## Facts

- Physician-scientists employed by a nonprofit cancer research institute participated in federally funded research that led to the purification of granulocyte colony-stimulating factor (G-CSF).
- Under the institute’s invention and patent policy, the institute owned employee inventions and, if a patent issued, shared royalties with inventors on a sliding scale; the policy disclaimed any obligation to share royalties if a patent application was denied, while allowing discretionary payments.
- The institute’s work was subject to a federal institutional patent agreement and the Bayh–Dole Act, including a requirement that federal funding agreements include a royalty-sharing provision.
- The institute’s patent application for G-CSF was denied, but the institute exercised discretion to share royalties anyway, distributing 5% of gross royalties among five scientists; each plaintiff received $505,490 and was told future royalties would be paid under the same formula.
- Plaintiffs sued seeking a greater share of royalties, asserting federal claims under Bayh–Dole and the federal funding agreement, plus state-law claims tied to the institute’s internal policy and related theories.
- The institute moved to dismiss for lack of subject-matter jurisdiction and failure to state a claim.

## Issues

1. Whether the Bayh–Dole Act creates an express or implied private right of action allowing inventors to sue a federally funded nonprofit contractor to enforce royalty-sharing.
2. Whether inventors are intended third-party beneficiaries of the federal institutional patent agreement or funding agreement with standing to enforce royalty-sharing terms.
3. Whether the complaint stated a substantial federal question supporting federal-question jurisdiction.
4. Whether the court should retain supplemental jurisdiction over state-law claims after dismissal of the federal claims.

## Decision

- The court granted the motion to dismiss under Rules 12(b)(1) and 12(b)(6) and dismissed the complaint in its entirety.
- The Bayh–Dole Act did not provide inventors a private right of action to enforce royalty-sharing against the contractor.
- Plaintiffs were not intended third-party beneficiaries of the federal agreement and could not sue to enforce it.
- With no viable federal claim, federal-question jurisdiction was lacking.
- The court declined to exercise supplemental jurisdiction over the remaining state-law claims.

## Legal Principles

- A statute’s requirement that federal funding agreements include a royalty-sharing term does not, without clear congressional intent, create a private damages remedy for inventors against contractors.
- Bayh–Dole enforcement is primarily administrative through federal agency oversight and contractual remedies, not private litigation by individual inventors.
- Third-party beneficiary standing requires intent to confer enforceable rights on the third party; incidental benefits from a government–contractor agreement are insufficient.
- When federal claims are dismissed at the pleading stage and no substantial federal question remains, a federal court may dismiss state-law claims rather than adjudicate them under supplemental jurisdiction.

## Conclusion

The district court dismissed inventors’ claims for additional royalties from a federally funded discovery because Bayh–Dole supplied no private cause of action and the federal funding agreement did not make the inventors intended beneficiaries; absent a viable federal basis, the court dismissed the associated state-law claims.


Platzer v. Sloan-Kettering Inst. for Cancer Rsch., 787 F. Supp. 360 (S.D.N.Y. 1992)