Chapter 2

CHAPTER 2
PROTECTION OF NANOTECHNOLGY
SIGNIFICANCE OF PATENT
Intellectual property, a product or creation of the human mind, is an
intangible asset representing humankind’s only truly inexhaustible resource. Patents are
the strongest form of intellectual property protection and are essential to the growth of the
nanotechnology industry. A patent is a legal right granted by a Patent Office for a new
invention. In most countries, the right has a maximum lifetime of 20 years from the date
of the patent application1. To obtain a patent, it is normally necessary to apply to the
Patent Office of the country in which patent rights are desired. If it is decided that the
invention is patentable, the patent will be granted2. A patent typically belongs to the
inventor, unless he or she has given the rights to someone else.
In order to be patentable, the invention must at least meet the
following conditions3: Fist one it must be new; that is, the invention must not have been
made public in any way before the application to the Patent Office is made. Secondly it
must involve an inventive step. This means that the invention must not simply be an
obvious development of something that is already known. Thirdly it must be capable of
being made or used in any kind of industry. And finally it must not fall into an excluded
category. Examples include works of art, scientific theories and mathematical methods.
In short, a valid patent gives its owner the legal right to
prevent others, within the jurisdiction of the patent, from using the invention for
generally commercial purposes without the patent owner’s permission. Thus, the buying,
selling or licensing of a patent is, in effect, the trading in this legal right4. However,
although a patent may give its owner a legal right to prevent unauthorized use of the
1
D’Amato,Antony and Long Doriss Estelle, International Intellectual Property Law, 1st ed,Kluwer Law
International,London,1997, Page 32
2
Id
3
Bainbridge David I, Intellectual property,4th ed, Financial Times Management, London, 1999,Page 15
4
Closton Catherine, Principles of Intellectual Property Law, 1ST ed.,Cavendish Publishing ltd,London 1998
page 18
1
patented invention by others, it does not automatically give the owner the right to use the
invention. Patents are granted to an invention (which may include a product, process,
machine, or composition of matter) as long as it is “novel, obvious, and useful” 5. Without
IP protection, would-be imitators could quickly copy someone else’s invention and reap
the rewards without suffering from the cost associated with developing the artifact and
securing the patent. This would reduce the incentive for people to innovate thereby
slowing down the rate of technological growth and advancement
PATENTING NANOTECHNOLOGY
In the area of nanotechnology, giving incentives by
providing for patents therefore seems to be necessary. A typical trend for an emerging
field, like nanotechnology, is that parties interested in the field will try to acquire as
many patents as fast as possible in hopes that their portfolio will contain an IP that will
be fundamental to one or more profitable products in the future 6. Hence, many of the
most basic ideas in nanotechnology are either already patented or may well end up being
patented. However, this presents a problem for the USPTO, which is not familiar with the
emerging technology. This general observation has, however, to be modified when it
comes to naturally occurring substances, which is reflected in the legal problems
concerning the distinction between invention and discovery7.
Naturally Occurring Products
It is obvious that the products of nanotechnology cannot be considered as

products of nature and so patentable. Furthermore, nanotechnology products are
patentable as man-made inventions8. Usefulness, novelty, adequate disclosure, and non-
obviousness are all required for a patent regarding a nanotechnology invention to be valid
as well but the substance of the terms has to be adjusted to the context of nanotechnology
5
Department of Justice and Federal Trade Commission. Antitrust Guidelines for the Licensing of
Intellectual Property (“IP Guidelines”). 6, April 1995. Viewed on July 5, 2005. Available Online:
http://www.usdoj.gov/atr/public/guidelines/ipguide.htm
6
Herbert Zech, Nanotechnology – New Challenges for Patent Law?, SCRIPTed 'Governance of New
Technologies' ,Volume 6, Issue 1, April 2009
7
Id
8
Id
2
and the characteristics of the new science in order a discovery to be transformed into an
invention. The principles of purification or modification of products of nature are hardly
applicable to nanotechnology inventions. Nanotechnology often draws on blueprints
provided by nature, e.g. complex proteins represent naturally occurring nanomachines9.
Thus drawing on “inventions” already existent in nature creates problems with several of
the patentability requirements.
In the question of whether the innovation is an invention or

just a discovery arises10. This question can be answered that the mere description of such
a substance is not a patentable invention but a discovery. If, however, a way of
synthesising and/or isolating the substance is found, the discovery becomes an
invention.11 The difference is that the inventor has shown a way of providing the
substance instead of merely describing it. The second problem is novelty12. The novelty
depends on the availability of an invention to the public13. Finally, the question of
whether such an invention satisfies the requirement of inventive step14 remains. When
naturally occurring substances are artificially modified, and the modification is inventive,
patenting the resulting product meets no objections. The same is true for the inventive
isolation and synthesis of a newly discovered natural substance.
With nanotechnology, this problem becomes even more acute,

since naturally occurring substances can be highly complex nanomachines at the same
time. Patenting these substances would be like patenting pre-existing machines.
Nevertheless, rejecting new effects as a sufficient cause for inventiveness would be
contrary to the EPO practice regarding the protection of substances: the inventive step for
9
This touches a new field of biology called “Synthetic Biology”. See: G Wolbring, “Bio-tech, NanoBio-
Tech, SynBio-tech, NanoSynBio-tech? The changing face of biotech law” (2007) 4 Journal of international
Biotechnology Law, 177-186 (Part I), 221-226 (Part II).
10
under the European Patent Convention (EPC), Art 52(2)
11
Cf Directiven98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal
protection of biotechnological inventions, Art 3(2); G Zekos, “Nanotechnology and Biotechnology Patents”
(2006) 14 International Journal of Law and Information Technology, 310-369, at 369.
12
EPC, Art 54
13
As long as you are the first to devise a way to provide a substance – i.e. the substance in its pure form –
your invention is novel.
14
EPC, Art 56
3
a product patent on substances can be fulfilled by new and surprising effects of the
substance.15 Patenting is therefore possible, even if the mere making available of the
substance is not inventive. The only caveat is – due to the novelty requirement – that the
substance has not been previously available to the public. This applies to both newly-
synthesised and naturally occurring substances.16
Patentability requirements
One of the fundamental aspects of obtaining a valid and enforceable patent is

that the claims must be novel and unobvious over the prior art. Identifying the pertinent
prior art in an emerging technology can often be a tedious and difficult task. This is
especially the case in nanotechnology because the technology has recently emerged, is
fast evolving and covers a rather wide range of scientific areas. In addition to that, one of
the major difficulties for all those involved in such activities is the fact that
17
nanotechnology-related inventions do not necessarily contain the term “nano” in their
title, abstract or description18.
a. Prior art in the nanotechnology sector

