1 (Slip Opin i o n) OCTOBER T ERM, 20 10 Sy llabu s N O TE : Wh er e it i s feas ibl e , a s y llab u s (h ead n ot e) wil lbe rel e as ed , as is bein g d o n e incon n ecti onwithth is cas e , a tth e ti meth e op in i o n is is s u ed

. Th e s y ll abu s con s titu tes n o p a r t of th e op in i o nof th eC o u r t bu t h a s be en pre p are dbyt h e Re po rte ro f De ci sio n s fo r t h e co nveni e nce of t h e reade r . Se e United Statesv. Detroit Timbe r& Lumb er Co., 200U. S

. 3 21, 337

. 

## SUPREME CO URT O F THE UNI TED STATES
Sy llabu s BOARD OFTRUSTEES OF T H E LELAND STANF O RD JUNIOR U N IVER SITY v . ROC H E MOL E C U LAR SYST EMS, INC., ET AL
. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT No. 09–1 15 9. Ar g u ed Feb r u a r y28, 2011 —Dec ided Ju ne 6, 2011 In198 5, a s m allCa lifor n i a r e sear c hc o mpan yc a lledCetu s beg a nto

dev e lop methods forquantif y ingbl ood-borne levels of human immu

nodeficiency vi rus (HIV), t h e virus t h a tc a us es AIDS

. A Nob e l Prize win n i n gtec hniqu e dev e loped at Cetu s kn ownas PCR was anin teg r al part of these efforts.

In1988, Ce t u s beg a nto c o llabor a te wit hsc ien t ists a tSt an for d University’s Department of I n fectious Diseases to te st th e efficacy of new AIDS drugs. Dr. Holodniy join ed Stan for das a r e s e ar c hfellow in the depar tment ar ound that ti me . Wh e nh e d i ds o , h e s i g n e da n agreement stating that he “ a gree[d] to assig n” to Stanfor dhis “r ight, title and inter e st in” inv e ntions r e su lting f r om his employment there. Holodniy’s s u pervis or a rra nged for himt o conductres e a rch a tCet u s to lear nabou tPCR. As a c o n d it ion of gaining acce ss to Cetus, Holodniy was required to sign an agreeme n t sta t ing that he “will as

sig nan d do[es] h e r e byassig n” to Cetus his “r ight, title and inter e s t in .

. . the ide a s, inventions, an d improve m ents” m a de “as a conse

q u ence of [hi s ] a cces s ” t o Cet u s . Work ing with Cet u s employees, Holodniy devi sed a PCR-based procedurefor measuring the amount of HIV in a patient’s blood. Upon ret u rnin g t o S t a n ford, he a n d ot her Stanford emp l oyees tested the proc edu r e . S t a n ford s e cured t h ree patents to the measur ement pr oc ess.

Roche Molecu la r S y s t em s a c q u ired Cetus ’ s PCR-relat e d as s e t s . After conducti ng clinical tri a ls onthe HIV quantific a t i on method de

veloped a t Cet u s , Roche com m e rcia liz ed the procedure

. Today, its HIV test kits are used world w ide.

The University and Small B u sine ss Paten tProcedures Act of 19802 BOARD OF T R US TEES OF LELAND STANFORD JU NIOR UNIV. v. ROCHE MOLECULAR SYSTEM S, INC. Sy llabu s (Bay h-Dole Act orAc t) alloc a tes r i ghts in federally funded “subject invent ion[s ] ” b e t w een t h e Federa l Gover n m e nta n d federa l cont ra c tor s . 35 U. S. C. §§201(e), (c ), 202(a). Th e Ac t defin e s “ s u bjec tin v e n tion” as “a ny invention of the cont ra ct or conceived or f i rs ta c t u ally reduced t o pra c t i ce in t h e perform a nce of work unde rafunding ag r eemen t,” §201(e), an d pr ov ides th at c o n t r a c t or s may“elec tto r e taint i tle to a n ysu bjec t in v e n t ion , ” §202( a). Bec a u s e s o me of S t an ford’s res e a r c hon t h eHIV m e a s urement technique wa s funded by the Nation al I n stitutes of H e alth (NIH), the Bayh-Dole Act applied. In a cco rda n cewit ht h e Ac t ’ s req u irem en t s , S t a n ford not i fied NIH that it wa s el ec tingto r e tain title to the i n v e ntion and c o nferr e d on the Gov e r n ment a lic ense to us e the patented procedure.

Petitioner, the Board of Trustees of S t anf o rd University, filed sui t ag ainst r e spo n dents (Roc he), c l aimingthat theirHIV test kit s in

fringed Stanford’s patents. Roch e responded that Ho lo dniy’s agree

ment with Cetus g av e it c o -owner ship of the procedure, and thus S t a n f o r dl a c k e ds t a n d i n gt o s u e i t for patent infringement. Stanford countered tha tHolodniy ha d no ri gh ts to assign because the Univer

sityhad super i orr i gh ts und erthe Bayh-Dole Act. The District Court ag r eed withS t an for dan d held th at under the Bayh-Dol e Act, Holod

niyhad no r i gh ts to assig nto Cetus. The Cour t of Ap peals forth e Federa l Circuitdisa greed, co ncludingthat Holodniy ’ s ag reement with Cetus as sig n ed his r i gh ts to Cetus, a n dt h u s t o R o c h e . I ta l s o f o u n d that the Bay h -Dole Ac t di d not auto ma tic a llyv o id a ninv e ntor ’ s rights in federa lly funded inventions

. Thus , the Act did not extin

guis h Roche ’ s owners hip int e res tinthe invention, and Stanford wa s deprived of standing. Held: The Bayh-Dole Act do es not automa tic a llyv e st ti t l e to feder a lly

funded invent ions in federa l contra ctors or authorize contractors to u n ilater a llyta ke title to su c hin v e n t ion s . Pp. 6–15.

(a) Sin c e 1790 , paten tlaw has oper ated o nth e pr emise th at r i gh ts in an invention belong to the inventor. Se e, e.g. , Gayler v. Wilder, 10 How. 477, 49 3

. Inmost c a s e s, a pa ten tm a ybe is su ed o n lyto anap plying invent o r , o r—b eca u s e a ninve nt or’s interest in his invention is ass i g n able inlaw by ani n str u men tinwr itin g
— anin v e n t or ’ s as signee. See Un i t e d S t a t es v. Dubilier Condenser Corp. , 289 U. S. 17 8 , 187. Ab sen t anag r eemen t to th e c o n t r a r y , anemploy erdoes n o t have righ ts in a ninve ntion “which is the original conce p tion of the employee alon e,” id., at 189; anin v e n t or mu st ex pr essl yg r an t th ose rights to his e m ployer, see id

. , at 187. Pp. 6–8.

(b) Stanford and amicus United States co nten d that, when an in

vent ion is con c eived or firs treduced t o pr a c t i ce wit ht h e s u pportof federal funds, the Bayh-Dole Act vest s ti tle to those inv e ntions in the inventor’s em ployer—the fe deral cont ra ct or. Congres s ha s in t h e3 Cite as: 56 3 U

. S. ____ (2011) Sy llabu s past d i vested inventors of t h eir righ ts in inventions by providing un

ambig u ou slyth at in v e n t ions c r e ated pu rsu a n tto c e r t ainspec ifie d federa l cont ra ct s b e com e t h e Gover n m e nt ’s propert y . S u ch una m b i

guous la ngua ge is notab l y ab s ent fr om the Bayh-Dole Act. Instead, the Act provid es that contractors may “elec tto r e tain titl e to anysub

j e ct invention, ” §2 02 (a), defining a “s ubj e c tinvention” as “a ny inven

t i on of t h e cont ra ct or conceiv e d or firs ta c tua lly reduced t o pra c t i ce in th e per f or manc e of wor k u n d era fu n d inga g r eemen t,” §201(e). Stanfor dc o ntends that “inv entionof the contractor” m e ans all in

ventions tha tacontra ctor’s employ ees make with the aid of federal fu n d s. Th at r e adin gas su m e s th a tCon g r e ss su btly set aside tw o c e n turies of p a ten tlaw in a statutory definition. This Court ha s rej e cted the idea th at mer e employ ment is suffic i ent to v e st ti tle to an em ployee’s invention in the e m ployer. Stan for d ’ s r e adin g also r e n d er s t h e phra s e “ o f t h e cont ra ct or” s u perf luous since the definition already covers inventions ma de under afundin g a g reement. Co ns truing the phra s e t o refe r ins t ea d t o apa rt icula rca t e gory of inve nt ions con ceived orredu ced t o pra c t i ceund er a fundi n g agreement—inventions “of the c o ntr a c t or ,” that is, those owned by or belongi n g to the con

tr ac tor

— make s the phr a se meaningf ulin the statutory definition. And “invention owned by t h e contra ctor” or “invention belonging to t h e cont ra ct or” a r e nat u ra l rea d ings of th e phrase “invention of the cont ra ct or.”

