Abstract

transform a wide range of economic sectors, from medicine to electronics to advanced materials. Science and research and development are at the center of these developments, trailed by policy and lawmakers who are con- templating what, if any, new governance mechanisms are necessary to advance the responsible use of nanotechnology. Perhaps less well known and understood is the work of voluntary consensus standards in this field. However, the work of standards writers is intimately bound with many of the scientific and policy issues central to the future of nanotechnology. This paper addresses standards initiatives relating to nanotechnology, with a focus on those being developed by the International Organization for Standardization, and closes with some observations on the potential impact of this standardization activity on the use of patent pools in intellectual property.

I. The Value of Consensus Standards

Nanotechnology continues to be touted as the “next big thing” that will transform a wide range of economic sectors, ranging from medicine to electronics to advanced materials. Science and research and development are at the center of these developments, trailed by policy and lawmakers who are contemplating what, if any, new governance mechanisms are necessary to advance the re- sponsible use of nanotechnology. Perhaps less well known and understood is the work of voluntary consensus standards in this field. However, the work of standards writers is intimately bound with many of the scientific and policy issues central to the future of nanotechnology.

Consensus standards have become essential to domestic and international trade, establishing agreed upon vocabularies and procedures for thousands of products and services. The concept is quite simple: economic actors in the value chain must share a common understanding about what they manufacture, sell, distribute and use if the global economy is going to work smoothly. Tech- nical standards make it possible for everything—from credit cards to the internet—to work around the globe.

Establishing consensus technical standards is particularly important for a rapidly developing and crosscutting field such as nanotechnology, where widely divergent views on even such basic issues as the definition of “nanomaterial” remain. For example:

• Functions essential to the commercialization of nanotechnology, such as intellectual prop- erty and contracts, depend on consensus definitions for the various types of nanomaterials (e.g., nanotube, nanoplate, nanofiber, nanowire, etc.). If the value chain has different under- standings of what is being bought and sold, then every task, from negotiating contractual terms to identifying and protecting intellectual property, will be that much more challeng- ing.
• Consensus on metrology and measurement standards also has significant implications for nanotechnology. Valid and consistent procedures for collecting and evaluating data about nanomaterials are essential if the vast amount of research being conducted around the world is to be meaningfully applied. Further, commerce involving nanomaterials and nano- technology will be impaired without common measurement techniques for actors in the value chain to use to verify product identity, quantity and quality.
• Standards may also play an important role in the development of public and legal policy regarding nanotechnology. Agreed upon definitions, descriptions and metrology for nanomaterials will foster consistent regulation and help minimize the risks of conflicting regulatory regimes that could hamper the success of this global technology. Reaching con- sensus on appropriate procedures to identify and manage any risks associated with nano- technology may also reassure the public, regulators and industry stakeholders that nano- technology can be responsibly commercialized.

Without standards, many of the products people take for granted would not function. The consequences of a failure to adopt international standards are apparent, for example, to international travelers unable to charge their electronic devices without adapters.

II. TheStandardsLandscape

Most countries have at least one national standards body responsible for developing standards. In the U.S., most standards writing is conducted under the auspices of the American National Standards Institute (“ANSI”), though much of the standards development work is done by individual standards development organizations accredited by ANSI, including professional associations (e.g., the American Society of Safety Engineers) and trade associations (e.g., the American Petroleum Institute). Many national standards bodies are directly or indirectly supported by their government, though ANSI is independent of the U.S. government.

The most prominent international standards body is the International Organization for Standardization (“ISO”), along with its companion organization focusing on electronics/electrical tech- nology, the International Electrotechnical Commission (“IEC”). Established in the 1940s to harmo- nize national standards in the interest of fostering international trade, ISO is the “United Nations of standards,” with the membership formed by the national standards body of over 100 nations. The U.S. “vote” in ISO is held by ANSI. ISO has established thousands of international standards, with perhaps the best known being the ISO 9000 series of quality management systems standards, being implemented at over one million facilities, and the ISO 14001 environmental management systems standard, which has been taken up by over a quarter million facilities.

ISO/IEC are not the only international standards organizations. For example, the European Committee for Standardization (formally known as the Comité Européen de Normalisation, or “CEN”) develops standards for the EU region, and ASTM International creates standards for interna- tional application. Further, the standards developed by some national standards bodies (e.g., the British Standards Institute) and even some private organizations (e.g., technical standards devel- oped for the energy sector by API) have gained international traction.

Standards development is typically a multi-stakeholder process, with participants from academia, industry, government and non-governmental organizations. At the ISO level, participants from the Americas, Europe and Asia are typically at the table.

