Client Alert

Commercializing Nanobio Products: An Overview of Legal Issues and Regulations


We are at a time of uncertainty and flux in the regulation of nanotech products, particularly in the regulation of nanobio products. Nanotechnology involves a new set of technologies, and adjustments in current legal and regulatory frameworks will be required to handle the unique technical, safety, and toxicological characteristics of nanotech products. Regulators and law-makers are carefully monitoring the development of this new industry, reviewing existing laws and regulations to determine how well they cover the new nanotech developments, and attempting to craft new laws and regulations when necessary. Until these regulators and law-makers complete their task, the laws and regulations covering nanotech products will continue to change and evolve.

Any company developing and commercializing nanobio products must carefully craft a strategy for dealing with intellectual property issues and regulation by numerous federal and state government agencies, including the FDA, EPA, OSHA, U.S. Department of Agriculture, Consumer Product Safety Commission, Department of Commerce, Department of Energy, and Department of Defense.[fn1] Many existing laws and regulations will be adequate for dealing with nanobio products.[fn2] However, certain unique features of nanobio products may require new regulations or a new interpretation of existing laws and regulations.

In this and subsequent articles, I will review the current state of the regulatory and legal regimes most important to companies commercializing nanobio products. I will also offer predictions regarding the direction of future regulations and report on the scientific and public perception issues that will impact such future regulation. In this first article I introduce at a summary level the key intellectual property (IP) issues impacting a nanobio company. In subsequent articles, I will review and analyze these IP issues in more depth and also review the regulatory developments, technical understanding, and public perception issues driving regulation of the nanobio industry by the FDA, EPA, OSHA and other government agencies.

IP issues relevant to commercialization of Nanobio products

For all nanobio companies, adequately dealing with IP issues will be crucial to the successful commercialization of a nanobio product. Although trademarks and trade secrets will be important to nanobio companies, the legal issues associated with these facets of IP will be substantially similar to those faced by non-nanobio companies. Certain patent issues will, however, be unique to nanotech and nanobio companies, and it is these patent issues I review in this article.[fn3]

A company bringing a nanobio product to market will encounter patent issues in three main situations: first, the company will be acquiring patents covering its nanobio product and other related technologies, and thus allowing the company to prevent others from commercializing similar products; second, the company will need to craft its business strategy to account for patents owned by competing companies; and third, the company may need to be involved in patent litigation, either to enforce its patents against competitor products or to defend against claims by a competitor that nanobio company's products are covered by the competitor's patent. The legal issues arising in each of these situations are somewhat different, and I summarize each separately below.

Patent Acquisition Issues

In acquiring its own nanobio patents, a company will need to prepare a patent application adequately describing the invention being patented and then negotiate with the United States Patent Office (USPTO) as to the scope of allowable patent coverage.[fn4]

For the relatively new technologies of biotechnology and business methods, the USPTO initially questioned whether such classes of inventions were even patentable.[fn5] The USPTO has to date raised no such questions regarding the patentability of nanotechnology and nanobio inventions.

The examination of nanotechnology patent applications, however, will raise certain unique issues, primarily because of the cross-disciplinary nature of nanotechnology inventions.[fn6] Specifically, the patent examiners at the USPTO who review and analyze the patentability of nanobio patent applications often will not possess the technical skills to adequately understand the new, complex, cross-disciplinary technologies described in nanobio patent applications. To the USPTO's credit, it is actively attempting to educate examiners in these new technologies.[fn7]

Having to deal with a patent examiner who is not adequately trained in a technology makes the negotiations with the USPTO much more difficult and can lead to a wide variability in the quality of patents granted in the new technology area. This situation can lead to both the allowance of overly broad patents and to patent coverage being refused on inventions deserving of patent coverage. [fn8]

Another problem stemming from the cross-disciplinary nature of nanobio inventions is the difficulty in identifying the most relevant references describing what is already known in the field. The USPTO classifies all patent applications by the technology area described in the application. Unfortunately, the existing classification scheme may not be adequate to accurately classify new, cross-disciplinary nanobio inventions. The USPTO is taking steps to remedy this situation and will likely be updating its classification system in the near future to account of nanotech inventions.[fn9]

Dealing with Competitor Patents

The difficulty in classifying nanotechnology inventions also complicates how nanobio companies deal with the patents of competing companies.

