Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems (09-1159; 563 U.S. ___ (2011)) Justices Roberts (author), Scalia, Kennedy, Thomas, Alito, Sotomayor, and Kagan; Breyer (author) and Ginsburg dissented.

First, the dissent, which is entirely correct; not that the majority isn't also. Justice Breyer, joined by Justice Ginsburg -

The question presented in this case is:

"Whether a federal contractor university's statutory right under the Bayh-Dole Act, 35 U. S. C. §§200-212, in inventions arising from federally funded research can be terminated unilaterally by an individual inventor through a separate agreement purporting to assign the inventor's rights to a third party." Brief for Petitioner i.

In my view, the answer to this question is likely no. But because that answer turns on matters that have not been fully briefed (and are not resolved by the opinion of the Court), I would return this case to the Federal Circuit for further argument.

Politic to a fault, Justice Sotomayor wrote a concurring opinion that generally agreed with the dissent: the cert issue went unresolved.

In brief, Stanford held patents obtained through government funding. Sued for infringement, Roche created a spat over ownership that worked: "Stanford's inability to establish that it possessed Holodniy's interest in the patents-in-suit defeats its right to assert its cause of action against Roche." (CAFC)

On to the majority opinion over patent ownership, penned by Chief Justice Roberts -

Since 1790, the patent law has operated on the premise that rights in an invention belong to the inventor. The question here is whether the University and Small Business Patent Procedures Act of 1980--commonly referred to as the Bayh-Dole Act--displaces that norm and automatically vests title to federally funded inventions in federal contractors. We hold that it does not.

In 1980, Congress passed the Bayh-Dole Act to "promote the utilization of inventions arising from federally supported research," "promote collaboration between commercial concerns and nonprofit organizations," and "ensure that the Government obtains sufficient rights in federally supported inventions." 35 U. S. C. §200. To achieve these aims, the Act allocates rights in federally funded "subject invention[s]" between the Federal Government and federal contractors ("any person, small business firm, or nonprofit organization that is a party to a funding agreement"). §§201(e), (c), 202(a). The Act defines "subject invention" as "any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement." §201(e).

The Bayh-Dole Act provides that contractors may "elect to retain title to any subject invention." §202(a). To be able to retain title, a contractor must fulfill a number of obligations imposed by the statute. The contractor must "disclose each subject invention to the [relevant] Federal agency within a reasonable time"; it must "make a written election within two years after disclosure" stating that the contractor opts to retain title to the invention; and the contractor must "file a patent application prior to any statutory bar date." §§202(c)(1)-(3). The "Federal Government may receive title" to a subject invention if a contractor fails to comply with any of these obligations. Ibid.

The Government has several rights in federally funded subject inventions under the Bayh-Dole Act. The agency that granted the federal funds receives from the contractor "a nonexclusive, nontransferrable, irrevocable, paid-up license to practice . . . [the] subject invention." §202(c)(4). The agency also possesses "[m]arch-in rights," which permit the agency to grant a license to a responsible third party under certain circumstances, such as when the contractor fails to take "effective steps to achieve practical application" of the invention. §203. The Act further provides that when the contractor does not elect to retain title to a subject invention, the Government "may consider and after consultation with the contractor grant requests for retention of rights by the inventor." §202(d).

Congress has the authority "[t]o promote the Progress of Science and useful Arts, by securing . . . to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." U. S. Const. Art. I, §8, cl. 8. The first Congress put that power to use by enacting the Patent Act of 1790. That Act provided "[t]hat upon the petition of any person or persons . . . setting forth, that he, she, or they, hath or have invented or discovered" an invention, a patent could be granted to "such petitioner or petitioners" or "their heirs, administrators or assigns." Act of Apr. 10, 1790, §1, 1 Stat. 109-110. Under that law, the first patent was granted in 1790 to Samuel Hopkins, who had devised an improved method for making potash, America's first industrial chemical. U. S. Patent No. 1 (issued July 31, 1790).

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. Under the law in its current form, "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter . . . may obtain a patent therefor." 35 U. S. C. §101. The inventor must attest that "he believes himself to be the original and first inventor of the [invention] for which he solicits a patent." §115. In most cases, a patent may be issued only to an applying inventor, or--because an inventor's interest in his invention is "assignable in law by an instrument in writing"--an inventor's assignee. §§151, 152, 261.

Our precedents confirm the general rule that rights in an invention belong to the inventor. See, e.g., Gayler v. Wilder, 10 How. 477, 493 (1851) ("the discoverer of a new and useful improvement is vested by law with an inchoate right to its exclusive use, which he may perfect and make absolute by proceeding in the manner which the law requires"); Solomons v. United States, 137 U. S. 342, 346 (1890) ("whatever invention [an inventor] may thus conceive and perfect is his individual property"); United States v. Dubilier Condenser Corp., 289 U. S. 178, 188 (1933) (an inventor owns "the product of [his] original thought"). The treatises are to the same effect. See, e.g., 8 Chisum on Patents §22.01, p. 22-2 (2011) ("The presumptive owner of the property right in a patentable invention is the single human inventor").

