II VOLUMBV/ /994 · "alert" to technology managers to watch for pitfalls in university practices that might cause problems later on in the patenting ... On the second anniversary

Journal of the Association ofUniversity Technology Managers

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VOLUMBV//994

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Association ofUniversityTechnologyManagers, Inc.

JOURNAL OF TIlEASSOCIATION OF UNIVERSITY

TECHNOLOGY MANAGERS

EDITORJean A. Mahoney

Princeton University

MANAGING EDITORDiane C. Hoffman

Diane C. Hoffman, Inc.

ASSOCIATE EDITORBeatrice Bryan

University of California System

EDITORIAL ADVISORY BOARDHoward W. Bremer Ann M. HammerslaWisconsin Alumni Research Syracuse UniversityFoundation

Beatrice BryanUniversity of CaliforniaSystem

Carol S. GrandeUniversity of Pennsylvania

Karen HerseyMassachusetts Institute ofTechnology

Martin RachmelerUniversity of California,San Diego

The Journal of the Association of University Technology Managersis provided free to members of AUTM. Single copies are availablefor $10.00 each, prepaid. Subscription requests and changes ofaddress should be sent to:

Ms. Penny DalzielAssociation of University Technology Managers71 East Avenue, Suite SNorwalk, CT 06851-4903Phone: (203) 852-7168FAX: (203) 838-5714

Copyright 1994 by the Association of University TechnologyManagers, Inc., and individual authors. All Rights Reserved.Reproduction in whole or in part without the written consent of thecopyright owners is prohibited.

Lonis P. BernemanCenter for Innovative Technology

1994AUTM OFFICERS

PRESIDENTWilliam Hostetler

Oregon State University

PAST PRESIDENTH. S. (Duke) Leahey

Washington University

PRESIDENT-ELECTJoyce Brinton

Harvard University

VICE PRESIDENT-EASTERN REGIONAnn R. Stevens

Emory University

VICE PRESIDENT-CENTRAL REGIONMelvin J. DeGeeterIndiana University

VICE PRESIDENT-WESTERN REGIONRita C. Manak

The University of Arizona

VICE PRESIDENT-CANADATerry Donaghue

Mount Sinai Hospital

VICE PRESIDENT-PROFESSIONAL DEVELOPMENTTeri F. Willey

Purdue Research Foundation

SECRETARYHelen Becker

Canadian Bacterial Diseases Network

TREASURERJoe M. Koepnick

Stanford University

TRUSTEESFrank R. Landsberger

The Mount Sinai Medical Center

Journal of theAssociation of University Technology Managers

Volume VI 1994

Editor's Preface vii

The Prior Art Effect of Material Transfer Agreementsby J. Steven Whitaker 1

Sequence Necessary for DNA Patent Claimsby Ellen P. Winner 11

Impact of the North American Free Trade Agreementon Canadian Intellectual Property RightsRelating to University Technology Management

by Sheldon Burshtein . . . . . . . . . . . . . . . . . . . . .. 19

What Counts:A Publication Guide for the InventorSeeking a Patent

by Patricia A. Hider . . . . . . . . . . . . . . . . . . . . . .. 49

Instructions for Contributors . . . . . . . . . . . . . . . . . . . . . 83

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Editor's Preface

Practitioners of technology transfer will attest to themulti-faceted nature of their profession, which combines aspectsof business, science, and law. Previous volumes of this Journalhave featured articles covering varied topics, including: specificlegal issues, such as the art of patenting and licensingbiotechnology, animals, and plants; business issues, such asproduct liability, licensee bankruptcy, withholding tax andunrelated business income tax; university administrative issues,such as conflict of interest and agreements governing ownershipof university inventions; and analysis of the famous Bayh-DoleAct of 1980, on which the profession is based.

In Volume VI the emphasis is on intellectual propertylaw. Three of the four articles focus on patent law, providing an"alert" to technology managers to watch for pitfalls in universitypractices that might cause problems later on in the patentingprocess. The fourth article concerns the North American FreeTrade Agreement (NAFfA) and its effect on intellectualproperty law and rights at universities.

In his article entitled "The Prior Art Effect of MaterialTransfer Agreements," J. Steven Whitaker analyzes the use ofMTAs and calls our attention to the potential loss ofpatentability when transfer agreements are utilized undercertain conditions.

Ellen Winner examines the art and strategy of filingpatent applications involving DNA segments. Her study,"Sequence Necessary for DNA Patent Claims," reviews theevolving state of the law in this area and calls for an appeal tothe Federal Circuit,

In "What Counts: A Publication Guide for the InventorSeeking a Patent," Patricia Hider compares various types ofpublic disclosures, assesses their impact on the patentapplication process, and provides guidance derived fromrelevant case law.

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On the second anniversary of the signing of the NorthAmerican Free Trade Agreement, Sheldon Burshtein providesan extensive analysis of the NAFTA, with specific attention toits significance for intellectual property rights at universities inCanada, Mexico, and the United States. Mr. Burshtein's articleis especially timely as the General Agreement on Tariffs andTrade (GATT) makes another appearance on the world scene.

The Editorial Board of the AUTM Journal welcomesletters and comments from its readers concerning issues raisedin published articles or on other matters of interest to ourcolleagues. Letters may be considered for the "Letters to theEditor" section or forwarded' to the individual author for reply,at the discretion of the Editor.

We thank the authors of this Volume, and encourage ourreaders to submit original papers on topics of interest toprofessional technology managers. Those contemplating writingan article or a letter to the Editor are asked to contact theManaging Editor for content and review procedures.

Jean A. Mahoney, EditorDecember 1994,

Viii

The Prior Art Effect ofMaterial Transfer Agreements

J. Steven Whitaker, M.D., J.D."

ABSTRACT

Material transfer agreements (MTAs) are used to memorializeterms for transfer of research materials between investigators.Generally, these agreements and their associated materialexchanges have no impact on the patentability of thetransferred materials. When the transfer occurs before filing apatent application related to the transferred materials, however,(in some instances) the transfer may be deemed prior art to theclaims and bar patentability of the transferred materials. Whilemost currently used academic MTAs are adequate for postfiling transfers, confidentiality provisions may be required toavoid the prior art effect of some pre-filing transfers.

INTRODUCTION

Material transfer agreements are widely used by academia andindustry to define the proprietary positions of the provider andrecipient to the transferred materials, and to the-improvementsor derivatives thereof. To focus on advancement, instead ofreproduction of the art, use of MTAs is particularly prevalentin biological sciences where materials such as cell lines orvectors may not be easilyreproducible. Unfortunately, in certainlimited circumstances,manycurrently used academic MTAs and

* J. Steven Whitaker, M.D., J.D., is a Patent Attorney in Seattle,Washington.

@ 1994, J. Steven Whitaker

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2 J. Steven Whitaker

the transfers memorialized therein, may prejudice patent rightsto the transferred materials. It must be emphasized, however,that most material transfers and associated MTAs do notimpact the patentability of transferred materials, and thus donot require revision of current university MTA practice.

These agreements serve other functions as well. For example,MTAs are used to limit the provider's potential liability for actsof the recipient by restricting .the use of the transferredmaterials in human subjects and disclaiming warranties thatmight serve as a basis for product liability claims. They alsooften require acknowledgement of the source of the materialsin publications or presentations to help further acceptedacademic disclosure standards.

Many scientificpublications require that published material begenerally available to third parties wishing to repeat or confirmpublished experiments, and as a result some institutions haveincorporated additional provisions into MTAs that insurereasonable general availability of the transferred materials tothird parties. Typically, these provisions obligate the provider tofurnish samples of the transferred materials to third parties, assupplies allow. While furthering the academic goals ofdisclosure and publication, in a limited _number of specialcircumstances these provisions may run afoul of patent lawsandrisk losing patent protection of the transferred materials;specifically, MTA-govemed transfers that occur prior to thefiling of patent applications (hereinafter "pre-filing materialtransfers") claiming the transferred materials may operate asprior art against the claimed invention: -

LEGAL STANDARDS FOR THE _PRIORART EFFECT OF MTAs

UnitedStates and non-Ll.S, patent laws require that claimedsubject matter be "novel" to be patentable. In the United States,novelty is defined by statute. In relevant part, if the claimedsubject matter was known or used by others in the United

The PriorArt Effect of Material TransferAgreements 3

States before the patent applicant's "invention" .thereof.i.theclaimed subject matter is not patentable in the United States(35 U.S.C. § l02(a». Although it seems self-evident that apatent applicant could not transfer her "invention" prior tomaking that "invention," present legal doctrines may allow forthis apparent contradiction.

For instance, an invention may be deemed legally incompleteat the time of the transfer if the inventor had not yet discoveredits full utility as claimed in a patent application. To illustrate,suppose a monoclonal antibody that is known to react with alung adenocarcinoma cell line is transferred. Subsequent to thetransfer, it is discovered (and claimed in a patent application)that the antibody reacts with, and kills, all types ofadenocarcinoma cells. The United States Patent and TrademarkOffice (PTO) may then assert that the "invention" was notcomplete until it was known that the antibody could kill alltypes of adenocarcinoma cells. By this interpretation,thetransfer would have occurred before the "invention" of theantibody was completed. In some instances, it may be possibleto establish a date of invention prior to the transfer by use ofdeclarations and tangible evidence if the transfer occurred lessthan one year prior to the filing date of the patent applicationin question, although this increases patenting costs and is notuniversally successful.

Whether pre-filing knowledge or use by others of an inventionwhose full utility is not known bars patentability awaits futureclarification by the courts. Strong arguments can be made onboth sides of the issue. Recent actions of the United StatesPatent and Trademark Office, however, suggest that the PTOinterprets the law to mean that transfer of material prior toawareness of the material's utility as claimed in a patentapplication can constitute use by others prior to "invention."

Further, if the claimed subject matter was publiclyused or soldmore than one year before the filing date of the patentapplication, the "invention" is not patentable (35 U.S.C. §

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4 1. Steven Whitaker

l02(b». While the law is not completelysettled, the provider'sknowledge of the utility of the claimed invention is probablyirrelevant in this instance. Disclosuresof potentially patentableinventions more than one year prior to filing a patentapplication maybar obtainingpatent protection of the inventionin the United States. If the inventor makes a transfer that islegally deemed to be a public use more than one year prior tothe date of patent filing, the transferred material would not bepatentable. Non-U.S. laws are even less tolerant and bar patentprotection for inventions disclosed prior to the filing date.Declarations are not effective to overcome these rejections.

The present controllingU.S. legal standard for both "knowledgeor use by others" and "public use" is public accessibility. If apre-filing material transfer is governed by an MTA providingpublic accessibility to the transferred materials, the transfer maybar patentability of those materials. Patent law doctrines ofpublic knowledge and use should be considered when preparingMTAs for transferring inventions prior to filing patentapplications. While technology managers might consider thisinquiry merely an academic exercise, examiners in the PTOhave seized upon such transfers as a basis for rejecting claimsto transferred materials. To date, the PTO has not yielded, evenin the face of evidence demonstrating that the transfers wereconfidential.

The term "known or used by others" (as recited in Section102(a» has been interpreted by U.S. courts to mean knowledgeor use that is accessible to the public. It is unfortunate that thecourts have not fully defined "accessible to the public" as itrelates to use or knowledge. In the analogous context ofpublications, the courts apparently do not consider the relativeaccessibility of the reference to the public. For example, U.S.courts have ruled that a doctoral thesis shelved and indexed ina single German university library is accessible to the public,and thus is prior art. Therefore, a publication that istheoretically accessible, although inaccessible as a practicalmatter, is legally "accessible to the public." Secret uses

The PriorArt Effect of Material TransferAgreements 5

protected from public access are deemed public uses if apublicly-available product results from the secret use. This isespecially significant for commercial purposes such asemployingtransferred materials for qualityassurance programs.In all cases under Section 102(a), the use or knowledge must beby more than one person.

"Public use" under § l02(b) has been interpreted by appellatecourts to include "any use" of the invention by a person otherthan the inventor who is under no restriction, limitation, orobligation of secrecy to the inventor. When an invention istransferred to a third party, the use is not considered public ifthe inventor retains control over the invention's use anddistribution of information regarding the invention. The use ofthe invention in experiments to bring the invention tocompletion or perfection is not considered a public use underpresent law. Perfection of the invention must be the purpose ofsuch experimental use, however, and not merely incidental toother purposes.

Recent cases suggest that MTA provisions preserving theinventor's control of the invention and information regardingthe invention need not be written or even expressed in allinstances. A court may infer control of the invention from therelationship between the parties and the surroundingcircumstances. Reliance on oral or implied confidentialityagreements between the provider and the recipient is notwithout risk, however, and maynecessitate costlyappeals withinthe PTO or courts.

Most academic MTAs recite no express restrictions onpublishing results of research with transferred materials. In fact,many contain provisions obligating the provider to make thematerials generally available. These provisions seem to belielater arguments to the PTO of oral or implied confidentialityagreements. If the transferred materials are published by therecipient, such a disclosure may immediately bar patentprotection for the provider in most countries (most notably

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Canada, Japan, and European countries). The publication mayalso be cited by the PTO as evidence that the prior materialtransfer was not confidential. As explained above, either thetransfer or the publication may be deemed to be "knowledge or

. use by others" prior to the invention by the provider, or act asan absolute statutory bar to patentability in the United Statesif the transfer (or publication) occurred more than one yearprior to filing the patent application.

THE IMPACT OF NON-CONFIDENTIAL MTAsON UNIVERSITY TECHNOLOGY TRANSFER

In view of current patent law doctrines of confidentiality,pre-filing material transfers evidenced by MTAs lackingconfidentiality provisions may adversely affect academictechnology transfer in many ways. First, if an issued patent isruled invalid on the basis of MTA-based transfers, theuniversity may not be entitled to royalties from the claimedinvention from the licensee. Second, even if a patent has notbeen challenged, pre-filing MTA-based transfers may be usedby prospective licensees to discount the value of the patent.Industry has begun to investigatepre-filingmaterial transfers byinvestigators more vigorously prior to licensing the materials orassociated know-how, Identificationof non-confidentialmaterialtransfers occurring prior to the filing date of the patentapplication alerts companies of potential patentability risk tothe transferred materials, which could cause a company todiscount the value of the license. Even more significant, afterdiscovering pre-filing material transfers, a company mayabandon licensing negotiations and develop the technologywithout a license, knowing that if sued for patent infringement,a strong attack on the validity of the patent could be mounted.The existence of the transfers would provide the company witha good argument that the patent is invalid and therefore avoidincreased liability for willful infringement.

Increased administrative burdens are another consequence foruniversities that use MTAs without confidentiality provisions.

The Prior Art EffectofMaterial Transfer Agreements 7

Potential licensees could legitimately require universities toproduce additional information, such as declarations fromproviders as to the confidentiality of material transfers, anddocumentationduring negotiations. Any transfers not disclosedto potential licensees could constitute grounds for allegations ofbad-faith.bargaining and provide a basis for later avoidance-of

. the licensing contract. Universities may also be requested towarrant the confidentialityof transfers during licensing. The duediligence .requirements. of securities, laws could requiresignificant investigation of university transfers during thefinancing (both public and private) of start-up companiesintended to commercialize university-developed technology.Further, under current regulations of the PTO, universityinventors and assignees may be required to disclose all MTAsevidencing transfers that occurred prior to the filing date of thepatent application. Should any pertinent transfers not bedisclosedto the PTO, patents issuing from the application couldbe held unenforceable as obtained through inequitable conductor fraud on the Patent Office.

