Although the amount of collaborative research and development (R&D) has been growing in recent decades, collaborative R&D raises many thorny patent issues regarding ownership and inventorship. Patent litigation and licensing, for example, are based on fundamental, emotional issues of patent ownership and inventorship that easily can arise during collaborative R&D. Expert counsel is needed when dealing with the increasing numbers of patents stemming from collaborative R&D. This is even more true today: on December 10, 2004 President Bush signed into law important patent-related legislation — the Collaborative Research and Technology Enhancement Act (CREATE) — which will influence in multiple ways patent Strategy Stemming From Collaborative R&D.

Briefly, CREATE provides rights to collaborating organizations under the obviousness provision of the patent code, 35 U.S.C. § 103(c). Under CREATE, collaborating organizations can enter into qualified "joint research agreements" to gain the benefit of avoiding so-called "secret prior art" in the all-important obviousness determination. Secret prior art easily can arise from, for example, private exchanges of information among collaborating researchers. By excluding secret prior art from an obviousness analysis, Congress’s goal was to protect valuable patents from deadly invalidity charges based on secret prior art and, generally, to encourage collaborative research. According to its legislative history, CREATE was passed to respond to the growing number of collaborative arrangements found in pharmaceuticals, biotechnology, and nanotechnology. In many cases, these arrangements involve universities and government laboratories, which successfully lobbied for the law. In passing CREATE, Congress attempted to "fix" past legislation that had created unintended consequences as it was interpreted by the courts.

Although it is not yet clear how much CREATE will be used by patentees, CREATE certainly can influence patent invalidity, inequitable conduct, and contract law theories developed by litigators in defending and enforcing patents arising from collaborative R&D, including both infringement and licensing litigation. Collaborative agreements will, in many cases, need to be evaluated for potential amendment. Patent applicants will need to comply carefully with CREATE to avoid charges of inequitable conduct and tension in collaborative arrangements. For CREATE benefits to apply, collaborating organizations must include information about these joint research agreements in their patent prosecution record so CREATE compliance can be examined. The new law also states that the joint research agreement must be within the "field of the claimed invention." Perhaps most important, CREATE legislative history suggested — and PTO interim regulations issued January 11, 2005 confirmed — that a critical aspect of the new law is a new type of double patenting/terminal disclaimer practice in which two patents joined under CREATE cannot be licensed or enforced separately. Hence, collaborating organizations will need to proceed very carefully before seeking the benefits of CREATE, as the benefits could later tie their hands when they seek to license or enforce the patents. CREATE applies to patents, including reissue patents, granted on or after December 10, 2004. In seeking reissue, however, organizations cannot violate the "recapture rule." Clearly, organizations immediately should review their patent portfolios and agreements and also confer with their collaborators. Only then can collaborators achieve CREATE benefits without negative, unintended consequences.

In sum, CREATE is a significant development in the thorny rose garden of collaborative research that will, to the extent it is used, influence patent strategy and raise still more issues for patent litigation for those patentees who have sought benefit under CREATE. Careful monitoring of CREATE is needed to determine whether unintended consequences are surfacing again as this complex body of law is implemented.

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