Co-inventorship/Ownership
Prof Merges
11.29.201`
Agenda
• What should we do with Thursday?
• Inventorship/Ownership/Co-ownership
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
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.”
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
Cases and principles
• Burroughs-Wellcome
• Ethicon
• Stanford v Roche
Burroughs-Wellcome
• Standard for co-invention
Janet Rideout – AZT Inventor
Samuel Broder - NIH
Burroughs standard
• 271(e) case; screening program
• Note timing: why important?
– Feb, 1985 events
• NB: “license defense” – see how it works?
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
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.
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
Ethicon
• Co-inventorship  co-ownership
 complete defense to
infringement
Claim 15
“Not insubstantial
contribution” by
Party D
US Patent # 000
Claim
15
Party D’s contribution to
the patent
US Patent # 000
Inventors: A,B, and C
Claim
15
Tenancy in common
Patent 000
Inventor D’s
contribution
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?
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)
§ 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.
§ 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.
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.
Stanford v. Roche
• Inventorship  ownership  co-owner
defense  no standing (not all owners
joined)
• Additional issue: Bayh-Dole Act and
federally-funded research
Mark Holodniy - Stanford
The claimed technology
• Use of PCR amplification to detect HIV levels
in blood samples
• Cetus – owned basic PCR patents (through
employee Kerry Mullis)
Researchers wearing 2 hats
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
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.
On April 6, 1995, Stanford formally notified
the Government that it elected to retain
title to the inventions under the BayhDole 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.”
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.
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
“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).
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.”
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
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.
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.
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.
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.”
“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
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).
[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.
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.
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?
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.”
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.”
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)
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).
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.”
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
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
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.