The requirements of present patent laws place academicinstitutions in a difficult position. Because a primary mission ofacademic institutions is the free and open dissemination ofknowledge derived from research, many university officialsconsider placing restrictions on the academic recipients ofmaterial transfers contrary to the spirit of the academic mission,if not outright sacrilege. Universities are confronted with thechoice of violating a basic academic tenet or potentiallyforfeiting valuable patent rights. This dilemma is becomingespecially acute as university administrators and regentsincreasinglyconsider technology transfer offices to be importantsources of university revenue.

To date, judicial decisions defining confidentiality of transfershave only addressed the extremes of confidentiality: either norestrictions on use by the recipient or complete controlpreserved with the provider. Although present law has notresolved cases falling between these extremes; a middle ground


might exist that is consistent with the academic mission as wellas protective of patent rights. A legallyacceptable compromisemay be a limit on the timing of disclosures by the recipient,rather than more limiting restrictions of confidentiality. Forexample, an agreement might forbid disclosure of the materials,whether by publication, presentation, or otherwise, absentnotification of the provider coupled with a reasonable waitingperiod (30-60days) following notification to allow the providertime to prepare and file a patent application, if desired.

The provider in such an agreement retains a degree of controlover disclosures and is assured of the invention's confidentialstatus, at least until the waitingperiod following notification haselapsed. Although a recipient could not disclose the materialsprecipitately, 'the recipient would retain the right to publishresearch results. It must be remembered, however, that becausethis strategy has not been legally tested, a court could later findthat such a transfer was not legally confidential, and patentclaims to the transferred materials could be ruled invalid if thetransfer occurred before the patent application was filed. Thistype of ruling would not only invalidate patent claims to thetransferred materials at issue, but could also retrospectivelyimpact other pre-filing transfers that employed the sameagreement format. If a university cannot accept more stringentconfidentiality terms in pre-filing MTAs, this type ofcompromise agreement might be the best alternative to anagreement having no confidentiality terms. '

University technology transfer officers may face similardilemmas if their investigators are required to sign confidentialMTAs as a condition for receiving materials. By signing aconfidential MTA, an investigator may be obligated not topublish or otherwise disclose the transferred materials. Thisnon-disclosureagreement couldbreach university disclosureandpublication policies. On the other hand, if the investigatorrefuses to sign the confidential MTA, the investigator may bedenied accessto the materials and lose research opportunities.Because only public use and knowledge in the United States

The Prior Art Effect of Material TransferAgreements 9

can constitute a bar to patentability, these terms are generallynot needed in MTAs transferring materials to non-U.S.institutions (as long as a patent application is filed prior topublication of the materials by the recipient). This givesnon-U.S. institutions a competitive advantage over U.S.universities. If the provider insists on confidential provisions inthe agreement, no compromise is readily apparent.

SUMMARY

MTAs are a valuable and common tool used by academicresearchers. Present patent law (both in the United States andelsewhere) suggests that unrestricted transfers, as generallypreferred by universities, may bar patentability of transferredmaterials if a patent application is not filed prior to thetransfer. This aspect of MTAs places a significant administrativeburden on university technology transfer offices, both in patentprosecution and licensing. As no compromise solution has yetbeen legallyvalidated, it is important for university technologymanagers to be aware of the risks inherent in MTA practiceand balance those risks against their university's mission.Because of the unsettled natiJreof the law and diversityof goalsamong different universities, a singlesolution for all universitiesis probably not possible. Technology managers should remainapprised of legal developments regarding confidentiality anddisclosure in order to make informed decisions regardingMTAs. Even if the risks cannot be eliminated, knowledge ofthese risks provides more informed decision making and avoidsunpleasant surprises by the PTO or potential licensees.

ACKNOWLEDGEMENTS

The author wishes to thank William M. Smith, Esq. and Steven W. Parmelee,Esq. for helpful discussions regarding their use of MTAs during licensingnegotiations and securities transactions, and Alisa J. Eid, Esq. for editorialassistance.

Sequence Necessary for DNA Patent Claims

Ellen P. Winner, Esq:

ABSTRACT

Recent case law indicates it may be necessary to provide exactsequence in order to obtain patent claimscoveringDNA. Theseholdings significantly narrow the scope of patent protectionavailable. The validity and applicability to specific naturallyoccurring genes of issued patent claims covering DNAmolecules broadly, such as claims to all synonymous DNAsequences encoding a given amino acid sequence as well asclaims to a given DNA sequence and homologous sequences,may also be in question. Both the evolving state of the art andthe evolving state of the law are expected to alleviate thissituation. Appeal of a test case to the Federal Circuit is needed.

* ."Ellen P. Winner is a Senior Parmer in the patenUawjihn,o! Greenleeand Winner, 5370 Manhattan Circle, Boulder; Colorado 8030~ .

e 1994, EllenP. Winner.' ",

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12 Ellen P. Winner

University patent administrators may be disturbed by recenttrends toward narrowing the protection afforded DNAinventions. It has always been important to develop patentstrategies early in gene cloningprojects, preferably even beforeinvention disclosures are received, so that worthwhile coveragecould be developed. In viewof recent case law,patent strategiesshould now be reviewed and possiblymodified. DNA sequenceshould be provided as early as possible.

Several recent opinions issuing from the Court of Appeals forthe Federal Circuit (which decides all appeals in patent cases)and from the Patent Office Board of Patent Appeals andInterferences indicate the necessity for providing an exactsequence in support of any claim to a DNA fragment or gene.

In a typical gene cloning research effort a protein is purifiedand at least partially sequenced, degenerate DNA probes areprepared and used to probe a cDNA or genomic library, andthe corresponding naturally-occurring DNA is isolated.Alternatively, antibody to the protein may be prepared andused to screen for expression of the gene, followed by isolationof the gene from the expression vector thus identified.

Patent strategists aiming for the earliest possible filing datehave recommended submittingpatent applications claimingthegene as soon as the protein is isolated or, at the latest, as soonas the protein is sequenced, reasoning that finding the genefrom that point on is obvious and a matter of routine skill inthe art. A number of patents have issued on DNA covering allsynonymous DNA sequences encoding a given amino acidsequence, or to DNA encoding a named protein, andhomologous DNA. These patents provide a reasonable scope ofprotection. The claims appear to cover the naturally-occurringgene as well as other coding sequences. Infringers are not ableto circumvent the patents simply by changing a few base pairsin the sequence.

Sequence Necessary for DNA Patent Claims 13

This strategy alone no longer appears to be effective forobtaining such broad patent claims. The validity of issuedclaims having such breadth, in fact, is now in question. In Fiddesv. Baird, 30 u.S.P.Q.2d 1481 (Bd. Pat. App. & Int. 1993), theBoard of Patent Appeals and Interferences held that partyFiddes' claims to a human gene for basic fibroblast growthfactor were separately patentable over party Baird's issued andpending claims specifying a sequence encoding "mammalian"basic fibroblast growth factor.

Party Baird's issued patent was based on an application filed atthe time the protein had been sequenced, and it disclosed theamino acid sequence of the protein, which had been isolatedfrom bovine pituitary and a theoretical DNA sequence encodingit. The pending claims were from a continuation-in-partapplication, presumablydisclosing the naturally-occurringcodingsequence for bovine fibroblast growth factor. Between the filingof the first application and the continuation-in-part application,DNA sequences anticipating claims to the naturally-occurringhuman fibroblast growth factor were published. Party Baird'sposition was that the published sequences could not be used asprior art because it was entitled to rely on the filing date of thefirst application,

The Board held that party Baird was not entitled to the filingdate of the first application for its claims to the mammalianDNA sequence because it did not set out specific DNAsequences of naturally-occurring mammalian genes in the firstapplication and therefore did not meet the "written description"requirementof the patent statute. The Board stated that evenwith respect to the bovine gene for which the amino acidsequence was known, party Baird was "not in possession of thenaturally occurring gene"at the time of filing the firstapplication. The Board specifically stated that as of the relevantdate (1987), knowledge of the amino acid sequence of a proteinwould not establish possession.of the gene encoding the protein.

14 Ellen P.Winnel'

In Fiddes, the Board held the term "mammalian" was overlybroad because "[t]he patent teaches no amino acid or DNAsequences for any mammalian FGF other than bovine pituitary

. FGF." If it had stopped there, the decisionwould not have beenso damaging to subsequent applicants seeking claims tosynonymous DNA sequences encoding a given amino acidsequence. In adding that party Baird was not even in possessionof the naturally-occurring bovine gene after ithad elucidatedthe corresponding amino acid sequence, however, the Boardcast doubt on the future patentability of synonymous codingsequence claims.

The Fiddes decision follows Federal Circuit decisions in Amgenv. Chugai, 18 U.S.P.Q.2d 1016 (Fed. Cir. 1991), which held(based on the state of the art in 1981) that inventive"conception" of a gene cannot occur until the sequence isknown, and Fiers v. Sugano, 25 u.S.P.Q.2d 1601 (Fed. Cir.1993), which held (based on the state of the art in 1981) that agene could not be adequately described for patent purposes byreference to a potential method for isolating it; the DNA itselfmust be described. The complete amino acid sequence,however, was not known in the Fiers case.

It appears that special consideration is being given to singlenaturally-occurring gene sequences as though they weredeserving of patentability over other synonymous DNAsequences even without a showing of special properties such asimproved expression. The Fiddes decision is clearly a holdingthat naturally-occurring gene sequences will not be patentedunless the sequence is spelled out in the patent application.

Arguments can be made that claims to all synonymous DNAsequences encoding a known amino acid sequence should bepatentable since the genetic code is known. In view of the largenumber of possible sequences such claims would encompass,however, the Patent Office finds it impossible to search all themany variants using sequence databases and therefore resiststhese claims. The Patent Office does not take the position that

Sequence Necessaryfor DNA Patent Claims 15

these claims are not enabled but rather that they are not.supported <by an adequate. "written description:' .Without- anadequate "written description," the applicant is assumed nottobe "inpossession of' the invention.The unfortunate language ofFiddes to the effect that "knowledge of the amino acid sequencecoupled with the 'established relationship in the genetic codebetween a nucleic acid and the protein it encodes would not

,establish possession.of the gene encoding the protein"can beused as a basis for rejecting all DNA claims unless the DNAsequences are given.

Fiddes., used to deny the patentability of, DNA claims to. allsynonymous DNA sequences encoding a given' amino acidsequence, is a move toward increasing '. the narrowness .ofallowable claims. Prior to this decision,the Board in Ex parteMaizel, 27 u.S.P.Q.2d 1662 (Bd. Pat. App, E. Int. 1992), hadheld that a claim to all DNA sequences encoding a given aminoacid sequence and biologically functional equivalents to theprotein was .not enabled by a disclosure of the naturallyoccurring amino acid sequence and a general teaching in thepatent application that the protein would have "conservative"amino acid substitutions where the substituted acids havesimilar hydrophobicity. and charge characteristics. The. Boardpointed out that.the claim was so broad as to cover any proteinregardless of its structure, such as a truncated protein. InMaizel, however, the Board had left open the question of thepatentability of synonymous coding sequences for a knownamino acid sequence.

In light of Fiddes, .nct only must the precise amino acidsequence encoded by the claimed DNA now be spelled out asMaizel indicates, it appears the precise DNA sequences claimedmust also be spelled out where one claims a gene or othernatural sequence.

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The state of the law thus provides significantly narrower patentprotection than would be desirable for the first in the race-toisolate agiven protein or gene, especially for universities, which

16 Ellen P. Winne,

often lack the resources to isolate and test alternativesequences. In fact, the validityof broad claims that may alreadyhave issued is questionable in light of these decisions.

. On the other hand, for late-comers desiring market entry,separate patent protection may be available for unique DNAsequences encoding known proteins. Owners of broad patentsto DNA sequences would be potential licensees for suchpatents.

In evaluating the patentability of DNA sequences, it should bekept in mind that the reasoning of these recent decisions shouldfavor attempts to patent naturally-occurring DNA sequenceseven after the amino acid sequence encoded by the DNA hasbeen published. This is contrary to the position generally takenby patent examiners in the past. In general, examiners routinelyissued obviousness rejections to DNA claims when the aminoacid sequence was known, citing the known amino acidsequence in combination with literature describing knownmethods of gene cloning based on the amino acid sequence.

In Fiddes, however, the Board held Fiddes' human genepatentable ov,er Baird's bovine gene, stating it was "highlyspeculative" for one of ordinary skill in the art to have areasonable expectation of success in obtaining the native humangene by using the native bovine gene, and therefore the humangene was unobvious over the bovine gene. This also follows theFederal Circuit's 1993 holding in In re Bell, 26 U.S.P.Q.2d 1529(Fed. Cir. 1993) (based on the state of the art in 1987) that anarrow claim to the single isolated sequence of a human genewas patentable over the known amino acid sequence it encodes.The decision appeared to hinge on the fact that it would nothave been possible to predict which of the myriad synonymouscoding sequences was the human coding sequence.

The take-home lesson from these cases appears to be that anadequate ''written description" of the claimed DNA (preferablysequence but perhaps not necessarily so) is required for

Sequence Necessary for DNA Patent Claims 17

patentability. This does not mean, however, that filingshould bedelayed until the DNA has been sequenced. The decisions allrefer to the state of the art at the time of the inventions,inviting the argument that today an amino acid sequence doesenable at least the naturally-occurring gene encoding it.

The decisions seem to suggest that the court will view specificDNA sequences encoding amino acid sequence variations, aswell as amino acid sequence variations themselves, as unobviouseven if the functional properties of the variant protein areunaffected. Such a position is perhaps reasonable forapplications filed in the 1980s. Increasingly, however, advancesin the ability to predict structure/function relationships throughanalysis of known functional motifs are expected to erode thecourt's rationale.

In light of these decisions, when.the naturally-occurring DNAsequence and specific sequences for the synonymous DNA arenot spelled out and only the amino acid sequence is given, weexpect that the Patent Office will routinely issue rejections ofclaims to synonymous DNA sequences based on failure to meetthe written description requirement of the statute. This is anextremely undesirable state of the law because generally apatent with narrower claims, which fails to cover obviousvariations of a DNA sequence, will be virtually worthless.Where such rejections are received, it is recommended thatarguments based on public policy be made. The issuance ofDNA patents so narrow as to be useless manifestly subverts thepurposes of the patent system to stimulate progress in thistechnology.

Where a licensee is available to bear the cost, appeal of suchrejections to the Federal Circuit is recommended. Otherwise,keeping applications pending while the state of the law evolvesmay be the best strategy.

