MIT asks top court to review patent case

Billions of dollars in licensing at stake

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Patents issued to U.S. universities every five years since 1969. In 1980, the Bayh-Dole Act was passed, and many more patents were issued.
Source: United States Patent & Trademark Office
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Patents applied for by MIT and issued to MIT, by year, from 2000 through 2009.
Source: Jack H. Turner, MIT Technology Licensing Office

MIT filed an amicus curiae, or friend-of-the court, brief with the U.S. Supreme Court on Monday, urging it to review Stanford v. Roche, a case about patent ownership whose outcome could influence claims to billions of dollars generated by federally funded, university-held patents.

This is MIT’s first amicus brief in nearly a decade; the last was in the University Michigan Law School’s 2003 affirmative action case, Grutter v. Bollinger.

In Stanford v. Roche, the Federal Circuit found that a researcher at Stanford had compromised Stanford’s rights to a patent, even though universities had generally understood their complete rights to be protected by intellectual property agreements that researchers sign.

The universities’ right to those patents come from the 1980 Bayh-Dole Act, which grants universities legal rights over inventions and intellectual property that result from their federally-funded research.

MIT has been issued 3,673 U.S. patents since 1980, according to MIT’s brief — some of which may potentially fall under dispute, depending on how the Court acts.

MIT, along with about 40 other University amici in the case, fears the loss millions of dollars of revenue, as well as dramatic economic costs to the nation.

See for copies of Stanford’s petition to the Court and the three amicus briefs.

According to MIT’s brief, “the clarity of title to federally funded inventions” generated by research institutions — including MIT — is at stake.

“We thought this was an important case, and we thought we could contribute in a unique way, so we did,” said R. Gregory Morgan, Vice President and General Counsel, MIT’s chief legal officer.

Stanford appealed the case to the Supreme Court on March 22, and two groups in addition to MIT have filed amicus briefs: the Association of American Universities, of which MIT is a member, representing 32 schools; and the Wisconsin Alumni Research Foundation, representing 10 institutions. MIT’s brief represents only itself.

The Stanford v. Roche case began in 2005 when Stanford University sued pharmaceutical company Roche for patent infringement, over a method for quantifying HIV devised by a researcher, Mark Holodniy, and collaborators. Holodniy was involved in work at both Stanford and a company purchased by Roche.

Stanford prevailed before the Northern District of California, but lost on appeal in Federal Circuit Court.

Holodniy’s agreement with Stanford stated that he “agree[d] to assign” rights to Stanford, but his agreement with Roche’s predecessor was that he “will assign and do[es] hereby assign.” The circuit court decided in favor of Roche in part because of this language.

According to MIT’s amicus brief, “MIT has received an aggregate of $19.9 billion in research funding from the federal government” since Bayh-Dole was passed into law, and “this enduring flow of research funding to the Institution has produced extraordinary public benefits.”

“Taxpayers should care because billions of research dollars are being turned into commercial products, and that’s happening with fair efficiency for university-held patents,” Morgan said.

In fiscal year 2009 alone, MIT was issued 153 new U.S. patents, received 501 new invention disclosures from its faculty and researcher, filed 131 new U.S. patent applications, and was granted 85 patent licenses and options, the brief said.

The brief also points out that, according to a 2009 report, “living MIT graduates, faculty, and staff have founded 25,800 active companies, which employ at least 3.3 million people and generate $2 trillion in annual revenue worldwide,” making the implications of this case’s review especially relevant.

“If those MIT related companies formed a nation, they would comprise the 11th largest economy in the world,” it says.

To draw attention to some of these economic implications of the case, the MIT’s brief begins with a focus on data.

“I wanted a brief that said on page one that this is really important. Forget the law for a moment, this is really important — more important than you might recognize,” Morgan said.

“[The other briefs] start with the law and talk about what the law says, and then on page 25, they say, ‘By the way, Bayh-Dole is a really important statute and billions of dollars are at stake,” he said.

“But there’s no guarantee that the Supreme Court will get to page 25.”

MIT’s contingency response

As a result of the lower court decision, MIT has revised its Inventions and Proprietary Information Agreement that MIT researchers are required to sign at the beginning of their employment with MIT

In a revision circulated yesterday to the administrative community, the language of the IPIA changed from “I agree … to disclose promptly to and assign to MIT all rights…” to “I will disclose promptly to and assign to, and I hereby assign to MIT all rights…”

The new form only needs to be signed by new employees and researchers; at this time, MIT does not intend to require existing employees to sign the new form, according to Tena Z. Herlihy, Counsel to the Technology Licensing Office.