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Nanotechnology is the science of the small, but it’s growing bigger every day. The National Science Foundation estimates that the worldwide market for nanotechnology will grow to $1 trillion in less than 15 years. Last year, worldwide government funding of research and development in nanotechnology exceeded $2 billion. The U.S. government alone spent $604 million. As happened in the biotechnology and e-commerce industries, patents will play a key role in the success of nanotechnology businesses. However, the U.S. Patent and Trademark Office isn’t treating nanotechnology like biotechnology and business methods. The patent office hasn’t established a separate examining group to deal with nanotechnology, as it did for those fields. In the long run this may cause complications for the industry. Before we jump into the patent office’s approach, here’s a quick technology tutorial. The “nano” in nanotechnology refers to a nanometer, or one billionth of a meter. To put that into perspective, a single human hair is about 10,000 nanometers in diameter. The length of ten silicon atoms side-by-side equals roughly one nanometer. Nanotechnology refers to methods that control matter at the nanoscale and create materials with distinctive properties and devices with unique capabilities. You may have already encountered a nanotechnology product. Today you can buy sunscreens that incorporate nanoparticles of titanium dioxide to prevent sunburn, and clothes made with nanofibers to help resist stains. Looking ahead, some scientists envision nanotechnology enabling a device the size of a sugar cube that could hold all the information now stored in the Library of Congress. Other possibilities include tiny machines flowing though a person’s bloodstream to destroy cancerous cells while leaving healthy cells untouched. Many scientists and business people are calling nanotechnology a “disruptive technology” that will revolutionize worldwide markets. Expectations for nanotechnology rival those for biotechnology, which altered research and development in life sciences, and those for e-commerce, which changed traditional retailing methods. The patent office originally took the position that biotech and business methods were not patentable. The courts had to step in and change the rules. In biotech, the Supreme Court’s ruling in Diamond v. Chakrabarty (1980) expanded the statutory subject matter of patents to specifically encompass live, human-made microorganisms. The U.S. Court of Appeals for the Federal Circuit’s 1998 ruling in State Street Bank & Trust Co. v. Signature Financial Group Inc., cleared the way for business-method patents. After each ruling, inventors flooded the patent office with patent applications. The office responded to the deluge by consulting extensively with the industry, adopting extraordinary procedures and publishing written examining guidelines. The patent office recognized the potential importance of these new technologies. It realized that none of its existing technology groups could competently examine applications in these fields and established new groups to handle biotechnology and business methods. In stark contrast, the patent office has refused to establish a specialized nanotechnology examining group. The office doesn’t seem interested in extensive consultations with the nanotechnology industry, either. To its credit, the patent office correctly identified a significant problem with a specialized nanotechnology group. That is, the cross-disciplinary nature of nanotechnology thwarts easy classification. Nanotechnology inventions may end up in an array of products from pharmaceuticals to semiconductors to sports equipment. Unfortunately, this wide range of uses places a burden on almost all patent examiners, who are unlikely to have nanotechnology expertise. To address this issue, the patent office must educate its examiners in the complexities and subtleties of nanotechnology, facilitate collaboration among examining groups, and issue written examining guidelines. A failure to do so could result in the issuance of patents with overly broad claims, allowing the patentees to unfairly exclude competition. Such patents might suppress market growth and innovation. The patent office’s decision not to form a specialized examining group appears to disregard lessons from biotechnology’s early days. Until 1988, no specialized biotechnology examining group existed, and a backlog of pending applications piled up. Examiners, perhaps ill-equipped to handle the technology, allowed a number of patents with overly broad claims. Take, for example, the Cohen-Boyer patents for basic gene-splicing tools, which were allowed before the office’s biotech group was established. The patents cover a technology that most scientists now use to make recombinant proteins. Stanford University decided to widely license the Cohen-Boyer patents at relatively low cost. But if it had decided to license them exclusively or at a high cost, some scientists would have been prevented from using the technology, and the biotechnology landscape might appear drastically different than it does today. In the short term, the lack of a nanotechnology examining group might translate into a faster turnaround for patent applications. The patent office currently expects the process from initial filing of a patent application to a first office action to average about 15 months. But specialized art groups often exceed that average. Many biotechnology and business-method patent applications, for example, wait much longer. In the long run, however, nanotechnology’s complexity, a shortage of examiners with the requisite technical education, and concerns about issuing overly broad patents could result in a more lengthy patent prosecution and lead to a backlog. With these applications spread throughout the patent office, even the detection of such a backlog presents difficulties. On the positive side, the patent office appears to accept that nanotechnology is patentable. There won’t likely be a nanotechnology Chakrabarty. Difficulties in obtaining nanotechnology patents may center around prior art. In some cases nanotechnology inventions are for smaller versions of an existing invention and applicants might be forced to argue that smaller is patentable. Some scientists and patent attorneys have said that a mere change in size doesn’t demonstrate sufficient novelty, but these naysayers fail to heed historical precedent. In the semiconductor industry, for example, applicants have patented transistors, and they continue to patent scaled-down transistors. New technical problems arise when physical dimensions are reduced, and these new problems call for new solutions. Indeed, case law currently exists supporting the proposition that where different concepts, purposes, or objects are involved, a change in size can result in patentable subject matter. Judging by the increase in the number of nanotechnology patent applications, others seem to agree. Timothy Hsieh and Jonathan Hack are partners in the law firm of Min, Hsieh & Hack LLP. Lawrence Galvin is an associate with the law firm of Finnegan, Henderson, Farabow Garrett & Dunner(www.finnegan.com). If you are interested in submitting an article to law.com, please click here for our submission guidelines.

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