Impact of theNorth American Free Trade Agreementon Canadian Intellectual Property RightsRelating to University Technology Management

Sheldon Burshtein'

1.0 INTRODUCTION

1.1 Background

Canada has seen a recent flurry of amendments andadditions to its intellectual property laws. Most of thesewere dictated by bilateral international agreements orwere required to enable Canada to join its major tradingpartners in adhering to international conventions. TheNorth. American Free Trade Agreement (nNAFTAn)

among Canada, the United States, and Mexico hasrequired further changes to Canada's intellectualproperty laws. This paper attempts to provide anoverview of such changesas they may relate to universitytechnology management.

. Canada and the United States entered into The CanadaUnited StatesFree Trade Agreement (the"FTAn) in late

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20 Sheldon Burshtein

1987. The FfA, which became an operative internationalobligation of the two countries at the start of 1988, is abilateral extension of the General Agreement on Tariffsand Trade (the "GAIT'), which already governed thetwo countries' international trade relationships. Like theGATT, the FfA allowed Canada and the United Statesto continue to pursue their trade relations with othercountries independently. Building on the GATT, theFfA freed trade between Canada and the United Statesfrom a variety of tariffs and other barriers, moving evercloser to free flow of goods, services, and peoplebetween the two countries.

The primary impact of the FfA was in the area of tariffelimination. The FfA provided for the bilateralelimination of tariffs, at different rates depending on thegoods involved, over ten years. The FfA established thefirst virtually comprehensive international arrangementfor trade in services between nations. Both countrieswere to provide for the right of establishment of serviceindustries, particularly those providingfinancial services.The countries also agreed to provide national treatmentto investors from both countries in relation to theestablishment, acquisition, conduct, and sale ofbusinesses. The FfA exempted certain sensitive areasfrom its ambit. For example, Canadian "culturalindustries," as defined in the FfA, are exempt from theFfA

Serious intellectual property issueswere on the table inthe FI'A negotiations. A number of the changesrequested by each side had already been made or werein the course of being made. It is not known for sure,but the negotiating process likely had a significantimpact on Canadian legislative developments. However,despite the encouraging steps foreshadowed by thechangesmade duringand subsequent to the negotiations,the impact of the FfA itself on intellectual property law

Impact of NAFTA on Canadian Intellectual Property Rights 2I

in Canada was minimal in the final result. The Canadiangovernment's explanatorynotes reveal that, as suspected,during the course of the negotiations, the twogovernments worked on a chapter that would haveprovided an overall framework for the protection ofintellectual property rights in both countries. However,in the end the chapter was abandoned.

Notwithstanding the FfA, Canada and the United Statescontinued to maintain their own intellectual propertylaws and structures, respectively, so that protection of aninvention, a trademark, an original work, a design, or amask work in one country will usually not protect it inthe other. The rules for obtaining protection continue todiffer from one country to the other. It must not beassumed that the national rules of one country, withwhich one may be familiar, apply in the other country.

1.2 The North American Free Trade Agreement

Following the suspension of the GAIT negotiations onDecember 20, 1991, with the publication ofthe so-calledDunkel Text, Canada, the United States, and Mexicoembarked upon negotiations towards tripartite freetrade. On December 17, 1992, Canada, Mexico, and theUnited States signed NAFfA. NAFfA seeks to createan expanded market for the goods and servicesproducedin the three member countries to reduce tradedistortions, eliminate barriers to trade and promote faircompetition in their territories, and establish clear andmutually advantageous rules governing trade. WhileNAFfA does not generally change United States orMexican access to the Canadian market, as manyMexican products already enter Canada with low tariffsor tariff-free, it does change Canadian and United Statesaccess to the Mexican market.


NAFTA incorporates much of the FfA, but expands onthe FfA both geographically and in terms of the issuescovered. Canada and the United States agreed thatNAFTA takes priority over the FfA. The FfAprovisions that Canada and the United States decidednot to bring fully into NAFTA will remain operationalbetween those two countries. NAFTA, like the FfA,attempts to level the playing field in both the goods and

. services sectors, using the .principle of "nationaltreatment."

Under NAFTA, all goods originating in Canada, theUnited States, and Mexico will be traded freely withinthe three countries once tariffs are phased out. Forgoods originating and traded between Canada and theUnited States, all tariffs will be eliminated by 1998,according to existing FfA reduction schedules. Forgoods originating in Canada and the U.S. and tradedwith Mexico, all tariffs will be eliminated in equalannual stages over 5, 10, or 15 years, depending on thetype of goods.

Under NAFTA, as in the FfA, national treatmentextends to service providers of the member countries.This means that the countries will treat service providersof other NAFTA countries no less favorably than theytreat their own service providers. Service providers alsocannot be required to establish an office or take upresidence as a condition of providing the service.

National treatment is not an obligation to harmonize thetreatment of service industries, however. As in the FfA,member countries are free to decide how they willregulate a particular service industry, as long as they donot discriminate between Canadian, American, andMexican providers.

Impact of NAFTA on Canadian Intellectual Property Rights 23

NAFTA includes an "accession" clause permitting othercountries to join. provided they meet all necessaryrequirements and submit to NAFTA disciplines. Thisprovides a mechanism for other Latin Americancountries to join the group. News items suggest thatseveral countries, includingChile, Venezuela, and Brazil,are considering this already. Each original NAFTAmember will have the right to approve the admission ofany other country.

On June 23, 1993, the Canadian government assented tothe North. American Free Trade AgreementImplementation Act ("Bill C-115"), to implement thelegislative changes necessitated by NAFTA. Bill C-115took effect on January 1, 1994.

2.0 NAFfA AND INTELLECTUAL PROPER1Y

2.1 Nature of Obligations

Unlike the FTA, NAFTA has expressly adopted as oneof its six stated objectives to provide adequate andeffective protection and enforcement of intellectualproperty rights in each of the three jurisdictions.Intellectual property rights are defined as "copyright and

. related rights, trademark rights, patent rights, rights inlayout designs of semiconductor integrated circuits, tradesecret rights;plant breeders' rights, rights in geographicalindications, and industrial design rights."

.NAFTA expands on the FTA by including a chapter onintellectual property. Chapter 17 of NAFTA establishesdetailed obligations on the. parties .. in the area ofintellectual property protection. Many of the provisionsare similar to the provisions of GATT concerning traderelated aspects of intellectual property rights ("TRIPS").Chapter 17 adopts many of the protections, provisions,and principles Which have been incorporated in the


intellectual property laws of the parties, as well as other. modern national intellectual property laws andinternational treaties. In many cases, NAFfA setscertain minimum standards of protection alreadyprovided by the countries' current legislation.

The intellectual property chapter follows the generalapproach taken in international intellectual propertytreaties: namely, that each country must provide to thenationals of another country effective protection ofintellectual property. For this purpose, each countrymust accede to specified texts of internationalconventions. NAFfA has required amendments to theintellectual property laws of all member countries,although more significant changes will be required forMexico.

Each country must provide in its territory to the"nationals of another country" adequate and effectiveprotection and enforcement of intellectual propertyrights while ensuring that measures to enforceintellectual property rights do not themselves becomebarriers to legitimate trade. A countrymay implement inits domestic law more extensiveprotection of intellectualproperty rights than is required under NAFfA, providedthat such protection is not inconsistent with NAFfA.

To provide adequate and effective protection andenforcement of intellectual property rights, at aminimum each country must give effect to theintellectual property chapter and to the substantiveprovisions of a number of international intellectualproperty conventions. These include:

(a) the Geneva Convention;

(b) the Berne Convention, although NAFfAconfers no rights and imposes no


obligations on the United States withrespect to Article 6 of the BerneConvention or the rights derived from theArticle;

(c) the Paris Convention; and

(d) the 1978 or 1991 UPOV Convention.

If a country has not acceded to the specified text of anysuch conventions on or before the date of entry intoforce of NAFfA, it must make every effort to accede.For Canada, this will mean joining the GenevaConvention (1971 text) and upgrading its adherence tomore recent versions of other conventions like the 1971text of the Berne Convention (current accession is to the1928 text) and the 1967 text of the Paris Convention(current accession text for some aspects is the 1934 text).

2.2 National Treatment

Each country must accord to nationals of anothercountry treatment no less favorable than that it accordsto its own nationals with regard to the protection andenforcement of all intellectual property rights. Nocountry may, as a condition of according nationaltreatment, require right-holders to comply with anyformalities or conditions in order to acquire rights inrespect of copyright and related rights. A country mayderogate from the obligations of national treatment inrelation to its judicial and administrative procedures forthe protection or enforcement of intellectual propertyrights. No country shall have any obligation of nationaltreatment with respect to procedures provided inmultilateral agreements concludedunder the auspices ofthe World Intellectual Property Organization ("W1PO")relating to the acquisitionor maintenance of intellectualproperty rights.


Nothing in the intellectual property chapter prevents acountry from specifying (in its domestic law governinglicensing) those practices or conditions that may inparticular cases constitute an abuse of intellectualproperty rights having an adverse affect on competitionin the relevant market.

2.3 Protection of Existing Subject Matter

NAFTA does not give rise to obligations in respect ofacts that occurred before the date of application of therelevant provisions of NAFTA for the country inquestion. However, except as otherwise provided for inNAFTA, each country must apply NAFTA to all subjectmatter existingon the date of application of the relevantprovisions of NAFTA for the country in question, andfor what is protected in a country on such date, or whichmeets or subsequently meets the criteria for protectionunder the terms of Chapter 17.

In the case of intellectual property rights for whichprotection is conditional upon registration, applicationsfor protection that are pending on the date ofapplication of the relevant provisions of NAFTA for thecountry in question must be permitted to be amended toclaim any enhanced protection provided under theprovisions of NAFTA, although such amendments maynot include new matter.

A country is not required to restore protection to subjectmatter that, on the date of application of the relevantprovisions of NAFTA for the country in question, hasfallen into the public domain in its territory.

Any country may provide for a limitation of theremedies available to the right-holder as to thecontinued performance of any acts in respect of specificobjects embodyingprotected subject matter that become


infringing under the terms of legislation in conformitywith NAFfA, and that were commenced or in respect ofwhich a significantinvestment was made, before the dateof ratification of NAFfAby that country, after the dateof application of NAFfA to that country. In such cases,the country shall, however, at least provide for paymentof equitable remuneration.

NAFfA preserves certain exemptions contained in FfA.These include guarantees of Canada's right to implementspecial measures for' cultural industries in areas likepublishing, film and video, music and sound recording,and broadcasting and cable industries. Also preserved isthe right to maintain existing cultural support measuresand the right to introduce new ones. The provision isborrowed from the FfA, which specifically exempts"culturalindustries" from its application.

The following is asummary of those key provisions thatmay impact university technology management.

3.0 PATENTS

3.1 Subject Matter

Subject to certain exclusions mentioned, each countrymust make patents available for any inventions, whetherproducts or processes; in all fields of technology,provided that such inventions are new, result from aninventive step, and are capable of industrial application.Patent protection must be the same in all industrialsectors.

A country may exclude inventions from patentability ifprevention in its territory of the commercial exploitation,of the inventions is necessary to protect pllblic order ormorality, including human, animal, or 'plant life orhealth, or to avoid serious prejudice to nature or the


environment, provided that the exclusion is not basedsolely on the ground that the country prohibitscommercial exploitation in its territory of the subjectmatter of the patent. A country may also exclude frompatentability:

(a) diagnostic, therapeutic, and surgicalmethods for the treatment of humans oranimals;

(b) essentially biological processes for theproduction of plants or animals, otherthan non-biological and microbiologicalprocesses for such production;

(c) plants and animals other thanmicroorganisms, although each countrymust provide for the protection of plantvarieties .through patents, an effectivescheme of sui generis protection, or both.

Subject to the exceptions mentioned above, patents mustbe available and patent rights enjoyable withoutdiscrimination as to the field of technology, the territoryof the country where the invention was made, andwhether products are imported or locally produced.Patents are to be available without discrimination as tothe signatory country where the invention was made.

The amendments made to the Canadian Patent Act in1992 bring the protection for pharmaceuticals in linewith that for other technologies. Canadian discriminationagainst pharmaceutical products not invented anddeveloped in Canada was eliminated by the 1993amendments to the Patent Act. NAFTA likely served asan impetus to enact this legislation. For theestablishment of an invention date for United Statespatents, research done in Canada and Mexico is now on

Impact of NAFTA on Canadian Intellectual PropertyRights 29

an equal footing with research done in the UnitedStates.

3.2 Term

Each country must provide a term of protection forpatents of at least 20 years from the date of filing or 17years from the date of grant. This provisionaccommodates the first-to-invent system of the UnitedStates. A country may extend the term of patentprotection, in appropriate cases, to compensate fordelays caused by regulatory approval processes. Ownersof patented medicines and chemicals often do not reapthe full benefits of the term of the patents in Canada. AsCanada is a "first-to-file" country, inventors are anxiousto file patent applications for new medicines as soon aspossible. Although the term of the patent is 20 yearsfrom the filing date of the patent application in Canada,the Health Protection Branch may not issue a notice ofcompliance to market and sell the medicine for manyyears after the Canadian Patent Office grants a patenton the medicine. The result is that the patent owner mayhave an abridged term of exclusivity. NAFfA providesthe opportunity for Canada to adopt patent termrestoration, following the paths of the United States,Japan, and European Community member states. Patentterm restoration would enable a patentee to obtain anextension of the term of the patent to compensate fordelays in selling the medicines caused by regulatoryauthorities.

3.3 I{j~ts

Each country must provide that, where the subjectmatter of a patent is a product, the patent must conferon the patent owner the right to prevent other personsfrom making, using, or selling the subject matter of thepatent without the patent owner's consent. Each country


must also provide that, where the subject matter of apatent is a process, the patent must confer on the patentowner the right to prevent other persons from using thatprocess and from using, selling, or importing at least theproduct obtained directly by that process, without thepatent owner's consent.

Where the subject matter of a patent is a process forobtaining a product, each country must, in anyinfringement proceeding, place on the defendant theburden of establishing that the allegedly infringingproduct was made by a process other than the patentedprocess where: (i) the product obtained by the patentedprocess is new; or (ii) a substantial likelihood exists thatthe allegedlyinfringing product was made by the processand the patent owner has been unable throughreasonable efforts to determine the process actuallyused. In the gathering and evaluation of evidence, thelegitimate interests of the defendant in protecting itstrade secrets must be taken into account.

Bill C-115 has codified this by amending the Patent Actto provide that, in an action for infringement of a patentgranted for a process for obtaining a new product, anyproduct that is the same as the new product shall beconsidered (in the absence of proof to the contrary) tohave been produced by the patented process.

3.4 Compulsory Licensing

A country may provide limited exceptions to theexclusive rights conferred by a patent, provided that suchexceptions do not unreasonably conflictwith the normalexploitation of the patent and do not unreasonablyprejudice the legitimate interests of the patentee, takinginto account the legitimate interests of other persons.Where the law of a country allows for use of the subjectmatter of a patent without the authorization of the right-


holder, includinguse by the government or other personsauthorized by the government, such use shall beconsidered on its individual merits.

Bill C-115 revised the law relating to compulsorylicensesin favor of Canadian governments to use a patentedinvention. The PatentAct has been amended specificallyto cover provincial governments as well as the federalgovermnent. This will be particularly important forinventions relating to healthcare.

