©2004 Foley & Lardner LLP

Territoriality In Nanotech Patents & Impact On US Manufacturing

Stephen B. MaebiusFoley & Lardner3000 K St. N.W. Washington D.C. 20007(202) 672-5569smaebius@foley.comwww.foley.com

©2004 Foley & Lardner LLP

Three Areas Of Patent Law Which May Impact US Manufacturing

Bayh-Dole licensing limitations

Domestic patent law restricting importation

Difficulties in obtaining international patent rights - may facilitate overseas production

©2004 Foley & Lardner LLP

Bayh-Dole Licensing Restrictions

Sec. 209(b): licensee must agree “that any products embodying the invention or produced through the use of the invention will be manufactured substantially in the United States”

many nanotech patents are and will be subject to this provision, but most will not

may be unclear whether end product was produced through use of the government-supported invention

©2004 Foley & Lardner LLP

Domestic Patent Law Restricting Importation

Sec. 271(g): prevents importation of a “product” made offshore by a process patented in the US

Problem: Bayer v. Housey held that information made by a biotech or nanotech process is not blocked (e.g., assay using nanoarray to discover new drug identity)

May encourage offshore research to discover end products not covered by US patents (Maebius & Wegner, NLJ, Dec. 24, 2001)

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Difficulties In Obtaining International Patent Rights Costs are prohibitive for many start-

ups

Not all countries have reliable enforcement systems

Failure to obtain rights in other countries may encourage overseas competitors

©2004 Foley & Lardner LLP

Conclusions Strong US patent system is encouraging

investment in nanotech start-ups Limited manufacturing of products at this

time; now mostly research jobs are being created

Domestic patent law reforms may help, but only to a limited extent

Need to continue push for global patent harmonization to make international patent rights affordable & effective for US nanotech businesses