[Federal Register Volume 65, Number 181 (Monday, September 18, 2000)]
[Rules and Regulations]
[Pages 56366-56394]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-23263]



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Part II





Department of Commerce





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Patent and Trademark Office



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37 CFR Part 1



Changes To Implement Patent Term Adjustment Under Twenty-Year Patent 
Term; Final Rule

  Federal Register / Vol. 65, No. 181 / Monday, September 18, 2000 / 
Rules and Regulations  

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DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Part 1

RIN 0651-AB06


Changes To Implement Patent Term Adjustment Under Twenty-Year 
Patent Term

AGENCY: United States Patent and Trademark Office, Commerce.

ACTION: Final rule.

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SUMMARY: The United States Patent and Trademark Office (Office) is 
revising the rules of practice in patent cases to implement certain 
provisions of the American Inventors Protection Act of 1999. These 
provisions of the American Inventors Protection Act of 1999 provide 
patent term adjustment to compensate patentees for certain delays in 
the application examination process.

DATES: Effective Dates: Sections 1.702 through 1.705 and the amendment 
to Sec. 1.701 are effective October 18, 2000. The amendment to 
Sec. 1.18 is effective November 17, 2000.
    Applicability Date: Section 1.701 applies to original (non-reissue) 
patents issued on applications (other than for a design patent) filed 
on or after June 8, 1995, and before May 29, 2000. Sections 1.702 
through 1.705 apply to original applications (other than for a design 
patent) filed on or after May 29, 2000, and to patents issued on such 
applications.

FOR FURTHER INFORMATION CONTACT: Karin L. Tyson, Robert W. Bahr, or 
Robert A. Clarke by telephone at (703) 305-1383, or by mail addressed 
to: Box Comments--Patents, Commissioner for Patents, Washington, D.C. 
20231, or by facsimile to (703) 872-9411 or (703) 308-6916, marked to 
the attention of Karin L. Tyson.

SUPPLEMENTARY INFORMATION: The American Inventors Protection Act of 
1999 (Title IV of the Intellectual Property and Communications Omnibus 
Reform Act of 1999 (S. 1948) as introduced in the 106th Congress on 
November 17, 1999) was incorporated and enacted into law on November 
29, 1999, by Sec. 1000(a)(9), Division B, of Pub. L. 106-113, 113 Stat. 
1501 (1999). The American Inventors Protection Act of 1999 contains a 
number of changes to title 35, United States Code. This final rule 
changes the rules of practice to implement the provisions of Secs. 4401 
and 4402 of the American Inventors Protection Act of 1999. These 
provisions are effective on the date that is six months after the date 
of enactment of the American Inventors Protection Act of 1999 (May 29, 
2000) and apply to original (non-reissue) applications, other than for 
a design patent, filed on or after the date that is six months after 
the date of enactment of the American Inventors Protection Act of 1999 
(May 29, 2000).
    Section 532(a)(1) of the Uruguay Round Agreements Act (Pub. L. 103-
465, 108 Stat. 4809 (1994)) amended 35 U.S.C. 154 to provide that the 
term of patent protection begins on the date of patent grant and ends 
on the date twenty years from the filing date of the application, or 
the earliest filing date for which a benefit is claimed under 35 U.S.C. 
120, 121, or 365(c). Pub. L. 103-465 also contained provisions, 
codified at 35 U.S.C. 154(b), for patent term extension due to certain 
examination delays.
    Section 4402 of the American Inventors Protection Act of 1999 
amends 35 U.S.C. 154(b)(1) to provide day-by-day patent term adjustment 
if the Office fails, within specified time periods, to: (1) initially 
act on the application; (2) respond to a reply or appeal to the Board 
of Patent Appeals and Interferences by the applicant; (3) act on an 
application after a decision by the Board of Patent Appeals and 
Interferences or a Federal court where at least one allowable claim 
remains in the application; or (4) issue the application after the 
issue fee is paid in reply to a notice of allowance and all outstanding 
requirements are satisfied (35 U.S.C. 154(b)(1)(A)). Section 4402 of 
the American Inventors Protection Act of 1999 also amends 35 U.S.C. 
154(b)(1) to provide day-by-day patent term adjustment if, subject to a 
number of limitations, the Office fails to issue a patent within three 
years of the actual filing date of the application (35 U.S.C. 
154(b)(1)(B)). Section 4402 of the American Inventors Protection Act of 
1999 also amends 35 U.S.C. 154(b)(1) to provide day-by-day patent term 
adjustment for delays due to interference proceedings under 35 U.S.C. 
135(a), imposition of a secrecy order under 35 U.S.C. 181, or 
successful appellate review by the Board of Patent Appeals and 
Interferences or a Federal court (35 U.S.C. 154(b)(1)(C)).
    Section 4402 of the American Inventors Protection Act of 1999 
amends 35 U.S.C. 154(b)(2) to place limitations on the period of patent 
term adjustment granted under 35 U.S.C. 154(b)(1). First, to the extent 
that the periods of delay attributed to the grounds specified in 35 
U.S.C. 154(b)(1) overlap, the period of adjustment shall not exceed the 
actual number of days the issuance of the patent was delayed. Second, 
no patent, the term of which has been disclaimed beyond a specified 
date, may be adjusted under 35 U.S.C. 154(b) beyond the expiration date 
specified in the disclaimer. Third, the period of patent term 
adjustment under 35 U.S.C. 154(b)(1) shall be reduced by a period equal 
to the period of time during which the applicant failed to engage in 
reasonable efforts to conclude prosecution (or processing or 
examination) of the application. Section 4402 of the American Inventors 
Protection Act of 1999, however, does not contain any limit (e.g., of 
five or ten years) on the total extension or adjustment that may be 
granted under 35 U.S.C. 154(b).
    An applicant is deemed to have failed to engage in reasonable 
efforts to conclude prosecution of an application with respect to any 
patent term adjustment under 35 U.S.C. 154(b)(1)(B) (failure to issue a 
patent within three years of the actual filing date of the application) 
for the cumulative total of any periods of time in excess of three 
months that are taken to reply to a notice of any rejection, objection, 
argument, or other request, measuring the three-month period from the 
date the notice was mailed or given. In addition, 35 U.S.C. 154(b)(2) 
directs the Office to prescribe regulations establishing the 
circumstances that constitute a failure of the applicant to engage in 
reasonable efforts to conclude processing or examination of an 
application.
    Section 4402 of the American Inventors Protection Act of 1999 also 
amends 35 U.S.C. 154(b)(3) to establish procedures for patent term 
adjustment determinations. 35 U.S.C. 154(b)(3) directs the Office to 
prescribe regulations establishing procedures for the application for 
and determination of patent term adjustment under 35 U.S.C. 154(b). 35 
U.S.C. 154(b)(3), however, requires the Office to: (1) Make a patent 
term adjustment determination and transmit a notice of that 
determination with the notice of allowance; and (2) provide the 
applicant with one opportunity to request reconsideration of that 
patent term adjustment determination. 35 U.S.C. 154(b)(3) also provides 
that the Office shall reinstate all or part of the cumulative period of 
time of an adjustment reduced under 35 U.S.C. 154(b)(2)(C) (for failure 
to reply to a notice of any rejection, objection, argument, or other 
request within three months of the date the notice was mailed or given) 
if, prior to issuance of the patent, the applicant makes a showing 
that, in spite of all due care, the applicant was unable to reply 
within the three-month period, except that the

