1. Co-inventorship/Ownership Prof Merges 11.29.201`

2. Agenda What should we do with Thursday? Inventorship/Ownership/Co-ownership

3. Co-inventorship/Ownership In the first instance, the inventor is the owner Co-inventors are therefore, in the absence of any agreement, co-owners Co-owners have complete right to use full invention with no liability to other co-owners

4. 35 U.S.C. 262 “[I]n the absence of any agreement to the contrary, each owner may make, use, offer to sell, or sell the patented invention within the Unites States, or import the patented invention into the United States without the consent of and without accounting to the other owners.”

5. Rights of Co-owners Each co-owner owns an undivided interest in the entire patent – Not subdivided by claims – Not related to “percentage contribution” of each inventor – Ethicon situation

6. Cases and principles Burroughs-Wellcome Ethicon Stanford v Roche

7. Burroughs-Wellcome Standard for co-invention

8. Janet Rideout – AZT Inventor

9. Samuel Broder - NIH

10. Burroughs standard 271(e) case; screening program Note timing: why important? – Feb, 1985 events NB: “license defense” – see how it works?

11. Burroughs-Wellcome “Coinventorship as a defense to infringement” – License from (putative?) coinventor who has not otherwise assigned his/her interest can provide defense to infringement defendant – Crucial: standard for determining coinventorship

12. 35 U.S.C. 116 Inventors When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. Inventors may apply for a patent jointly even though (1) they did not physically work together or at the same time, (2) each did not make the same type or amount of contribution, or (3) each did not make a contribution to the subject matter of every claim of the patent.

13. Role of conception Conception = invention; joint conceiver is a joint inventor “The test for conception is whether the inventor had an idea that was definite and permanent enough that one skilled in the art could understand the invention; the inventor must prove his conception by corroborating evidence.” – Burroughs-Wellcome

14. Ethicon Co-inventorship  co-ownership  complete defense to infringement

15. Claim 15 “Not insubstantial contribution” by Party D

16. US Patent # 000 Claim 15 Party D’s contribution to the patent

17. US Patent # 000 Claim 15 Inventors: A,B, and C

18. Tenancy in common Inventor D’s contribution Patent 000

19. Bootstrapping a complete defense One “not insubstantial contribution” to one claim leads to complete co-ownership interest in entire patent How to fix or prevent? Research before filing; reissue; 256 action; other?

20. All that is required of a joint inventor is that he or she (1) contribute in some significant manner to the conception or reduction to practice of the invention, (2) make a contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention, and (3) do more than merely explain to the real inventors well-known concepts and/or the current state of the art.” Pannu v. Iolab Corp., 155 F.3d 1344, 1351 (Fed.Cir.1998)

21. § 256. Correction of named inventor Whenever through error a person is named in an issued patent as the inventor, or through error an inventor is not named in an issued patent and such error arose without any deceptive intention on his part, the Director may, on application of all the parties and assignees, with proof of the facts and such other requirements as may be imposed, issue a certificate correcting such error. The error of omitting inventors or naming persons who are not inventors shall not invalidate the patent in which such error occurred if it can be corrected as provided in this section. The court before which such matter is called in question may order correction of the patent on notice and hearing of all parties concerned and the Director shall issue a certificate accordingly.

22. § 256. Correction of named inventor The error of omitting inventors or naming persons who are not inventors shall not invalidate the patent in which such error occurred if it can be corrected as provided in this section. The court before which such matter is called in question may order correction of the patent on notice and hearing of all parties concerned and the Director shall issue a certificate accordingly.

23. Administrative remedy: section 116 Whenever through error a person is named in an application for patent as the inventor, or through error an inventor is not named in an application, and such error arose without any deceptive intention on his part, the Director may permit the application to be amended accordingly, under such terms as he prescribes.

24. Stanford v. Roche Inventorship  ownership  co-owner defense  no standing (not all owners joined) Additional issue: Bayh-Dole Act and federally-funded research

25. Mark Holodniy - Stanford

27. The claimed technology Use of PCR amplification to detect HIV levels in blood samples Cetus – owned basic PCR patents (through employee Kerry Mullis)

30. Researchers wearing 2 hats

31. Roche defense Holodniy assigned invention rights to Roche, via Visitors Confidentiality Agreement (VCA) Roche is therefore a co-owner of the Stanford patents, through Holodniy

32. VCA - assignment In February 1989, Holodniy began regular visits to Cetus over several months to learn PCR and to develop a PCR-based assay for HIV. Holodniy signed a “Visitor's Confidentiality Agreement” (“VCA”) with Cetus. The VCA stated that Holodniy “will assign and do[es] hereby assign to CETUS, my right, title, and interest in each of the ideas, inventions and improvements” that Holodniy may devise “as a consequence of” his work at Cetus.

33. On April 6, 1995, Stanford formally notified the Government that it elected to retain title to the inventions under the Bayh- Dole Act, 35 U.S.C. §§ 200-212. J.A. 5095. All three patents-in-suit contain the notation: “This invention was made with Government support under contracts AI27762-04 and AI27766-07 awarded by the National Institutes of Health. The Government has certain rights in this invention.”

34. Roche defense Roche pleaded its ownership theory in three forms: as a declaratory judgment counterclaim, an affirmative defense, and a challenge to Stanford's standing to sue for infringement.

35. Federal Circuit Opinion While we agree with the district court that the statutes of limitation preclude Roche from obtaining a judgment of ownership, we do not agree that such determination prevents Roche from asserting Stanford's lack of ownership of Holodniy's interest as a defense and a challenge to Stanford's standing to maintain its action against Roche. – 583 F3d at 839

36. “Although state law governs the interpretation of contracts generally, the question of whether a patent assignment clause creates an automatic assignment or merely an obligation to assign is intimately bound up with the question of standing in patent cases. We have accordingly treated it as a matter of federal law.” DDB Techs., L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284, 1290 (Fed.Cir.2008).

