Patenting Nanotechnology: Exploring the Challenges

Nanotechnology is one of the most promising and radical new technological frontiers. It involves the engineering of functional systems or the design, production and application of materials at the molecular scale1 that is, with structures around 40,000 times smaller than the width of a human hair. It holds enormous promise for the development of new materials and devices with a vast range of applications. It is the “global economy’s fastest growing information and investment sector2”. In this article, Aparna Watal, Legal Officer (Asia-Pacific) Attomic Labs, Inc., and Professor Thomas A. Faunce, Faculty of Law, Australian National University (ANU), explore some of the challenges patenting authorities face when dealing with nanotechnology.

One red blood cell has a diameter
of around 7,500 nanometers. (Photo:
iStockphoto.com/Kirill Putchenko)

At the nanoscale, materials can express unusual or distinctive physical, chemical, and biological properties, which differ in important ways from bulk materials and single atoms or molecules.3 At the nanoscale, the laws of quantum physics take over and new physical properties emerge enabling exciting new applications. Nanotechnology is about building functional mechanisms with nanoscale dimensions, such as supercomputers the size of a sugar cube with the power of a billion laptops. In sum, “by taking advantage of quantum-level properties,” nanotechnology “allows for unprecedented control of the material world.”4

The technology is already evident in an increasing range of consumer products such as cosmetics and sunscreen lotions. Zinc oxide, for example, a key ingredient of sunscreen lotions leaves a chalky-white residue on the skin. Using nanoscale zinc oxide particles, the lotion becomes clear and leaves no visible trace. Clothing manufacturers also use nanotechnology to create stain and grime repellent clothing. Nano-composite materials that offer advantages in weight, strength and durability are increasingly used in manufacturing car parts and sports equipment, such as golf clubs and tennis rackets. Nano-materials can serve infinitely varied applications, from site-specific drug delivery mechanisms and biomarkers that light up cancer cells to cost-effective and energy efficient photovoltaic cells.

In the past 20 years, nanotechnology has enjoyed phenomenal growth, with the “nanotech” market projected to be worth a trillion US dollars by 2015. This has fuelled an upsurge in nanotech-related patent applications filed worldwide which grew more than 50-fold between 1991 and 2008⁵. The push to protect nanotechnologies has highlighted a number of issues relating to the patent system.

Size matters

Size is everything in the world of nanotechnology. It also raises a number of interesting questions when it comes to determining the validity and enforceability of nanotechnology patents. Is “nanoscale” a sufficiently precise term to include in a patent claim? Are current patent examination practices – to determine the patentability of a claimed invention6 - sufficient to effectively scrutinize nanoscale inventions? What are the difficulties in assessing the novelty of an invention in this emerging area where, in general, extensive prior art is considered to be lacking. What are the difficulties associated with enforcing nanotechnology patents? What happens if the size range mentioned in a nanoscale patent application overlaps with that featured in the prior art? Is downsizing in itself obvious for the person skilled in the art? Although, case law on these issues is not unique to nanotechnology there is an emerging consensus about how to address these issues under existing patent laws.

Researchers use nanoparticles
to shrink tumors in mice.
Fluorescence shows
accumulation of nanoparticles
in tumor. (Credit: Fuyu Tamanoi,
Jeff Zink, UCLA)

Defining nanotechnology for patent claims

A precise and uniform definition of the terms nanotechnology and nano-scale has long eluded scientists and patent offices. Lack of a standardized definition has implications for patent search and classification, and for tracking patenting trends. It magnifies the risk that relevant prior art remains undetected and creates uncertainty about how an ordinary person skilled in the art – one of the yardsticks against which patentability is established - might interpret “nanoscale”. It heightens the risk of a nanotechnology patent being invalidated and of overlapping or conflicting patents being granted.

The three key nanotechnology patent powerhouses – the USPTO, EPO and JPO7 – have each sought to resolve this issue by respectively adopting definitions that generally speaking restrict nanotechnology inventions to a length scale of less than 100 nms. This effectively excludes applications that claim nanoscale measures according to different nanomeasures. But the situation is further compounded by the use in patent applications of ambiguous or undefined terms, such as “nanoagglomerates,” creating uncertainty and making it difficult for patent examiners to assess how an invention differs from the prior art.

A multidisciplinary field

The inherently multidisciplinary nature of nanotechnology8 presents significant challenges for patent granting authorities. In practice, applications are assigned to examiners with the expertise most relevant to an invention. As nanotechnology patent applications typically span multiple scientific and engineering fields, it is unlikely that any single examiner has the required expertise to appropriately assess the patentability of such an application.

This heightens the risk of overlooking relevant prior art and inaccurately assessing an invention’s novelty or inventiveness. It also increases the chances of granting substandard patents that may not stand up in court.

