In this issue of NanoNews-Now Editor Rocky Rawstern covers nanotechnology patenting via interviews with the United States Patent and Trademark Office (Bob Craig, Richard Elms, Yen Nguyen), Michael Pitkethly (QinetiQ Nanomaterials), and from our NanoTech Transfer Report: James T. Yardley (Columbia University), Richard Bruno (McGill University), and Kevin Cullen (University of Glasgow).

Off the main topic: Dr. Pearl Chin (in the next in her monthly series) contributes an article titled Thoughts About IP Investment Strategy in Nanotechnology

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Table of contents:
Michael Pitkethly
James T. Yardley
Richard Bruno
Kevin Cullen
Pearl Chin
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New USPTO Cross-Reference Digest for Nanotechnology

Why the addition of Class 977?

Class 977, Digest 1, has been created to facilitate the searching of prior art related to nanotechnology and as a collection of issued U.S. patents and published pre-grant patent applications relating to nanotechnology across the Technology Centers at the USPTO. Establishing this new class as a cross-reference digest is the first step in a multi-phase nanotechnology classification project that will lead to the development of an expanded, more comprehensive, nanotechnology cross-reference art collection classification schedule.

What types of technologies does Class 977 provide for?

Class 977 provides for nanotechnology-related disclosures:

  1. Related to research and technology development at the atomic, molecular or macromolecular levels, in the length of scale of approximately 1-100 nanometer range in at least one dimension, and
  2. That provides a fundamental understanding of phenomena and materials at the nanoscale and to create and use structures, devices, and systems that have novel properties and functions because of their small and/or intermediate size.

In addition, disclosures in this class may be defined by one or more of the following statements:

  • The novel and differentiating properties and functions of disclosures in this class are developed at a critical length scale of matter, typically under 100 nanometers.
  • Nanotechnology research and development includes manipulation, processing, and fabrication under control of the nanoscale structures and their integration into larger material components, systems and architectures. Within these larger scale assemblies, the control and construction of their structures and components remains at the nanometer scale.
  • In some particular cases, the critical length scale for novel properties and phenomena may be less than 1 nanometer or be slightly larger than 100 nanometers.
  • The novel properties or functions, e.g., special effects, are attributed to and are intrinsic at the nanoscale.
  • Such nanoscale materials are infinitesimally minute arrangements of matter (i.e. nano-structural assemblages) have particularly shaped configurations formed during manufacture and are distinct from both naturally occurring and chemically produced chemical or biological arrangements composed of similar matter.
  • Also, encompassed within this collection are disclosures related to the controlled analysis, measurement, manufacture or treatment of such nano-structural assemblages and their associated processes or apparatus specially adapted for performing at least one step in such processes.
  • Novel and differentiating properties and functions relate to the altering of basic chemical or physical properties of the nano-structural assemblage attributed at the nanoscale.

How many patents and published pre-grant patent applications have been brought into Class 977 (so far)?

As of mid-December, 2004, there are 505 patent documents in Class 977/Dig.1. A collection of existing patents is still being reviewed for addition to this digest. The USPTO is also reviewing these patent documents and assigning them to a more detailed schedule that is being developed to replace Digest 1. As new patent documents related to nanotechnology are published, they will be cross-referenced in Class 977/Digest 1 and then re-classified into the final detailed schedule.

At what rate are you receiving applications that will likely fall into this new class?

Since this nanotechnology classification digest has just recently been established and we are still adding existing patents to this digest, it is too early to determine. The USPTO plans to analyze its growth once there is sufficient data.

How will this new class help the patent-seeker and those doing research on patents?

It is intended that the current Class 977/Digest 1 will serve as a collection of U.S. patent documents relating to nanotechnology that a patent-seeker or researcher can use in searching or reviewing patent documents on nanotechnology-related concepts. The USPTO believes that when the final detailed schedule is completed with subclasses and definitions, it will provide a more efficient search tool for specific nanotechnology-related concepts.

For questions regarding Class 977, Digest 1, please contact Yen Nguyen at (703) 305-6589 (, Bob Craig at (703) 305-5136 (, or Richard Elms at (571) 272-1869 (

Thanks to Brigid Quinn (Deputy Director Office of Public Affairs, USPTO) for coordinating these responses.


Michael Pitkethly, Commercial Director, QinetiQ Nanomaterials Ltd.
Michael Pitkethly

QinetiQ Nanomaterials Ltd (QNL) produces nanometric metals (Tesimet), oxides (Tesimox), carbides and nitrides (Tesimide). Can you tell our readers a bit about them?

The QNL Tesmia (R) process can produce a range of nanometric materials which are typically 20-100nm in size. The process is based upon DC plasma technology and so it is possible to make any metal in nanometric form, and wide range of simple oxides such as zinc oxide, cerium oxide and copper oxide, but also more complex oxides such as barium Titanate and doped oxides such as yttria stabilised zirconia. Carbides and Nitrides are also readily made using the process.

What was your overall experience in getting patents for the IP that they use?