[[Page 56367]]

Office may not reinstate more than three additional months for each 
reply beyond the original three-month period. Section 4402 of the 
American Inventors Protection Act of 1999 also amends 35 U.S.C. 
154(b)(3) to provide that the Office shall proceed to grant the patent 
after completing its patent term adjustment determination and amends 35 
U.S.C. 154(b)(4) to provide for judicial review in the event that the 
applicant is dissatisfied with that patent term adjustment 
determination.
    Section 4405(a) of the American Inventors Protection Act of 1999 
provides that Sec. 4402 shall take effect on the date that is six 
months after the date of enactment of the American Inventors Protection 
Act of 1999 (May 29, 2000) and shall apply to any application (other 
than for a reissue or design) filed on or after the date that is six 
months after the date of enactment of the American Inventors Protection 
Act of 1999 (May 29, 2000). Therefore, patents (other than reissue or 
design) issued on applications filed on or after June 8, 1995, but 
before May 29, 2000, are subject to the patent term extension 
provisions of 35 U.S.C. 154(b) as amended by Sec. 532(a)(1) of Pub. L. 
103-465 and Sec. 1.701, whereas patents (other than reissue or design) 
issued on applications filed on or after May 29, 2000, are subject to 
the patent term adjustment provisions of 35 U.S.C. 154(b) as amended by 
Sec. 4402 of the American Inventors Protection Act of 1999.
    The filing date of a continued prosecution application (CPA) under 
Sec. 1.53(d) is the date that the request for CPA is filed 
(Sec. 1.53(d)(2)), even though the Office uses the filing date of the 
prior application for identification purposes. Therefore, the patent 
term adjustment provisions of 35 U.S.C. 154(b) as amended by Sec. 4402 
of the American Inventors Protection Act of 1999 apply to any CPA filed 
on or after May 29, 2000, regardless of the filing date of the prior 
application of the CPA. While an applicant may file a continuing 
application under Sec. 1.53(b) on or after May 29, 2000, for the 
application to be subject to the patent term adjustment provisions of 
35 U.S.C. 154(b) as amended by Sec. 4402 of the American Inventors 
Protection Act of 1999, an applicant need only file a CPA under 
Sec. 1.53(d) on or after May 29, 2000, for the application to be 
subject to the patent term adjustment provisions of 35 U.S.C. 154(b) as 
amended by Sec. 4402 of the American Inventors Protection Act of 1999. 
The filing of a CPA on or after May 29, 2000, does not, however, 
entitle an applicant to receive term adjustment for Office delays 
before the filing date of the CPA (i.e., before May 29, 2000).
    The Office published a notice proposing changes to the rules of 
practice to implement the provisions of Sec. 4402 of the American 
Inventors Protection Act of 1999. See Changes to Implement Patent Term 
Adjustment Under Twenty-Year Patent Term, Notice of Proposed 
Rulemaking, 65 FR 17215 (Mar. 31, 2000), 1233 Off. Gaz. Pat. Office 109 
(Apr. 25, 2000) (notice of proposed rulemaking). This final rule adopts 
changes to the rules of practice to implement the provisions of 
Sec. 4402 of the American Inventors Protection Act of 1999.
    Section 4732 of the American Inventors Protection Act of 1999 
changed (among other things) the title ``Commissioner'' to 
``Director.'' The title ``Commissioner,'' however, is not being changed 
to ``Director'' where it appears in the rules of practice involved in 
this final rule because legislation is pending before Congress that (if 
enacted) would restore the former title ``Commissioner.'' See 
Intellectual Property Technical Amendments Act of 2000, H.R. 4870, 
106th Cong. (2000).

