rights in their faculty-created inventions.
Clarity and certainty of title are essential parts of university technology transfer. In
this chapter, the implications to universities and industry of these and other university
practices on universities’ assertion of ownership of patent rights are considered in some
detail. The adequacy of university academic policies to claim patent rights is discussed,
with a particular emphasis on Stanford v. Roche and several Federal Circuit cases in which
university policies were analyzed.
The Leahy-Smith America Invents Act of 2011 (AIA)7 provides American colleges and
universities with a much-needed tool for capturing patent rights of inventors who refuse
to execute an assignment of rights in a specic invention. In this chapter, that change in
American patent law is reviewed. The AIA, however, does not lessen the other impedi-
ments to universities’ claiming patent rights.
University collaborations with industry present challenges to asserting patent rights in
inventions developed in joint research agreements. Who owns the joint inventions? Who
may practice them? Who may out-license them, and how are license agreements to be
negotiated, managed, and enforced, license fees to be shared, prosecution to be handled,
and infringers dealt with? Add to these questions concerns about the effect on patent-
ability of the parties’ prior art. This chapter nally describes the 2004 amendments to
American patent law in the Cooperative Research and Technology Enhancement (CRE-
ATE) Act.8 The CREATE Act provides an essential safe harbor that permits universities
to collaborate with industry, sharing nonpublic information, while preserving the ability
to obtain patent rights for inventions arising out of the collaboration.
5. In this chapter, I use the phrase “bare assignment” to refer to an assignment of the assignor’s patent rights in
inventions that had not been conceived of or reduced to practice when the assignment was executed and delivered.
6. Bd. of Trustees of the Leland Stanford Jr. Univ. v. Roche Molecular Sys., Inc., 131 S. Ct. 2188 (2011) [here-
inafter Stanford v. Roche].
7. Pub. L. No. 112-29 (Sept. 16, 2011).
8. Pub. L. No. 108-453 (Dec. 10, 2004).

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