Shaw v. University of California

In 1986, the University of California (the university) (defendant) hired Douglas Shaw (plaintiff) as a research professor in the field of cultivating fruit. At that time, the university asked Shaw to sign a single-page, two-sided form document that included a half-page oath of allegiance, a half-page “patent agreement,” and the “university policy regarding patents” (patent policy). The patent policy began on one side of a page and continued onto the second side. The policy provided that all employees who used university facilities or funds were required to assign their inventions and patents to the university. The policy further provided that employees who had agreed to assign their inventions were entitled to receive 50 percent of net royalties received by the university. The patent agreement required the disclosure of patentable inventions and assignments of patent interests. The patent agreement stated that Shaw should “read the patent policy located on reverse side and above,” noted that Shaw’s employment constituted consideration for entering the agreement, and explicitly referenced Shaw’s rights under the patent policy. Shaw signed the patent agreement. In 1990, the university revised the patent policy so that royalties would be shared at less than a flat rate of 50 percent. Shaw consistently objected to the revised policy as it pertained to him. Thereafter, Shaw invented six new strawberry cultivars. The university attempted to apply its 1990 patent policy to Shaw and requested an assignment of his patent interest. Shaw sued the university, seeking a declaration that he was entitled to 50 percent of royalties consistent with the patent agreement and that the university could not unilaterally modify the patent agreement. The trial court granted Shaw’s motion for summary judgment, and the university appealed.