Discussion of Specific Rules

    Sections 1.18(e) and (f) are added to set forth the fees for filing 
an application for patent term adjustment under Sec. 1.705, and for 
filing a request for reinstatement of all or part of the term reduced 
pursuant to Sec. 1.704(b) in an application for patent term adjustment 
under Sec. 1.705. The fees in Sec. 1.18(e) and (f) are set to recover 
the estimated average cost to the Office for processing and evaluating 
an application for patent term adjustment under Sec. 1.705, and for 
processing and evaluating a request under 35 U.S.C. 154(b)(3)(C) for 
reinstatement of the term reduced under 35 U.S.C. 154(b)(2)(C), 
respectively. See 35 U.S.C. 41(d).
    Section 1.18(e) is added to provide a $200 fee for filing an 
application for patent term adjustment under Sec. 1.705. An application 
for patent term adjustment under Sec. 1.705(b) requires the Office to 
calculate the applicable patent term adjustment to determine the 
correct patent term adjustment. Handling such applications for patent 
term adjustment will involve careful record review and date 
calculation, but not a great deal of legal analysis. The Office expects 
them to be as burdensome as petitions of medium level complexity. Based 
upon activity-based cost estimates (using the costs of treating similar 
petitions, that is, petitions of medium level burden), a $200 fee was 
determined to be the appropriate fee amount for cost-recovery as 
provided for in 35 U.S.C. 41(d).
    Section 1.18(f) is added to provide a $400 fee for filing a request 
for reinstatement of all or part of the term reduced pursuant to 
Sec. 1.704(b) in an application for patent term adjustment under 
Sec. 1.705. The request for reinstatement provided for in Sec. 1.705(c) 
requires the Office to evaluate the merits of the applicant's showing 
that at least one delay occurred in spite of all due care. Evaluating 
such ``due care'' showings is expected to be as burdensome as 
evaluating the ``unavoidable'' delay petitions provided for in 
Secs. 1.137(a) and 1.378(b), which are some of the most burdensome 
petitions. Thus, based upon activity-based cost estimates (using the 
costs of treating ``unavoidable'' delay petitions), a $400 fee was 
determined to be the appropriate fee amount for cost-recovery as 
provided for in 35 U.S.C. 41(d).
    The Office initially proposed a $450 fee for filing a request for 
reinstatement of all or part of the term reduced pursuant to 
Sec. 1.704(b) in an application for patent term adjustment under 
Sec. 1.705. The Office, however, has since further refined its cost 
estimates for processing and evaluating such requests for reinstatement 
and has determined that $400 is the appropriate fee amount for cost-
recovery as provided for in 35 U.S.C. 41(d).
    Subpart F of 37 CFR Part 1 is amended to include a first 
undesignated center heading to read ``Adjustment of Patent Term Due to 
Examination Delay'' followed by an amended Sec. 1.701 and newly added 
Secs. 1.702 through 1.705 concerning patent term adjustment under 35 
U.S.C. 154(b), and a second undesignated center heading to read 
``Extension of Patent Term Due to Regulatory Review'' followed by 
current Sec. 1.710 et seq. concerning patent term extension under 35 
U.S.C. 156.
    Section 1.701 is amended by revising its heading to indicate that 
its provisions concern the patent term extension provisions of the 
Uruguay Round Agreements Act (Pub. L. 103-465 and to add a paragraph 
(e) to specify that the provisions of Sec. 1.701 apply only to original 
patents issued on applications filed on or after June 8, 1995, and 
before May 29, 2000. As discussed above, the provisions of 35 U.S.C. 
154(b) as amended by Sec. 532(a)(1) of Pub. L. 103-465 and Sec. 1.701 
apply to applications (other than for a reissue or design patent) filed 
on or after June 8, 1995, but before May 29, 2000, and the provisions 
of Sec. 4402 of the American Inventors Protection Act of 1999 and 
Secs. 1.702 through 1.705 apply to applications (other than for a 
reissue or

[[Page 56368]]

