Collaborative Research and the CREATE Act

By Edward Hejlek, Dennis J. Harney, Ph.D., & Timothy B. McBride

The passage of the Cooperative Research and Technology Enhancement (CREATE) Act on December 10, 2004, significantly increased the patentability of jointly-developed inventions. The CREATE Act is of particular importance to pharmaceutical, biotech, and nanotechnology companies relying upon collaborative research efforts with universities, non-profit institutions, and private enterprises. The CREATE Act applies prospectively, available to patents issuing from patent applications, including reissue patent applications, pending on or after December 10, 2004.

The CREATE Act

Before the CREATE Act, a first invention made by one or more inventors was prior art that had to be considered when assessing the obviousness of a second, later invention made by another group of inventors unless, at the time of the second invention, both were commonly owned or assigned. For example, a first invention made by a university professor and owned and maintained in secrecy by the university would nevertheless be prior art against a second invention jointly made by the professor and a scientist at a collaborating company unless an obligation existed, at the time the second invention was made, to assign the second invention to the university. This created a substantial obstacle to collaborative research.

The CREATE Act now effectively eliminates secret prior art for collaborative research projects provided (1) the claimed invention was made by or for parties to a joint research agreement in place before the claimed invention was made; (2) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and (3) the patent application for the claimed invention discloses, or is amended to disclose, the names of the parties to the joint research agreement. If these conditions are met, a prior invention of any of the collaborators cannot be used in assessing whether a later collaborative invention satisfies the nonobviousness requirement of the patent laws. In addition, an invention made in the course of the collaborative research cannot be used in assessing whether another invention stemming from the collaborative research effort satisfies the nonobviousness requirement of the patent laws.

The CREATE Act defines a joint research agreement ("JRA") 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.” Evidence of a JRA may take the form of research and development agreements, Government Cooperative Research and Development Agreements (CRADAs), material transfer agreements (MTAs), or other written contracts or multiple written documents or contracts covering various parties or aspects of the written agreement. Recording a JRA with the patent office is optional, and only an excerpt with each collaborators name, the date of the JRA, and a concise statement of the field of invention is required.

Implications

The CREATE Act is particularly important to any organization, for example a university, benefiting from the Bayh-Dole Act. Universities were often unable to take advantage of the prior §103(c) safe harbor provision because the Bayh-Dole Act limited their ability to transfer patent rights resulting from federally funded research. Establishing a JRA presents far fewer barriers than arranging for common ownership or assignment. This allows universities to more easily establish collaborative research programs with commercial partners.

Although the CREATE Act removes a major impediment to collaborative research arrangements, it does not cure all ills. Research by either party to the JRA outside the scope of and subsequent to the JRA is not affected by the CREATE Act. For example, assume: (1) a university makes a first invention, (2) the university enters into a JRA with a commercial partner, (3) a second invention, an improvement to the first invention, is made by the university and/or the commercial partner pursuant to the JRA, and (4) a third invention is independently made by the commercial partner outside the scope of the JRA.

Under this scenario, the first invention can be eliminated as prior art for purposes of determining obviousness of the second invention, but the first and second inventions cannot be eliminated as prior art for purposes of determining obviousness of the third invention because the third invention was not made pursuant to the JRA. As a result, there may be some tension. If the scope of the collaborative effort is defined too broadly or vaguely, a party may find itself contributing more than it would have desired to the collaboration. Conversely, if the scope of the collaborative effort is defined too narrowly, inventions made as part of the collaborative research may create serious patentability issues for other inventions a party makes outside the agreement.

Our Take

If a JRA is desired to obtain the benefit of the CREATE Act, we recommend the following:

Define the scope of the collaborative effort in the JRA with sufficient breadth to capture all potential subject matter arising from the collaborative efforts, but not so broadly or vaguely so as to inadvertently contribute more to the joint effort than is desired.
Periodically review the scope of activity actually pursued to ensure the project(s) remain within the field of the agreement.
Promptly amend the scope of activity before expansion of the project.
Identify each and every collaborating researcher before any inventive activity.
Amend the JRA any time a new collaborating researcher joins the research project.
Make clear that affiliates or consultants conducting work under the collaboration are doing so on behalf of the parties to the agreement.
When drafting a JRA, include an excerpt suitable for filing with the PTO. Filing of only the excerpt retains confidentiality of the balance of the agreement.

Conclusion

In conclusion, the CREATE Act recognizes the importance of intra-organization collaborative research and provides a safe harbor that fosters the patentability of jointly-developed inventions. While beneficial, the newly amended safe harbor is not a panacea. Careful attention to both the usefulness and limitations of the act will ensure maximum protection of intellectual property rights covering collaborative inventions.




