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Under President Bush’s signature, the Cooperative Research andTechnology Enhancement (CREATE) Act was incorporated into U.S. patentlaw late last year. The act extends the safe harbor provision of 35U.S.C. �103 (c) that shields patent claims from certain types of priorart. Under the new law, a patent applicant can use the safe harbor toexclude prior art if the claimed invention and the prior art arose undera joint research agreement despite the fact that the prior art andclaimed invention are owned by different entities. Exclude prior art? Wow. Wow indeed. But, before you order preprinted terminal disclaimer formsfor your favorite patent attorneys, take a look at the act from asystems approach — start to finish — for your joint researchrelationships. Doing so will enable you to make more effective use –and nonuse — of the new law and will likely strengthen your protectionon inventions produced by the relationships. This article provides a brief introduction to the act and gives detailedpractical tips to facilitate its systemwide implementation into yourjoint research programs. OVERVIEW OF THE CREATE ACT The act was made effective immediately upon being signed on Dec. 10,2004, and the U.S. Patent and Trademark Office has already issued aretroactive interim rule governing the use of the act in patentapplications. The law is live and available for use now, highlightingthe need for those with existing or contemplated joint research anddevelopment relationships to become familiar with the CREATE Act, itspractice and the consequences of its use. Congress passed the act to clarify its intent behind the existing safeharbor. In OddzOn Products Inc. v. Just Toys, Inc., 122 F.3d1396, 43 U.S.P.Q.2d 1641 (Fed. Cir. 1997), the U.S. Court of Appeals forthe Federal Circuit interpreted the 103(c) safe harbor as not applicablein situations in which members of a joint research team are not under anobligation to assign rights flowing from the contemplated research to asingle entity before the generation of the invention. Because the safeharbor does not apply, the Federal Circuit ruled that the sharing ofinformation among members of a research team could render any resultinginvention unpatentable. Congress enacted the CREATE Act to remove theimpediment to joint research activities that it believed was created bythe OddzOn decision. The CREATE Act enables the exclusion of prior art under 103 (c) when:
A) The claimed invention was made by or on behalf of parties to ajoint research agreement that was in effect on or before the date theclaimed invention was made; B) The claimed invention was made as a result of activitiesundertaken within the scope of the joint research agreement; and C) The application for patent for the claimed invention disclosesor is amended to disclose the names of the parties to the joint researchagreement.

Putting the application in practice can be quite simple. Appropriatepatent applications can simply be amended to include the requiredinformation, and, if the prior art is an issued patent, a terminaldisclaimer can be filed. But the simplicity of the act and its practice can be quite deceiving.The terminal disclaimer must include a waiver of rights to separatelyenforce and license the prior art patent and any patent that issues fromthe pending application. Invocation of the act in these situationswill, in effect, marry the patent applicant and the patentee for thelife of the patents. PRACTICAL TIPS FOR SYSTEMWIDE IMPLEMENTATION OF CREATE Patent attorneys may not be able to resist the opportunity to excludeprior art in a pending application, and may tend to use the act on acase-by-case basis in knee-jerk fashion. Effective use of the new law,though, requires careful thought and planning in all stages of yourjoint research relationships, starting with the joint research agreementand extending through prosecution of all resulting patent applications. First, optimize the joint research agreement. All such agreementsshould now be drafted with the act in mind. When forming a newrelationship, draft the controlling agreement to include a field ofresearch that accurately reflects the broadest possible scope of therelationship. If the scope changes over time, the agreement should beamended to again reflect the broadest possible scope. The agreement should include a portion specifically designed forrecordation at the Patent and Trademark Office. Regulations promulgatedby the Patent and Trademark Office permit recordation of a jointresearch agreement should future reference to the agreement benecessary. Importantly, the regulation allows for the recordation of aportion of the agreement, in lieu of the entire agreement. Recording aportion of the agreement allows the parties to keep the detailsconfidential. Plan for this by including a page in the agreementspecifically for this purpose. Include the names of all parties, thedate of execution, and a concise statement of the scope of theagreement. Setting this section off from the remainder of theagreement, such as in an appendix, will facilitate effective recordationwithout using the entire agreement or wasting time on redaction ofunnecessary details. Second, educate the project team on the agreement. Inform everyone ofthe field of research. Most importantly, make sure the patent attorneysand researchers understand the field and its scope. Request that theresearches provide timely updates if the scope or field of the projectshifts. Also, ask that updates be provided if new fields of researchare contemplated or realized. This will facilitate timely amendment tothe agreement if necessary. The patent attorneys need to understand thefield of research listed in the agreement before invoking the act andprior to the making of any statements regarding the scope of theagreement. For large projects where the act may be invoked severaltimes, it is important that all statements made regarding the field ofresearch be consistent with each other. Lastly, develop a patent prosecution game plan regarding the act. Forexample, all applications filed as a result of the joint researchrelationship should list the field of the invention in a manner that isconsistent with the field of research in the governing agreement. Anamendment made to the field of invention to match the field listed inthe agreement, or a statement that includes a different field, may placethe applicability of the act at issue, either in the patent office orduring subsequent patent litigation. Also, instruct the patent attorneys to fully consider the act and itsconsequences before invoking the safe harbor as a knee-jerk reaction tothe citation of applicable art. The act is only an issue after theexaminer has established a prima facie case of obviousness. Ifappropriate, the patent attorney should attack the rejection first andonly use the act if necessary. Also, if a terminal disclaimer is filedto exclude an issued patent, you will be tied to your joint researchpartner for the life of the patents. Ask that the patent attorneyconsider all available options before filing such a disclaimer,including abandonment of the application. Implementing these tips will allow you to optimize your joint researchrelationships in light of the new law.

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