• Nanotechnology and the Law
  • May 1, 2003
  • Law Firm: Winstead Sechrest & Minick P.C. - Austin Office
  • Recently, nanotechnology has become a headline grabber within the national and international news media. However, even with all the media excitement nanotechnology has garnered lately, few people really understand what nanotechnology is and what it can potentially do for them. Moreover, most law firms and lawyers do not fully appreciate the impact that nanotechnology will have on future technology growth in the United States, and thus how nanotechnology will actually impact the legal world.

    Let's first try to describe what nanotechnology is. Very simply, nanotechnology is technology at the nanoscale. A nanometer is one billionth of a meter, approximately 1/80,000th the width of a human hair. The size of a nanometer relative to the width of the human hair is comparable to relating 6½-feet to 100 miles. Another way to conceptualize such a small dimension is to consider that a nanometer is approximately the width of four atoms.

    One common, but possibly overbroad, definition for nanotechnology is that it comprises all materials less than 100 nanometers. Others define nanotechnology as the art of manipulating matter on the nanometer scale to enable the fabrication of material structures and devices with atomic and molecular precision. Many of these structures and devices will then possess unique physical and chemical properties as a result of sizes below the threshold of quantum confinement. Translated, nanotechnology can be said to be humans doing what Mother Nature has been doing for eons: making things atom by atom with just the right properties to perform a specific function. One particular example is quite illustrative. When Mother Nature lays out carbon atoms like sheets of stacked paper, graphite is created, which is relatively soft and useful for such items as pencil lead. When Mother Nature lays out the same carbon atoms in a crystalline structure, the hardest natural substance on earth is created -- diamond. The reason that nanotechnology is a relatively "new" science is that it has only been quite recently that tools have been available to observe and manipulate matter in the nanoscale realm.

    All of the foregoing probably helps one to better understand what is meant by nanotechnology, but undoubtedly many will still question, or at least not appreciate, the potential impact of nanotechnology. This is where nanotechnology excites so many. Nanotechnology promises to be both pervasive and transparent. Nanotechnology can potentially have an impact on every aspect of human life, from clothing to cancer treatments, electronics to food science, and from the defense industry to consumer products. Already nanotechnology is having an impact in sunscreens, cosmetics, eyeglass scratch resistant coatings, and men's slacks. Theoretically, everything that humans have created in the past can be reengineered using nanotechnology to be better, stronger, lighter, softer, etc.

    Already some key market areas have surfaced. As nanotechnology research and development ramps up, there will be an increasing need for small tech tools to assist in this research and development, such as the atomic force microscope (AFM), which is often noted as the significant breakthrough in starting the nanotechnology revolution. Nanomaterials are already a thriving market, with many companies creating various materials and particles at the nanoscale level, which have improved properties over those same materials when made in larger sizes. Life sciences, or biotechnology, still holds immense promise, and will only become more promising with the infusion of nanotechnology. In fact, nanotechnology in many ways is reviving biotechnology within the investment markets. Information technology and communications are ever growing fields, where the hope of nanotechnology is the miniaturization of electronics beyond the fastly approaching theoretical limits of semiconductor technology. The auto and aerospace industries are seriously looking at nanotechnology for lighter and stronger materials. Energy should soon benefit from nanotechnology research for improving alternative energy sources such as hydrogen fuel cells and solar panels. And lastly, the marriage of nanotechnology and biotechnology holds many promises for improving the environment, or at least nullifying the effects of industry on the environment.

    It is no wonder that Japan, China, Europe and the U.S. are all spending increasingly larger amounts of government funds on nanotechnology research and development. For example, recently the U.S. Department of Commerce's top official for Technology, Don Evans, extolled nanotechnology, stating its promise is "mind boggling" and that it is imperative that America retain leadership in further developing this emerging technology, which is probably why the National Science Foundation (NSF) has a proposed 2003 nanotechnology research budget of $221 million, more than any other federal agency. At the local levels, states such as California, New York and New Jersey are spending tax dollars on funding nanotechnology within their boundaries. On the academic level, many universities throughout the country are vying for the state and federal dollars to fund what are seen as the primary incubators for nanotechnology at this time, the university graduate programs. For example, four Texas-based universities, The University of Texas at Dallas, The University of Texas at Arlington, The University of Texas at Austin, and Rice University, have formed a partnership to help position the state of Texas as a center for education, research and development in nanotechnology. Given that federal dollars are beginning to flow more readily from the NSF, the Department of Defense, and the Department of Energy, these academic institutions will most likely seek to secure a significant portion of these 2003 federal research budgets. In fact, these universities have already succeeded in acquiring a $6 million grant from the federal government.

