Nanotech Patent Trap

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Nanotechnology start-ups live and die by the value of their intellectual property, but in many cases the value of a company's patents may depend on whether a customer can use the patent without fear of being sued. A recent analysis of U.S. nanotechnology patents by the New York City investment research firm Lux Research Inc. and the law firm Foley & Lardner LLP, in Washington, D.C., reveals that nanotech innovators face a messy situation [see "table"].

There are several hot spots of activity centering on five principal nanotechnology platforms: carbon nanotubes, quantum dots, fullerenes, nanowires, and dendrimers. By examining more than 1000 patents in these areas, the analysts generated two metrics for each technology platform in fields such as energy, electronics, and medicine. The first, which they call white space, is a measure of how crowded with patents an area is. The second, entanglement, is a measure of how likely one patent is to overlap with another.

Art: Rensselaer Polytechnic Institute

In electronics applications, only one technology, dendrimers, scored well in both categories. Patents for electronics based on these spherical polymers--imagine a three-dimensional snowflake--are relatively free from the overlap that can lead to lawsuits, and there are not many of the patents to begin with.

But the situation is the reverse for carbon nanotubes, a leading candidate to be used in electronics as our ability to manipulate silicon reaches its limits [see "Supertubes," IEEE Spectrum, August 2004]. And that could turn the commercialization of carbon-nanotube electronics into a sticky mess. "If you pick up one of these patents, you're going to have to license a whole bunch of others in order to use the one that you've got," says Matthew Nordan, vice president of research at Lux Research. The best way for the industry to clear a path through the mess and get products out is cross-licensing, he says. And the best way to achieve this sort of arrangement is through organizations similar to the MPEG Licensing Authority, in Denver, Colo., a one-stop shop where consumer electronics companies can buy packages of digital coding licenses if they want to make, for example, a DVD player.

In that model, firms with relevant patents negotiate how to divide up each dollar from such a license package. Lux Research predicts that the first of these cross-licensing deals in carbon nanotube electronics will be for field-emission displays, in which the tubes could function as the tiny cathodes that excite the pixels.