S e ct ion 2 0 2 ( a) , which s t a t es t h a tcont ra ctors m a y “ e lect t o ret a in title,” c o nfir m s that the Ac tdoes not vest title. Stanfor dr e ac hes the opposite conclusion, but only becaus e itr e ads “r etain” to mean “ac

qu ir e” an d “r e c eiv e .” Th at is c e r t ainlynot the c o mmonmeaningof “reta i n,” which is “to hold or conti nue to hold in pos s e ss ion or us e.” You ca nnot r e ta in s o mething u n les s you a l rea d y have it. And §210( a)—wh i c hpr ov ides th at th e Ac t “ t a k e[s] pr ec eden c e ov eran y other Act which would req u ire adis p os itio n of rights in s u bject inven

tions

. . . that is incons is tent wi th” the Ac t—does not dis p lac e the ba

sic principle that an inventor owns the r i gh ts to his inv e ntion. Onl y when an inve ntion belongs to the contractor does the Bayh-Dole Act c o me into pl a y . The Ac t’ s dispos ition of r i gh ts does n o thingmor e than clarify t h e orde r of p r iority of rights between the Federal Gov

ernm enta n d afedera l cont ra ct or in a federally funded invention that a l rea d y b e longs t o t h e cont ra ct or.

The Act’s isolated provisions dea ling with inventors’ rights in sub

jec tinv e ntions ar e c o nsistentwith the Court’ s c o nstr uc tion of the Ac t. See §2 02(d). That c o nstr uction is al so bo lster e d by the Ac t’ s li mit e d procedural protections, which expres s l y gi ve cont ra ct or s t h e right to c h alleng e a Gov e r n ment-imposed imped i ment to r e tai n ingtitle to a su bjec t in v e n t ion , §202(b)( 4) , bu t do n o t pr ov ide simi lar pr otec tionfor4 BOARD OF T R US TEES OF LELAND STANFORD JU NIOR UNIV. v. ROCHE MOLECULAR SYSTEM S, INC. Sy llabu s inventor and t h ird-party rights.

S t a n ford’s cont ra ry cons t r uct i on wouldperm it t i tle t o a nem ployee’s inventions to vest i nthe Un iversi ty even if the i n vention was conceivedbefore the i n vento rbecame an e m ployee, so long as the i n vent ion’s redu ct ion t o pra c t i ce wa s s u pport ed b yfedera l funding

. It also su g g e sts th at th e sc h ool w o u l d obtain title were even one dollar of federal funding appliedt o ward aninvention’s concep tion or reduc

tion to pr ac tic e . It would be no t e wort hye n oughfor Co n g res s t o s u p plant one of the fundamental precep ts of patent l a w and deprive in

ventors of righ ts in their own inve ntions

. To do so under s u c h unus ua l term s would b e tr uly s u rp ris i ng . Ha d Con g r e s s intended such a sea change in intellectual prop erty rights it would have s a id s o clea rly—not ob liq uely through a na m bigu ous definitionof “su bject invention” a n da nidios y ncra tic us e of the word “reta i n.”

The Cour t’ s c o nstr uc tion of the Ac t is al so r e flec ted in the c o mmon pra c t i ce of co n t ra ct ors , who genera lly ob t a in a s s i gnm e nts fromt h eir employees, an d of agencies that f und federa l cont ra ct ors , who t y pi

ca lly expectt h os e cont ra ct ors t o ob t a ina ssig n men t s. Witheffec t iv e a s signments , federa lly funde dinvent ions b e come “s ubj e ct inventions ” and the Ac t a s a pr ac tic a l mat t er wor k s pr ettymuc hthe wayStan

for dsay s it sh ou ld. Th e on l ysig n if icant di fference is that it does s o without v i olenc e to the ba sicpatentl a w principle that in ventors own th eirin v e n t ion s . Pp. 8–15. 583 F. 3d 83 2, affir m ed.

R OBERTS , C. J., delivered the opinion of the Court, in which S CALI A , K ENNEDY , T HOMAS , ALITO , S OTOMAYOR , an d K AGAN , JJ., joined. S OTOMAYOR , J., f iled aconcurr i ng opinion. B REYER , J., fil e d a dissentin g opinion, in which G IN SB U R G , J., joined._________________

_________________ 1 Cite as: 56 3 U

. S. ____ (2011) Opinion of theCourt
NOTIC E : Th is op i n ionis subjec t to f o rma lrevi si onbef o r e publicat ioninth e p r eli m in ary p r in t of th e U n it edS t at es R e p o rts

. R e ad ers ar e r e qu es ted to n o tif yth e R e p o r t e rof D e c i s i on s , Su p r em e C o u r t of th e U n ited St at es , Wa s h

ington, D. C. 2054 3, of any typ o gra p hical or other f o rmal err o rs , in or der th atc o rr ect i on sm a y b e mad eb e f o r e th ep r e lim in aryp r in t go es t o p r es s . 

## SUPREME CO URT O F THE UNI TED STATES

No. 09–1 15 9 BOARD OFTRUSTEES OF T H E LELAND STANF O RD JUNIOR UNIVERSITY , PETITIONER v. ROCHE MOLE CULAR SY STE M S, INC., ET AL
. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEAL S FOR THE FEDERAL CIRC UI T [Ju n e 6, 2011] C HIEF J U S TICE R OBER TS delivered the opinion of the Court. Since 1790, the patent law has operated on th e premise that rights in an invention belon gto the inventor. The question h e re is whether the University and Small Busi

ness PatentProcedures Act of 1980—commonly referred to as the Bayh-Dole Act—displaces that norm and automati

cally vests title to federally funded inventions in federal contractors. We hold t hat it does not. I A In 1985, a small California research company called Cetus began to develop methods for quantifying blood

borne levels of human immunodeficiency virus (HIV), the virus that causes AIDS. A Nobel Prize winning technique developed at Cetus—polymera se chain reaction, or PCR— was an inte gral part of these efforts. PCR allows billions of copies of DNA sequences to be made from a small initial blood sampl e . In 1988, Cetus beganto collab o rate with scientists at2 BOARD OF T R US TEES OF LELAND STANFORD JU NIOR UNIV. v. ROCHE MOLECULAR SYSTEM S, INC. Opinion of theCourt Stanford University’s Department of Inf e ctious Diseas es to test the efficacy of ne w AIDS d r u g s. Dr. Ma rk Holodniy joined Stanford as a research fellow in the department around tha ttime. Wh en he did so, he signed a Copyrigh t and Patent Agreement (CPA) stating that he “agree[d] to assign” to Stanford his “right, title and interest in” inven

tions resulting from his employm e nt at the University. App. to Pet. for Cert. 118a–119a. At Stanford H o lodniy undertookto develop animproved method for quantifying HIV levels in patien t blood sa m ples, using PCR. Because Holodniy was largel y unfamiliar with P CR, his super v isor arran g ed for hi m to cond uct research at Cetus. As a condition of gaining access t o Cetus, Holodniy signed a Vi sitor’s Confidentiality Ag ree ment (VCA). That agreement stated that Holodniy “will assign and do[es] hereby assign” to Cetus his “right, tit l e and interest in each of the ideas, i n ventions a n d improve

ments” made “as a consequence of [his] acc e ss” to Cet u s. Id., at 122a–124a. For the next nine mont hs, Holodniy conductedresearch at Cetus. Working wi th Cetus employees, Holodniy de

vised a PCR-based procedure for calculating the amount of HIV in a patient’s blood. That technique allowed doctors to determine whether a patien t was benefitin gfrom HIV therapy. H o lodniy then returned to Stanford where he and other University employees tested the H I V measurement tech

nique. Over the next few years, Stanford obtained written assignments of rights from the Stanford e m ployees i n volved in re finement of the techni que, including Holodni y , and filed several patent applications related to the proce

dure. Stan ford secured three pat e nts to the HIV meas

urement process. In 1991, Roche Molec u lar Syste ms, a company that specializes in diagnostic blood scre ening, acquired Cetus’s PCR-relate d assets, including all rights Cetus had ob