design patent) filed on or after May 29, 2000.
    Section 1.702 is added to set forth the bases for patent term 
adjustment under 35 U.S.C. 154(b)(1). Section 1.702(a) indicates that a 
patent is entitled to patent term adjustment if the Office fails to 
perform certain acts of examination within specified time frames (35 
U.S.C. 154(b)(1)(A)). Section 1.702(b) indicates that a patent is 
entitled to patent term adjustment if, subject to a number of 
limitations, the Office fails to issue a patent within three years of 
the actual filing date of the application (35 U.S.C. 154(b)(1)(B)). 
Section 1.702(c) indicates that a patent is entitled to patent term 
adjustment if the issuance of the patent was delayed by an interference 
proceeding (35 U.S.C. 154(b)(1)(C)(i)). Section 1.702(d) indicates that 
a patent is entitled to patent term adjustment if the issuance of the 
patent was delayed by the application being placed under a secrecy 
order under 35 U.S.C. 181 (35 U.S.C. 154(b)(1)(C)(ii)). Section 
1.702(e) indicates that a patent is entitled to patent term adjustment 
if the issuance of the patent was delayed by successful appellate 
review under 35 U.S.C. 134, 141, or 145 (35 U.S.C. 154(b)(1)(C)(iii)). 
Section 1.702(f) provides that the provisions of Secs. 1.702 through 
1.705 apply only to original (i.e., non-reissue) applications, except 
applications for a design patent, filed on or after May 29, 2000, and 
patents issued on such applications.
    Section 1.703 specifies the period of adjustment if a patent is 
entitled to patent term adjustment under 35 U.S.C. 154(b)(1) and 
Sec. 1.702. When a period is indicated (in Sec. 1.703 or 1.704) as 
``beginning'' on a particular day, that day is included in the period, 
in that such day is ``day one'' of the period and not ``day zero.'' For 
example, a period beginning on April 1 and ending on April 10 is ten 
(and not nine) days in length.
    35 U.S.C. 154(b)(1)(A) and (B) provide for an adjustment of one day 
for each day after the end of the period set forth in 35 U.S.C. 
154(b)(1)(A)(i), (ii), (iii), (iv), and (B) until the prescribed action 
is taken, whereas 35 U.S.C. 154(b)(1)(C) provides for an adjustment of 
one day for each day of the pendency of the proceeding, order, or 
review prescribed in 35 U.S.C. 154(b)(1)(C)(i) through (iii). 
Therefore, the end of the period set forth in Secs. 1.703(a) and 
1.703(b) (which correspond to 35 U.S.C. 154(b)(1)(A) and (B)) is ``day 
zero'' (not ``day one'') as to the period of adjustment, whereas the 
first day of the proceeding, order, or review set forth in 
Secs. 1.703(c), 1.703(d), and 1.703(e) (which correspond to 35 U.S.C. 
154(b)(1)(C)(i) through (iii)) is ``day one'' of the period of 
adjustment.
    Section 1.703(a) pertains to 35 U.S.C. 154(b)(1)(A) and indicates 
that the period of adjustment under Sec. 1.702(a) is the sum of the 
periods specified in Sec. 1.703(a)(1) through Sec. 1.703(a)(6).
    Section 1.703(a)(1) pertains to the provisions of 35 U.S.C. 
154(b)(1)(A)(i). Section 1.703(a)(1) specifies that the period is the 
number of days, if any, beginning on the date after the day that is 
fourteen months after the date on which the application was filed under 
35 U.S.C. 111(a) or fulfilled the requirements of 35 U.S.C. 371 in an 
international application and ending on the mailing date of either an 
action under 35 U.S.C. 132, or a notice of allowance under 35 U.S.C. 
151, whichever occurs first. A written restriction requirement, a 
written election of species requirement, a requirement for information 
under Sec. 1.105, an action under Ex parte Quayle, 1935 Comm'r Dec. 11 
(1935), and a notice of allowability (PTOL-37) are each an action 
issued as a result of the examination conducted pursuant to 35 U.S.C. 
131. As such, each of these Office actions is a notification under 35 
U.S.C. 132. Office notices and letters issued as part of the pre-
examination processing of an application are not notices issued as a 
