Life Sciences Legal Update : Life Sciences Lawyers & Attorneys : Reed Smith Law Firm : Healthcare, Food and Drug Law, Biotechnology, Privacy, Product Liability

The Supreme Court's new Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc., et al., 563 U.S. ___ (2011) decision has significant implications for federally-funded inventions and any patents that may result. As Christopher Rissetto, Louis DePaul, and Stephanie Giese explain in this new alert, each federal government contractor and grantee should take the following steps:

• Establish agreements with employees that require each employee to make present assignments to the contractor or grantee for inventions made during his or her employment.
• Establish agreements with third parties, including consultants, that protect each party’s rights in inventions developed during collaborative efforts consistent with the terms of the government contract.
• Recognize that, as a federal contractor or grantee, it may be in breach of its federal contract or grant if it fails to obtain: (1) an assignment (preferably a present assignment) of a federally funded invention from an employee; or (2) an agreement on rights in a federally funded invention from a third-party collaborating organization or consultant.
• Recognize that the federal government may propose new rulemaking in connection with patent rights that may include regulations that require contractors to obtain (and perhaps certify that they have obtained) the assignments from employees, as well as agreements with collaborating organizations and consultants discussed above.
• Understand that patent rights are not implemented in federal contracts and grants uniformly across the federal agencies and, as such, a federal government contractor or grantee should carefully review its rights and responsibilities under the patent rights clauses in each of its contracts or grants.
• Recognize that under certain circumstances, a federal contractor or grantee should negotiate patent rights with the federal government.
• Recognize that, pursuant to the definition of “subject invention” in a federal government grant or contract, the federal government may obtain rights in inventions conceived at private expense, but first reduced to practice using federal funding, or alternatively, conceived using federal funding, but first reduced to practice at private expense. 
• Recognize that, as a federal government contractor or grantee, it may need to review the federal government contract or grant, as well as agreements made in connection with the contract or grant, to determine rights to a federally funded invention.
• Recognize that, to determine rights to a federally funded invention, third parties acquiring patent rights from a federal government contractor or grantee may need to review the federal government contract or grant, as well as agreements made in connection with the contract or grant. 
• While not specifically addressed by the Supreme Court, recognize that the precedent set in the Stanford v. Roche decision is likely to apply to large, for-profit companies, as well as to small businesses and nonprofit organizations that are performing federal government contracts or grants. See Exec. Order No. 12,591, para. 1(b)(4), 52 Fed. Reg. 13,414 (Apr. 10, 1987) (citingPresident’s Memorandum to the Heads of the Executive Departments and Agencies, Government Patent Policy (Feb. 18, 1983)).

Please contact one of the authors for more information regarding intellectual property rights under federal government contracts and grants.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

This post was written by Irene M. Recio and Lorraine M. Campos.

E-Verify is a free internet-based program operated by the U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services ("CIS") to allow employers to verify the employment eligibility of new hires. Until recently this had been a voluntary program. However, a new regulation went into effect on September 8th, which now requires that all Federal contracts awarded and solicitations issued after that date must include a clause mandating use of E-Verify for all employees hired during the contract period, and those employees who will perform work under the given contract. Employers are not required to use E-Verify with employees who perform support work on the contract, such as indirect or overhead functions. Institutions of higher education, state and local governments, and governments of federally recognized Native American tribes need only verify employees assigned to a covered federal contract (and not all newly hired employees, as is the case for all other Federal contractors).

This new requirement is of specific interest to health care providers and pharmaceutical and medical device manufacturers who have a Federal government contract containing the E-Verify clause, which requires the usage E-Verify with employees working on the Federal contract. Those providers will be required to use E-Verify with all new employees and with any employees assigned to work on the Federal contract. An important exception exists for health care providers only having an agreement with Medicare to provide patient services. In those situations the usage of E-Verify is not required. A provider will only be required to use E-Verify with employees assigned to a Federal contract when there is a separate contract with a Federal agency to provide specific health care items (i.e. pharmaceuticals or devices) or specific services delivered through a Government-sponsored health plan. In addition, Medicare administrative contractors and fiscal intermediaries will also be required to use the E-Verify System.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

This post was written by Lorraine Mullings Campos and Steven D. Tibbets.

On December 12, 2008 the Federal Acquisition Regulation (“FAR”) Council’s Final Rule – which applies to all federal government contracts in amounts greater than $5 million and more than 120 days in duration, including small business and commercial item contracts -- went into effect, requiring all federal contractors to disclose wrongdoing to the federal government, including certain violations of federal law, and violations of the False Claims Act. Specifically, contractors must “timely” disclose, in writing and to the Inspector General and the contracting officer (in that order), whenever, in connection with the award, performance, or closeout of a contract, the contractor has “credible evidence” that a principal, employee, agent, or subcontractor has committed a violation of federal criminal law involving fraud, conflict of interest, bribery or gratuity violations under Title 18 of the U.S. Code, or a violation of the False Claims Act.

In addition, the rule requires contractors to establish a “business ethics awareness and compliance program,” as well as an “internal control system” with certain attributes. In addition, significant overpayments by the government must be disclosed to the contracting officer. Failure to disclose violations of federal criminal law or violations of the False Claims Act may lead to criminal sanctions, civil penalties, suspension, or debarment.

Click here to view an an alert highlighting this and other major issues likely to impact government contracts businesses in the coming months and years.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

This post was written by Lorraine M. Campos, Gregory S. Jacobs and Brett D. Gerson.

On November 12, 2008, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council issued an amendment to the Federal Acquisition Regulation (“FAR”) to establish: (1) mandatory disclosure requirements for certain violations of federal criminal law and the False Claims Act; (2) requirements for contractors to establish and maintain specific internal controls to detect, prevent, and disclose improper conduct in connection with the award or performance of any government contract or subcontract; and (3) new causes for suspension and debarment. See 73 Fed. Reg. 219, 67,064 (Nov. 12, 2008). The final rule went into effect December 12, 2008, and applies to all federal government contracts in amounts greater than $5 million and more than 120 days in duration, including small business and commercial item contracts. Certain exceptions are discussed in the attached.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link