On June 6, 2011, the Supreme Court rejected Stanford’s arguments that provisions of the Bayh-Dole Act created university ownership rights to inventions made by university employees with federal funding. (A copy of the decision is found at the end of this post.) In effect, the Court held that an assignment in hand is worth (more than) two rights to elect under the Act. Stanford was trying to read the provisions of the Act that give universities the right to elect to retain title to inventions made with government funding to, in fact, vest title in the universities at the time the invention was made; essentially Stanford wanted the Court to read “retain” to mean “acquire or receive.” The Court rejected this interpretation, finding that “You cannot retain something unless you already have it” and, without an assignment from the inventor in hand, Stanford had nothing to retain. Any language in the Act relating to its superiority over other acts disposing of rights, the Court held, does not displace the basic principle that, in the first instance, an inventor owns the rights to his/her invention.
The Court felt that this disposition of rights was only fair since, otherwise, a university could assert rights to inventions conceived prior to the inventor’s employment, so long as reduction of practice used any amount of federal funding while the inventor was an employee. Also, a very small amount of federal funding, combined with funding from other sources, would permit the university to claim title to the entirety of the invention.