© 2004, Sterne, Kessler, Goldstein & Fox P.L.L.C.

IP Issues in NanotechnologyA View from Around the World

NSTI Nanotech2004

ByDavid Cornwell

Donald Featherstone

March 10, 2004 Boston, MA

21

Major Legal Issues

Overview of Intellectual PropertyPatentabilityOwnership/CollaborationInfringementOther Legal Issues

31

Intellectual Property

Patents (utility)Patents (design)Trade SecretsKnow-howCopyrightsTrademarksTrade Dress

41

Trade Secrets

In simple terms, a trade secret is something that is not generally known to the public and which gives the possessor of the information a competitive edge or market advantage.

51

Trade Secrets (Examples)

Recipe for a Product (Coca Cola)Formula for a Material (leading cymbal manufacturer has kept the formula secret for 300 years)Computer Source CodeCustomer Lists

61

Copyrights

Protect expression of an ideaDoes not protect underlying idea

71

Copyrights

Rights are protected upon creationThe right may be registeredFor works created after January 1, 1978, the term is the life of the author plus 70 yearsWorks Made for Hire

81

Utility Patents

Prevent Others from– Making– Using– Selling– Offering for Sale– Importing (data?)

For a period of 20 years from the filing date

91

Utility Patents

In the U.S. we have a “first to invent” system. Thus, evidence of “conception” is important and evidence of “reduction to practice” is important.In most countries, if two parties are attempting to obtain protection for the same subject matter, the “first to file” wins.

101

Utility Patents

The scope of a patent is determined by the “claims.”An inventor of any claim is an inventor of the entire patent.Inventorship can have an important effect on ownership.

111

Patentability?

Can something be patentable based solely on size?Does the patent office require proof that the inventor can actually make the invention?Does the patent office require a utility of the invention and is this a problem?Will patentability still be based on unpredictable results, new functionality and new applications of nanotechnology to solve problems? Can quantum or other physics/chemical properties be patented?

121

Patentability? (cont.)

• Mechanical/chemical/electrical lines blur at the nano scale– Quantum, Van der Waals, surface effects take

over• Perhaps focus on unique properties

– Optical properties– Electrical properties– Opto-electrical properties– Structural properties

Nanowires

131

Quantum Dots

5nm Quantum Dot(viewed through a

transmission electron microscope)

Family of Qdot particles excited with single excitation source

Qdots used to label human mitochondria cells

141

NEMS & Life Sciences

DetectorsDrug deliveryLab-on-a-chip, etc.

151

• Electronicse.g., LCDs, Semiconductors, Memory

• Energye.g., solar cells, fuel cells, membranes

• Materialse.g., powders, polymers, gecko-feet

• Securitye.g., molecular level barcoding, chemical detection, sensors

• Nano Toolse.g., STMs, AFMs

Perspective

Pervasive Examples

The wide range of applications is one force driving the excitement surrounding nano.

161

General Ownership Rules

Inventor ownership is defaultCompany owns if employee is paid to inventContract usually addresses employeesWhat about the Janitor who invents on company time?What about Contractors?

171

Thoughts About Strategic Alliances

Always consider identification and allocation of IP rights.Always put agreement in writing.Do not assume that 50-50 split means that you are protected.

181

Example A

If X and Y agree that each owns 50% of a patent

Can X grant a license to Z?If so, does X share royalties with Y?

191

Technology Transfer

Bayh-Dole - Investment through government funding of non-profits– Encourages active commercialization of federally

funded inventions– Governments/agency retains license to practice

inventionUniversity license to small businesses

– Possible assignment with sponsor waiver– Detailed IP management and reporting

requirements

201

Licensing StatisticsAmerican Universities

2000 2001 2002Institutions reporting 190 194 212Research expenditures ($B) 29.5 31.8 37# Invention disclosures 13,032 13,569 15,573# U.S. patent applications 6,375 6,812 7,741# Licenses and options 4,362 4,058 4,673Licensing income ($M) 1,260 1,071 1,267New start-ups 454 494 450

Source: Association of University Technology Managers: autm@autm.net

211

Infringement Problem (Part I)

Identifying nanoproductsInventor invents nanoproduct (for use in macroproduct) and patents worldwideCopyist reads patent and makes knockoff macroproduct that incorporates nanoproductHow do enforcing agents (e.g., customs officials) recognize that macroproduct infringes patent for nanoproduct?Inventor might take the position:

– Protect future inventions under trade secret laws

221

Infringement Problem (Part II)

• United States • China • Japan • India • Germany • United Kingdom • France • Italy • Russia • Brazil • Mexico • South Korea • Canada

• Spain • Indonesia • Australia • Turkey • Iran • Thailand • South Africa • Netherlands • Taiwan • Argentina • Poland • Philippines • Pakistan

Highlighted countries are included in 2003 USTR “Special 301 Report”

231

Regulation On Research

Ignorance breads fear - exaggerated fears of self-replication and "gray goo problem“

– Macro-scale robots have not taken us over, why will nano-bots?

Like biotechnology, minimize catastrophe risks– Restriction on development of organisms that cannot readily

survive outside of the lab– Ban or limit creation of self-replicating organisms/devices– Limit/more strictly regulate research into military applications– Government vs. private/self regulation

241

Will new legal rules be required for uniqueissues?