To date we have filed a number of patents on applications utilising nanomaterials, but as you are aware it can take some years to gain grant for a patent and we do not have any granted to date, although we have had positive examinations. It is certainly true that there is more activity in this area and that the prior art is extensive and just moving from a micron sized material to a nano sized material is not sufficiently inventive to gain a patent. There is still a great deal of room available to gain patents but it does require real innovation to do so. The examination reports also do need careful consideration since this is a new subject and the examiners are still exploring the area themselves.

In your opinion, are there areas where the patenting process needs work? If so, what are they, and how can they be improved?

The real areas are as always the time taken to grant patents and the cost associated with the patenting process. The recent EPO conference on nanotechnology in the Hague covered many of these and other issues.

What recommendations would you make to someone new to the patent process?

It is very important to take professional advice since although the process is relatively straight forward the tactics involved can be quite complex, particularly when multiple countries are involved. The other key issue is does the individual/company really benefit from publication of the invention in a patent or is it better to retain this knowledge as know-how. The cost of patenting, and defending the patents against infringers, needs to be established early so that the benefits versus budgets can be understood. It is not an easy one to decide upon, but the correct professional advice will help.

Dr. Michael Pitkethly Commercial Director, QinetiQ Nanomaterials Ltd

Michael is a founding director of QinetiQ Nanomaterials ltd, a wholly owned subsidiary of QinetiQ Group, which was established in January 2002. QinetiQ Nanomaterials Ltd (QNL) provides nanomaterials solutions based on the manufacture of nanometric powders coupled with the ability to develop innovative and targeted applications tailored to meet the requirements of customers.

Michael graduated from Imperial College in Materials Science and then completed a Ph.D. at the University of Surrey in polymer composite materials. He worked for Plessey Microwave Materials before joining the MoD at RAE Farnborough in 1988. He has held a range of posts including Technology Chief for Low Observable Materials, Head of Department for Multifunctional and Composites Materials in DERA now QinetiQ and Associate Director for Technology Exploitation.

He is a Charted Engineer and a Fellow of the Institute of Materials, Minerals and Mining.

QNL headquarters are in Farnborough, UK, with sales offices in UK, USA and Japan.

Dr. James T. Yardley Professor of Electrical Engineering, Columbia University; Director, Center for Integrated Science and Engineering (CISE); Managing Director, Center for Electron Transport in Molecular Nanocrystals. He has published over 116 research papers and is co-inventor on more than 27 issued U.S. patents.

James T. Yardley  - Professor of Electrical Engineering at Columbia University

What key points would you emphasize to the business community regarding the technology transfer process?

Business usually knows what it wants, and most businesses are aware that most universities have gotten into the Intellectual Property (IP) process. Universities often underestimate how much work and creativity goes into the technology transfer process.

What advice would you give a business wanting license your patents?

Most of the time businesses know what they are doing and what they want.

Prior to working with a business to develop a new technology, what questions must you answer? Patent rights? Mutually defined (and agreed upon) definitions of success? Critical path to success? Stock distribution? Funding opportunities? Other?

All of those are good questions to ask. Probably the most important question to ask is the sense of commitment of the business. Universities are very concerned with the fruits of their labor. They want to be sure that their time will not be wasted. Level of commitment by the business is very important.

What are some of the hurdles in the way of commercialization of technologies discovered by universities?

Mostly all the same hurdles that are out there (for everybody else). I have found that sometimes universities are naive in terms of time, and probability of success. (They are also) sometimes quick to blame the business partner. (Some) universities do not fully appreciate the nature of Intellectual Property (IP), and how important it is to know what information should be and should not be disclosed.

Tell us about a few of the most interesting patents that your university has co-developed with a company.

Columbia is a big place and there are alot of interesting patents, (with) a long tradition of successfully developing patents. MPEG 3 or MPEG 4 - I am not sure which ... is a patent they developed. About 10 years ago, Columibia developed an optic software company called R-Soft.

What types of businesses are most likely to use it?

With respect to R-Soft and its optical modeling software, aerospace businesses, communications businesses, and some defense industries and military departments.

Can you talk a bit about any patents pending that you would like the business community to know about?

Currently I don't know of any.

If you could, would you change anything about the patent process?

If I could change anything I would change the rate of speed of the patent approval process. Also, instead of a first-to-invent system, which slows down the approval process (the legal aspects), maybe implement a first-to-file process. I feel that European Patent system has a superb standard that the USPTO would benefit from if they implemented a few of the same programs.

Dr. Yardley is currently Professor of Electrical Engineering at Columbia University where he serves as Director of the Center for Integrated Science and Engineering (formerly the Columbia Radiation Laboratory). Prof. Yardley is also managing director of the Columbia Center for Electron Transport in Molecular Nanostructures, one of the NSF-sponsored Nanoscale Science and Engineering Centers. He received a BS in Chemistry from Rice University (magna cum laude) in 1964 and PhD in Physical Chemistry from University of California at Berkeley in 1967. He served as Assistant Professor and Associate Professor of Chemistry at University of Illinois, Champaign-Urbana from 1967 to 1977 where he received the Alfred P. Sloan fellowship and a Dreyfus Teacher-Scholar Award.

Previously he served as head of the Growth Center for Allied Signal's Electronic Materials business and directed several technical and business development programs.