Bill C-115 also provided that such a license may only begranted on .an application. Under prior law, thegovernment could use the invention, subject to anapplication by the patentee for compensation. ThePatent Act now provides that the use of the patentedinvention may be authorized for such purpose, for suchperiod and on such other terms as the Commissioner ofPatents considers expedient. The scope and duration ofthe use shall be limited to the purpose for which the useis authorized, the authorized use shall be non-exclusive,and any use shall be authorized predominantly to supplythe domestic market.

The Commissioner must notify the patentee of any useof the patented invention that is authorized. Where suchuse is authorized, the user must pay to the patentee suchamount as the Commissioner considers to be adequateremuneration in the circumstances, taking into accountthe economic value of the authorization. TheCommissioner, on application by the patentee and aftergiving all concerned parties an opportunity to be heard,may terminate the authorization if the Commissioner issatisfied that the circumstances that led to the grantingof the authorization have ceased to exist and are unlikelyto recur, subject to such conditions as the Commissionerdeems appropriate to protect the legitimate interests ofthe authorized user. An authorization granted under this


provision is not transferable.

The Commissioner may not authorize the use of apatented invention by a government unless the applicantestablishes that it has made efforts to obtain from thepatentee on reasonable commercial terms and conditionsthe authority to use the patented invention, and itsefforts have not been successful within a reasonableperiod. This provisiondoes not apply in cases of nationalemergency or extreme urgency or where the use forwhich the authorization is sought is a publicnon-commercial use.

The Patent Act formerly made it an abuse of patentrights that may result in compulsory licensing if thepatented invention is not worked in Canada. Bill C-115has changed this because NAFfA provides that patentrights are to be enjoyable without discrimination as towhether products are imported or locally produced.

4.0 COPYRIGHTAND RELATED RIGHTS

Most of the amendments to the Copyright Act made byBill C-115 are for conformity to the Berne Convention.Most of the amendments to Canada's copyright law willimpact non-technological .industries, such asentertainment and publishing. However, a few changesmay impact on the management of technology relatingto computer software.

4.1 Works.

Each country must protect the works covered by Article2 of the Berne Convention, including any other worksthat embody original expression within the meaning ofthat Convention. In particular, all types of computer

. programs are literary works within the meaning of theBerne Convention and each country must protect them


as such. Compilations of data or other material (inmachine readable or other form) whether by reason ofthe selection or arrangement of their contents, shall beprotected as such.The protection a country provides fora compilation must not extend to the data or materialitself or prejudice any copyright subsisting in that data ormaterial.

Bill C-115 made a number of amendments to definitionsin the Copyright Act. Among the new definitions arethose for "compilations" and "translations." A,"compilation" is "a work resulting from the selection orarrangement of literary, dramatic, musical or artisticworks, or a work resulting from the selection orarrangement of data." A compilation containing two ormore of the categories of literary, dramatic, musical, orartistic works would be deemed to be a compilation ofthe category making up the most substantial part of thecompilation. The mere fact that a work is included in acompilation does not increase, decrease, or otherwiseaffect the copyright in the work or the moral rights inrespect of the work. The definition of "literarywork"wasamended to clarify that it includes compilations ofliterary works.

4.2 Publication

The former definition of "publication" in the CopyrightAct did not require, at least expressly, that sufficientcopies be available to satisfy the reasonablerequirements of the public, as required in the BerneConvention. The CopyrightAct formerly provided a 14day period for "simultaneous" publication while theBerne Convention calls for a 30-dayperiod. To remedythese inconsistencies, a number of amendments weremade. Bill C-115, substantially revised the definition of"publication" to mean, among other things, in relation toany work, making copies of the work available to the


public in such a quantity as to satisfy the reasonabledemands of the public, having regard to the nature ofthe work, However, publication does not include, amongother things, the communication of a work to the publicby telecommunication.

A work is deemed to be first published within Canadaand the: other countries in the British Commonwealth orwithin a foreign country to which the Copyright Actextends recognition, notwithstanding that it has beenpublished simultaneously in some other place. A work isdeemed to be published simultaneously in two places ifthe time between the publication in one place and theother place does not exceed 30 days or such longerperiod as may for the time being be fixed by order incouncil.

4.3 Conditions for Obtaining Copyright

The Copyright Act arguably formerly required that toqualify for copyrightprotection in Canada a person mustarrange for first publication in a country to which theCopyright Act extends, subject to the "simultaneous"publication provision. The Berne Convention stipulatesthat a national of a member country must have copyrightirrespective of where first publication occurs. TheCopyright Act was amended by Bill C-1l5 to providethat copyright subsists in Canada in every original workif anyone of the following conditions is met:

(a) in the case of any work, whether publishedor unpublished, the author was, at thedate of the making of the work, a BritishSUbject; a citizen or subject of, or a personordinarily resident in, a Berne Conventioncountry; or a resident within Canada orthe British Commonwealth; or


(b) in the case of a published work, includinga cinematograph, the work was firstpublished within Canada or the BritishCommonwealth or in a Berne Conventioncountry.

Copyright does not subsist in Canada otherwise than asprovided above, except in so far as the protectionconferred by the Copyright Act is extended byMinisterial Certificate to foreign countries that theCopyright Act does not recognize.

4.4 Term

Each country must provide that, where the. term ofprotection of a work, other than a photographic work ora work of applied art, is to be calculated on a basisother than the life of a natural person, the term must benot less than 50 years from the end of the calendar yearof the first authorized publication of the work, or, failingsuch authorized publication within 50 years from the.making of the work, 50 years from the end of thecalendar year of making. To comply with NAFfA, BillC-1l5 effected a number of amendments to the term ofcopyright.

1. All terms were extended to the end of thecalendar year in which they wouldotherwise terminate.

2. A new provision was inserted foranonymous and pseudonymous works.Except in the case of a work of jointauthorship, where the identity of theauthor of a work is unknown, copyright inthe work subsists for the shorter of (i) aterm of 50 years following the end of thecalendar year of the first publication of


the work; and (ii) a term of 75 yearsfollowing the end of the calendar year ofthe making of the work. Where, duringthat term, the author's identity becomescommonly known, the ordinary termapplies.

Where the identity of all the authors of awork of joint authorship is unknown,copyright in the work subsists for theshorter of (i) a term of50 years followingthe end of the calendar year of the firstpublication of the work; and (ii) a term of75 years following the end of the calendaryear of the making of the work. Where,during that term, the identity of one ormore of the authors becomes commonlyknown, copyright subsists for the life ofwhichever of those authors dies last.

3. Authors who are nationals of any country,other than a country that is a party toNAFTA, that grants a shorter term ofprotection are not entitled to claim alonger term of protection in Canada.

4.5 Rights

Each country must provide to authors and theirsuccessors in interest those rights enumerated in theBerne Convention in respect of protected works,including the right to authorize or prohibit:

(a) the importation into the country's territoryof copies of the work made without theright-holder's authorization;

(b) the first public distribution of the original


and each copy of the work by sale, rental,or otherwise;

(c) the commercial rental of the original or acopyof a computer program, except wherethe copy of the computer program is notitself an essential object of the rental.Each country must provide that puttingthe original or a copy ofa computerprogram on the market with the rightholder's consent shall not exhaust therental right. This commercial rental rightfor the original or a copy of a computerprogram is not exhausted where thecopyright owner puts a program. on themarket. This right need not apply in anycountry to originals or copies purchasedprior to the date of application of NAFfAin that country; and

(d) the communication of a work to the"public."

The CopyrightAct was amended to include the right torent a computer program that can be reproduced in theordinary course of its use. An arrangement, whatever itsform, constitutes a rental if, and only if: (i) it is insubstance a rental, having regard to all thecircumstances; (ii) it is entered into with motive of gainbeyond the recovery of the costs, including overhead,associated with the rental operation; and (iii) thecomputer program constitutes an essential object of therental. Some have suggested that this right isunnecessarily restricted to the storage format ortechnology used by the program.


4.6 Transfers

Each country must provide that any person acquiring orholding copyright and related rights may freely andseparately transfer those rights by contract for purposesof their exploitation and enjoyment by the transferee.Each country must also provide that any personacquiring or holding such economic rights by virtue of acontract, including contracts of employment underlyingthe creation of works and sound recordings, shall be ableto exercise those rights in its own name and enjoy fullythe benefits derived from those rights. If this languagesuggests that moral rights in works may be transferred,it may be inconsistent with the provisions of theCopyright Act and require clarification or amendment.

Each country must confine limitations or exceptions tothese rights to certain special cases that do not conflictwith a normal exploitation of the work and do notunreasonably prejudice the legitimate interests of theright-holder. Bill C-115 repealed the provision of theCopyright Act which, in certain circumstances, conferreda right to reproduce a published work 25 years after thedeath of the author. The current section of the CopyrightAct that provides for a reversion to the author's estate25 years after death was not addressed.

4.7 Topography Rights

Each country must protect layout designs (topographies)of integrated circuits ("layout designs") in accordancewith the Integrated Circuit Treaty. Mexico is given agrace period with respect to topography rights. However,it must make every effort to implement theserequirements as soon as possible and must do so no laterthan four years after the date of entry into force ofNAFTA. No change was required to the CanadianIntegrated Circuit Topography Act as a result of


NAFTA. Bill C-115 did not include any amendments tothe Integrated Circuit Topography Act.

5.0 INDUSTRIAL DESIGNS

Each country must provide for the protection ofindependently created industrial designs that are new ororiginal. A country mayprovide that designs are not newor original if they do not significantly differ from knowndesigns or combinations of known design features. Acountry mayalso provide that protection shall not extendto designs dictated essentiallyby technical or functionalconsiderations.

Bill C-115 established a worldwide novelty standard fordesign applications filed in Canada on or after theeffective date of the provision. Bill C-115 amended theIndustrial Design Act, to provide for refusal of anapplication for registration of an industrial design that isfiled more than one year after the publication of thedesign in Canada or elsewhere.

The Industrial Design Act now provides a separateexclusive right for each variant represented in theregistration and for the design applied to each article ofa set represented in the registration.

A country may provide limited exceptions to theprotection of industrial designs, provided that suchexceptions do not unreasonably conflictwith the normalexploitation of protected industrial designs and do notunreasonably prejudice the legitimate interests of theowner of the protected design, taking into account thelegitimate interests of other persons.

Each country must provide a term of protection forindustrial designs of at least 10 years. Bill C-115amended the Industrial Design Act accordingly.


Each country must provide the owner of a protectedindustrial design the right to prevent other persons nothaving the owner's consent from making or sellingarticles bearing or embodying a design that is a copy, orsubstantially a copy, of the protected design when suchacts are undertaken for commercial purposes. Bill C-115amended the Industrial Design Act by expanding thedefinition .of infringing activities to include making,importing for the purpose of trade or business, or selling,renting, or offering or exposing for sale or rent, anyarticle for which the design is registered and to whichthe design or a design not differing substantiallytherefrom has been applied. In relation to a kit, anyactivity that would constitute an infringement if done inrelation to an article assembled from the kit would alsobe infringement.

Article 1701 requires Canada to give effect to the ParisConvention. In this regard, lack of marking cannot be areason for the unenforceability of an industrial designregistration. Bill C-115 achieved this compliance byamending the Industrial Design Act to introduce adefense to any award other than an injunction similar tothe copyright defense. The presence of a new mark, Din a circle, would eliminate such a defense.

NAFTA requires that compensatory and injunctive civilremedies be made available for industrial designinfringements similar to those available for patentinfringement. The right to these remedies has beenunclear under the Industrial Design Act. Bill C-115addressed this obligation by specifically providing forinjunctive, compulsory, and disposal relief in theIndustrial Design Act.

The limitation period for industrial design infringementhas also been extended to three years by Bill C-115.


6.0 TRADE SECRETS AND REGULATORYDISCLOSURES

6.1 Trade Secrets

"Confidential information" is defined in NAFfA toinclude trade secrets, privileged information, and othermaterials exempted from disclosure under a country'sdomestic laws. Each country must provide the legalmeans for any person to prevent trade secrets frombeing disclosed to, acquired by, or used by otherswithout the consent of the person lawfully in control ofthe information in a manner contrary to .honestcommercial practices, so far as:

(a) the information is secret in the sense thatit is not, as a. body or in the preciseconfiguration and assembly of itscomponents, generally known among orreadily accessible to persons that normallydeal with. the kind of information inquestion;

(b) the information has actual or potentialcommercial value because it is secret; and

(c) the person lawfully in control of theinformation has taken reasonable stepsunder the circumstances to keep it secret.

Each country must provide that for data that aresubmitted to the country after the date of entry intoforce of NAFfA, no person other than the person thatsubmitted the data may, without the latter's permission,rely on the data in support of an applicationfor productapproval during a reasonable period of time after theirsubmission. A reasonable period will normally not beless than five years from the date on which the country


granted approval to the person who produced the datafor approval to market his product, taking into accountthe nature of the data and the person's efforts andexpenditures in producing them. Subject to thisprovision, there must not be any limitation on anycountry to implement abbreviated approval proceduresfor such products on the basis of bioequivalence andbioavailability studies.

Where a country relies upon a marketing approvalgranted by another country, the reasonable period ofexclusive use of the data submitted in connection withobtaining the approval relied upon shall commence withthe date of the first marketing approval relied upon.

Bill C-li5 amended the Canadian Food and Drugs Actto enable the government to make regulations respectingthe extent to which (if any) a person may rely on test orother data submitted by others in seeking to establishthe safety or effectiveness of a new drug. If regulationsrelating to this paragraph are implemented, it mayamong other things affect the way in which the HealthProtection Branch treats information provided to it insupport of an investigational new drug application ornew drug submission. Bill C-li5 also provides foramendments to the Canadian Pest Control Products Actto enable the making of regulations to implement theseprovisions.

7.0 ENFORCEMENT OF INTELLECTUAL PROPERTYRIGHTS

7.1 General Provisions

Enforcement procedures must be available under thedomestic law of each country to permit effective actionagainst any act of infringement of intellectual propertyrights, including expeditious remedies to prevent


infringement and remedies to deter further infringement.Such enforcement procedures must be applied to avoidthe creation of barriers to legitimate trade and toprovide for safeguards against abuse of the procedures.Procedures for the enforcement of intellectual propertyrights must be fair and equitable, must not beunnecessarily complicated or costly, and must not entailunreasonable time limits or unwarranted delays. Amongthe provisions of NAFfA are articles relating to generalprovisions, civil administrative procedures (includingevidence and remedies), provisional measures, andcriminal sanctions and penalties.

7:2 Enforcement of Intellectual Property Rights at theBorder

Each country must adopt procedures to enable a rightholder, who has valid grounds for suspecting that theimportation of counterfeit trademark goods or piratedcopyright goods may take place, to lodge an applicationin writing with its competent administrative or judicialauthorities for the suspension by the customsadministration of the release of such goods into freecirculation. No country is obligated to apply theprocedures to goods in transit. A country may permit anapplication to be made in respect of goods that involveother infringements of intellectual property rights. Acountry may also provide for corresponding proceduresconcerning the suspensionby the customsadministrationof the release of infringing goods destined forexportation from its territory.