Patenting and searching for prior art in the nano world can be a thorny
issue since nanotechnology is an interdisciplinary sector to which many diverse
15
Triazoles/AGREVO, T 939/92 [1996] OJ EPO 309 (EPO); cf. S Féaux de Lacroix, “Wann machen
überraschende Eigenschaften erfinderisch?” 2006 Gewerblicher Rechtsschutz und Urheberrecht, 625-630;
B Jestaedt, “Artikel 56 Erfinderische Tätigkeit“ in G Benkard (ed), EPÜ (München: CH Beck, 2002), at
margin number 141. An instructive example is the decision of the German Federal Court of Justice,
Kosmetisches Sonnenschutzmittel, X ZR 68/99 [2002] BGHReport 555 [2003] (BGH). There, the mixture
of two sun protecting agents (one of them consisting of nanoparticles) with different radiation absorption
maxima was not held to be inventive if the new effect was simply the sum of the two absorption spectra.
16
Cf. R Moufang, “Patentfähige Erfindungen (‘patentable inventions’)” in R Schulte (ed), Patentgesetz mit
EPÜ, 8th ed (Köln: Heymanns, 2008), at margin number 325.
17
Examples of patents using the term “nano” in their titles are: US Pat. No. 6,974,618 “Multicoloured
polymer nanocomposites for optical memory storage and security data encryption” and US Pat.No.
6,970,239 “Metal coated nanocrystalline silicon as an active surface enhanced Raman
spectroscopysubstrate”.
18
For example, all the inventions and the related patents concerning the Atomic Force Microscope are
deemed to fall under the nanotechnology category.
4
disciplines Converge19. . In late 2004, to tackle this problem, the USPTO created a new
classification to help examiners and other professionals search and examine
nanotechnology patents with the adoption of a new cross-reference digest designated
class 977, entitled Nanotechnology20. This new digest is the first step of a classification
project and facilitates the searching of prior art related to nanotechnology functioning as
a collection of issued US patents and published patent applications21. The new class 977
contains documents whose disclosures are: “related to research technology development
at the atomic molecular or macromolecular levels in the length scale of approximately 1-
100 nanometer range in at least one dimension and that provide a fundamental
understanding of phenomena and materials at the nanoscale and to create and use
structures devices and systems that have novel properties and functions because of their
small and/or intermediate size”22
As defined by the US PTO, nanotechnology patents in Class 977 must
meet the following criteria: First one relate to research and technology development in
the length scale of approximately 1-100 nm in at least one dimension. Second one
provide a fundamental understanding of phenomena and materials at the nanoscale and
create and use structures, devices, and systems that have size-dependent novel properties
and functions.
The PTO’s new classification may prove to be too narrow to be of
particular use, defining nanotechnology by including only those patents: Whose subject
matter is in the scale of approximately 1-100 nanometers in at least one dimension; and
That involves materials, structures, devices or systems that have novel properties and
functions because of their nanoscale size23.
19
Luca Escoffier, Nanotechnology: the revolutionary technology seen from the U.S. and European
perspective, DIME Working Papers on intellectual property rights No 14 (August 2006) , available on
http://ipr.dime-eu.org/ipr_publications
20
Id
21
For further details see the “New cross-reference digest for nanotechnology” at
http://www.uspto.gov/web/patents/biochempharm/crossref.htm (last accessed, March 2006).
22
“New cross-reference digest for nanotechnology” at
http://www.uspto.gov/web/patents/biochempharm/crossref.htm
23
For a general overview of the many types of patents being found in the nanotechnology field, Albert P.
Halluin & Lorelei P. Westin, Nanotechnology: The Importance of Intellectual Property Rights in an
EmergingTechnology, 86 J. PAT. & TRADEMARK OFF. SOC’Y220, 220-36 (2004).
5
The European Patent Office faced the same problem of the USPTO in dealing
with the retrieval of nanotechnology-related inventions due to their interdisciplinarity.
For this reason the EPO created a new tag for nanotech patents, called Y01N. The
introduction of this new cross-reference allows those seeking information in this field to
carry out an interdisciplinary search24. The Y01N tag concerns “all entities with a
controlled geometrical size of at least one functional component below 100 nanometers in
one or more dimensions susceptible to make physical, chemical or biological effects
available which are intrinsic to that size”25. Y01N is divided into six main groups (from
Y01N2 to Y01N12), with each group collecting nanotechnology patents of similar
technological backgrounds
b. Novelty26
An invention is considered novel if, prior to the filing date of the patent, it has not been
made available to the public by oral description, written description, or prior use. The size
of the nanoscale component should be sufficient to distinguish that component from that
of the prior art27. In fact, a patent application of a nanoscale form of a material that
already exists, for example, could face a rejection under 35 U.S.C. § 102, which bars the
patenting of inventions anticipated by prior art28, but if there is one difference in the
properties between the two elements there is no anticipation. Under the doctrine of
inherency then, if a compound, for instance, displays properties and features at the
nanoscales which are inherent to those of the prior known compound as a necessary and
common result, it might well happen that the former could be anticipated by the latter
24
This tool also allows EPO officials to map nanotech developments
25
Manfred Scheu, Head of Nanotechnology Working Group (EPO), at
http://www.europeanpatentoffice.org/epidos/conf/epic2005/workshops/pdf/workshop_c_extra_presentatio
.pdf.
26
Novelty as a requirement for patentability is embodied in:Article 54, European Patent Convention,
Section 2, UK Patent Act, 1977,Section 102, US Code Title 35 ¡V Patents ,Section 2 (1)(l), Indian Patents
Act, 1970 ( as amended in 2005)
27
28
See 35 U.S.C. § 102 Conditions for patentability; novelty and loss of right to patent
6
and, consequently, could not be eligible for patent protection29. At present there has been
no change to the guidelines for examination before the EPO for these kinds of inventions,
but there are some principles which are pretty settled when dealing with nanotech- related
entities.
c. Obviousness
Non-obviousness30 is a highly complicated subject in the patent field, and is the standard
of mainly patent litigation battles. It is difficult to reduce into ordinary terms, but suffice
it to say that even if an invention passes the novelty test above; it still needs to be “non-
obvious” to one of ordinary skill in the art. Non-obviousness determinations in emerging
technologies are highly determined by the scope of prior art, and again the quality of the
search performed by the patent office31. To a larger extent, non-obviousness requires
intimate knowledge of the particular technology to get a sense of what “one of ordinary
skill in the art” would know in order to combine knowledge or prior art references.
This ties back to the knowledge of the examiners, and the expertise of
the technology group at the PTO. Because nanotechnology is a multi-disciplinary field, it
is difficult to define the scope of the prior art and who “one of ordinary skill in the
nanotechnology art” is. Obviousness is judged by reference to an imaginary legal
construct, the person having ordinary skill in the art32. Disclosure is the inverse of the
obviousness requirement Obviousness, or inventive step, has been called the ultimate bar
to patentability and the purpose of the non-obviousness requirement is to add to the
novelty requirement and to extend the scope of the relevant prior art beyond anticipatory
prior art ensuring that an invention constitutes an adequate advance in technology to
29
30
35 U.S.C. § 103 Conditions for patentability; non-obvious subject matter.
31
32
Id
7
warrant an exclusive right. The application of obviousness has varied greatly among
nations and particularly in its application to nucleic acid molecules.
d. Utility requirement
The quid pro quo nature of the patent laws requires that an invention
be operative and function for its intended purpose. Otherwise, there will be no benefit to
society, no exchange for the reward of a limited monopoly. The utility of an invention
may not always be known at the time of conception or reduction to practice. Although
patentees in emerging technology companies would like broad protection on their patents,
claiming incredible uses of the invention may work contrary to the goal of obtaining
patent protection. There is a risk that the patent may be denied on lack of utility 33. Yet the
utility standard or force of the utility requirement has fluctuated from being a very low
bar to patentability, excluding only affirmatively harmful inventions, to being a very high
bar, excluding all inventions lacking a substantial utility in their current form34.As
discussed earlier, patent law applies uniformly to all technologies but applies distinctively
in different contexts35. The same utility standard applies to both chemical and mechanical
inventions courts apply the standard with more force in a different approach adjusted to
the kind of science in evaluating the patentability of chemical inventions36. Chemical,
biotechnological or nano-technological compounds are often discovered before their
33
DAVID S. ALMELING, NOTE Patenting Nanotechnology: Problems with the Utility Requirement, 2004
STAN. TECH. L. REV. N1, available on http://stlr.stanford.edu/STLR/Article/04_STLR_N1
34
Lowell v. Lewis, 15 F. Cas. 1018, 1019 (C.C.D. Mass. 1817) (‘All that the law requires is, that the
invention should not be frivolous or injurious to the well-being, good policy, or sound morals of society.’)
35
Dan L. Burk & Mark A. Lemley, Policy Levers in Patent Law, 89 VA. L. REV. 1575, 1576–77 (2003) (‘In
theory, then, we have a uniform patent system that provides technology-neutral protection to all kinds of
innovation.’)
36
Rebecca S. Eisenberg, Analyze This: A Law and Economics Agenda for the Patent System, 53 VAND. L.
REV. 2081, 2086 (2000) (‘The courts treat the utility requirement as a hybrid subject matter limitation and
disclosure requirement.’). at 2085–86 (‘Although the utility requirement has played little role in evaluating
the patentability of mechanical inventions, it has been more prominent in the chemical and biotechnology
fields, in which new compounds are often discovered before their functions are well understood.’);R. CARL
MOY, MOY’S WALKER ON PATENTS 6:6 (4th ed. 2003) (‘As this statement of the trend indicates, the
effort is closely related to the concepts of adequate disclosure that are applied under the first paragraph of
section 112, and there are considerable arguments in favor of classifying the rules there.’). Teresa M.
Summers, Note, The Scope of Utility in the Twenty-First Century: New Guidance for Gene-Related Patents,
91 GEO. L.J. 475, 475 (2003) (‘To a significant extent, the specific industry sought to be promoted through
the patent system influences the boundaries of the law.’).
8
functions are well understood and so their utility has to be examined under another angle.
Moreover, the utility requirement is effortlessly met with most mechanical devices but is
a repeated problem with chemical compounds and processes mainly
pharmaceutical/biotechnological/nano-technological compounds (drugs)37. Each new
technology requires courts to determine the context in which utility belong
In Fujikawa v. Wattanasin,38 the Federal Circuit discussed the role of utility in the
‘pharmaceutical arts’ reasoning that a specific type of testing is adequate to ascertain
pharmacological activity in the minds of those skilled in the art39. It is obvious that it will
be a need for adjusting the meaning of utility into the substance of nanotechnology but
merely abstract idea with no near future applicability cannot be patentable with the
thought that they might be used in a distant future in nanotechnology intentions. There
will be needed some time to shape the substance of prior art in advance nanotechnology
and not merely application of nanotech into other disciplines such as biotechnology,
nanotechnology patents, if more limiting the strength of nanotechnology patents and
freedom to use basic tools and processes, and patents only on downstream
implementations.40 Moreover, the use of utility as a technology-specific policy lever as
applied to biotechnology is too powerful to be implied in nanotech patents as well41.
37
JANICE M. MUELLER, AN INTRODUCTION TO PATENT LAW 156 (2003) ("Utility is rarely an
issue for mechanical or electrical inventions . . . ."); Eisenberg, ("Although the utility requirement has
played little role in evaluating the patentability of mechanical inventions, it has been more prominent in the
chemical and biotechnology fields, in which new compounds are often discovered before their functions are
well understood."); DONALD S. CHISUM, CHISUM ON PATENTS §4.01 (1994) ("The [utility]
requirements easily met with most mechanical devices but is a frequent problem with chemical compounds
and processes—particularly pharmaceutical compounds (drugs).").
38
93 F.3d 1559 (Fed. Cir. 1996)
39
Dr. Georgios I. Zekos, Nanotechnology and Biotechnology Patents, International Journal of Law and
Information Technology Vol. 14 No. 3 © Oxford University Press 2006
40
Arti K. Rai, Fostering Cumulative Innovation in the Biopharmaceutical Industry: The Role of Patents and
Antitrust, 16 BERKELEY TECH. L.J. 813,816 (2001). Professor Rai notes, however, that this definition is
tricky. She writes that the terms "upstream" and "downstream" "are quitefluid." Id. at 816 n.9. Thus, for
example, "research identifying a gene linked to a disease might be quite ‘upstream’ if the commercial goal
is a drug therapy. By contrast, if the commercial goal is a diagnostic test, research identifying the gene
might be relatively ‘downstream.’"
41
In re Kirk, 376 F.2d 936, 961 (C.C.P.A. 1967) (Rich, J., dissenting) (Brenner’s utility requirement would
never be ‘indulged in with respect to other scientific ‘tools’ or a mechanical or optical or electronic sort.’);
9
Writing claims for nanotechnology
The claims in a given patent application define the scope of the
monopoly held by the patent owner. The framing of patent claims is crucial in any
application but more so in an emerging technologies such as nanotechnology42. An
applicant must particularly describe the invention, and give sufficient detail of the best
method of performing it so that a skilled worker in the field is able to do so. It must be
noted that with unpredictable technologies a greater level of disclosure is required.
Providing working examples with details of the work performed and the results achieved
can do this43. A claim writer must consider what aspects of the invention may be
patentable. Although a particular nanoscale product may not be patentable, yet the
process involved in making the nano-product could be. The tools involved in making the
nano-product as well as the uses of the product may also be patentable. A claim writer
must take advantage of interdisciplinary nature of invention because prior art may be in a
different area of technology44.
NANOTECHNOLOGY PATENT ISSUES

