We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B) and (d)(3), the Coast Guard finds that good cause exists for not publishing a NPRM and for making this regulation effective less than 30 days after publication in the Federal Register . On November 28, 2003, a contractor for the Army Corps of Engineers began conducting dredging operations, which are potentially hazardous to mariners in New Castle Range Ship Channel and in Anchorage 5 southeast of Pea Patch Island. Publishing an NPRM, allowing for a comment period, and/or waiting 30 days after publication before making this regulation effective is impracticable and contrary to public interest. Immediate action is needed to protect mariners against the potential hazards associated with the dredging operation. Advance notification will be made to affected mariners via marine information broadcasts.

The U.S. Army Corps of Engineers (USACE) conducts dredging operations on the Delaware River in the vicinity of New Castle Range Ship Channel to maintain the 46-foot project depth.

To reduce the hazards associated with dredging the channel, mariners must receive approval from the Captain of the Port Philadelphia before using Anchorage 5 while the operations are ongoing.

Currently in paragraph (b)(2) of 33 CFR 110.157, vessels are allowed to anchor for up to 48 hours in the anchorage grounds listed in § 110.157(a), which includes Anchorage 5. However, because of underwater dredge piping in Anchorage 5 southeast of Pea Patch Island, the Coast Guard is temporarily adding paragraph (b)(12) in 33 CFR 110.157 to protect mariners from encountering hazards within Anchorage 5. All vessels desiring to use Anchorage 5 must obtain permission from the Captain of the Port 24 hours prior to anchoring. The Coast Guard expects that vessels normally permitted to anchor in Anchorage 5 will make arrangements to anchor elsewhere during the dredge operations, as there are 15 other anchorages in the local area.

This temporary rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS) because we expect the economic impact of this rule to be so minimal. There are fifteen other anchorages in the local area for use by mariners. Also, New Castle Range is not near any critical infrastructure or marine terminals and Anchorage 5 is rarely used by the public or by the river pilots.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

Therefore, the Coast Guard certifies under section 605(b) of the regulatory Flexibility Act (5 U.S.C 605(b)) that this rule will not have a significant impact on a substantial number of small entities.

This rule may affect the following entities, some of which may be small entities: the pilots association, the supply boat providers, and the tugboat operators. However, there are fifteen other anchorages in the local area for use by these small businesses. This temporary regulation will not have a significant impact on a substantial number of entities for the following reasons: Anchorage 5 is rarely used, as other anchorages are more convenient to these businesses. In addition, the New Castle Range is not near any critical infrastructure or marine terminals.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking process.

Small businesses may send comments on the actions of federal employees who enforce or otherwise determine compliance with federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-743-3247).

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that this rule does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not affect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not concern an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

We have considered the environmental impact of temporarily restricting the usage of Anchorage 5 and concluded under figure 2-1, paragraph (34)(f), of Commandant Instruction M16475.lD, that this rule is categorically excluded from further environmental documentation.

The American Inventors Protection Act of 1999 (AIPA), enacted on November 29, 1999, contained a number of changes to title 35, United States Code (U.S.C.). See Pub. L. 106-113, 113 Stat. 1501, 1501A-552 through 1501A-591 (1999). The 21st Century Department of Justice Appropriations Authorization Act, enacted on November 2, 2002, contained technical corrections to the AIPA, as well as other technical amendments to title 35, U.S.C. See Pub. L. 107-273, 116 Stat. 1758, 1899-1906 (2002). This final rule revises the rules of practice in title 37 CFR to implement the patent-related provisions of the 21st Century Department of Justice Appropriations Authorization Act (and other related miscellaneous changes).

I. Third Party Requester Appeal Rights to United States Court of Appeals for the Federal Circuit: Optional inter partes reexamination was newly enacted in the AIPA. The AIPA provided that the patent owner in an inter partes reexamination could appeal a decision of the BPAI (adverse to patent owner) to the Federal Circuit. The third party requester of the inter partes reexamination, however, was specifically precluded from appealing a decision of the BPAI to the Federal Circuit. See 35 U.S.C. 134(c) as amended by the AIPA, 113 Stat. at 1501A-571. In addition, the AIPA did not permit the third party requester to be a party to ( i.e. , participate in) an appeal taken by the patent owner to the Federal Circuit.

The Office published a final rule in December of 2000 revising the rules of practice in patent cases to implement the optional inter partes reexamination provisions of the AIPA. See Rules to Implement Optional Inter Partes Reexamination Proceedings, 65 FR 76755 (Dec. 7, 2000), 1242 Off. Gaz. Pat. Office 12 (Jan. 2, 2001) (final rule). Section 1.983 is promulgated to codify in the rules of practice the patent owner's statutory right, under 35 U.S.C. 141, to appeal to the Federal Circuit in inter partes reexamination proceedings. Because the third-party requester of an inter partes reexamination was previously expressly precluded under 35 U.S.C. 134(c) (as amended by the AIPA) from appealing the decision of the BPAI to the Federal Circuit, the rules of practice did not previously provide for such an appeal. Likewise, because there was no authority in the statute for the third party requester to participate in an appeal taken by the patent owner to the Federal Circuit, no such provision of the rules was provided. Finally, because the third-party requester of an inter partes reexamination was precluded under 35 U.S.C. 134(c) (as amended by the AIPA) from appealing the decision of the BPAI to the Federal Circuit, no provision in the rules concerning patent owner participation in a third-party requester appeal was provided.

Section 13106 of Public Law 107-273 now grants the inter partes reexamination third party requester the right to appeal an adverse decision of the BPAI to the Federal Circuit. See 35 U.S.C. 315(b)(1). It further authorizes the third party requester to be a party to any appeal taken by the patent owner to the Federal Circuit. See 35 U.S.C. 315(b)(2). Moreover, section 13106 of Public Law 107-273 also permits the patent owner to be a party to an appeal taken by the third party requester to the Federal Circuit. This is so because 35 U.S.C. 315(a)(2) as enacted by the AIPA states that the patent owner involved in an inter partes reexamination proceeding “may be a party to any appeal taken by a third-party requester under subsection (b).” Therefore, the Office is revising § 1.983 to implement this statutory revision, and making conforming or ancillary amendments to §§ 1.301, 1.304, and 1.979.

II. Technical amendments to the inter partes reexamination provisions of the American Inventors Protection Act of 1999: Section 13202 of Public Law 107-273 made technical corrections to statutory provisions directed to inter partes and ex parte reexamination. The Office is revising §§ 1.191, 1.303, and 1.913 to address the inter partes and ex parte reexamination technical corrections.

III. Other miscellaneous changes made to reexamination proceedings: Additionally, the Office is revising the inter partes reexamination rules to avoid the loss of appeal rights during appeals to the BPAI due to certain inadvertent errors on the part of the patent owner or third party requester. Further, the Office is revising the inter partes and ex parte reexamination appeal rules generally for clarity. These revisions are made in §§ 1.302, 1.959, 1.965, 1.967, 1.971, and 1.977.

IV. Patent and Trademark Efficiency Act Amendments: Section 13203 of Public Law 107-273 is directed to efficiency amendments to the statute. The Office is revising § 1.13(b) to eliminate its requirement for an attestation for certified copies of documents, similar to the elimination of the attestation requirement in 35 U.S.C. 153 as provided in section 13203(c) of Public Law 107-273.

V. Technical amendment related to eighteen-month publication of applications and provisional rights: Sections 13204 and 13205 of Public Law 107-273 made technical corrections to provisions directed to the eighteen-month publication of patent applications and provisional rights, and the issuance of patents. The Office is revising §§ 1.14, 1.78, 1.417, and 1.495 to implement the statutory revisions made by these sections of Public Law 107-273.

Section 1.1: Section 1.1(c) is amended to provide separate mail stops for ex parte reexamination proceedings and inter partes reexamination proceedings. Section 1.1(c) is amended to clarify that the mail stop for ex parte reexamination proceedings can only be used for the original request papers for ex parte reexamination. The new mail stop for inter partes reexamination includes both original request papers and all subsequent correspondence filed in the Office (other than correspondence to the Office of the General Counsel pursuant to § 1.1(a)(3) and § 1.302(c)). Correspondence relating to inter partes reexamination proceedings is best handled at one central location where Office personnel have specific expertise in inter partes reexamination because of the unique nature of inter partes reexamination proceedings.

Section 1.13: Section 1.13(b) is amended to delete “attested by an officer of the United States Patent and Trademark Office authorized by the Director.” Section 13203(c) of Public Law 107-273 eliminated the requirement in 35 U.S.C. 153 that the signature of the Director for issued patents be attested to by an officer of the Office. To achieve further efficiencies, certified copies of documents will no longer include an attestation for the Director's signature. Accordingly, § 1.13(b) is amended to eliminate the requirement for an attestation for certified copies of documents.

Section 1.14: Section 1.14(g)(2) is amended to correct the reference to “35 U.S.C. 154(d)(4)”.

Section 1.78: Section 1.78(a)(3) is amended by deleting the phrase “in a nonprovisional application.” Section 4508 of the AIPA as originally enacted did not make the eighteen-month publication amendments to 35 U.S.C. 119 and 120 applicable to an international application unless and until it enters the national stage under 35 U.S.C. 371. See Public Law 106-113, 113 Stat. at 1501A-566 through 1501A-567. Section 13205 of Public Law 107-273 amended section 4508 of the AIPA to make the eighteen-month publication amendments to 35 U.S.C. 119 and 120 also applicable during the international stage of an international application. With regard to international applications, § 1.78(a)(2)(ii) requires that the reference required by § 1.78(a)(2)(i) be submitted: (1) during the pendency of the later-filed application; and (2) within the later of (A) four months from the date on which the national stage commenced under 35 U.S.C. 371(b) or (f) in the later-filed international application, or (B) sixteen months from the filing date of the prior-filed application. Since an abandoned international application is not a nonprovisional application, the petition procedure set forth in former § 1.78(a)(3) was not applicable to a delayed priority claim in an abandoned international application. Section 1.78(a)(3) as amended now makes the petition procedure set forth in § 1.78(a)(3) applicable to submitting a delayed priority claim in an abandoned international application including an international application that has not entered the national stage under 35 U.S.C. 371. Therefore, when filing a “bypass” continuation application under 35 U.S.C. 111(a) that claims the benefit of the international application with a filing date on or after November 29, 2000, that could have but did not claim the benefit of an earlier U.S. nonprovisional application or international application designating the United States and the benefit claim is to be added, a petition under § 1.78(a)(3) will be required in the abandoned international application. A “bypass” continuation application is an application for patent filed under 35 U.S.C. 111(a) that claims the benefit of the filing date of an earlier international application designating the United States that did not enter the national stage under 35 U.S.C. 371. See H.R. Rep. No. 107-685, at 222 (2002). The Office previously indicated that to amend a later-filed abandoned international application to add a claim to the benefit of a prior-filed nonprovisional application, or a prior-filed international application designating the United States, an applicant need only file a petition under § 1.182 to amend an abandoned application (the later-filed international application) with the claim to the benefit of a prior-filed application. See Requirements for Claiming the Benefit of Prior-Filed Applications Under Eighteen-Month Publication of Patent Applications, 66 FR 67087, 67092 (Dec. 28, 2001), 1254 Off. Gaz. Pat. Office 121, 125 (Jan. 22, 2002) (final rule) (response to comment 6). In view of this change to § 1.78(a), applicants should no longer rely upon that advice.

Section 1.191: Section 1.191(a) is amended to delete each appearance of the phrase “for a patent that issued from an original application filed in the United States.” Section 13202(d) of Public Law 107-273 provides a technical correction for the effective date set forth in the AIPA for appeals to the BPAI as follows:

The effective date language in section 4608 of the AIPA limited the applicability of the conforming amendments to 35 U.S.C. 134 to a reexamination of a patent that issued from an original application which was filed on or after November 29, 1999. Thus, the conforming amendments to 35 U.S.C. 134 applied only to those ex parte reexamination proceedings filed under § 1.510 for patents that issued from an original application which was filed on or after November 29, 1999. Public Law 107-273 revised the applicability of the conforming amendments to 35 U.S.C. 134 such that the conforming amendments are applicable to a reexamination of a patent where the request for ex parte reexamination was filed on or after November 29, 1999. Accordingly, § 1.191 is amended to track the statutory revision of the effective date.

Section 1.191(a) is also subdivided into paragraphs (a)(1) (for applications and ex parte reexamination proceedings filed before November 29, 1999), (a)(2) (for ex parte reexamination proceedings filed on or after November 29, 1999), and (a)(3) (for inter partes reexamination proceedings).

