Jan. 20, 2005 — Nanotechnology innovators may avoid getting bogged down in legal disputes over who was the first to invent something with the recent reissuing of rules by the U.S. Patent and Trademark Office. The rules are intended to speed up the process used to resolve instances where two parties apply for a patent covering the same invention.

Unlike most nations, the United States awards a patent to the first party to invent, rather than the first party to file. This means inventors must keep meticulous records in lab notebooks that reflect the “invention conception” and “reduction to practice,” or the actual machine or process in operation. Nanotechnology companies seem vulnerable to interferences, the legal term for dual applications, because many of them rely on intellectual property based on work done in research labs.

The new rules are expected to accelerate interference proceedings before the patent office, according to Richard Torczon, an administrative patent judge. “In the mid-’90s we had cases that were taking a decade to resolve,” Torczon said. “Now our average is down to below two years. We got religion and the rules reflect that.”

The rules now require that issues be identified at an early stage. “The idea is to let everybody know what we are trying to accomplish in the proceeding early on,” Torczon said.

The rules also place an increased amount of discretion with the administrative patent judge to waive or suspend procedural rules in an effort to move proceedings along. The rules also codify the patent office’s practice of using a “two-way test” to determine when to declare an interference; that is, when the granting of a patent to one party would necessarily deny the patent to the other.

Daniel Yannuzzi, a San Diego-based patent expert with Morrison & Foerster, says the two-way test rule is most likely to come up where one invention is the genus and the other is a species. “So let’s say I’ve got a vessel that is a cup and another patent has a cup with a handle,” he said. The question is whether the handled cup is a separate invention or merely another form of a cup. Yannuzzi says the effect of codifying the two-way rule will be to limit the number of interferences granted.

In practice, the new rules require inventors and their attorneys to keep an eye on the record of patent applications, which are now published 18 months after the application is filed, Yannuzzi says. “From the practitioner’s standpoint, the process has become more front-loaded and clients are going to spend a little more money up front,” Yannuzzi said. “The bottom line is, you have to have a substantial portion of your argument done in the filing” for the interference.

Advice to clients? “Be diligent about searching patent publications, and in documenting the conception and reduction to practice,” he said.

With the process more front-loaded, experts are pointing to a presumption that can arise in favor of the first to file for a patent, though the U.S. has not abandoned its “first to invent” standard.

“A lot of nanotechnology is invented in university labs, and inventors hear they’re going to make a fortune,” said Scott Harris, a San Diego-based patent attorney with Fish & Richardson. “If you get $4 million of funding, the last thing you want to do is spend a million of it on a patent interference.” His advice is not to “cheap out” on the upfront work needed to secure the invention.

Filing a patent application first is a good defense against interferences, Harris adds. “In an interference action, the offense is the guy who filed his patent first; he’s the senior party. The other guy is trying to play catch up and show why he didn’t.”