ii. Classification of Nanotechnology Patent Applications

Because the patent office is so large and handles so many applications, the earliest nanotechnology patents were considered by those parts of the office that traditionally handled the technology from which the applications grew. A nanotechnology application on quantum dots developed by a semiconductor physicist may have been considered by an examiner in a group that handles semiconductor structures; an application directed to biological applications of dendrimers may have been considered by an examiner in the biological arts; an application directed to nanophotonics may have been considered by an examiner who routinely works with optics; and so on. This fragmentation has the potential drawback that an examiner will be unaware of relevant information that has been developed in another field and that the examination of the patent application will suffer for it. A current distribution of nanotechnology-related patent applications in the United States shows that about 30 percent are classified as "electrical" inventions, 26 percent are classified as "biotechnology" inventions, 23 percent are classified as "chemistry" inventions, and 21 percent are classified as "mechanical" inventions.16

The patent office has engaged in a number of efforts to address this fragmentation. For example, in November 2001, the patent office initiated a project to identify nanotechnology-related inventions and used this to develop a cross-reference classification digest in August 2004. This digest was intended to simplify the searching of documents relevant to nanotechnology, particularly by patent examiners in evaluating the novelty of newly submitted patent applications. This was superseded in November 2005 by the establishment of a more complete cross-reference that includes 263 subclasses to permit more refined classification and searching.17 This is likely still an intermediate step to development of a complete classification schedule that is as detailed as the classification schedules that the patent office has in other technology areas.

Input into the development of a suitable classification system was one result of a series of Nanotechnology Customer Partnership meetings that the patent office initiated in September 2003. The meetings are informal gatherings among potential nanotechnology patent applicants and representatives of the patent office. They have been held every few months and provide a mechanism for the patent office to receive feedback that it uses in its attempts to improve the overall examination of nanotechnology applications. It also provides a venue for the patent office to articulate where it currently stands in addressing issues of particular concern to nanotechnology applicants—how examiners will be identifying relevant prior art, how issues like changes in scale will be addressed, and so on.

Every one of the thousands of applications filed with the patent office every day has the potential to mature into a patent and therefore to provide a government-backed monopoly power that could have wide-reaching commercial implications. Each application has the potential to affect the cost of goods and services within the United States, to impact the success or failure of commercial entities (and therefore the employment of the people who rely on those entities for their livelihoods), and to inhibit or promote future lines of scientific and technological development in the country. While the ability of different applications to realize this potential will of course vary, each submission deserves to be treated with these potential ramifications in mind. It is therefore important that each application be considered with care to determine whether it meets the criteria for patentability—significant adverse consequences can result both from issuing a patent that is not valid and from refusing to issue a patent that complies with all requirements.

iii. Security Review and Secrecy Orders

The patent office is highly compartmentalized. When an application is initially submitted to the patent office, it is considered by the Office of Initial Patent Examination. This office is responsible for checking for compliance with formalities, preparing the application for entry into various databases used by the patent office, and for assigning the application to the correct technology center for examination. In addition to these functions, the content of the application is reviewed at this stage to determine whether it includes any subject matter that various government agencies have identified as being of interest.

If so, the application will be made available to those agencies who will review it for the possible imposition of a secrecy order.18 Patent applications are on the forefront of technological change and orders for secrecy may be desired by the government for any of a variety of reasons. Nanotechnology applications are particularly likely candidates for secrecy, especially those that describe inventions that may have military uses, intelligence-gathering uses, and so on. If a secrecy order is imposed, there may be a number of ramifications. Perhaps most obvious is the fact that the information in the application will be prohibited from being disclosed publicly—the application will not be published and the applicant will not be permitted to disclose the information through other means. This includes a prohibition on filing a counterpart to the application in other countries whose governments would then also have access to the information.

This secrecy also means that a patent cannot be issued on the application until the secrecy order is lifted. The application may undergo examination, but will be held up by the secrecy order even after it has been determined that it is patentable. The examination itself will be largely similar to conventional examination, except that it will be conducted by an examiner who holds a security clearance at an appropriate level.

It is well recognized that the effects of a secrecy order can be severe on an applicant. A company might be structured completely around the invention that is disclosed and will be prevented from engaging in its usual activities to commercialize the product. Applicants whose patent applications are suppressed by a secrecy order are entitled to compensation for financial damage that results from the secrecy order or by use of the invention by the government.19

iv. Examination

Irrespective of whether a secrecy order is imposed, the patent application is assigned to an examiner who is charged with evaluating whether the application meets the criteria for issuing a patent that were described in the preceding section. The particular specialization of the examiner is generally quite narrow—an examiner could be assigned to review only applications related to the manipulation of quantum-dot structures using atomic force microscopy or something similarly narrow. The advantage of such specialization is that the examiner becomes very familiar with both the applications that are being filed in his area and the prior art that is relevant to their examination.

The examination of the application usually takes the form of some back-and-forth between the examiner and the applicant. While it does sometimes happen, it is relatively rare that an application is immediately allowed. Instead, the examiner finds some reference that raises a question as to the novelty or obviousness of at least some of the claims. The applicant then explains why the reference is not as relevant as the examiner believed or alters the claims in some way to provide distinctions that will meet the patentability requirements. This back-and-forth can proceed a number of times, with one of three potential results: the examiner is persuaded that the application, perhaps with some amendment, meets the requirements for patentability; the applicant concedes that the examiner is correct in assessing the invention as not being patentable and decides not to pursue the application; or there is a stalemate with neither the examiner nor the applicant being convinced of the other's position.