Section 1.197: Section 1.197(c) is amended to provide that an appeal to the Federal Circuit is terminated when the mandate is issued by the Court, rather than when the mandate is received by the Office. This change to § 1.197(c) is for consistency with a 1998 amendment to Rule 41 of the Federal Rules of Appellate Procedure. The commentary on the addition of subdivision (c) to Rule 41 of the Federal Rules of Appellate Procedure indicates that this provision is intended to make clear that the Court's mandate is effective upon issuance, and that its effectiveness is not delayed until receipt of the mandate by the trial court or agency.

Section 1.301: Section 1.301 (last sentence) is amended by inserting the phrase “appeals by patent owners and third party requesters in” before “ inter partes reexamination proceedings.” The revision makes it clear that appeals by third party requesters of inter partes reexamination proceedings are controlled by § 1.983.

Section 1.302: Section 1.302 is amended by adding new paragraphs (c) and (d), and redesignating existing paragraph (c) as paragraph (e). New paragraph (c) points out that when an appeal is taken to the Federal Circuit in an ex parte reexamination proceeding, the appellant must serve notice as provided in § 1.550(f). New paragraph (d) points out that when an appeal is taken to the Federal Circuit in an inter partes reexamination proceeding, the appellant must serve notice as provided in § 1.903. These revisions are intended to focus parties on the unique service requirements in ex parte and inter partes reexamination proceedings, when appealing to the Federal Circuit.

Section 1.303: Section 1.303 is amended by revising paragraphs (a), (b) and (d) to delete the appearance of “for a patent that issued from an original application filed in the United States” in each paragraph. This revision is made for the reasons stated in the discussion of § 1.191.

Section 1.304: Section 1.304 is amended by revising paragraph (a)(1) to add after the second sentence, the following sentence: “If a request for rehearing or reconsideration of the decision is filed within the time period provided under § 1.979(a), the time for filing an appeal shall expire two months after action on the last such request.” In addition, reference to § 1.979(a) in the second sentence is deleted. Further, § 1.304 is amended to include all of the current provisions relating to interferences in § 1.304(i), and to include a new § 1.304(ii) which provides that in inter partes reexaminations the time for filing a cross-appeal expires: (1) fourteen days after service of the notice of appeal to the Federal Circuit; or (2) two months after the date of decision of the BPAI, whichever is later.

Section 1.304(a)(1) now provides that an inter partes third party requester can appeal to the Federal Circuit and can participate in the patent owner's appeal to the Federal Circuit. The time for filing an appeal to the Federal Circuit will expire two months after “action on the last such request made by the parties,” as opposed to the sentence which precedes the added sentence where time for filing an appeal to the Federal Circuit is stated to expire two months after “action on the request.” Thus, the potential for rehearing or reconsideration by more than one party is now factored into the time for appeal to the Federal Circuit. Since a party may not challenge a BPAI decision in an inter partes reexamination in a civil action under 35 U.S.C. 145, § 1.304(a)(1) provides that “the time for filing an appeal shall expire * * *” and not “the time for filing an appeal or commencing a civil action shall expire * * *” (which appears in the sentence which precedes the added sentence).

The revision to § 1.304(a)(1) also conforms to the change to § 1.983, by addressing the potential for cross appeal to the Federal Circuit in an inter partes reexamination (in addition to that in an interference).

Section 1.417: As discussed with regard to the revision to § 1.14, the statute has been revised to clarify that a translation of the international publication, as opposed to the international application, must be filed in order for a patent owner to obtain the provisional right of a reasonable royalty under 35 U.S.C. 154(d). Accordingly, § 1.417 is amended: (1) To delete “the international publication or”; (2) to add “of the publication” after “English language translation”; and (3) to delete “, unless it is being submitted pursuant to § 1.495,”.

Section 1.495: Section 1.495(c) is amended to change “if it was originally filed in another language (35 U.S.C. 371(c)(2)” to “if the international application was originally filed in another language and if any English language translation of the publication of the international application previously submitted under 35 U.S.C. 154(d) (§ 1.417) is not also a translation of the international application as filed (35 U.S.C. 371(c)(2)).” The purpose of this revision is to clarify that if an English language translation of the publication has already been filed and the publication was also a translation of the international application, a second translation is not required. Instead, the translation required by 35 U.S.C. 154(d) will satisfy the requirement for a translation under 35 U.S.C. 371(c)(2). In § 1.495(g), the phrase “, except for a copy of the international publication or translation of the international application that is identified as provided in § 1.417,” is deleted because the phrase is unnecessary, since it merely repeats a provision of § 1.417.

Section 1.913: Section 1.913 is amended to add the phrase “other than the patent owner or its privies” after “any person,” because section 13202 of Pub. L. 107-273 now clarifies that only the third party requester may file a request for inter partes reexamination; a patent owner may not file a request for inter partes reexamination. This is consistent with the initial position taken by the Office during the implementation of optional inter partes reexamination. See Rules to Implement Optional Inter partes Reexamination Proceedings, 65 FR 18153, 18178 (Apr. 6, 2000), 1234 Off. Gaz. Pat. Office 93, 116 (May 23, 2000) (proposed rule).

Section 1.959: Section 1.959 is amended by adding a new paragraph (f), which provides a non-extendable one-month period for correcting an inadvertent failure to comply with any requirement of § 1.959, when a notice of appeal or cross appeal is submitted. The revision of § 1.959 will permit a remedy of inadvertent defects in a notice of appeal or cross appeal.

Section 1.959 relates to appeals and cross appeals to the BPAI in inter partes reexamination proceedings. The requirements for acceptance by the Office of a notice of appeal and cross appeal to the BPAI are: (1) Payment of the appeal fee set forth in § 1.17(b) (§§ 1.959(a) and (b)); (2) identification of the appealed claim(s) (§ 1.959(c)); and (3) signature by the patent owner, the third party requester, or their duly authorized attorney or agent (§ 1.959(c)).

Section 1.959 is amended to provide the third party requester (as well as the patent owner) one opportunity to supply, within one month, the missing fee or missing portion of the fee that was inadvertently not supplied. Section 1.957(a) provides that if “the third party requester files an untimely or inappropriate comment [or] notice of appeal * * * in an inter partes reexamination, the paper will be refused consideration.” Thus, if the third party requester inadvertently fails to pay the appeal fee, or makes a payment which is deficient as to the amount specified in § 1.17(b), the requester's notice of appeal (or cross appeal) will not be considered, and requester's appeal will otherwise be barred. The failure to submit the complete appeal fee is not a “ bona fide attempt to respond and to advance the prosecution” where “some requirement has been inadvertently omitted” under § 1.957(d) (with requester then given a chance to rectify the inadvertency), since § 1.957(d) applies only to a patent owner and not to a third party requester. In addition, the third party requester does not have the opportunity to “revive” the appeal, as does the patent owner under § 1.137 (further, an extension of the time for filing the notice of appeal (or cross appeal) is not provided for by § 1.956, even if the requester becomes aware of the inadvertency on the last day to remedy it). Thus, the third party requester would be barred from appealing the case when a sufficient payment of the fee is inadvertently not made, in the absence of the present revision to § 1.959. Yet, estoppel attaches to the third party requester which precludes further resolution of the issues that the requester wishes to appeal. Under the statute, requester is estopped from later asserting in any civil action, or in a subsequent inter partes reexamination, the invalidity/unpatentability of any claim finally determined to be valid and patentable on any ground the third party requester raised or could have raised in the inter partes reexamination. Requester is further estopped from later challenging in a civil action any fact determined in the inter partes reexamination. Accordingly, a requester's loss of appeal rights because of an inadvertent payment would be an unduly harsh and extreme measure. Thus, the Office is revising § 1.959 to provide the third party requester one opportunity to supply, within one month, the missing fee or missing portion of the fee. As to the requirements that the notice of appeal (or cross appeal) identify the appealed claim(s) and be signed by the appellant, it may be that an opportunity to remedy the inadvertent failure to comply with same is not precluded by § 1.957(a). The refusal of consideration mandated by that section is directed only to “untimely or inappropriate” notices of appeal (and cross appeal). If so, the failure to sign or identify as required might not render the notice untimely, and the paper might be an “appropriate” paper, i.e. , the type of paper that is entitled to entry in an inter partes reexamination, but is not a complete paper. However, to cover the possibility that failure to comply with the signature or identification of claims requirements of § 1.959(c) could permanently bar the requester's appeal, new § 1.959(f) has been phrased to explicitly encompass these potential defects in a notice of appeal (or cross appeal).

Sections 1.965 and 1.967: Section 1.965(d) is amended by inserting “paragraphs (a) and (c)” in place of “paragraph (c).” Section 1.967(c) is amended by inserting “paragraphs (a) and (b)” in place of “paragraph (b).”

Under former § 1.965, an inadvertent failure to comply with a requirement of § 1.965(a) permanently barred the requester's appeal from going forward. Under former § 1.967, an inadvertent failure to comply with a § 1.967(a) requirement also barred the requester's participation via respondent brief in the patent owner's appeal. Sections 1.965 and 1.967 are revised to provide the appellant and respondent, respectively, with a non-extendable one-month period for correcting an inadvertent failure to comply with a requirement of §§ 1.965(a) and 1.967(a), respectively. This revision of §§ 1.965 and 1.967 is for reasons analogous to those set forth above for the revision of § 1.959. Again, the loss of requester's appeal rights because of a § 1.965(a) inadvertency, and the loss of requester's participation rights because of a § 1.967(a) inadvertency, are considered to be unduly harsh and extreme measures.

It is noted that § 1.965(b) states: “A party's appeal shall stand dismissed upon failure of that party to file an appellant's brief, accompanied by the requisite fee, within the time allowed.” Under § 1.965(d), as it has now been revised, the phrase ‘within the time allowed” in § 1.965(b) includes the filing of an “appellant's brief, accompanied by the requisite fee” within the one-month period for correcting an inadvertency (in failure to comply with a requirement of § 1.965(a) and/or (c)) set forth in § 1.965(d).

Section 1.971: Section 1.971 is amended by designating the sole current paragraph of the section as paragraph (a), and adding new paragraph (b). New paragraph (b) provides a non-extendable one-month period for correcting an inadvertent failure to comply with any requirement of paragraph (a) of § 1.971, when a rebuttal brief is submitted. Existing §§ 1.965(d) and 1.967(c) provide relief for certain non-compliance inadvertencies in appellant and respondent briefs, respectively. However, prior to the present amendment of § 1.971, there was no relief of this nature provided for rebuttal briefs. Section 1.971 is amended (in a new paragraph (b)) to provide similar relief for inadvertencies in the rebuttal brief. In addition, the phrase “[n]o new ground of rejection can be proposed by a third party requester” is being changed to “[n]o new ground of rejection may be proposed by a third party requester” to more correctly state the limitation.

Section 1.977: Section 1.977(g) is amended by inserting the phrase “, when the patent owner is responding under paragraph (b)(1) of this section” at the end of the first sentence of the paragraph, and by adding the following new sentence as the second sentence: “The time period set forth in paragraph (b) of this section may not be extended when the patent owner is responding under paragraph (b)(2) of this section.”

Prior § 1.977(g) provided that “[t]he time period set forth in paragraph (b) of this section is subject to the extension of time provisions of § 1.956.” Thus, an extension of time could be obtained for the filing of a patent owner amendment or showing of facts under § 1.977(b)(1), or the filing of a patent owner request for rehearing of the decision of the BPAI made under § 1.977(b)(2). However, § 1.979(g) stated, and continues to state, that the times for requesting rehearing under § 1.979(a) may not be extended, and a patent owner request for rehearing of the decision of the BPAI made under § 1.977(b)(2) is included as § 1.979(a)(2). Thus, the time for filing a patent owner request for rehearing under § 1.977(b)(2) could not be extended. The present amendment to § 1.977(g) makes it consistent with the language of § 1.979(g). Note further that this revision is consistent with the policy for a streamlined appeal procedure, which is reflected, for example, in § 1.959 (no extension of the time for filing the notice of appeal or cross appeal), § 1.963 (no extension of the time for filing appellant, respondent, and rebuttal briefs), and § 1.979(g) (no extension of the time for filing any rehearing request). Thus, it is appropriate that an extension of time cannot be obtained for the filing of a patent owner request for rehearing of the decision of the BPAI made under § 1.977(b)(2), while an extension can be obtained for the filing of a patent owner amendment or showing of facts presented under § 1.977(b)(1), which may be considered a reopening of the examination process, as opposed to the appeal process.