In particular, at AlliedSignal (now Honeywell International) Prof. Yardley created a research program to develop new optical materials and devices resulting in several business ventures in polymeric optics. His organization also developed new polymeric substrate materials for advanced electronic circuitry.

Dr. Richard Bruno Director, Office of Technology Transfer, McGill University.

Richard Bruno - Director, Office of Technology Transfer, McGill University

What key points would you emphasize to the business community regarding the technology transfer process?

If technology transfer is associated with transferring enabling technology based on basic research - the big R technology - to a company, whether it's from a University or 3rd party private sector organizations, we need to realize that, because basic research delivers enabling technologies, there is a large degree of uncertainty about which products and markets the fruits of this basic research will effect or can be used for. As such, the transfer process has less clarity than for tech transfer of small r and big D (research and Product Development phase). In this latter case there is greater clarity with regards to the product-market mix and usability, for the licensor who is transferring and the licensee that is the receptor. For the big R technology transfer - which is the case for Universities as a licensor and companies as licensees - both parties need to behave as partners to make the transfer process successful.

What advice would you give a business wanting license your patents?

First of all, the company needs to focus on a narrow and small number of, preferably one, target products and markets that it wants to dominate. In a narrow market the company will need to clearly define what its value proposition is and how the product, based on this new technology, is adding value to its core business. It needs to share this with the licensor.

Secondly, the company need to properly ascertain with the licensor that there is a good match between the capabilities of the technology and its product needs and the market pains it is trying to address. This again needs to be clearly transparent between both parties.

Thirdly, both parties need to understand their symbiotic responsibilities and how the transfer will occur, in terms of Intellectual Property AND know how, what consideration will be exchanged, and that there is a gestation time when transferring big R technology that may not be under the control of the researcher(s).

Finally, both parties must be sure that there are getting a fair deal out of this relationship.

Prior to working with a business to develop a new technology, what questions must you answer? Patent rights? Mutually defined (and agreed upon) definitions of success? Critical path to success? Stock distribution? Funding opportunities? Other?

One of them is "what intellectual property is actually being transferred?" Is it inventions, i.e. patents, copyrightable material, trade secrets and/or know how? Does one have the freedom to operate for this technology in the product-market space of interest to the company? Has a thorough due diligence been done, and if not who can and will do it? Is this technology scalable and what needs to be done to make it product ripe?

For big R technology a University does not know or understand the target market and the company may not be ready to focus on just one product-market mix yet, so it is up to the company to do proper due diligence when it has reached the small r big D phase, including knowing the position of the competition. Finally, can it be used to differentiate the company or give it a first-adopter advantage in a market.

For a University, its reputation as a research leader is probably up there in importance. For the licensor, in general, sustainable revenues of at least a couple of hundred thousand to a million dollars per year are a good measure of success. I certainly believe that another aspect of a success story is that the company and the licensee can work together synergistically towards a common good.

The ability of both parties to realize conceptually and in practice that they are partners on the same mission.

Stock distribution - is it important? Yes and no! There are 3 components to financial success:

  1. Upfront fees and guarantee minimum yearly fees,
  2. Royalties and
  3. Equity. Equity is not a basis for sustained revenues, it's the big bang!

Universities as well as companies do a balancing act between what you get up front, yearly sustained revenue and after dilution equity. It is the sustained revenue stream from minimum fees and royalties that indicate whether a company is doing its job well year in year out. Equity is basically a one shot deal for the licensor as it is for the Venture capitalist; it's like drilling for the one big one and selling out at the right time. Once sold it is history, but sustained revenue of a couple of hundred thousand or a couple of million dollars a year is the engine over time that feeds technology transfer.

Funding Opportunities? The Licensee is the one who looks for funding opportunities for business viability, and the University licensor looks for research funding to sustain their leadership in a technology. In each case, without a critical mass of resources and capital, neither will succeed. If the company is a start-up, then Venture capital funding is needed.

But capital is not enough, more important is a seasoned management team. If you don't have a seasoned, product-market savvy management team you can have all the dollars in the world but your ability to achieve the success story is dramatically reduced. You need to know who the management team is, what their track record is, and find out what they have been able to deliver in the past and what they haven't. You need to know that they can make mistakes and gracefully recover from them. At the end of the day this is more important than capital. Anyone can raise money with a good team and a great story. Good management can really spin and sell a good tale!

What are some of the hurdles in the way of commercialization of technologies discovered by universities?

Number 1: going from the big R to the big D, a real developed product and from there to a cost-effective product that can be reliability replicated to meet customer needs. Once you have achieved this you need a good wide pipe to the customers and a process to synchronously create demand, get above the noise threshold in the marketplace.

Tell us about a few of the most interesting patents that your university has co-developed with a company.

A university as broad as McGill with 600 to 1200 projects on-going at any snapshot in time produces patents in almost all technological areas. From transgenic animals that deliver new proteins or bio-materials, to new drugs to treat cancers, to new medical imaging devices, to better software systems to make the practice of medicine more human and cost effective, to new robots, to new space craft and airplanes, to smart music selection systems and lighter-stronger more flexible materials. The list is long, anything that you can pretty well imagine from the biotech area to the pure and applied sciences, from nanotechnology to proteomics!