-3 Cite as: 56 3 U

. S. ____ (2011) Opinion of theCourt tained through agreements like the VCA signed by Holod

niy. After conducting clinical trials on the HIV quantifica

tion method developed at Cetus, R o che commercialized the procedure. Today, Roche’s H I V test “k its are used i n hospitals and AIDS clinics worldwide.” Bri e f for Respon

dents 10–11. B In 1980, Congress passed the Bayh-Dole Act to “promote the utilization of inventions arisi n g from federally sup

ported research,” “p romote collaboration bet w een commer cial concerns and nonprofit organizations,” and “ensu r e that the Go vernment obtains sufficient rights in federally supported i n ventions.” 35 U. S. C. §200. To a c hieve these aims, the Act allocates rights in f e derally funded “subje c t invention[s]” between the Federal Government and federal contractors (“any perso n , small bu siness firm, or nonprofit organization that is a party to a funding agreement”). §§201(e), (c), 202(a). The Act de fines “subject inventio n” as “any invention of the con tractorconceived or first actu

ally reduced to prac tic e in the performance of work un der a funding agreement.” §201(e). The Bayh- D ole Act p r ovides that contractors may “elect to retain ti tle to any s ubject inve ntion.” §202(a). To b e able to retain title, a c o ntractor must fulfill a number of obligations imposed by the statu t e. The con tractormus t “disclose each subject invention to the [relevant] Federal agency with in a reasonable time”; it must “make a writte n election within two y e ars after disclosure” stating th at the contrac t or opts to r e tain title to the invention; and the contractor must “file a patent application prior to an y statutory b a r date.” §§202(c)(1)–(3). The “ F ederal Gov

ernment may receive title” to a subject inv e ntion if a contractorf a ils to comply with a n y of these obligations. Ibid

. The Govern ment has s e veral right s in federally funded4 BOARD OF T R US TEES OF LELAND STANFORD JU NIOR UNIV. v. ROCHE MOLECULAR SYSTEM S, INC. Opinion of theCourt subject inventions un der the Ba yh-Dole Act. The agency that gran ted the federal funds receives from the contractor “a nonexclusive, nont ransferrable, irrevocable, paid-u p license to p r actice . . . [the] s ubject invention.” §202(c)(4). The agency also pos s esses “[m]arch-in righ ts,” whic h permit the agency to g r ant a license to a responsible thir d partyunder certain ci rcumstance s , such as when the c o n tractor fail s to take “effective steps to achi eve practical application” of the inve ntion. §203. The Act further pro vides that when the contractor do es not elect to retain title to a subject invention, the Govern ment “may consider and after consultation wit hthe contr a ctor g r antrequests for retention of rights by the inventor.” §202(d). Some of Stanford’s research related to the HIV meas

urement technique was funded by the National Institutes of Health (NIH), there b y subjecting the invention to the Bayh-Dole Act. Accor d ingly, Sta n ford disclosed the in

vention, conferred on the Government a nonexclusive, nontransferable, paid-up license to use the patented proce

dure, and formally notified NI H that it elected to retain title to the invention. C In 2005, th e Board of Trustees of Stanford University filed suit against Roche Molecul a r Systems, Inc., Roche Diagnostics Corporatio n, andRoche Diagnostics Opera

tions, Inc. (collectively Roche), contending that Roche’s HIV test kits infringed Stanfor d’s patents. As relevant here, Roche responded by asserting that it wa s a co-owner of the HIV quantification proced ure, based on Holodniy’s assignment of his rights in the Visitor’s Confidentiality Agreement. As a result, Roche argued, Sta n ford lacke d standing to sue it for patent infri n gement. 487 F. Supp. 2d 1099, 1111, 1115 ( N D Cal. 2 007). Stanford claimed that Holodniy had no rights to assign because the Unive r sity’s HIV r e search was federally funded, giving the school5 Cite as: 56 3 U

. S. ____ (2011) Opinion of theCourt superior rights in the invention under the B a yh-Dole Act. Ibid. 1 The Distric tCourt hel dthat the “VC A effectively as

signed any rights tha tHolodniy had in the patented in

vention to Cetus,” and thus to Roche. Id., a t1117. But because of the operation of the Bayh-Dole Act, “H olodniy had no interest to assign.” Id. , at 1117, 1119

. The court concluded that the Bayh-Dole Act“provides that the indi

vidual inventor may obtain title” to a feder a lly funded invention “only after t h e governm e nt and the contrac t in g party ha ve declined to do so.” Id. , at 1118. The Court of Appeals for the Fed e ral Circuitdisagreed. First, the court concluded that Holodniy’s initial agree

ment with Stanford inthe Copy right and Pa tent Ag ree ment constituted a mere promise to assign rights in the future, unlike Holodniy’s ag reement with C e tus in the Visitor’s Co nfidentiality Agreement, which itself assigned Holodniy’s rights in the invention to Cetus. S ee 583 F. 3d 832, 841–842 (2009). Therefore, as a matter of contract law, Cetus obtained Holodniy’s rights in the HIV quanti f i

cation tech nique through the V CA. 2 Nex t , the cour t ex plained that the Bayh -Dole Act “does not automatically void ab init io the inventors’ rights in government-funded inventions” and that the “statuto ry scheme did not auto

matically v o id the patent rights t hat Cetus r e ceived from Holodniy.” Id. , at 844–845. The court held that “Roch e possesse[d] an ownership interest in the patents-in-suit”

——————

1 Roche s u b m itt e d a hos tof ot her cla i ms to the Distr i c tC o ur t, inc l ud

ingthat i thad“shop r i gh ts ” to the p a tents and was ent i tl ed to a l i c e nse to u s e th e pat e n t s. See 58 3 F. 3d 832, 8 3 8(CA Fed. 2 0 09). Non e of t h os e cla i m s is now b e fore us ; we dea lonly wit hRoch e’s cla i m t o co own e r s h i p to rebu t Stan for d ’ s stan din gto b r in gan in fr ingemen tac tion

.

2 Beca us e t h e Federa l Circuit ’s int e rpret a tion of t h e rele va nta s s i gn ment agreements is not an issue onwhic h we gra n t e dcert iora ri, we have no occasion to pass on the validity of the lower court’s construction of those agree m ents.6 BOARD OF T R US TEES OF LELAND STANFORD JU NIOR UNIV. v. ROCHE MOLECULAR SYSTEM S, INC. Opinion of theCourt that was not extinguished by the Bayh-Dole Act, “de

priv[ing] Stanford of standing.” Id. , at 836–837. The Court of Appeals then remanded the case with instru c tions to dis m iss Stanford’s infringement clai m. Id., at 8 49. We granted certiorari. 562 U. S. ___ (2010). II A Congress h a s the auth o rity “[ t]o p r omote the Progress of Science and useful Arts, by secu ring .