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Senniger Perspectives Industry Perspectives Case Summaries Relevant Links		Collaborative Research and the CREATE Act By Edward Hejlek, Dennis J. Harney, Ph.D., & Timothy B. McBride Download a PDF \| Get Acrobat The passage of the Cooperative Research and Technology Enhancement (CREATE) Act on December 10, 2004, significantly increased the patentability of jointly-developed inventions. The CREATE Act is of particular importance to pharmaceutical, biotech, and nanotechnology companies relying upon collaborative research efforts with universities, non-profit institutions, and private enterprises. The CREATE Act applies prospectively, available to patents issuing from patent applications, including reissue patent applications, pending on or after December 10, 2004. The CREATE Act Before the CREATE Act, a first invention made by one or more inventors was prior art that had to be considered when assessing the obviousness of a second, later invention made by another group of inventors unless, at the time of the second invention, both were commonly owned or assigned. For example, a first invention made by a university professor and owned and maintained in secrecy by the university would nevertheless be prior art against a second invention jointly made by the professor and a scientist at a collaborating company unless an obligation existed, at the time the second invention was made, to assign the second invention to the university. This created a substantial obstacle to collaborative research. The CREATE Act now effectively eliminates secret prior art for collaborative research projects provided (1) the claimed invention was made by or for parties to a joint research agreement in place before the claimed invention was made; (2) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and (3) the patent application for the claimed invention discloses, or is amended to disclose, the names of the parties to the joint research agreement. If these conditions are met, a prior invention of any of the collaborators cannot be used in assessing whether a later collaborative invention satisfies the nonobviousness requirement of the patent laws. In addition, an invention made in the course of the collaborative research cannot be used in assessing whether another invention stemming from the collaborative research effort satisfies the nonobviousness requirement of the patent laws. The CREATE Act defines a joint research agreement ("JRA") 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.” Evidence of a JRA may take the form of research and development agreements, Government Cooperative Research and Development Agreements (CRADAs), material transfer agreements (MTAs), or other written contracts or multiple written documents or contracts covering various parties or aspects of the written agreement. Recording a JRA with the patent office is optional, and only an excerpt with each collaborators name, the date of the JRA, and a concise statement of the field of invention is required. Implications The CREATE Act is particularly important to any organization, for example a university, benefiting from the Bayh-Dole Act. Universities were often unable to take advantage of the prior §103(c) safe harbor provision because the Bayh-Dole Act limited their ability to transfer patent rights resulting from federally funded research. Establishing a JRA presents far fewer barriers than arranging for common ownership or assignment. This allows universities to more easily establish collaborative research programs with commercial partners. Although the CREATE Act removes a major impediment to collaborative research arrangements, it does not cure all ills. Research by either party to the JRA outside the scope of and subsequent to the JRA is not affected by the CREATE Act. For example, assume: (1) a university makes a first invention, (2) the university enters into a JRA with a commercial partner, (3) a second invention, an improvement to the first invention, is made by the university and/or the commercial partner pursuant to the JRA, and (4) a third invention is independently made by the commercial partner outside the scope of the JRA. Under this scenario, the first invention can be eliminated as prior art for purposes of determining obviousness of the second invention, but the first and second inventions cannot be eliminated as prior art for purposes of determining obviousness of the third invention because the third invention was not made pursuant to the JRA. As a result, there may be some tension. If the scope of the collaborative effort is defined too broadly or vaguely, a party may find itself contributing more than it would have desired to the collaboration. Conversely, if the scope of the collaborative effort is defined too narrowly, inventions made as part of the collaborative research may create serious patentability issues for other inventions a party makes outside the agreement. Our Take If a JRA is desired to obtain the benefit of the CREATE Act, we recommend the following: Define the scope of the collaborative effort in the JRA with sufficient breadth to capture all potential subject matter arising from the collaborative efforts, but not so broadly or vaguely so as to inadvertently contribute more to the joint effort than is desired. Periodically review the scope of activity actually pursued to ensure the project(s) remain within the field of the agreement. Promptly amend the scope of activity before expansion of the project. Identify each and every collaborating researcher before any inventive activity. Amend the JRA any time a new collaborating researcher joins the research project. Make clear that affiliates or consultants conducting work under the collaboration are doing so on behalf of the parties to the agreement. When drafting a JRA, include an excerpt suitable for filing with the PTO. Filing of only the excerpt retains confidentiality of the balance of the agreement. Conclusion In conclusion, the CREATE Act recognizes the importance of intra-organization collaborative research and provides a safe harbor that fosters the patentability of jointly-developed inventions. While beneficial, the newly amended safe harbor is not a panacea. Careful attention to both the usefulness and limitations of the act will ensure maximum protection of intellectual property rights covering collaborative inventions.

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