While standards are developed by a collaborative process, consensus does not mean that una- nimity is necessary. For example, ISO defines consensus as “[g]eneral agreement, characterized by the absence of sustained opposition to substantial issues by any important part of the concerned in- terests and by a process that involves seeking to take into account the views of all parties con- cerned and to reconcile any conflicting arguments.”¹ Practically, this means that, to adopt a stand- ard, ISO voting procedures require at least a 2/3 positive vote from the participating standards organizations, with no more than 1/4 of the total votes cast being negative.

Standards development in the nanotechnology field is occurring at all of the levels discussed above. Several national standards bodies have been very active, as have been CEN and ASTM Inter- national. Much of the work of national standards bodies ends up being routed through the ISO pro- cess, and ISO, CEN and the IEC have also been coordinating their efforts on nanotechnology standards.²

III. Standards, Law and Public Policy

Voluntary standards have the potential for direct and indirect effects on legal regimes. For ex- ample, in the United States, the National Technology Transfer Act of 2005 (“NTTA”) directs Federal agencies to participate in standards writing processes and to use applicable consensus standards in regulations unless such use would be contrary to law or impractical.3 Demonstrating the influence of standards on Federal policy, the U.S. Environmental Protection Agency (“EPA”) recently sought comment on draft guidance on the use of voluntary environmental standards by all Federal agen- cies to meet the government’s commitment that 95% of all Federal procurement be sustainable.⁴ The U.S. National Institute for Standards and Technology (“NIST”) has identified more than 20,000 citations of standards incorporated by reference in procurement and regulatory documents since 1997. In 2012, only one federal agency issued its own standard in lieu of a voluntary consensus standard, bringing the total of such “government-unique” standards to only 53 since 1997.⁵

Voluntary standards can influence Federal policy even where such standards are not formally adopted into regulatory requirements. For example, the ISO 14001 environmental management systems (“EMS”) standard is generally recognized by the EPA (and many states) as the preferred EMS approach, and the EPA and other Federal agencies (including the Department of Defense) are implementing this standard. Therefore, there is a strong likelihood that standards on nanotechnology being developed by ISO and other standards bodies will similarly influence Federal policy and regulations.

Consistent with the dictates of the NTTA and OMB Circular A-119, Federal agencies participate in developing voluntary consensus standards, with over 3,000 personnel participating in over 552 standards-development projects in 2012.⁶ Participation in international nanotechnology standards is an explicit element of the Federal government’s multi-agency National Nanotechnology Initiative (“NNI”).⁷ Implementing this strategy, many Federal agencies are participating in the U.S. delegation working on the ISO TC 229 nanotechnology standards, including the Food and Drug Administration, National Institute on Occupational Safety, Department of Energy, Federal Trade Commission, NIST, EPA and the Department of State. This broad level of participation extends to other standards bod- ies as well, such as EPA’s involvement in ASTM International’s nanotechnology standards work. In addition to reflecting the importance of nanotechnology standards to the Federal government, agency participation also provides a less adversarial forum for a multi-stakeholder dialogue on important issues.

The relevance of consensus standards to legal requirements is not limited to the U.S. In the EU, for example, legal requirements frequently include compliance with standards established by CEN. CEN (and through CEN, the national standards bodies of the EU member states) has a formal relationship with ISO, with CEN frequently adopting ISO standards, which in turn can become conditions of compliance with EU law. CEN and ISO have been cooperating closely on nanotechnology work, with CEN representatives regularly attending ISO negotiating sessions (as do representatives of the European Commission and the OECD).

On a broader level, national or regional laws based on consensus international standards are presumed to not create illegal barriers to trade under the Technical Barriers to Trade provisions of the World Trade Organization. Therefore, ISO standards have the potential for use in national law to insulate governmental policy from WTO claims.

Voluntary standards can also be transformed into mandatory commercial contractual require- ments. Contracts frequently establish product quality standards by reference to international or national technical standards. In addition, implementing and obtaining third-party certification to the ISO 9001 quality management systems standard has become a contractual condition of doing business in many economic sectors, including electronics, automotive, aerospace and chemicals. Nanotechnology standards will likely play a similar role in commerce and thus in related contractual issues.

Therefore, though formally denominated as “voluntary” standards, the nanotechnology standards being developed by ISO and other standards bodies will affect national and international law and policy, as well as the contractual relationships in the nanotechnology value chain.