Amid the rising number of nanotechnology patent applications, the EPO, JPO and USPTO are exploring ways to address the problem - for example, by placing greater emphasis on training examiners to carry out more specialized prior art searches for nanotechnology applications. The introduction of new nanotechnology tags in patent classification systems - “Y01N” (EPO), “ZNM” (Japan) and “977” (USPTO) - is also helping to enrich and improve the quality of these searches.

When is a nanotechnology novel?

Nanoshapes arising from catalytic impurities particles - around 5
to 20 nanometers - which burrow into graphite, causing massive
fissures and caves and dramatically influence the properties of
graphite. (Photo:  Heinrich Badenhorst, University of Pretoria)

As a general rule, size is not a sufficient condition to establish the novelty of an invention. Some nanotechnology inventions, however, involve nanoscale formulations of previously disclosed chemical compounds, structures and materials. Does this mean that these inventions are not patentable?

When nanoscale inventions exhibit properties that are, in some measure, unanticipated or different from those found in larger scale prior art, exceptions have been made. For example, in BASF v Orica Australia,9 the EPO’s Technical Board of Appeals (TBA) held that a prior patent which disclosed polymer nanoparticles larger than 111 nms did not destroy the novelty of a subsequent application by Orica for nanoparticles smaller than 100 nms. Orica’s smaller particles exhibited remarkably improved technical properties resulting in a glossier coat compared to the larger particles protected under the prior patent. The difference in properties was held to be sufficient to impart novelty. But does an invention lack novelty if it claims to use particles in a range of sizes that overlap with those disclosed in the prior art? Generally, even the slightest overlap is sufficient to destroy novelty but exceptions have been liberally applied to nanoscale inventions.

Under the EPO’s approach to assessing novelty of these so-called “selection inventions”, the overlap must be narrow relative to the larger prior art range, sufficiently far removed from the larger range and indicative of an invention, for example, by exhibiting a new or unexpected effect that occurs only within the selected sub-range. The new effect does not, of itself, render the sub-range novel; rather, it permits the inference that the sub-range has been specifically selected to provide a technical advantage or resolve a technical issue in the prior art and that it is, therefore, novel. Additionally, the EPO assesses the relevance of the sub-range to prior art documents by asking whether a person skilled in the art would seriously contemplate applying the technical teachings of the prior art in the range of overlap.
The EPO’s TBA applied this measure in a recent case involving Smithkline Beecham Biologicals v Wyeth Holdings Corporation10. The question was whether Smithkline’s patent application on a Hepatitis B vaccine adjuvant11 lipid measuring 60-120 nms lacked novelty in light of a prior patent on a similar adjuvant with particles measuring 80-500 nms. The TBA found that Smithkline’s patent was novel because the overlap was:

• narrow - only 10% of the larger range in the earlier patent;
• at the extreme lower end of the prior art range; and
• exhibited significantly improved adjuvancy – the smaller particles resulted in an unexpected and favorable shift in immune response.

Moreover, the prior art gave little guidance on how to prepare the smaller particles. A skilled person who followed the vaccine supplier’s protocol would have produced particles of between 115 and 951 nms. The technical teachings in the prior art were, therefore, not considered relevant to Smithkline’s patent application.

Granting patents for inventions falling within such overlapping ranges has become more common in nanotechnology than in any other field. Arguably, this creates a fragmented patent proprietorship landscape with multiple “blocking” patents on the same invention. The existence of “a dense web of overlapping rights” creates uncertainty and inhibits inventors in “designing around” existing patents. Such a dead weight of patents for inventions falling within overlapping ranges already overshadows research on nanotubes, nanowires, nanocrystals and nanoemulsions and threatens to severely arrest innovation and the further development of the nanotechnology sector.

When is a nanotechnology non-obvious/inventive?12

(Photo:  Heinrich Badenhorst, University of Pretoria)

In addition to proving novelty, a nanotechnology patent application must pass the test of non-obviousness. Generally, an invention is considered obvious if it miniaturizes known elements, performing the same function, and yields no more than might be expected from the diminished size. Technology is considered non-obvious if it produces new and unexpected results or serves previously unrecognized functions that overcome a technical problem relating to the prior art. As practically all nanoscale technologies display these characteristics, only those results which are not likely to emerge from extrapolations by a skilled person working with smaller structures are deemed patentable.

In the Smithkline Beecham Biologicals v Wyeth Holdings Corporation case, the vaccine adjuvant was held to be inventive because of its unexpectedly improved effect and the fact that nothing in the prior art had suggested that a skilled person might consider reducing the particle size to achieve that advantage.

Nanotechnology applications can pass the non-obvious test if the invention affords a significant technological advantage over prior art, for example, by enabling a skilled person to practice the previously disclosed invention at the nanoscale for the first time. In BASF v Orica Australia13, Orica’s claimed invention involved manufacturing polymer particles at 100 nms or less by initiating polymerization at temperatures below 40°C. BASF argued that the invention was obvious because a prior patent had disclosed the same manufacturing process using temperatures below 50°C to yield particles averaging 111 nms or more. They argued that a skilled person exercising no inventive effort and repeating reactions on a trial-and-error basis for all temperatures between 0°C and 50°C would have derived sub-100 nm particles at temperatures below 40°C.

