Feature Article - CREATE Act of 2004 Benefits Joint Research
by Eugene R. Quinn, Jr.
, Associate Director, NYS Science & Technology Law Center
On December 10, 2004, the United States Congress once again updated the obviousness provisions of the U.S. Patent Act, this time with an eye toward fostering the research, development and patenting of inventions that are the fruits of joint research efforts. These new amendments to the Patent Act make narrow, but important, changes in the patent laws to ensure the public will benefit from the results of collaborative research efforts. While this new law is not limited to joint research and development efforts between and among universities and industry, the legislative history demonstrates that fostering the continued joint research efforts between universities and industry was the motivating factor that lead to this Congressional action. Indeed, Congress saw this modification of the patent laws as an important step toward furthering the goals of the Bayh-Dole Amendments to the Patent Act.
The purpose of the recent change to Patent Act, which became law with the enactment of the the Cooperative Research and Technology Enhancement Act (CREATE) of 2004, was to allow certain benefits available to both individual inventors and companies to also become available to those participants of joint research agreements.
As a general rule, the work of an inventor cannot be used against the inventor for purposes of obviousness. This is an important rule for serial inventors because obviousness is the most serious impediment to obtaining a patent in most situations. This is true because something can be new, as that term is understood under the patent laws, but still be obvious. "Newness", or novelty as the statute defines it, looks to whether the invention is exactly identical to a previous invention. In making a newness determination the operative question is whether a single reference alone exactly discloses the claimed invention. Obviousness, however, goes one step further. A patent may not be obtained if it contains only obvious differences from prior art. An invention is considered obvious if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made, to a person having ordinary skill in the art to which said subject matter pertains. In contrast to the above described newness determination, obviousness requires the presence of more than a single reference.
Admittedly, the previous definition of obviousness is somewhat circular, but, at times such is the nature of patent law. In essence, the term "obviousness" is defined in patent law as it would be defined in ordinary conversational use of the word. There is a significant caveat, however. Obviousness must be determined at the time of invention, which means no hindsight is permissible. This is a sensible rule given the truth that everything is obvious once you know about it. The law says that it is the prior art itself, and not the applicant’s achievement, that must establish the obviousness of the combination. Explained another way, there must be some suggestion or motivation within the prior art references to combine the references to achieve the invention. The suggestion to combine may be found in explicit or implicit teachings within the references themselves, from the ordinary knowledge of those skilled in the art, or from the nature of the problem to be solved. Nevertheless, there must be something in the prior art as a whole to suggest the desirability, and thus the obviousness, of making the combination.
The rule that the inventors own work cannot be used against a subsequent invention for obviousness purposes gives inventors the ability to file follow up patent applications without fear that his or her own work would be relied upon to claim that the subsequent invention is obvious in light of earlier research or invention. Given that many, if not most, inventors work in a particular field, a rule that would allow an inventor’s own work to be used against them for obviousness purposes would significantly limit the ability to seek secondary or follow up patents. The result would likely be that most inventors would wait to file a patent until such time as it could be relatively certain that the invention and all of its permutations are known. Such a waiting period for perfection is antithetical to the purpose of the patent laws, which are designed to encourage early disclosure, which in turn is seen as benefiting the public by contributing to the base of public knowledge.
In 1973, the Court of Customs and Patent Appeals decided a case, In re Bass, that dealt a serious blow to the simplicity of the previously mentioned general rule. In many situations there is not a single inventor, but two or more individuals who are co-inventors. The presence of co-inventors can wreak havoc on the principle that an inventor’s own work cannot be used for obviousness purposes. This is true because each different grouping of inventors creates a different inventive entity, which could undo this general fairness rule.
For example, if Tom and Sue are inventors on the ’555 patent, and Tom, Sue and Harry are inventors on a pending patent application, there is a difference in the inventive entity and the patent to Tom and Sue could be used against Tom, Sue and Harry for obviousness purposes. This would be true regardless of the fact that Tom, Sue and Harry are all employed by Mega Corporation. Thus the ruling in Bass was particularly hard on those who employed inventors and who were the ultimate owners of the exclusive rights.