IV. ISO’s Work on Nanotechnology Standards

ISO is developing nanotechnology standards primarily through the work of Technical Committee 229 (“TC 229”).⁸ TC 229 was formed in 2006 and has 34 participating and 13 observing countries, along with several liaison bodies including officials from the European Union. TC 229 has published 36 documents as of November 2013, and over two dozen projects are in progress. TC 229 is composed of four working groups tackling the following subject matter areas: terminology and nomenclature (JWG1); measurement and characterization (JWG2); environmental health and safety (WG3); and material specifications (WG4). There are also task groups on societal and con- sumer issues (TG2) and sustainable development (TG3).

1. Terminology and Nomenclature

The TC 229 terminology and nomenclature working group is developing standards dealing with vocabulary, terminology and nomenclature for nanotechnology. “Terminology” is a list of terms used in a field, akin to key words in a computer search; “vocabulary” adds definitions to the terms; while “nomenclature” refers to the system for naming and classifying an item in a consistent and unique manner. TC 229 has already published a number of standards on these topics, including:

• “Core terms” vocabulary
• Terminology and definitions for “nano-objects,” including nanoparticle, nanofibre, and nanoplate and carbon nano-objects;
• Vocabulary for diagnostics and therapeutics for healthcare
• Vocabulary for nanostructured materials
• Vocabulary for the bio-nano interface
• Vocabulary for nano-object characterization

Additionally, there are a number of projects currently in progress, including:

• Framework for nomenclature models for nano-objects
• Framework for identifying vocabulary development for nanotechnology applications in human healthcare
• Terminology and definitions for nanomanufacturing processes
• Vocabularies for science, technology, and innovation indicators
• Plain language guide for terminology
• Vocabulary – nanolayer, nanocoating, nanofilm and related terms
• Vocabulary – quantum phenomena

While the initial focus of the terminology and nomenclature working group was on “core terms” such as “nanotechnology” and “nanomaterial,” it has also become a forum for negotiations on sector-specific issues, such as the application of nanotechnology in medicine and nanomanufacturing.⁸ The parallel IEC committee is 113. Other ISO Technical Committees are addressing nanotechnology to the extent that it is relevant to their primary scope of work.

These two fields have likely captured additional attention because they have received vast amounts of research and development funds (public and private) around the world.

2. Measurement and Characterization

The ability to innovate and commercialize nanotechnology depends on accurate systems of measurement so that manufacturers know what they are making and customers know what they are buying. Further, measurement and characterization is essential to any reasonable sciencebased regulation of nanotechnology, including in the critical dimensions of environment, health and safety. Public acceptance of nanotechnology may also depend, in part, on credible data regarding the nanomaterial content of consumer products and the potential for the release of and exposure to any such materials.

The experts in the ISO TC 229 measurement and characterization working group have been wrestling with very challenging issues related to metrology and measurement for nanomaterials, including measurement uncertainty, repeatability, and reproducibility. Central to its work is the effort to translate the work of individual laboratories into agreed-upon protocols that can produce accurate, reproducible and verifiable results around the world (including sample preparation, analytical methods, and criteria for reference materials).

The measurement and characterization working group has published several documents, including methods for:

• classifying and categorizing nanomaterials
• endotoxin testing nanomaterials for in vitro systems
• characterizing single and multi-walled carbon nanotube samples (several documents)
• generating metal nanoparticles for inhalation toxicity testing
• characterizing nanoparticles in inhalation exposure chambers for inhalation toxicity testing

The measurement and characterization working group is also developing a quantum dots metrology and a generic measurement methods matrix, and has employed a round robin study group to determine primary particle size distribution using transmission electron microscopy. Areas of future development include graphene transition radiation, concentration and nanoparticle coating metrology, nanocellulose, and food-specific nanometrology.

3. Health, Safety and the Environment

Effectively and transparently addressing environmental, health and safety (“EHS”) issues is widely viewed as essential to the commercial success and public acceptance of nanotechnology. Neither regulators nor the public will accept a “trust us” approach from industry, particularly in this era, where influential stakeholders often presume a new technology is dangerous unless proven safe. While it is difficult, if not impossible, to prove the negative, consensus international standards can be part of the process of commercializing nanotechnology in a responsible and sustainable manner. These standards may also foster more consistent public policy and regulatory approaches to managing the EHS issues related to nanotechnology, a desirable result given that nanotechnology is being developed on a global basis through a widespread value chain.

The TC 229 environmental health and safety working group is developing standards and other documents on the environmental, health and safety aspects of nanotechnology. It has already produced documents on a broad range of issues, including:

• Occupational safety practices related to nanomaterials
• Identifying, evaluating and managing risks associated with the manufacture and use of engineered nanomaterials⁹
• Preparation of material safety data sheets for nanomaterials
• Physicochemical characterization of engineered nanoscale materials for toxicologic assessment

A controversial and vigorously negotiated document on the labeling of consumer products containing nanomaterials is close to publication. There are also a number of projects under development or consideration, including guidance on setting occupational exposure limits (led by NIOSH) and measuring the release of nanomaterials from products. This group also works on measurement projects that arguably overlap with the work of the TC229 measurement and characterization working group, such as methodologies to assess the biodurability of nanomaterials and toxicological and ecotoxicological screening methods for engineered and manufactured nanomaterials.

