TeAM YYePG Digitally signed by TeAM YYePG DN: cn=TeAM YYePG, c=US, o=TeAM YYePG, ou=TeAM YYePG, email=yyepg@msn.com Reason: I attest to the accuracy and integrity of this document Date: 2005.06.22 14:53:22 +08'00' More Praise for The Handbook of Nanotechnology “As someone who has successfully transitioned nanotechnology from the university lab to the commercial world, I can recommend this book as a ‘must-read’ for nascent academic entrepreneurs, those wishing to commercialize technologies they have developed at the university. As a faculty member at a major research univer- sity that is comprehensively involved in nanoscience and nano- technology research, I come into continual contact with such persons: I can now point them to the first book they should study. The chapters on business development are particularly valuable; I wish I had had this book 5 years ago.” —Max G. Lagally, founder nPoint, and professor of Surface Science, at the University of Wisconsin-Madison “In order for our society to realize the awe-inspiring potential for revolutionary change which nanotechnology promises in every industry from transportation to pharmaceuticals, complex issues of business, public policy and law must be managed at the highest levels of leadership in both the public and private sector. This Handbook provides an invaluable guide for that leadership.” —Rodney E. Slater, former U.S. Secretary of Transportation and partner at the law firm of Patton Boggs ffirs_miller.qxd 8/12/04 5:22 PM Page i “This is an excellent work that is both comprehensive and prac- tical across a wide range of perspectives. It is great to have solid, detailed analysis of and advice on the science, business, and policy aspects of nanotechnology. This is one of the few publications to identify both the commonality of nanotechnology with existing industry and regulatory structures as well as its unique character- istics that have implications for policy, law, and running a busi- ness. It is a book that intelligently anticipates future developments in policy and intellectual property, as well as mergers and other financing activity.” —Randy Levine, Ph.D., president and CEO, ZettaCore, Inc. “Indispensable. I can’t imagine an attorney or policy maker not having this book on their shelf. It is an extraordinarily insightful and thorough book that delves into the intricacies of the emerg- ing nanotechnology field in an accessible and easy-to-understand manner.” —F. Mark Modzelewski, founder of the NanoBusiness Alliance and managing director, Lux Research, Inc. ffirs_miller.qxd 8/12/04 5:23 PM Page ii THE HANDBOOK OF NANOTECHNOLOGY Business, Policy, and Intellectual Property Law John C. Miller Arrowhead Research Corporation Ruben M. Serrato Canon U.S.A. Jose Miguel Represas-Cardenas Stanford University Griffith A. Kundahl NanoBusiness Alliance with an editorial contribution by Mark Graffagnini John Wiley & Sons, Inc. ffirs_miller.qxd 8/12/04 5:23PM Pageiii Copyright © 2005 by John C. Miller, Ruben Serrato, Jose Miguel Represas- Cardenas, and Griffith Kundahl. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifi- cally disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial dam- ages, including but not limited to special, incidental, consequential, or other damages. For general information on our other products and services, or technical support, please contact our Customer Care Department within the United States at 800-762-2974, outside the United States at 317-572-3993 or fax 317-572-4002. Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. For more information about Wiley products, visit our web site at www.wiley.com. Library of Congress Cataloging-in-Publication Data The handbook of nanotechnology business, policy, & intellectual property law : preparing industry and policy makers for the revolution in nanotechnology / John C. Miller [et al.]. p. cm. Includes bibliographical references and index. ISBN 0-471-66695-5 1. Microelectronics industrty. 2. Nanotechnology—Industrial applications. 