The state of the law in Canada regarding the seizure ofcounterfeit and pirated goods by Canada Customs haslong been a source of frustration for owners ofintellectual property rights. Despite the ever-increasingnumber of these goods being imported into Canada, themeasures taken to halt the imports have not improved.


Canada Customs' powers to seize counterfeit and piratedgoods were limited to the provisions of the CopyrightAct and the Trade-Marks Act. The narrow judicialinterpretations given to provisions of these actscompounded the problem.

For works that are the subject of copyright, such ascomputer programs, the Customs Tariff provides thatreprints of Canadian copyrighted works are prohibitedgoods. However, in order to compel Canada Customs toseize those goods, a copyright owner had first to obtainan order under the Copyright Act. Section 44 of theCopyright Act provides that copies made outside Canadaof any work in which copyright subsists, that if made inCanada would infringe copyright,and in respect of whichthat the owner of the copyrightgives notice in writing tothe Department of National Revenue that it desires thatthe copies not be imported into Canada, shall not beimported and are deemed to be included in Schedule IVto the Customs Tariff.

Section 44 must also be read with Subsection 37(1) ofthe Customs Tariff. Item 99202-1 of Schedule IVreferences reprints of Canadian copyrighted works.Section 44 requires the Canadian owner to give notice tothe Department of National Revenue. Upon the receiptof such notice, it appears that the Minister has noobligation to act. Consequently, the courts refused toissue a mandamus to force the Minister to apply thisprovision of the Customs Tariff. In addition to givingnotice to the Minister, therefore, it is still essential forthe Minister himself to make the decision to act so thatSchedule IV can be amended to impose an obligation onthe Canadian customs authorities to curtail imports.

The reluctance on the part of Canada Customs to seizematerial, combined with the narrow interpretation givento the existing legislation by the courts, has created a


situation where counterfeit and pirated goods areallowed to enter into Canadian channels of trade withlittle difficulty.

7.2.1 Legislative Changes

Statutory amendments resulting from NAFfA haveprovided much needed relief for the owners ofintellectual property rights in Canada. In addition toproviding specific protection against the importation ofcopyrighted computer programs, NAFfA requires thateach country adopt procedures to enable a right-holderwho has valid grounds to suspect that counterfeit orpirated goods are going to be imported to make anapplication in writing to the authorities requiringCustoms to detain the goods. .

There are two prerequisites for having goods seized.There must be a prima facie case of infringement of anintellectual property right, and the applicant must supplya sufficiently detailed description of the goods to makethem readily recognizable by Customs. If theseprerequisites are met and any required security has beenfurnished, Customs will be compelled to detain thegoods for at least 10 working days. While not explicitlystated, Article 1718 contemplates that these applicationsbe made without notice to the importer. It remains to beseen if the "competent authority" will remain thejudiciary or whether authority will be transferred to anadministrative body such as Customs itself.

Bill C-115 made significant changes to the CopyrightAct, Trade-Marks Act, and Customs Act. Moreimportant than the legislative changes are the extensivechanges that are taking place in the daily operations ofCanada Customs. Formally, there was no system in placeto monitor the flow of potentially infringing, counterfeit,or pirated goods. Customs is implementing procedures


and acquiring the necessary equipment to enable themto examine goods at the border and to verify that theirimportation does not infringe any trade-mark, copyright,or other intellectual property right in Canada.

Bill C-115 proposes significant amendments to theenforcement provisions of the Copyright Act. Where acourt is satisfied, on application by a person who ownsthe copyright in Canada in a work, that

(a) the work is about to be imported intoCanada, or has been imported intoCanada but has not yet been released byCanada Customs;

(b) in the jurisdiction where the work wasmade, it was made without the consent ofthe person who then owned the copyrightin that jurisdiction; and

(c) the work, to the knowledge of theimporter, would have infringed copyrightif it had been made in Canada by theimporter;

the court may make an order

(a) directing the Minister (i) to takereasonable measures, on the basis ofinformation reasonably required by theMinister and provided by the applicant, todetain the work; and (ii) to notify theapplicant and the importer, forthwith afterdetaining the work, of the detention andthe reasons therefor; and

(b) providing for other matters the courtconsiders appropriate.


An application may be made in an action or otherwise,either on notice or exparte, except that it must always bemade on notice to the Minister. Before making such anorder, the court may require the applicant to furnishsecurity in an amount fixed by the court (i) to coverduties, storage and handling charges and any otheramount that may become chargeable against the work;and (ii) to answer any damages that may by reason ofthe order be incurred by the owner, importer, orconsignee of the work.

The Minister may apply to the court for directions inimplementing'such an order. The Minister may give theapplicant or the importer an opportunity to inspect thedetained work for the purpose of substantiating orrefuting the applicant's claim. .

Unless such an order provides otherwise, the Minister,subject to the Customs Act and to any other federallegislation that prohibits, controls, or regulates theimportation or exportation of goods, must release thework without further notice to the applicant if, twoweeks after the applicant has been notified, theapplicant has not notified the Minister that the applicanthas commenced an action for a final determination ofthe issues by the court. Where the court finds that thecircumstances referred to existed, the court may makeany order that it considers appropriate in thecircumstances, including an order that the work bedestroyed, or that it be delivered up to the plaintiff asthe plaintiffs property absolutely.

8.0 CONCLUSION

The amendments effected to Canada's intellectualproperty laws by NAFfA are random, at least at firstglance. What they do is make intellectual propertyprotection in Canada similar to that in the United States


and Mexico. With appropriate changes to United Statesand Mexican law, the intellectual property laws of allthree members of NAFTA will be more consistent.However, it is essential to appreciate that, while theintellectual property laws of each country will meet theminimum standards imposed by NAFTA, there are stillsignificant variations from country to country.

What Counts:A Publication Guide for the InventorSeeking a Patent

Patricia A Hider •

INTRODUCTIONTHE PATENT ACT· THE SOURCE OF THE RULES

In the United States the source of the rules governing theprocess of obtaining it patent is the Patent Act.' The originalPatent Act was drafted in 1790 and the current version wascodified by Congress in 1952.2 The Patent Act is part of a setof statutes referred to as the United States Code. Today, aninventor can obtain a patent for any new and useful process,machine, manufactured article, or composition of matter."Congress promulgated the Patent Act under authority deriveddirectly from the Constitution, which states "The Congress shallhave Power ... To promote the Progress of Science and usefulArts, by securing for limited Times to Authors and Inventorsthe exclusive Right to their respective Writings and Discoveries;... ."4 The original version of the Patent Act in 1790 did notmention printed publications and provided no means for themto affect the patent process. It wasn't until 1836, whenCongress passed a revised version of the Patent Act, that thewords "printed publication" appeared in the statute," Once itbecame part of the Patent Act, a printed publication couldserve as both a bar to receiving a patent and a defense in a

• Patricia A. Hider is a third yearlawstudent at Suffolk University LawSchool, Boston, Massachusetts. Thispaper waswritten during Ms. Hider's tenureas a legal intern at the Massachusetts Institute of Technology Licensing Office.

© 1994, Patricia A. Hider

49

50 PatriciaA. Hider

patent infringement suit,"

Today in the United States patent system, printed publicationscan count against or serve to deprive an inventor of theprivilege of being granted a patent for his or her invention intwo ways. First, certain acts of others (as opposed to actionstaken by the inventor himself or herself) can prevent aninventor from obtaining a patent. A printed publication,authored by another person and existing anywhere in the worldbefore the inventor conceived of his or her invention, cannegate novelty, which is one of the mandatory prerequisites ofevery patentable invention." Second, acts performed by aninventor more than one year before filing for the patent withthe U.S. Patent and Trademark Office can prevent patentabilityof the inventor's own discovery. An inventor may be denied apatent if, more than twelve months before filing the patentapplication, the inventor disclosed the invention in a printedpublication in the United States or a foreign country, put theinvention on sale, or made the invention available for publicuse,"

In the United States a patent will be granted only if aninvention is new; this essential requirement is referred to as'novelty' in the patent law lexicon. The focus in a noveltyinquiry is on events that occurred before the inventor evenconceived of the idea for his or her invention. A printedpublication that discloses enough of the substance of aninvention to allow a practitioner, skilled in the technology, toduplicate the invention is described as "anticipating" theinvention and negating novelty. An invention .cannot bepresumed to be new if another earlier practitioner in the fieldalready described the invention before the later inventor madehis or her discovery. Lack of novelty is a legitimate basis onwhich an inventor can be denied a patent, and the U.S. Patent

.and Trademark Office relies on the statutory law set forth inthe Patent Act when it uses novelty as a basis for rejecting apatent application," Section 102 of the Patent Act provides that"A person shall be entitled to a patent unless- (a) the invention

A Publication Guide for the Inventor Seeking a Patent 51

was ... described in a printed publication in this or a foreigncountry, before the invention thereof by the applicant for patent

.1il

An inventor cannot receive a patent for any knowledge that theinventor has already dedicated to the public. Certain actsperformed by the inventor are called "statutory bars' becauseunder the patent statute, unless an inventor files for a patentwithin twelve months of disclosing the invention by means of aprinted publication or by putting the invention on sale or inpublic use, the inventor is barred from receiving a patent forthe invention. Dedication of an invention to the public is thebasis for the publication bar of the Patent Act and has beendescribed in the following way: "[I]f an inventor discloses hisinvention to another in any manner, without securing a promiseof confidentiality.rcommunication of the knowledge of theinvention to the public results because the knowledge thereofis no longer controlled by the inventor, and thus is consideredan irrevocable dedication to the public,"!'

The grant of a patent has been looked upon as a bilateralcontract .between the inventor and the public. A bilateralcontract is formed when two parties exchange promises.Promises alone, however, are not enough to form a contract.The element of consideration (i.e., something of value) must bebargained for and exchanged by each party to the contract tomake mutually exchanged promises binding and the resultantcontract enforceable. It is consideration that distinguishes acontract from a mere gift.12 In a contract between an inventorand the public, the consideration provided by the inventor isknowledge and that provided by the public is the patent itselfgranted to the inventor by the United States govermnent. In thewords of one court, "[I]n consideration for the patent grant,something must be given to the public which it did not havebefore . . . . If the public is already possessed of that'something,' or if it is accessible to the public, there is afailure of consideration and no patent may be granted..13

52 Patricia A. Hider

If the inventor applies for a patent in spite of having previouslydisclosed the invention to the public, the application will eitherbe denied by the U.S. Patent and Trademark Office or if apatent is granted, the activities of the inventor, if discovered,may later be used against the inventor in an effort to invalidatethe patent in an infringement suit. Statutory authority for theprinted publication statutory bar comes from the Patent Act,which states "A person shall be entitled to a patent unless... (b)the invention was described in a printed publication in thisor a foreign country more than one year prior to the dateof the application for patent in the United States .. ,"14 Forthe patentability bar to attach, the publishing must occur morethan one year before the date of application for the patent.

Specific words, as they are used in statutes, garner theirmeaning either from the intent of the legislative body thatwrote the law or from the interpretation given the words bycourts when they attempt to apply the statute to facts in thedisputes before them. This guide examines the meaning given"printed" and "publication" by the courts and attempts toidentify the specificacts of the inventor or acts of other personsthat might prevent an inventor from attaining a patent for aninvention.

PHYSICAL FORMAT OF THE AUTHOR'S WORKAND THE MEANING OF "PRINTED"

Interpreting the meaning of the word "printed" has challengedmore than one court. In 1937, the Patent Office Board ofAppeals dealt with the issue in regard to a typewritten thesisplaced in the library at the Massachusetts Institute ofTechnology (M.I.T.).15 Harold Edgerton, the patent applicant,was barred from receiving a patent on a synchronous motorbecause the subject matter of his invention had been fullydisclosed in the thesis of M.I.T. student, F. J. Zak. Zakcompleted his thesis more than two years before Edgerton filedhis patent application. The inventor Edgerton argued, indefense of his application, that even though Zak had already


described his invention, formal printing meeting traditionaltypesetting requirements was required before a documentshould be considered "printed" under. the statute. As Zak'sthesis was produced on a typewriter and not a printing press, itwas not a printed publication and could not bar Edgerton'spatent. The Patent Office Board of Appeals decided that thethesis was indeed "printed" and denied Edgerton a patent."In support of its position, the Board of Appeals stated, " ....the statute does not leave the door open to anyone claiming tobe a prior inventor to secure a patent on an invention of whichthere has been for two years a description in a public library, orthe like, solely because the description there is typewritten andnot printed on a printing press."? Subsequent courts haveapplied similar reasoning and kept pace with technology bydeclaring microfilm," slides and drawings;" andphotographs" as printed material under the statute.

Microfilm

In 1958, the Court of Customs and Patent Appeals held in theTenney case that a microfilm of an unpublished German patentapplication placed in the Library of Congress and improperlyindexed was not a printed publication." After World War II,the German government patent office in Berlin was abandonedand permanently closed. United States government personnelobtained access to a collection of unpublished patentapplications on file in the German office and recorded them onmicrofilm. The microfilm eventually found its way to theLibrary of Congress, and the microfilm of the unpublishedpatent application germane to the Tenney case was in a canistermistakenly labeled "German patent applications on aircraft,"even though the patent apparatus related to a pulse jet engineused to produce dispersions of liquids in air or fog. The patentexaminer, whose decision was later supported by the PatentOffice Board of Appeals, rejected Mr. William L Tenney'smachine for making fog as unpatentable because a descriptionof his machine was contained in the unpublished Germanpatent on microfilm filed in a mislabeled canister in the Library

54 PatriciaA. Hider

of Congress.

The court hearing Mr. Tenney's case reversed the PatentOffice Board of Appeals and held that the German patent hadno legal effect, stating "While microfilming furnishes a meansof multiplying copies, there is no probability, ...• that thedisclosure has achieved wide circulation and that, . . . . thepublic has knowledge of it."22 Because the microfilm wasincapable of being widely disseminated, it was not a printedpublication within the meaning of the patent law. Theprobability of the microfilm's becoming public knowledge (notwhether or not it actually became public knowledge) was thebasis for the court's decision.

Recently, a microfilm copy of an Australian patent applicationpreserved on a. reel and a diazo photograph produced from asecond microfilm copy was held to be "printed" within themeaning of the patent statute." Mr. Joseph Wyer applied' fora patent for a cable junction box, but his application wasrejected by the examiner on the grounds that the sameinvention was described in a printed publication in Australiamore than one year before filing of the application in theUnited States. The printed publication specifically referred toin the Ujler case was an Australian patent application preservedon 16 mm film. It was the custom of the Australian patentoffice to maintain two film copies. One of the microfilm copieswas preserved in the Australian patent office as a security reeland the other was cut into strips, placed in a transparent jacketand used to produce a photograph of up to 36 microfilm frames(referred to as a diazo copy). Six diazo copies were made; onewas retained at the Australian Patent Office and the other fiveWere distributed to the Australian patent system sub-offices.The court noted that equipment was available to the public inthe Australian Patent Office and in the sub-offices forproducing enlarged paper copies or enlarged reproductions ofthe diazo 'copies.24


The court distinguished this microfilm from the Germanmicrofilmed patent in the Tenney case: "Since the patent officewas ready to supply, on order, blown-up prints made from thediazo copies, the probability of public knowledge of appellant'sapplication exceeds that for the German application inTenney."25 Thus, a microfilm of a foreign patent applicationmaintained in a foreign patent office, accessible to the publicand available for dU~lication, is a printed publication as of itsdate of accessibility.