TC 229 also has two task groups related to EHS issues: TG2, which serves as a platform for taking social and consumer issues into account in the work of TC 229, and TG3, which is addressing sustainability issues related to nanotechnology standards.

4. Materials Specifications

The TC 229 material specifications working group is the newest, addressing specifications for particular types of materials. While this working group is still in its early stages, its efforts on mate rial specifications will likely have direct commercial implications. It has produced one general document providing guidance on how to create material specifications for nanomaterials, and has been working on technical specifications relating to individual powdered materials. Currently, the mate- rial specifications working group is considering developing specifications of dispersions and tex- tiles with liquid-resistance characteristics enabled by nanotechnology.

V. Nanotechnology Standards, Intellectual Property and Patent Pools

Standards that promote clarity in the definition and characterization of nanomaterials should aid in establishing and protecting intellectual property. In addition, the emergence of standards for nanotech based products presents an opportunity for “patent pooling,” cooperative arrangements among a group of patent holders where all of the patents in the pool can be licensed at a single price. The goal of a patent pool is to avoid the high costs associated with obtaining numerous license agreements (such as by cross-licenses) and to avoid widespread patent disputes. The existence of standards is generally a requirement for patent pooling. Indeed, trying to establish a patent pool without standards would almost certainly trigger strict antitrust scrutiny from the Department of Justice,¹⁰ primarily because, without standards, it would be difficult to determine what patents were “essential” for nanotech-based products. 

Patent pools are generally necessary to overcome bottlenecks and potential liabilities that exist when fundamental technologies are owned by multiple parties. With a patent grant, patent holders have the power to exclude others from making, using, selling, or offering to sell the invention claimed by the patent. Hence, during the life of the patent, a patent holder may license its patent in return for royalties, use the patent exclusively, or sell the patent outright. When the patent is in a fragmented industry (which is the case in emerging technologies, such as nanotechnology), the pa- tent holder will typically need to use other patent holders’ patents to develop the product. Because of this impasse, these patent holders may need to come together and “pool” their patents so that all members of the pool have access to the collective intellectual property necessary for technical and commercial progress. Other parties without patents may also license the pool, thereby gaining li- censing agreements for several patents from one source. Patent pools are thus a solution to bottle- necks that arise when multiple parties own critical intellectual property rights, particularly when there is an overlap of intellectual property or a significant concern of possible infringement that the market must address before technology can evolve.¹¹

Patent pooling has been around since before the Civil War. In 1856, for example, the manufac- turers of sewing machines formed a patent pool to prevent them from suing each other out of exist- ence. A more recent example is the formation of the MPEG-2 patent pool, which was created in the mid-1990s when a group of patent holders agreed to pool around 30 “essential” patents to create technological standards for video systems. The MPEG-2 patent pool provides its members access to patents essential to the MPEG-2 video and systems coding standards used in set-top boxes, DVD players and recorders, TVs, personal computers, game machines, cameras, DVD video discs, and other related products. Because of this pool, advances in videos and video systems occurred signif- icantly faster, more efficiently, and more broadly

Generally, patent pooling has the following characteristics:

1. The licensors of the patent pool grant non-exclusive licenses to the pool (typically irrevo- cably).
2. An independent patent expert evaluates which patents are “essential” in the formation of the patent pool. This includes a process for future review of the current patents in the pool, as well as an evaluation of any desired additions to the patent pool.¹²
3. The patent pool is open for all, i.e., the patent pool is licensed to any interested party in the technology in a non-discriminatory manner.
4. The royalty rates are reasonable and distributed based on an agreed upon formula.
5. The patent pool has grant-back provisions limited to essential patents and also requires non-exclusive licenses with fair and reasonable terms. These provisions must be reason- able so as not to discourage further innovation.

Underlying these factors is the definition of the “essential” patents in the patent pool.

Generally, determining the essential patents is based upon the standards of the product to which the patent pool is directed. Thus, without standards, it is unlikely any procedure could be implemented to determine what patents would (or could) be essential to the patent pool. Indeed, without standards, each manufacturer may have needs directed to different sets of patents (e.g., one manufacturer may need to license one set of patents for its product, while a second manufacturer may need to license a completely separate set of patents, even though the products are relatively similar).