3. Intellectual property. I. Title: Handbook of nanotechnology business, policy, and intellectual property law. II. Miller, John C. HD9696.A2H36 2004 620.5′068—dc22 2004009884 Printed in the United States of America 10987654321 ffirs_miller.qxd 8/12/04 5:23 PM Page iv This book is dedicated to the Nomads, who take risks to follow their dreams. ffirs_miller.qxd 8/12/04 5:23 PM Page v ffirs_miller.qxd 8/12/04 5:23 PM Page vi Contents Acknowledgments ix Foreword xi Introduction 1 Part I: Introduction to Nanotechnology 11 Chapter 1: Understanding Nanotechnology 13 Chapter 2: The Industrial Structure Giving Rise to Nanotechnology 33 Part II: Nanotechnology Policy and Regulation 39 Chapter 3: Societal and Ethical Implications 41 Chapter 4: Environmental Regulation 51 Chapter 5: The Patent and Trademark Office 65 Chapter 6: FDA Regulation 83 Chapter 7: National Security and Export Controls 103 Chapter 8: Federal Funding 115 Chapter 9: Conclusions 131 Part III: Nanotechnology Business 137 Chapter 10: Starting a Nanotech Company 139 Chapter 11: Business Plans and Strategy 161 Chapter 12: Early Stage Financing 189 Chapter 13: Intellectual Property 209 Chapter 14: Corporate Partnering and Globalization 235 Chapter 15: Consolidation and Standardization 251 Chapter 16: Exit Opportunities 267 Chapter 17: Conclusions 281 Notes 287 About the Authors 355 Index 357 vii ftoc_miller.qxd 8/12/04 5:25 PM Page vii ftoc_miller.qxd 8/12/04 5:25 PM Page viii Acknowledgments Special thanks to all of our families and friends: Caroline Campbell, Mike, Scotti, and Brian Miller, Wayne and Ila Harris, Bob Gilliland, Ruben, Rafaela, Linda, and especially Gabriel Serrato, Jose Represas-Perez and Ana Beatriz Cardenas, Chuck Ballingall, Bill Southworth, Byron Arthur, Kim, Kate, and Caroline Kundahl, and Cheryl and Joseph Graffagnini. John also wishes to thank the Campbell family for providing hospitality in Australia and Palo Alto during the writing of this book and Professor Hank Greely for providing inspiration to see the book to completion. Jose Miguel also wishes to thank the Department of Electrical Engi- neering at Stanford University for his fellowship award, as well as the many professors that over the years have been examples of generosity, intellectual independence, and scientific integrity. We would also like to thank all of the people that provided ideas, com- ments, and assistance: Mark Modzelewski (NanoBusiness Alliance); K.J. Cho (Stanford University); Mike McGehee (Stanford University); Hari Manoharan (Stan- ford University); Leon Radomsky (Foley & Lardner); Ken Barovsky (Quantum Dot Corp.); Steve Maebius (Foley & Lardner); Rita Colwell (National Science Foundation); Larry Bock (Nanosys); Margaret Radin (Stanford Law School); John Barton (Stanford Law School); Deborah Hensler (Stanford Law School); Joe Grundfest (Stanford Law School); Rich Wolf (Caltech Office of Technology Transfer); Max Lagally (nPoint); Katharine Ku and Linda Chao (Stanford Office of Technology Licensing); Veronica Lanier and Carol Mimura (Berkeley Office of Technology Licensing); Rebecca Goodman and Robert Nidever (UCLA Technology Licensing Office); Joyce Brinton and Robert Benson (Harvard Technology Licensing Office); Craig Zolan (Uventures); Randy Levine (ZettaCore); Rodney Slater (Patton Boggs); Randy Bell (Nanotechnologies Inc.); J. Kevin Gray (Fish & Richardson P.C.); John Belk (The Boeing Corporation); Chad Mirkin (Northwestern Uni- versity); Mark R. Wiesner (Rice University); Vicki Colvin (Rice University); Jess Milbourn and Thomas Schults (PST); Christine Peterson (Foresight Institute); Nadrian Seeman (NYU); Joe Mauderly (Lovelace Respiratory Research Institute); Kathy Jo Wetter (ETC Group); Elisabeth Lutanie (Institute of Physics); Terry Lowe (Metallicum); Robert Bradbury (Robo- biotics); Bruce Stewart (Arrowhead Research Corporation); Peter Grubstein (NGEN Partners); Raj Bawa (Bawa Biotechnology Consulting and Rensselaer ix flast_miller.qxd 8/17/04 1:24 PM Page ix [...]