News Briefs from Around the State

House Tight-lipped on Budget Proposal

ANNAPOLIS — House Republicans are expected to propose a 1 percent across-the-board reduction for state agencies as part of a series of budget cuts the minority party will roll out later today.

Republican delegates have been tight-lipped about releasing details of their proposal, which will be presented to the House Appropriations Committee at a briefing following a 1:30 p.m. hearing. But GOP leadership is set to outline up to $1 billion in additional budget cuts, according to

"We're going to present a budget proposal today that would fix our immediate problem and put Maryland on a long-term trajectory to make us business friendly and reduce the tax burden on Maryland citizens," said House Minority Leader Anthony O'Donnell.

Outside of the 1 percent reduction for state agencies, O'Donnell declined to comment on the GOP budget proposal.

Delegate Gail Bates, the ranking Republican on the House Appropriations Committee, offered one extra tidbit. She said this year's alternative budget proposal will call for a repeal of the increase to the sales and corporate income taxes passed during the 2007 special session.

"That's essential for creating a more business-friendly climate," she said.

The 1 percent reductions to state agencies is "a small part" of a wide range of ideas House Republicans will propose, Bates said, declining to release details of the plan.

"We're looking at the drivers of the budget and looking for efficiencies," Bates said.

Last year, Republicans called for hundreds of millions in additional cuts to the state budget. The Democratic-controlled House rejected the proposal.

—By Capital News Service's David Saleh Rauf

Supreme Court Looks at Inventor's Rights

WASHINGTON — The Supreme Court heard arguments Monday in a case that could decide whether university researchers in Maryland and nationwide have control over the ownership rights to their innovations when federal funding is involved.

The case, Stanford v. Roche, had three main parties: Stanford University, the United States government and Roche Molecular Systems (formerly Cetus Corporation). It centers around Stanford professor Mark Holodniy's research into an HIV/AIDS test.

In 1988, Holodniy signed a patent agreement with Stanford assigning it the rights to his future innovations. He then began visiting Cetus to learn about the company's polymerase chain reaction (PCR) technology, which was integral to his HIV/AIDS test. He also signed a contract with Cetus giving it the rights to any inventions he might devise from his work there.

Cetus became Roche in 1991 and the company started selling HIV detection kits based on Holodniy's work. Stanford later obtained three patents related to the professor's research and sued Roche for patent infringement.

Stanford's lawyers argued that under the Bayh-Dole Act of 1980 the university had first dibs on any ownership rights to Holodniy's work because he was a university employee, and that any contract he signed with Cetus/Roche is void because he didn't own the rights to his inventions.

"Being covered by Bayh-Dole means he lacks the power to transfer title to someone else," Stanford's lawyer, Donald Ayer, said in court Monday.

A district court initially ruled in Stanford's favor on those grounds, but the Federal Circuit Court overturned, ruling that Holodniy did have the right to transfer title of his work.

Kathi Westcott is associate counsel for the American Association of University Professors, which filed a joint amicus brief supporting the Federal Circuit court's decision. She said the Bayh-Dole Act was only intended to reduce bureaucracy and help bring innovations to the market, while Stanford was trying to use it to strip individual inventors of their ownership rights.

"I certainly think that that is what Stanford is arguing and our position is that they're asking the court to read the Bayh-Dole Act much more broadly than it was intended," Westcott said in a phone interview Monday.

Justice Ruth Bader Ginsburg seemed to want to bring the case back to its origins as a simple contract dispute, noting that if Stanford had written a more airtight agreement with Holodniy, the case would not have ended up before the Supreme Court.

But Holodniy's work at Stanford was funded in part by the Bethesda-based National Institutes of Health and that federal money complicates things. Ayer argued that the Federal Circuit's judgment would not only allow researchers to cut universities out of ownership rights in third-party deals, it would also cut out the U.S. government's ownership rights, which are second only to the contracting institution's under Bayh-Dole when federal funding is involved.

But Justice Antonin Scalia seemed skeptical, noting that the government could just withhold federal funds from a project unless the researchers involved agreed not to transfer the rights to their inventions to a third party.

Roche attorney Mark Fleming said that the government also had other leverage, like the ability to grab patent rights by eminent domain, and needed no help from a new interpretation of Bayh-Dole to ensure its interests. He said overturning the Federal Circuit court's ruling could cheat Roche out of any ownership rights it had to an invention that Holodniy never would have developed without the company's help.

"He showed up because he did not know how to do the PCR," Fleming said. "That was the basis of this invention. ... To this day Stanford hasn't explained what else Cetus could have done to protect its research."

Justice Stephen Breyer challenged Fleming, saying that if Roche was right, then Bayh and Dole had written legislation that was so easy to subvert that the U.S. and its contracting universities might never get licensing rights to federally-funded innovations. Chief Justice John Roberts echoed that point a moment later.

Fleming countered, saying the current interpretation of Bayh-Dole had been perfectly adequate for the last 30 years. Breyer again pressed him on his view of Bayh-Dole and at one point the two briefly tried to talk over each other. But afterward Breyer was conciliatory. "Your answer's not as bad as I think," he said, drawing a laugh from the gallery.

—By Capital News Service's Andy Marso

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