Review form intellectual property assignment documents in view of these two new cases

Two recent court decisions involving interpretation of patent assignments may have a significant effect on companies, research institutions, and others who acquire intellectual property rights.   The first decision illustrates the importance of indicating whether or not the assignment is immediate.  The second suggests that patent assignments for which the parties intend to include “continuations in part” should expressly say so — or at least they should unless the Federal Circuit says otherwise when it reviews the appeal of the second case.

I.  Agreements to Assign (Stanford v Roche, Fed. Cir 10/1/09)

In the first case (Stanford v Roche), the U.S. Court of Appeals for the Federal Circuit considered a situation where a Stanford University researcher signed an agreement that obligated the researcher to assign his inventions to the University.  A year later, while still employed by the University, as part of a collaboration between the University and private company Cetus, the researcher signed a “Confidentiality Agreement” with Cetus in which he agreed that he “will assign and does hereby assign” to Cetus all inventions created as a result of his work with Cetus.  The collaboration resulted in the development of a new way of measuring the efficacy of drugs used in the treatment of HIV, and patents followed. 

Roche later acquired the assets of Cetus and began manufacturing HIV detection kits.  The University sued Roche for patent infringement.  Roche responded that it was an owner of the relevant patents due to its acquisition of the Cetus assets.  The Federal Circuit agreed.  The court stated that researcher’s agreement with the University said that he would “agree to assign” inventions, which merely reflected an agreement to do so in the future.  In contrast, the Cetus contract’s statement that “I will assign and do hereby assign” effected a present assignment.  So, even though the Cetus contract was signed after the Stanford contract, its effect was immediate. 

More information about the Stanford v. Roche case, including a discussion of how the court addressed issues relating to the Bayh-Dole Act, is available at the Pepper Hamilton website by clicking here.

II.  Continuations-in-part (Gerber Scientific v. Satisloh, D. Conn. 9/25/09)

In the second case, the plaintiff alleged infringement of U.S. Patent 5,485,771.  The patent issued from an application that was a continuation-in-part of an earlier (now abandoned) application, which in turn was a continuation of an even earlier application (also abandoned).  The inventors executed an assignment of the first application in which they conveyed all rights in the application and “all divisions, continuations, and continuations-in-part” to Pilkington Visioncare, Inc.   Pilkington then assigned the application to Coburn Optical Industries pursuant to an assignment document that conveyed all rights in the patent application “and any divisions, reissues, continuations and extensions thereof.”   Continuations-in-part were notably absent from the assignment to Coburn.  The plaintiff sought to enforce the patent, and argued that it owned the patent as successor-in-interest to Coburn.  The defendant disagreed, stating that the plaintiff could not have acquired the patent because the Coburn assignment did not include continuations-in-part.

After an original order in which the district court held that the Pilkington-to-Coburn assignment did include continuations-in-part, on September 25, 2009 permitted an interlocutory appeal of this issue to the Federal Circuit.  The district court stated that applicable precedent led to a substantial ground for difference of opinion about the contract language.  Thus, the district court stayed the case while this issue is considerd by the Federal Circuit during an interlocutory appeal.  Additional guidance from the Federal Circuit can be expected on this issue in the upcoming months.

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