There are numerous mechanisms to permit the examiner and the applicant to understand each other's point of view. While most of the interaction takes place in writing, opportunities are available for other types of interaction—interviews between the examiner and the applicant (or, more likely, the applicant's attorney) may be conducted by telephone, through video conferencing, or in person at the patent office. This type of interaction may be tremendously valuable, particularly when an applicant travels to Washington DC to take the time to explain face-to-face with the examiner what the invention is and how it differs from what was done before.

Without such direct interaction with at least some applicants, there would be a great risk that patent examiners would treat applications too abstractly— they would operate in a sheltered environment where they do not realize how strong an impact their decisions can have, where the ability to obtain a patent might determine the fate of a small company and its ability to maintain a certain level of employment. Even with the possibility of direct interaction such a risk remains. But a practical approach to interacting with the patent office recognizes that particular applications can be distinguished in the examiner's mind—by talking to the examiner on the telephone about the application or by visiting her in her office with the chief technology officer of the company that needs the patent to raise further investment capital.

There are other practical considerations that good patent attorneys make in helping applicants interact with the patent office. These attorneys are keenly aware of the environment in which patent examiners work; indeed, some of the most effective patent attorneys were once examiners themselves and know that environment intimately. The productivity requirements imposed on examiners are significant. For each application they consider, they are allotted a total time of about twenty-four hours to do the full examination— to read the application and learn what the invention is; to conduct a search of the prior art in the context of each claim; to determine whether each of those claims is novel and not obvious over the results of that search; to evaluate the formal requirements of the claims and of the written description; to prepare potentially multiple written communications to the applicant detailing the results of these analyses; to discuss the reasoning with the applicant over the phone or in person; and a host of other functions that are involved in examining a patent application.

This time allotment is quantified in a point system in which points (referred to in the patent office as "counts") are accumulated for performing specified functions that typify a certain stage in the consideration of an application (and having spent the time to get to that stage). The performance evaluations of examiners, and the availability of salary increases and promotions, are directly tied to this measure of productivity. Good patent attorneys are aware of the motivational effect this system has on examiners and exploit it. Examiners have considerable discretion to be clear or vague in suggesting approaches that will address the concerns that exist, or to be generous or stingy in how they interpret claims and prior art. Establishment of an implicit quid pro quo during the process may result by taking actions that cause the examiner to earn a count.

Is exploiting the natural human motivations that such a point system creates improper? Almost no patent attorney would think so. The role of the patent attorney is to play the game as effectively as possible to secure the best possible rights for his clients. After all, it is the government that gets to set the rules of the game, and it can change the rules if it wants to.

If a stalemate has been reached between an applicant and the examiner, it is possible to go over the examiner's head by appealing the rejection to the Board of Patent Appeals and Interferences. This is a body made up of a group of specialized administrative law judges called patent law judges. They are highly experienced in applying the law to patent applications and have their own technical specializations. When the board hears an appeal, it does so as a panel drawn from the full body, usually with three of the judges considering a particular application (although sometimes more judges may participate if the appeal raises unusually important issues).

v. Appeals

In considering an appeal, the selected panel has access to the entire written exchange that has been developed between the applicant and examiner. This is supplemented with an appeal brief, which summarizes the applicant's views, and an examiner's answer to the appeal brief, which summarizes the examiner's views. These documents are especially valuable to the panel because there may have been some evolution in the positions of the applicant and examiner over time. Agreement may have been reached on some issues; some concerns may have vanished because of ways in which the claims were amended; and the specific character of certain issues may have changed for any of a variety of reasons.

The appeal brief and examiner's answer act to focus the attention of the panel on the precise issues that need resolution. In most cases, the applicant may also file a reply brief that responds to the examiner's answer, perhaps giving the applicant the advantage by getting in the last word. It is also possible to conduct an oral hearing before the panel. This may be especially valuable when the issues being raised are close ones since it provides the panel with the opportunity to present their questions to the applicant and the examiner. The way in which those questions are answered may well alleviate concerns that the individual judges might otherwise have in deciding close issues.

Not surprisingly, the board dislikes spending its valuable time considering arguments that are frivolous or unreasonable. The board exercises greater control on the type of arguments that may originate from examiners than it does from applicants. This is done by requiring that the examiner hold a conference with two other senior examiners before the appeal is transmitted to the board. This conference must result in agreement with the position taken by the examiner, with the two other participants also signing the examiner's answer.20

The board has a number of options it may take, the most straightforward of which are simply to uphold the rejections or to reverse them. Other actions that may be taken include a hybrid approach in which the rejections of some claims are upheld while others are reversed, or to request clarification of the arguments made by the examiner and/or applicant before reaching a decision.

In the event the board upholds the rejections, the applicant still has recourse to further appeals, but these are presented to the court system. At this stage, a rejection may be appealed to the Court of Appeals for the Federal Circuit, a court that specializes in patent cases.21 If the appeal is unsuccessful in the federal circuit, a further appeal may be considered by the United States Supreme Court, although that court generally has the ability to be selective about which cases it is willing to hear. An alternative route to appeal a rejection in the court system is provided by the ability to bring a civil action against the director of the patent office in the United States District Court for the District of Columbia. Subsequent appeals in the event of an adverse decision there may then subsequently be had in the Court of Appeals for the Federal Circuit and potentially in the United States Supreme Court.

It is apparent that there are many steps that must be taken by the patent office in deciding whether to grant a patent (Figure I.9). Each of these steps inherently takes significant time, resulting in a long wait by patent applicants for a decision to be made. Currently, this wait is exacerbated by the general burdens placed on the patent office from the sheer volume of applications being submitted. A realistic time to obtain a patent from the time an

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