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Prior art can make the difference between nanotechnology patent gold and fool’s gold. There is a growing number of nanotechnology patents, many of which have extremely broad claims. Will these patents turn into gold, or merely fool’s gold that embarrasses business executives and investors? Many factors will contribute to the answer to that question. One fundamentally important factor is prior art. In the United States, ideally all prior art is considered during the examination of a patent application. However, the process of identifying prior art during examination is often not perfect. As discussed below, the process may currently be far less perfect with respect to nanotechnology than with other technologies. When prior art is not considered during examination, and then later found, that prior art can then be used to invalidate an issued patent. As a result, nanotechnology patents may exist that are of questionable validity. In the last several years, there have been many proclamations announcing the discovery of gold in the form of the latest and greatest nanotechnology patent. However, the nanotechnology industry might well pause and ponder for a moment the relevance of lessons of gold seekers who thought they had found gold, but later learned that they were only fooled by fool’s gold. In particular, the industry might consider what prior art lurks below that may undermine and devalue a nanotechnology patent. The requirement that an invention must be new to be patentable gives rise to the concept of prior art and its importance. Prior art can preclude a patent from issuing or invalidate an issued patent by either anticipating a claimed invention or rendering a claimed invention obvious. Examples of prior art include other patents and patent applications, an article in a magazine, a Web page and a Ph.D. thesis found only in a college library. Even evidence of public knowledge can be prior art. For example, a presentation at an industry or scientific conference can be considered prior art. Moreover, public knowledge need not be in a tangible form, as long as a sufficient number of people have information of the claimed invention. BROAD AND OVERLAPPING CLAIMS There are numerous indicators that nanotechnology prior art will play a particularly critical role. The U.S. Patent and Trademark Office (PTO) has allowed many nanotechnology patents with very broad claims to issue. The recently published Handbook of Nanotechnology: Business, Policy and Intellectual Property Law (2004) by John C. Miller et al. notes that “examiners have … granted broad and overlapping claims on upstream [nanotechnology] inventions.” The handbook identifies numerous examples of very broad claims, such as a nanotube patent, which issued more than a decade after single-walled carbon nanotubes were discovered and which claims “[a] composition of matter comprising at least about 99% by weight of single-wall carbon molecules.” Having patents issue with broad claims is not unique to nanotechnology, nor is it necessarily an indicator that the prior art was inadequately considered. However, when taken with the following discussion, one may conclude that early nanotechnology patents may be more susceptible to being invalidated based on newly considered prior art than patents in many other areas. First, commentators have suggested that there are shortcomings in the PTO examination process for nanotechnology-related patents. Specific concerns range from poor examiner training to inefficient searching capabilities. The newness of nanotechnology means that few examiners have a background in this area — a problem the PTO is working to change. Indeed, the PTO has recently recognized the need to provide specific nanotechnology-related training for its examiners. Additionally, the PTO has recently created a nanotechnology digest to facilitate more efficient searching of patents and published patent applications when examining nanotechnology patent applications. The PTO has also launched customer partnership meetings to work with industry to improve the quality of nanotechnology patent examination. While laudable, the fact that the PTO felt the need to take these steps in the last couple of years raises uncertainty as to the quality of nanotechnology patent examination prior to implementing these steps. Second, the lack of a common vernacular for nanotechnology terms also undermines the ability to effectively search nanotechnology prior art. As recently as 2002 the PTO (and industry, for that matter) was still coming to grips with how to define nanotechnology, let alone agreeing on the definition of terms such as nanotube, quantum dot or nanowires. The lack of clarity related to these terms, their synonyms or phrases to represent these materials increases the likelihood that prior art would be missed during a search. Additionally, a high rate of PTO first office action allowances supports the premise that prior art is not being adequately considered for nanotechnology patent applications. A first office action allowance occurs when the PTO allows claims in the first PTO official action on the merits of an application. An examination of a set of nanotube patents issued in 2004 found that an uncommonly high percentage resulted from first office action allowances, compared to rates of first office action allowances for other technologies, leaving the door open wider for prior art that may be found to challenge the validity of these patents. NONPATENT SCIENTIFIC LITERATURE Last, but certainly not least, there is a huge wealth of nonpatent scientific literature that addresses nanotechnology. This literature predates many of the nanotechnology patents that have issued and are currently issuing. For example, an article appearing in the August 2002 issue of Science magazine noted that there were hundreds of scientific articles related to nanotubes being published in the early 1990s and more than 10,000 articles published per year by the year 2000. These are just nanotube-related articles. This growing treasure trove of nanotube prior art is sure to be the bane of existence for some poor legal assistants, who are directed by a litigation partner to find prior art to invalidate a patent that is being litigated. One also may wonder, given that much of the early nanotechnology work occurred at universities, how many Ph.D. theses are shelved (and catalogued) somewhere that may be used to invalidate a nanotechnology patent or how many presentations at scientific conferences have occurred that are not easily tracked down-but arguably are public knowledge or have been published. In light of this huge amount of nanotechnology research, one would expect more narrowly drawn claims and fewer first office actions. The fact that the opposite is true further supports the premise that there is a lot of prior art lurking below. When litigation occurs, significant time and resources will be dedicated to finding prior art to invalidate nanotechnology patents-particularly ones with broad claims. An inventor may spend a few thousand to tens of thousands of dollars to have a patent application developed and conduct a minimal prior art search, while hundreds of thousands to millions of dollars may be spent on litigation and researching references to invalidate a patent. Because of the infancy of the nanotechnology industry, there has been minimal litigation activity focused on nanotechnology patents. Given the estimates that nanotechnology represents industry opportunities measured in the billions and even trillions of dollars, when commercialization starts to accelerate and revenues grow, there will be nanotechnology patent litigation. With so much at stake, significant resources will be made available to search far and wide for prior art during litigation. If the prior art is out there, it will likely be found. What can be done? Companies and investors building patent positions to dominate a specific area within nanotechnology must dig deeper than usual in their patent due diligence. There is a presumption that an issued patent is valid. In nanotechnology, however, less reliance must be placed on that presumption and significant due diligence must be conducted to affirm the strength of the patent. Furthermore, when applicants are drafting nanotechnology patent applications, they and their attorneys should work together to file claims with varying breadth-a good practice generally, but even more important within nanotechnology. Of course, this is a challenge with the rising costs of claim-filing fees and the use of restriction practice by the PTO. Applicants and their attorneys should also ensure that information-disclosure statements are filed that include nonpatent prior art. While a legal requirement exists to file all material references to the PTO that are known, applicants and their attorneys should err on the side of filing more nonpatent references than is normally the case. Such an approach will help ensure that a quality examination occurs. This approach will also give the appearance to an adverse party looking to invalidate a patent that thorough consideration of the prior art was given, and thereby potentially discourage efforts to invalidate the patent. For sure, there is nanotechnology patent gold to be found. Nonetheless, investors and businesspeople in the nanotechnology area will be wise to heed the last bit of advice to recreational gold diggers on the bottom of a Utah Geological Survey Web site. “Good luck in your quest for gold and don’t be fooled by fool’s gold,” and be particularly aware of the prior art lurking below. Michael Specht is an associate, Aaron Lukas is a technical specialist and Jonathan Tuminaro is a student associate at Washington’s Sterne, Kessler, Goldstein & Fox.

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