Figure I2

The patents issued to A, B, and C are of progressively narrower scope. Because A's patent covers all fullerenes, B and C both need a license from A. Because B's patent covers all nanotubes, C additionally needs a license from B.

disclosure that the patent system provides. Inventor C may accordingly file for and be granted a patent that covers doped nanotubes.

The three patents that have now issued cover progressively narrower aspects of technology, but the narrower patents tend to cover technology that is more commercially useful. Consider the situations in which Inventors A, B, and C now find themselves. Inventor C, even though he holds a patent on the very valuable doped nanotube structures, may nonetheless be prevented from making and selling them because he infringes the patents held by Inventors A and B. He infringes the patent held by Inventor B because his doped nanotubes are still nanotube structures that are covered by the second patent. And he infringes the patent held by Inventor A because his doped nanotubes are also fullerenes that are covered by the first patent. For Inventor C to be able to make and sell these structures, he must obtain permission from both Inventors A and B, usually in the form of a license (see Figure I.2).

Inventor B faces a similar difficulty. Even though she holds a patent on nanotube structures, she infringes Inventor A's patent. Inventor B may be prevented by Inventor A from fabricating her nanotube structures because they are a type of fullerene covered by the first patent.

At first glance, it may appear that Inventor A is in the catbird seat. In many respects he is, for he owns the fundamental patent for a line of technology that has begun to develop and that has attracted public interest. Anyone who wishes to fabricate fullerenes will have to deal with him in some fashion, and he may be rewarded financially by selling licenses to his patent to Inventors B and C, and to anyone else who might want to participate in commercializing this line of technology. This is how it should be. Inventor A made a fundamental discovery that has spawned a whole new line of valuable technology. The patent system has put him in the position of being able to reap a significant financial reward in exchange for having disclosed his invention publicly and permitting others to improve on it.

Of course, the ability of Inventor A to exploit his invention is limited. The patent that he was granted is enforceable only for a limited time, after which anyone will be able to manufacture and sell fullerenes without his interference. Also, it may be that Inventor A recognizes the much better commercial value that exists for the discoveries of Inventors B and C. While the basic buckyballs that Inventor A initially discovered are viewed by the public as interesting curiosities, with their soccer-ball truncated-icosahedral shapes, consumers are really interested in getting their hands on nanotubes. The nanotubes that Inventor B developed have tremendous tensile strength that makes them useful in all sorts of industrial applications. The doped nano-tubes that Inventor C developed are even more valuable and can command a higher sales cost because they not only have that tensile strength, but also have superconducting electrical properties that are in high demand.

Knowing that there is really little market for his buckyballs, Inventor A may wish to make and sell doped nanotubes—the demand for them is becoming extremely hot and, having read the disclosure provided in Inventor C's patent, Inventor A has thought of a few ideas to make them even more valuable. These are ideas that could, for instance, raise the temperature at which the nanotubes will be superconducting, allowing the use of specialized cooling units to be avoided.

But Inventor A now finds himself confronted with the same difficulties that faced Inventors B and C, namely that patents held by others may prevent him from marketing the doped nanotubes that he would like to develop. It is in such circumstances that cross-licensing arrangements may become attractive to all the parties involved. In these kinds of arrangements, Inventor A provides a license to his basic patent to Inventor C in exchange for a return license by Inventor C to the doped nanotube patent, and similar arrangements are made between A and B and between B and C. This allows all the parties to continue to develop and market products, with the public benefiting from the competition that the parties engage in to attract their business.

As time goes on, each of the inventors (and, of course, still other inventors) will build further on these ideas, with the patent system progressively encouraging disclosure of the new innovations to the public. Of course, the system is not a perfect system and many criticisms leveled at it have some merit. But while deficiencies with the system are relatively easy to identify, it is considerably more difficult to identify solutions that would not weaken the system by inhibiting inventors from disclosing their ideas. As it stands, the patent system represents a compromise that has been reached to try to balance competing considerations over a period of centuries. In considering the various tradeoffs—which at their core reflect the tension between the benefits of public disclosure with the detriments of monopolies—it is perhaps helpful to paraphrase Winston Churchill's comments about democracy as a system of government: "No one pretends that [it] is perfect or all-wise. Indeed it has been said that [it] is the worst form ... except for all those other forms that have been tried from time to time."


1. As mentioned, different countries permit or prohibit the patenting of methods for treating living bodies. What evidence is available to support each of these positions? Which position reflects the better public policy? Should nanotechnology inventions that are used in the treatment of human bodies be treated the same way as other methods of treatment, or are they different? Why?

2. While Brunelleschi's patent had a term of three years, modern patents typically have a term of twenty years. In some technology areas, such as software, it is sometimes suggested that this term is too long because of the rate of advancement of the technology. What is an appropriate term length for a nanotechnology patent? What difficulties do you see in having different term lengths for different technology areas?

3. Should the monopoly power granted to the patent holder permit her to prevent experimental uses of the technology by others in trying to improve the technology? How would such power defeat the goals of the patent system? Research the extent to which different countries exempt such uses from patent grants. Are such exemptions dependent on the type of technology? Should they be?

4. A patent cross-licensing arrangement permits a patent to be used defensively to avoid payment of a license fee. What factors might be relevant in quantitative valuations of patents obtained for such defensive purposes?

2. Patentability Requirements

Probably the most fundamental characteristic of nanotechnology is that it is concerned with the very small. Even the most cursory look at articles written about nanotechnology reveals just how pervasive the urge is to make puns about size. Headlines tell us about "The Small Wonders of Nanotechnology" and how "Nanotechnology is the Next Big Thing." The working title of this book was "A New Scale for Lady Justice," reflecting the author's own impulse to highlight just how central size is to any discussion of nanotech-nology. As multiple other headlines tell us, when it comes to nanotechnol-ogy, "Size Matters."

How does this focus on size impact the ability to obtain a patent for a nanotechnology invention? For instance, in considering the general requirements for patentability discussed in the following section, it may be useful to keep a specific example in mind. In the autumn of 2005, nanotechnology researchers at Rice University reported that they had fabricated the world's first "nanocar."2 This device represents a rather remarkable feat of nanoengineering. With four buckyballs acting as wheels, the nanocar has four independently rotating alkyne axles supported by an organic-molecule

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