1. IP Issues in Nanotechnology
A View from Around the World
NSTI Nanotech2004
By
David Cornwell
Donald Featherstone
March 10, 2004
Boston, MA
© 2004, Sterne, Kessler, Goldstein & Fox P.L.L.C.

2. Major Legal Issues
Overview of Intellectual Property
Patentability
Ownership/Collaboration
Infringement
Other Legal Issues
1 2

3. Intellectual Property
Patents (utility)
Patents (design)
Trade Secrets
Know-how
Copyrights
Trademarks
Trade Dress
1 3

4. 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.
1 4

5. 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 Code
Customer Lists
1 5

6. Copyrights
Protect expression of an idea
Does not protect underlying idea
1 6

7. Copyrights
Rights are protected upon creation
The right may be registered
For works created after January 1, 1978, the
term is the life of the author plus 70 years
Works Made for Hire
1 7

8. Utility Patents
Prevent Others from
Making
–
Using
–
Selling
–
Offering for Sale
–
Importing (data?)
–
For a period of 20 years from the filing date
1 8

9. 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.
1 9

10. 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.
1 10

11. 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?
1 11

12. 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
1 12

13. 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
1 13

14. NEMS & Life Sciences
Detectors
Drug delivery
Lab-on-a-chip, etc.
1 14

15. Pervasive Examples
• Security
e.g., molecular level barcoding, chemical detection, sensors
• Electronics
e.g., LCDs, Semiconductors, Memory
• Materials
e.g., powders, polymers, gecko-feet
• Energy
e.g., solar cells, fuel cells, membranes
• Nano Tools Perspective
e.g., STMs, AFMs The wide range of applications is one force
driving the excitement surrounding nano.
1 15

16. General Ownership Rules
Inventor ownership is default
Company owns if employee is paid to invent
Contract usually addresses employees
What about the Janitor who invents on
company time?
What about Contractors?
1 16

17. 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.
1 17

18. 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?
1 18

19. Technology Transfer
Bayh-Dole - Investment through
government funding of non-profits
Encourages active commercialization of federally
–
funded inventions
Governments/agency retains license to practice
–
invention
University license to small businesses
Possible assignment with sponsor waiver
–
Detailed IP management and reporting
–
requirements
1 19

20. Licensing Statistics
American Universities
2000 2001 2002
Institutions reporting 190 194 212
Research expenditures ($B) 29.5 31.8 37
# Invention disclosures 13,032 13,569 15,573
# U.S. patent applications 6,375 6,812 7,741
# Licenses and options 4,362 4,058 4,673
Licensing income ($M) 1,260 1,071 1,267
New start-ups 454 494 450
Source: Association of University Technology
Managers: autm@autm.net
1 20

21. Infringement Problem (Part I)
Identifying nanoproducts
Inventor invents nanoproduct (for use in macroproduct)
and patents worldwide
Copyist reads patent and makes knockoff
macroproduct that incorporates nanoproduct
How 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
–
1 21

22. Infringement Problem (Part II)
United States Spain
• •
China Indonesia
• •
Japan Australia
• •
India Turkey
• •
Germany Iran
• •
United Kingdom Thailand
• •
France South Africa
• •
Italy Netherlands
• •
Russia Taiwan
• •
Brazil Argentina
• •
Mexico Poland
• •
South Korea Philippines
• •
Canada Pakistan
• •
Highlighted countries are included in 2003 USTR “Special 301 Report”
1 22

23. Regulation On Research
Ignorance breads fear - exaggerated fears of self-
replication and quot;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
–
1 23

24. Will new legal rules be required for unique
issues?
Too few may result in environmental and human safety
hazards, make investors uncertain or forestall research
Too many may stagnate R&D, or promote quot;black
marketquot; research or drive research off-shore to
unregulated locals
Analogies to other regulation/reform quot;hot topics“
Medicines
–
Chemical and biological weapons
–
Nuclear energy/arms
–
Stem cell research
–
Cloning/genetic engineering
–
Bioengineered food
–
1 24

25. Other Legal Issues
Will existing legal rules readily extend to nanotechnology?
International Trade Laws/Regulations/Treaties
Inter. Traffic in Arms Regs. (ITAR) - State Dept.
Controls export of predominantly military quot;technical dataquot;, quot;defense articlesquot; and quot;defense
–
services“
Numerous general and university exemptions to control categories
–
Export Admin. Regs. (EAR) - Commerce Dept.
Controls export of dual-use quot;technologyquot; and quot;commodities“
–
Commerce control list - export licenses
–
Foreign filing license
–
Office of Foreign Assets Control (OFAC) - Treasury Dept.
Environmental Laws
1 25

26. 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?
1 26

27. 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?
1 27

28. 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 are
susceptible 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 . . .”
1 28

29. 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
1 29

30. 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
1 30

31. 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
1 31

32. 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
1 32

33. 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
–
1 33

34. 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
1 34

35. 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
1 35

36. 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)
1 36

37. China (Part I)
China is believed to be investing in
nanotechnology research and development
Patentability 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
1 37

38. 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)
1 38

39. With Special Thanks To
Timothy Doyle, Esq., at SKG&F
TMI Associates International Legal Services (Tokyo, Japan)
Yoshiyuki Inaba
–
Tani & Abe (Tokyo, Japan)
Yoshikazu Tani
–
Kim & 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
–
1 39