Thus, each manufacturer may view the patents it needs as essential but the other patents as non-essential. Accordingly, a patent pool created in the absence of standards would be open to many more patents being viewed by someone as essential, even though others would find those pa- tents completely unnecessary. Under such circumstances, the end result would be a patent pool re- quiring parties (patent holders and third parties) to license patents they do not need to obtain li- censes for the patents they require. This would be problematic because, for example, a patent holder could insert additional unnecessary “essential” patents into the pool, thus requiring a licens- ing fee and a greater percentage of the royalty revenues to be paid. This could be a form of unlaw- ful tying of patents, which would raise antitrust issues and stricter scrutiny by the Department of Justice.

Thus, the emergence of nanotechnology standards, particularly for specific materials, products or processes, facilitates the use of patent pooling. Patent pooling in turn becomes a viable tool to facilitate the sharing of technologies, thereby increasing the speed and efficiency of product devel- opment, as well as permitting a more effective allocation of limited resources to commercialization activities instead of litigation.

VI. Conclusion

Consensus standards have a long history of promoting international trade, establishing com- mercial and contractual criteria for doing business, and creating predictability in the global value chain. Standards, particularly those developed by ISO, have the potential for influencing public pol- icy and law on a national and international basis. Further, the international standards development process itself fosters multi-stakeholder international cooperation and dialogue on technical and policy issues. All of these factors come into play with the standards being developed for nanotech- nology, and should support the responsible and commercially viable development and public ac- ceptance of this promising technology. 

^{1 ISO/IEC Guide 2:2004, Standardization and Related Activities—General Vocabulary.}

^{2 Another major area of international work on nanotechnology is being conducted by the Organisation for Economic Co-Operation and Development (OECD) through its Working Party on Manufactured Nanomaterials. OECD’s current projects include compiling a database of research regarding the environment, health, and safety; developing research strategies; conducting safety testing of a representative set of manu- factured nanomaterials; facilitating cooperation on voluntary schemes and regulatory programs; and facilitat- ing cooperation on risk assessments and exposure measurements. See generally OECD, Science and Technolo- gy Policy: Nanotechnology, http://www.oecd.org/sti/nano/ (last visited Dec. 6, 2013).}

^{3 National Technology Transfer Act of 2005, Pub. L. 104-133, 110 Stat. 775 (1996). Office of Management and Budget Circular A–119, Federal Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities, describes how Federal agencies are to implement the NTTA. See NIST, Circular No. A-119, Revised, http://www.nist.gov/standardsgov/omba119.cfm (last visited Dec. 6, 2013). To provide another recent example, EPA has proposed, in a direct final rule, to allow the use of ASTM International’s E1527–13 ‘‘Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process’’ to satisfy the requirements for conducting “all appropriate inquiries” to provide pur- chasers of contaminated property liability protection under the Comprehensive Environmental Response, Compensation, and Liability Act. 78 Fed. Reg. 49714 (Aug. 15, 2013).}

^{4 Draft Guidelines - Product Environmental Performance Standards and Ecolabels for Voluntary Use in Feder- al Procurement, 78 Fed. Reg. 70938 (Nov. 27, 2013).}

^{5 Nathalie Rioux, Sixteenth Annual Report on Federal Agency Use of Voluntary Consensus Standards and Con- formity Assessment, NIST 1 (2013), available at http://dx.doi.org/10.6028/NIST.IR.7930.}

^6 Id.

^{7 See, e.g., NNI 2014 Strategic Plan, http://www.nano.gov/node/1071 (last visited on Dec. 6, 2013).}

^{8 The parallel IEC committee is 113. Other ISO Technical Committees are addressing nanotechnology to the extent that it is relevant to their primary scope of work.}

^{9 The ISO document (ISO/TR 13121:2011 – Nanotechnologies—Nanomaterial risk evaluation) was derived from the Nano-Risk Framework jointly developed by the Environmental Defense Fund and DuPont.} 

^{10 See generally Michael A. Carrier, Resolving the Patent-Antitrust Paradox Through Tripartite Innovation, 56 VAND. L. REV. 101 (2003), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=380880.}

^{11 A patent pool is not, however, the same as a cross-license. A cross-license is an agreement between two or more parties that allows the parties to that agreement to practice certain intellectual properties of the other parties. A cross-license does not, however, include any specific intent regarding allowing third parties to li- cense the patents being cross-licensed.}

^{12 The independent patent expert (or someone else) is also charged with dividing the royalties obtained by the patent pool in a pre-arranged portion depending upon which, and to what extent, each patent holder has contributed essential patents to the patent pool.}