The problem with emerging technologies has always been the struggle
with patentability. The issues in nanotechnology ensuing are the huge amount of patents
which are being filed for already patented inventions.
Patenting in nanotechnology presents myriad problems due to the following
factors; First one Lack of technology centre and there is a lack of focused expertise in the
field of nanotechnology. second one is the backlog in the number of grants for patents is
too high and with the advent of emerging technologies like nanotechnology, there has
been an enormous increase in the number of applications for patents. And finally there
have been no definite training modules or guidelines to educate patent examiners in the
complex aspects and issues relating to nanotechnology45.
42
Sanjay Pandey, Patenting nanotechnology in India, Electronic copy available at:
http://ssrn.com/abstract=838745
43
Id
44
Id
45
Neill Sean o’; ‘broad claiming in nanotechnology patents; is litigation inevitable.’
www.rpitechnology.com/files/article_broad_claiming_nanotech.pdf.
10
Due to these factors many patent applications for nanotechnology inventions
are wrongly examined leading to the following; primarily improper rejection of the
nanotechnology patent application46 due to an examiners erroneous conclusion that the
subject matter is not novel. Secondarily issuance of an overly broad nanotechnology
patent that infringes on previously issued patents and/or gives far too much control over a
particular swath of nanotechnology allowing the patentees to unfairly exclude
competition. And thirdly issuance of nanotechnology patent in spite of existing prior art
that was overlooked during the patent examination.
Due to these problems nanotech patents can face the following
difficulties in being granted, that is the examiners application of the patent may lead to
the erroneous conclusions that the patents should be rejected because they are not novel.
There will be an overlapping of patents without knowing that the patent granted shall be
infringing the existing patents. And Any errors while granting patents or in evaluating the
applications for patents in nanotechnology shall have a direct impact on the development
of the technology, that is why it is required that caution must be exercised in evaluating
the applications for patents.
There are some relatively unique situations faced by applicants who file
nanotechnology patents. PTO examiners might object to claims based on the doctrines of
inherent anticipation, obviousness, and enablement47.
1. Size-Based Patentability As Impacted By Anticipation, Inherency and
Obviousness
First, applicants attempting to patent the nanoscale form of a material or
device that already exists at the micro scale could face rejections under § 10248 or § 103.
However, if there is at least one clear difference in the physical properties between two
products, there cannot be anticipation49.
46
Bawa Dr Raj, ‘Nanotechnology Patenting in the U.S.’
www.nanoscienceexchange.org/Patenting_Nanotech_Inventions_(RajBawa).pdf
47
Koppikar et al.: Current Trends in Nanotech Patents, Nanotechnology Law & Business, Vol. 1 [2004],
No. 1, Article 4, available on http://pubs.nanolabweb.com/nlb/vol1/iss1/4
48
Section 102 bars patenting inventions that have been anticipated by prior art, 35 USC § 102
49
Koppikar et al ,supra 45
11
Another potential complication for nanotech applicants is the doctrine of
inherency. Under the doctrine of inherency, a prior art reference may “inherently”
anticipate a claimed invention, even if the reference does not expressly disclose the later
invention50. The case law in this area holds that inherency can only be applied if the
alleged feature would necessarily and inherently result – a result that might have occurred
under certain conditions is not good enough to deny patentability.
Yet another potential complication is obviousness under § 103 51. Even if
there is a clear difference in size, the examiner may argue that the difference is obvious.
Section 103 requires inventions to not be obvious in order to be patentable. An invention
is obvious if the prior art would have suggested to one of ordinary skill in the art that this
process should be carried out and would have a reasonable likelihood of success52.
The foregoing discussion illustrates that a common question faced by
nanotechnology patent applicants is whether a smaller version of an existing product is
patentable based on size alone. In re Rose,53 where claims directed to a lumber package
“of appreciable size and weight requiring handling by a lift truck” were held unpatentable
over prior art lumber packages which could be lifted by hand because “the elements and
50
Verdegaal Bros., Inc. v. Union Oil Co., 814 F.2d 628, 631, 2 U.S.P.Q.2d (BNA) 1051, 1053 (Fed Cir.
1987) (“A claim is
anticipated only if each and every element as set forth in the claim is found, either expressly or inherently
described, in a single
prior art reference.”)
51
35 U.S.C. § 103 (2003).
52
In re Dow Chemical Co., 837 F.2d 469, 473 (Fed. Cir. 1988) (“The consistent criterion for determination
of obviousness is whether the prior art would have suggested to one of ordinary skill in the art that this
process should be carried out and would have a reasonable likelihood of success, viewed in the light of the
prior art.”). Although the obviousness determination is a legal conclusion, the court must make factual
inquiries including: the scope and content of prior art; differences between the prior art and the claims at
issue; and the level of ordinary skill in the art. Graham v. John Deere Co., 383 U.S. 1, 17 (1966). Courts
have repeatedly emphasized that “obvious to try” is not the standard and that the use of “hindsight” is
prohibited in making obviousness determinations., e.g., In re O’Farrell, 853 F.2d 894, 903 (Fed. Cir. 1988).
53
220 F.2d 459, 464, 105 USPQ 237 (CCPA 1955). also In re Rinehart, 531 F.2d 1048, 1053, 198 USPQ 143
(CCPA 1976) (“Mere scaling up of a prior art process capable of being scaled up, if such were the case,
would not establish patentability in a claim to an old process so scaled.”); and In re Gardner v. TEC
Systems, Inc., 725 F.2d 1338, 220 USPQ 777 (Fed. Cir. 1984), cert. denied, 469 U.S. 830, 225 USPQ 232
(1984) (holding that, where the only difference between the prior art and the claims was a recitation of
relative dimensions of the claimed device and a device having the claimed relative dimensions would not
perform differently than the prior art device, the claimed device was not patentably distinct from the prior
art device).
12
features perform in combination the same function as set forth in said prior art without
giving an unobvious and unexpected result.”
One must bear in mind that this case was based on simple mechanical
technology of the past, where it would have indeed been obvious to cut parts to larger or
smaller dimensions in order to make the overall package larger or smaller54. However, the
more accurate answer for nanotechnology patent applications in this situation is, “it
depends.” If the prior art does not enable one to make a smaller version of an existing
device at the nanoscale, then the resulting nanoscale version of the same device may in
fact be non-obvious over its larger cousin even if there is no difference other than size.
This important point of law was established first in the chemical area, in the case of In re
Hoeksema,55 where an examiner rejected a claimed chemical compound on the ground
that its structure was already suggested by the prior art. On appeal, the court reversed the
examiner’s rejection, holding that a claimed chemical compound could be unobvious,
even though its structure is suggested, when no process existed at the time that would
have enabled its production56. That is, a prior art reference must provide an enabling
disclosure of how to make the compound before the claimed compound can be found
obvious. Likewise, a nanotechnology product could be found unobvious on the basis of
size alone if the prior art references in existence before the application was filed fail to
provide an enabling method of making it at the nanoscale. Indeed, this points out the
challenge for all participants who are involved in the process of patenting
nanotechnology. Case law from diverse disciplines may apply to an invention in
nanotechnology. A given patent examiner from the mechanical group may not be aware
of cases such as In re Hoeksema57, which arose out of the chemical arts. An alert patent
attorney can spot issues such as this and bring the patent application to a successful
conclusion with the right cases to educate the examiner. Moreover, one must recognize in
the first instance that a smaller version of an existing device can be patentable, or else the
patent application might never even be filed58.
54
55
158 USPQ 596 (CCPA 1968).
56
Id
57
Id
58
13
2. Enablement
Second, applicants drafting broad claims might face rejections based on the enablement
doctrine59. The enablement doctrine requires the inventor to provide sufficient
information to enable a person skilled in the relevant art to make and use the claimed
invention without “undue experimentation.60” In biotechnology, examiners and courts
have used the enablement doctrine to narrow the scope of overly broad claims. A typical
rejection states that the scope of the claim is too broad in relation to the number of
examples provided in the specification, given the level of unpredictability that existed in
the area of the invention at the time the application was filed61.
In reviewing the first wave of nanotechnology patents, the PTO
has shown that it will issue claims of considerable breadth in some instances despite the
enablement requirement. For example, the Patent Office has issued patents with claims
that appear broad on their face relating to carbon-based tubes and microelectronic devices
which utilize carbon-containing materials62. One important way for nanotech applicants
to overcome an enablement rejection is to argue that the specification does provide a
“representative” group of examples in relation to the scope of the claim based on the
relative predictability of the area in question. An applicant in the U.S. is even permitted to
submit post-filing date test results which confirm the statements made in the specification
as filed63. As time passes, the PTO can be expected to more carefully scrutinize claims in
59
Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1365, 42 U.S.P.Q.2D (BNA) 1001, 1004 (Fed. Cir.
1997).
60
In re Goodman, 11 F.3d 1046, 1052-53 (Fed. Cir. 1993) (holding that a single example could not “enable
a biotechnician of ordinary skill to produce any type of mammalian protein in any type of plant cell.”); and
Enzo Biochem, Inc. v. Calgene, 188 F.3d 1362, 1372 (Fed. Cir. 1999) (holding that claims directed to
genetic antisense technology in the “entire universe of cells” were not enabled, because the disclosure only
discussed E. coli cells).
61
62
Id
63
U.S. PTO training guidelines for § 112 rejections in chemical and biotechnology inventions, which states
as follows :To overcome a prima facie case of lack of enablement, applicant must demonstrate by argument
and/or evidence that the disclosure, as filed, would have enabled the claimed invention for one skilled in
the art at the time of filing. This does not preclude applicant from providing a declaration after the filing
date which demonstrates that the claimed invention works. However, the examiner should carefully
compare the steps, materials, and conditions used in the experiments of the declaration with those disclosed
in the application to make sure that they are commensurate in scope, i.e., that the experiments used the
guidance in the specification as filed and what was well known to one of skill in the art. Such a showing
14
nanotech patents, a cycle that occurred in the biotech industry. The first wave of
biotechnology patents issued by the PTO contained extremely broad claims. As the field
matured, and many of the broad biotech patents were litigated and found invalid, then
examiners began to require applicants to narrow the scope of the claims. Similarly, as the
agency becomes more familiar with nanoscience and the prior art, it will be more likely
to flag an overly broad claim and reject it or force the applicant to make an amendment64.
INTERNATIONAL RESPNSE TOWARDS NANOPATENTS
World Intellectual Property Rights Organisation (WIPO)