What types of businesses are most likely to use it?

Goodness that is a broad question. A 3M, a Bayer, a Bombardier, a Boeing, a Phillips or Sony, a Universal studios, a Hitachi Medical division, a Dupont - you name it, we have a leading edge technology that befits any of these companies.

Can you talk a bit about any patents pending that you would like the business community to know about?

We'd love it if the business community would contact us, tells us of their product needs and market pains. The more industry folks that contact us the more we can use our technologies to help them, the better we can serve them, and, in turn, the better research we will do in the future.

If you could, would you change anything about the patent process?

Most important thing I would change in/for Montreal, in/for Quebec, in/for Canada is to find a way to have patent attorney firms that will work as our partners as opposed to working with us as a source of billable hours. If they work with us as partners Canada and Quebec will have stronger patent portfolios and Montreal will have stronger patent firms and we will become stronger licensors, better equipped to compete with the real competition, our neighbor to the south. Partnering is the key that will help them help us and help themselves assure self sustaining technological excellence.

Dr. Bruno (McGill B.Sc., McMaster Ph.D. Physics, EP.M.B.A. Michigan.) is the Director of the Office of Technology Transfer at McGill University in Montreal, Canada. As an entrepreneur he built and sold a half a dozen high tech companies in the US and Japan. Dr. Bruno developed and launched several products that are in common use today, each generating revenues in excess of a billion dollars annually. In his capacity as a CTO and CEO he is best known for his twenty-eight years of pioneering work on and leadership of the Compact Disc (in several of its formats), Multimedia, Minitel, Video Conferencing, JPEG, MPEG, computer games, computer peripherals and security systems with Philips-Sony, PRISM Interactive Corp., GCA Inc., GCT Inc., Alliance Interactive Corp., Digital Frontiers LLC, Beyond If Corporation and BI Informatics Co. and their associated international Fortune 1000 partner companies. As CEO of RBruno Consultants he has provided component and product technology, IT consulting services and interim management to over forty international Fortune 1000 companies. Dr. Bruno is also well known for his works in the areas of Solar Energy and Energy Control Systems at Philips N.V. and with Stiebel Eltron.

Dr. Kevin Cullen Director, Research & Enterprise (R&E), University of Glasgow.

Kevin Cullen - Director, Research & Enterprise (R&E), University of Glasgow

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Tell us about a few of the most interesting patents that your university has co-developed with a company.

Our electrocardiogram (ECG) recorder Analysis Software. The University of Glasgow ECG Interpretation Algorithm is now used globally and has been continuously improved since its initial development in the 1970s, allowing it to stay current with the latest advancements in electrocardiographic research.

What types of businesses are most likely to use it?

The software has been licensed to a variety of companies, including Quinton Cardiology - who recently won the prestigious US-based Healthcare Independent Distributors Association (HIDA) Product of the Year Award for their ECG recorder. Quinton received the HIDA award for its Burdick-branded Atria 3000 ECG recorder. In partnership with the University, Quinton developed the software for the Atria 3000, manufactured in their Deerfield Wisconsin facility. Quinton, and its predecessors, have enjoyed a successful working relationship with the University for over 15 years.

Can you talk a bit about any patents pending that you would like the business community to know about?

We have a number of opportunities in the broad areas of biosciences/bio-medical; engineering; IT/software; optics/optoelectronics and other. You can view these opportunities here.

There is also a relatively new Internet site that promotes new technology from all 13 of Scotland's Universities, and has been receiving very positive feedback for its ease of use. Check out:

One example is the Bio-Chip with Integrated Nano-Waveguides for High Performance Optical Analysis. Methods have been adapted from the telecommunication industry to fabricate 'biochips' which integrate optical and micro-fluidic components. The underlying technology provides a range of benefits over currently available biochips. The analytical chips can be used in a range of applications. International patents have been filed on this development. Patent is titled 'Improved Analytical Chip' with an International publication number WO 01/51658 A1.

If you could, would you change anything about the patent process?

Ideally, there should be some harmonisation as to an official language to be used as part of an international patent system. As such, the hefty translation costs which are often a major drawback to protecting some fledgling technologies in major industrial markets such as Japan would be removed, thereby allowing the technology to be brought to a much wider market.

Further Information

The R&E Office
Research & Enterprise at the University of Glasgow was founded in 1997, pulling together areas including Research Office, IP office and CPD into a single unit. Now manages a wide range of things from research policy development, research administration (all applications go through the office), contract negotiation, Knowledge Transfer and commercialisation.

Patenting activity
We have seen an increase in the level of patent activity over the past few years. The drivers for this have come from not only an increased awareness of the importance of patents but also due to new schemes such as the Scottish Enterprise Proof of Concept Fund and the DTI University Challenge Fund initiative which have made more funds available to pursue IP protection strategies. Patenting activity varies according to the commercial strategy envisaged for a particular piece of technology. Each year, there may be a different mix of technologies to be considered in terms of potential patent applications, which will inevitably have an effect on patenting activity.