It is likely that any modern court would consider microfilm a"printed publication" under the current patent law. The focusof the inquiry regarding microfilm centers on whether or notthe microfilm can be located by those skilled in the art andwhether the essence of the claimed invention is disclosed on themicrofilm. If the microfilm is easily accessible to practitionersin the field and clearly describes the invention, it may beconsidered a printed publication with the potential ofbarringpatentability of an invention.

Slides and Drawings

Film and projection slides are considered printed publicationsunder the patent law. Whether these forms of printedpublications serve to bar patentability depends on the amountof information conveyed on slides used during a presentationand on the identity of the audience. The following two cases areillustrative.

Four orthopedic surgeons associated with the University ofCalifornia at Irvine developed an artificial knee prosthesis.fWright Manufacturing Company, a Tennessee corporation,assisted in the development of the final product and financiallysupported the prosecution of the patent application. After thepatent was granted, Wright ultimately became the exclusivelicensee of the patented artificial knee. After identifying whatwas thought to be infringement of the patent, University ofCalifornia (owner of the patent) and Wright Manufacturing


Company (licensee) joined together to bring suit againstHowmedica, Inc., another manufacturer of an artificial kneeprosthesis. As a defense against the infringement, Howmedicaclaimed that the University of California patent was invalidbecause the device had been described in a printed publicationmore than one year before the University's application, inviolation of § 102of the Patent Act. Howmedicapointed to twospecific events to support its claim: 1) the success of the use ofthe artificial knee on a human patient was reported by theAssociated Press in articles in various newspapers; and 2) twoof the inventors described the invention using slides anddrawings at a medical meeting."

Dr. Smith, one of the inventors of the device, delivered apresentation at the California Medical Association meeting inwhich he discussed the development of the knee toapproximately thirty persons. The slides and drawings used byDr. Smith during the lecture showed the knee prosthesis, butDr. Smith did not make any prints of the slides available, andno one at the meeting had access to the slides or was able tosee them other than during the presentation. The court foundthat because the projection of the slides at the meeting waslimited in duration, they could not disclose the invention to theextent necessary to enable a person of ordinary skill in the artto make or use the artificial knee." Similarly, the court heldthat the newspaper articles did not bring the invention into thepublic domain because they did not sufficiently describe theinvention." Because the publications (newspaper articles andslides) were not disseminated such that persons interested inthe artificial knee could comprehend and put to use theessentials of the invention, the publicationswere not a statutorybar under § 102 of the Patent Act.

In another case involving a drill string motion compensatorused in offshore drilling, in its own defense an alleged infringerused printed publications produced by the patent holder toargue that the patent was invalid. Vetco Offshore Industries,Inc., disclosed its motion compensator invention to producers


and contractors in drawings, blueprints, and written descriptionsof the invention. These materials were either delivered ordisplayed to sixteen companies and thirty individuals involvedin offshore drilling." In finding that Vetco violated § l02(b)of the Patent Act, the court noted that the drawings andblueprints were disseminated without Vetco's placing anyrestrictions on the use of the Information by the recipients,Although the number of parties to whomVetco providedtheinformation was small in absolute numbers, the recipientsrepresented the persons most concerned with offshore drillingand likely to be. interested in the information.

In summary, slides and drawings of an invention, even if onlydisplayed to a small group of persons, are printed publicationsand can be used as the basis for denying an inventor a patent.Important things to consider when using slides and drawingsmore than one year before a patent application is filed includethe amount of information conveyed to the audience and thepersons to whom the slides will be projected. Slides anddrawings are likelyto be classified as printed publications underthe Patent Act if enough information is conveyed by themedium to enable a person of ordinary skill in the art to makeor use the invention, and the information is conveyed.to thoselikely to be most interested in the information. If extensiveinformation must be conveyed, even to a small group,restrictions must be put on the use of the information by therecipients.

Photographs

Photographs of a new device distributed by a corporatiori'to itssales representatives have been considered'~rinh:d

publications." An employee of Torin Corporation," amanufacturer of fan assemblies used in heating, refrigerating,and air conditioning systems, developed a new fan xhatexhibited vibration characteristics superior to' other fans. In arush to market, Torin Corporation provided photographs of thenew fan accompanied by a field sales memorandum to its sales

58 PatriciaA. Hider

representatives. The photographs were provided so that salesrepresentatives could "understand and describe" the fansufficiently," When Torin Corporation later sued PhilipsIndustries, Inc., for infringement of its new fan, Philips pleadedthe prior publication defense based on the memorandum andthe photographs. Torin Corporation didn't file its patentapplication until approximately thirteen months after thephotographs and memotandum were' sent to the field salesforce.

. The court in the Torin case' held that the fan was a visualdevice, and therefore the memorandum and photographs weresufficiently descriptive to inform one skilled in the art of airmoving equipment of the essentials of the invention." Theinformation in the sales memorandum was also intended fordisclosure to Torin Corporation's customers, who are thepersons most concerned with the art of the invention. It was thedescriptiveness of the photographs and the memo that causedthe court to accept the defense of Philips Industries, Inc., andto invalidate the Torin Corporation patent. As it turned out,production tooling for the new Torin fan was delayed threemonths, making the advanced notice given to the sales forceunnecessary.

In another caseinvolvingphotographs, a patent was invalidatedas a result of a description of the invention contained in apamphlet prepared for a convention. Brothers Incorporated, aMinnesota corporation, was the assignee of a patent entitled"Pneumatic Roller Compactor.t" The invention entailed' apneumatic roller designed to be pulled behind. a tractor andused in road construction jobs for airports, at job sites withembankments, or in heavy fill work. More than one year beforeBrothers Incorporated applied for a patent on the compactor,the company prepared a pamphlet describing the machine anddistributed the pamphlet at a Road Show of the AmericanRoad Builders Association held' in Chicago, Illinois. The fourpage pamphlet included four photographs of the machineattached to a tractor. The photographs were taken at various


angles and one photograph specifically illustrated the oscillatingeffect of the wheels as the machine moved over uneven ground.This characteristic of the compactor was one of its mostdistinguishing features. The pamphlet also listed numerousspecifications of the machine, such as maximumloaded weight,body capacity, maximum travel speed, and overall body width,length, and height. On the back page of the pamphlet were twodrawings of the rollers, showing side and top views.

The court found that the inventive concept of the machine,which was the basis for the claimsmade in the patent, was fullydisclosed in the pamphlet. Furthermore, the pamphlet enabledone knowledgeable about road-buildingequipment to build andproduce the roller compactor described in the patent from theinformation in the pamphlet alone.36 The court invalidatedevery claim of the Brothers Incorporated patent on thecompactor because it was described in a printed publicationmore than one year before the filing of the application for apatent.

Courts no longer seem to search for a major distinctionbetween "printed" and "publication." Each case is decided onthe basis of its own facts and the burden is on the patentchallenger to prove that the information is "printed,handwritten, or on microfilm or a magnetic disk or tape."?The major focus of a printed publication inquiryis generally noton the format of the document but on whether the work wasaccessible or was disseminated.

THE MEANING OF ·PUBLICATION":ACCESSIBILIlY AND DISSEMINATION OF THE WORK

Today, whether or not a document has been printed in thetraditional sense has little or no bearing on the probability ofits dissemination. Determining whether or not a work is apublication centers on measuring the accessibility of the workfor some types of documents, and on judging the degree ofdissemination for other materials. Those documents that are


determined to be either accessible or disseminated are likely tobe called publications, and may bar patentability. Courts haveused two main lines of reasoning in deciding whether adocument is a publication: sufficient indexing or cataloguing ina library setting, so that the document is accessible; and actualdissemination, for other types of documents.

If a work has been placed in a library anywhere in the worldwith a proper reference, it has consistently been held to bepublished." A single copy of a document properly indexedand catalogued is generally considered disseminated because itis accessible to someone searching for it. By the samereasoning, am improperly indexed document is not widelyaccessible and therefore not published.

The other method used for determining whether or not adocument has been published is actual dissemination. Casesrelating to works other than those placed in libraries focus noton the availability of one copy, but on the extent ofdissemination and the number of copies circulated. Because apatent grant is a contract between the inventor and the public,it follows that the primary inquiry in determining whether aprinted document constitutes a publication under the statute ispublic accessibility. The two determinations are separate anddistinct, for if a document has been sufficiently disseminated, itmakes no difference whether or not it is indexed or cataloguedin a library. Therefore, the threshold question is always whetherthe work has been disseminated. Courts have failed to developclear tests for identifying sufficientdissemination, but there aresome guidelines that can be drawn from the case law. Thenumber of copies of a work produced and the identity of thereaders to whom those copies were distributed are twoimportant elements used in determiningwhether there has beensufficient actual dissemination.


Actual Dissemination: Importance ofthe Number of Copies andthe Identity of Readers

Most conclusions of dissemination involve cases where morethan one copy of the work was produced. One method that hasbeen used to evaluate whether the number of copies producedis sufficient to constitute dissemination is to look at the methodof reproduction used to produce the work. If the mode ofreproduction used by a particular publisher would ordinarily be

.used to make a large number of copies for general distribution,then the work is likely to be considered a printed publication.

Some courts have found that accessibility to any segment of thepublic is all that is necessary for a. work to fulfill therequirements of a printed publication." Other courts haveestablished that publication means accessibility to those skilledin the art and whether "persons interested and ordinarilyskilled in the subject matter or art, exercising reasonablediligence, can locate it and comprehend the essentials of theclaimed invention without further research orexperimentation.•40

Speeches and Handouts Can Be Dissemination of an Invention

Delivery of a speech and accompanying paper at an academicconference may constitute a printed publication under thepatent law," Massachusetts Institute of Technology (M.I.T.),recipient of a National Science Foundation grant, initiatedresearch in 1974 on microcarrier culture systems suitable for thein vitro cultivation of mammalian cells. Having achieved somesuccess by September of 1975, Dr. David Levine of M.I.T.delivered an oral presentation at the First International CellCulture Congress in Birmingham, Alabama. Approximately 50to 500 scientists with expertise in cell culture techniquesattended the conference. An important part of Dr. Levine'stalk centered on the M.I.T. discovery that optimal cell adhesionand growth could be obtained by reducing the total chargecapacity of the microcarriers to which the mammalian cells

62 PatriciaA. Hider

attach. This discovery was the essence of M.LT.'s patent.?

Approximately fourteen months after Dr. Levine's presentation,M.I.T. filed a patent application covering the development oflimited-charge cell culture microcarriers: After receiving apatent, M.I.T. licensed the microcarrier technology to amanufacturer of cell culturing products, FlowGeneral, Inc., andits subsidiary Flow Laboratories, located in Mcl.ean, Virginia.Approximately six years later, M.I.T. and Flow jointly filed suitagainst another manufacturer .of cell culture supplies,Pharmacia, Inc., (it Swedish company, formerly known as ABFortia, with offices in New Jersey), claiming infringement of itsmicrocarrier patent Because the case involved importation ofproducts from Sweden, and therefore potentially involved aviolation of the Tariff Act by Pharmacia, Inc., it was decided bythe United States International Trade Commission." TheCommission considered the presentation given by Dr. Levine inBirmingham as sufficient to invalidate the M.I.T. patent, andthe United States Court of Appeals for the Federal Circuitagreed.

Dr. Levine had provided the head of the conference with a copyof his paper and distributed additional copies withoutrestrictions to approximately six persons who requested them.M.I.T. argued unsuccessfully that Dr. Levine's presentation wasnot a "printed publication" within the meaning of § 102(b) ofthe Patent Act The court, however, held that a sufficientnumber of persons (between 50 and 500) skilled in.the art weretold of the existence of Dr. Levine's paper and copies of thepaper itself were actually disseminated. The combination of Dr.Levine's oral presentation and the distribution of a transcriptof his talk provided those skilled in the technological area withenough information to reproduce his work if they.chose."

After finding a printed publication, the court must establish thatthe publication is' "enabling" or capable of teaching thoseskilled in the art the essence of the invention. A mere findingof a printed publication alone will not suffice' to invalidate a


patent. In another infringement suit involving a patentedapparatus and process for underground drilling, the UnitedStates Court of Appeals of the Federal Circuit considered aone-page promotional brochure describing the results of adrilling process to be non-enabling." "The mere fact that theSmith brochure, a one-page promotional brochure, boasts theability and results of the process of the '903 patent' isinsufficient, as a matter of law, to constitute an enablingdisclosure of the process of the '903 patent.'"46

Intra-Company Distribution is Not Dissemination of a Work

Generally, documents circulated within one company ororganization are not sufficiently disseminated to constitutepublication and do not bar patentability. Similarly, internalcorporate documents are not printed publications." Aftercertain claims in their patent application were rejected by thepatent examiner, two inventors, Kratz and Strasburger, appealedto the United States Court of Customs and Patent Appeals. Theinventors had discovered that the addition of small amounts ofpure 2-methyl-2-pentenoic acid (2M2PA) to foods imparted afresh fruit or strawberry flavor to those foods. Prior to applyingfor a patent, Kratz authored a memorandum concerning theobjectives of the flavor research that was used internally atInternational Flavor and Fragrances, Inc., where Kratz worked.The memo was never distributed outside the company.

The dispute in the Kratz case centered on whether 2M2PA, anaturally-occurring constituent of strawberries, could be new ornovel and therefore patentable. The court declined to use theinternal memorandum, where Kratz had stated that 2M2PA isnot new, as a printed publication because the memorandum wasnot a public document."

library Cataloguing: One Copy of a Thesis ConstitutesDissemination

The issue of whether a thesis is a printed publication has been


considered on marty occasions over the past fifteen years.Courts hearing these cases have provided significant guidanceto inventors regarding when the inventor's own thesis maystand as a bar to a subsequent patent application. A documentimproperly indexed or catalogued is not widely accessible, as itmay remain hidden from a person searching for it. A properlycatalogued or indexed work, on the other hand, can easily befound by anyone searching for it. A properly indexed documentwithin a library anywhere in the world is a printed publicationwithin the meaning of the Patent Act, even where there hasbeen no dissemination of the material, because it is accessible.Thus, accessibility is behind the indexing rationale, and casesrelating to manuscripts and academic articles in libraries relyupon the indexing system under which the publication is filedto provide accessibility to persons ordinarily skilled in the art.

In 1978, the United States Court of Customs and PatentAppeals found an uncatalogued and unshelved master's thesisplaced in the school library not to be a publication." JohnBayer, a graduate student in chemistry at the University ofToledo, wrote a thesis entitled "Coordination Complexes of 2methyl-5-hydroxy-1,8-naphthyridine,· which was submitted to agraduate committee in partial fulfillment of the degreerequirements for a Masters of Science in chemistry. Mr. Bayerapplied for a patent on his discovery, but the majority of theclaims were rejected by the patent examiner. The thesis wasconsidered a printed publication that was received by the librarymore than one year before Bayer applied for a patent.