WIPO identifies certain complexities regarding
nanotechnology. One problem is that the granted claims are overly broad, due at least in
part to a lack of available prior art, which could allow patent holders to lock up huge
areas of technology. So there is a risk of overlapping patents. Nanotech is not confined to
a single field of endeavor but exploits the peculiar properties of matter at the nanoscale65
across many different fields of modern engineering. If a nanotechnology patent
application satisfies the criteria of novelty, inventive step (or nonobviousness within the
United States), utility and public disclosure, members of the WTO are prohibited from
excluding it from patent protection under their domestic legal framework.
TRIPS
Over the past two decades the role of intellectual property in all
areas of science and technology has exploded globally – primarily due to rules prescribed
by the World Trade Organization’s TRIPS and by bilateral/ regional trade agreements the
also must be commensurate with the scope of the claimed invention, i.e., must bear a reasonable
correlation.
64
Koppikar et al., supra 45
65
The Nanoscale or the nanoscopic scale refers to the structures with the length scale applicable to
nanotechnology usually cited as 1-100 nanometers.
15
TRIPS agreement obligates all WTO member countries to adopt and enforce minimum
standards of intellectual property.
Article 27(1) of TRIPS Agreement provides patent protection only for
inventions and not mere discoveries66. While the TRIPS Agreement fails to provide a
definition of "invention," Article 27(1) discriminates between the rapidly blurring
distinctions of "inventions" and "discoveries67." This distinction has been maintained with
current nano-products including CNT’s (Carbon Nanotubes). Since these compounds are
naturally occurring, Article 27(1) technically prohibits the patenting of the compounds
themselves. Article 27(1) enable that a requisite inventive step be deemed as the process
of creation, rather than the creation itself68. Since the start of the 21st century, there has
been a nanotech patent explosion. Both the number of nanotech patent applications filed
and the number of patents issued have increased annually at a nearly exponential pace.
By all measures, the nanotech patent explosion shows no signs of subsiding.
U.S Patent and Trademark Office(USPTO)