Section 1.979: Section 1.979 is amended by revising its paragraphs (e) and (f) to replace “patent owner” (and its possessive) with “parties to an appeal to the Board of Patent Appeals and Interferences,” “party,” “any party,” or “party's,” as applicable. Section 1.979 is also amended by deleting the first and second sentences of paragraph (f). The third sentence of § 1.979(f) is amended to add “to the Board of Patent Appeals and Interferences” after “An appeal” to provide additional clarity. Section 1.979 was formerly drafted to address the situation where an appeal to the Federal Circuit is possible only for the patent owner. The first revision modifies the language of § 1.979 to make it applicable to all parties to the inter partes reexamination proceeding, i.e. , the patent owner and any inter partes reexamination third party requester, who are the parties to the appeal to the BPAI. The second revision deletes the provision for termination of the third party requester's appeal, which was (before the enactment of Public Law 107-273) under criteria different than that for the patent owner (since a third party requester could not appeal to the courts under the statute prior to Public Law 107-273). The first revision to the text of § 1.979(f) makes the criteria for termination the same for all parties to the appeal. Finally, § 1.979(f) is amended to provide that an appeal to the Federal Circuit is terminated when the mandate is issued by the Federal Circuit, which is consistent with a 1998 amendment to Rule 41 of the Federal Rules of Appellate Procedure. See the discussion of § 1.197 above.

Undesignated center heading immediately preceding § 1.983: The undesignated center heading immediately preceding § 1.983 is revised by deleting “PATENT OWNER” before “APPEAL TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT.” The undesignated center heading immediately preceding § 1.983 was formerly drafted to address the situation where appeal to the Federal Circuit was possible only by the patent owner. This revision modifies the language to make it applicable to all parties to the inter partes reexamination proceeding who are the parties to the appeal to the BPAI.

Section 1.983: Section 13106 of Public Law 107-273 grants the inter partes reexamination third party requester the right to appeal an adverse decision of the BPAI to the Federal Circuit. 35 U.S.C. 315(b)(1). It further authorizes the third party requester to be a party to any appeal taken by the patent owner to the Federal Circuit. See 35 U.S.C. 315(b)(1). Also, as pointed out above, section 13106 of Public Law 107-273 implicitly permits the patent owner to be a party to the newly provided appeal taken by the third party requester to the Federal Circuit. Section 1.983 is amended to track this newly enacted legislation by revising its heading, dividing the existing text into paragraphs (a) and (b), revising the text of newly designated paragraphs (a) and (b), and adding new paragraphs (c) through (f).

The heading of § 1.983 is amended by changing “Patent owner appeal” to “Appeal.”

Section 1.983(a) is amended to permit the patent owner and any third party requester who is a party to an appeal to the BPAI to: (1) appeal the BPAI's decision to the Federal Circuit; and (2) be a party to any appeal to the Federal Circuit taken from the BPAI's decision.

Section 1.983(b) is amended to clarify that service of the notice of appeal or cross appeal must be made on every other party to the reexamination proceeding as required in § 1.903. The explicit statement of requirement for service on other parties also provides antecedent for the fourteen-day period recited in paragraph (e) of § 1.983 that follows.

Section 1.983 is amended to add paragraphs (c) and (d) to provide for a cross appeal to the Federal Circuit within fourteen days of service of an opposing party's notice of appeal to the Federal Circuit. This is analogous to the cross appeal (within fourteen days of service of the notice of appeal) provided for in § 1.304(a)(1) for interferences. The interferences model is used, because an interference is the only other inter partes proceeding appealed to the Court from the decision of the BPAI. It is noted that if the two-month time period from the BPAI's decision will expire after the fourteen-day period set for a cross appeal, then the later-expiring two-month period will control. Thus, where a first party files an appeal to the court (the Federal Circuit) fourteen days after the BPAI's decision, an opposing party need not file a cross appeal fifteen days later (twenty-nine days after the BPAI's decision), but rather has the remainder of the two-month period to do so.

A new paragraph (e) is added to § 1.983, to set forth the action a party must take in order to participate in an appellant's appeal (including cross appeal). Participation in the appellant's appeal is directed to providing argument supporting the decision of the BPAI. Such participation is in contrast to the cross appeal which is provided for in paragraphs (c) and (d) of § 1.983, where a party challenges a decision of the BPAI adverse to that party. New paragraph (f): Section 13106(d) of Public Law 107-273 provides the effective date for the revision to the statute made in section 13106 as follows: “[t]he amendments made by this Section apply with respect to any reexamination proceeding commenced on or after the date of enactment of this Act.”

Accordingly, § 1.983 is amended to add a new paragraph (f) stating: “[n]otwithstanding any provision of the rules, in any reexamination proceeding commenced prior to November 2, 2002, the third party requester is precluded from appealing and cross appealing any decision of the BPAI to the Federal Circuit, and the third party requester is precluded from participating in any appeal taken by the patent owner to the Court.”

Response to comments: The Office published a notice proposing changes to the rules of practice to implement the patent-related provisions in the intellectual property title of the 21st Century Department of Justice Appropriations Authorization Act. See Changes to Implement the 2002 Inter Partes Reexamination and other Technical Amendments to the Patent Statute, 68 FR 22343 (Apr. 28, 2003), 1270 Off. Gaz. Pat. Office 106 (May 20, 2003) (proposed rule). The Office received six written comments (from intellectual property organizations, patent practitioners, and the general public) in response to this notice. While the comments were for the most part favorable to the changes proposed, a number of issues were raised. The comments which raise issues, and the Office's responses to these comments, now follow:

Comment 1: The comments of all three intellectual property associations which provided comments focused on the revision that was proposed for §§ 1.949 and 1.953, to issue a Right of Appeal Notice (under § 1.953) after all claims are found patentable, without first issuing an Action Closing Prosecution (under § 1.949). The comments noted that the revision was proposed in an effort to streamline inter partes reexamination prosecution, based on the assumption that a patent owner “presumably” would not file any further comments after receiving a notice that all claims are patentable. The comments then pointed out that while it is possible that this assumption should cover most situations, the proposed revision would eliminate an important safeguard for the patent owner in circumstances where the assumption is not correct. An example was given where a patent owner would wish to respond after all claims are allowed, but would be precluded from doing so under the proposal. A patent owner receiving notice that all claims are found patentable might very well decide to propose an amendment at that point, if the patent owner disagrees with the examiner's statement of reasons for allowance or statement of claim interpretation. If, as proposed, a Right of Appeal Notice would be the paper that first informs a patent owner that all claims have been found patentable, then the patent owner would be precluded from submitting such an amendment in the proceeding. One comment asserted that in the instance of a first action indication of patentability of all claims and simultaneous issuance of a Right of Appeal Notice, the proposed revision could deny the patent owner its statutory right to propose amendments during reexamination pursuant to 35 U.S.C. 314(a), since amendments to claims are expressly barred once the Right of Appeal Notice is issued.

Based on the above, the comments urge that the Office retain the current practice of issuing an Action Closing Prosecution in all cases where the request for inter partes reexamination is granted, even after all claims in the proceeding have been found patentable.

Response: In view of the comments, the proposed revision of §§ 1.949 and 1.953 will not be adopted. The public response expresses a view that the need to always provide the patent owner with an opportunity to comment after all claims are found patentable outweighs the pendency reduction benefit that would result from bypassing the issuance of an Action Closing Prosecution and directly issuing a Right of Appeal Notice. In view of the preference stated in the comments that the patent owner should always be given an opportunity to comment after all claims are found patentable (by issuing an Action Closing Prosecution under § 1.949, after which patent owner can comment under § 1.951(a)), the proposal to revise §§ 1.949 and 1.953 has been withdrawn.

One of the comments suggested that the Office's objective of streamlining prosecution (after a determination of patentability of all claims) could be achieved by providing patent owner with an opportunity to expressly waive its right to submit comments/amendments under current § 1.951(a) upon notice that all claims have been found patentable. It is noted, however, that such a right already exists, because the patent owner is free to file, after an Action Closing Prosecution under § 1.949, a paper stating that no comments/amendments will be filed under current § 1.951(a). Thus, a new provision is not needed to implement the suggestion.

As a final point, it is noted that (contrary to a statement made in one of the comments) under the current practice, an Action Closing Prosecution will not be issued in all cases where a request for inter partes reexamination is granted. Where all claims are rejected in a first Office action (for example) and the patent owner fails to respond, a Notice of Intent to Issue a Reexamination Certificate will issue canceling all the patent claims, and there is no need for an Action Closing Prosecution. Also, if the ordered reexamination is vacated, where appropriate, prior to the issuance of an Action Closing Prosecution, there will be no Action Closing Prosecution issued in the proceeding.

Comment 2: One comment points out that the effective date language in section 4608 of the AIPA changes to 35 U.S.C. 134 and 35 U.S.C. 145 was to be “phased in only years after enactment,” i.e. , only for an ex parte reexamination that was based upon an original application filed on or after November 29, 1999. This would have taken many years to become effective, thus providing a gradual transition. Instead, the comment notes, Public Law 107-273 accelerates the effective date provision to apply to any reexamination filed on or after November 29, 1999 ( i.e. , nearly three years ago). The comment urges that this change has accelerated the existence of a situation where an examiner can “suppress a case from appellate review ‘forever’ simply by refraining from making a rejection final.” The comment requests relief from this situation.

Response: If a patent owner believes that a reexamination proceeding is being “suppressed” from appellate review by the examiner's refraining from making a rejection final, the patent owner may file a petition under § 1.181(a) requesting that the most recent Office action by the examiner be designated as a final rejection so as to permit an appeal. Such a petition should be accompanied by a showing as to why the most recent Office action should have been designated as a final rejection. If such a petition is denied by the Technology Center Director, the patent owner could seek further review by way of a petition under § 1.181(a)(3) requesting higher level review of the decision of the Technology Center Director. Since a petition under § 1.181 does not operate to stay the reexamination proceeding (§ 1.181(f)), it is advisable that the petition under § 1.181(a) be accompanied by a notice of appeal and appeal fee set forth in § 1.17(b) (which will be refunded as unnecessary if the petition is denied) and a request for an extension of time under § 1.550(c) to respond to the most recent Office action (since an appeal is not a proper response to a non-final Office action and the period for response to the Office action continues to run if the petition is denied). However, it must be remembered that in no case can the period for response be extended so as to expire later than six months from the date of the most recent Office action.

Comment 3: Two comments have suggested that the Office permit inter partes reexamination of patents issuing from original applications filed in the United States prior to November 29, 1999. One of the comments argues that the Office's statement that the effective date language in section 4608 of the AIPA limited the applicability of inter partes reexamination (and conforming amendments) to patents issuing from original applications filed in the United States on or after November 29, 1999, is “bad law, bad policy for the patent system and bad policy for the Patent and Trademark Office.” The commenter then presents a constitutional argument to support this. The same comment further argues that the inter partes reexamination effective date provision of the AIPA has been repealed by implication, based upon the legislative expansion of third party requester appeal rights provided by Public Law 107-273. The comment further urges that, if its proposal is not adopted, then third party requester participation in ex parte reexamination which would be analogous to that provided by statute for inter partes reexamination should be permitted by rule for patents issuing from an original application filed in the United States prior to November 29, 1999.

Response: Section 4608 (effective date) of the AIPA provides: “this subtitle and the amendments made by this subtitle shall take effect on the date of the enactment of this Act [November 29, 1999] and shall apply to any patent that issues from an original application filed in the United States on or after that date [November 29, 1999].” See Pub. L. 106-113, 113 Stat. at 1501A-572. The plain language of the statute is clear and is not ambiguous. The enacted inter partes provisions of the AIPA are clearly stated (in Section 4608) to apply “to any patent that issues from an original application filed in the United States on or after” the date of enactment (November 29, 1999).

To the extent that it is argued that this provision is unwise and should not be adhered to, and that Art. I, § 8, cl. 8 of the U.S. Constitution (Congress shall have the power * * * “[t]o promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries”) provides a basis for the Office to ignore the limitations in the AIPA on the applicability of inter partes reexamination, it is noted that the Federal courts have generally held that the power of Congress to legislate on the subject of patents is plenary by the terms of the Constitution. See e.g., McClurg v. Kingsland, 42 U.S. (1 How.) 202, 206 (1843); see also Owen v. Heimann, 12 F.2d 173, 174 (D.C. Cir.), cert. denied, 271 U.S. 685 (1926) (“Congress has full power to prescribe to whom and upon what terms and conditions a patent shall issue”); Kling v. Haring, 11 F.2d 202, 204-05 (D.C. Cir.), cert. denied, 271 U.S. 671 (1926) (same). In any event, administrative agencies do not have the authority to declare unconstitutional the laws they are charged with administering. See, e.g., Oestereich v. Selective Service Board, 393 U.S. 233, 242 (1968); McGowan v. Marshall, 604 F.2d 885, 892 (5th Cir. 1979); and Buckeye Industries, Inc. v. Secretary of Labor, 587 F.2d 231 (5th Cir. 1979).