result of an examination conducted pursuant to 35 U.S.C. 131, and thus 
are not notifications under 35 U.S.C. 132. Examples of such notices 
are: a Notice of Incomplete Nonprovisional Application (PTO-1123), a 
Notice of Omitted Item(s) in a Nonprovisional Application (PTO-1669), a 
Notice to File Missing Parts of Application (PTO-1533), a Notice of 
Informal Application (PTO-152), a Notice to File Corrected Application 
Papers Filing Date Granted (PTO-1660), or a Notice to Comply with 
Requirements for Patent Applications Containing Nucleotide Sequence 
and/or Amino Acid Sequence Disclosures (PTO-1661).
    Section 1.703(a)(2) pertains to the provisions of 35 U.S.C. 
154(b)(1)(A)(ii). Section 1.703(a)(2) specifies that the period is the 
number of days, if any, beginning on the day after the date that is 
four months after the date a reply under Sec. 1.111 was filed and 
ending on the mailing date of either an action under 35 U.S.C. 132, or 
a notice of allowance under 35 U.S.C. 151, whichever occurs first.
    Section 1.703(a)(3) also pertains to the provisions of 35 U.S.C. 
154(b)(1)(A)(ii). Section 1.703(a)(3) specifies that the period is the 
number of days, if any, beginning on the day after the date that is 
four months after the date a reply in compliance with Sec. 1.113(c) was 
filed and ending on the date of mailing of either an action under 35 
U.S.C. 132, or a notice of allowance under 35 U.S.C. 151, whichever 
occurs first. A reply under Sec. 1.113 is a reply to a final Office 
action, and a reply in compliance with Sec. 1.113 is a reply that 
cancels all of the rejected claims and removes all outstanding 
objections and requirements or otherwise places the application in 
condition for allowance. Any amendment after final that does not cancel 
all of the rejected claims and remove all outstanding objections and 
requirements or otherwise place the application in condition for 
allowance is not a reply in compliance with Sec. 1.113(c).
    Section 1.703(a)(4) also pertains to the provisions of 35 U.S.C. 
154(b)(1)(A)(ii). Section 1.703(a)(4) specifies that the period is the 
number of days, if any, beginning on the day after the date that is 
four months after the date an appeal brief in compliance with 
Sec. 1.192 was filed and ending on the mailing date of any of an 
examiner's answer under Sec. 1.193, an action under 35 U.S.C. 132, or a 
notice of allowance under 35 U.S.C. 151, whichever occurs first. As 
discussed below, the phrase ``the date on which'' an ``appeal was 
taken'' in 35 U.S.C. 154(b)(1)(A)(ii) means the date on which an appeal 
brief (and not a notice of appeal) was filed. The phrase ``appeal brief 
in compliance with Sec. 1.192'' requires that: (1) the appeal brief fee 
(Sec. 1.17(c)) be paid (Sec. 1.192(a)); and (2) the appeal brief 
complies with Sec. 1.192(c)(1) through (c)(9).
    Section 1.703(a)(5) pertains to the provisions of 35 U.S.C. 
154(b)(1)(A)(iii). Section 1.703(a)(5) specifies that the period is the 
number of days, if any, beginning on the day after the date that is 
four months after the date of a final decision by the Board of Patent 
Appeals and Interferences or by a Federal court in an appeal under 35 
U.S.C. 141 or a civil action under 35 U.S.C. 145 or 146, where at least 
one allowable claim remains in the application and ending on the 
mailing date of either an action under 35 U.S.C. 132, or a notice of 
allowance under 35 U.S.C. 151, whichever occurs first.
    For a Board of Patent Appeals and Interferences decision to be a 
``decision by the Board of Patent Appeals and Interferences under [35 
U.S.C.] 134'' within the meaning of 35 U.S.C. 154(b)(1)(A)(iii) (and 
Sec. 1.703(a)(5)), the decision must sustain or reverse the 
rejection(s) of the claim(s) on appeal. For a Board of Patent Appeals 
and Interferences decision to be a ``decision by the Board of Patent 
Appeals and Interferences under [35 U.S.C.] 135''

