THE CREATE ACT: CREATING OR SOLVING PROBLEMS

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THE CREATE ACTCREATING OR SOLVING PROBLEMS?
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CREATE ACT OVERVIEW

• The CREATE Act Tom Engellenner
• I. Background
• II. Implications
• Application to Licensing Activities Nina Green
• I. Non-Disclosure Agreements (NDAs)
• II. Material Transfer Agreements (MTAs)
• Joint Research and Follow-on Research - Dean
  Stell
• I. License Agreements
• II. Sponsored Research Agreements

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Tom Engellenner, Partner Nutter McClennen Fish
LLCOverview of the CREATE Act
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REQUIREMENTS FOR PATENTABILITYA. UTILITY (35
U.S.C. 101)B. NOVELTY (35 U.S.C. 102)
C. NON-OBVIOUSNESS (35 U.S.C. 103)
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NON-OBVIOUSNESS (35 U.S.C. 103) A Patent
may not be obtained though the invention is not
identically disclosed or described as set forth
in section 102 of this title, if the differences
between the subject matter sought to be patented
and the prior art are such that the subject
matter as a whole would have been obvious at the
time the invention was made to a person having
ordinary skill in the art to which said subject
matter pertains.
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BACKGROUND In re Bass (1973)
A non-public (secret) disclosure between
employees of the same entity (e.g., same
company) can be used as prior art against a
later invention of one or more employees of that
entity.
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1984 and 1999 Amendments to the U.S. Patent Laws
provide a Safe Harbor for Commonly Owned Secret
Prior Art
Subject matter developed by another person, which
qualifies as prior art only under subsection
(e), (f) or (g) of section 102 of the title,
shall not preclude patentability under this
section where the subject matter and the claimed
invention were, at the time the invention was
made, owned by the same person or subject to
obligation of assignment to the same person
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Non-Commonly Owned Secret Prior Art Remained a
Problem

For example, secret communications between
different entities? The 1984/1999 Amendments
did not address the situation posed by different
inventive entities working together
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CASE LAWOddzon Products, Inc. v. Just Toys,
Inc. 122 F.3d 1396 (Fed. Cir. 1997)A Design
Patent for a foam football-shaped with a
tailshaft and fins The district court held that
two confidential designs disclosed to the
inventor by another entity qualified as prior art
to determine whether the design was obvious under
35 U.S.C. 103.
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The CREATE Act amended 103 to expand its safe
harbor provisions to cover non-commonly owned
secret prior art cited against patent
application(s) arising from research
collaborations between different entities.
CREATE Act A Congressional Response to Oddzon
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CREATE ACT Amendments Introduced to
103 (103(c)(2))
Subject matter developed by another person
shall be treated as owned by the same person for
purposes of determining obviousness if three
conditions are met
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CREATE ACT (103(c)(2))
(A) The claimed invention was made by or on
behalf of parties to a written joint research
agreement that was in effect on or before the
claimed invention was made(B) The claimed
invention was made as a result of activities
undertaken within the scope of the joint research
agreement(C) The application for patent for the
claimed invention discloses or is amended to
disclose the names of the parties to the joint
research agreement
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CREATE Acts Definition of Joint Research
Agreement
Joint research agreementI. a written contract,
grant, or cooperative agreement entered into by
two or more persons or entities II. for the
performance of experimental, developmental, or
research work in the field of the claimed
invention
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CREATE ACT Types of Agreements

• Research Collaborations
• Material Transfer Agreements
• Non-Disclosure Agreements
• CRADAs
• Sponsored Research Agreements
• Licenses

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CREATE Act Effective Date
The provisions of the CREATE Act apply to any
patent (including any reissue patent) granted on
or after December 10, 2004.Applies equally to
pre- and post- CREATE Act collaborative
arrangements so long as they meet the
requirements of the Act.
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CREATE Act Advantages

• Facilitates patenting of inventions arising out
• of collaborations
• Promotes collaborative research
• Encourages exchange of information among
• researchers from different entities engaged in
• collaborative research
• Lowers risk of accusation of inequitable conduct
  based
• on failure to disclose prior art during
  prosecution

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Nina Green, Director Tufts Office of Technology
Licensing and Industry CollaborationNon
Disclosure Agreements and Material Transfer
Agreements
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CREATE ACT Potential Pitfalls

• One party to the collaboration may obtain
  blocking
• patents that cover obvious improvements to the
  core
• collaborative technology by unilaterally
  invoking the
• Act.
• A party may be able to invoke the Act based on
  an
• agreement not initially contemplated by the
  parties
• to be covered by the Act.

