Courts Complicate Industry-Academia Ties

Abstract

The U.S. Supreme Court has thrown a wrench into the Innovation Toolkit described by R. S. Williams and S. Desmond-Hellmann in their Editorial about industry/academia partnerships (“Making translation work,” 17 June, p. [1359][1]). The authors encouraged new methods for sharing and profiting from intellectual property, and they suggested that “[c]onfidentiality provisions of industry/academia partnerships can be adjusted” for mutual benefit. The recent Court decision allowed an industry confidentiality agreement to trump a prior academic employment agreement ([ 1 ][2]). This decision was based on a dispute between the pharmaceutical and diagnostics company Roche and Stanford University over rights to the work of a Research Fellow who had been sent by Stanford to Roche (then Cetus) to learn the technique of PCR amplification. The U.S. Court of Appeals for the Federal Circuit found that the Fellow's agreement with Stanford (“agrees to assign” to Stanford “right, title, and interest” in inventions resulting from his employment at the University) was a mere promise, whereas his Roche (then Cetus) agreement (“does hereby assign” to Cetus “his right, title, and interest in each of the ideas, inventions, and improvements” made “as a consequence of [his] access” to Cetus) was an actual assignment and superseded the Stanford agreement as a matter of contract law. This decision could lead to difficulties for the academic-industry relationships supported by Williams and Desmond-Hellmann. The employment contracts used by many academic institutions, including Stanford and the University of California—major biomedical patent holders—still contain the language deemed weak by the Court. Modifying existing contracts retroactively presents a formidable legal and practical task. Although many academics might agree to such modifications of existing contracts, some may not, especially those who have a substantial interest in a company. Furthermore, outside agreements by faculty are often contained in confidentiality agreements, which administrators may not see; requiring disclosure here could be challenging. In addition, companies who want to shed licensing and royalty arrangements with academia can now challenge the intellectual property rights of academic institutions. With the conclusion of this dispute, the patent court system's ability to navigate this issue as Williams and Desmond-Hellmann envisioned has been exhausted. Other agreement approaches are now needed for “delivering the promising results of academic research to industry.” 1. [↵][3] Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems (No. 09-1159, 6/06/11). [1]: http://www.sciencemag.org/content/332/6036/1359.full [2]: #ref-1 [3]: #xref-ref-1-1 View reference 1 in text