[[Page 56369]]

within the meaning of 35 U.S.C. 154(b)(1)(A)(iii) (and 
Sec. 1.703(a)(5)), the decision must include a decision on the 
patentability of the claims or priority of invention. A remand or other 
administrative order by the Board of Patent Appeals and Interferences 
(even if by a merits panel) is not a ``decision'' within the meaning of 
35 U.S.C. 154(b)(1)(A)(iii) (and Sec. 1.703(a)(5)).
    The phrase ``final decision'' in Sec. 1.703(a)(5) means that: (1) 
the decision is the last decision in the review by the Board of Patent 
Appeals and Interferences (or by a Federal court); and (2) the decision 
does not require further action by the applicant to avoid termination 
of proceedings as to the rejected claims. Thus, a Board of Patent 
Appeals and Interferences decision containing a new ground of rejection 
under Sec. 1.196(b) requires action by the applicant to avoid 
termination of proceedings as to the rejected claims and is thus not 
considered a ``final decision'' for purposes of Sec. 1.703(a)(5). The 
phrase ``final decision,'' however, does not require that the decision 
be final for purposes of judicial review (e.g., a Board of Patent 
Appeals and Interferences decision reversing the rejection of all of 
the claims on appeal is not ``final'' for purposes of judicial review, 
but (absent a subsequent decision by the Board of Patent Appeals and 
Interferences) is a ``final decision'' for purposes of 
Sec. 1.703(a)(5)).
    The phrase ``allowable claims remain in the application'' for 
purposes of 35 U.S.C. 154(b)(1)(A)(iii) means that after the decision 
there is at least one pending claim (for purposes of statutory 
construction, ``words importing the plural include the singular'' (1 
U.S.C. 1)) that is not withdrawn from consideration and is not subject 
to a rejection, objection, or other requirement. This applies in the 
following situations: (1) At least one claim is allowable (not merely 
objected to) at the time the examiner's answer is mailed and is not 
canceled before, or made subject to a rejection as a result of, the 
appellate review; or (2) when all of the rejections applied to at least 
one claim are reversed, and such claim is not made subject to a 
rejection, as a result of the appellate review. For example:
    (1) If claims 1 and 2 (both independent) are pending, the decision 
affirms the rejection of claim 1, and claim 2 was indicated as 
allowable prior to the appeal, ``allowable claims remain in the 
application'' for purposes of 35 U.S.C. 154(b)(1)(A)(iii).
    (2) If claims 1 and 2 are pending, the decision affirms the 
rejection of claim 1, and claim 2 was objected to by the examiner prior 
to the appeal as being allowable except for its dependency from claim 
1, ``allowable claims'' do not ``remain in the application'' for 
purposes of 35 U.S.C. 154(b)(1)(A)(iii) (claim 2 is not allowable 
because there is an outstanding objection to it).
    (3) If claims 1 and 2 are pending, the decision affirms the 
rejection of claim 1 and reverses the rejection of claim 2, ``allowable 
claims remain in the application'' for purposes of 35 U.S.C. 
154(b)(1)(A)(iii) (claim 2 is ``allowable'' within the meaning of 
Sec. 1.703(a)(5) because there is no outstanding objection or 
requirement as to it until the examiner issues a notice under section 
1214.06, paragraph (I)(B) of the Manual of Patent Examining Procedure 
(7th ed.1998) (Rev. 1, Feb. 2000) (MPEP)).
    Section 1.703(a)(6) pertains to the provisions of 35 U.S.C. 
154(b)(1)(A)(iv). Section 1.703(a)(6) specifies that the period is the 
number of days, if any, beginning on the day after the date that is 
four months after the date the issue fee was paid and all outstanding 
requirements were satisfied and ending on the date the patent was 
issued. The date the issue fee was paid and all outstanding 
requirements were satisfied is the later of the date the issue fee was 
paid or the date all outstanding requirements were satisfied. If 
prosecution in an application is reopened after allowance (see MPEP 
1308), all outstanding requirements are not satisfied until the 
application is again in condition for allowance as indicated by the 
issuance of a new notice of allowance under 35 U.S.C. 151 (see MPEP 
1308).
    Section 1.703(b) pertains to the provisions of 35 U.S.C. 
154(b)(1)(B). Section 1.703(b) indicates that the period of adjustment 
under Sec. 1.702(b) is the number of days, if any, in the period 
beginning on the day after the date that is three years after the 
actual filing date of the application and ending on the date a patent 
was issued. Section 1.703(b) also sets forth the limitations on patent 
term adjustment specified in 35 U.S.C. 154(b)(1)(B)(i) and (ii). 
Section 1.703(b) specifically provides that the period of adjustment of 
the term of a patent under Sec. 1.703(b) shall not include the period 
equal to the sum of the following periods: (1) The period of pendency 
consumed by continued examination of the application under 35 U.S.C. 
132(b) (35 U.S.C. 154(b)(1)(B)(i)); (2) the period of pendency consumed 
by interference proceedings (35 U.S.C. 154(b)(1)(B)(ii)); (3) the 
period of pendency consumed by imposition of a secrecy order (35 U.S.C. 
154(b)(1)(B)(ii)); and (4) the period of pendency consumed by appellate 
review under 35 U.S.C. 134, 141, 145, whether successful or 
unsuccessful (35 U.S.C. 154(b)(1)(B)(ii)). The provisions of 35 U.S.C. 
154(b)(1)(B)(iii) concerning the period of pendency consumed by delays 
in the processing of the application requested by the applicant are 
treated in Sec. 1.704 as such delays are also circumstances 
constituting a failure of an applicant to engage in reasonable efforts 
to conclude processing or examination of an application.
    Section 1.703(c) pertains to the provisions of 35 U.S.C. 
154(b)(1)(C)(i). Section 1.703(c) indicates that the period of 
adjustment under Sec. 1.702(c) is the sum of the following periods (to 
the extent that such periods are not overlapping): (1) The number of 
days, if any, in the period beginning on the date an interference was 
declared or redeclared to involve the application in the interference 
and ending on the date that the interference was terminated with 
respect to the application; and (2) the number of days, if any, in the 
period beginning on the date prosecution in the application was 
suspended by the Office due to interference proceedings under 35 U.S.C. 
135(a) not involving the application and ending on the date of the 
termination of the suspension.
    Section 1.703(d) pertains to the provisions of 35 U.S.C. 
154(b)(1)(C)(ii). Section 1.703(d) indicates that the period of 
adjustment under Sec. 1.702(d) is the sum of the following periods (to 
the extent that such periods are not overlapping): (1) The number of 
days, if any, the application was maintained in a sealed condition 
under 35 U.S.C. 181; (2) the number of days, if any, in the period 
beginning on the date of mailing of an examiner's answer under 
Sec. 1.193 in the application under secrecy order and ending on the 
date the secrecy order was removed; (3) the number of days, if any, in 
the period beginning on the date applicant was notified that an 
interference would be declared but for the secrecy order and ending on 
the date the secrecy order was removed; and (4) the number of days, if 
any, in the period beginning on the date of notification under 
Sec. 5.3(c) and ending on the date of mailing of the notice of 
allowance under 35 U.S.C. 151 and Sec. 1.311.
    Section 1.703(e) pertains to the provisions of 35 U.S.C. 
154(b)(1)(C)(iii). Section 1.703(e) indicates that the period of 
adjustment under Sec. 1.702(e) is the sum of the number of days, if 
any, in the period beginning on the date on which a notice of appeal to 
the Board of Patent Appeals and Interferences was filed under 35 U.S.C. 
134 and Sec. 1.191 and ending on the date of a final decision in favor 
of the applicant by the

[[Page 56370]]