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Non Disclosure Agreements (NDAs)

• Commonly used to convey a yet unpublished
  invention
• disclosure or patent application to a
  potential licensee.
• Binds recipient of Information to hold in
  confidence
• until the information is made public by
  disclosing party.

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NDA Can an NDA be construed as a JRA?
Examples of NDA clauses Company will not use
the Information except for its evaluation
pursuant to this Agreement. All proprietary
rights (including but not limited to patent
rights and trade secrets) in and to the
Information shall remain the property of the
disclosing party.
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CREATE ACT Potential Pitfall -- NDA
University A files patent application to
invention X and discloses invention X to Company
B pursuant to an NDA Company B files a patent
application to invention Y Bs patent
application is rejected as obvious over As
patent filing B invokes the Act by asserting
that the NDA is a JRA under the Act, potentially
obtaining a blocking patent
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Protecting the Disclosing Party Clauses
to Prevent an NDA from being used by the Recipient
This agreement is not a joint research agreement
under the CREATE Act and the Recipient shall not
invoke the CREATE Act during patent examination
to overcome prior art rejections. or
Inventorship of intellectual property generated
through the use of the Information will be
determined according to US Patent Laws. However,
in the event that Recipient invokes the CREATE
Act, all patents that arise therefrom will be
jointly owned by the Recipient and the
University.
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Material Transfer Agreements (MTAs)
MTAs govern the transfer of tangible research
materials between two organizations, when the
recipient wishes to use the material for its own
purposes. MTAs can be used for reagents, cell
lines, plasmids, vectors, antibodies, tissue
samples or organisms. Different flavors
University gt Industry University gt
University Industry gt Industry
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Can a MTA be construed as a JRA?
Examples of MTA clauses The Biological
Material is provided to you for internal research
and/or evaluation purposes only. Recipient
will inform University, in writing, of results of
Research related to the Material or by providing
University with a draft manuscript describing
such results. If publication occurs Recipient
will acknowledge University scientists based on
provision of the Material or other direct
contribution to the Research .
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CREATE ACT Potential Pitfall -- MTA
University A sends cell line to University B
under a MTA. University B files a patent
application based on work they did with the cell
line. University Bs application gets rejected
based on prior art of University A. University
B invokes the CREATE Act arguing that the MTA is
a JRA under the Act.
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Protecting the Material Donor Clauses to Prevent
an MTA from Being Used Unilaterally by a Recipient
Inventorship of intellectual property generated
through the use of this material will be
determined according to US Patent Laws. However,
in the event that Recipient invokes the CREATE
Act to overcome any prior art rejection, all
patents obtained by Recipient by asserting that
this MTA is a joint research agreement will be
jointly owned.
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Dean Stell, Associate Director Wake Forest
University Office of Technology Asset
ManagementLicense AgreementsandSponsored
Research Agreements
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License Agreements
License agreements are the primary vehicles for
technology transfer between University innovators
and commercial entities. In addition to patent
rights, Licenses often transfer technical
know-how. License agreements may also provide
for consulting services on the part of the
inventors to ensure technology transfer.
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CREATE ACT Potential Pitfalls License Agreement

• University A and Company B sign an agreement,
  licensing patent rights to newly identified
  protein know-how.
• Company B independently files a second patent
  application for an arguably obvious, but
  commercially important, improvement (e.g., a
  glycosylated form with greater activity).
• Patent Office rejects Bs application as being
  obvious in view of the University As earlier
  filing (that was not published at the time of Bs
  filing).
• Company B unilaterally invokes the CREATE Act
  to overcome obviousness and obtains a blocking
  patent.