. . to Authors an d Inventors the exclusive Right to t h eir respective Writing s and Discov eries.” U. S. Const. Art. I, §8, cl. 8. The first Congress put that power to use byenacting the Patent Ac t of 1790. Th at Act provi d ed “[t]hat upon the petition of an y person or persons . . . setting fort h, that he, she, or they, hath or have invented or discovered” an inve ntion, a pat

ent could be granted to “such pe titioner or petitioners” or “their heirs , administr a tors or as signs.” Actof Ap r. 10 , 1790, §1, 1 Stat. 109–1 10. Under that law, the first pa tent was grante din 1790 to Samuel Hopkins, who had de vised an improved method for mak i ng potash, America’s first industrial chemical. U. S. Paten tNo. 1 (issued July 31, 1790). 3

Although m u ch in intellectual property la w ha s change d in the 220 years since the first Patent Act, the basic id ea that inventors have the right to patent the i r inventions has not. Under the law in its current for m , “[w]hoe v er invents or discovers any new and useful process, machine, manufacture, or composition of m a tter .

. . may obtain a patent therefor.” 35 U. S. C. §101. The inventor must attest that “he believes himself to be the original and firs t inventor of the [invention] for which he solicits a patent. ”

——————

3 The patent was signed by Presid ent George Washingt on, Secretary of State Thomas Jefferson, and Atto rney Gene ra l Edmund Ra ndolph. See Maxey, S a muel Hopkins, The Hold er of the First U. S. Patent: A Stu d yof Failu r e , 122 Pa. M a g a zin e of Hist. an d Biog r a phy6 (1998).7 Cite as: 56 3 U

. S. ____ (2011) Opinion of theCourt §115. In most cases, a patent may be issued only to an applying in ventor, or—because an inventor’s interest in his invention is “assignable in law by aninstrument in writing”—a n inventor’s assignee. §§151, 152, 2 61. Our preced ents confirm the general rule that rights i n an invention belong to the inventor. See, e.g., Gayle r v. Wilder , 10 How. 477, 493 (1851) (“the discoverer of anew and useful improvement is vested by law withan inchoate right to its exclusive use, which he may perfect and make absolute by proceeding in the manner whichthe law re

quires”); Solomonsv. United S t ates , 137 U. S. 342, 346 (1890) (“whatever invention [an inventor] may thus con

ceive and perfect is his individual property”); Uni t ed Sta t esv. Dubilier Condenser Cor p . , 289 U. S. 178, 188 (1933) (an inventor owns “the product of [his] original thought”). The treatis es are to th e same effect. See, e.g. , 8 Chisum on Patents §22.01, p. 22–2 (2011) (“The presump

tive owner of the property ri ght i na patenta b le invention is the single human inventor”). It is equa lly well established that an inventor can assign his rights i nan invention to a third pa rty. See Dubilier Condenser Corp ., supra, at 187 (“A patent is property an d title to it can pass on ly by assignment”); 8 Chisum on Patents, su pra , §22.01 , at 22–2 (“The inventor .

. . [may] transfer o w nership i n terests bywrit ten a ssignment to anyone”). Thus, although others may acquire an interest in an invention, any such interest—as a ge neral rule— must trace back to the inventor. In accordance with these principles, we have recognize d that unless there is an agreement to the contrary, an employer does not hav e rights in an invention “which is the original conception of the em ployee alon e.” Dubilier CondenserCorp ., 289 U. S., at 1 89. Such an invention “remains the property of him who conceived it.” Ibid

. In most circu mstances, an inventor must expre ssly grant his rights in an invention to his emplo y er if the e m ployer is to8 BOARD OF T R US TEES OF LELAND STANFORD JU NIOR UNIV. v. ROCHE MOLECULAR SYSTEM S, INC. Opinion of theCourt obtain those rights. See id. , at 18 7 (“The res p ective ri ghts and obligations of em ployer and employee, touching an invention conceived by the latte r, spring from the contract of employm e nt”). B Stanford and the United States as amicus curiaecon tend that t h e Bayh-Do l e Act reor ders the normal priorit y of rights inan invention when th e inventionis conceived or first reduced to practice withthe support of feder a l funds. In their view, the Act moves inventors from the front of the line to the back by v e sting title to federally funded inventions in the inventor’s employer—the federal contractor. See Brief fo r Petitioner 26–27; Bri e f for Unite d States as Amicus Curiae6. Congress has in the past divested inventors of their rights in i n ventions by providi n g unambiguously th at inventions created pursuant to sp ecified federal contracts become theproperty o f the United States. For example, with respect to certa in con tract s dealing with nuclear material and atomic energy, Congress provided that title to such inventions “shall be vested in, and be the property of, the [Ato mic Energy] Commission.” 42 U. S. C. §2182

. Congress has also en acted laws requiring that title to certain inventions ma de purs uant to contracts with th e National Aeronautics and Spa c e Administra tion “shall be the exclusive property of the United States,” Pub. L. 111– 314, §3, 12 4 Stat. 3339, 51 U. S. C. §20135(b )(1), and that title to certain inventions undercontracts with the De

partment of Energy “shall vest in the United States.” 42 U. S. C. §5908. Such langu a ge is nota bly absent from the Bayh-Dol e Act. No where in the Act is title expressly vested in co n tractors or anyone else ; nowhere in the Act are inventors expressly deprived of their interest in fede rally funded inventions. Instead, th e Actprovid es that cont ractors ma y9 Cite as: 56 3 U

. S. ____ (2011) Opinion of theCourt “elect to ret a in title to any subjectinvention.” 35 U. S. C

. §202(a). A “subject invention” is defined as “a ny invention of the cont ractorconc eived or fi rst ac tually redu ced to practice in the performance of work under a funding agreement.” §201(e). Stanford as serts that t h e phrase “invention of the con

tractor” in this provision “is naturally read t o include all inventions made by the contract or’s employees with the aid of federal funding.” Brief for Petitioner 32 (footnote omitted). T hat reading assumes that Congress subtly set aside two centuries of patent law in a statutory definition. It also renders the phrase “of the contractor” superfluous. If the phrase “of the contra ctor” were deleted from th e definition of “subject in ventio n,” the definition would cover “any invention .

. . conceived or first actuallyreduced to practice in the performance of work under a funding agreement.” Reading “of the contractor” t o mean “all inventions made by the contract or’s employees with the aid of feder a l funding,” as Stanford would, adds nothin g that is not already in the definition, since t h e definition already covers inventions made under the funding agree

ment. Th at is contr a ry to ourgeneral “r eluctan[ce] to treat statut ory terms a s surplusage.” Duncanv. Walk er , 533 U. S. 167, 174 ( 2001) (internal quotation marks omitted). Construingthe phras e to refer instead to aparticula r categoryof inventions concei vedor redu ced to p r acti ce under a fu nding agreement—inventions “of the contra c tor,” that i s , those owned by o rbelonging to the con

tractor

— m a kes the phrase meaningful in the statutor y definition. And “inve n tion owned by the c o ntractor” or “invention belonging to the contractor” are natural read

ings of the phrase “invention of the contrac t or.” As we have explained, “[t]he use of the word ‘of’ denotes owner

ship.” Poev. Sea b or n , 2 82 U. S. 10 1 , 10 9 (1930 ); see Flo resFigueroav. United Sta t es , 556 U. S. ___,
__ _,
_ __10 BOARD OF T R US TEES OF LELAND STANFORD JU NIOR UNIV. v. ROCHE MOLECULAR SYSTEM S, INC. Opinion of theCourt (2009) (slip op., at 2, 11) (treating the phras e “identifica

tion [papers] of another person” as meaning such item s belonging to another person (internal quotation marks omitted)); Ellisv. Unit ed Stat es , 20 6 U. S. 246, 259 (1907 ) (interpreting the phrase “work s o f the United States” to mean “works belonging to the United State s ” (internal quotation marks omit ted)). That reading follows from a com m on definit i on of the word “of.” See Webst e r’s Third New International Dic

tionary 1565 (2002) (“of” can be “u sed as a function word indicating a possessive relationship”); New Oxford Amer i

can Diction ary 1180 (2 d ed. 2005) (defining “of” as “indi

cating an a ssociation between two entities, typ i cally one of belonging”); Webster’s New Twentieth Century Dictionar y 1241 (2d ed. 1979) (defining “of” as “belonging to”). Stanford’s reading of the phrase “invention of the con

tractor” to mean “all inventions made by the contractor’s employees” is plausibleenough in the abstract; it is often the case that whatever an empl oyee produces in the course of his empl oyment bel o ngs to his employer. No onewould claim that an autoworker who bu ilds a car while workin g in a factory owns that car. But, as noted, pat e nt law has always been different: We have rejected the idea that mere employmen tis suffici ent to vest title to a nemployee ’s invention in the employer. Against this ba ckground, a contractor ’ s invention—an “inv ention of the contractor” — does not automatically include i n ventions made by the contractor ’ s employees. 4