... functions because of their small and/ or intermediate size.”5 Rather than adopt one of the preceding definitions to confine our discussion of nanotechnology, we survey nearly anything and everything that has been described as nanotechnology and provide a new and useful framework for understanding different types of nanotechnology UNDERSTANDING NANOSCIENCE The dawn of the journey into the nano world can... reviewing nanotechnology patents Due to the absence of a core group of examiners well versed in nanoscience, the agency has issued broad and overlapping patents on the building blocks of nanotechnology Further, a compulsion to patent has swept nanotechnology researchers and companies; the number of patents and different patent holders is large and rapidly growing A chaotic and fragmented intellectual property. .. least the type that I have—will be a thing of the past.1 The politicians are persuaded Silicon Valley, CA: 2003 The investors take their seats in the polished conference room on Sand Hill Road Although still visibly weathered by the dot-com storms, they are somewhat upbeat The sky is clear, and there is something new in the air Veteran entrepreneur Larry Bock dims the lights and starts the tape The screen... of these research goals will take 20 or more years to achieve.” There is always the risk that advocates of nanotechnology, whether in government, industry, finance, or academia, will overpromise and underdeliver What is clear is that we must now address the ethical, legal, policy, regulatory, and business issues associated with the commercialization of nanotechnologies This is why The Handbook of Nanotechnology. .. biotechnology and the rise of the Internet dazzled investors and made headlines in the final years of the twentieth century, a quiet revolution was taking place in the field of nanotechnology In 2000, the National Science and Technology Council (NSTC) observed that nanotechnology, which involves the manipulation of matter at the atomic and molecular levels, “could be at least as significant as the combined... molecular biology, materials science, and condensed matter physics dissolve as scientists struggle to understand new and sometimes unexpected properties Although these professionals are only on the first leg of the journey, they have made significant progress in synthesizing and understanding the “building blocks” of nanotechnology In the coming years, the ability to utilize these building blocks for practical... precision.”4 The National Science Foundation, on the other hand, defines nanotechnology as “research and technology development at the atomic, molecular or macromolecular levels, in the length scale of approximately 1– 100 nanometer range, to provide a fundamental understanding of phenomena and materials at the nanoscale and to create and use structures, devices and systems that have novel properties and functions... concrete proposal for the President’s FY2001 budget My colleagues at the OSTP and I met with senior officials from the science agencies; we convinced them that we would fight to protect any increases in nanotechnology research that they proposed as part of their budget submission to the Office of Management and Budget We also asked the President’s Council of Advisors on Science and Technology to review... Washington D.C.: 2002 In one of the deepest, darkest rooms in the Pentagon, five-star generals and White House officials meet In light of recent international events, there is a great deal of unease—it seems the future has never been more uncertain But today the generals are confident as they present their vision of the military battle suit of the twenty-first century, a suit enhanced by nanotechnology It can... comprehensive, and many of the issues identified in this book were not even mentioned Since the report took place in 2000, much of the discussion was also necessarily an “inherently speculative exercise.”5 The lack of well-informed and rigorous academic analysis of the policy issues associated with nanotechnology is problematic As we argue in the fol- Introduction 5 lowing chapters, the history of law and technology . founder of the NanoBusiness Alliance and managing director, Lux Research, Inc. ffirs_miller.qxd 8/12/04 5:23 PM Page ii THE HANDBOOK OF NANOTECHNOLOGY Business, Policy, and Intellectual Property Law John. www.wiley.com. Library of Congress Cataloging-in-Publication Data The handbook of nanotechnology business, policy, & intellectual property law : preparing industry and policy makers for the revolution in nanotechnology. and index. ISBN 0-471-66695-5 1. Microelectronics industrty. 2. Nanotechnology Industrial applications. 3. Intellectual property. I. Title: Handbook of nanotechnology business, policy, and intellectual