The University generally licenses its IP (note that each of our spin-outs licenses the technology from us). We actively seek licensees for our technology and utilise a wide variety of marketing channels. Technology developed at Glasgow is being exploited by companies located around the globe.

Number of patents
141 patents currently granted in the name of GU - main areas are Life Sciences, Optoelectronics. The total portfolio of cases is over 400.

When would you say the big surge in commercialising university activities started?
The big surge in university commercialisation activity in Scotland was around 1996/97, following the Royal Society of Edinburgh/Scottish Enterprise Commercialisation Enquiry. There was another surge around 1999/2000 which coincided with schemes such as the University Challenge Fund and the Scottish Enterprise Proof of Concept Fund being launched, thus providing much needed funds to protect IP

Dr. Cullen is responsible for directing and managing all Research & Enterprise activities in order to achieve the objectives of the University. This includes responsibility for the development and implementation of the Knowledge Transfer/commercialisation strategy for the University; leading the University's involvement in Economic Development, particularly with the LECs and through the European Structural Funds; and working with others to develop and promote the University's research strategy.

Thoughts About IP Investment Strategy in Nanotechnology

Pearl Chin - Managing General Partner, Seraphima Ventures

The industries that nanotechnology will likely have a disruptive effect on in the near term include the following:
(Amounts are Billions of US Dollars)




Long Term Care








U.S. Chemical












Hospitality / Restaurant


US Insurance




Corrosion Removal


US Steel




Diet Supplement


















Blue Jeans




Fluorescent Tagging

Figures are from:

The Next Big Thing Is Really Small: How Nanotechnology Will Change the Future of Your Business. J Uldrich & D Newberry. March 2003
Read our review

NANO - John Robert Marlow. Hardcover January 2004
Our Review
The Superswarm Interview
The Superswarm Option
Nanoveau - This column will cover the science, the speculation, and (occasionally) the politics of nanotechnology and related topics. If you want to know what nanotech is about, and how and why it will change everything we know-Nanoveau is for you.

Got Nanotechnology?
If not, read this:

Our Molecular Future: How Nanotechnology, Robotics, Genetics, and Artificial Intelligence Will Transform Our World.
Douglas Mulhall, March 2002
Read our review

A number of VC funds, such as Nanotech Capital LLC, have implemented an intellectual property (IP) investment strategy recently for nanotechnology. A typical IP investment strategy is buying up IP or patent or licensing rights to some well known university or even some lesser known university. Often it is done in a carpet-bombing approach where a whole slew of IP is included in the portfolio being purchased without regard to what it is. This is not all that different than the carpet-bomb approach of some VC's trying to invest in the nanotech space because they don't understand it.

Firms are throwing millions of dollars at university IP portfolios without regard to what is actually in the portfolio. Are we seeing another lemming investment strategy that will take us to another nanotech bubble bursting because they are ill-informed and believe nanotech is still so far off for ROI that only IP is available? The average person still believes that nanotech only exists as IP and not product. There is plenty of evidence in the commercial markets that counters that. The internet is a very valuable research tool for nanotech information if someone wants to take the time to do their due diligence.

How many of these patents will actually be so tightly written and reap such rewards that claiming a piece of the profits from it will be worth it? Is this piece of the action going to generate the returns necessary to make those millions spent worthwhile? What type of IP are they investing in? How many successful IP investment strategies have happened before that makes this a proven strategy?

Patents are a defensive tactic to protect and defend yourself from those who want to steal your valuable idea, valuable meaning making money. In the past, patent infringement cases usually revolve around a specific technology or process already making money being copied by another company. It is not supposed to be used in an offensive strategy.

However, IP is certainly valuable. In certain situations, an entrepreneur can secure financing using their IP as asset collateral. In most cases, that IP has to have proven to generate revenues. Of course, if that is the case, you can also get financing backed by the collateral of your purchase orders (PO's). IP is important but it is not the driver for making money. Product is what actually sells and brings in revenues, not IP. IP supports the product. Not all IP will or should end up in product - but should IP be the product? Unless it's a process that is already producing money, that IP may very well be worth little.

Do the VC's who are investing in IP actually know what's in the portfolio? Would they know it well enough to know when there is a new technology that has infringed upon a patent? Blanket buying of university IP portfolios is like going to a garage sale and buying everything because you don't have time to pick through all the stuff but you like the previous owners. You thought they were great people so they must have great stuff, right? Well, then you find that along with the nice stuff, you bought all the useless stuff hidden in the attic as well and you have no idea what it all is.

In a February 2003 article in Small Times, Edward K. Moran, Director of Product Innovation for Deloitte & Touche's (link) technology consulting practice and leader of its nanotechnology practice, is quoted as saying "Whenever I run into a entrepreneur or company that's overfascinated with intellectual property (IP), it kind of raises the red flag for me."… "And if someone is saying, 'I've got a couple of pieces of IP that give me a competitive advantage or lock up some important competitive advantage,' that's what I call 'Islands of IP'."

