Behind the buzz and beyond the hype:
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Posted: Jan 31st, 2007
Growing nanotechnology problems: navigating the patent labyrinth
(Nanowerk News) Carbon nanotubes (CNTs) belong to the most exciting nanomaterials discovered so far and the buzz associated with them has to do with their amazing properties. Depending on their structure, they can be metals or semiconductors. They exhibit extraordinary mechanical properties, which make them extremely strong materials with good thermal conductivity. Their tensile strength is several times that of steel. These characteristics have generated strong interest in their possible use in reinforced composites, nanoelectronics, nanomechanical devices, circuits and computers. Single-wall nanotubes (SWNTs) are an intriguing variant of carbon nanotubes because they exhibit important electrical properties that are not shared by the multi-walled carbon nanotubes (MWNT). SWNTs are the most likely candidate for miniaturizing electronics toward the nanoscale. Because of their enormous commercial potential, universities, start-ups, and corporations have aggressively sought patent protection on nanotube-based products (see our previous Nanowerk Spotlight "The patent land grab in nanotechnology continues unabated, creating problems down the road"). A recent legal paper identifies key patents claiming compositions of matter, methods of production, and products incorporating nanotubes. The authors summarize potential patent invalidity arguments that may be raised against certain patents in the field and explain how the patent landscape impacts the commercialization of nanotube-based products. A proposed "Nanotube Patent Forum" could be a means for industry to facilitate cost-effective licensing transactions between patent holders and manufacturers.
"The commercial potential of carbon nanotubes is vast, but the corresponding patent landscape is daunting" Drew Harris, a lawyer and Managing Editor of Nanotechnology Law & Business, told Nanowerk. "Firms seeking to manufacture nanotube-based products now face a dense thicket of patents and patent applications held by different universities, government labs, and companies. When products incorporating nanotubes begin to come to market in the near future, complicated and untested patent issues will confront lawyers and executives."
Harris, together with co-author John Miller, also a Managing Editor of Nanotechnology Law & Business, wrote a very detailed and informative article about the swampy patent jungle surrounding all things CNT ("The Carbon Nanotube Patent Landscape").
Patent issues every step of the way
Manufacturers of CNT-based products not wanting to rely on external suppliers for their CNTs face patent issues in all stages of their inhouse CNT synthesis: the growth technique (based on arc discharge, laser ablation, or chemical vapor deposition methods); the CNT processing tools (for purification, sorting, doping, functionalizing, coating, etc.); the manipulation techniques for final deposition on or integration with the product.
Harris explains how patent claims, which are comprised of elements, determine the scope of a patent. There are three primary types of claims in carbon nanotube patents: (1) "composition of matter" claims; (2) "product, device, apparatus, or system" claims; and (3) "method" claims. A product or process infringes a patent claim when every element of the claim, or an equivalent of the claim, is found in the product or process.
"We use the term 'building block' patents to generally describe fundamental patents claiming nanotubes, nanotube-based products, and methods of making nanotubes and nanotube-based products" says Harris. "Building block patents are distinguished from incremental improvement patents, which have a much narrower claim scope."
"We divide building block carbon nanotube patents into two categories. First, 'basic building block' patents are fundamental patents claiming nanotube compositions of matter, general techniques for synthesizing nanotubes, and widely used tools for altering and manipulating nanotubes. Basic building block patents are likely to be infringed across a variety of different industries."
"Second, we use the term 'applied building block' patents to describe patents claiming specific products based on carbon nanotubes and specific methods for manufacturing those products. Examples include apparatus and method claims directed to nanotube transistors, nanotube-based sensors, and nanotubes embedded in polymer resins. Applied building block patents are only relevant to a select number of firms in specific industries."
Universities, government labs and corporate research groups have aggressively sought to establish broad patent protection. A Lux/Foley & Lardner report in June 2006 showed that 446 carbon nanotube patents having 8,557 claims, of which 420 claims are directed to 'building block' type claims, have already been issued in the U.S. A quick search on the U.S. Patent Office's website shows that as of January 30, 2007, there are 543 patents with the term "carbon nanotube" included in the abstract and 2,415 patents with this term included in the patent specification.
