Stanford v. Roche (Fed. Cir. 2009) 08-1509r.pdf (PDF via www.patentlyo.com).
Using federal NIH funding, Stanford scientists developed and patented a method of using PCR to measure HIV virus concentration in blood plasma. The development was done in partnership with the PCR maker Cetus. The Cetus PCR business was later purchased by Roche, and Stanford subsequently offered to license the patent rights to Roche (for a substantial royalty). After negotiations stalled, Stanford sued Roche for patent infringement. Roche claims that it has ownership rights or - at least - shop rights to the patents based on its acquisition of Cetus's PCR assets. The district court (N.D. Cal.) rejected Roche's claim of rights, but did find the patents invalid as obvious (on summary judgment).
Using federal NIH funding, Stanford scientists developed and patented a method of using PCR to measure HIV virus concentration in blood plasma. The development was done in partnership with the PCR maker Cetus. The Cetus PCR business was later purchased by Roche, and Stanford subsequently offered to license the patent rights to Roche (for a substantial royalty). After negotiations stalled, Stanford sued Roche for patent infringement. Roche claims that it has ownership rights or - at least - shop rights to the patents based on its acquisition of Cetus's PCR assets. The district court (N.D. Cal.) rejected Roche's claim of rights, but did find the patents invalid as obvious (on summary judgment).
The Fed. Cir. made a number of findings about the nature of Roche's defense as well as the validity of the patent itself. What I found interesting was the discussion on assignment of rights.
Roche provides some interesting practice notes for both the small litigator as well as the patent prosecutor. In fact, small law firms which combine both (such as my own) would do well to study Roche for all the practical morsels of legal knowledge that the Fed. Cir. is serving up. Roche is a good example of the conventional wisdom that the "little things" end up being a big litigated issue. In Roche that "little thing" was the often over-looked portion of client / new matter application intake, the assignment. Assignment intake and filing are generally a routine matter, something that takes a back seat to IDSs and application drafting. However, Roche shows the importance of not only a) making sure that the client provides the full scope of information for the assignment in take form, but b) that the practitioner ask some follow up questions to make sure that the client is not "on notice" about rights transfers, and if they are "on notice", that suitable steps be taken to resolve the assignment issues.
As a first issue the Fed. Cir. reaffirmed that contractual issues surrounding assignments of patents are intimately tied into issues of standing, and hence, are subject matter ripe for federal review. As a more practical matter, Roche brings to light is something that every employment / contract agreement drafter should be aware. The assignment between the inventor and Stanford and the Inventor and Roche (by way Cetus) determined the order of the transfer of ownership rights, even though the temporal order and the transfer order of relationships was reversed.
Roche provides some interesting practice notes for both the small litigator as well as the patent prosecutor. In fact, small law firms which combine both (such as my own) would do well to study Roche for all the practical morsels of legal knowledge that the Fed. Cir. is serving up. Roche is a good example of the conventional wisdom that the "little things" end up being a big litigated issue. In Roche that "little thing" was the often over-looked portion of client / new matter application intake, the assignment. Assignment intake and filing are generally a routine matter, something that takes a back seat to IDSs and application drafting. However, Roche shows the importance of not only a) making sure that the client provides the full scope of information for the assignment in take form, but b) that the practitioner ask some follow up questions to make sure that the client is not "on notice" about rights transfers, and if they are "on notice", that suitable steps be taken to resolve the assignment issues.
As a first issue the Fed. Cir. reaffirmed that contractual issues surrounding assignments of patents are intimately tied into issues of standing, and hence, are subject matter ripe for federal review. As a more practical matter, Roche brings to light is something that every employment / contract agreement drafter should be aware. The assignment between the inventor and Stanford and the Inventor and Roche (by way Cetus) determined the order of the transfer of ownership rights, even though the temporal order and the transfer order of relationships was reversed.
The Fed. Cir. held:
Recordation of Rights: Patent ownership regularly transfers without the new owner recording the assignment with the USPTO. Recordation is not required, but it does offer some benefits. Notably, where two entities both claim ownership (as there are in this case), a second assignee can hold title if it records first.
Recordation of Rights: Patent ownership regularly transfers without the new owner recording the assignment with the USPTO. Recordation is not required, but it does offer some benefits. Notably, where two entities both claim ownership (as there are in this case), a second assignee can hold title if it records first.
A [prior] assignment . . . shall be void as against any subsequent purchaser or mortgagee for a valuable consideration, without notice, unless it is recorded in the Patent and Trademark Office within three months from its date or prior to the date of such subsequent purchase or mortgage. 35 U.S.C. 261.
One caveat in the statute is that the subsequent assignee must be a bona fide purchaser - i.e., take "without notice" and pay "valuable consideration." Here, the Federal Circuit found that Stanford was at least on inquiry notice of the relationship between the inventor and Cetus and the potential for a rights transfer.
Here, the inventor "agreed to assigned" to assign his patent rights to Stanford. Roche at 11. The Court interpreted this as requiring a subsequent written instrument in order to effect the transfer.
This is in contrast to the Cetus transfer which stated "do hereby assign", which effected a present assignment of the future invention without requirement of a subsequent additional written instrument. Roche at 12,
The lesson learned by Stanford and its attorneys is to make sure that if a recordation of the assignment is taking place at the time desired by the parties. To do this, you must insure that the proper terms of art are being used to effect immediate transfer.
Conversely, if immediate transfer is not desired, we now have several Fed Cir decisions that will allow for a proper time-line of assignments to be drafted.
I think a lot of licensees and contractual drafters are going to be copying and pasting "do here by assign" on to all of their new drafts.
(GA)