In that same article, "In most cases, unless a deep-pocketed development, manufacturing or venture capital partner is willing to put the time and money into turning that IP into a real product that exhibits demonstrable, mass-production-friendly manufacturing processes, the long-term prospects for most of these companies are not very good," said James Tully, Gartner's chief analyst specializing in IP issues for the company's Semiconductor Group (link). "This doesn't mean these companies will necessarily fail outright, but dreams of small tech glory and riches may one day be replaced by a licensing deal or buyout to pay off creditors" said Tully. "Based on the lessons of startup history, this is where most companies will end up." I must agree here.

However, in an April 2004 article in Chemical and Engineering News, Ed Moran is quoted as saying "Those buying nanotechnology IP have an opportunity not unlike getting into electricity or the automobile industry early and locking up patents"…"there's going to be unimaginable innovation [based on] these early discoveries. If you can claim a piece of that action going forward, that's good from an IP standpoint." He is also quoted here as saying "A lot of nanotechnology companies are going out and locking up these little islands of intellectual property,"…"They grab a couple of promising but limited patents in a given area, and then they figure that they are ready to take in financing. Unfortunately, nanotech is so new and evolving so quickly that it is very difficult to lay bets on whether a little sliver of technology is ever going to turn into a commercial product."

These quotes are confusing and somewhat contradictory in their position on IP. I am still not exactly sure what "Islands of IP" are and if it's a good or bad thing unless they happen to be the "right islands of IP" are but I expect Deloitte & Touche offers IP consulting services. Note also, there are a lot of people offering IP services in that article.

Ed Moran says, "But for now, companies seem to want to avoid fighting over patent turf even though they might have grounds to do so."…"There's not a lot of litigation going on yet in nanotechnology, which is curious, because it's not difficult to find examples of one company's IP bleeding into another's." There are some answers provided in that article as to why no one is litigating now but it is actually not so complicated and quite simple. Why should they litigate now? It's expensive to sue. The reason someone sues someone is to recoup damages and make some money from someone who has money. Why spend time litigating things that are not making money yet? It is akin to suing someone who has no money yet. What an awful waste of time and resources.

This is obviously a very long term investment strategy because you have to wait until a patent actually makes a significant amount of money, then someone sues someone else to reap the benefits from it and you have to wait until it goes through the court system for a decision and the money comes in. And in the court system, the decision typically rests with people who do not understand the technology and must depend on interpreting the wording in the patent.

Patenting IP is expensive and the potential for return is unclear. Often you also have to pay for international patents to be well covered. For a startup company bootstrapping their operations, this may or may not be a good use of scarce resources at the moment. It might be more useful to wait until success is looking more promising before investing in the patents. At least they would have a better idea of what looks like is going to succeed.

Getting around a patent is not that difficult. How to word a patent is extremely important. If a technology is only slightly different, that could negate the applicability and validity of the patent. They are hard and expensive to defend because it often comes down to interpretation of the patent. How the patents are written becomes critical to an IP strategy.

Perhaps it is easier to keep your technology a secret versus risking reverse engineering or stolen by being in the public domain. Coca Cola does it. They don't have to worry about patents expiring or international companies or countries who don't honor the international patent laws coming in to steal their secrets. I don't think anyone is going to say Coca Cola doesn't know what they're doing. However, you have to know how to keep a secret.

In the meantime, it is a great way for universities to sell off what's in their IP attic and generate income from sunk costs and position some university tech transfer guy for a promotion. What is to stop a university from only offering the stuff in the attic and keeping the more promising IP for itself? Some IP investment strategies try to overcome this problem by buying rights to IP from a whole university department such as Chemistry. However, nanotechnology is so broad there may be more than one department one can classify a certain patent. What about a patent that can be categorized under both Chemistry and Electrical Engineering? This is not as far-fetched as some may think as it is already happening.

I would caution against investing mainly in IP. An IP portfolio investment strategy can sound a lot more complicated in implementation than it sounds. An IP investment strategy is certainly very creative and sounds very simple to begin with but is very high risk and very long term. There may be more interesting stuff coming down the pipeline and if you've tied up your investment capital on some long shots, it's probably time to diversify your nanotech investment portfolio and risk.

Stay tuned for next month's article.

Dr. Pearl Chin has an MBA from Cornell, a Ph.D. in Materials Science and Engineering from University of Delaware's Center for Composite Materials and B.E. in Chemical Engineering from The Cooper Union.

Dr. Chin specializes in advising on nanotechnology investment opportunities. She is also CEO of Red Seraphim Consulting where she advises investment firms and startup firms on the business strategy of nanotechnology investments. She was Managing Director of the US offices and co-Managing Director of the London offices of Cientifica. Prior to that, she was a Management Consultant with Pittiglio Rabin Todd & McGrath (PRTM)'s Chemicals, Engineered Materials and Packaged Goods group.

Dr. Chin will be advising the Cornell University JGSM's student run VC fund, Big Red Venture Fund (BRVF), on investing in nanotechnology.

She is a Senior Associate of The Foresight Institute in the US and was the US Representative of the Institute of Nanotechnology in the UK. She was an alternate finalist for a Congressional Fellowship with the Materials Research Society.