Board of Patent Appeals and Interferences or by a Federal court in an 
appeal under 35 U.S.C. 141 or a civil action under 35 U.S.C. 145. The 
phrase ``in which the patent was issued under a decision in the review 
reversing an adverse determination of patentability'' (a final decision 
in favor of the applicant) in 35 U.S.C. 154(b)(1)(C)(iii) requires a 
Board of Patent Appeals and Interferences or Federal court decision in 
the review that reverses all of the rejections of at least one claim 
and that such claim is not subject to a rejection under Sec. 1.196(b). 
For example:
    (1) If claims 1 and 2 are pending, claim 1 stands rejected under 35 
U.S.C. 103 and claim 2 was indicated as allowable prior to the appeal, 
the rejection of claim 1 under 35 U.S.C. 103 is affirmed, and a patent 
is issued (containing claim 2), the patent was not issued under a 
decision in the review reversing an adverse determination of 
patentability.
    (2) If claims 1 and 2 are pending, claims 1 and 2 stand rejected 
under 35 U.S.C. 103, as well as 35 U.S.C. 112, para. 2, the rejection 
of claims 1 and 2 under 35 U.S.C. 103 is affirmed but the rejection of 
claims 1 and 2 under 35 U.S.C. 112, para. 2, is reversed, and a patent 
is issued as a result of continued examination under the provisions of 
35 U.S.C. 132(b) and Sec. 1.114, the patent was not issued under a 
decision in the review reversing an adverse determination of 
patentability.
    (3) If claims 1 and 2 are pending, claims 1 and 2 stand rejected 
under 35 U.S.C. 102, the rejection of claims 1 and 2 under 35 U.S.C. 
102 is reversed, and the decision by the Board of Patent Appeals and 
Interferences enters a new ground of rejection of claims 1 and 2 under 
35 U.S.C. 103 (Sec. 1.196(b)), and a patent is issued as a result of 
further prosecution before the examiner, the patent was not issued 
under a decision in the review reversing an adverse determination of 
patentability.
    (4) If claims 1 and 2 are pending, claims 1 and 2 stand rejected 
under 35 U.S.C. 103, the rejection of claim 1 under 35 U.S.C. 103 is 
affirmed but the rejection of claim 2 under 35 U.S.C. 103 is reversed, 
and a patent is issued (containing claim 2), the patent was issued 
under a decision in the review reversing an adverse determination of 
patentability.
    The Committee Reports for the predecessors of the American 
Inventors Protection Act of 1999 in the 105th Congress (the 21st 
Century Patent System Improvement Act, H.R. 400, 105th Cong. (1997), 
and The Omnibus Patent Act of 1997, S. 507, 105th Cong. (1997)) 
indicate that the Office should not determine whether ``the patent was 
issued under a decision in the review reversing an adverse 
determination of patentability'' in a mechanistic way, but should 
consider the particulars of each application after an appeal to 
determine whether patent term adjustment (restoration) is appropriate. 
See H.R. Rep. No. 105-39, at 66-67 (1997), and S. Rep. No. 105-42, at 
102-03 (1997). Nevertheless, this language cannot be relied upon in 
interpreting the phrase ``the patent was issued under a decision in the 
review reversing an adverse determination of patentability'' because: 
(1) while H.R. 400 was passed by the House of Representatives on April 
23, 1997, neither H.R. 400 nor S. 507 were enacted into law; and (2) 
this language is not contained in the section-by-section analysis of 
the American Inventors Protection Act of 1999 or the Committee or 
Conference Reports for its predecessors (the Intellectual Property and 
Communications Omnibus Reform Act of 1999, H.R. 1554, 106th Cong. 
(1999), and the American Inventors Protection Act of 1999, H.R. 1907, 
106th Cong. (1999)) in the 106th Congress. See 145 Cong. Rec. S14,708-
26 (1999)(daily ed. Nov. 17, 1999), H.R. Conf. Rep. No. 106-464 (1999), 
and H.R. Rep. No. 106-287 (1999).
    As discussed below, the Office must make its patent term adjustment 
determinations by a computer program that uses the information recorded 
in the Office's automated patent application information system (the 
Patent Application Location and Monitoring system or PALM system). 
Thus, the Office must determine whether the Board of Patent Appeals and 
Interferences (or court) decision was of a nature such that ``the 
patent was issued under a decision in the review reversing an adverse 
determination of patentability'' under 35 U.S.C. 154(b)(1)(C)(iii) from 
information concerning the decision susceptible of being recorded in 
the PALM system (rather than by a case-by-case review of each 
decision).
    Section 1.703(f) indicates that the adjustment will run from the 
expiration date of the patent as set forth in 35 U.S.C. 154(a)(2). 
Section 1.703(f) also indicates that to the extent that periods of 
adjustment attributable to the grounds specified in Sec. 1.702 overlap, 
the period of adjustment will not exceed the actual number of days the 
issuance of the patent was delayed (35 U.S.C. 154(b)(2)(A)). Section 
1.703(f) also specifically indicates that the term of a patent entitled 
to adjustment under Sec. 1.702 and this section shall be adjusted for 
the sum of the periods calculated under Sec. 1.703(a) through (e), to 
the extent that such periods are not overlapping, less the sum of the 
periods calculated under Sec. 1.704. Section 1.703(f) also provides 
that the date indicated on any certificate of mailing or transmission 
under Sec. 1.8 shall not be taken into account in this calculation. 
That is, while the date indicated on any certificate of mailing or 
transmission under Sec. 1.8 will continue to be taken into account in 
determining timeliness, the date of filing (Sec. 1.6) will be the date 
used in a patent term adjustment calculation. Applicant may wish to 
consider the use of the ``Express Mail Post Office to Addressee'' 
service of the United States Postal Service (Sec. 1.10) or facsimile 
transmission (Sec. 1.6(d)) for replies to be accorded the earliest 
possible filing date for patent term adjustment calculations.
    Section 1.703(g) indicates that no patent, the term of which has 
been disclaimed beyond a specified date, shall be adjusted under 
Secs. 1.702 and 1.703 beyond the expiration date specified in the 
disclaimer (35 U.S.C. 154(b)(2)(B)).
    Section 1.704 implements the provisions of 35 U.S.C. 154(b)(2)(C). 
35 U.S.C. 154(b)(2)(C) specifies certain circumstances as constituting 
a failure of an applicant to engage in reasonable efforts to conclude 
processing or examination of an application and also provides for the 
Office to prescribe regulations establishing circumstances that 
constitute a failure of an applicant to engage in reasonable efforts to 
conclude processing or examination of an application.
    Section 1.704(a) implements the provisions of 35 U.S.C. 
154(b)(2)(C)(i) and indicates that the period of adjustment shall be 
reduced by a period equal to the period of time during which the 
applicant failed to engage in reasonable efforts to conclude 
prosecution (i.e., processing or examination) of an application.
    Section 1.704(b) provides that with respect to the ground for 
adjustments set forth in Secs. 1.702(a) through (e), and in particular 
Sec. 1.702(b), an applicant shall be deemed to have failed to engage in 
reasonable efforts to conclude prosecution for the cumulative total of 
any periods of time in excess of three months that are taken to reply 
to any notice or action by the Office making any rejection, objection, 
argument, or other request, measuring such three-month period from the 
date the notice or action was mailed or given to the applicant. A 
Notice of Omitted Items in a Nonprovisional Application (PTO-1669), 
however, is not a notice or action by the Office making a rejection, 
objection, argument, or other request