As to the argument that the inter partes reexamination effective date provision of the AIPA has been repealed by implication, based upon the legislative expansion of third party requester appeal rights provided by Public Law 107-273, Congress is well versed in the mechanism for changing an effective date of prior legislation (as it did for the eighteen-month publication provisions of the AIPA), and Congress did not do so for the inter partes reexamination effective date provisions of the AIPA. It is noted that a proposed revision to the inter partes reexamination eligibility effective date was explicitly placed before Congress by way of Section 3(a) of H.R. 2231 introduced on June 19, 2001, and referred to the House committee. See H.R. 2231, 107th Cong., 1st Sess. (2001). Thus, an explicit provision to revise the inter partes reexamination effective date was before Congress; yet, it was not carried forward into Public Law 107-273.

As to the suggestion that third party requester participation rights (analogous to those provided by statute for inter partes reexamination) should be provided by rule for ex parte for patents issuing from an original application filed in the United States prior to November 29, 1999, the statute does not provide authority for a third party requester of a reexamination proceeding requested under 35 U.S.C. 302 to file a paper directed to the issues during the examination of the reexamination proceeding. The statute and its intent are clear that the reexamination proceeding under 35 U.S.C. 302 must be ex parte and third party requester participation is barred by statute. See Syntex (U.S.A.) Inc. v. U.S. Patent and Trademark Office, 882 F.2d 1570, 1573, 11 USPQ2d 1866, 1868-69 (Fed. Cir. 1989) (third parties do not participate before the Office). While the third party requester is permitted by statute pursuant to 35 U.S.C. 304 to file a “reply” prior to the examination stage if the patent owner files a statement under 35 U.S.C. 304, that is the only paper directed to the merits of the proceeding authorized to a requester that files an ex parte reexamination.

Comment 4: One comment points out that a reexamination requester may “piggyback” a second or subsequent reexamination onto an ongoing reexamination proceeding with the possibility of merged proceedings and thus thwart a final rejection being made as the second action in the ongoing reexamination, with a first Office action then being issued for the merged proceeding. The commenter further notes that a requester could “hamstring a reexamination proceeding to keep a case bottled up in the examining corps forever” by filing multiple requests for reexamination based on the same patent.

Response: Section 2283 of the Manual of Patent Examining Procedure states that:

Thus, the examiner is directed to, where possible, prepare an Office action at the most advanced point possible for the ongoing (first) proceeding, which in the commenter's scenario is the final rejection stage. If, however, a new issue ( e.g. , new art, combining the old art a new way, or new evidence) that precludes a final rejection is raised by the later request, a final rejection would not be issued. In that instance, public policy dictates that the substance of the later request be considered and applied in order that only valid patent claims result from the reexamination proceeding, i.e. , to prevent the public from being barred from using claimed subject matter for which protection is not warranted. It is noted that even in this situation, the patent owner would be free to file a petition under § 1.181 requesting that the Office action be designated as a final rejection (see response to comment 2).

A patent owner faced with the filing of multiple reexamination requests on a patent may obtain relief if it can be shown that the newly filed reexamination request was filed: (1) by the same real party in interest who filed a previous request (rather than another party who wishes to approach the issue in its own way), and (2) without providing a new issue in the form of new art or viewing art previously applied in the reexamination proceeding in a new light. If a bona fide new issue is, however, raised by the later request, public policy dictates that the substance of the later request be considered and applied in order to resolve the new issue such that only valid patent claims result from the reexamination proceeding.

Comment 5: One comment raises a concern that there is no express requirement in § 1.953 for an examiner to set forth grounds for not making any third party proposed rejections (as is required in existing § 1.949) upon a determination of patentability of all claims.

Response: Initially, it is noted that § 1.953 (c) states “The Right of Appeal Notice shall be a final action, which comprises a final rejection setting forth each ground of rejection and/or final decision favorable to patentability including each determination not to make a proposed rejection, an identification of the status of each claim, and the reasons for decisions favorable to patentability and/or the grounds of rejection for each claim”. Thus, the commenter's concern is in fact addressed in the rule.

It is also noted that in any Office action (in an inter partes reexamination) where an examiner declines to adopt a rejection proposed by a third party requester, the examiner must explicitly identify the proposed rejection, state that the proposed rejection is not adopted, and set forth grounds for not adopting the proposed rejection. This will be covered in a new chapter of the MPEP which will be directed to inter partes reexamination. It is noted, however, that if the third party requester then fails to address and contest the refusal to adopt the proposed rejection at the first opportunity to do so, such will be taken as an acquiescence to the examiner's position. In such a case, the proposed ground of rejection will be withdrawn from further consideration in the proceeding, will not be addressed in future Office actions, and will not serve as a basis for appeal in any subsequent appeal that may be taken by the requester in the proceeding.

Comment 6: Two comments suggested that an inconsistency was raised by the statement in the notice of proposed rule making that an Action Closing Prosecution (or Right of Appeal Notice) can be issued “even though the Office action being issued is the first action on the merits.” It is argued that if a request for reexamination does not present prior art printed publications and patents that provide a prima facie case of unpatentability (or come “exceedingly close” to it), then the Office should not have issued an order for reexamination in the first place, but rather should have denied the request (and thus the first Office action stage should not be reached). Stated another way, it is argued that finding all the claims patentable over the art at the first action stage should be inconsistent with ordering reexamination based on such art.

Response: A finding that all of the claims are patentable over the art at the first action stage is not inconsistent with the prior order of reexamination based on such art. See MPEP 2240. The initial decision on a request for reexamination is based upon whether or not a “substantial new question of patentability” is raised by the art (the patents and/or printed publications). See id. Where a finding is made that a substantial new question of patentability has been raised, the examiner has only determined that there is a “substantial likelihood” that a reasonable examiner would consider the art of record important in deciding whether or not the claims are patentable. See MPEP 2242. After reexamination has been ordered, it is then determined, in the examination stage of the proceeding, whether or not the claims are patentable over the art. See MPEP 2240. At the time when the first Office action is issued, if one or more claims are not patentable over the art, the claims will be rejected based on that art. If claims are found patentable over the art, the action will state that finding (and supporting reasons). A decision that all the claims are patentable at this point does not negate the initial finding that a substantial new question of patentability was raised by the art, because reexamination will be ordered as long as a reasonable examiner would consider the art of record important in deciding whether or not the claims are patentable; there is no requirement that the claims be prima facie obvious over the art. The Federal Circuit has specifically indicated that:

It is also noted that the third party requester is not entitled (under 35 U.S.C. 315(b)) to appeal a finding of claim patentability in situations in which the Director does not issue a determination pursuant to 35 U.S.C. 312 and 313 that a substantial new question of patentability has been presented. See 35 U.S.C. 312(c) (a determination made under 35 U.S.C. 312(a) by the Director on the request for reexamination is “final and non-appealable”). Refusing to order reexamination where a substantial new question has been found to be present, but all the claims are found to be patentable over the art, would deprive the requester of the right to appeal the finding of claim patentability (under 35 U.S.C. 315(b)).

Comment 7: One comment suggests that the policy of issuing an Action Closing Prosecution (or Right of Appeal Notice) as the first action on the merits where all claims are patentable may be “contrary to the letter of the law.” The comment notes that according to 35 U.S.C. 314(a), “reexamination shall be conducted according to the procedures established for initial examination under the provisions of sections 132 and 133.” These sections (35 U.S.C. 132 and 133) are directed to prosecution before the examiner and not proceedings on appeal to the BPAI. The comment urges that 35 U.S.C. 132(a) indicates that “each interested party shall get two bites at the apple. By analogy to initial examination, 35 U.S.C. 132(a) should be construed, in the context of inter partes reexamination, to loosely read: “Whenever, on reexamination, any claim in a patent is confirmed to be patentable, the Director shall notify the Third Party Requester thereof, stating the reasons for such confirmation, together with such information and references as may be useful in judging of the propriety of continuing the Reexamination of the patent; and if after receiving such notice, the Third Party Requester persists, the previously-confirmed patent claim shall be reassessed.” Thus, the commenter believes that the statute provides the third party requester with a right to address the finding of claims patentable during the examination stage of the inter partes reexamination proceeding.

Response: 35 U.S.C. 132(a) reads in part: “Whenever, on examination, any claim for a patent is rejected, or any objection or requirement made, the Director shall notify the applicant thereof, stating the reasons for such rejection, or objection or requirement, together with such information and references as may be useful in judging of the propriety of continuing the prosecution of his application; and if after receiving such notice, the applicant persists in his claim for a patent, with or without amendment, the application shall be reexamined”. 35 U.S.C. 132(a) provides for an applicant's opportunity to participate in an application, and by virtue of the incorporation of 35 U.S.C. 132(a) into 35 U.S.C. 314(a), it also provides for a patent owner's opportunity to participate during the examination stage of the inter partes reexamination proceeding. 35 U.S.C. 132(a), by virtue of its incorporation into 35 U.S.C. 314(a), does not confer any participation rights on a third party requester.

Further, 35 U.S.C. 314(b)(2) states: “Each time that the patent owner files a response to an action on the merits from the Patent and Trademark Office, the third-party requester shall have one opportunity to file written comments addressing issues raised by the action of the Office or the patent owner's response thereto, if those written comments are received by the Office within 30 days after the date of service of the patent owner's response”. The third party requester may file a paper during the examination stage of the inter partes reexamination proceeding if, and only if, the patent owner files a response to an Office action. Thus, the third party requester is precluded by statute from participation in the examination stage of the inter partes reexamination proceeding if the patent owner fails to respond to all Office actions issued. Thus, contrary to the commenter's argument, the third party requester certainly is not ensured of the opportunity to participate during the examination stage of the inter partes reexamination proceeding. It is only the requester's right to appeal any rejection proposed and not adopted that is ensured by the statute.

As a final point, issuance of an Action Closing Prosecution as the first action on the merits (where all claims are patentable) is entirely consistent with the statute, since it provides the requester with the rights provided by statute to comment if and only if the patent owner responds to the Action Closing Prosecution.

In conclusion, the inter partes third party requester of reexamination is permitted by statute only to comment pursuant to 35 U.S.C. 314(b)(2) if the patent owner responds to an Office action, and to appeal and participate in appeals pursuant to 35 U.S.C. 315(b). No further participation in an inter partes reexamination proceeding is authorized by 35 U.S.C. chapter 31.

Administrative Procedure Act: The changes in this notice conform the patent-related rules of practice in 37 CFR to the changes to title 35 U.S.C. contained in Public Law 107-273. Therefore, these changes involve interpretive rules or rules of agency practice and procedure under 5 U.S.C. 553(b)(A). See Bachow Communications Inc. v. FCC, 237 F.3d 683, 690 (D.C. Cir. 2001); Paralyzed Veterans of America v. West 138 F.3d 1434, 1436 (Fed. Cir. 1998); and Komjathy v. National Transportation Safety Board, 832 F.2d 1294, 1296-97 (D.C. Cir. 1987). Therefore, prior notice and opportunity for public comment are not required pursuant to 5 U.S.C. 553(b) or (c) (or any other law).

Regulatory Flexibility Act: As prior notice and an opportunity for public comment are not required pursuant to 5 U.S.C. 553 (or any other law), an initial regulatory flexibility analysis under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) is not required. See 5 U.S.C. 603.

Executive Order 13132: This rule making does not contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132 (Aug. 4, 1999).

Executive Order 12866: This rule making has been determined to be not significant for purposes of Executive Order 12866 (Sept. 30, 1993).

Paperwork Reduction Act: This notice involves information collection requirements which are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). The collections of information involved in this notice have been reviewed and previously approved by OMB under OMB control numbers: 0651-0021, 0651-0031, 0651-0032, and 0651-0033. The United States Patent and Trademark Office is not resubmitting any information collection to OMB for its review and approval, because the changes in this notice do not affect the information collection requirements associated with the information collection under these OMB control numbers.

The title, description and respondent description of each of the information collections are shown below with an estimate of each of the annual reporting burdens. Included in each estimate is the time for reviewing instructions, gathering and maintaining the data needed, and completing and reviewing the collection of information. The changes in this notice conform the patent-related rules of practice in 37 CFR to the changes to title 35 U.S.C. contained in Public Law 107-273.

OMB Number: 0651-0021.

Title: Patent Cooperation Treaty.

Form Numbers: PCT/RO/101, PCT/RO/134, PCT/RO/144, PTO-1382, PCT/IPEA/401, PCT/IB/328, PCT/SB/61/PCT, PCT/SB/64/PCT.

Type of Review: Approved through December of 2003.

Affected Public: Individuals or Households, Business or Other For-Profit Institutions, Not-for-Profit Institutions, Farms, Federal Government and State, Local and Tribal Governments.

Estimated Number of Respondents: 331,407.

Estimated Time Per Response: Between 15 minutes and 4 hours.

Estimated Total Annual Burden Hours: 401,202.

Needs and Uses: The information collected is required by the Patent Cooperation Treaty (PCT). The general purpose of the PCT is to simplify the filing of patent applications on the same invention in different countries. It provides for a centralized filing procedure and a standardized application format.

OMB Number: 0651-0031.

Title: Patent Processing (Updating).

