Thursday, 10 October 2013 15:10

University Tech Transfer in the Legal Spotlight

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Although the technology transfer system of research universities and related institutions has been long-established in the United States, it has been picking up even more steam recently, which in turn has generated some interesting legal issues with lessons to be learned.

By way of background, a recent Association of University Technology Managers (AUTM) report underscores the economic importance and scope of university tech transfer, including the following statistics for 2012: over 22,000 total U.S. patent applications filed, total licensing revenue of $2.6 Billion, and over 700 startup companies formed, the majority remaining based in the university’s home state.

One recent legal issue relating to university-owned patents was decided by the Federal Circuit on August 19, 2013, holding that the University of Utah was permitted to sue officials at the University of Massachusetts in efforts to change the listed inventorship for two biotech patents, namely, to include one of UUtah’s research professors. The key question in University of Utah v. Max-Planck-Gesellschaft et al. was whether one state university can sue the president and other officials of another state university in a different state when intellectual property ownership is at issue. Ordinarily, one state or state institution can only sue another state or state institution by filing suit directly in the U.S. Supreme Court, not in the lower courts.   In this case, it was held that the University of Utah is permitted to sue officials of UMass directly, rather than the university itself, given that UMass’ interests were sufficiently represented by the named defendants. Indeed, UUtah had amended its complaint to individually list the UMass officials after UMass had first asserted both sovereign immunity and lack of federal jurisdiction. As such, this case provides new motivation for university officials to be vigilant about their institutions’ intellectual property policies.

The University of Utah case also highlights the importance of obtaining appropriate assignments and taking overall care in documenting disclosure of inventions, particularly in cases of collaboration (or perceived collaboration). As another example, the well known Stanford University v. Roche case went the distance to the U.S. Supreme Court in 2011. This case concerned the ownership rights of biotech inventions that were developed in connection with federally funded research (a common issue since a majority of research dollars come from federally funded sources). Specifically, the United States Supreme Court held that the University and Small Business Patent Procedures Act of 1980 (the Bayh-Dole Act) does not automatically vest title to federally funded inventions in the federal contractor. Rather, the Supreme Court upheld long-standing precedent that patent rights initially vest in individual inventors, and noted that a federally funded contractor, such as a university, may only “elect to retain title” under the Bayh-Dole Act if title has already been assigned by the inventor(s) to the contractor.

Furthermore, at the appellate level in 2009, the Federal Circuit in Board of Trustees of Leland Stanford Junior Univ. v. Roche Molecular Systems, Inc. had analyzed whether the contract between Stanford and its researcher-employee trumped the agreement of the same employee who had also entered a separate contract with an outside research company. In the employee’s agreement with Stanford, the researcher merely agreed “to assign” to Stanford his “right, title and interest in” inventions resulting from his employment there. In contrast, the employee’s agreement with the outside research company stated that he “will assign and do[es] hereby assign” his “right, title and interest in... the ideas, inventions, and improvements” made as a consequence of his access to the company’s facilities. The former was construed as a mere promise to assign; whereas the latter was construed as an actual assignment. Consequently, even though the employee eventually did execute an assignment to Stanford, it was too late, as legal title had already vested with the outside research company once the invention was made.

These examples provide valuable lessons for university administrators to consider when evaluating institutional policies on intellectual property rights. Indeed, it would not be surprising to see even more legal developments in the field of technology transfer going forward, given its importance to the American economy.

Read 2747 times Last modified on Thursday, 10 October 2013 21:23
Jason LaCosse

As a Registered Patent Attorney, Mr. LaCosse concentrates his practice in Patent and Trademark Prosecution, Intellectual Property Enforcement, and Licensing. He maintains an AV-Preeminent peer rating by Martindale-Hubbell, is Board Certified by the Florida Bar as an expert in Intellectual Property Law, and is licensed to practice in the U.S. District Court for the Southern and Middle Districts of Florida. Mr. LaCosse is an active member of the Dade County Bar Association, serving on the DCBA Membership Committee and the DCBA Intellectual Property Committee. Mr. LaCosse earned his bachelor's degree in Applied Physics with honors from Michigan Tech, his master’s degree in Electrical Engineering from the University of Michigan, and his law degree from the University of Denver.