——————

4 Th e dissen tsu g g e sts th at “ w e c o u l d i n terpr e t the Bay h -Dole Ac t as or din a r ilyass u min g , an d ther ebyor din a r i lyr e qu ir in g, anass i g n men t of patent r i g h ts bythe fe der a llyfunded employee to the federall y funded employer.” Post , a t8

. T h a ts u g g e s t i o ni s b a s e d i nl a r g e p a r to n Ex ec u t iv e Or der10096, wh ic h“g ov er n s Feder a l Gov e rnmen temploy ee to-employ e rpatent r i gh t assig n ments.” Post, at 9. Lest th er e be an y doubt, emplo y ees of nonfe d eral en tities that hav e feder a l funding cont ra ct s
—like Holodniy—a re notfede ral employees. And there is no11 Cite as: 56 3 U

. S. ____ (2011) Opinion of theCourt The Bayh- D ole Act ’ s provision stating that contractor s may “elect to re tainti tle” confirm s that the Actdoes not vest title. 35 U. S. C. § 202(a) (emphasis added). Stanford reaches the opposite conclusion, but only because it reads “retain” to mean “acquire” and “receive.” Brief for Peti

tioner 36 (i nternal qu otation ma rks omitted). That is certainly n o t the com m on meaning of “retai n .” “[ R]etain” means “to hold or continue to hold in posses s ion or use.” Webster’s T h ird, sup ra , at 1938; se e Webster’s New Colle

giate Dicti onary 980 (1980) (“to keep in possession or use”); American Heritage Dictionary 1109 (1969) (“[t]o keep or ho ld in one’s possession”). You cannot retain something unless you already h a ve it. Se e Alaskav. UnitedStates , 545 U. S. 75, 104 (2005) (interpreting th e phrase “the United Sta t es shall ret a in title to all property” to mean th at “[t]he U n ited State s . . . retained title to it s property l o cated wit h in Alaska’s borders”) (emphasis added). The Bayh-Dole Act does not confer title to feder

ally funded inventions on contract ors or authorize contrac

tors to unilaterally take title to those inventions; it simply assures contractors tha tthey may keep title to whatever i t is they already have. Such a pro v ision makes sense ina statute specifying the respective rights and responsibili

ties of feder a l contracto rs and the Government. The Bayh-Dole Act states that it “tak e [s] precedence over any other Act wh ich would require a disposition of rights in subject invent ions .

. . that is inconsistent with” the Act. 35 U. S. C. §210(a). The United States as amicus curiaea r gu es that this provision operates to displace the basic principle, codifiedin th e Patent Act, that an inventor owns the rights to hi s invention. See Brie f for Unite d States 21. But because the B a yh-Dole Act, includin g

—————— equivalent executive orde r governing invention r i gh ts with r e spec t to federa lly fund ed res e a rch; t h a tiss u e is of cou r s e a ddres s e d b yt h e Bayh-Dole Act.12 BOARD OF T R US TEES OF LELAND STANFORD JU NIOR UNIV. v. ROCHE MOLECULAR SYSTEM S, INC. Opinion of theCourt §210(a), ap plies on ly to “subject inventions”—“inventions of the contr a ctor”—itd oes not displace an inventor’s ante

cedent title to his invention. Only when an invention belongs to t h e contract or does the Bayh-Dole Act come into play. The Act’s disposition of r i ghts—lik e much of the rest of the Bayh-Dole Act—ser v es to clarify the order of priority of rights between the Federal Government and a federal contractor in a federally funded invention that already belongs to the co ntractor. Nothing more. 5 The isolate dprovisions of the Bayh-Dole Act dealing with inventors’ rights in subj ect inventions are consistent with our construction of the Act. Under the Act, a federal agency may“grantreq u ests for retention of rights by th e inventor .

. . [i]f a contr a ctor does not elect to retain title t o a subject i n vention.” §202(d). If an employee inventor never had title to his invention because title vested in th e contractor by operation of law— as Stanford submits—it would be odd to allow the Government to grant “reque sts for retention of rights by the inventor.” By u s ing the word “retention,” §202(d) assumes that the inventor had righ ts in the subject invention at some point, undermining th e notion that the Act a u tomatica lly vests titl e to federally funded inventions in federal contractors. 6

——————

5 Far from superseding the Patent Act insu c ha bac kh an de d way , it is clea r t h a t§2 10 (a)’s concern is fa r na rrowe r. Tha tprovis ion s p ecifies 2 1 different s t atutory provis ions tha tthe Bayh-Dole Act “take[s] prece dence over,” the vast majori ty of wh ich deal with the di vision of owner

s h ip in cert a i n inve nt ions b e t w een acon t ra ct or a n d t h e Gover n m e nt

. 35 U. S. C. §§210( a)(1)–( 21); see, e. g. , §§210(a)(1 9)–(2 0 ) (th e Bay h -Dole Act takes precedence ove r “section 6(b) of the So lar Photovoltaic Energy Resear c hDevelopment and Demonstr at io n Ac t” and “sec tion 12 of the Nativ e Latex Commer c i aliz ation and Ec onomicDev e lopment Ac t”).

6 S t a n ford cont ends t h a titcannotb e t h e ca s e “ t h a tt h e cont ra ct or ca n only ‘retain title’ to an invention th atitalr e adyown s , while anin v e n t or may be considered for ‘retention’ of ti tle only whe nhe has assigned titl e away .” Re plyBr ief forPe ti tion er8. Th a tar g u men th a s some for c e . But ther e ma ybe situat ions wher e an inventor, by the terms of an13 Cite as: 56 3 U

. S. ____ (2011) Opinion of theCourt The limited scope of the Act’s procedural protections also b o lster s our concl u sion. The Bayh-Dole Act expressly confers on contractors the ri ght to challenge a Govern

ment-imposed impedi ment to retaining title to a subject invention. §202(b)(4). As Roche correctly notes, however, “the Act co ntains not a single procedural protection for third partie s that have neither sought nor rec e ived federal funds,” such as cooperating priva t e research institutions. Brief for Respondents 29. Nor does the Bayh-Dole Act allow inven t ors employed by fe deral contracto rs to contest their employer’s claim to a subject invention. The Act, fo r example, does not expressly permit an interested third party or an inventor to challenge aclaim that a particular invention was supported by federalfunding. In a world i n which there is frequ e nt collabo ration between private entities, i nventors, and fede ral c o ntractors, see Brief for Pharmaceu t ical Research and M anufacturers of America as Amicus Curiae22– 23, that absence would be deeply troubling. But the lackof procedures protecting inventor and third- party ri ght s makes perfect sense if the Act applies only when a federal contractor has already ac

quired title to an inventor’s interes t

. In thatc a se, there is no need to protect in v e ntor or thi r d-par t yrigh ts, because the only righ ts at issue are those of the contractor and the Government. The Bayh- D ole Act applies to subject inventions “con

ceived or first actuallyreduced to practice in the perform

ance of work” “funded in whole or in partb y the Federal Government.” 35 U. S. C. §§201(e), 201(b) (emphasis added). U n der S t anford’s constru ction of the Ac t, title t o