For good business planning, a nanobio company needs to be able to identify with reasonable certainty the patents of competitors that may block development of a particular product. Only by identifying such competitor patents can the company assess the strength of the blocking patent and take any necessary remedial actions, such as licensing or acquiring the patent, reengineering the nanobio product so that it is not covered by the competitor patent, or deciding that the patent does not cover the product or that the patent is not valid and obtaining a legal opinion to such end. The identification of competitor patents that may be infringed by the manufacture, use, or sale of a nanobio product is often called a Freedom to Operate or Clearance study, and is an important part of business planning for the development and commercialization of products.

Identifying relevant competitor patents in the cross-disciplinary nanotechnology and nanobio fields can be particularly difficult. Patents may be classified by the patent office in classes that do not make them easy to identify as nanobio patents,[fn10] and the patent may be written using terms and phrases that does not make it easy to identify the patent as relevant to nanobio products by keyword searches. These issues may make it difficult to conduct an accurate Clearance study for a nanobio product, and without being able to simply identify possible problematic competitor patents, adequate business planning becomes extremely difficult.

Patent Litigation Issues

Nanobio companies will also need to handle patent litigation issues: either as a plaintiff, enforcing its own patents against a competing product; or as a defendant, answering a claim that its product has infringed a competitor's patent. To date, there has been little or no patent litigation in the nanotechnology area. This is not too surprising since there are as yet few nanotechnology products on the market. It is expected, however, that in the next few years, we will experience an increasing amount of nanotech patent litigation as more products come to market and nanotech companies begin to assert their patents.[fn11] These initial nanotechnology patent litigation cases will lay the foundations for a body of patent law unique to nanotechnology. Unlike with biotechnology, however, for which a whole new body of law developed, people do not expect the development of a "nanotech" patent law. Instead, it is expected that some aspects of existing law will evolve to account for the special features of nanotech inventions. Only time will tell, however, how the patent law will change to embrace these new technologies.

In this brief article I have summarized some of the important patent issues facing a company bringing a nanobio product to market. In future articles I will analyze these patent issues in greater detail, provide practical advice on navigating the nanotech patent waters, and address the regulatory regimes relevant to nanobio products, including FDA, EPA, and OSHA.


1:If a company will be commercializing products outside of the United States, it will also have to deal with similar issues in each country in which it intends to market a nanobio product

2:The current administration's view is that nanotech products fall under existing regulations. See The Nanotech Land Grab, Corporate Legal Times, Vol. 14, (2004), p34.

3:See, for example, Current Trends in Nanotech Patents: A View fromIinside the Patent Office, Nanotechnology Law And Business, Vol. 1, (2004), article 4.

4:A patent can cover only what is new and what is not an obvious modification of what is already known. The exact scope of what is considered "known" under patent law is complicated and is set forth in 35 USC 102 (a)-(g).

5:For example, the USPTO initially took the position that genetically modified organisms were not patentable subject matter. The U.S. Supreme Court, in Diamond v. Chakrabarty, 447 U.S. 303, 206 USPQ 193 (1980), refuted this position and held that such organisms were patentable.

6:This issue is particularly important in the nanobio area in which developing inventions can involve sophisticated understanding in the biotechnology, medical, pharmaceutical, material science and other areas.

7:See, for example, Patent Office Struggles to stay ahead of nanotech Industry, Small Times, April 20, 2004. (Small Times)

8:Comparable problems were encountered in the nascent development stages of biotechnology and business methods.

9:See, for example, U.S. Patent OfficeIinitiates Nanotechnology Classification Project, May 26, 2004 issue of NanoBiotech News.

10:See, for example, U.S. Patent No. 6,628,016 directed to small, dipole containing molecules, classified under 310/10 as an "Electric Generator or Motor"; and U.S. Patent No. 6,670,631 directed to small molecules with particular HOMO-LUMO electronic characteristics, classified under class 257/40 as "Active Solid State Devices."

11:A similar situation was seen in growth of the biotech industry, where there was initially little patent litigation but this was followed by extensive litigation as biotechnology products became commercially successful.




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