Recent actions by both the U.S Patent and Trademark Office
(“USPTO”) and the courts will affect the strength and enforceability of nanotech patents.
Based on the ever-changing nanotech patent landscape, companies must strategically
stake patent claims or risk missing the nanotech patent gold rush. Developing a patent
portfolio that protects and leverages nanotech inventions is critical for companies to
prosper in the nanotech patent explosion.
OVERLAPPING NANOPATENTS
There are several explanations for the compulsion to patent that has
swept academic and business enterprises69. In the scientific community, patents can
66
Edited by alfredo ilardi & Micheal blakeny, International Encyclopedia of Intellectual Property Ttreaties,
Oxford University Press, 2004, page 58
67
Id
68
Bowman Diana M & Hodge Graeme A. ‘A small matter of Regulation: An International Review of
Nanotechnology Regulation’, 8 Colum. Sci. &Tech. L. Rev.1 (2007).
69
John miller ET AL., The Handbook of nanotechnology business,policy and intellectual property law
pages 68-75 (2005).
16
bolster a researcher’s reputation and enhance his or her resume. In the business world,
patents create barriers to entry. Companies can sometimes shut down existing competitors
and they may also deter future companies from entering their marketplace. Patents also
may enable companies to generate revenue through licensing or increase their valuation,
as evidenced by stock fluctuations in response to patent issuances and court decisions.
Just as patents have become central components of academic and business enterprises,
legal restraints on patenting have gradually eroded. As courts have chipped away at the
barriers to obtaining patents, the Patent ant Trademark Office (“PTO”) has demonstrated
an increased willingness to issue patents70. In nanotechnology, this is exacerbated by the
fact that patents are often sent to different centers at the PTO for review. For example,
different examiners in centers reviewing nanotube patents may be reviewing different
prior art and this may result in the issuance of patents that would have otherwise been
rejected. Finally, the recent trend to patent may simply be another manifestation of a
culture that is consumed by property rights.
Lux Research and the law firm Foley & Lardner recently conducted a
study that counted the number of nanotechnology patents issued and pending at the PTO 71
issued approximately 3,818 patents between 1985 and March 2005, with an additional
1,777 patent applications pending. This large number of patents and patent applications
exemplifies the minefield that nanotechnology patents represent, making it difficult for
practitioners to know if and which patent or multiple patents they may infringe. These
patents and patent applications are drafted by multiple practitioners, utilizing a variety of
terms and phrases that create overlapping boundaries for the same product or field72. This
variety in term-usage makes it difficult to search for relevant patents, and in turn
contributes to the uncertainty for practitioners in knowing whether or not their products
70
John R. Allison & Mark A. Lemley, Empirical Evidence on the Validity of Litigated Patents, 26 AIPLA
Q. J. 185 (1998) (Decisions holding patents valid rose from 35% in the 1970s to 54% in the early 1990s.);
Robert Merges, As Many as Six Impossible Patents before Breakfast: Property Rights for Business
Concepts and Patent System Reform, 14 BERKELEY TECH. L.J. 577 (1999) (arguing that PTO has
become less rigorous in review); Cecil D. Quillen, Jr. & Ogden H. Webster, Continuing Patent Applications
and Performance of the U.S. Patent and Trademark Office, 11 FED. CIR. B.J. 1, 12 (2001-2002)
(concluding that the PTO may approve as many as 97% of the applications placed before it).
71
Lux Research and Foley & Lardner L.L.P., The Nanotech Intellectual Property Landscape (Apr. 21,
2005), available at http://www.luxresearchinc.com/
72
ALBERT P. HALLUIN, Incorporation of Parts into the Whole: Avoiding Liability When Incorporating
Nanotechnology Improvements, Nanotechnology Law & Business, vol 3. no 1, February/march 2006
Available on http://www.wsgr.com/publications/PDFSearch/halluin0306.pdf
17
may infringe a patent. Others have previously noted that, as a result of the PTO’s failure
to grasp the interdisciplinary nature of nanotechnology, as well as to appreciate the
problems created due to the lack of definition of technological boundaries, a multitude of
patents have been issued with broad, claims and overlapping claims in more than one
patent.73These overlapping patents can create real problems for nanotechnology
companies. Practitioners need to worry not only about creating a viable IP portfolio for
their nanotechnology products, but also whether any real patent estate is available
because of the PTO’s past policy of allowing fairly broad claims that overlap in multiple
patents. Of particular concern are the narrow fields of dendrimers74 and quantum dots,
where many patents have already been issued75.
With an ever increasingly dense landscape with broad and overlapping
claims, nanotechnology could face three potentially serious implications: firstly
decreased rate of innovation, secondly widespread nanotechnology IP disputes, and
finally educed rate of consumer acceptance. The PTO has been working on the
examination problem by creating a new interdisciplinary classification for
nanotechnology applications, Class 977. In October 2004, the US PTO announced it had
created a new classification for nanotechnology patents - Class 977 - which would serve
as a cross-reference to help examiners, among others, search prior art. Before Class 977
existed, examiners relied on keyword searches to find relevant information and related
patents. The creation of this new classification, as well as other ongoing measures, does
demonstrate the PTO’s commitment to resolving future overlapping patent claims.
Despite the PTO’s recent efforts, however upcoming disputes may be inevitable because
of the uncertain IP climate created by issuance of patents with overlapping claims.
73
John miller et al., the handbook of nanotechnology business, policy and intellectual property 68-74
(2004).
74
The concept of dendrimers was first reported by Fritz Vögtle (University of Bonn, Germany) in 1978,
where he was able to create a molecule with branch like structures coming out of the core by employing a
divergent iterative methodology using acrylonitrile. Dendrimers are treelike molecules that have branching
tendrils that all stem from a central core. Dendrimers are highly customizable in that altering their chemical
composition of the core and number of layers (also known as generations) can result in precise control of
the molecule’s size, shape, void space, and reactivity according to the manufacture’s desire.Roth,
Kimberlee. “Recent announcements spur growth at Dendritic Nanotechnologies.” Michigan Small Tech. 28
Nov, 2005. P.1
75
Nanodot.org ,Nanotechnology Gold Rush Yields Crowded ,Entangled Patents,
http://nanodot.org/article.pl?sid=05/04/22/181229
18
Of the actions taken by the EPO to get to grips with this new
technology, the one that has been welcomed most by nanotechnologists was the
introduction of the "Y01N" tags to label nanotechnology in EPO databases. According to
the latest in-house research, about 86000 patent documents from around the world, as
well as about 20000 non-patent literature files, have been tagged as nanotechnology in
one or more of the Y01N main groups. Since 1999, most nanotechnology patents have
been published in the Y01N4 group, followed by Y01N6 and Y01N12. The Y01N code is
not static, but is constantly updated and improved as new aspects of this young
technology emerge.
CHALLENGES TO NANOTECHNOLOGY PATENT
GOVERNMENTAL OWNERSHIP AND CONTROLS

The owners of nanotechnology should consider the possibility, however
remote, that the federal government may step in and acquire the technology. Under the
Bayh-Dole Act76, the government as the funding agency has the right to ignore the
exclusivity of a patent and grant licences on the technology to other parties as long as a
few criteria are met. This government right is known as a ‘march-in’ right.77 Two of the
most important criteria are a failure on the part of the licensor to take ‘effective steps to
achieve practical application of the subject invention’ or to satisfy ‘health and safety
needs’ of consumers78. Since a great deal of nanotechnology research and development
involves military and national defence applications or public health, it is sometimes
funded by various US governmental agencies79. Technology resulting from such
government funds, in general, can be subject to government march in rights.
The possibility of losing rights in an invention to the government presents

significant risks for both licensors and licensees. For this reason, both parties should
conduct significant due diligence into the areas of inventor ship and the circumstances
76
Bayh-Dole Act of 1980, 35 U.S.C. 200-212
77
35 USC 203
78
During the anthrax attacks in 2001, for instance, the federal government contemplated marching in and
acquiring Bayer's patent rights to the drug ciproflaxin in order to benefit the health and safety of the public.
79
Governmental agencies involved in the funding of nanotechnology include the National Science
Foundation, the National Institute of Health, and the Department of Defense to name a few
19
surrounding inventive contributions. From the licensee's perspective, if the risk of the
government acquiring the technology is high, a licensee may not be eager to accept a
licence because the licensee could lose the ability to use the licensed technology80. In this
situation, a licensee should consider paying less for the licence or ask for a termination
clause that would provide contingent relief from certain obligations, such as paying
royalties, in the event that the government takes ownership.
From the licensor's perspective, if the risk of the government acquiring the
technology is high, licensors may find it difficult to license their technology because
licensees may not want to risk losing the right to use the technology81. As a result,
licensors face losing potential revenues under these circumstances. To compensate for this
risk, a licensor may ask for direct payments to assure itself of some revenue. A licensor
may also ask for a covenant not to sue to protect itself from a possible lawsuit by the
licensee in the event that the government acquires the technology. Such provisions would
protect the licensee's interests in using the technology as well as the licensor's interests in
generating revenues.
On the international front, licensors who wish to license their inventions

abroad must take additional precautions to protect their patents. Export control laws
require that certain dual-use commodities, software, and technology be authorized by the
US government before being exported overseas.82 These export control laws are designed
to protect national security and foreign policy. They apply regardless of whether the
technology is protected by patents or trade secrets. Since nanotechnology may involve
matters of national security, precautions must be taken to ensure that valuable information
is not unlawfully disclosed to others abroad.
Thus, to export nanotechnology or other technical information beyond

