Correction appended.
As the Supreme Court examines an invention-ownership dispute between Stanford University and Roche Molecular Systems, Brown is tightening its own regulations. Under federal law, universities currently own faculty inventions. But while some faculty members stand with administrators in support of University ownership, others are skeptical of the system.
Last April, the University co-signed a brief siding with Stanford in support of university ownership of faculty inventions.
Case basics
The case, Stanford v. Roche, challenges the current federal standards regarding invention ownership, which is granted in full to universities under the 1980 Bayh-Dole Act.
The case involves Stanford Professor of Medicine Mark Holodniy, who signed an agreement giving Stanford ownership of his research. Holodniy later signed a competing agreement with a local company, Cetus, granting them the rights to his invention.
When Cetus was acquired by Roche Molecular Systems, Roche said the stronger wording of the Cetus contract gave the company the right to the invention, according to a Feb. 22 article in the Chronicle of Higher Education. After Stanford unsuccessfully tried to negotiate ownership with Roche, the university sued in 2005, arguing that Holodniy lacked the authority to turn over the rights under federal law.
The Supreme Court began hearing arguments for the case in February and is expected to rule by July, according to a Feb. 28 Chronicle article.
In addition to the brief filed by the Association of American Universities, which Brown signed, the Obama Administration has also filed a friend of court brief in favor of Stanford. The American Association of University Professors, as well as various industry groups, have filed briefs in favor of Roche, according to a February article on the Patent Law Practice Center website.
University response
In response to the court case, Brown and other universities have "tightened up" the language in their invention disclosure documents to avoid similar disputes, said Katherine Gordon, managing director of the Technology Ventures Office.
The office now ensures that researchers assign rights to the University when they first disclose their inventions. Any discovery that might be patentable must be promptly disclosed to the University, according to the current patent policy.
Clyde Briant, vice president for research, said there is "no question" the court decision is important because of the challenge it poses to Bayh-Dole. "We feel that the Bayh-Dole Act is very important for universities because it does allow us to own our intellectual property," Briant said.
Though a federal appeals court ruled in favor of Roche in 2009, Gordon said she did not believe the court would make a decision to alter the current interpretation of the Bayh-Dole Act. "The prevailing winds are that things are working pretty well," Gordon said. "I don't think there's too much of a danger of shifting."
A December 2002 article in the Economist heavily praised the act, calling it "possibly the most inspired piece of legislation" since the 1950s. Prior to the Bayh-Dole Act, ownership of federally funded research was held neither by researchers nor by universities but by the federal government. "More than anything, this single policy measure helped to reverse America's precipitous slide into industrial irrelevance," according to the article.
But during oral arguments for Stanford v. Roche, Chief Justice John Roberts suggested Stanford's use of the Bayh-Dole Act as rationale for securing full ownership of inventions was simply a way of "cloaking" its own interests in the economic interests of the United States.
Roberts suggested universities would sacrifice some ownership of inventions to keep prominent researchers, advancing their interests over those of the United States.
Assigning ownership
Gordon said the granting of patent rights to universities is advantageous to faculty researchers. The Technology Ventures Office can help streamline the process of analyzing whether an invention is patentable, filing the patent application, finding good lawyers and any other parts of the commercialization process.
"We have in place a lot of the mechanisms where we can smoothly handle this for the faculty, and the office has a lot more contacts probably than any individual," Briant said.
Jeffrey Morgan, associate professor of medical science and engineering, said he sees the current system as a mutually advantageous setup. The Technology Ventures Office recently filed U.S. and international patent applications for a three-dimensional Petri dish invented by Morgan's team.
"Valuable inventions are getting protected, and if the University opts not to protect a particular invention, the inventors have that right to go on their own," Morgan said.
Morgan said he views the University as a "partner in the research process," since it provides lab space, capital, support and a network of industry contacts.
The faculty researcher and University each get a third of all royalties after operating and patent costs have been paid.
A system that assigned ownership to faculty members could be problematic, Gordon said. "It would basically go back to the Wild West of the way things used to be — there'd be very little things that get commercialized," Gordon said. She said granting ownership to faculty would not be fair to those with less money, and as a result, "the University's technologies as a whole would not be very well-served."
But Justin Fallon, professor of medical science, said his ideal system would be one in which faculty members were given the choice about assigning rights to the University or retaining ownership.
Fallon's team has been developing a treatment for Duchenne muscular dystrophy and had been assigning ownership of related patents to the University for several years. Last September, the University licensed the patent portfolio to Tivorsan Pharmaceuticals, a start-up formed by Fallon, to take the treatment through clinical trials, according to a University press release.
Fallon said he personally would not have been able to take ownership of the patent process earlier, adding that patents can be expensive to maintain. But for faculty members who are willing and able to assume the risks and benefits of commercialization, assigning rights to the University should not be mandatory, he said.
A question of priorities
This is a crucial time to examine the question of invention ownership, Fallon said. The drug industry is particularly vulnerable and stands to lose a $50 billion revenue source as several major drug patents will expire this year, according to a Mar. 6 New York Times article.
Major companies are realizing that it is not cost-effective to operate research facilities, Fallon said, and an increasingly large amount of drug discoveries are coming out of non-profits, including academia.
The research relationship between universities and industry is therefore becoming more important, making questions about invention ownership and licensing technologies to industries particularly important, Fallon said.
Fallon added there is a tension between the prospect of turning a university into a "mini drug company" and a university's academic mission to promote the free exchange of ideas to benefit future scientists.
"Those are both hugely important and valid goals," Fallon said. "There's not a right or wrong here, and the question becomes, ‘How do you do that? How do you serve both those goals and not compromise either one?'"
This question will only become more prominent for Brown in coming years, Fallon added, and the University will have think more critically about its mission.
A previous version of this article
incorrectly stated the amount of revenue pharmaceutical companies stand to lose this year as patents expire. The Herald regrets the error.
