Since Congress enacted the Bayh-Dole Act in 1980, universities have reaped hundreds of millions of dollars in licensing revenue
from inventions arising out of the work of faculty, graduate students, and staff researchers. Accordingly, virtually all U.S.
universities now have some kind of technology transfer policy in place under which the universities obtain patent rights to
their researchers' work. Typically, universities compel their employees to disclose and assign all patentable inventions developed
in the course of employment to the university as a condition of their employment.
Some states have taken these efforts a step further, however, by enacting regulations that automatically give state-supported
universities ownership rights to employee inventions by operation of law—even if the inventors never signed an assignment
agreement. One such Florida regulation provides that inventions developed by University of South Florida employees "in the
field or discipline in which the employee is employed" or "by using university support" are the property of USF. A Connecticut
law provides that the Connecticut State University System "shall be entitled to own the entire right, title, and interest"
to all inventions conceived by its employees, although inventors must be paid a share of any net proceeds. Other states, such
as Virginia, have enacted laws that provide that all employees of state-supported higher education institutions are automatically
bound to their institutions' IP policies as a condition of employment, whatever those policies may be.
Can states really enact such drastic laws? A Supreme Court case decided in June 2011 strongly suggests the answer is no; state
laws with automatic vesting provisions are in conflict with federal patent law and thus would be preempted and unenforceable.
In Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, the Supreme Court said that it is a "fundamental premise" of our patent system that inventors have an inchoate right to their
own inventions, and, while an inventor may assign his rights to others, the chain of ownership must be traceable back to the
inventor. In that case, the Supreme Court considered the question of whether the federal Bayh-Dole Act automatically vests
title in an inventor's employer by operation of law. It concluded that that interpretation would be inconsistent with the
entire scheme of federal patent law, dating back to the first Patent Act of 1790: "It would be noteworthy enough for Congress
to supplant one of the fundamental precepts of patent law and deprive inventors of rights in their own inventions ... Had
Congress intended such a sea change in intellectual property rights it would have said so clearly—not obliquely," through
ambiguous language in the Bayh-Dole Act.