Form Numbers: PTO/SB/08A, PTO/SB/08B, PTO/SB/21-27, PTO/SB/30-32, PTO/SB/35-37, PTO/SB/42-43, PTO/SB/61-64, PTO/SB/67-68, PTO/SB/91-92, PTO/SB/96-97, PTO-2053-A/B, PTO-2054-A/B, PTO-2055-A/B, PTOL-413A, eIDS, EFS form.

Type of Review: Approved through July of 2006.

Affected Public: Individuals or Households, Business or Other For-Profit Institutions, Not-for-Profit Institutions, Farms, Federal Government and State, Local and Tribal Governments.

Estimated Number of Respondents: 2,208,339.

Estimated Time Per Response: 1 minute 48 seconds to 8 hours.

Estimated Total Annual Burden Hours: 830,629 hours.

Needs and Uses: During the processing of an application for a patent, the applicant/agent may be required or desire to submit additional information to the Office concerning the examination of a specific application. The specific information required or which may be submitted includes: Information Disclosure Statements; Terminal Disclaimers; Petitions to Revive; Express Abandonments; Appeal Notices; Petitions for Access; Powers to Inspect; Certificates of Mailing or Transmission; Statements under § 3.73(b); Amendments, Petitions and their Transmittal Letters; and Deposit Account Order Forms.

OMB Number: 0651-0032.

Title: Initial Patent Application.

Form Number: PTO/SB/01-07, PTO/SB/13PCT, PTO/SB/16-19, PTO/SB/29 and 29A, PTO/SB/101-110.

Type of Review: Approved through July of 2006.

Affected Public: Individuals or Households, Business or Other For-Profit Institutions, Not-For-Profit Institutions, Farms, Federal Government, and State, Local, or Tribal Governments.

Estimated Number of Respondents: 454,287.

Estimated Time Per Response: 22 minutes to 10 hours and 45 minutes.

Estimated Total Annual Burden Hours: 4,171,568 hours.

Needs and Uses: The purpose of this information collection is to permit the Office to determine whether an application meets the criteria set forth in the patent statute and regulations. The standard Fee Transmittal form, New Utility Patent Application Transmittal form, New Design Patent Application Transmittal form, New Plant Patent Application Transmittal form, Declaration, Provisional Application Cover Sheet, and Plant Patent Application Declaration will assist applicants in complying with the requirements of the patent statute and regulations, and will further assist the Office in processing and examination of the application.

OMB Number: 0651-0033.

Title: Post Allowance and Refiling.

Form Numbers: PTO/SB/44, PTO/SB/50-51, PTO/SB/51S, PTO/SB/52-53, PTO/SB/55-58, PTOL-85B.

Type of Review: Approved through January of 2004.

Affected Public: Individuals or Households, Business or Other For-Profit Institutions, Not-For-Profit Institutions, Farms, State, Local and Tribal Governments, and Federal Government.

Estimated Number of Respondents: 205,480.

Estimated Time Per Response: 1.8 minutes to 2 hours.

Estimated Total Annual Burden Hours: 63,640 hours.

Needs and Uses: This collection of information is required to administer the patent laws pursuant to Title 35, U.S.C., concerning the issuance of patents and related actions including correcting errors in printed patents, refiling of patent applications, requesting reexamination of a patent, and requesting a reissue patent to correct an error in a patent. The affected public includes any individual or institution whose application for a patent has been allowed or who takes action as covered by the applicable rules.

Comments are invited on: (1) Whether the collection of information is necessary for proper performance of the functions of the agency; (2) the accuracy of the agency's estimate of the burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information to respondents.

Interested persons are requested to send comments regarding these information collections, including suggestions for reducing this burden, to Robert J. Spar, Director, Office of Patent Legal Administration, United States Patent and Trademark Office, P.O. Box 1450, Alexandria, Virginia, 22313-1450, or to the Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street, NW., Washington, DC 20503, Attention: Desk Officer for the Patent and Trademark Office.

Notwithstanding any other provision of law, no person is required to respond to nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB control number.

Entities potentially regulated by this action are nine States in the Western United States (Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Utah and Wyoming) and Indian tribes within that same geographic area. This final action, and an earlier action taken by EPA in 1999, provides these States and tribes with an optional program to protect visibility in federally protected scenic areas. The portion of the program addressed by today's final rule is a program for tracking of mobile source emissions under the 1999 rule.

The contents of today's preamble are listed in the following outline.

Section 169(A) of the Clean Air Act (CAA) establishes a national goal for protecting visibility in federally-protected scenic areas. These “Class I” areas include national parks and wilderness areas. The national visibility goal is to remedy existing impairment and prevent future impairment in these Class I areas, consistent with the requirements of sections 169A and 169B of the CAA.

Regional haze is a type of visibility impairment caused by air pollutants emitted by numerous sources across a broad region. The EPA uses the term regional haze to distinguish this type of visibility problem from those which are more local in nature. In 1999, EPA issued a regional haze rule requiring States to develop implementation plans that will make “reasonable progress” toward the national visibility goal (64 FR 35714, July 1, 1999). The first State plans for regional haze are due between 2003 and 2008. The regional haze rule provisions appear at 40 CFR 51.308 and 40 CFR 51.309.

The regional haze rule at 40 CFR 51.308 sets forth the requirements for State implementation plans (SIPs) under the regional haze program. The rule requires State plans to include visibility progress goals for each Class I area, as well as emissions reductions strategies and other measures needed to meet these goals. The rule also provides an optional approach, described in 40 CFR 51.309, that may be followed by the nine western States (Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Utah, and Wyoming) that comprise the transport region analyzed by the Grand Canyon Visibility Transport Commission (GCVTC) during the 1990's. This optional approach is also available to eligible Indian Tribes within this geographic region. The regulatory provisions at 40 CFR 51.309 are based on the final report issued by the GCVTC in 1996, 1 which included a number of recommended emissions reductions strategies designed to improve visibility in the 16 Class I areas on the Colorado Plateau.

In developing the regional haze rule, EPA received a number of comments on the proposed rule encouraging the Agency to recognize explicitly the work of the GCVTC. In addition, in June 1998, Governor Leavitt of Utah provided comments to EPA on behalf of the Western Governors Association (WGA), further emphasizing the commitment of western States to implementing the GCVTC recommendations. The WGA's comments also suggested the translation of the GCVTC's recommendations into specific regulatory language. The EPA issued a Notice of Availability during the fall of 1998 requesting further comment on the WGA's proposal and a draft set of regulatory language based upon the WGA's recommendations. Based on the comments received on this Federal Register action, EPA developed the provisions set forth in 40 CFR 51.309 that allow the nine Transport Region States and eligible tribes within that geographic area to implement many of the GCVTC recommendations within the framework of the national regional haze rule.

The provisions in 40 CFR 51.309 comprise a comprehensive long-term strategy for addressing sources that contribute to visibility impairment within this geographic region. The strategy addresses the time period between the year 2003, when the implementation plans are due, 2 and the year 2018. The provisions address emissions from stationary sources, mobile sources, and area sources such as emissions from fires and windblown dust.

The GCVTC determined that mobile source emissions need to be an essential part of a strategy to reduce haze on the Colorado Plateau. Therefore, one element of the GCVTC's strategy, as reflected in 40 CFR 51.309(d)(5), was to address mobile sources emissions. Section 309 also requires States to establish a mobile source emissions budget for each area that significantly contributes to visibility impairment in any of the 16 Class I areas covered by this section of the regulations. At the time the GCVTC made its recommendations (in 1996), mobile source emissions were projected to be lowest in 2005, and to subsequently rise over the course of the first regional haze planning period ( i.e. , until 2018). Accordingly, section 309 required mobile source emissions budgets to be set using the lowest projected level as a planning objective and performance indicator for each area.

Since the GCVTC made its recommendations, new developments have caused mobile source emissions projections to change significantly. Over the past few years, we have promulgated a series of new emissions standards for several different engine types, as well as new standards for diesel fuel content. 3 As a result of these new standards, the WRAP, using EPA's latest models, 4 now projects a significant decline in mobile source emissions throughout the region during the 2003-2018 time period covered by the section 309 plans, particularly from on-road mobile sources. Rather than emissions being lowest in 2005, and subsequently rising, mobile source emissions for all pollutants except sulfur dioxide (SO 2 ) are expected to decline continuously over the course of the first regional haze planning period.

The projected trends for mobile source emissions of SO 2 differ from those of other pollutants. Emissions reductions from pollutants such as nitrogen oxides (NO X ) and particulate matter (PM) are dependent on technological changes to the onroad fleet and to nonroad engines which are implemented gradually. In contrast, SO 2 emissions reductions are immediately realized when the sulfur content of the fuel changes, because emissions from both new and existing engines immediately drop sharply. We have already published stringent fuel sulfur limits for onroad engines and have proposed stringent fuel sulfur limits for nonroad engines. 5 These Federal fuel sulfur regulations, fully implemented, would together result in a substantial reduction in SO 2 emissions over the 2003—2018 planning period.

These revisions would change 40 CFR 51.309(d)(5)(i) to eliminate the requirement for setting mobile source emissions budgets using the lowest projected level as a planning objective and performance indicator for each area. Instead, the new 40 CFR 51.309(d)(5)(i) would substitute, as the new planning objective and performance indicator, a requirement for statewide inventories to show a continuous decline in emissions of each pollutant of concern over the planning period. Should mobile source emissions not decline as expected, States would have to revise their SIPs to include any feasible additional strategies. This new requirement conforms to trends that are currently projected.

In addition, in light of the continuous decline in mobile source emissions expected over the entire region, these revisions also eliminate the unneeded requirement in 40 CFR 51.309(d)(5)(ii) and (iii) to determine whether mobile sources emissions constitute a significant contributor to haze in a given State. The revisions retain the requirements for statewide inventories and performance demonstrations.

Finally, the revisions contain a backstop provision, requested by the WRAP, to address any potential concerns regarding SO 2 from nonroad sources in the event that recently proposed Federal standards, referenced above, are not finalized. The backstop provision, contained in the new 40 CFR 51.309(d)(5)(i)(B), requires States to assess the need for any long-term strategies to address SO 2 from nonroad mobile sources by no later than December 31, 2008. In determining whether to revise their SIPs to address SO 2 from mobile sources, States may consider the emissions reductions achieved—or anticipated—by any Federal standards that are in place addressing fuel sulfur content for nonroad engines.

We received one comment letter on the proposed rule, from the Center for Energy and Economic Development (CEED). We also received three comments at the public hearing—one from CEED, reiterating comments provided in its letter, one from the WRAP in support of this rule, and one from the Colorado Mining Association.

The CEED commented (1) that EPA should fix other flaws in section 309 before making this change; (2) that making this change now may constrain state authority in making “reasonable progress” determinations; (3) that it is not clear that all WRAP states and tribes have authorized the request for this change; and (4) that this action circumvents the recent statutory process enacted by Arizona for determining which regional haze path to implement.

In regard to comment (1), EPA believes that we would be remiss in awaiting the outcome of CEED's current lawsuit before bringing the requirements of section 309 in line with the most recent data on mobile sources emission trends. Section 309 is currently in effect, and, as explained earlier in this preamble, this change is needed by States and tribes who must submit section 309 SIPs to EPA by the December 31, 2003, deadline. Without this change, those section 309 SIPs would have to contain extra work by States to determine significance, work that the current data shows is unnecessary.

In regard to comment (2), EPA does not agree that making this change would constrain state authority in making “reasonable progress” determinations. We do not agree with CEED that greater public input is needed from western States on this point; we believe by specifically requesting this change, the WRAP has made it quite clear that western States (and tribes) need it. We believe that CEED's claim in comment (3), that it is not “clear that all WRAP States and tribes authorized such a request”, is disingenuous at best. Representatives of the WRAP have assured us that the WRAP discussed this request at length. The WRAP requested this change, in writing, on behalf of its member States and tribes, and we have not heard of any member State or tribe objecting in any way.

In regard to comment (4), we do not believe that removing an unneeded requirement from a voluntary program circumvents the Arizona legislature in any way.

The Colorado Mining Association asserted that we should make available for public reivew the assumptions and model inputs that support our projections. In regard to this comment, as noted in footnote 4 of the proposed rule, the WRAP used EPA's MOBILE6 and MOBILE6.2 models for on-highway vehicles and the NONROAD model for nonroad vehicles. The assumptions and model inputs for these models have undergone numerous public workshops and reviews, as described in detail on our Web site, http://www.epa.gov/otaq/models/mobile6/m6wkshop.htm.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), the Agency must determine whether the regulatory action is “significant” and therefore subject to Office of Management and Budget (OMB) review and the requirements of the Executive Order. The Order defines “significant regulatory action” as one that is likely to result in a rule that may:

Pursuant to the terms of Executive Order 12866, we have determined that this direct final rule is not a significant regulatory action.