—————— ass i gnment, has subs idiary rights in a ninvention to w h i c h a contra cto r h a s ti tle, as § 202(d) su g g e sts. Comp ar e §202(d) ( “ r e ten t ionof rights ”) with§202(a) ( “ r e tain title”) (emphasi s ad ded). And at the end of the day , it is Sta n for d ’ s c o ntention that “r et ain” must be “r ead as a sy no nymfor ‘a cq u i re’ or ‘re c eive ’ ” thatdooms its ar g u ment on this po int

. Brief for Petitioner 37.14 BOARD OF T R US TEES OF LELAND STANFORD JU NIOR UNIV. v. ROCHE MOLECULAR SYSTEM S, INC. Opinion of theCourt one of its e m ployee’s i n ventions could vest i nthe Univer

sity even if the inventi o n wa s conceived before the inven

tor became a University employee, so l o ng as the inven

tion’s reduction to practice wa s supported by federal funding. What is more, Stanford’s reading suggests that the school would obtain title to one of its emp l oyee’s inve n tions even if only one dollar of federal funding was applied toward the invention’s conception or reduction to practic e . It would be noteworthy enou gh for Congress to supplant one of the fundamental precepts o f patent law and deprive inventors of rights in th eir own inventions. To do so under such unusual terms would be truly surprising. We are confident that if Congress had intended such a sea change in intellect ual property righ ts it would h a ve said so clearly—not obliquely through anambiguous definition of “subject invention” and an idiosy ncratic use of the word “retain.” C f

. Whi t manv. Am eric a n Tru c king Assn s., Inc

. , 531 U. S. 4 57, 468 (2001) (“Congress .

. . does not alter the fundam ental details of a regul a tory sche me in vagu e terms or ancillary provi s ions”). Though unnecessary to our conclu sion, it is w o rth noting that our construction of the Ba yh-Dole Act is reflected in the common practice among part ies operating under the Act. Cont ractors gen e rally institute policies to obtain assignments from their employees. See Brie f for Respo n dents 34; B r ief for Pha r maceutical Research a n d Manufac

turers of A m erica as Amicus Cu riae13–18. Agencies th at grantfund s to federal contrac t or s typically expect those contractors to obtain assignment s . S o i ti s w i t hN I H , t h e agency that granted th e federal fu nds at issue in this case. In guidance documents made available to contractors, NI H has made clear that “[b]y law, an inventor has initial ownership of an invention ” and that contr a ctors should therefore “have in pl ace em ploy ee agreeme n ts requiring an inventor to ‘assign’ or give own e rship of an invention to the organization upon acceptance of Federal funds.” NI H15 Cite as: 56 3 U

. S. ____ (2011) Opinion of theCourt Policies, Procedures, and Forms, A “20–20” View of Inven

tion Reporting to the National In stitutes of H e alth (Se p t. 22, 1995). Such guida n ce would be unneces s ary if Sta n ford’s readi n g of the statute were correct. Stanford co ntends that reading the Bayh-Dole Act as not vesting title to f e derally funded inventions in fed e ral contractors “fundament a lly undermin[es]” the Act’s fram e work and severely threatens its continued “successful application.” Brief for Petitioner 45. We do not agree. As just noted, universities typically enter into agreements with theiremployees requiring the assignment to the university of rights ininventions. With aneffective a s signment, those invent ions—if fed e rally funded—become “subject inventions” un der the Act, and the s t atute as a practical m a tter wor k s pretty muc hthe way S t anford say s it should. The only significant di fference is that it does so without vio l ence to the basic princ i ple of patent law that inventors own their inventions. The judgm e nt of the Court of Ap peals for the Federal Circuit is affirmed. It is so orde red._________________

_________________ 1 Cite as: 56 3 U

. S. ____ (2011)

S OTOMAYOR , J

. , con c u rrin g 

## SUPREME CO URT O F THE UNI TED STATES

No. 09–1 15 9 BOARD OFTRUSTEES OF T H E LELAND STANF O RD JUNIOR UNIVERSITY , PETITIONER v. ROCHE MOLE CULAR SY STE M S, INC., ET AL
. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEAL S FOR THE FEDERAL CIRC UI T [Ju n e 6, 2011] J USTICE S OTOMAYOR , c o ncurring. I agree with the Court’s resolution of this case and with its reasoning. I write separately to note t hat I shar e J USTICE B RE YE R ’s concerns as to the principles adopted b y the Court of Appeals for the Fed e ral Circuitin FilmTec Corp. v. All i ed-Signal, Inc. , 939 F. 2d 1568 (1991), and the application of those principles to agreements that impli

cate the Bayh-Dole Act. See post , at 6–10 (dissentin g opinion). B e cause Stanford failed to challenge the decision below on these grounds, I agree that the appropriate disposition is to affirm

. Li ke the dissent, however, I un

derstand th e majority opinion to permit consideration of these arguments in a future case. See ante , a t5, n. 2._________________

_________________ 1 Cite as: 56 3 U

. S. ____ (2011)
B REYER , J., diss enting 

## SUPREME CO URT O F THE UNI TED STATES

No. 09–1 15 9 BOARD OFTRUSTEES OF T H E LELAND STANF O RD JUNIOR UNIVERSITY , PETITIONER v. ROCHE MOLE CULAR SY STE M S, INC., ET AL
. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEAL S FOR THE FEDERAL CIRC UI T [Ju n e 6, 2011] J USTICE B RE YE R , withwhom J US TICE G IN SB URGjoins, dissenting. The question presented in this case is: “Whether a federal contractor un iversity’s st atutory right under the Bayh-Dole Act, 35 U. S. C. §§200–212, in inventions arising f r om federal l y funded research can be ter m inated un ilaterally b yan individual in

ven t ort h ro ugha se pa r a te a greem ent pu rpo r ti ng to as

sign the inventor’s righ ts to a third par t y.” 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 t h e Court), I would returnthis case t o the Feder a l Circuit f o r further argument. I The Bayh-Dole Act creates a three-tier system for patent rights own e rship applicable to federally funded research conducted b ynonprofit organiza tions, such as universities, and small businesses. It s e ts for t h conditions that mean (1) the fun d ed firm; ( 2 ) failing t hat, the United States Government; and (3) failing that, the employee who made2 BOARD OF T R US TEES OF LELAND STANFORD JU NIOR UNIV. v. ROCHE MOLECULAR SYSTEM S, INC. B REYER , J., diss enting the invention, will likely obtain (or retain) any resul t ing patent rights (nor mally in that just-listed order). 3 5 U. S. C. §§ 202–203. The statute applies to “subject i n vention[s]” defined as “any invention of the contractor conceived or first actu ally re duced to practic e in the per

formance of work under a fundin g agreement.” §201(e) (emphasis added). Si nce the “contractor” ( e.g . , a univer

sity or small business) i s unlik ely to “conceiv[e]” of an idea or “reduc[e] ” it “ t o prac tice” other than through its employ

ees, the term “invent i on of the contractor” must refer to the work and ideas of those em ployees. We all agree that the term covers t h ose employee inventions that th e employee properly assigns to the contractor, i.e. , his or her employer. But does the term “subjec t invention” also include inventions that the employee fails to assign properly? II Congress enacted this statute a g ainst a background norm that often, but not always, denies individual inven

tors patent rights growing ou t of research for which the public has already pai d

. This leg a l norm reflects the fa ct that paten t s themselves have both benefit s and costs. Patents, for example, help to elic it useful inventions and research and to assure publicdisclosure of technological advances. See, e.g., Mazer v. St e i n , 347 U. S. 201, 21 9 (1954); Bilskiv. Kappos , 561 U. S. ___, ___ (2 010) (slip op., at 4); id., at ___ (slip op ., at 10) (Stevens, J., c o ncurring in judgment). But patents sometim e s mean u nnecessaril y high prices or restricted dissemination; andthey some

times di sco u ra ge fu rth e r inno va tio nand co mpetitio n by r e quiring costly searches for ea rlier, related patents or by tying up id eas, which, were they free, would more effec

tively spur research and development. See, e. g . , Labora

tory Corp. of Americ aHoldingsv. Metabolite Laboratori e s , Inc. , 548 U. S. 124, 128 (2006) (B REYE R , J., dissenting3 Cite as: 56 3 U

