DOJ will not challenge proposed nanotechnology research

Nick Snow
Washington Correspondent

WASHINGTON, DC, Aug. 27 -- The US Department of Justice will not challenge a proposal by a group of oil and gas producers, oil field service companies, and the University of Texas at Austin to jointly research and develop nanotechnology applications for oil and gas exploration and production.

DOJ announced its position in an Aug. 23 letter from Thomas O. Barnett, assistant attorney general in charge of the department's antitrust division, to attorneys for Advanced Energy Consortium (AEC).

AEC's goal is to develop subsurface nanosensors that can be injected into well bores, DOJ reported in the announcement. It said the sensors' microscopic size should allow them to migrate out of the well bores and into pores of the surrounding geological structure to collect data about hydrocarbon reservoirs' physical characteristics, allowing more-efficient exploitation.

The consortium "appears to be structured so that its proposed business conduct will not create any risks to competition. To the extent that AEC engages in research efforts that would not be undertaken by individual firms, the joint venture may have the procompetitive effect of promoting innovation," Barnett said in his letter.

AEC members are BP America Inc., ConocoPhillips Co., Marathon Oil Co., Occidental Oil & Gas Corp., Shell International E&P Inc., Schlumberger Technology Corp. and Halliburton Energy Services Inc., with UT Austin supplying management, said DOJ. Additional qualifying members may join with approval of two thirds of the members and the university's concurrence, it added.

Consortium's setup
Under the consortium's proposal, industry members will contribute financially to the research, which the university will carry out. UT Austin will own all inventions resulting from that research. Each member company contributing to an invention will receive a royalty-free, nonexclusive, irrevocable, worldwide perpetual license to use the invention for noncommercial, internal purposes. The member also will have the independent right to create, use, and sell any patented inventions, subject to the payment of patenting costs, DOJ said.

It said further that UT Austin plans to license its rights to third parties on a royalty-bearing basis, subject to the approval of AEC members, which shall not be unreasonably held. The consortium itself will not license, produce, or market anything, the federal department said. All members will retain the right to conduct independent research and development and to obtain intellectual property rights resulting from its own research, DOJ said.

Barnett said AEC is not designed to restrict price or output of any product on the basis of information it supplies or to limit competitive research by its member companies. The venture's operation should not adversely affect other nanotechnology research, as its participants retain the right to conduct such research, he indicated.

"Moreover, the existence of a substantial number of other entities engaged in nanotechnology research, both in the United States and abroad, indicates that the formation and operation of the AEC is not likely to reduce the amount or variety of such research," Barnett said.

The consortium's structure makes it unlikely that members will share anticompetitive company information, he continued. The agreement limits information-sharing to information that is "reasonably related and necessary to the accomplishment of the research program. It also requires that access to confidential information be limited to individuals who need it to carry out the research program," he added.

Contact Nick Snow at nsnow@cox.net.

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