This action does not add any new requirements involving the collection of information as defined by the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The OMB has approved the information collection requirements contained in the final Regional Haze regulations (64 FR 35714, July 1, 1999) and has assigned OMB control number 2060-0421 (EPA ICR No. 1813.04). A copy of this ICR may be obtained from Susan Auby, Collection Strategies Division, U.S. Environmental Protection Agency (2822T), 1200 Pennsylvania Ave., NW., Washington, DC 20460 or by calling (202) 566-1672.

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et seq. , generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For purposes of assessing the impacts of today's rulemaking on small entities, small entity is defined as: (1) A small business that is a small industrial entity as defined in the U.S. Small Business Administration (SBA) size standards (as discussed on the SBA Web site at http://www.sba.gov/size/indextableofsize.html ); (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's direct final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the proposed rule on small entities.” 5 U.S.C. sections 603 and 604. Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule.

This rule eliminates certain comprehensive requirements to address mobile source emissions that EPA now considers to be unnecessary. Specifically, as discussed above, this rule eliminates the requirements in 51.309(5)(ii) and (iii) to determine whether mobile sources emissions constitute a significant contributor to haze in a given State, and for those States with areas that meet this significance criterion, to establish mobile source emissions budgets. The rule requires emissions reductions consistent with the downward trend in mobile source emission inventories that is currently projected, based on regulations that have already been promulgated. We have therefore concluded that today's rule will relieve regulatory burden for all small entities.

Title II of the Unfunded Mandates Reform Act of 1995 (Public Law 104-4) (UMRA), establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, 2 U.S.C. 1532, EPA generally must prepare a written statement, including a cost-benefit analysis, for any proposed or final rule that “includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more * * * in any one year.” A “Federal mandate” is defined under section 421(6), 2 U.S.C. 658(6), to include a “Federal intergovernmental mandate” and a “Federal private sector mandate.” A “Federal intergovernmental mandate,” in turn, is defined to include a regulation that “would impose an enforceable duty upon State, local, or tribal governments,” section 421(5)(A)(i), 2 U.S.C. 658(5)(A)(i), except for, among other things, a duty that is “a condition of Federal assistance,” section 421(5)(A)(i)(I). A “Federal private sector mandate” includes a regulation that “would impose an enforceable duty upon the private sector,” with certain exceptions, section 421(7)(A), 2 U.S.C. 658(7)(A).

Before promulgating an EPA rule for which a written statement is needed under section 202 of the UMRA, section 205, 2 U.S.C. 1535, of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule.

Because the entire program under 40 CFR 51.309, including today's amendments, is an option that each of the States may choose to exercise, these revisions to section 309 do not establish any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments. The program is not required and, thus is clearly not a “mandate.” Moreover, as explained above, today's rule eliminates certain requirements and will overall reduce any regulatory burdens. Accordingly, this rule will not result in expenditures to State, local, and tribal governments, in the aggregate, or the private sector, of $100 million or more in any given year. Thus EPA is not obligated, under section 203 of UMRA, to develop a small government agency plan.

We believe that this rulemaking is not subject to the requirements of UMRA. For regional haze SIPs overall, it is questionable whether a requirement to submit a SIP revision constitutes a Federal mandate, as discussed in the preamble to the regional haze rule (64 FR 35761, July 1, 1999). However, today's direct final rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, or tribal governments or the private sector. In addition, the program contained in 40 CFR 51.309, including today's revisions, is an optional program.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

Under section 6(b) of Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing a regulation. Under section 6(c) of Executive Order 13132, EPA may not issue a regulation that has federalism implications and that preempts State law, unless EPA consults with State and local officials early in the process of developing the regulation.

This rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. As described above, this rule contains minor revisions to section 309 of the regional haze rule which will reduce any regulatory burden on the States. In addition, section 309 is an optional program for States. The minor revisions to section 309, accordingly, do not directly impose significant new requirements on State and local governments. Moreover, even if today's revisions did have federalism implications, these revisions would not impose substantial direct compliance costs on State or local governments, nor would they preempt State law. Thus, Executive Order 13132 does not apply to this rule.

Consistent with EPA policy, we nonetheless did consult with representatives of State and local governments in developing this rule. This rule directly implements specific recommendations from the WRAP, which includes representatives from all the affected States.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 6, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.”

This rule eliminates certain requirements and will overall reduce any regulatory burden on the tribes. Moreover, the section 309 program is an optional program for tribes within the same geographic region as the WRAP states. Accordingly, this rule will not have tribal implications. In addition, this rule directly implements specific recommendations from the WRAP, which includes representatives of tribal governments. Thus, although the rule does not have tribal implications, representatives of Tribal governments have had the opportunity to provide input into development of the recommendations forming its basis.

Executive Order 13045: “Protection of Children from Environmental Health and Safety Risks” (62 FR 19885, April 23, 1997) applies to any rule that: (1) is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Order has the potential to influence the regulation. This rule is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety risks.

This rule is not subject to Executive Order 13211, “Actions that Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g. , materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

This action does not involve technical standards. Therefore, EPA did not consider the use of any voluntary consensus standards.

Executive Order 12898 requires that each Federal agency make achieving environmental justice part of its mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minorities and low-income populations. The requirements of Executive Order 12898 have been previously addressed to the extent practicable in the Regulatory Impact Analysis (RIA) for the regional haze rule (cited above), particularly in chapters 2 and 9 of the RIA. Today's direct final rule makes no changes that would have a disproportionately high and adverse human health or environmental effect on minorities and low-income populations.

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the SBREFA, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A “major rule” cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(a).

Statutory authority for today's direct final rule comes from sections 169(a) and 169(b) of the CAA (42 U.S.C. 7545(c) and (k)). These sections require EPA to issue regulations that will require States to revise their SIPs to ensure that reasonable progress is made toward the national visibility goals specified in section 169(A).

The President's Management Agenda (PMA) for fiscal year 2002 identified five Governmentwide goals to improve Federal management and deliver results. This resulted in the establishment of a Governmentwide task force known as QuickSilver to address performance gaps in existing Government systems as they relate to E-Government, and to improve internal efficiency and effectiveness throughout the Federal Government. Accordingly, in support of the PMA, the Government is procuring the eTravel Service (eTS) from Government contract suppliers to replace agencies' current Travel Management Systems (TMS) (see section 301-1.1 of the FTR for the definition of “agency”). This final rule amends the FTR by requiring, with specified exceptions, the use of the common Governmentwide, end-to-end eTS. This regulation does not apply to the Department of Defense or the Government of the District of Columbia.

This final rule continues to be written in the “plain language” style of regulation writing as a continuation of the General Services Administration's (GSA) effort to make the FTR easier to understand and use. Questions are in the first person, and answers are in the second person. GSA uses a “we” and “you” question when referring to an agency, and an “I” and “you” question when referring to the employee. However, the rules stated in either section apply to both the employee and agency.

A proposed rule with request for comments was published in the Federal Register on June 30, 2003 (68 FR 38661). During the 30-day comment period, GSA received feedback from ten Federal agencies and one individual. GSA has carefully reviewed each comment, and based on those comments, this final rule modifies the proposed rule. An explanation of changes and/or further responses to questions received are discussed as follows.

One agency asked for a definition of “in-house system” and suggested that GSA rearrange the wording within the definition of “travel management service” to make it clear that an “in-house system” is not a part of a commercial method of arranging travel. GSA addresses this comment by stating that an “in-house (travel) system” is where some or all of an agency's travel processes ( e.g. , travel reservation and ticketing services) are provided by the agency's employees. GSA has also rearranged the wording within the definition of “travel management service” to distinguish between an agency's “in-house system” and an agency's commercial method of arranging travel.

Scope of eTravel Service. This section defines the scope of the eTS, as well as the required date of agencies' full deployment. One Federal agency pointed out that the policy requirements in this section, which stated that this regulation applies to all Executive branch agencies, conflicted with the statement in the Summary of the proposed rule, which stated that the eTS will require all agencies subject to the Federal Travel Regulation (FTR) to begin migration to the eTS as soon as possible. GSA appreciates and agrees with this comment. As a result, GSA has revised the section to clarify that this rule applies to all agencies as defined in section 301-1.1, with the exception of the Department of Defense and the Government of the District of Columbia.

One agency stated that because agencies may phase in the eTS at different times for its various organizational components, the requirement should be that an employee must use the eTS when the agency makes the service available to the employee. GSA agrees with this comment. The regulation's intent is that employees will begin using eTS when the service becomes available within an agency, unless an exception applies under section 301-50.4, 301-73.102 or 301-73.104, and the agency will make it available no later than September 30, 2006. As a result, section 301-50.3 has been modified.

The section heading in the proposed rule, “Who in my agency has the authority to waive the required use of a Travel Management Service or the eTravel Service,” has been revised to read, “May I be granted an exception to the required use of the eTravel Service?”

One agency stated that sections 301-50.5 and 301-50.6 should be reversed. GSA is not persuaded that this change is needed, and the order of these sections remains unchanged.

Limitations On The Use of Travel Management Services. This section imposes certain requirements and limitations on arranging for travel services. One agency stated that GSA should clarify that there are other regulations, contract provisions, etc., with which both travelers and TMS providers must comply when making common carrier, lodging, or car rental reservations. GSA has considered this change and has added a sentence to this section to acknowledge that there may be additional limits on the travel arrangements that a traveler makes.

This section describes the process for filing a travel claim. One agency questioned whether this section applies to infrequent Government travelers, Government employees traveling for an agency/bureau other than the employing agency, and invitational travelers. GSA's answer is yes. The use of eTS applies to all travelers subject to the FTR, with the exception of employees of the Department of Defense and the Government of the District of Columbia. However, an agency head or his/her designee may grant individual case-by-case exceptions to the use of eTS in accordance with sections 301-73.102 and 301-73.104 of this regulation. In addition, if a traveler is unable to use a portion of the eTS, ( e.g. , reservation services), the traveler is not exempt from the requirement to use the remaining eTS components.

This section defines what an agency must do under the Federal travel management program. One agency asked how would an agency support eTS in an “efficient” and “cost effective” manner and determine that support is “efficient” and “cost effective” other than through normal contracting procedures. GSA's response is that an agency can determine if its current TMS is cost effective by comparing its current service costs and benefits to the cost of services and benefits provided by the eTS contract. This will be accomplished through a competitive task order evaluation among the eTS contractors.

This section sets the dates by which agencies must implement the eTS. eTS implementation is when an agency places a task order with an eTS vendor. It was unclear to one agency what GSA meant by the parenthetical “if applicable” in the note to this section. GSA agrees that the words “if applicable” may have been confusing to the reader and has therefore removed the use of these words throughout this regulation.

Two agencies requested more clarification in regard to the statement “Agency-wide use of the eTS accommodating FedTrip through September 30, 2004, and agency-contracted TMC support * * *”. GSA provides the following clarification: The Department of Transportation's Governmentwide contract with FedTrip will expire on September 30, 2004. Until that time, the eTS will accommodate agencies' use of FedTrip. Upon expiration of the FedTrip contract, the eTS-provided on-line booking engine(s) (OBEs) will become the designated OBE(s) for all agencies as defined in section 301-1.1 of this regulation, except for the Government of the District of Columbia and the Department of Defense. In addition, the note to this section has been revised to clarify that agencies may continue to use non-eTS government-contracted TMC services.

This section outlines the steps agencies should take to prepare for eTS migration. One agency stated that budgetary and personnel allocations should not be part of the FTR and that the eTS final rule should establish goals or targets for implementing eTS, but not direct agencies on budgetary or personnel matters. GSA agrees that normally the FTR would not address how an agency should arrange its travel related budget or personnel requirements. In this instance, however, GSA believes it is very important for agencies to prepare for the eTS migration/implementation by establishing their budget and personnel resources. GSA did, however, remove the provisions as a requirement under paragraph (c) and established it as a “Note” to provide guidance to agencies.

Section 301-73.102 governs agency approval of exceptions to the use of the eTS on an individual case-by-case basis; section 301-73.104 governs approval of exceptions on an agency-wide basis, or a sub-component thereof. Two agencies stated that the exceptions in the proposed rule were too limited and that an agency might have need for exceptions other than those listed. GSA has considered these comments and modified section 301-73.102 to broaden the circumstances under which an agency head may approve exceptions on an individual case-by-case basis. GSA has also modified section 301-73.104 to broaden circumstances under which GSA may grant an exception to a Department (or component thereof) or an Independent agency.

eTravel Service (eTS) and Travel Management Service. One agency commented that the statement “eTS will replace Executive agencies' current Travel Management System” clearly conflicts with other portions of the regulation that are intended to give agencies choices in obtaining travel agent services ( i.e. , Government-contracted TMCs) outside of the eTS, while another agency stated that if the definition of a TMS were expanded, agencies would have flexibility to move to a system that might not require the intervention of a travel agency. GSA's response is that an agency may choose to incorporate a non eTS-provided TMC into eTS or use the eTS provided TMC services. However, the intent of eTS is not to replace an agency's Government-contracted TMC, but to deliver a unified, simplified service that delivers a cost effective travel experience, supports excellent travel management, and results in superior customer satisfaction. The eTS contractors must accommodate agency-contracted TMCs. GSA has revised the notes to sections 301-73.100 and 301-73.106 to better reflect this intent.