. S. ____ (2011)
B REYER , J., diss enting from dismi ssal of certiorari as i m providently granted); Heller & Eisenberg, Can Pate nts Deter Innovation? The Anticommons in Biomedical Research, 280 Science 6 98 (1998). Thus, Thomas Jeffers on wrote of “the difficulty of draw

ing a line between the things whic h are worth to the pub

lic the embarrassment of an exclusive patent, and thos e which are not.” Letter to Isaac McPherson (Aug. 13 , 1813), in 6 Writings of Thomas Jef f erson 181 (H. Washing

ton ed. 185 4). And J a mes Madison favored the patent monopoly because it amounted to “compensation for” a community“benefit.” Monopolies. Perpetuities. Corpora

tions. Eccle s iastical Endowments., in J. Madison, Writings 756 (J. Rakove ed. 199 9). The importance of assuring this c o mmunity “benefit” is reflected in legal rules that may de ny or limit the award of patent righ ts 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 inve ntion. Why should the public have to pay twice for the same invention ? Legal rules of this kind include an Executive Order tha t ordinarily g i ves to the Government “the entir e right, titl e and interest” to in vent ions made by Go vern ment employ

ees who “conduct or perform research, development wor k , or both.” 37 CFR §501.6 (2010) (codifying, as amended, Exec. Orde r 10096, 3 CFR 292 (1 949–1953 Comp.)). See also Heine m annv. U n ited S t ates , 796 F. 2d 451, 455–4 56 (CA Fed. 1 986) (holding Execu t i v e Orde r constitutional and finding “no ‘taking’ because th e invention was not the property of H e ineman n”). They alsoinclu d e statutes, which, in specific research areas, give the Governmen t title to inv e ntions ma de pursuant to Government con

tracts. See Atomic En ergy Act of 1954, §152, 68 Stat. 94 4 (codified as amended at 42 U. S. C. §2182); Na tional Aero

nautics and Space Act of 1958, §30 5 , 72 Stat. 435 (codified4 BOARD OF T R US TEES OF LELAND STANFORD JU NIOR UNIV. v. ROCHE MOLECULAR SYSTEM S, INC. B REYER , J., diss enting at 42 U. S. C. §2457), repealed by §6, 124Stat. 3444; Federal Nonnuclear Energy Rese arch and Development Act of 1974, §9, 88 Stat. 1887 (codified as am ended at 42 U. S. C. §5 908(a)). And they ha ve included Governme nt regulations, established prior to t h e Bayh-Dole Act’s en

actment, th at work in roughly similar ways. See, e.g., 45 CFR §650.4(b) (1977) ( N ational Science Foun dation regu

lations providing that Foundation would “determine the disposition of the invention [made under the grant] and title to and rights under any patent application”); §§8.1(a) , 8.2(d) (Department of Health, Education, and Welfare regulations providing that inventions ma de under de

partment g r ants “shall be subject to determination” by th e agency an dthat the departmentmay “req u ire that a l l domestic rights in the invention shall b e as signed to t h e United States”). These legal rules provi d e the basic backgrou n d agains t which Cong ress passed the Bayh- D ole Act. And the Ac t’s provisions reflect a related effo rt to assure that rights t o inventions arising out of research for which the public has paid are dis tributed an d used in ways that further specific important p ublic interests. I agree with the majority that the Act do es not simply take t h e individual inventors’ rights andgrantthe m to the Government. Ra ther, it assumes that the federal funds’ recipient, say a universit y or small business, wi ll possess those rights. The Act leaves thos e rights in the hands of that recipient, not because it s eek s to mak e the public pay twice for the same invention, b u t for a special public policy reason. In doing so, it seek s to encourage thoseinst itutions to commercia l

ize inventions that oth e rwise might not realize their po

tentially beneficial pub lic use. 35 U. S. C. §200. The Act helps assure that com m ercialization (while “promot[ing] free competition” and “protect[in g] the public,” ibid. ) by imposing a set of conditions upon the federal funds recipi

ent, by providing that sometimes the Government will5 Cite as: 56 3 U

. S. ____ (2011)
B REYER , J., diss enting take direct control of the patentrights, and by adding th at on occasionthe Government will permit the individual inventor to retain those rights. §§202–203. Given this basic statutory objecti ve, I cannot so easily accept the majority’s c o nclusion—that the in dividual in

ventor canlawfully assign an invention (p roduced b y public funds) to a third party, th ereby takin gthat in ven tion out from under the Bayh- D ole Act’s restrictions, conditions, and allocation rules. That concl u sion, in m y view, is inconsistent with the Act’s basic purposes. It may significantly undercut the Act’ s ability to achieve its objec

tives. It allows individual inventors, for whose invention the public has paid, t o avoid the Ac t’s corre sponding r e strictions and conditions. And it makes the commerciali

zation and marketing of such an invention more difficult: A potential purchaser of rights fr om the contractor, say a university, will not know if the u n iversity itself poss ess e s the patent right in question or whether, as here, the indi

vidual, ina dvertently or delibera t ely, has previously as

signed the title to a third part y. Moreover, I do notagree that the language to which the majority points—the words “i nvention of the contractor” and “retain”—requires its result. As the majority co n cedes, Stanford’s alternative reading of the phrase “ ‘in

vention of the contrac t or’ ” is “plausible enough in the abstract.” Ante , at 10. Nor do I agree that the Act’s lack of an explicit provision for “an interested third party” to claim that an invention was not the result of federal fund

ing “bolsters” the majo rity’s inter p retation. Ante , a t13

. In any event, universities and businesses have worked out ways to pro t ect the var i ous participants to re search. Se e Brief for Association of American Universities et al. a s Amici Cu ri ae22–24 (hereinafter AAU Brief); App. 118

– 124 (Materials Transfer Agreem ent between Cetus and Stanford University). Ultimately, the majority rejects S t anford’s re ading (an d6 BOARD OF T R US TEES OF LELAND STANFORD JU NIOR UNIV. v. ROCHE MOLECULAR SYSTEM S, INC. B REYER , J., diss enting the Government’s reading) of the Act becaus e it believes that it is i n consistent with certa i n background norms of patent law, norms tha tordinarily provide a nindividual inventor wi th full pate nt righ ts. Ante , a t10

. B u ti nm y view, the co mpeting norms govern ing rights i ninventions for which the public has already paid, along with th e Bayh-Dole Act’s objectives, suggest a different result. III There are two different legal routes to what I consider an interpretation more consistent with the statute’s objec

tives. First, we could set as ide the Federal Circuit’s inter

pretation of the licensing agreements and its related licensing doctrine. Tha tdoctrine g o verns interpretation of licensing a greements made beforean invention is con

ceived or r e duced to practice. Here, there are two s u ch agreements. In the earlier agreement—that between Dr. Holodniy and Stanford University—Dr. Holodniy said, “I agre e to as sign

. . . to Stanford .

. . that righ t, title and interest in and to .

. . s u ch inventions as req u ired by Con

tracts and Grants.” App. to Pet. for Cert. 119a (emphasis added). In the later ag reement—that betwee n Dr. Holod

niy and th e private r e search firm Cetus— Dr. Holodniy said, “I will assign an d do hereby assignto Cetus, my right, title, and interest in” here relevant “ideas” and “inventions.” Id., at 12 3a (emphasis added; ca pitalization omitted). The Federal Circuit held that the e a rlier Stanf ord agree

ment’s use of the words “agree to assign,” when compared with the la ter Cetus agreement’s use of the words “ d o hereby assign,” made all the di ffer e nce. It concluded that, once the invention came into existence, the latter words meant thatthe Cetus agreement trumped the earlier, Stanford a greement. 583 F. 3d 832, 841–842 (CA Fed. 2009). Th at, in the Circuit’s vi ew, is because the latter words operated upon the invention automatically, while7 Cite as: 56 3 U

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B REYER , J., diss enting the former did not. Quoting its 1991 opinionin FilmTec Corp. v. A llied-Sign al, Inc. , 939 F. 2d 1568, 1572, the Circuit declared that“ ‘[o]nce the invention is made and [the] application for [a] patent is f i led, .