Too few may result in environmental and human safety hazards, make investors uncertain or forestall researchToo many may stagnate R&D, or promote "black market" research or drive research off-shore to unregulated localsAnalogies to other regulation/reform "hot topics“

– Medicines– Chemical and biological weapons– Nuclear energy/arms– Stem cell research– Cloning/genetic engineering– Bioengineered food

251

Other Legal Issues

Will existing legal rules readily extend to nanotechnology?International Trade Laws/Regulations/TreatiesInter. Traffic in Arms Regs. (ITAR) - State Dept.

– Controls export of predominantly military "technical data", "defense articles" and "defense services“

– Numerous general and university exemptions to control categories

Export Admin. Regs. (EAR) - Commerce Dept.– Controls export of dual-use "technology" and "commodities“– Commerce control list - export licenses– Foreign filing license

Office of Foreign Assets Control (OFAC) - Treasury Dept.Environmental Laws

261

International Patentability (Part I)

• Can something be patentable based solely on size?

• Does the patent office require proof that the inventor can actually make the invention?

• Does the patent office require a utility of the invention and is this a problem?

• Will patentability still be based on unpredictable results, new functionality and new applications of nanotechnology to solve problems?

271

International Patentability (Part II)

Do they differ for nanotechnology?– Statutory subject matter?

Do special examination procedures exist?Are there special examiners for nanotechnology?What is the pendency for a nanotechnology patent application?How does this differ from the pendency in other technologies?

281

Patentability Standards

Subtle differences that may be important:United States“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter . . .”Europe“European patents shall be granted for any inventions which aresusceptible of industrial application . . . The following in particular shall not be regarded as inventions . . . discoveries . . .”Japan“Any person who has made an industrially applicable invention may obtain a patent therefore . . .”

291

Japan

Japanese National Science and Technology Plan for 2001-2005 – Plans to develop nanotechnology– Part of effort to revitalize economy

Investments by Japanese government:– $600M (2001) $800M (2002) $900M (2003)– Companies interested in nanotechnology: NEC,

Hitachi, Sony

301

Japan (Part II)

Patentability Standards– Patent application must explain utility of invention– “Size” may be patentable if unpredictable/unexpected

results– Method for making nanodevice likely is patentable

Patent Office Initiatives– Special examination group for nanotechnology created– Have guidelines for assessing patentability of business

methods– Anticipated pendency: 21-30 months– Examination can be expedited in same manner as for

other technologies

311

South Korea (Part I)

In 2001, Korean government initiated 10-year plan to develop nanotechnology

– Infrastructure for developing nanotechnologies to be in place by 2005(KAIST (university) installing nanotech fabrication center)

– 10 nanotechnologies to be developed by 2010– Budget for plan: $1.2B– 2003 investments by South Korean government: $177M

Companies interested in nanotechnology: Samsung Electronics, Samsung SDI, Hynics, LG Electronics

321

South Korea (Part II)

Patentability Standards– Patent application must explain utility of invention– “Size” may be patentable if unexpected effects or

prior art could not realize disclosed size (application must explain how size realized)

– New style of claiming being developed to allow, for example, describing physical/chemical properties by a distribution function

331

South Korea (Part III)

Patent Office Initiatives– Nanotechnology applications typically assigned to

group B81 or B82– 2000 (3 nanotech applications); 2002 (30 nanotech

applications)– Anticipated pendency: 20-24 months– Examination can be expedited in same manner as

for other technologies– Method for making nanodevice likely is patentable

341

South Korea (Part IV)

Ownership Issues– Much current investment in nanotechnology is through

university systems where ownership between university and researcher is not always clear

Remuneration Issues– Recent Japanese court decisions likely to impact Korean

court– Decisions involved compensation of inventors under

“work-for-hire”– In Japanese decisions, awarded inventors large sums of

money

351

Taiwan (Part I)

Taiwanese government is forming Association for Promotion of Industrial Application of Nanotechnology for research institutes and private enterprises

– Universities have established nanoscience centers– Private enterprises have invested in nanotechnology

Patentability Standards– Patent application must explain utility of invention– “Size” likely is patentable so long as novelty and inventive step

shown

361

Taiwan (Part II)

Patent Office Initiatives– No nanotechnology examination group has been

created– Anticipated pendency: 12-24 months– Examination can be expedited in same manner as

for other technologies (after patent application has published)

371

China (Part I)

China is believed to be investing in nanotechnology research and developmentPatentability Standards– Application must prove with data that invention has

been made– Patent application must explain utility of invention– “Size” likely is patentable so long as novelty and

inventive step shown

381

China (Part II)

Patent Office Initiatives– No nanotechnology examination group has been

created– Anticipated pendency: 36 months– No procedure for expedited examination of

nanotechnology (or other fields)

391

With Special Thanks To

Timothy Doyle, Esq., at SKG&FTMI Associates International Legal Services (Tokyo, Japan)

– Yoshiyuki InabaTani & Abe (Tokyo, Japan)

– Yoshikazu TaniKim & Chang (Seoul, Korea)

– Chun Yang– Seok-Chan Baek– Andrew Choung

Kang & Lee (Seoul, Korea)– Y.S. Kang

Saint Island International Patent & Law Offices (Taipei, Taiwan)– Hong-Yue Du

CCPIT Patent and Trademark Law Office (Beijing, China)– Chuanhong Long