She was also a Guest Scientist collaborating with the National Institute of Standards & Technology (NIST) Polymer Division's Electronic Materials Group under the US Department of Commerce.

Dr. Chin is a US Citizen, born and raised in New York City.

She can be contacted here.


As part of the USPTO's continuing efforts to improve the ability to search and examine nanotechnology-related patents, the agency has established a new cross-reference digest for nanotechnology designated Class 977/Dig.1, entitled Nanotechnology.

Establishing this nanotechnology cross-reference digest is the first step in a multi-phase nanotechnology classification project and will serve the following purposes:

  • Facilitate the searching of prior art related to Nanotechnology,
  • Function as a collection of issued U.S. patents and published pre-grant patent applications relating to Nanotechnology across the technology centers, and
  • Assist in the development of an expanded, more comprehensive, nanotechnology cross-reference art collection classification schedule.
New Cross-Reference Digest for Nanotechnology

The obviousness of making something smaller is also a key issue, since many nanotechnology inventions involve a reduction in size from known structures at the larger micrometer range. Under a classical analysis, a mere change in the size of a previously known structure is not enough to convey patentability. [16] However, if size plays some critical role in its function or utility, as is often the case with nanotechnology, arguments may be made in favor of patentability. [17] This is particularly true if the change in size is associated with the classic indicia of nonobviousness, such as commercial success, unexpected results, long felt but unsolved needs, and failure of others.
Staking A Claim In The Nanoworld

Patents issuing every week demonstrate the growing importance of nanotechnology. In many cases, technology which was first conceived in the 1970s and early 1980s, often as academic curiosities, have now become a major area of commercial development under the nanotechnology rubric.

The atomic force microscope (AFM) is a powerful, fundamental nanotechnology tool and was first patented in 1988 by Bennig and IBM. By 1994, over 100 patents issued per year, and by 2003, over 500 patents were issuing per year referring to this tool. Quantum dots and dendrimers, similarly, are examples of nanomaterials first patented in the mid-1980s. By 1994, over ten patents issued per year, and by 2003, over 100 patents were issuing per year referring to each of these materials.
Current Trends in Nanotech Patents: A View From Inside the Patent Office

As the successful development of concepts and implementations of nanotechnologies depends increasingly on more rapid and pervasive commercialization and market development, intellectual property legal protections take on greater significance. These protections and the assets arising from them derive from carefully balanced economic principles that encourage the development of creative writing, inventions, art and knowledge.
Patent Databases and Analytical Tools for Nanotechnology Research, Design and Development

The number of issued patents involving nanotechnology has increased by more than 600% in the last five years, from 370 in 1997 to 2,650 in 2002. While only 2% of all patents issued in 2002 involved nanotechnology, that was much higher than the 0.3% in 1997. About 90% of the applications came from private corporations, while universities filed roughly 7%, and about 3% were filed by government agencies and collaborative research centers. Nanotechnology-related patent applications are evenly split between process and product inventions. Most of the inventions are refinements to known technology, but a significant number can be considered "revolutionary" or pioneering in nature.
Patent Trends in Nanotechnology Sept. 2003

The fundamental nature of nanotechnology is part of the challenge for effectively mapping the patent landscape. Many patent applications may result from a single nanotechnology invention; hence, a single patent may generate many products or markets.

Published patents that are truly nanotechnological in nature may not use any specific nanorelated terminology. Often patents are written “not to be found” in order to keep potential competitors at a “knowledge” disadvantage. Conversely, there are business savvy inventors and assignees that might use key terms incorporating a nano prefix for the sake of marketing their invention or concept.
Nanotechnology Patents and Challenges

While scientists toil to conquer the mechanics of nanotechnology and Wall Street strives to cash in on it, the intellectual property bar and the United States Patent & Trademark Office (USPTO) have begun to prepare for an onslaught of new patent applications and potential new patent prosecution pitfalls. As the fundamental science of nanotechnology (which embraces combined elements of, at least, such well-developed arts as chemistry, physics, electronics, material science, and mechanical engineering) seems likely to be readily integrable into the scope of traditional patent protection, nanotechnology-related patent applications are not expected to encounter the wholesale confusion associated with early prosecution practice as to claims for business methods and certain biotechnology applications, both of which were initially held by the USPTO to be non-patentable subject matter.
Nanotechnology patents: will small-scale science pose big challenges for applicants and patent office?

Patent application cases concerning nanotechnology have grown rapidly in China over recent years, with the number following the United States and Japan to take the world's third place.
China's nanotechnology patent applications

Patents are the strongest form of intellectual property protection and are essential to the growth of a nanotechnology company. Similar to their importance to the development of the biotechnology and information technology industries, patents will also play a critical role in the success of the global nanotechnology revolution.
Nanotechnology Patenting in the US

The new-frontier buzz around nanotechnology -- the effort to develop infinitesimally small structures into futuristic products -- has companies, universities and investors hustling for patents, the key to markets that the government estimates at $1 trillion by 2015. But the intensifying race to file patent applications has sparked concern that a proliferation of patents, especially broadly defined ones, could hobble innovation and produce a thicket of conflicting legal claims.
Nanotechnology Patents Surge As Companies Vie to Stake Claim

The large influx of investment in nanotechnology research should accelerate the availability of commercial nanotechnology applications. Therefore, it is critical to develop intellectual property strategies that allow for fluid transfer of government-funded science to the private sector for commercialization of nanotechnology.26 As with the emergence of any pioneering technology, nanotechnology creates issues and opportunities in perfecting intellectual property rights.

