Issue



Ignorance over patent reforms could make your nano tech fortune a flash in the pan


05/01/2006







In 1849, gold was found at Sutter’s Mill in California. Alas, John Sutter never prospered by this discovery. The Supreme Court ultimately held he did not have proper title to this property. In 1889, Alexander Smith laid claim to valuable property during the Oklahoma land rush. Unfortunately, the Supreme Court held that he lost the property due to the illegal actions he took during his rush for land. In today’s emerging field of nanotechnology, where the mad rush has moved from real property to intellectual property, nanotechnology pioneers need to understand and adhere to the law when staking their property claims.

Patent law reform has become a Congressional agenda item as companies work to protect the nation’s technological innovations. Reforms focused on improving the quality of issued patents and curbing abusive patent litigation, however, could adversely affect nanotechnology innovators such as university researchers, sole inventors or small companies. As these potential patent law changes evolve, typical nanotechnology pioneers will need to pay close attention to cultivate their intellectual properties in view of these changes. Otherwise, the impact will hardly be nano.

The manner in which Congress has proposed to improve the quality of issued patents will tend to increase the costs to obtain a patent, an increase that smaller entities will feel more. Its proposed method to curb abusive patent litigation generally reduces the risk for third parties to infringe patents, lowering the value of the patents received.

This does not mean that Congress’ proposed changes to the patent laws are wrongful per se. To the contrary, the ramifications depend on a parties’ viewpoint (i.e., a large company vs. small, a patentee as opposed to an alleged infringer, or a technologist in an emerging technology as compared to a mature technology). However, since the typical nanotechnology innovator is a small entity, potential changes to the U.S. patent laws can have a big impact.

In its proposed changes, Congress has elected to bypass the first-to-invent standard and adopt a first-to-file scheme. This means the proverbial race to the patent office will be won by the swift and the cost of protracted interference proceedings between inventors will presumably be a thing of the past. Despite this proposed change, inventors must still continue documenting their inventorship process because only the true inventor may obtain a patent. The net result favors a strategy of filing patent applications (particularly provisional patent applications) early and often to protect a party’s innovations.

Congress also proposes to eliminate the “best mode” requirement (disclosing the best embodiment known by them when filing their patent application). Such requirement promoted full disclosure of the invention, rewarding people who were willing to share what they had discovered. Eliminating “best mode” will force nanotechnology patent applicants to walk a fine line between how much to disclose of their invention (to obtain a strong patent) and how much to hold back (to retain trade secrets to give themselves a competitive edge). In emerging fields, it is difficult to determine which aspect will ultimately have long-term value.

This leads to another change Congress proposes, namely allowing the patent office to put limitations on continuation applications. The present theory is that applicants could watch the industry develop around certain technology, and then amend their claims in a continuation application to cover these new developments. Again, the difficulty in patents and patent applications for emerging technologies is that there is less past knowledge of what will become important in the field as time progresses. Emerging companies must strive to make this determination early and to take steps to show they are not abusing the system to unfairly broaden their property claims.

Another change proffered by Congress is the ability of third parties to oppose patents for a period of time after they issue from the patent office. Patentees are legitimately concerned that the opposition process is subject to abuse by third parties. For instance, a large entity concerned about the issuance of a patent for a small entity may oppose the patent. The small entity would have little choice and endure a long and costly opposition proceeding well before any legitimate damages have begun to accrue. By such process, the large entity can prevail by attrition because the small entity may not have the resources or wherewithal to fight the opposition.

These are not the only changes proposed. Congress has targeted an applicant’s duty of candor, willful infringement, apportionment of patent damages, injunctive relief, prior user rights, venue issues and more. As these proposed changes are not yet final, they still may be modified or withdrawn before enactment.

What is important to realize now is that regardless of what the final changes to the patent laws turn out to be, nanotechnology pioneers must adapt to these new rules. Otherwise they will be like John Sutter, who literally stood on top of a pile of gold but somehow failed to own any of it.

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Ross Garsson is chair of the intellectual property section at Winstead Sechrest & Minick P.C. He can be reached at rgarsson@winstead.com.