By Fadi Kiblawi & James G. McEwen
The Cooperative Research and Technology Enhancement (CREATE) Act (implemented at 35 U.S.C. §103(c)(2)) is a recently enacted provision which provides that subject matter developed by another person shall be treated as owned by the same person or subject to an obligation of assignment to the same person for purposes of determining obviousness. The CREATE Act was passed in order to facilitate cooperative agreements by allowing patents owned by different parties to be treated as commonly owned if three conditions are met:
- The claimed invention was made by or on behalf of parties to a joint research agreement that was in effect on or before the date the claimed invention was made;
- The claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and
- The application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement. (35 U.S.C. 103)
A joint research agreement is defined as “a written contract, grant, or cooperative agreement entered into by two or more persons or entities for the performance of experimental, developmental, or research work in the field of the claimed invention.”
In this way, the patents and patent publications of each party, which otherwise qualify as prior art under 35 U.S.C. §§102(e), 102(f), and (g), cannot be used as part of a combination under 35 U.S.C. §103 against an invention resulting from the agreement. This exclusion is designed to correspond to the obviousness treatment for such prior art which is commonly owned by the applicant under 35 U.S.C. §103(c)(1), without requiring that the patent applications be assigned to a single entity as was the case prior to passage of the CREATE Act. While not of particular use where the parties have few patents in the technologies related to the joint venture, the CREATE Act can be of substantial use in improving the patentability of inventions resulting from the agreement where at least one party has a substantial number of pending patent applications related to the agreement.
II. Requirements for Compliance
If an invention qualifies under the CREATE Act and meets the three conditions of 35 U.S.C. §103, then the following rules apply:
- The specification must disclose the names of the parties to the joint research agreement in a section following the statement regarding federally sponsored research or development;
- If the specification is amended to include the names of the parties, then a processing fee must be paid if the amendment is not filed in the stipulated time period (37 CFR 1.71(g)(2)); and
- The applicant must provide a statement to the effect that the prior art and the claimed invention were made by or on the behalf of parties to a joint research agreement, within the meaning of 35 U.S.C. §103(c)(3) that was in effect on or before the date the claimed invention was made, and that the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement.
Where such an amendment is not made on filing of the application, the amendment must be made within the following timeframe in order to take advantage of the CREATE Act exclusion:
- Within three months of the filing date of a national application;
- Within three months of the date of entry of the national stage as set forth in § 1.491 in an international application;
- Before the mailing of a first Office action on the merits; or
- Before the mailing of a first Office action after the filing of a request for continued examination under §1.114.
If the amendment is made outside of these time frames, the amendment must be accompanied by a fee.
III. Terminal Disclaimer
As a result of the CREATE Act, situations arise where two patents for the same subject matter can issue. The legislative history of the Act, however, makes it clear that when a double-patenting situation emerges under the act, Congress intends that a new form of double-patenting disclaimer be filed in the application. This disclaimer will limit the term of a patent issuing from the application and waive the right to separately enforce the patent from the cited patent.
37 CFR 1.321(d) promulgates the terminal disclaimer requirements for the CREATE Act:
(d) A terminal disclaimer, when filed in a patent application or in a reexamination proceeding to obviate double patenting based upon a patent or application that is not commonly owned but was disqualified under 35 U.S.C. 103(c) as resulting from activities undertaken within the scope of a joint research agreement, must:
(1) Comply with the provisions of paragraphs (b)(2) through (b)(4) of this section;
(2) Be signed in accordance with paragraph (b)(1) of this section if filed in a patent application or be signed in accordance with paragraph (a)(1) of this section if filed in a reexamination proceeding; and
(3) Include a provision waiving the right to separately enforce any patent granted on that application or any patent subject to the reexamination proceeding and the patent or any patent granted on the application which formed the basis for the double patenting, and that any patent granted on that application or any patent subject to the reexamination proceeding shall be enforceable only for and during such period that said patent and the patent, or any patent granted on the application, which formed the basis for the double patenting are not separately enforced.
This Terminal Disclaimer is similar in certain ways to existing Terminal Disclaimers filed to obviate double patenting rejections, which are filed under 37 CFR 1.321(c) with one important distinction: the Terminal Disclaimer under 37 CFR 1.321(d) only requires the disclaimed patent to be commonly enforced with the resulting patent, whereas 37 CFR 1.321(c) requires common ownership. This difference allows each party to the agreement to retain their separate ownership of their existing patents, but does prevent each party from separately licensing the disclaimed patent unless the resulting patent is licensed with the disclaimed patent. As such, when drafting the intellectual property provisions for a joint development agreement, care should be taken to allow the parties to block license existing patents and patents resulting from the agreement if the parties hope to take full advantage of the CREATE Act.