Mr. Bayer appealed the rejection of his patent application andwas able to provide evidence to the court showingthat after thelibrary at the University of Toledo received his thesis it waswithheld from public access for approximately ten months. Itwas the practice of the library to accumulate masters' theses inan office to which only library employees had access,until therewas a sufficient number to send to a book bindery. Staff of thelibrary collated the theses, assigned call numbers, and preparedtemporary slips for the shelf list catalogue and temporary


author slips for the public card catalogue, before the documentswere sent out for binding. Once bound, theses were furtherprocessed before being : transferred to the CirculationDepartment, where the temporary author slipswere filed in thepublic card catalogue and the theses were shelved in the library.

The court reversed the rejection of Mr. Bayer's patent claimsand held that the uncatalogued, unshelved thesis was not aprinted publication under the Patent Act.5o The court went onto note that· ... under 35 U.S.C. § 102(b), delays within auniversity library or within any other organization responsiblefor the publication of printed documents, are of utmostsignificance because public access to the document is therebydeferred, thus postponing the commencement of the one yeartime bar."51 .

In 1989, the United States Court of Appeals for the FederalCircuit likewise found three undergraduate theses were notprinted publications. Unlike the Bayercase, however, the thesesin the Cronyn case had been shelved, but nevertheless werefound by the court not accessible to the public because they hadnot been catalogued or indexed in a meaningful way. MarshallW. Cronyn, a professor of chemistry at Reed College. inPortland, Oregon, applied for a patent on a chemical compound

. that was anticipated as being useful in cancer treatment. Thepatent examiner rejected the patent as anticipated by' threeundergraduate theses contained in the library of Reed College.The Board of Patent Appeals and Interferences agreed withthepatent examiner, but the United States Court of Appeals did

. not and reversed the rejection of the Cronyn patentapplication.P

.Reed College, a solelyundergraduate institution, required eachstudent pursuing a Bachelor of Arts degree to prepare a seniorthesis based on laboratory or scholarly research.A copy of eachthesis was filed in the main college library and in the library ofthe particular department in which the student's work wasdone. In both libraries, the theses were listed on individual


cards and filed alphabetically by the author's name. In themain library, there were approximately 6,000 theses listed oncards, and in the chemistry department library there wereapproximately 450 cards in a shoe box. None of the theses ineither library was indexed or catalogued.

The court concluded that the three theses were not accessibleto the public because they were not indexed in a meaningfulway.S3 The three theses were listed on cards among 450 othersand because they were listed only by the student's name, aresearcher in the field would not have been able to find thetheses by subject. The nature of the indexing system seems tohave played a significant role in determining patentability,although the case was decided by a three-judge panel, with onejudge dissenting.

A single catalogued thesis in one university library has beenfound to be sufficient to constitute accessibility." In Hall, adissertation was found accessible because it was indexed,catalogued, and shelved. A patent examiner rejected the patentof Leo M. Hall, citing a dissertation entitled "1,4-alphaGlucanglukohydrolase ein amylotylishches Enzym..." by PeterFoldi. The Foldi dissertation was contained in the library ofFreiburg University in what was then the Federal Republic ofGermany. A director of the library was able to testify byaffidavit that copies of the Foldi dissertation were madeavailable to the public approximately one month after they werereceived by the library. Mr. Hall was denied a patent becausethe Foldi dissertation was considered prior art that anticipatedhis invention. .

It is interesting to note that the United States Court of Appealsfor the Federal Circuit in the Hall case relied on the routine of

. the library in Germany in much the same way that the UnitedStates Court of Customs and Patent Appeals did in the Bayercase. In the Bayer case, evidence was presented that theUniversity of Toledo routinely took months to properly indexand catalogue a thesis after receiving it, thereby delaying its


access to the public..The Bayer court relied on this informationin reaching its decision that the thesis was not a printedpublication. Similarly, in the Hall case, evidence was availableshowing that the University of Freiburglibrary made thesesavailable to the public one month after their receipt by thelibrary. The Hall court stated that "competent evidence of thegeneral library practice may be relied upon to establish anapproximate time when a thesis became accessible.t" TheHall court found that the thesis at issue was a printedpublication.

Additionally, in the Gulliksen case discussed above under"Physical Format 'of the Author's Work and the Meaning of"Printed," the Patent Office Board of Appeals concluded thata master's thesis that was properly indexed and cataloguedwould be considered published." By placing his work in thelibrary, the author dedicated it to the public. This position hasbeen criticized under the reasoning that without dissemination,knowledge is not available to the general public. Nevertheless,interpretation of the meaning of printed publication still focuseson the indexing system under which the publication iscatalogued if it is part of a public library.

A FEDERAL RESEARCH GRANTIS A ·PRINTED PUBLICATION·

A district court in California recently decided that a researchgrant proposal, which resulted in the award of a federal grantfor its submitter, was a printed publication under § 102(b) ofthe Patent Act.57 Using reasoning similar to that used bycourts in determining whether a thesis is a printed publication,and citing the Hall case where a thesis that was indexed,catalogued, and shelved in a university library was held to be aprinted publication, the California court decided that a grantproposal was a printed publication because it was accessible.The court based its determination of accessibility on the factthat the grant proposal was: 1) indexed by title, author,institution, and grant number; 2) made available to the public

68 PatriciaA. Hider

at large through the Freedom of Information Act; and 3) hadbeen cited by its grant number in a scientificpublication writtenby the author of the grant proposal."

. In 1972, Dr. H. Gobind Khorana submitted a grant proposalentitled "Chemical and Biological Studies of Nucleic Acids" tothe National Science Foundation. As a result of the proposal,Dr. Khorana received a research grant and subsequentlydirected the work that was performed in his laboratory underthe grant. Two years later, Dr. Khorana co-authored a scientificpublication, 'Studies on Polynucleotides: the linkage ofDeoxyribopolynucleotide Templates to Cellulose and Its Use inTheir Replication," which was published in the Journal ofBiological Chemistry. On the first page of the scientificpublication, Dr. Khorana and his co-author, Dr. Panet, cited theNational Science Foundation grant number, under which theresearch for the publication was conducted. In 1989, the workof Dr. Khorana became the subject of a dispute between E. I.Du Pont De Nemours & Co. (Du Pont) and Cetus Corporation(Cetus) when Du Pont claimed that two patents coveringpolymerase chain reaction (PCR) technology, issued by the U.S.Patent and Trademark Office in 1987 and held by Cetus, wereinvalid. Among other things, Du Pont alleged that the Cetusinventions lacked noveltyunder 35 U.S.C.§ 102(b)because theywere described in a printed publication by Dr. Khorana in hisgrant proposal in 1972, more than one year before the Cetuspatent applications were filed on March 28, 1985 by Dr. KaryB. Mullis.

Du Pont, in moving for summaryjudgment, attempted to showthat the existence of Dr. Khorana's scientific publication andgrant proposal were sufficient evidence on which the districtcourt could find the Cetus patents invalidwithout proceeding toa trial. The United States District Court for the NorthernDistrict of California did not agree, and in denying Du Pont'smotion for summary judgment, implied that the issue ofwhether the Cetus patents were invalid due to the content ofthe publications of Dr. Khorana remained for a jury to


determine. Although the court did not reach the question of thevalidityof the Cetus patents, the court did conclude that a grantproposal that is indexed, available to the public under theFreedom of Information Act, and cited in a scientificpublication is a printed publication under the Patent Act.

Accessibility of a Grant Proposal Does Not Depend on IndexingAlone.

In the Du Pont case, Cetus argued that the grant proposal wasnot a printed publication under the Patent Act because aninvestigator interested in PCR technology could not havediscovered the work easily. Cetus relied on reasoning similar tothat used in the Cronyn case, where an indexing systemconsisting of 450 cards in a shoe box resulted. in theinaccessibility of a thesis, and argued that the grant proposalwas not indexed in a meaningful way because the NationalScience Foundation did not file the grants by subject matter. Tobolster their argument, Cetus also claimed that the title,"Chemical and Biological Studies of Nucleic Acids," was vague.

The California court did not just evaluate the accessibility ofthe single grant proposal the way other courts have evaluatedthe accessibility of a single thesis, but expanded its reasoningbeyond the indexing system alone and based its judgment ofaccessibility, in part, on the professional reputation of theauthor of the grant proposal. The California district courtreasoned that any investigator in the field of nucleic acidsynthesis is likely to have seen the publication of Drs. Khoranaand Panet because of their stature as pioneers in the field. Thecombination of the title of the grant proposal and the authors'reputations made the grant proposal accessible once its numberwas reproduced in Khorana and Panet's article in the Journalof Biological Chemistry.

It is impossible to predict what effect the Du Pont case willhave on future determinations of whether grant proposals areprinted publications under the Patent Act, and one can only

70 PatriciaA. Hider

speculate as to the decision the court might have reached hadthe number of the grant not appeared in Drs. Khorana andPanet's scientific paper. If future courts are persuaded by thereasoning of the United States District Court for the Northern

. District of California, however, they are free to consider thereputation of a grant proposal's author in reaching theirdecisions. In the case of a thesis, indexing, cataloguing, andshelving in a library are sufficient to make the thesisaccessible." In the case of a research grant proposal, indexingmust be combined with the power of the Freedom ofInformation Act to make the grant proposal accessible.

The Freedom of Information Act (FOIA) and Accessibility ofGrant Proposals

The FOIA legislation was passed by Congress to alter anattitude of secrecythat had developed in the government in theyears before its enactment in 1967. The fundamental purposeof the FOIA is to allow the public access to governmentrecords. The FOIA requires all federal agencies to make theirrecords available to any person requesting them, unless therecords contain information included in one of nine exemptionsspecified by Congress." The United States Supreme Courtheld in 1982that nearly everyone is free to request governmentrecords, under the FOIA, regardless of his or her motive."

A party who submits information to a federal agencyand wishesto prevent its disclosure to a third party FOIA requester mustattempt to establish that the information submitted is includedin one of the nine exemptions. Otherwise, the federal agency isrequired by law to disclose the information to the public underthe FOIA. It is onlywhen information can be classifiedinto oneof the nine exemptions that a federal agency has the authorityto use its discretion and choose to either withhold theinformation or release it to the public.

A Publication Guide for the Inventor Seeking a Patent 7I

In developing the FOIA legislation, Congress did not specifytheimpact it intended FOIA to have on scientific grant.administration.f Information disclosed by a researcher in agrant proposal submitted to a federal agency becomes an"agency record" and subject to disclosure to the public underthe Freedom of Information Act even if the agency does notaward the grant.63 Two of the FOIA exemptions sections552(b)(3) and (4), however, are arguably applicable to the typeof information contained in grant proposals. If information ina grant proposal is exempt from being disclosed to the publicunder the FOIA, a federal agency is not required by law tosupply the contents of the proposal to any person who requestsit, and the agency can exercise its discretion and choose towithhold the information. If a grant proposal is not accessible,it should not be considered a printed publication under thePatent Act.

The first exemption that applies to grant proposals is exemption3, which states that records exempted from disclosure by "otherstatutes" do not have to be released to the public under theFOIA.64 The Patent Act requires that the U.S. Patent andTrademark Office keep patent applications confidential untilthe patent is granted/" If the information contained in a grantproposal is the subject of a patent application pending beforethe u.s. Patent and Trademark Office, then the grant proposalqualifies under the Freedom of Information Act as an agencyrecord that is exempted from disclosure by another statute (inthis case, the Patent Act). The Patent Act and its requirementthat patent applications be kept confidential overrides thecompulsory disclosure of information mandated by Congress inthe FOIA. It may be possible, therefore, to keep a grantproposal from being disclosed to the public under the Freedomof Information Act if the subject matter of the grant proposalis part of a patent application simultaneously submitted to theU.S. Patent and Trademark Office.

Not every statute that requires confidentiality on the part of thegovernment, like the Patent Act, automatically overrides the


requirement of mandatory disclosure under FOIA. Statutes onlyqualify under exemption 3 of the FOIA if they clearly specifynondisclosure and refer to particular types of information to bewithheld or establish particular criteria for withholdinginformation/" Congress must have explicitly expressed itsdesire to prohibit the federal agency subject to the statute fromdisclosing .certain information to the public. If Congressdelegates to the federal agency the authority to exercise itsdiscretion regarding disclosure, the statute does not fall underFOIA exemption 3 because it is not sufficiently specific. Anexample of a statute of this type is the Trade Secrets Act, whichprohibits federal employees from disclosing trade secretsacquired during the course of their employment." The TradeSecrets Act is not a statute that falls under FOIA exemption 3and even though it requires that certain information be keptconfidential by the government, it does not by itself override themandatory disclosure requirement of the FOIA.68 Ifinformation falls within another exemption such as FOIAexemption 4, then the Trade Secrets Act may prohibit agovernmental agency from disclosing the material." Thesecond exemption that applies to a grant proposal is FOIAexemption 4, which excludes from mandatory disclosure "tradesecrets and commercial or financial information obtained froma person and privileged or confidential.v" The exemptionsunder the FOliA are iIiterpreted narrowly, and one court hasheld that a noncommercial scientist's research designs are. nottrade secrets because a scientist is not engaged in trade orcommerce.?' A federal agency, however, may still be able touse its discretion and deny a request under FOIA exemption 4for information contained in a grant proposal if the commercialvalue of the research described in the proposal can be

. demonstrated." Research with commercial value is exemptfrom disclosure under FOIA exemption 4 as "commercialinformation" as long as it is also considered confidential by itssubmitter. Commercial or financial matter is "confidential" forpurposes of the exemption if disclosure of the information islikely to "impair the Government's ability to obtaininformation in the future or to cause substantial harm to the

A Publication Guidefor the Inventor Seeking a Patent 73

competitive position of the person from whom the informationwas obtalned.t"

The competitive position of a researcher employed in anonprofit setting may be harmed by the release of confidentialinformation contained in a grant proposal in at least two ways:first, business organizations may try to exploit the discoveries ofnonprofit research organizations revealed through the Freedomof Information Act in an attempt to save on research anddevelopment costs; second, other scientists may attempt to findpromising avenues of research by following grant proposals."The substantial harm caused to a researcher by the release ofconfidential information contained in a grant proposal can alsobe measured by any loss of professional or peer recognition andthe concomitant benefits that accompany such recognition duethe researcher and author of the grant proposal.P

A grant proposal is a printed publication within the meaning ofthe Patent Act and can prevent an inventor from being granteda patent in two ways. First, if the grant proposal was availablefor dissemination under the Freedom of Information Act by afederal agency more than one year before the date on whichthe inventor filed for a patent, the grant proposal will barpatentability. Second, if the grant proposal was authored bysomeone other than the inventor and filed with a federal agencybefore the inventor conceived of his or her discovery, theinventor will be denied a patent because the invention is notnew. A disclosure of an invention in a publication of any type,however, only has the potential of denying an inventor a patentif the disclosure is enabling or clearly describes the invention sothat a practitioner skilled in the technological field could makeor use the invention.