Quite a number of companies have already invested in or are conducting active research in products based on CNTs. These firms face the prospect of potentially infringing both "basic building block patents" and "applied building block patents." The large number of nanotube building block patents and accompanying legal uncertainties could either stifle investments in mass production of CNT products or impose significant legal and license costs on companies seeking to develop and manufacture such products.
Legal disputes are certain
"There are certain to be disputes over the meaning of terms used in building block patent claims as well as whether certain products or processes infringe those claims" says Harris. "In many cases, however, the central question for firms analyzing building block patents held by third parties will be the validity and scope of the claims."
This whole area could be further complicated by some parties potentially trying to invalidate certain nanotube patent claims by disputing the novelty of the invention. In U.S. patent law, "anticipation" or even "inherent anticipation" occurs when one prior art reference, such as a scientific publication, discloses the features of a claim; the claim is then said to lack novelty. Harris points out that "carbon nanotube patents will likely be repeatedly challenged as being anticipated (or inherently anticipated) by prior art."
Apart from the classic 1952 Radushkevich and Lukyanovich paper (O strukture ugleroda, obrazujucegosja pri termiceskom razlozenii okisi ugleroda na zeleznom kontakte), the earliest example of such "prior art" appeared in 1976, when researchers in France and Japan published an article entitled "Filamentous Growth of Carbon Through Benzene Decomposition", which described the creation of hollow tubes of carbon fibers. These tubes were made of "concentric sheets of carbon, set around the fibre axis, as the annual rings of a tree." The researchers describe the tube as "running parallel to the axis ... the diameter of which widely varies from about 20 Â to more than 500 Â." This could be used, for example, as prior art anticipating a multi-walled carbon nanotube. In fact, there are several other scientific publications prior to Ijima's 1991 Nature article that potentially could be used as "prior art" examples.
Some might reach back really far in their "prior art" argumentation. For example, scientists have recently discovered that the 17th century Damascus sabers, which were famed for their strength and exceptionally sharp cutting edge, were crafted through a special process that incorporated carbon nanotubes in the blade (see our Nanowerk Spotlight "Military nanotechnology (take 2): the secret of superior weaponry hundreds of years ago"). Some manufacturers of structural composites comprising nanotubes, for example, may try to argue that this prior use of carbon nanotubes as a structural reinforcement, although not expressly disclosed in any prior art, inherently anticipated certain claims related to carbon nanotubes.
Are patent pools or patent forums the answer?
Faced with a fragmented and confusing patent landscape, potentially costly and messy patent disputes, and high legal transaction and license costs, some commentators have proposed the formation of a patent pool on "building block" CNT patents. However, at the moment, the licensing managers at the companies and universities holding the key patents may not yet recognize the impact of the fragmented patent landscape and, in many cases, may believe that their organizations can maximize the value of their intellectual property by engaging in unilateral enforcement and licensing efforts.
"Notwithstanding the obstacles to patent pooling arrangements, we are not entirely pessimistic" says Harris. "It is possible that some of these issues might be resolved and some types of patent pools involving carbon nanotubes can be established. In the immediate future, there is an opportunity for universities, industry, and the government to take action to facilitate investments in nanotube-based products and reduce wasteful transaction costs. We propose that industry would benefit from the launch of a 'Nanotube Patent Forum.'"
The Forum would bring together the different patent holders with firms developing and manufacturing nanotube-based products. Harris and Miller suggest that the forum would be open to anyone, but should at least include participation by key patent holders such as IBM, NEC, Hyperion, Intel, Rice University, GE, Carbon Nanotechnologies, Nantero, Unidym, and Stanford University.
The primary purpose of the Forum would be to provide patent holders with insight into the appropriate royalty streams they should expect in light of the royalty streams being demanded from other patent holders. Patent holders would get a better sense for what they should expect in terms of royalty streams when enforcing their patents. Patent seekers considering substantial investments in CNT-based product lines could gain some insight into the costs of obtaining the licenses necessary to have freedom to operate.
"A Nanotube Patent Forum would be a beneficial step towards making it much easier for companies to navigate the carbon nanotube patent landscape" Harris concludes.