The Federal Circuit decision in Bass stood as the law for a number of years, but in 1984 Congress amended the obviousness provisions of the patent laws (35 U.S.C. § 103) to largely do away with the different inventive entity problem previously described. In most situations, prior art cannot be used against a different inventive entity as long as both the patent and the subsequently claimed invention were owned by the same person or corporate entity, or subject to an obligation to assign. This change to the obviousness provisions was updated and expanded in 1999.
As Senator Orin Hatch explained upon the introduction of the CREATE Act of 2004:
[W]e have long realized the enormous value of these joint research efforts, and we have long realized that their potential cannot be realized unless their participants can benefit from the intellectual property rights generated by such research. Unfortunately, the literal language of Section 102(g) of the Patent Act suggests that non-public information known to some members of a private-public research team can constitute "prior art" that may make the final results of the team research obvious, and thus not patentable. Because non-public information does not usually constitute "prior art" under the Patent Act, the potentially disparate treatment of such information creates a disincentive for . . . institutions to collaborate in joint research efforts.
In order to rectify the potential obviousness problems presented by the situation where there is not exact identity of inventors and no single common owner, but rather a joint research venture, §103(c) of the Patent Act was amended to provide that patentability is not precluded on the basis of obviousness where subject matter which qualifies as prior art is developed by a person different from the person claiming the invention if: (1) the claimed invention was made by or on behalf of parties to a joint research agreement that was in effect on or before the date the claimed invention was made; (2) the claimed invention was made as a result of activities undertaken within the scope of the agreement; and (3) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the agreement. Through the amendments of the CREATE Act of 2004, participants in joint venture research endeavors will not ultimately be penalized when it comes time to seek a patent, provided of course the above requirements are indeed satisfied.
From a procedural standpoint, the Patent Office procedure is not expect to substantially change despite the enactment of the CREATE Act of 2004. Given that this change in the law applies to any US patent granted on or after December 10, 2004, many applications may not make specific reference to the existence of a joint research agreement sufficient to trigger the benefits of the CREATE Act of 2004. Therefore, the patent examiner will still need to make an initial determination regarding obviousness as has been done previously. Assuming the examiner does believe there to be a proper obviousness rejection, the burden will then shift to the applicant to successfully challenge obviousness. In order to gain the benefit of the CREATE Act of 2004, the applicant will be required to provide a statement to the effect that the prior art and the claimed invention were made by or on the behalf of parties to a joint research agreement. In addition to providing this statement, the applicant must also: (1) amend the specification to disclose the names of the parties to the joint research agreement; and (2) either amend the specification to either set forth the date the joint research agreement was executed and a concise statement of the field of the claimed invention, or specify where (i.e., by reel and frame number) this information is recorded in the assignment records of the Office. Presumably, applications filed after December 10, 2004, which relate to an invention that is the result of a joint research agreement will be filed with enough specificity such that amendments will not be necessary.
Although the CREATE Act of 2004 is quite short by any definition, the rules of practice in the Patent Office will need to be amended to address several minor matters, as well as several extremely complicated questions regarding double patenting, which the legislative history tell us were indeed foreseen by Congress prior to enactment of the Act. Currently there are no permanent rules and regulations in place at the United States Patent Office to carry out the mandates of the CREATE Act of 2004. This is not, however, out of the ordinary. The Patent Office has drafted rules and regulations to implement the CREATE Act of 2004, and these draft rules and regulations have been published in the Federal Register. A public comment period is open until February 10, 2005. At some point after the comment period expires, the draft rules and regulations, in some form, will be implemented and integrated into the rules of practice and procedure at the Patent Office. Once these rules have been adopted, a future feature article will focus on these topics, including the thorny double patenting issues.
Before leaving this topic it is worth noting that this article addresses the use of an inventor’s own work in the context of obviousness. This is not to say that an inventor’s own work cannot be used for purposes of a newness inquiry pursuant to 35 U.S.C. §102. Under §102 an inventor can act as their own bar to patentability in the situation where an invention has been made, certain activities have occurred and more than 12 months have passed. Therefore, it is true to say as a general rule that an inventor’s own previous work cannot be used against the inventor in a present, pending application, but an inventor’s own work can and sometimes does create a statutory bar. The topic of statutory bars will be the focus of a feature article in the near future.
R. Quinn, Jr.</a>, Associate Director, NYS Science & Technology Law Center