Adoption/Delay of Implementation. One agency asked if their agency should develop its own eTS or wait for the Governmentwide eTS. GSA's response is that use of the Governmentwide eTS is a requirement for all agencies subject to the FTR, with the exception of the Department of Defense and the Government of the District of Columbia. GSA has cautioned agencies against investing in new systems that will be agency-specific and non-transferable to the Governmentwide eTS.

One agency stated that GSA should change the agency's full deployment date of eTS from September 30, 2006 to December 31, 2007, and implementation from December 31, 2004 to December 31, 2005, while another agency stated that the required use of eTS should be delayed, or waivers granted, until eTS is tested and costs are known and benefits are shown. GSA's response is that migrating to eTS will improve internal efficiency and effectiveness throughout the Federal Government. In support of the President's Management Agenda for fiscal year 2002, representatives from twenty-seven agencies serving on the QuickSilver Task Force identified web-based travel management services as a high impact initiative. These benefits have been validated through business case analysis published under OMB 300/Exhibit 53 which outlines the funding for each agency to use for migration and full deployment to eTS. This information may be obtained through your agency's Chief Information Officer. Delayed migration to the eTS would unnecessarily delay cost savings and service benefits to agencies; for that reason, GSA is committed to its scheduled migration/full deployment dates.

eTS and DTS. One individual asked if the eTS will replace the DTS. GSA's response is no. Although the eTS is available for use by the Department of Defense (DOD), DOD has developed the DTS for its use.

Small Agencies/(eTS and International Travel/Training on eTS). One agency asked how eTS will incorporate small commissions/agencies, handle international travel, and if training will be provided on the program's application. The eTS will support all agencies, large and small. As a commercially hosted service, eTS is well-positioned to serve small agencies with a minimum investment and no IT overhead. If a small commission/agency receives travel management services (electronic authorizations and/or vouchers) from a larger cross-servicing agency, GSA recommends the small agency to work with the large agency to understand the large agency's plan and timeline for migrating to eTS. A small agency may determine there is value in continuing a relationship with the servicing agency, or it may migrate to eTS independently of the large agency.

Processing international travel through the eTS will be the same as processing domestic travel. Travelers will have access to an online booking engine with the ability to view and book international reservations (air, hotel, rental, car, etc.) without calling a travel agent. The eTS also includes traditional travel agency services should a traveler require the assistance of a travel agent for more complex international (or domestic) trips. ( Note: An agency may continue to use its own TMC in conjunction with eTS, or it may use the TMC provided by its eTS vendor.)

The eTS vendors are required to provide training on the standard migration services. Additionally, each vendor may provide supplemental training services at the agency's option.

Migration to eTS. One agency asked what GSA means by the term “migration.” GSA defines “migration” as when an agency is actively moving from its current travel management service to the eTS. Migration begins when an agency submits its migration plan to the eTravel PMO and ends when an agency has fully deployed the eTS.

One agency stated that it would submit its migration plan and schedule within three months, once the eTS vendors are selected and they know what steps need to be taken. As long as this agency submits its migration plan and schedule to the eTravel PMO no later than March 31, 2004, it will be in compliance with this regulation. Migration plans are the roadmap for agencies to migrate to eTS. The migration plan represents tasks and key decisions each agency must map out in order to make an informed and intelligent decision regarding its eTS migration.

One agency asked whether all bureaus within an agency have to begin migration to eTS for an agency to receive credit for beginning migration. GSA's response is yes. An agency's migration to the eTS begins when it submits to the eTravel PMO the agency's plan to migrate all bureaus/activities to eTS. Agencies are strongly encouraged to submit a task order that will include the handling of all activities under its organization ( i.e. , a task order signed by the designated authority at a Department (for cabinet-level agencies) or the head of an Independent Agency that will apply to all its sub-organizations under its Department or Independent agency).

One agency asked what the eTS PMO will do if an agency does not have funds to migrate to the eTS. The eTS PMO has been working with the Office of Management and Budget (OMB) and Federal financial officers to identify funds for migration to the eTS during fiscal year 2004/2005 budget cycles. The OMB has indicated that its resource management officers are working with agencies to allocate funding for all E-Government Initiatives launched in support of the President's Management Agenda published in FY 2002. The note in section 301-73.101 of this regulation provides guidance to agencies on the importance of allocating budgets and establishing personnel resources to support the migration to eTS.

Funds. One agency stated that agencies may incur expenses to end or modify contracts with TMCs in order to migrate to eTS. That agency asked if the eTS PMO will subsidize or account for such costs. GSA's response is, expenses incurred as a result of contractual actions related to orders for travel management services are the responsibility of the ordering agency. This applies for orders placed under GSA contract vehicles, as well as orders under other agency contracts. When an agency prepares its migration plan, it should identify the types of constraints it may encounter and take steps to mitigate any risk by coordinating eTS migration schedules to address risk mitigation strategies, such as the expiration of contract option periods. We note that this FTR amendment does permit an agency to continue using its existing TMC in conjunction with eTS.

One agency asked, if GSA will publish eTS metrics and baseline costs per transaction so that agencies have a benchmark to determine if it would be impractical from a cost perspective to migrate to eTS. GSA's response is yes. The eTS PMO will provide a contractor-pricing schedule that will identify transactional costs for reservations, online voucher services costs and charges for other services to assist agencies in comparing their current systems to eTS.

One agency stated that GSA should identify and publish the cost it plans to charge agencies/bureaus for the eTS. The eTS PMO will provide the Industrial Funding Fee (IFF) and contractor price schedules.

FPLP. One agency stated that its employees have found that they can stay at an FPLP lodging facility at a greatly reduced fee if they do not identify themselves as a Federal traveler, and that rooms can be obtained at rates at a significantly lower rate than the Government published rate. When selecting a commercial lodging facility, first consideration must be given to the commercial lodging facilities contracted by GSA under the FPLP that meet the fire safety requirements, where available, unless certain conditions exist under section 301-50.6 of this regulation. However, when a traveler can obtain a lower rate at an FPLP lodging facility, the employee is encouraged to do so. This is consistent with the long-standing policy that employees should exercise the same standards of care when incurring expenses on official business that a prudent person would exercise if traveling on personal business. During a sluggish economy, hotels are deeply discounting rooms forecasted not to sell within a short window of time. However, in a better economy, hotels need not reduce rates, and may increase them. When companies and Government agencies negotiate long term discounted lodging rates for their preferred lodging programs, these rates are based on a year-long commitment not subject to changes in the economy, and these rates provide overall better value to travelers.

This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

This final rule is not required to be published in the Federal Register for notice and comment; therefore, the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. , does not apply.

The Paperwork Reduction Act does not apply because the changes to the FTR do not impose recordkeeping or information collection requirements, or the collection of information from offerors, contractors, or members of the public that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

This final rule is also exempt from congressional review prescribed under 5 U.S.C. 801 since it relates solely to agency management and personnel.

On August 1, 2002, NMFS published an interim final rule (67 FR 50292) that implemented interim measures intended to reduce overfishing on species managed under the FMP. The August 1, 2002, interim final rule was in response to a Remedial Order issued on May 23, 2002, by the U.S. District Court for the District of Columbia (Court). The interim rule completed implementation of restrictions specified in a Settlement Agreement, which was ordered to be implemented by the Court.

Based on the May 23, 2002, Court Order, the management measures implemented by the August 1, 2002, interim rule and its extension, must remain in effect until implementation of Amendment 13 to the FMP, which is scheduled to be in effect no later than May 1, 2004. On January 22, 2003, NMFS published a Notice of Continuation of Regulations in the Federal Register (68 FR 2919) to inform the public of the continuance of the interim regulations for a second 180-day period. Under the Magnuson-Stevens Act, however, the authority to implement interim regulations is limited to two consecutive 180-day periods. The second 180-day period ended on July 27, 2003.

Because the schedule for implementation of Amendment 13 was extended until May 1, 2004, emergency Secretarial action was necessary to continue the current management measures from July 28, 2003, until the implementation of Amendment 13 (on or about May 2004). Due to the need to continue the regulations until May 1, 2004, a proposed emergency rule, soliciting public comment, was published on April 24, 2003 (68 FR 20096), and subsequently corrected on May 9, 2003 (68 FR 24914), followed by a final emergency rule (68 FR 38234), published on June 27, 2003, implementing emergency measures intended to reduce overfishing on species managed under the FMP and to continue most interim conservation measures specified in the Settlement Agreement until Amendment 13 is implemented. These measures included a freeze on days-at-sea (DAS) at the highest annual level used from fishing years 1996-2000 and a 20-percent cut from that level; a freeze on the issuance of new open access Hand-gear permits; gear restrictions for certain gear types, including gillnets, hook-gear and trawl nets; modifications and additions to the closure areas; and restrictions on yellowtail flounder catch. In addition, in response to public comment on the proposed rule, the final emergency rule implemented measures pertaining to haddock, including reducing the haddock minimum size limit for private recreational and party/charter vessels to 21 inches (52.5 cm), and relaxing the haddock trip limit (also known as bag limit) for charter/party and open access Handgear permit vessels.

Pursuant to section 305(c) of the Magnuson-Stevens Act, the June 27, 2003, emergency rule may remain in effect for 180 days and may be extended through publication in the Federal Register , for one additional period of 180 days, provided the public has had an opportunity to comment on the emergency rule. The public was given such opportunity to comment in the form of a proposed rule before the final emergency rule was published. NMFS has determined that it is necessary to continue this emergency rule to reduce overfishing and to comply with the Court Order. Because the management measures implemented by the June 27, 2003, final emergency rule were written in such a way as to be effective indefinitely, no formal regulatory action is necessary. Instead, to comply with section 305(c) of the Magnuson-Stevens Act, it is necessary only to publish in the Federal Register a Notice of Continuation of Regulations to inform the public that NMFS has decided to continue these regulations. The impacts of continuing the Settlement Agreement measures, with some modifications, were analyzed in the Environmental Assessment completed for the June 27, 2003, final emergency rule.

The June 27, 2003, final emergency rule was determined to be significant for purposes of Executive Order 12866.

The Fishery Management Plan for the Atlantic Surfclam and Ocean Quahog Fisheries (FMP) requires that NMFS, in consultation with the Mid-Atlantic Fishery Management Council (Council), specify quotas for surfclams and ocean quahogs on an annual basis from a range that represents the optimum yield (OY) for each fishery. It is the policy of the Council that the levels selected allow sustainable fishing to continue at that level for at least 10 years for surfclams and 30 years for ocean quahogs. In addition to this constraint, the Council policy also considers the economic impacts of the quotas. Regulations implementing Amendment 10 to the FMP, published on May 19, 1998 (63 FR 27481), added Maine mahogany ocean quahogs (locally known as mahogany quahogs) to the management unit and provided that a small artisanal fishery for ocean quahogs in the waters north of 43° 50′ N. lat. has an annual quota with an initial amount of 100,000 Maine bu (35,240 hectoliters (hL)) within a range of 17,000 to 100,000 Maine bu (5,991 hL to 35,240 hL). As specified in Amendment 10, the Maine mahogany ocean quahog quota is in addition to the quota specified for the ocean quahog fishery.

Detailed background information regarding the development of these quotas was provided in the preamble to the proposed rule published at 68 FR 60324, October 22, 2003, and is not repeated here. The comment period for that rule ended on November 21, 2003. One comment was received during the comment period.

The final quotas for the 2004 Atlantic surfclam, ocean quahog, and Maine mahogany ocean quahog fisheries, which are unchanged from those in the proposed rule, are shown in the table below. The status quo level of 2003 for the surf clam fishery will be increased by 4.6 percent (from 3.25 to 3.4 million bu) and the ocean quahog quota will be increased by 11.1 percent (from 4.5 to 5.0 million bu). Finally, this rule makes no changes to the Marine ocean quahog quota from the 2003 level of 100,000 Maine bushels.

The deadline for receiving comments on the proposed rule was November 21, 2003. One comment was received on the proposed rule during the comment period.

Comment: The commenter expressed concern that the determination of OYs is biased by industry and politics and that they are set too high; asserted that NMFS fails to protect the stocks; and voiced general support for establishing marine protected areas and reducing any quotas by at least 50 percent. The commenter also objected to NMFS not accepting comments via e-mail on this action.