US borders, a licensor should first explore whether the technology falls within a
designated category such that the licensor would need to obtain a foreign export licence
80
Paul J. Sutton, Chinh H. Pham and Joanna Toke, Nanotechnology licence pitfalls, Journal of Intellectual
Property Law & Practice 2009,Volume 4, Number 3, Pp. 176-180
81
Id
82
Bureau of Industry and Security, http://www.bis.doc.gov/licensing/exportingbasics.htm
20
from the US government83. Failure to do so can subject the licensor to penalties, and may
risk invalidating patent protection covering such unauthorized disclosures, or in the event
of trade secret protection, may result in significant adverse consequences
POLICING AND ENFORCING NANOTECHNOLGY PATENT RIGHTS

A further concern for licensors and licensees involves the
difficulty of policing and enforcing nanotechnology patent rights against possible
infringers. Infringing activity of technology on such a small scale can be particularly
difficult to observe, analyse, and police not only because of its size, but also because a
vast number of new discoveries and improvements are occurring almost daily across
multiple disciplines. Monitoring and policing potentially infringing activities may
therefore be overwhelming in the light of all the new developments84.
To address some of the difficulties faces companies in policing patent
rights, companies entering into technology transfer agreements involving nanotechnology
should consider including, among other things, mutual cooperation provisions within the
agreement85. Such cooperation may allow both parties to better monitor developments not
only of their particular technology, but also of competitors technologies. Thus, if a third
party creates a technology with features or functions within the scope of the licensed
technology, the licensor and licensee may have an easier time pursuing a cause of action.
Mutual cooperation provisions may, therefore, relieve some of the burdens affiliated with
policing patent rights.
Even though policing patent rights may become easier through the
use of mutual cooperation provisions, there remain hurdles to enforcing those rights.
Adding to these difficulties are the requirements under the Federal Rules of Civil
83
35 USC 184
84
Paul J. Sutton, Chinh H. Pham and Joanna Toke: supra 80
85
Mutual cooperation provisions may require the licensor to initially disclose features of the licensed
technology to the licensee. Thereafter, both the licensor and the licensee can continually share with one
another critical developments, including improvements, advancements, or modifications, of the licensed
technology
21
Procedure86, as well as a recent US Supreme Court case87. In the case of nanotechnology,
however, this requirement can become a significant burden because, as noted above, the
very nature of small-scale inventions spanning multiple disciplines makes it difficult to
determine if a third party is infringing.
In addition, a recent Supreme Court decision has increased the

difficulty for a patent holder to file a court injunction to stop an alleged infringer from
continuing with the infringing action. In eBay v MercExchange88, decided on 16 May
2008, the Supreme Court held that a permanent injunction will no longer automatically
issue upon a finding of patent infringement. Instead, a four-factor test will need to be
applied. Despite these hurdles in alleging infringement, mutual cooperation provisions
can alleviate some of the burden faced by licensors in enforcing patent rights89.
Technology companies and the legal practitioners representing them should consider and
incorporate the foregoing factors into their licensing strategies with respect to
nanotechnology-related agreements. In this way, the licence agreements resulting from
negotiations will provide maximum protection for future events in this exciting and
unique field.
LITIGATION SAVVY
Litigation is the final way to test a patent’s validity and
enforceability. Because of the field’s infancy, only a handful of nanotechnology patent
infringement cases have been filed in the courts so far90. The number of patent
86
Rule 11 of the US Federal Rules of Civil Procedure requires a meaningful form of infringement due
diligence on the part of both counsel and client prior to initiating a patent infringement action.
87
EBay, Inc. v MercExchange, LLC, 126 S.Ct. 1837, 547 US 388 (2006).
88
Id
89
Mutual cooperation provisions, in part, demand that both parties to the agreement cooperate to protect
each other's patent rights. In the event of infringement, these provisions may require that both parties
participate in gathering evidence and pursuing court action. Such cooperation can lead to the identification
of infringing activity early on, before any significant financial or other harm comes to either licensor or
licensee. Moreover, when both parties cooperate in a patent infringement action, the likelihood of success in
proving a cause of action can be greater. Mutual cooperation provisions can therefore be helpful in policing
and enforcing patent rights.
90
Note, for example, Caliper Technologies’ suit against Molecular Devices Corporation for U.S. Patent
Nos.
6,287,774 and 6,472,141. Caliper Technologies Settle Patent Infringement Suit Against Molecular Devices,
22
infringement filings will likely increase as more nanotechnology products enter the
market. With litigation comes increasing costs that can quickly spiral out of control if
companies are not litigation savvy, and do not put into place, from the beginning,
litigation cost-saving measures. Conservative estimates for patent litigation range to
several million dollars, depending on the number of patents and claims being litigated.
These large values take into account the high attorneys’ fees typically charged by patent
attorneys, as well as the large discovery costs (document production costs, etc.) and
expert fees paid. Although contingency fee attorneys are becoming more available, most
firms will only take a case if the benefits are high—for example, in willful infringement
cases where damages can be tripled. It is easy to see how litigation budgeting for a
typical small nanotechnology company can easily become overwhelming. Because
litigation for both patent holder and accused infringer is likely to be expensive, a cost-
benefit analysis should be performed before any decisions are made. Pre-litigation
negotiations, including cross-licensing or royalty payments, may bring about a cost-
effective amicable agreement allowing a company to practice the invention with minimal
costs. If the losing party appeals the case, the costs of litigation could rise significantly.
Marketing time and profits are equally lost if the suit is dragged into multiple appeals. If
the company as patent holder wins the case, A permanent injunction or cessation of patent
infringement activities may be the only remedy available to a patent holder if the product
is not yet commercially available or successful. A patent holder may be more amenable to
negotiating a reasonable licensing fee, rather than going through the expense of litigation
with no prospect of money damages.
Nanocrystalline Pharmaceutical Patent Litigation: The First Case
Facts of the case

On June 13, 2008, a Delaware jury delivered a $55.2 million dollar jury
verdict to Plaintiff Elan Pharmaceutical International, Ltd. (“Elan”) in the first patent
N
ANOTECHWIRE
.
COM
(Nov. 4, 2003), http://nanotechwire.com/news.asp?nid=534&ntid=125&pg=1 (last visited Jan.
17, 2006).
23
infringement trial involving pharmaceuticals and nanotechnology. In July 2006, Elan
Pharmaceutical International, Ltd. (“Elan”) filed a complaint in the U.S. District Court
for the District of Delaware alleging that the cancer treatment, “Abraxane,” manufactured
by Abraxis Bioscience, Inc. (“Abraxis”), infringes two of Elan’s patents91. After almost
two years of discovery battles, the dispute went before a jury on June 2, 2008.
Importance of this case