    What has probably held nanotechnology back up till now is the concern that it may be more hype than substance. This is, of course, the result of the burst of the dotcom bubble, which in some respects is the cause for the recent downward spiral of the economy, and more specifically, the stock market. Moreover, the claims that nanotechnology will affect all aspects of modern life supports the skepticism that nanotechnology is just too good to be true. No doubt, the fear of too much hype plus the considerable unknown aspects and understanding of nanotechnology, have kept private money in the shadows waiting to see if the hype turns into truth. It also does not help that the venture capitalists are still in the process of licking their wounds and shoring up their remaining investments.

    However, this time the boom will be based more on pure science and less on marketing hype, eliminating the possibility of another Internet economy bubble bursting right before our eyes. This time there will be companies who concentrate on actually developing real products that businesses and consumers can buy, instead of merely trying to maximize market share measured by the number of hits on a website, or how much venture capital can be raised. In many respects, the very fact that nanotechnology has hopes of being a long term driver of technology for decades to come is making it its own worst enemy. Nanotechnology research can often take several years before a viable product with consumer acceptance will emerge. Though the government, the universities, and even large corporations such as IBM and General Electric, have the patience and resources to wait for such fruitful results, the typical venture capitalist has a much shorter investment horizon. With most nanotechnology research and development still driving to push ideas and discoveries into the marketplace, when markets begin to pull, or demand, nanotechnology products, it is then that the venture capitalists will pour their resources into this area.

    How does this impact lawyers and law firms? Obviously, any new technology search, with a significant influx of money, has a trickle down effect of putting attorneys to work, creating companies, funding projects, lobbying for government funds, and naturally creating and protecting intellectual property. Clearly, the dotcom boom had significant effects on the growth of technology law firms, intellectual property practices, and associate salaries.

    What nanotechnology promises to do is to have a more significant, deeper and longer term impact than the dotcom bubble. Recall again the pervasive nature of nanotechnology, where virtually every industry can benefit from improvements made due to nanotechnology. The Internet promised to have a similar impact in all industries by providing a means to distribute information seemlessly, and by opening up new channels of trade. There is still hope that this will be eventually accomplished, but the root technology of each of these industries still remains the same. Nanotechnology, however, will serve not only to perpetually disrupt industrial markets, it will also create significant new technologies. Even a law firm having a relatively low-tech client base will see the impacts of nanotechnology within the next decade. Nanotechnology will soon be not merely a line mentioned in movies such as Spiderman and Minority Report, but will become as ubiquitous as the computer has become in the last 10 years.

    Of course, the area of law that will see the most significant impact from nanotechnology is intellectual property, and specifically, patent law. Already, the patent examiners at the Patent & Trademark Office (PTO) in Washington, D.C. are having difficulty in understanding the unique aspects of nanotechnology inventions. As a result, this past year they have been inviting a group of nanoscientists to give tutorials to PTO examiners on various nanotechnology subjects, such as carbon nanotubes, to help them gain a better understanding of nanotechnology and the patents they are reviewing.

    Furthermore, the dotcom boom resulted in an influx of attorneys into the intellectual property field, many with little or no significant technical or science background or education. Nanotechnology will cause a re-emergence of the importance of patent attorneys with degrees in hard sciences, not only to write patents and counsel clients on protecting trade secrets, but also for litigating the rights created in those patents and for appreciating the finer points when negotiating a license agreement.

    It will be clearly advantageous for nanotechnology clients to hire patent attorneys with technical and science degrees who has had several years of experience in procuring nanotechnology related patents. Further, patent attorneys having advanced degrees, such as Ph.D's in physics and chemistry will be better equipped to represent nanotechnologists. The better the patent attorney is able to comprehend the technology, the better the quality of the patent application and the resultant claim protection. For example, a patent attorney, or patent agent, who has previous nanotechnology research experience will be able to more fully understand a nanotechnology discovery or idea than the typical patent attorney. Such an experienced patent practitioner will be able to talk on the same level as the nanoscientist inventor, resulting in a better product, produced in less time and with lower cost.

    This current down cycle in the economy should result in an increase in law school applicants with technical and science degrees, providing some assistance in the near future in the supply of patent attorneys having the needed background to handle such nanotechnology patent work. However, if nanotechnology fulfills the promise of the next technology boom, the supply of patent attorneys with technical degrees coming out of law school will begin to diminish as these nanotechnologists remain in industry. Good for patent attorneys, bad for law firms.