Response: This rule implements measures designed to provide for improved utilization of the Federal commercial surfclam and ocean quahog resource, and to improve efficiency of this fishery. The OYs used to determine the quotas for each fishery are based on the best scientific information available, and have been vetted through the SARC, NOAA's Northeast Fisheries Science Center (Center), and peer reviewers, without dispute. None of the stocks are overfished, and overfishing is not occurring. The areas most affected by the surfclam and ocean quahog industry operations are high-energy, sandy areas that are only temporarily impacted by fishing operations under this FMP; as such, there is no immediate need for MPAs as a result of this fishery. Finally, the recommended quotas will allow sustainable fishing to continue at these quota levels for at least 10 years for surfclams and 30 years for ocean quahogs.

This final rule has been determined to be not significant for purposes of Executive Order 12866.

A delay in the effective date of this rule would cause a disruption in the ordinary commerce of the surfclam and ocean quahog fisheries. Individual Transferable Quota (ITQ) shareholders each receive a portion of the overall quota for these two species. An allocation holder receives an amount of cage tags equivalent to his/her share of the overall quota. Fishing for surfclams and ocean quahogs begins on January 1, regardless of the publication of the annual quota. Historically, allocations have been transferred either permanently or temporarily to meet changing economic circumstances in the fishery right from the commencement of these fisheries. For example, vessel owners who enter into a supply contract with a processor may experience vessel breakdowns that thwart performance of their contractual obligations. In this situation, it is imperative that the vessel owner have the ability to request that NMFS transfer temporarily part of his/her allocation to another harvester who is willing to fulfill the terms of the supply contract in time for the start of the 2004 fishing year. Further, and of more immediate concern is that five banks currently hold twenty-nine allocations between the surfclam and ocean quahog fisheries. These allocations are held by the banks as security for loans made by the banks to fishermen in these two fisheries. This entails the permanent transfer of the individual allocation to the bank as collateral for the pendency of the loan. The banks request NMFS on an annual basis to transfer the cage tags associated with the allocation back to the borrower. This transaction is characterized as a temporary transfer of the allocation pursuant to the regulations. This temporary transfer of allocation enables the borrower to begin fishing at the beginning of the fishing year in order to generate income with which to discharge the loan. NMFS has received several such requests from the banks holding allocations for the 2004 fishing year. More requests are expected in the near future. Without a quota in effect, NMFS cannot make a transfer of part or the entirety of an allocation either permanently or temporarily. This inability on the part of NMFS to make such transfers effective would preclude the intended recipients of such transfers from fishing, thereby engendering a negative economic impact on the surfclam and ocean quahog fisheries. Therefore, there is good cause under 5 U.S.C. 553(d)(3) to waive the 30-day delayed effectiveness period for the implementation of the 2004 surfclam, ocean quahog, and Maine mahogany quahog quotas.

A description of the reasons why this action is being taken by the Agency and the objectives of this final rule are explained in the preambles of the proposed rule and this final rule. This action does not contain any collection-of-information, reporting, or recordkeeping requirements. It does not duplicate, overlap, or conflict with any other Federal rules. This action is taken under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) and regulations at 50 CFR part 648. There are no compliance costs associated with this final rule.

Included in this final rule is the Final Regulatory Flexibility Analysis (FRFA) prepared pursuant to 5 U.S.C. 604(a). The FRFA incorporates the IRFA, the comments and responses to the proposed rule, and the economic analyses completed in support of this action. A copy of the IRFA is available from the Council ( see ADDRESSES ).

The preamble to the proposed rule included a detailed summary of the analyses contained in the IRFA, and that discussion is not repeated here.

A description of the reasons why this action is being taken, and the objectives of and legal basis for this final rule are explained in the preambles to the proposed rule and this final rule and are not repeated here.

One comment was received during the comment period on the proposed rule, although it did not pertain to the economic impacts of this rule. No changes to the proposed rule were required to be made as a result of public comments. For a summary of the comment received, refer to the section above titled “Comments and Responses.”

A description and estimate of the number of small entities to which the rule will apply is provided in the IRFA and IRFA summary contained in the Classification section of the proposed rule and is only summarized here.

All of the affected businesses (fishing vessels) are considered small entities under the standards described by the Small Business Administration because they have annual returns (revenues) that do not exceed $3.5 million annually. This rule could affect any vessel holding an active Federal permit for either species. However, the commercial use of the permit is limited to vessels fishing under an individual fishing quota or fishing in the Maine mahogany fishery. In 2002, a total of 54 vessels reported harvesting surfclams or ocean quahogs from Federal waters under an Individual Transferable Quota (ITQ) system. There were 35 vessels in 2002 that fished under the federal limited access Maine mahogany quahog permit for Maine ocean quahogs.

This rule would not impose any new reporting, recordkeeping, or other compliance requirements. Therefore, the costs of compliance would remain unchanged.

Economic impacts on small entities have been minimized within the constraints of the FMP. Specification of commercial quotas is constrained by the conservation objectives of the FMP, and implemented at 50 CFR part 648 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). It is not possible to further mitigate economic impacts on small entities because the Council selected the alternative with the most positive economic impacts relative to the other alternatives determined to achieve the biological objectives.

This rule establishes a 4.6-percent increase in the surfclam quota, an 11.1-percent increase in the ocean quahog quota, and no change in the 2004 quota for Maine mahogany ocean quahogs from their 2003 quotas. Since 2002 harvest levels of 3.133 and 3.871 million bu (1.668 and 2.061 million hL) for surfclams and ocean quahogs, respectively, were below the 2004 proposed quotas, NMFS and the Council believe that the final 2004 quotas may yield a surplus quota available to vessels participating in all these fisheries. This is especially likely to occur in the ocean quahog fishery. In the case of a surplus quota, vessels would not be constrained from harvesting additional product, thus allowing them to increase their revenues.

The Council identified four surfclam quota alternatives in addition to the selected quota of 3.400 million bu (1.810 million hL), including 1.850, 3.135, 3.250, and 3.325 million bu (0.985, 1.669, 1.730 and 1.771 million hL). The Council and NMFS determined that the only alternative that would significantly negatively impact revenues to vessels is the 1.850-million bu (0.985-million hL) alternative for surfclams. The 3.135-million bu (1.669-million hL) and status quo alternative would be restrictive and have a slight to moderate impact on revenues. The 3.325-million bu (1.771-million hL) and 3.400 million bu (1.810 million hL) alternatives would yield increases relative to the actual 2002 landings, so increased revenues would be likely to occur. The industry believes it can utilize the additional product from the 4.6-percent increase in landings and thus have a beneficial impact for the Nation.

The Council analyzed four ocean quahog quota alternatives in addition to the selected quota of 5.000-million bu (2.662-million hL), including 4.000, 4.250, 4.500, and 6.000 million bu (2.129, 2.263, 2.396, and 3.195 million hL). Adoption of a 4.000-million bu (2.129-million hL) or a 4.250-million bu (2.263-million hL) quota would represent a 12-percent or a 10-percent decrease, respectively, from the 2003 quota level and would result in the fewest economic benefits available to the ocean quahog fishery. Given the current biological status of the quahog resource, the Council does not believe that a quota reduction is warranted at this time. Adoption of the 4.500-million bu (2.396-million hL) quota would most likely have a limited impact on small entities, since it results in no change from status quo. The 5.000-million bu (2.662-million hL) quota allows for an 11.1-percent increase in quota from 4.500 million bu (2.396 million hL), and a 29-percent increase to the 2002 ocean quahog landings. Adopting the maximum allowable quota of 6.000 million bu (3.195 million hL) for ocean quahogs would represent a 33-percent increase in allowable harvest and a 55-percent increase in landings from 2002, assuming all the quota were harvested. However, the industry does not have a market available to absorb such a large increase in landings and may not have the vessel capacity necessary to harvest a quota this large. Since all alternatives, including the selected quota, would yield increases relative to the actual 2002 landings, increased revenues would be likely to occur, albeit at various percentage differences.

The quota for Maine mahogany ocean quahogs is specified at a maximum 100,000 bu (35,240 hL). The FMP specifies that upward adjustments to the quota would require a scientific survey and stock assessment of the Maine mahogany ocean quahog resource. However, no survey or assessment has been conducted. The Council considered two alternative quotas for the Maine mahogany ocean quahog fishery, in addition to the preferred alternative of 100,000 bu (35,240 hL), including 50,000 bu and 84,700 bu (17,620 and 29,847 hL). Any quota the Council would have recommended below the 1999 landing level of 93,938 Maine bu (33,104 hL) would most likely have resulted in a decrease in revenues to individual vessels.

Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the action a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, a small entity compliance guide (the guide) was prepared. Copies of the guide will be sent to all holders of commercial Federal Atlantic surfclam and ocean quahog fishery permits. The guide will also be available on the Internet at http://www.nero.noaa.gov . Copies of the guide can also be obtained from the Regional Administrator ( see ADDRESSES ).

NMFS, Alaska Region, administers the halibut and sablefish IFQ programs in the North Pacific. The IFQ Programs are limited access systems authorized by section 303(b) of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) and the Northern Pacific Halibut Act of 1982. Fishing under the IFQ Programs began in March 1995. Regulations implementing the IFQ Program are set forth at 50 CFR part 679.

In 1996, the Magnuson-Stevens Act was amended (by Pub. L. 104-297) to require the Secretary of Commerce to, among other things, “collect a fee to recover the actual costs directly related to the management and enforcement of any . . . individual fishing quota program” (section 304(d)(2)(A)). Section 304(d)(2) of the Magnuson-Stevens Act specifies an upper limit on these fees, when the fees must be collected, and where the fees must be deposited. Section 303(d)(4) of the Magnuson-Stevens Act allows NMFS to reserve up to 25 percent of the fees collected for use in an IFQ loan program to aid in financing the purchase of IFQ or quota share (QS) by entry-level and small-vessel fishermen.

On March 20, 2000, NMFS published regulations implementing the IFQ Cost Recovery Program (65 FR 14919), which are set forth at 50 CFR 679.45. Under the regulations, an IFQ permit holder incurs a cost recovery fee liability for every pound of IFQ halibut and IFQ sablefish that is landed on his or her IFQ permit(s). The IFQ permit holder is responsible for self-collecting the fee liability for all IFQ halibut and IFQ sablefish landings on his or her permit(s). The IFQ permit holder is also responsible for submitting a fee liability payment to NMFS on or before the due date of January 31 following the year in which the IFQ landings were made. The dollar amount of the fee due is determined by multiplying the annual IFQ fee percentage (3 percent or less) by the ex-vessel value of each IFQ landing made on a permit and summing the totals of each permit (if more than one).

Three percent of the ex-vessel value of IFQ halibut and IFQ sablefish harvested is the maximum fee amount allowed by section 304(d)(2)(B) of the Magnuson-Stevens Act. Regulations at § 679.45(d) allow the Administrator, Alaska Region, NMFS (Regional Administrator) to reduce the fee percentage if actual management and enforcement costs could be recovered through a lesser percentage. In this event, the Regional Administrator will publish a notification of any adjustment of the IFQ fee percentage in the Federal Register pursuant to § 679.45(d)(4).

For 2003, the Regional Administrator has determined that a fee of 1.4 percent is necessary to recover the actual management and enforcement costs. Therefore, the Regional Administrator is adjusting the cost recovery fee applicable to year 2003 IFQ landings from 3.0 percent to 1.4 percent.

The fee liability is based on the sum of all payments of monetary worth made to fishermen for the sale of the fish during the year. This includes any retro-payments (e.g., bonuses, delayed partial payments, post-season payments) made to the IFQ permit holder for previously landed IFQ halibut or sablefish.

For purposes of calculating IFQ cost recovery fees, NMFS distinguishes between two types of ex-vessel value: “actual ex-vessel value” and “standard ex-vessel value.” “Actual ex-vessel value” is the amount of all compensation, monetary or non-monetary, that an IFQ permit holder received as payment for his or her IFQ fish sold. “Standard ex-vessel value” is the default value on which to base fee liability calculations. However, IFQ permit holders have the option of using “IFQ actual ex-vessel value” if they can satisfactorily document those values.

Regulations at § 679.45(c)(2)(i) require the Regional Administrator to publish IFQ standard prices during the last quarter of each calendar year. These standard prices are used, along with estimates of IFQ halibut and IFQ sablefish landings, to calculate standard values. The standard prices are described in U.S. dollars per IFQ equivalent pound for IFQ halibut and IFQ sablefish landings made during the year. IFQ equivalent pound(s) means the weight amount, recorded in pounds, for an IFQ landing and calculated as round weight for sablefish and headed and gutted (“net”) weight for halibut. NMFS calculates the standard prices to reflect, as closely as possible, by month and port or port-group, the variations in the actual ex-vessel values of IFQ halibut and IFQ sablefish landings. The standard prices for IFQ halibut and IFQ sablefish are listed in the following table. Data from ports are combined as necessary to protect confidentiality of data submissions.