. . lega l title to the rights accruing thereunder would be in the assignee [ i.e. , Cetus] .

. . , and the assignor-inventor would have nothing remaining to assign.’ ” 583 F. 3d, at 842. Given what seem only slight linguistic differences in the contractuallanguage, this reasoning seems to make to o much of to o little. Dr. H o lodniy executed his agreement with Stanfo r d in 1988. At that time, patent law appears to have long specified that apres ent assignment of future inventions ( a s in both contracts he re) conveyed equitable, but not legal, title. See, e.g., G. C u rtis, A Tre a tise on the Law of Pa tents for Us eful Inventions §170, p. 155 (3d e d

. 1867) (“A contract to convey a future invention .

. . cannot alone authorize a patent to be taken by the party in whos e favor such a contract was intended to operate”); Comment, Contract R i ghts as Commerci al Security: P r esent and Future Intangibles, 67 Yale L. J. 847, 854, n. 27 (195 8) (“The rule generally applicable grants equitable enf o rce ment to an assignment of an expectancy but demands a further ac t, either reduction to p o ssession or further a s signment of the right when it comes into existence”). Under this rule, boththe initialStanford and later Cetus agree m ents would have gi ve n rise only to equitable interests in Dr. Holodniy’s invention. And as between these two c l aims in equity, the fa cts that St anford’s co n tractcame f i rst and tha tStanfor d s ubsequently obtained a postinvention assignment as well should have meant that Stanford, n o t Cetus, would receive the rights its contrac t conveyed. In 1991, h o wever, the Federal Circuit, in FilmTec , adopted th e new rule quoted above—a rule that disti n guishes between these equitable claims and, in effect, says that Cetus must win. The Federal Circuit provided n o8 BOARD OF T R US TEES OF LELAND STANFORD JU NIOR UNIV. v. ROCHE MOLECULAR SYSTEM S, INC. B REYER , J., diss enting explanation for what seems a significant change in the law. See 9 39 F. 2d, at 1572. Nor did it give any explan a tion for that change in its opinionin this case. See 583 F. 3d, at 841–842. The Federal Circuit’s FilmTec ru le undercuts the objectives of the Bayh-Dole Act. While th e cognoscenti may be able to meet the FilmTec rule in future contracts si mply by co pying the p r ecise word s blessed by the Federal Circuit, the rule nonetheless remains a tech

nical drafting trap for the unwary. See AAU Brief 35–36. But cf. an te , at 15 (assuming eas e of obtain ing effective assignments). It is un clear to me why, where the BayhDole Act is at issue, we should prefer the Federal Circuit’s FilmTecru le to the rule, of apparently muchlonger vin

tage, that would trea tboth a gre ements in this case a s creating merely equitable rights. At the sam e time, the Federal Cir c uit’s reasoning bring s about an interpretati on contraryto the int e ntion of the parties to the earlier, Stanford, c o ntract. Se e App. to Pet. for Cert. 1 20a (provis i on in Stan ford contra ct promising that Dr. Holodniy “will not enter into any agreement creating co pyrigh t or patent obligations in conflict wit h this agree m ent”). An d it runs counter to what may well have been the drafters’ reasonable expectations of how courts woul d interpret the relevant language. Second, we could interpret the B a yh-Dole Act as ordi

narily assuming, and thereby ordinarily requiring, an assignment of patent rights by the federally funded em

ployee to the federall y funded employer. I concede that this interpr e tation would treat fed e rally funded employees of contractors (subject to the Act) differently than the law ordinarily treats private sector employees. The Court long ago describ e d the latt er, private sector pri n ciples. In United S t a t esv. Dubili er Condens er Corp. , 289 U. S. 178 (1933), the Court expla i ned that a “patent is property, an d title to it can pass onl yby assignment.” Id., at 187. It then described two categories of p r ivate sector employee

-9 Cite as: 56 3 U

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B REYER , J., diss enting to-employer assignmen t s as follo w s : First, a person who is “employed to make an invention, who succeeds, dur

ing his term of service, in accomplishing that task, is bound to as sign to his employer any patent obtained.” Ibid. But, second, “if the employment be general, albeit it cover a field of labor and e ffort in the performance of which the em

ployee conceived the invention for which he obtained a patent, the contract is not so broadly constru ed as to require an assignment of the patent.” Ibid. The Court added that, because of “the peculiar nature of the act of invention,” courts are “reluctan[t] .

. . to imply or infer an agreement by the employee to assign his patent.” Id., at 188. And it applied these same principles govern

ing assignment to inventions made by employees of the United States. Id., at 1 89–190. Subsequently, however, the President promulgate d Executive Order 1009 6. Courts h a ve since found that th is Executive Order, not Dubilier, g o verns Federal Govern

ment employee-to-emp loyer pa tent right a ssignments. See, e.g., K aplanv. Co rcoran , 545 F. 2d 1073 , 1076–1077 (CA7 1976); Heineman n , 796 F. 2 d , at 455–456; Wrigh tv. United Sta t es , 164 F. 3d 267, 269 (CA5 199 9); Hala sv. United S t a t es , 28 Fed. Cl. 354, 364(1993). Th e Bayh-Dole Act seeks objectives roughly anal ogous to the objectives of the Executive Order. At leas t one agency has promulgated regulations that require Bayh -Do l e contractors to insist upon simi la r assignments. See NIH Policies, Procedures, and Forms, A “20–20” View of Invention Reporting to th e National In stitutes of Health (Sept. 22, 1995) (available in the Clerk of Court’s case file) (requiring aGovernme nt contractor, such as Stanford Univ ersity, to “have in place employee a greements requiring an inventor to ‘assign’ or10 BOARD OF T R US TEES OF LELAND STANFORD JU NIOR UNIV. v. ROCHE MOLECULAR SYSTEM S, INC. B REYER , J., diss enting give ownership of an invention to the organization upon acceptance of Federal funds,” as the Bayh-Dole Act “re

quire[s]”). And an am icusbrief, filed by major associa

tions of universities, sc ientis ts, medical resear chers, and others, argues that we should interpret the rules govern

ing assignments of the employees at issue here (and consequently the Ac t’s reference to “inventions of the con

tractor”) in a similar way. AAU Brief 5–14. The Distric tCourt inthis case adopted roughly this approach. 487 F. Su pp. 2d 109 9, 1118 (ND Cal. 200 7) (“[A]lthough title still vests in the named inventor, the inventor re mains under a legal obligation to assign his interest either to the g o vern ment or the nonp rofit contra c tor unless the inventor acts with in the stat utory fram e work to ret a in title”). And since a university often enters into a gra n t ag reement withth e Governm e nt for a r e searcher’s benefit andat his req u est, see J. Hall, Gran t Management 205 (201 0), implying such apresumption in favor of co mpliance with the g r a n t ag reement, and thu s with the Ba yh-Dole Act, would ordinarily be eq uitable. IV As I have suggested, these view s are tentative. That is because the parties h a ve not ful l y arguedt h ese matters (though one amicusbrief raises the license interpretatio n question, s ee Brief for Alexande rM. Shukh as Amicu s Curiae18– 24, and at l e ast one other can be read as sup

porting something like the equitable presu m ption I h a ve described, see AAU Brief 5–14). Cf. ante , at 5, n. 2. While I do not understand the majority to have foreclosed a similarly situated par t y from rais ing these matters in a future case, see ibid., I believe them relevant to our effort s to answer the question presen ted here. Cons equently, I would va cate the jud g ment of th e Federal Circuit an d remand thi s case to p r ovide the p a rties with an opportu

nity to argu e these, or r e lated, matters more fully.11 Cite as: 56 3 U

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B REYER , J., diss enting Because th e Court decides otherwise, with respect, I dissent.