37. Stanford assignment [U]pon joining Stanford, Holodniy executed the CPA with Stanford on June 28, 1988. Holodniy signed as a “Fellow” in the Department of Infectious Disease. In the CPA, Holodniy acknowledges that Stanford enters into “Contracts or Grants” with…the Government, and that he may “conceive or first actually reduce to practice” various inventions. Paragraph 2 of the CPA then recites: “I agree to assign or confirm in writing to Stanford and/or Sponsors that right, title and interest in... such inventions as required by Contracts or Grants.”

38. We have held that the contract language “agree to assign” reflects a mere promise to assign rights in the future, not an immediate transfer of expectant interests. IpVenture, Inc. v. Prostar Computer, Inc., 503 F.3d 1324, 1327 (Fed.Cir.2007) (interpreting “agree to assign” as “an agreement to assign,” requiring a subsequent written instrument) – 583 F.3d at 842

39. Effect of “agreement to assign” While Stanford might have gained certain equitable rights against Holodniy, see Arachnid, 939 F.2d at 1581 (“equitable rights.”), Stanford did not immediately gain title to Holodniy’s inventions as a result of the CPA, nor at the time the inventions were created.

40. Paragraph 3 of the VCA recites: “I will assign and do hereby assign to CETUS, my right, title, and interest in each of the ideas, inventions and improvements.” In contrast to the CPA, the VCA's language of “do hereby assign” effected a present assignment of Holodniy's future inventions to Cetus. E.g., Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1253 (Fed.Cir.2000) … Therefore, Cetus immediately gained equitable title to Holodniy's inventions.

41. Therefore, Cetus's equitable title converted to legal title no later than the parent application's filing date. Holodniy executed an assignment of his rights in the parent application to Stanford on May 4, 1995. However, because Cetus's legal title vested first, Holodniy no longer retained his rights, negating his subsequent assignment to Stanford during patent prosecution.

42. Bona fide purchaser (BFP) issue 35 U.S.C § 261 (2006): “An assignment, grant or conveyance 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.”

43. “Generally, a bona fide purchaser is one who purchases legal title to property in good faith for valuable consideration, without notice of any other claim of interest in the property.” Good faith: no notice of prior, superior claim of title Absent here: Stanford NOT a BFP because it was on “inquiry notice” re: Cetus assignment

44. Bayh-Dole Issue The Act allows the Government to take title to “subject inventions” under certain circumstances, id. §§ 202(a), 202(b), or the “contractor” universities or inventors to retain ownership if the Government does not, id. § 202(d).

45. [T]he Act did not automatically void Holodniy's assignment to Cetus, and provided the Government with, at most, a discretionary option to his rights. The district court noted, however, that under 35 U.S.C. § 202(d), Holodniy, as an inventor, could keep title to his inventions only “[i]f a contractor does not elect to retain title to a subject invention.” On appeal, Stanford insists that Holodniy's rights were “contingent” upon his CPA obligations to assign them to Stanford, and that Stanford's election of title in 1995 gave it all patent rights.

46. Stanford identifies no authorities or reasons why its election of title under Bayh-Dole had the power to void any prior, otherwise valid assignments of patent rights. However, Holodniy transferred his rights to Cetus more than six years before Stanford formally notified the Government of its election of title.

47. Stanford argument “Retains title” – they made much of this Future vs present assignment – enough to divest “contractor” of title, and government of its rights, under Bayh-Dole?

48. Supreme Court Opinion Held: Affirmed Fed Cir (!!) “The question here is whether the … Bayh–Dole Act … displaces th[e] norm [of inventor ownership in place since 1790] and automatically vests title to federally funded inventions in federal contractors. We hold that it does not.”

49. Court’s basic approach “Although much in intellectual property law has changed in the 220 years since the first Patent Act, the basic idea that inventors have the right to patent their inventions has not.”

50. Inventors as Owners Court is correct that usually an inventor is the initial owner, unless there is a prior assignment BUT: employees who are “employed to invent” are held to have implicitly licensed their inventions to their employees, eg, Dubilier, 289 US 178 (1933)

51. Statutory Interpretation Issue A “subject invention” is defined as “any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement.” 35 USC § 201(e).

52. Construing the phrase to refer instead to a particular category of inventions conceived or reduced to practice under a funding agreement—inventions “of the contractor,” that is, those owned by or belonging to the contractor—makes the phrase meaningful in the statutory definition. And “invention owned by the contractor” or “invention belonging to the contractor” are natural readings of the phrase “invention of the contractor.”

53. So two categories of contractor employee inventions Those “of” (or owned by) the contractor And those conceived by employees that are not “of the contractor” – i.e., that are owned by employees or others by assignment

54. The FilmTec issue Does the case outcome change if the Cetus/Roche Visitor’s Agreement had NOT currently assigned all future inventions to Cetus? Court does not reach this as it was waived

55. I agree with the Court's resolution of this case and with its reasoning. [But] I share JUSTICE BREYER's concerns as to the principles adopted by the Court of Appeals for the Federal Circuit in FilmTec Corp. v. Allied–Signal, Inc., 939 F.2d 1568 (1991), and the application of those principles to agreements that implicate the Bayh–Dole Act. Because Stanford failed to challenge the decision below on these grounds, I agree that the appropriate disposition is to affirm. Like the dissent, however, I understand the majority opinion to permit consideration of these arguments in a future case.