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Protecting the Licensor Clauses to Prevent
Licensee from taking undue advantage of
transferred know-how or other secret prior art
Inventorship of intellectual property generated
by access to Licensors know-how and inventions
will be determined according to US Patent Laws.
However, in the event that Licensee invokes the
CREATE Act to overcome any prior art rejections,
all patents obtained by Licensee by asserting
that this MTA is a joint research agreement will
be jointly owned or owned by Licensor and
become part of the Licensed Patent Rights.
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Practice Tips Licensing

• Issues to consider
• Know-how
• Consulting provisions
• Does it meet the requirements of a JRA?

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Sponsored Research Agreements
Sponsored Research agreements allow Industry to
use University innovators to solve their
problems. The researchers are typically required
to provide quarter and final progress reports,
including unpublished data. Sponsored Research
agreements may also provide for consulting
services on the part of the researchers or access
to the lab and key personnel for visitation
and/or consultations. Sponsored Research
agreements often result in joint inventions.
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CREATE ACT Potential Pitfalls Sponsored
Research
University A and Company B sign a sponsored
research agreement, jointly develop a new drug
and file for a patent Company B independently
files a second patent application for an obvious,
but commercially important, improvement (e.g.,
slow release, co-administration) Patent Office
rejects Bs application as being obvious in view
of A/Bs earlier unpublished filing Company B
unilaterally invokes the CREATE Act to overcome
obviousness and obtains a blocking patent
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Protecting the Innovator(s) in a Sponsored
Research Agreement (Exemplary Clauses)


No party shall invoke the CREATE ACT
without written consent of the other party. In
the event that a party invokes the Act without
such prior consent, any patent issued arising
out of such invocation will be owned by the
non-invoking party jointly owned by the
parties.
or The parties shall not invoke the CREATE ACT
to overcome a rejection of any claimed invention
unless that invention is jointly made by the
parties.
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Practice Tips Sponsored Research Agreements and
Collaborations.
Clarify whether an Agreement is intended by the
parties to be covered by the CREATE Act (e.g.,
specify NDA is not intended to be a JRA under the
Act) Draft JRA to prohibit unilateral invocation
of the Act (e.g., require written consent) Put
JRA in place prior to the start of
collaboration Ensure that JRA adequately
specifies field of research
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Further Practice Tips for Research Agreements

• Issues to consider prior to entering into a JRA
• Are obvious modifications to the innovators
  prior work
• likely to be valuable?
• Willing to forego to separate enforcement of
  patent?
• Willing to be tied to collaborator in event of a
  need to
• pursue patent infringement suit?

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Tom Engellenner, Partner Nutter McClennen Fish
LLCMechanics of Patent Prosecution under the
CREATE Act
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Double Patenting Rejection The Price of
Invoking the Benefits of the CREATE Act
If a patent applicant invokes the CREATE Act to
overcome an obviousness rejection based on the
innovators prior patent or application, the PTO
Examiner can (and probably will) reject the
claims again based on double patenting. Basicall
y, double patenting is a doctrine that prevents
anyone from getting more than one patent on the
same invention. Rejection can be overcome by a
terminal disclaimer.

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Double Patenting Rejection MPEP 804
Congress recognized that the amendment to
103(c) would result in situations in which there
would be double patenting rejections between
applications not owned by the same party (see
H.R. Rep. No. 108-425, at 5-6 (2003)). For
purposes of a double patenting analysis, the
application or patent and the subject matter
disqualified under 35 U.S.C. 103(c) as amended
by the CREATE Act will be treated as if commonly
owned.

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Double Patenting (Continued)
The double patent rejection can be overcome by
filing a terminal disclaimer. The terminal
disclaimer must state that the owner of
the patent application waives the right to
enforce any patent granted on that application
separately from a disqualified patent or any
patent granted on the disqualified application.
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Practice Tips Patent Prosecution

• Ensure the field of invention identified in
  patent applications matches that of the JRA
• Record CREATE Act portion of JRA with USPTO
• Do not invoke the Act too early in prosecution
• Examiner must establish prima facie obviousness
• Consider other options
• divisional applications to separate
• non-obvious claims from rejected claims
• amend rejected claims to overcome rejection

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The End
Thank you Tom Engellenner Nina Green Dean Stell