Opinion ID: 207967
Heading Depth: 4
Heading Rank: 2

Heading: Bona Fide Purchaser

Text: To overcome its defective chain of title, Stanford argues that it was a bona fide purchaser under 35 U.S.C § 261 (2006). Section 261 provides: “An assignment, grant or conveyance shall be void as against any subsequent purchaser or mortgagee for a valuable consideration, without notice, unless it is recorded in the Patent and Trademark Office within three months from its date or prior to the date of such subsequent purchase or mortgage.” “Generally, a bona fide purchaser is one who purchases legal title to property in good faith for valuable consideration, without notice of any other claim of interest in the property.” Rhone-Poulenc Agro, S.A. v. DeKalb Genetics Corp., 284 F.3d 1323, 1329 (Fed. Cir. 2002) (collecting cases). Stanford contends that it purchased Holodniy’s rights through his 1995 assignment of the parent application for “good and valuable consideration,” J.A. 5070, that Cetus and Roche never recorded their interests with the Patent and Trademark Office, and that Stanford received no notice of Holodniy’s countervailing assignment to Cetus. However, Stanford’s argument fails because there can be no genuine dispute that Stanford had at least constructive or inquiry notice of the VCA. While “the bona fide purchaser defense to patent infringement is a matter of federal law,” the doctrine draws upon common law principles. Rhone-Poulenc, 284 F.3d at 1328-30. “Notice” under § 261 can include constructive or inquiry notice, in addition to actual notice. See FilmTec, 939 F.2d at 1574 (noting that either actual or inquiry notice might defeat a bona fide purchaser defense). Therefore, Stanford’s claim that it remained ignorant of the VCA until shortly before the current litigation is inconsequential. The CPA established an employment relationship between Holodniy 2008-1509, -1510 14 and Stanford, and Holodniy’s PCR work at Cetus related directly to his infectious disease research at the university. J.A. 741. Moreover, Merigan, Holodniy’s supervisor at Stanford, directed Holodniy to work with Cetus and himself executed Materials Transfer Agreements with Cetus that allocated intellectual property rights. See id. 4504-05. An organization can be charged with notice of its employees’ assignments. See FilmTec, 939 F.2d at 1574 (noting that where a company founder signed away his patent rights, the company “may well be deemed to have had actual notice of an assignment”); see also Santillan v. Roman Catholic Bishop of Fresno, 163 Cal. App. 4th 4, 11 (Ct. App. 2008) (“For this purpose, there is no difference between constructive and actual notice. The rule applies to employees, who are agents of their employer.”) (citations omitted); 3 Witkin Summary of California Law of Agency § 150 (“[A] corporation may be charged with notice of matters known to its employees.”). The fact that Holodniy promised in the CPA to “not enter into any agreement creating copyright or patent obligations in conflict with this agreement” does not prevent imputation of notice to Stanford. See Restatement (Third) of Agency § 5.04 cmt. b (2006) (“Ordinarily, an agent’s failure to disclose a material fact to a principal does not defeat imputation, nor does the fact that the agent’s action otherwise constitutes a breach of a duty owed the principal.”). Stanford claims that Holodniy signed the VCA on his own behalf, not Stanford’s. Although the VCA states that Holodniy was “[a]cting as a consultant and an independent contractor,” the context of the VCA reveals that this refers to Holodniy’s status as a consultant to Cetus, not Stanford. The VCA specified a limited time period for Holodniy’s visits, restricted him from “perform[ing] consulting services” for other 2008-1509, -1510 15 companies, and listed his address as “Stanford University Medical Center, Division of Infectious Disease.” J.A. 1657-58. Stanford also argues that there was no evidence that Holodniy “had authority to act as Stanford’s agent in assigning patent rights.” Stanford’s Reply Br. 50. This contention misses the mark—Holodniy signed away his individual rights as an inventor, not Stanford’s, while performing work for Stanford after promising to assign his rights to the university. Stanford identifies no other disputed facts that could establish its bona fide purchaser status, and thus cannot prevail on this theory.