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Stanford University Loses Appeal on Patents for HIV Test
Federal Circuit ruling turns partly on court's interpretation of Bayh-Dole Act
The Recorder
October 02, 2009
Stanford spent a lot of time pursuing a patent case against Roche for its HIV test kits. Unfortunately for the university, it's also spent a lot of time losing.
On Wednesday, the U.S. Court of Appeals for the Federal Circuit ruled that Stanford didn't have standing to sue because it didn't own all the patent rights and ordered the case dismissed. The appellate court undid 2008 rulings by Northern District of California Judge Marilyn Hall Patel. Patel had previously disposed of the case in a different way, ruling that the patents were invalid -- showing that as with cat-skinning, there is more than one way to lose a patent case.
Stanford sued Roche in 2005, alleging that the Swiss pharmaceutical company's HIV detection tests using a biochemical process called the polymerase chain reaction infringed on methods patented by Stanford researchers. The problem for Stanford, according to the 25-page opinion authored by Federal Circuit Judge Richard Linn, was that one of the researchers, Mark Holodniy, had assigned his IP rights to a company he worked for called Cetus, which was later acquired by Roche.
"Stanford cannot establish ownership of Holodniy's interest and lacks standing to assert its claims of infringement against Roche," wrote Linn for the unanimous three-judge panel.
The loss went to Ricardo Rodriguez, a Cooley Godward Kronish partner in Palo Alto, Calif., who had the chance to represent the university where he went to law school. Stanford senior university counsel Patrick Dunkley said he was disappointed with the ruling and was considering the options.
The win went to Adrian Pruetz of the Pruetz Law Group and her former colleague, Brian Cannon, a partner in Quinn Emanuel Urquhart Oliver & Hedges' Silicon Valley office.
Cannon said the win on appeal was sweeter because Roche didn't have to invalidate what are essentially its own patents to win.
"We actually expanded our rights on appeal," Cannon said. "We had won by invalidating the patents at the district court, now we still win because the Stanford complaint is dismissed and we have the patent rights back."
The issue of standing had come up at the beginning of the case, but Patel denied Roche's motion for summary judgment on the issue. Roche's lawyers fired off a writ of mandamus asking the Federal Circuit to intercede before they were put "in the position of having to invalidate our own patents." But the Federal Circuit, with one dissenter -- Judge Pauline Newman -- declined to get involved. The case continued until Roche won the case by invalidating the patents on grounds that they were obvious.
Although the ownership dispute was mainly fact-intensive, the Federal Circuit did expound on Stanford and Patel's interpretation of the Bayh-Dole Act, which deals with IP from federally funded research. In this case, Stanford claimed that it had full ownership of the patents because the federal government -- which has first right of refusal -- didn't claim them. Patel agreed. But the Federal Circuit ruled that the Bayh-Dole Act doesn't extinguish the agreements between Stanford; the company it collaborated with, Cetus; and researcher Holodniy, which gave some rights to Cetus.
Cannon said the Bayh-Dole Act rarely gets litigated, and so that part of the decision was perhaps the biggest point of general interest in the opinion.