Laws covering products and technology since the Industrial Revolution may not apply to nanotechnology. Can you patent an atomic or molecular structure? How do you protect an atom or molecule-sized device from being illegally copied? How will patent policies evolve and affect the scope of nanotechnology patents? These and other intellectual property questions require resolution in order to make effective and efficient use of nanotechnology innovation.

Today, nanotechnology intellectual property issues focus primarily on patents, with additional issues relating to trade secrets.
Current Intellectual Property Issues in Nanotechnology

Between 1997 and 2002, the number of nanotechnology patents grew by 600%. As of December 2003, there were around 7,000 such patents. None of these patents has been addressed by the Federal Circuit, which means that we can consider the patentability of nanotechnology on a clean slate.
Patenting Nanotechnology: Problems with the Utility Requirement

The value and strategic importance of protecting intellectual property cannot be overstated. The costliest example in US history of R&D is perhaps the case of Eastman Kodak vs. Polaroid begun in the 1970s, and resolved in 1990. Seven patents upheld by Polaroid led to the total destruction of Kodak's instant photography business, to the tune of more than $3 billion dollars in infringement damages, compensation and legal fees, research and manufacturing costs.
Intellectual Property Rights in Nanotechnology

From Our Molecular Future: How Nanotechnology, Robotics, Genetics, and Artificial Intelligence Will Transform Our World, by Douglas Mulhall:

  • What happens to the monetary system when everyone is able to satisfy his own basic material needs at very low cost?
  • How would we use cash when digital manufacturing makes it impossible to differentiate a counterfeit bill or coin from the real thing?
  • What happens to fiscal policy when digital information, moving at light speed, is the major commodity?
  • How fast will monetary cycles move compared to, say, the ten- or twenty-year cycles of the late twentieth century, when products and patents go out of date in a matter of months instead of years?
  • What happens when we don't have to worry about trade or social services for our basic needs, because most of what we need is provided locally with digital manufacturing, and the biggest trade is in information?
  • How do we control the excesses of the ultrarich, the overabundance of the molecular assembler economy, and the challenge to intellectual property laws created by intelligent, inventive machines?
  • What happens if half of all jobs are made redundant every decade?
  • What happens to the War on Drugs when there's no import, export, or transport of contraband because drugs can be manufactured in a desktop machine using pirated software downloaded from the Internet?
  • What happens to democratic controls when individuals can get as rich as small governments in a year or so?
  • What's the relevance of insurance if many things are replaceable at very low capital cost, but liabilities from software are potentially unlimited?
  • How should organized labor react when molecular assemblers and intelligent robots eliminate most manufacturing jobs?
  • What is the nature of work going to be?
  • What happens to land prices when an individual can build a tropical farm under a bubble in North Dakota, and get there from New York in an hour?
  • What happens when everyone can go everywhere, whenever they want, and work from wherever they want?

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Useful Links

Consolidated Appropriations Act, 2005 enacted on December 8, 2004 New Patent Fees Implemented

New Cross-Reference Digest for Nanotechnology

Patent office's nano digest to facilitate IP process

Bill Aims to Protect Joint Patents

A Patent Lather

Nanosciences - A new dimension in opportunity

Tiny Ideas Coming of Age

Nano World: Lawyers Key To Nano-Revolution

Patent Revolution

Nanotechnology Patents Surge As Companies Vie to Stake Claim

NanoTech-Transfer Patent Database and Report Debuts

Rich Pickings for Patent Trolls

Patent office struggles to stay ahead of nanotech industry

As nanometer-scale materials start making money, intellectual property issues are heating up

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Issue #20 will cover Molecular Nanotechnology. It will land in your mailbox February 7th, 2005.

Infamous Quotes:

"This 'telephone' has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us." Western Union internal memo, 1876
"Heavier-than-air flying machines are impossible." - Physicist and mathematician Lord Kelvin, President of the British Royal Society, 1895
"Everything that can be invented has been invented." - Charles H. Duell, Director of U.S. Patent Office, 1899
"There is no likelihood man can ever tap the power of the atom." - Robert Milikan, Nobel Laureate in Physics, 1923
"Theoretically, television may be feasible, but I consider it an impossibility-a development which we should waste little time dreaming about." - Lee de Forest, inventor of the cathode ray tube, 1926
"I think there is a world market for maybe five computers." IBM's Thomas Watson, 1943
"Landing and moving around on the moon offer so many serious problems for human beings that it may take science another 200 years to lick them." - Science Digest, August 1948
"Computers in the future may weigh no more than 1.5 tons." Popular Mechanics, 1949
"There is no reason anyone would want a computer in their home." Ken Olsen, Digital Equipment Corp, 1977

And the lesson is? It's a tough game to call.

Need advice? Check out NanoStrategies

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