It is equally well established that an inventor can assign his rights in an invention to a third party. See Dubilier Condenser Corp., supra, at 187 ("A patent is property and title to it can pass only by assignment"); 8 Chisum on Patents, supra, §22.01, at 22-2 ("The inventor . . . [may] transfer ownership interests by written assignment to anyone"). Thus, although others may acquire an interest in an invention, any such interest--as a general rule-- must trace back to the inventor.

In accordance with these principles, we have recognized that unless there is an agreement to the contrary, an employer does not have rights in an invention "which is the original conception of the employee alone." Dubilier Condenser Corp., 289 U. S., at 189. Such an invention "remains the property of him who conceived it." Ibid. In most circumstances, an inventor must expressly grant his rights in an invention to his employer if the employer is to obtain those rights. See id., at 187 ("The respective rights and obligations of employer and employee, touching an invention conceived by the latter, spring from the contract of employment").

Affirmed.

Back to the dissent, with a tempered anti-patent tone, for a good reason -

Congress enacted this statute against a background norm that often, but not always, denies individual inven-tors patent rights growing out of research for which the public has already paid. This legal norm reflects the fact that patents themselves have both benefits and costs. Patents, for example, help to elicit useful inventions and research and to assure public disclosure of technological advances. See, e.g., Mazer v. Stein, 347 U. S. 201, 219 (1954); Bilski v. Kappos, 561 U. S. ___, ___ (2010) (slip op., at 4); id., at ___ (slip op., at 10) (Stevens, J., concurring in judgment). But patents sometimes mean unnecessarily high prices or restricted dissemination; and they sometimes discourage further innovation and competition by requiring costly searches for earlier, related patents or by tying up ideas, which, were they free, would more effectively spur research and development. See, e.g., Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc., 548 U. S. 124, 128 (2006) (BREYER, J., dissenting from dismissal of certiorari as improvidently granted); Heller & Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 Science 698 (1998).

Thus, Thomas Jefferson wrote of "the difficulty of drawing a line between the things which are worth to the public the embarrassment of an exclusive patent, and those which are not." Letter to Isaac McPherson (Aug. 13, 1813), in 6 Writings of Thomas Jefferson 181 (H. Washington ed. 1854). And James Madison favored the patent monopoly because it amounted to "compensation for" a community "benefit." Monopolies. Perpetuities. Corporations. Ecclesiastical Endowments., in J. Madison, Writings 756 (J. Rakove ed. 1999).

The importance of assuring this community "benefit" is reflected in legal rules that may deny or limit the award of patent rights where the public has already paid to produce an invention, lest the public bear the potential costs of patent protection where there is no offsetting need for such protection to elicit that invention. Why should the public have to pay twice for the same invention?

[The Bayh-Dole] Act's provisions reflect a related effort to assure that rights to inventions arising out of research for which the public has paid are distributed and used in ways that further specific important public interests. I agree with the majority that the Act does not simply take the individual inventors' rights and grant them to the Government. Rather, it assumes that the federal funds' recipient, say a university or small business, will possess those rights. The Act leaves those rights in the hands of that recipient, not because it seeks to make the public pay twice for the same invention, but for a special public policy reason. In doing so, it seeks to encourage those institutions to commercialize inventions that otherwise might not realize their potentially beneficial public use. 35 U. S. C. §200.

Given this basic statutory objective, I cannot so easily accept the majority's conclusion--that the individual inventor can lawfully assign an invention (produced by public funds) to a third party, thereby taking that invention out from under the Bayh-Dole Act's restrictions, conditions, and allocation rules. That conclusion, in my view, is inconsistent with the Act's basic purposes. It may significantly undercut the Act's ability to achieve its objectives. It allows individual inventors, for whose invention the public has paid, to avoid the Act's corresponding restrictions and conditions. And it makes the commercialization and marketing of such an invention more difficult: A potential purchaser of rights from the contractor, say a university, will not know if the university itself possesses the patent right in question or whether, as here, the individual, inadvertently or deliberately, has previously assigned the title to a third party.

[T]he competing norms governing rights in inventions for which the public has already paid, along with the Bayh-Dole Act's objectives, suggest a different result.

[T]hese views are tentative. That is because the parties have not fully argued these matters.... Consequently, I would vacate the judgment of the Federal Circuit and remand this case to provide the parties with an opportunity to argue these, or related, matters more fully.