In Regents of the Univ. of N.M. v. Knight (Fed. Cir. February 28, 2003), the Federal Circuit determined a university owned patent applications notwithstanding refusal by the inventors to assign the patent applications to the university.

Cancer research at the University of New Mexico resulted in inventions.  The university filed original and continuation-in-part (“CIP”) applications in the U.S. Patent and Trademark Office (“PTO”) including some directed to vitaletheine modulators and methods for their use.  With regard to the vitaletheine applications, the inventors assigned the original but not the CIP applications to the university.

During prosecution of the patent applications, the university entered into an agreement with a corporation granting a worldwide exclusive license for inventions that included the vitaletheine inventions and warranting ownership by the university.  In pursuing synthesis and characterization of the vitaletheine compounds, the corporation and university concluded two chemical structures in the vitaletheine applications needed correction.  The university submitted amendments to the PTO changing “vitaletheine V₄” and “benzyl derivative of vitaletheine” structures in the vitaletheine applications to the structures for beta-alanyl-taurine and carbobenzoxy beta-alanyl-taurine, respectively.  Notwithstanding objections by the inventors, the PTO accepted the amendments as not directed to new matter.

After the corporation alleged breach of the ownership warranty in the agreement, the university filed suit against the inventors.   In considering the contract issues on appeal, the Federal Circuit applied New Mexico state law.  One inventor who was a faculty member had in each relevant year entered into a written contract with the university which incorporated a patent policy contained in a faculty handbook.  Another inventor who was a faculty staff member lacked any employment contract with the university.  The patent policy indicated broad applicability to all “staff members [which included] any faculty member, student, or any other person associated with the teaching or research staffs of the University.”  Under the state law, the court found the patent policy created an implied contract which governed the relationship between the university and the faculty staff member.  Based on the provisions of the patent policy, other agreements between the inventors and the university, and the conformance to the patent policy of the conduct of the inventors with regard to the subject patent applications as well as other inventions until the dispute concerning the prosecution of the vitaletheine applications arose, the court found the subject inventions belonged to the university.

Recommendation:

An organization, such as a university, must have a written policy pertaining to inventions and discoveries made by staff members.  The policy (1) must comply with applicable law, including federal law and state law; (2) should outline the activities and circumstances that result in the inventions and discoveries covered by the policy;  (3) should identify the ownership of the inventions and discoveries; and (4) should state the procedures for pursuing, perfecting, and exploiting the rights of the organization to the inventions and discoveries.  The organization should also have a compliance function to pursue conformance with the policy.

March 17, 2003

Text Copyright © 2003 Bob Brill et al.

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