The Elan case is important to those who follow nanotechnology
patent litigation. First, this case raises an important procedural issue regarding summary
judgment motions in patent litigation. Presiding Judge Sleet has been quoted as
disfavoring such summary judgment motions in patent litigation matters. In this case,
while both parties requested permission to file motions for summary judgment,
permission was never granted. According to Judge Sleet, summary judgment motions can
be a significant waste of time and money in cases where parties have experts that are
willing to dispute the underlying facts. Because patent cases often involve a disagreement
over the facts, there is a growing trend to limit the use of summary judgment motions by
requiring permission for filing such motions from the presiding judge—a permission that
may not be as freely granted as in the past. The outcome of this case is also a poignant
example of Judge Sleet’s theory regarding the central role of experts in patent cases. The
parties relied heavily on expert testimony regarding the composition of Abraxane to
establish their respective positions. Second, those companies obtaining and defending
against nanotechnology patents will be interested to see how the jury determined and
applied the facts of the present case to the interpreted claims as this may have
implications on their own patent drafting and product clearance work. The Elan case may
also have important implications regarding the preparation of other legal and non-legal
documents to the extent they describe or characterize a nanotechnology based material.
However, in the end, the final word on the verdict in this case may still be far off as there
will mostly likely be numerous post-trial motions and an appeal to the Federal Circuit.
91
Elan Pharma. Int’l, Ltd. v. Abraxis Biosci., Inc., No. 06-438 (D. Del. filed July 19, 2006), at Complaint at
3.
24
LIABILITY
Some laboratory studies have shown certain carbon-
based nanomaterials cause inflammation and damage kidneys, livers and spleens in lab
animals. Sometimes the damage was fatal. Agricultural researchers found some
nanoparticles can stunt plant growth and cause cells to die. Other researchers have found
that chemicals in sunscreens biologically accumulate in fish and questions are now being
raised as to whether nanoparticles in sunscreens which increase the absorption rate also
increase bioaccumulation rates92. Some researchers say the minute size of nanoparticles
makes it easier for those particles to penetrate cells and to evade host defenses. Other
researchers suggest the nanomaterial itself may be benign but, given its size and
configuration, may catalyze other chemical reactions which may be harmful. While these
studies do not prove that problems exist, they suggest the possibility. Nanoparticles, once
in the environment, will prove very difficult to remove because of their size and
durability, particularly if they enter and accumulate in the human body. If nanoparticles
become the next asbestos or PCB-like crisis, the cost to industry will be huge. In fact,
some observers are already pointing to decisions by smaller companies, and even some
larger companies, to not pursue nanotechnology because these companies do not want to
be exposed to nanotech liability if potential risks become actual problems93. Other
companies have been reluctant to pursue nanotechnology because they lack the resources
to undertake expensive toxicity and safety tests, without which they fear they cannot
guard against potential liabilities
Organizations that produce products containing nanomaterials will
face the threat of legal liability under nuisance, negligence, or strict liability theories if
their use causes harm to public health or the environment. The civil liability system plays
a critical role in tempering corporate decisions to prematurely introduce potentially risky
products into the market. Companies can mitigate their liability exposure through a
number of mechanisms that are part of the proposed environmental and public health
governance structure94. Liability can be mitigated by a robust regulatory regime that will
92
George J. Mannina, Jr. nanotechnology: don’t delay liability risk assessments and solutions, Washington
Legal Foundation, Vol. 21 No. 37
93
Id
94
Mark Stallworthy, Environmental Liability and the Impact of Statutory Authority, 15 J. Envtl. L. 3
25
encourage courts to view compliance with the regulatory scheme as establishing
reasonable care on the part of the industry. This may be especially true of a transparent
adaptive system that regularly gathers new information and adjusts the regulatory system
based on the information. Courts, in these circumstances, may see the information
generation and rule adjustment process as an indication that reasonable care is being
taken in dealing with potential risks.
The risks of civil liability can also be minimized by increased
transparency. The worst case scenario for companies is demonstrated by the fate of the
asbestos industry and, more recently, by litigation related to anti-inflammatory drugs. A
key factor in both liability situations is that information about the adverse impact of
asbestos and the drugs was available to the manufacturer but was not disclosed to the
public or regulatory authorities. Prompt disclosure of information about adverse impacts
of a product does not immunize a company from legal liability. However, it can reduce
the potential of legal liability in several ways.
First, the prospect of disclosure can provide the impetus for a
company to modify its product, withhold it from the market, or temporarily remove it
from the market until the impact can be better understood or the public can be more
clearly warned. Second, disclosure can prompt regulatory action including additional
studies, product warnings, or market restrictions. Third, disclosure allows consumers to
make more informed choices in the use of a product. Finally, wider stakeholder
involvement with access to more complete information early in the approval process may
raise issues or problems that could be resolved before a product reaches the market,
avoiding potential mishaps. The prospect of liability for harm to public health or the
environment will be an important governance tool for the nanotechnology industry. Of
equal importance is industry’s opportunity to minimize that liability by employing
mechanisms such as public reporting and early public involvement.
Given our past experience with “wonder products,” it may
also be appropriate to learn from that past and to consider the creation of a
Nanotechnology Insurance Fund (“NIF”)95. The two principal purposes of an NIF would
be to 1) provide an exclusive source of compensation for people such as consumers or
(2003).
26
workers who claim, and can prove injury from nanoparticles and 2) pay for any required
environmental cleanup and restoration costs. A secondary purpose of the NIF could be to
undertake nanotechnology research to determine if there are, in fact, adverse effects from
nanoparticles and, if so, whether those particles can be engineered to eliminate or reduce
such effects96. Revenue sources for the NIF could include a consumer-paid surcharge on
the sales price of products with nanoparticles, a fee assessed on producers and sellers of
nanotechnology, and/or congressional appropriations. Payment of any such fees by
industry could be voluntary or mandatory, but companies contributing to the NIF would
receive limited or complete liability protection from injury claims and from
environmental cleanup costs. If a limited rather than complete liability program is
appropriate, the program could also be structured using standard insurance models in
which companies pay higher rates to have lower deductibles. The NIF could sunset after a
specific number of years so that Congress and the affected parties could, at a time certain,
determine if there is a reason to continue the program based on then current research and
experience. If the NIF is discontinued, companies paying into the NIF could have their
payments returned minus any administrative and research costs. No one in corporate
America is eager to incur new and unnecessary costs. But anyone who has been part of,
or witness to, the asbestos and PCB wars should think twice about whether what
happened there is a preferable outcome to developing some type of pre-emptive liability
and insurance program. If a pre-emptive insurance program is the proper course of action,
it need not necessarily be a Federal program97. It may be better implemented as an
initiative undertaken by the private insurance sector, perhaps with appropriate federal
insurance guarantees as a safety valve. Regardless of whether an NIF, or a similar
concept, has merit, surely there is a better solution to potential nanotechnology liability
problems than years of tedious and expensive litigation followed by large and
bankrupting settlements or judgments.
95
George J. Mannina, Jr. nanotechnology: don’t delay liability risk assessments and solutions, Washington
Legal Foundation, Vol. 21 No. 37
96
Id
97
Id
27
TRADE SECRETS AS AN ALTERNATIVE TO PATENT PROTECTION
Nanotechnology is unique in that it can be very difficult for

competitors to discover the underlying technical principles of an invention simply
through an analysis of its structure or function98. This is because nanotechnology occurs
on a scale that is much smaller than what people are habituated to. As such,
nanotechnology-related inventions, in certain instances, can be safe from reverse
engineering. Given the inherent difficulties in reverse engineering technical advances in
certain areas of nanotechnology, patent law may not always be the best available method
for protecting nanotechnology-related inventions99. In general, in exchange for patent
protection, the technology must be disclosed for the world to see, and upon expiration of
patent rights, patented inventions fall into the public domain. Thus, if a disclosure is not
desirable for any number of competitive reasons, an alternative to pursuing patent
protection is to treat the advances in nanotechnology as trade secrets, without publishing
them in any form. Trade secret protection involves protecting ideas simply by keeping
them secret. It therefore avoids the effort and expense associated with filing patent
applications100. Protection can remain for as long as the underlying technology is kept
secret. Trade secret protection, however, requires continuous diligence, since once the
technology is revealed, it is no longer protected. Thus, when the likelihood of reverse
engineering a nanotechnology invention is small, licensors and licensees should consider
protecting their inventions through trade secrets101.
When licensing nanotechnology, it is therefore possible to convey

nanotechnology trade secret rights under types of licence agreements known as ‘material
transfer agreements’102. A material transfer agreement usually involves a contract between
98
Paul J. Sutton, Chinh H. Pham and Joanna Toke, Nanotechnology licence pitfalls, Journal of
Intellectual Property Law & Practice 2009
99
Id
100
Id
101
Id
102
Under these agreements, the licensor shares the materials with the licensee, but does not disclose their
composition.
28
two parties that governs the transfer of tangible materials from one party to the other103.
The agreement provisions define the respective rights, including IP rights, duties, and
obligations of the receiving party with respect to the materials and their derivatives.
Under a material transfer agreement, therefore, the recipient has the right to practice the
technology but is not entitled to and is prohibited from analysing, reverse engineering,
altering or otherwise modifying the materials, and further cannot sell, transfer, disclose or
otherwise provide access to the materials to another party without the prior written
consent of the transferor. As a result, the underlying structure and function of the
licensor's invention remains secret104.
While suitable confidentiality and non-compete provisions may give

owners of nanotechnology similar protection, this route can carry the risks associated
with accidental disclosure or misappropriation of these secrets. Protecting trade secrets
rights under material transfer agreements therefore offers a more protective alternative
that allows the recipient to use the technology without requiring the transferor to disclose
what is novel or unique about the material105.
Another advantage to pursuing trade secret protection as an alternative to

