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Avoiding Prior Art Using the Safe Harbor of a Joint Research Agreement

Prior to December 2004, joint research parties faced a serious obstacle against patenting inventions resulting from joint research efforts. Claimed inventions could be rejected as unpatentable during prosecution, or be invalid if issued, over confidential information shared during the joint research.1 The rejection or invalidity could be avoided only if the inventors had an obligation to assign to a single entity in effect before the invention was made. This rule had a chilling effect on joint research.

This changed in December 2004 when the Cooperative Research and Technology Enhancement (CREATE) Act was enacted. The CREATE Act was enacted in significant part to vitiate Oddzon and thereby unchill and encourage joint research. The joint research provisions of Sections 102 and 103, both under the AIA and under pre-AIA laws, provide a safe harbor that can be very helpful in prosecution to disqualify prior art and thereby gain allowance of a patent application.

Under the CREATE Act, subject matter of one party is disqualified as prior art against a claimed invention of another party if three requirements are met:

(1) A joint research agreement (JRA) was in effect on or before the date on which the claimed invention was made;
(2) The claimed invention resulted from activities under the JRA; and
(3) The corresponding patent application disclosed the parties to the JRA.

The CREATE Act defines a JRA as a written contract, grant, or cooperative agreement entered by two or more entities to perform experiments, development, or research in the field of the claimed invention.2

The CREATE Act disqualifies only prior art arising under 35 U.S.C. § 102(e), (f), and (g) when used to make an obviousness rejection. The 2004 Act does not provide a safe harbor for novelty destroying prior art. This changed under the new provisions of 35 U.S.C. §§ 102, 103 enacted under the America Invents Act (AIA) when the safe harbor became available for novelty, too.

The disqualified prior art and the claimed invention are deemed to be commonly owned for purposes of an obviousness type double patenting rejection. The patent applicant, therefore, may file a terminal disclaimer to overcome the rejection if made. This kind of terminal disclaimer must include statements about enforcement that are not required in other terminal disclaimers.

The CREATE Act governs patent rights subject to pre-AIA laws. Inasmuch as many patent properties remain subject to pre-AIA laws, the CREATE Act remains relevant.

The new provisions of 35 U.S.C. §§ 102 and 103 change the JRA landscape in two significant respects. First, under the CREATE Act of 2004, a JRA had to be in effect as of the date the claimed invention was made in order for the JRA to be eligible to disqualify prior art; now, the JRA must be in effect on or before the effective filing date of the claimed invention. Second, under the CREATE Act of 2004, the JRA safe harbor was not available to disqualify novelty destroying art; now, the safe harbor applies when novelty and/or obviousness are at issue.

The definition of a JRA remains the same under the new laws. Thus, the JRA safe harbor is still available only for written contracts, grants, or cooperative agreements to perform experiments, development, or research in the field of the claimed invention.

Smoke and mirrors also are not a substitute for an actual, written joint research agreement. This charade was attempted in In re Hubbell, 106 USPQ2d 1032 (Fed. Cir. 2013). An application owned by one party was rejected for obviousness type double patenting over an earlier patent naming overlapping but different inventors. The two patent properties were never commonly owned. Although the propriety of rejecting the application for double patenting in these circumstances was challenged by the applicant, the Federal Circuit confirmed that this is a well-established and entirely proper situation to apply the rejection.

The applicant then asserted that he should be able to file a terminal disclaimer to avoid the rejection. The Federal Circuit indicated the applicant could not do this because the application at issue and the patent posing double trouble were never commonly owned.

The applicant countered that the CREATE Act allows independent parties to be treated as common owners if (i) the parties had a JRA in effect at the time the rejected invention was made, (ii) the invention was made under the JRA, and (iii) the application is amended to disclose the JRA parties. The Federal Circuit acknowledged this, but then rebuked the applicant on grounds that applicant had no such agreement and, therefore, could not benefit from the statute. Implicit in the court’s rebuke is the principle that mere overlapping inventorship is not the same as or even a substitute for a joint research agreement.

1 Oddzon Products Inc. v. Just Toys Inc., 43 USPQ2d 1641 (Fed. Cir. 1997).

2 Oral agreements are not eligible for the JRA safe harbor under this pre-AIA law. This contrasts to 35 USC § 262, where oral agreements qualify as an “agreement to the contrary” that may restrict independent action by joint patent owners.