• Patent CREATE Act Decoded for Research Partners
  • January 14, 2011 | Authors: Terri S. Flynn; Charles L. Leeck; May Mowzoon
  • Law Firms: Quarles & Brady LLP - Milwaukee Office ; Quarles & Brady LLP - Phoenix Office
  • In uncertain economic times, collaborative research is particularly desirable to provide cost savings through shared resources and expertise, improved efficiency, and decreased time to market for new products. While collaborative research can provide economic advantages, collaboration can also have undesirable effects on intellectual property rights if the parties involved fail to enter into appropriate joint development agreements.

    The United States Patent Office can reject the claims of a patent application as obvious based on categories of “secret” prior art that are typically shared during collaborative research. “Secret” prior art can include the content of unpublished patent applications, information that was shared with the inventor from another party, and inventions made but not disclosed to the general public prior to the date of a patent application.

    The Cooperative Research and Technology Enhancement (“CREATE”) Act of 2004 prevents the United States Patent Office from rejecting a patent claim as obvious based on information shared by the research partners if a joint research agreement was in effect on or before the date the claimed invention was made. The CREATE Act defines a “joint research agreement” as “a written contract, grant, or cooperative agreement” that is “for the performance of experimental, developmental, or research work in the field of the claimed invention,” and requires that the claimed invention be made as a result of activities undertaken within the scope of the joint research agreement. When a joint agreement exists, a patent applicant can prevent confidential disclosures from being used as prior art by disclosing the names of the parties to the joint agreement in the patent application.

    A problematic situation arises, however, when each of the research partners apply for corresponding patents for similar inventions, and one patent is cited as prior art against the other. Of course, the applicant with the rejected patent may invoke the CREATE Act to disqualify the cited reference. Here, however, the Patent Office may reject the patent again stating that research partners are trying to get two patents for the same invention. In this situation, the research partner with the rejected patent may overcome the second rejection by filing a “terminal disclosure,” which limits the term life of its patent to that of the other research partner’s cited patent and agreeing not to enforce the resulting patent separately from the cited patent. In a sense, the lifetime and enforcement of the two patents at issue must be tied together.

    Accordingly, research partners should take proactive steps in order to avail themselves of the CREATE Act’s benefits but also prepare for its potential consequences; this can be done through well-crafted joint research agreements. For example, if the research partners do not want the CREATE Act to apply to inventions that are developed pursuant to their agreement, then their agreement should explicitly exclude the CREATE Act. If the research partners want the CREATE Act to apply, then the joint research agreement should have a well but broadly defined scope of work in order to capture “performance of experimental, developmental, or research work in the field of the claimed invention.” A joint research agreement can further require that neither party can invoke the CREATE Act with respect to inventions developed pursuant to the agreement without prior written consent of the other party. Moreover, the research parties may wish to jointly own patents that may be eligible for the CREATE Act’s safe harbor in order to preclude an inadvertent dismissal of a subsequent infringement suit.