patent law protection is that it is often times easier to obtain an injunction for
misappropriation under trade secret law. The chances of early success in seeking a
preliminary injunction in a theft of trade secret litigation usually can be greater than in a
patent infringement action106. This is because, in the absence of a prior favourable court
finding of infringement and validity of the same patent courts may not be as willing to
issue preliminary injunctions in relatively complex patent cases, thus allowing
wrongdoers to continue infringing107. However, courts might be more willing to issue a
preliminary injunction in a trade secret case. Because of its potential to prevent
103
UC Berkeley A Quick Guide to Material Transfer Agreements.
http://www.spo.berkeley.edu/guide/mtaquick.html
104
Paul J. Sutton, Chinh H. Pham and Joanna Toke, Nanotechnology licence pitfalls, Journal of Intellectual
Property Law & Practice 2009
105
Id
106
Id
107
Id
29
wrongdoers from benefiting from a misappropriated technology, trade secret protection
may be considered as a viable alternative to protecting owners of nanotechnology against
infringement
OPEN SOURCE NANOTECHNOLOGY
The open source movement is of course not new. This movement is synonymous with the
software industry; one of the best and most widely known success stories is that of the
operating system –Linux108. An open source software license is one that conforms to the latest
version of the open source definition (OSD) published on the website of the Open Source
Initiative (OSI), a non profit corporation109. Of late there have been calls for similar strategies
in the biotechnology industry, though the bioopen source movement has not been as wide
reaching or popular as the software version110. This has however not stopped calls for the
concept of open sourcing to be introduced to nanotechnologies especially to the basic science
and particularly technologies relevant to developing and poor developing countries. Issues
relating to nanopatents have similarities to biotechnology patents, the most fundamental being
–patenting life or basic building blocks of nature111, control and ownership of a fundamental
technology and development concerns112. The concerns over the patenting of living materials
and other naturally derived materials have punctuated debates over biotechnology for several
years113. Arguments for open source nanotechnology do not imply that all information should
108
Linux is a computer operating system and is one of the most prominent examples of free software and
open source development; typically all the underlying source code can be freely modified, used, and
redistributed by anyone. The name "Linux" comes from the Linux kernel, originally written in 1991 by
Linus Torvalds.
109
OSI - The Open Source Definition - available at: http://www.opensource.org/docs/osd
110
Some Open Source Biotechnology projects are: (a) Tropical Disease Initiative – collaboration on early
stage development of drugs to fight tropical diseases (b) HapMap Project – developing a specialized map of
the human genome (c) Biological Innovation for Open Society (BIOS)- plans to operate as a combination
of the cooperative and the protected commons approach. See, Feldman Robin (2004), Open Source
Biotechnology Movement: Is it patent misuse?, Minn. J. L. Sci. & Tech, vol. 6(1), pp. 122-129
111
According to the ETC Group, biotechnology created scope for ‘nature patents’ while nanotechnology
which allows manipulation of both living and non-living materials (sometimes in combination) creates
scope for ‘second nature patents’. ETC Group (2005), Nanotech’s Second Nature Patents, Special Report.
112
See, Feldman Robin (2004), Open Source Biotechnology Movement: Is it patent misuse?, Minn. J. L.
Sci. & Tech,vol. 6(1), pp. 117- 167 and ETC Group (2005), Nanotech’s Second Nature Patents, Special
Report, pp. 5-19.
113
Diamond vs. Chakrabarty 447 U.S. 303 (1980) – patenting of all life forms, Harvard mouse patent- A
transgenic non-human mammal all of whose germ cells and somatic cells contain a recombinant activated
30
be placed in the commons. Both opened and closed source intellectual property have
advantages under different circumstances and can productively coexist 114. Once an innovator
decides to release his or her technology in a non-proprietary fashion, he or she must then
decide between open source licensing and placing the innovation in the public domain. While
placing the innovation directly in the public domain means the innovator need not worry
about obtaining or maintaining intellectual property, dissemination of the innovation through
an open source license still allows the innovator a degree of authorship. This then allows the
innovator to set the terms and conditions on the basis of which the innovation may be used.
There is also nothing stopping an open source licensor from adopting a combination of
proprietary, open source and public domain licenses115. An inventor may also simply opt to
open source fringe research while patent essential or more important aspects.
However the application of the open source concept to
nanotechnology has several aspects and dimensions, namely; Since computer software will
be used in modelling and simulating nanostructures, these nanotechnology modelling
software’s can be open sourced accordingly116. If governments fund, support and promote the
idea of public domain or open source nanotechnology, it may lead to more activity in open
source nanotechnology. Initiatives and projects by universities and research centres ultimately
open source resultant research. However, aspirations of researchers and their universities to
profit from intellectual property rights encourage closed approaches. A lot of nanotechnology
related research requires considerable amount of funding and resources which is generally
provided by governments, large corporations and research centres. The source of the funding
in most cases will have a say in what happens to the outputs. Hence even if the researcher or
scientist wants to open source he may be without a vehicle to do so. The advantage of open
oncogene sequence introduced into said mammal, or an ancestor of said mammal, at an embryonic stage.
[U.S. Patent No. 4,736,866]; Ex Parte Hibberd, 227 U.S.P.Q (BNA) 443 (1985)- Allowed patent rights to
be issued for plant varieties regardless of whether the plant is obtained through asexual or sexual
reproduction. Asgrow Seed vs. Winterboer, 513 U.S. 179 (1995) - seeds were effectively considered
licensed commodities. J.E.M. Ag Supply Inc. vs. Pioneer Hi-Bred International Inc. 534 U.S. 124 (2001) -
United States Supreme Court reiterated utility patents on plants
114
Bruns Bryan (2001), Open Sourcing Nanotechnology research and development: Issues and
Opportunities, Nanotechnology Vol. 12, p.200; See also, Raymond S (1999), The Cathedral and the Bazaar:
Musings on Linux and open source, Sebastapol, CA, pp169-179.
115
See, Janet Hope (2007), Open Source Licensing, in Intellectual Property Management in Health and
Agricultural Innovation: A Handbook of Best Practices (eds. A Krattiger, RT Mahoney, L. Nelsen et al.)
Oxford UK, pp.107-118.
116
An example is NanoCAD, a design system for mechanical modelling of molecules released under
General Public Licence (GPL).
31
sourcing means that it becomes easier to receive inputs on improvements and enhancements
this can only add more value to the research. The idea of open source nanotechnology would
seem to be ideal since nanotechnology deals with fundamental science and has a wide
spectrum of application; however there are fundamental differences between the software
industry and the nanotechnology industry.
The most basic objection to open source nanotechnology is that the
dynamics and requirements of the software industry and the nanotechnology industry are
different117. The software industry in most cases can be classified as one type of industry with
specific purposes and outputs, while in the case of nanotechnology, it is the convergence of
several established domains and technologies, with the exact definition of what is
nanotechnology still being debated. The writing or programming of code is also different
from manipulation at the nanoscale, so also is the investment and infrastructure requirements.
The capital costs for investing in nanotechnologies is considerable higher with fewer players
as compared to the software industry. On the whole it cannot be denied that much will
depend on whether nano intellectual property owners will find open sourcing more cost
effective and conducive to their short and long term goals 118. Open sourcing in technology
also has the potential to shift the balance of power as has become obvious in the software
industry where software giants like Microsoft are now wary of open source software, and are
being forced to re-examine their approach and strategies. It is unlikely that open source
strategies will completely supersede traditional patent and licensing approaches; they will
however complement the existing system and in certain cases offer a more conducive
alternative.
117
Bruns Bryan (2001), Open Sourcing Nanotechnology research and development: Issues and
Opportunities, Nanotechnology Vol. 12, p.200; See also, Raymond S (1999), The Cathedral and the Bazaar:
Musings on Linux and open source, Sebastapol, CA, pp169-179
118
Joel D’Silva, Pools, Thickets and Open Source Nanotechnology, Electronic copy available at:
http://ssrn.com/abstract=1368389
32

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CHAPTER 2

It is obvious that the products of nanotechnology cannot be considered as

In the question of whether the innovation is an invention or

With nanotechnology, this problem becomes even more acute,

One of the fundamental aspects of obtaining a valid and enforceable patent is

a. Prior art in the nanotechnology sector

NANOTECHNOLOGY PATENT ISSUES

INTERNATIONAL RESPNSE TOWARDS NANOPATENTS

World Intellectual Property Rights Organisation (WIPO)

U.S Patent and Trademark Office(USPTO)

GOVERNMENTAL OWNERSHIP AND CONTROLS

The possibility of losing rights in an invention to the government presents

On the international front, licensors who wish to license their inventions

Thus, to export nanotechnology or other technical information beyond

POLICING AND ENFORCING NANOTECHNOLGY PATENT RIGHTS

In addition, a recent Supreme Court decision has increased the

Nanocrystalline Pharmaceutical Patent Litigation: The First Case

Facts of the case

Importance of this case

Nanotechnology is unique in that it can be very difficult for

When licensing nanotechnology, it is therefore possible to convey

While suitable confidentiality and non-compete provisions may give

Another advantage to pursuing trade secret protection as an alternative to

OPEN SOURCE NANOTECHNOLOGY

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