There are steps under the inventor's control that can be takento prevent a grant proposal from being interpreted as a printedpublication. The inventor can draft the grant proposal so thatit is not enabling. As was the case with slides, drawings,speeches, and handouts, a grant proposal must enable a


practitioner skilled in the technological art to reproduce theinvention to be considered a printed publication under thePatent Act. If the .. grant proposal does not teach anotherresearcher in the field how to conduct the research or make oruse the invention, it cannot be considered a printed publication.An inventor can file a patent application within one year ofsubmitting the grant proposal to a federal agency. Filing of thepatent application within one year assures that the inventor'sown grant proposal will not bar patentability under the PatentAct. The inventor's patent, however, may still be barred by agrant proposal submitted by another researcher, as then theinvention would not be considered new.

Ari inventor can also claim that the grant proposal is exemptfrom mandatory disclosure under FOIA exemptions 3 and 4.First, the inventor can inform the government agency to whomthe research grant is submitted that the subject of the grant isalso the subject of a United States patent application and isexempt from disclosure under 5 U. S. C. § 552(b)(3). Theinventor can also claim that the grant proposal should not bedisclosed to the public and is exempt from disclosure under 5U.S.C. § 552(b)(4) because the grant proposal is commercialinformation due to its commercial value and confidentialnature. To alert a federal agency to the confidential nature ofany information submitted with a grant proposal, the inventorshould mark each document with a legend indicating that theinformation is considered confidential by the sender.f

SUMMARY.WHAT COUNTS AGAINST AN INVENTOR

A printed publication can prevent an inventor from receiving apatent for an invention if the printed publication was eitherproduced by the inventor more than one year before theinventor submitted a patent application to the U.S. Patent andTrademark Office, or if the printed publication was authored bysomeone other than the inventor before the inventor conceivedof the discovery. For a printed publication to invalidate a


patent, two criteria are required: the publication must beprinted; and it must be accessible to persons skilled in thetechnology. "Accessible" means indexed and catalogued, if thedocument is a thesis. For documents other than a thesis,"accessible" means that the work has been generallydisseminated. Printed publications that count against aninventor and may prevent the inventor from receiving a patentinclude microfilm, slides, blueprints, drawings, and writtendescriptions of the invention. One court held that an oralpresentation of an invention constituted a printed publicationbecause the speaker also distributed a transcript of the talkwithout restriction to those who requested it. The courts havekept pace with evolving communication technology andinterpret the meaning of "printed" broadly.

The accessible or disseminated printed publication is likely tobe interpreted by a court as a bar to patentability if thedocument sufficiently describes a patented device so that oneskilled in the technological area of the invention, or "art" as itis called in the patent law, can recognize and comprehend theessentials of the claimed inventionwithout the need for furtherresearch or experimentation. Therefore, when evaluating thepotential for patenting an invention, it is important toinvestigate the activities of the inventor to determine whetherthey may foreclose the grant of a patent. The activities thatcount against an inventor are those involving disclosure of theessence of the invention in printed documents (slides, drawings,photographs, or written descriptions)to those considered skilledin the technological area, without restriction, and more thanone year before a patent application is filed with the U.S.Patent and Trademark Office.

One court recently held that a grant proposal is a printedpublication within the meaning of the Patent Act. A grant

. proposal can bar its author, the inventor, from being granted apatent if the grant proposal was available for disseminationunder the Freedom of Information Act by a federal agencymore than one year before the date of filing for a patent. A


grant proposal authored by someone other than the inventorand filed with a federal agency before the inventor conceivedof an invention will deny an inventor a patent because theinvention will be deemed to lack novelty. An inventor can guard

. against having a previously submitted research grant countagainst patentability later by not disclosing all of the details ofthe invention in the grant proposal, by appropriately markingthe application confidential and requesting FOIA exemptions,and/or by filing a patent application within one year of thesubmission of the grant proposal to assure that the proposal willnot bar patentability under the Patent Act.


NOTES

1. 35 U.S.c. §§ 1-376 (1988).

2. Richard W. Hoffman, Comment, What Constitutes a PrintedPublication under the PatentAct, 1988, Det. C. L. Rev. %1 (Winter1988).

3. 35 U.S.C. § 101.

4. U.S. Const. Art. I, § 8.

5. Richard W. Hoffman, Comment, What Constitutes a PrintedPublication under the PatentAc4 1988, Det. C. 1.. Rev. %1.

6. Id.

7. 35 U.S.c. § l02(a). 'The similarity in wording between subsections102(a) and 102(b) is a constant source of confusion in patent law.Section 102(a) is a novelty provision - determining whether subjectmatter is new as of the inventor's invention date in view of prior artof others. Section 102(b) is a loss of right provision, whichcontemplates that the right to a patent on an invention that waspatentable as of the date of invention is lost when the inventor delaystoo long in filing a patent application. Different policy considerationssupport the two subsections.' quoting Donald S. Chisum & MichaelA. Jacobs, Understanding Intellectual ProperlY Law § 2C[5], 2-84n.305 (1992).

8. 35 U.S.C. § l02(b).

9. 35 U.S.C. § 101.

10. 35 U.S.C. § 102(a).

11. Richard W. Hoffman, Comment, What Constitutes a PrintedPublication under the PatentAc4 1988, Det. C. L. Rev. %1.

12. Steven H. Gifis, Law Dictionary. 92 (3d ed. 1991).

13. In re Tenney, 254 F.2d 619, 624 (C.C.PA. 1958).

14 35 U.S.C. § 102(b).


15. Gulliksen v. Halberg, 75 U.S.P.O. (BNA) 252 (1937).

16. Id. at 254. The court stated, "It seems to us that an inventor shouldnot be precluded from dedicating his invention to the public by usingmodern printing means now available, such as the typewriter, andthat he should not be restricted to printing press printing to effectsuch dedication." The court could not have foreseen that theircomment made in 1937would apply to the computerized technologiesthat have become available for disseminating information ahnost sixtyyears later.

17. Id.

18. In re Tenney, 254 F.2d 619;In reWeyer, 655 F.2d 221 (C.C.PA 1981).

19. Regents of the Univ. of Cal. v. Howmedica, Inc., 530 F. Supp. 846(D.NJ. 1981); Veteo Offshore Indus. v. RuckerCo., 448 F. Supp. 1203(N.D. Cal. 1978).

20. Torin Corp. v. Phillips Indus., 625 F. Supp. 1077 (S.D. Ohio 1985);Bros. Inc. v. Browning Mfg. Co., 317 F.2d 413 (8th Cir. 1963).

21. In re Tenney, 254F.2d 619,627. The United States Court of Customsand Patent Appeals (C.c.pA) was abolished in 1982 when theUnited States Court of Appeals for the Federal Circnit (CAF.C.)was created. The CA,F.C. has exclusivejurisdiction over all appealsfrom patent cases heard anywhere in the United States.

22. Id.

23. In re uter, 655 F.2d 221, 226.

.24. Id.

25. [d. at 225.

26. ta. at 224.

27. Regents ofthe Univ. of Cal. v.Howmedica, Inc., 530 F. Supp. 846,849.

28. Id. at 859.

29. Id. at 860.


30. Id. at 859.

31. Vetco Offshore Indus. v. Rucker Co., 448 F. Supp. 1203, 1208.

32. Torin Corp. v. Phillips Indus., 625 F. Supp. 1077, 1090.

33. Id. at 1082.

34. Id. at 1083.

35. Bros. Inc. v. Browning Mfg. Co., 317 F.2d 413, 414.

36. Id. at 416.

37. In re JlYer, 655 F.2d 221, 227.

38. Richard W. Hoffman, Comment, What Constitutes a PrintedPublication under the Patent Act, 1988, Det. C. L. Rev. %1.

39. Pickering v. Holman, 459 F.2d 403, 407 (9th Cir. 1972) ("[T]he keyfactor is not access by a specific segment of the public, or number ofpersons, or even by any specific means, but simply distribution to anysegment of the public.").

40. I.CE. Corporation et. al. v. Anno Steel Corp. 250 F. Supp. 738, 743(S.D. New York 1966).

41. Massachusetts Institute of Technology v. AB Fortia, 774 F.2d 1104(Fed. Cir. 1985). .

42. Id. at 1106.

43. 19 US.C. § 1337 (1988).

44. Massachusetts Institute of Technology v. AB Fortia, 774 F.2d 1104,1109.

45. Reading & Bates Construction Co. v. Baker Energy Resources Corp.,748 F.2d 645 (Fed. Cir.1984).

46. Id. at 651, 652.

47. In re Kratz, 592 F.2d 1169 (C.C.PA. 1979).


48. Id. at 1174.

49.' In re Bayer,568 F.2d 1357 (C.C.PA. 1978).

50. Id. at 1362.

51. Id.

52. In re Cronyn, 890 F.2d 1158 (Fed. Cir. 1989)

53. Id. at 1160.

54. In re Hall, 781 F.2d 897 (Fed. Cir. 1986).

55. Id. at 899.

56. Gulliksen v. Halberg, 75 U.S.P.O. (BNA) 252,254.

57. E.l. Du Pont de Nemours & Co. v. Cetus Corp., 1990 U.S. Dist.LEXIS 18414 (N.D. Calif. 1990).

58. Id. at *24.

59. See supra note 54 and accompanying text (single, catalogued thesis inthe library of Freiburg University in Germany was accessible becauseit was indexed, catalogued, and shelved).

60. The Freedom of Information Act (FOIA) is codified at 5 U.S.C. §552. The exemptions to the mandatory disclosure required under theFOIA, and listed in subsections (b)(1) to (9), are: 1) records relatedto national defense and foreigu policy; 2) records related to internalpersonnel rules and practices; 3) records exempted by other statutes;4) trade secrets and confidential commercial or financial informationobtained from a person; 5) internal government communications andnotes that fall within a generally recognized evidentiary privilege; 6)records that if disclosed would constitute a clearly unwarrantedinvasion of personal privacy;7) government records compiled for lawenforcement purposes; 8) records concerning regulation orsupervision of financial institutions; 9) geological and geophysicalinformation and data, including maps, concerning wells. The UnitedStates Supreme Court has held that exemptions are discretionary andthat a federal agency may choose to disclose information, even if theinformation falls within an exemption and the federal agency is notrequired to disclose it. Chrysler Corp. v. Brown, 441 U.S. 281 (1979).


61. Baldrige v. Shapiro, 445 U.S. 385 (1982).

62. Judith Lowitz Adler, The Impact of FOIA on Scientific ResearchGrantees, 17 Colum. J. L.& Soc. Probs. 1, 2 (1981).

63. Jerome S. Gabig, Jr., Federal Research Grants: Who Owns theIntellectual Property?, 16 Pub. Cont, L. J. 187, 208 (1986).

64. 5 U.S.C. § 552(b)(3) (1988).

65. 35 U.S.C. § 122 (1988).

66. See, e.g; Irons & Sears v. Dann, 606 F.2d 1215 (1979).

67. 18 U.S.c. §19Q5 (1988).

68. See generally, Westchester General Hospital, Inc. v. Department ofHealth Education & Welfare, 464 F. Supp. 236 (M,D. PIa. 1979);Guerra v. Guajardo, 466 F. Supp. 1046 (S.D. Texas 1978).

69. Chrysler Corp. v. Brown, 441 U.S. 281,301 (1979) quoting the HouseCommittee on Government Operations H. R. Rep. No. 94-880, pt. 1,p. 23 (1976).

70. 5 U.S.c. §552(b)(4) (1988).

71. Washington ResearchProject; Inc. v. DepartmentofHealth, Education& Welfare, 504 F.2d 238 (D.C. Cir. 1974). See also Public CitizenHealth Research Group v. Food and Drug Administration, 704 F.2d1280 (D.C. Cir, 1983) (A trade secret, for the purpose of 5 U.S.C. §552(b)(4), has been defined as a 'secret, commerciallyvaluable plan,formula, process, or device that is used for the making, preparing,compounding, or processing of trade commodities and that can besaid to be the end product of either innovation or substantialeffort'). See also Jerome S. Gabig, Jr., Federal Research Grants:Who Owns the Intellectual Property?, 16 Pub. Cont. L. J. 187, 209(1986) (Definition of trade secret was created in a case that involveda request by a consumer advocacy organization seeking informationon the safety of intraocular lenses, and another court dealing with anissue other than health and safety may not choose to use the samedefinition.),


72. Judith Lowitz Adler, The Impact of FOlA on SCientific ResearchGrantees, 17 Colum. J. L. & Soc. Probs. 1, 13, 14 (1981); Jerome S.Gabig, Jr., Federal Research Grants: Who Owns the IntellectualProperty?, 16 Pub. Cont. L. J. 187, 208 (1986).

73. National Parks and ConservationAssociation v. Morton, 498 F.2d 765,770 (D.C. Cir. 1974). See also Jerome S. Gabig, Jr., Federal ResearchGrants: Who Owns the Intellectual Property?, 16 Pub. Cont. L. J. 187,210 (1986) ("An obvious example of impairing the government'sability to obtain information in the future would be where the granteeis incited by the FOIA request to seek alternate sources of fundingto avoid federal involvement in the research.").

74. Jerome S. Gabig, Jr., Federal Research Grants: Who Owns theIntellectual Property?, 16 Pub. Cont. L. J. 187, 210 (1986). See alsoJudith Lowitz Adler, The Impact of FOlA on Scientific ResearchGrantees, 17 Colum. J. L. & Soc. Probs. 1, 14 (1981) ("Commercialenterprise, with access to large numbers of research designs, couldselect ideas of potentially great commercial value and fund anddevelop them before their originators could do so.").

75. Jerome S. Gabig, Jr., Federal Research Grants: Who Owns theIntellectual Property?, 16 Pub. Cont. L. J. 187, 210 (1986).

76. Id. at 208.

Instructions for Contributors

The Association of University Technology Managers (AUTM)welcomes contributions of original manuscripts to the AUTMJournal, covering any aspect of the management of technologyand intellectual property. Please submit manuscripts to theManaging Editor, Ms. Diane C. Hoffman, 23 Perrine Path,Cranbury, NJ 08512.

All manuscripts, including those written at the invitation of theEditor, are subject to reviewby the Editorial Advisory Board orother reviewers. The final decision as to publication will bemade by the Editor, and authors willbe notified of the decision.Authors may retain title to the copyright of their articles;however, papers are published in the Journal with theunderstanding that they have neither appeared nor will besubmitted elsewhere. .

Please submit an original and two copies of your typewritten,double-spaced manuscript. The first page should contain thetitle, author's name(s), affiliation(s), addressees), and telephonenumber(s). An abstract of 100 words summarizing the paper'smain points and a 50-word background statement about theauthor should also be included.Shouldyour article be acceptedfor publication, you will be asked to provide a copy on diskettecompatible with MS Word or WordPerfect software.

References should be numbered and listed at the end of themanuscript. Please avoid the use of footnotes. Tables andFigures must be numbered and identified as such, and shouldbe provided in camera-ready format, ready for reproduction.

Letters commenting on the issues discussed in the publishedarticles or on other matters of interest to technology managersare welcome, and will be considered for publication as "Lettersto the Editor" or forwarded to the author for reply, at thediscretion of the Editor.

83

Documents

II VOLUMBV/ /994 · "alert" to technology managers to watch for pitfalls in university practices that might cause problems later on in the patenting ... On the second anniversary