The EPO rejected this argument and reasoned that the prior patent suggested using temperatures not exceeding 50°C. While this “did not rule out the use of temperatures below 40°C, it was far from suggesting their use.” Moreover, the patent was aimed at manufacturing particles larger than 111nms only. A skilled person following the teachings of the prior patent would not have used temperatures below 40°C or foreseen that lower temperatures would result in particles smaller than 100 nms. The TBA held that Orica’s invention provided, for the first time, a method of creating smaller variants of polymer nanoparticles and was, therefore, inventive.

Detecting Abuses

The cross-industry application of nanotechnology, as well as the tendency to grant patents on “selected inventions” (those using particles in a range of sizes that overlap) makes policing and enforcement of nanotechnology patents prohibitively expensive and practically impossible. There is no easy way for a patentee to know whether a competitor or a firm operating in another sector is using a protected technology without authorization. The only way to determine whether a marketed end product infringes a nanotechnology patent is to use sophisticated and expensive microscopy techniques and equipment. Analysis of every suspect product is beyond the purse of most outfits. Moreover, as much of the current nanotechnology research is guarded behind closed doors in corporate research facilities and university laboratories, it is often difficult to establish a legal basis for an infringement action even if abuse is detected.

These factors risk undermining the primary incentive for patent disclosure, namely, to obtain an exclusive monopoly to use and commercialize an invention.

A complex legal landscape

By their very nature, nanotechnologies are “universal” technologies that provide an enabling platform for manufacturing processes and products in multiple technologies and industries. While its cross-industry character has created an enormous buzz about its potential, this very quality presents significant challenges for anyone seeking to develop and commercialize products in this space. A basic patent on carbon nanotubes or semiconducting nanocrystals or processes for functionalizing them, for example, has applications in many fields - semiconductor design, biotechnology, construction, pharmaceuticals, agriculture and telecommunications. A patentee, however, may only be operational in one or two of these fields. Any company seeking to develop and commercialize a nanotechnology-related product, then, must take a comprehensive view of the nanotech patent landscape to ensure that all patents owned by third parties are identified. This, coupled with a well planned licensing strategy – to ensure that all relevant patented technologies are licensed - can greatly facilitate the process of establishing freedom to operate and help avoid potentially costly and unforeseen legal wrangles.

When framing patent claims, nanotech patentees also need to keep in mind the complexities of the international patent landscape. The fact that different jurisdictions interpret principles governing patent law in various ways can impact the patentability of an invention. The German Federal Supreme Court, for instance, has in the past invalidated a nanotechnology patent granted by the EPO for a “selection invention,” on the grounds of lack of novelty.14

So far, the difficulties involved in tracking patent infringement and enforcement have, arguably, granted researchers and inventors a tacit and much needed freedom to operate. However, overlooking these patents will become riskier and harder as more nanotechnology products reach the market. The challenge for the future will be to foster sustained nanotechnology innovation by ensuring that the intellectual property regime affords innovators ample freedom to operate and to develop novel nanotechnology applications, without substantially undercutting the incentives for patent disclosure and investment.

______________________
1  www.crnano.org/whatis.htm
2  www.nanotech-now.com/
3  www.nano.gov/html/facts/whatIsNano.html
4  www.nanotech-now.com/basics.htm
5  Yan Dang, Yulei Zhang, Li Fan, Hsinchun Chen, Mihail C. Roco, ‘Trends in worldwide nanotechnology patent applications: 1991 to 2008’ (2010) Journal of Nanoparticle Research 12: 687-706.
6  To merit a patent, among other requirements, an invention must be novel, involve an inventive step (be non-obvious) and must have industrial application (utility).
7  The United States Patent and Trademark Office (USPTO); the European Patent Office (EPO); and the Japan Patent Office (JPO)
8  Nanotechnology derives its scientific knowledge base from a range of disciplines, including physics, chemistry, materials science, engineering, computational sciences and biotechnology.
9  BASF v Orica Australia Boards of Appeal of the EPO, T-0547/99 (8 January 2002)
10  Smithkline Beecham Biologicals v Wyeth Holdings Corporation Boards of Appeal of the EPO, T-0552/00 (30 October 2003).
11  An adjuvant is a pharmacological or immunological agent often included in vaccines to enhance the recipient's immune response to a supplied antigen.
12  Both terms are equivalent. A novel invention can be non-obvious if it represents a sufficient advance in relation to the state of the art to be considered worth patenting. If an invention would be obvious to a person of ordinary skill in the field concerned, it would not denote progress to the stage qualifying for patent protection.
13  BASF v Orica Australia Boards of Appeal of the EPO, T-0547/99 (8 January 2002).
14  Bundesgerichtshof [BGH] Federal Court of Justice, Inkrustierungsinhibitoren, 2000, 591 GRUR (F.R.G).