[[Page 56371]]

within the meaning of 35 U.S.C. 154(b)(2)(C)(ii) or Sec. 1.704(b), 
since the Office does not require a reply to that notice to continue 
the processing and examination of an application. Section 1.704(b) 
indicates that the period of adjustment set forth in Sec. 1.703 shall 
be reduced by the number of days, if any, beginning on the day after 
the date that is three months after the date of mailing or transmission 
of the Office communication notifying the applicant of the rejection, 
objection, argument, or other request and ending on the date the reply 
was filed. As discussed above, a reply is considered filed on the date 
of its actual receipt in the Office as defined by Sec. 1.6, and the 
date indicated on any certificate of mailing or transmission under 
Sec. 1.8 will not be taken into account for patent term adjustment 
purposes.
    The three-month period in Sec. 1.704(b) applies to the Office 
notices and letters issued as part of the pre-examination processing of 
an application (except a Notice of Omitted Items in a Nonprovisional 
Application (PTO-1669) as discussed above). These notices include: (1) 
A Notice of Incomplete Nonprovisional Application (PTO-1123) (except as 
to any period prior to the filing date ultimately accorded to the 
application); (2) a Notice to File Missing Parts of Application (PTO-
1533); (3) a Notice of Informal Application (PTO-152); (4) a Notice to 
File Corrected Application Papers Filing Date Granted (PTO-1660); or 
(5) a Notice to Comply with Requirements for Patent Applications 
Containing Nucleotide Sequence and/or Amino Acid Sequence Disclosures 
(PTO-1661).
    In addition, the three-month period in 35 U.S.C. 154(b)(2)(C)(ii) 
and Sec. 1.704(b) applies regardless of the period for reply set in the 
Office action or notice. For example, if an Office action sets a one-
month period for reply (restriction requirement), the applicant may 
obtain a two-month extension of time under Sec. 1.136(a) before being 
subject to a reduction of patent term adjustment under 35 U.S.C. 
154(b)(2)(C)(ii) and Sec. 1.704(b). If, however, an Office action sets 
a six-month period for reply, as is commonly set in applications 
subject to secrecy orders (see MPEP 130), the applicant is subject to a 
reduction of patent term adjustment under 35 U.S.C. 154(b)(2)(C)(ii) 
and Sec. 1.704(b) if the applicant does not reply to the Office action 
within three months, notwithstanding that a reply may be timely filed 
six months after the mailing date of the Office action.
    Section 1.704(c) establishes further circumstances that constitute 
a failure of an applicant to engage in reasonable efforts to conclude 
processing or examination of an application. Sections 1.704(c)(1) 
through (c)(11) set forth actions or inactions by an applicant that 
interfere with the Office's ability to process or examine an 
application (and thus circumstances that constitute a failure of an 
applicant to engage in reasonable efforts to conclude processing or 
examination of an application), as well as the period by which a period 
of adjustment set forth in Sec. 1.703 shall be reduced if an applicant 
engages in any of the enumerated actions or inactions.
    Sections 1.704(c)(1) through 1.704(c)(11) address situations that 
occur with sufficient frequency to warrant being specifically provided 
for in the rules of practice. An attempt to provide an exhaustive 
listing of actions or inactions that interfere with the Office's 
ability to process or examine an application is impractical, since 
there are a myriad of actions or inactions that occur infrequently but 
will interfere with the Office's ability to process or examine an 
application (e.g., applicant files and persists in requesting 
reconsideration of a meritless petition under Sec. 1.10; parties to an 
interference obtain an extension for purposes of settlement 
negotiations which do not result in settlement of the interference; and 
when the scope of the broadest claim in the application at the time an 
application is placed in condition for allowance is substantially the 
same as suggested or allowed by the examiner more than six months 
earlier than the date the application was placed in condition for 
allowance). Thus, the actions or inactions set forth in Sec. 1.704(c) 
are exemplary circumstances that constitute a failure of an applicant 
to engage in reasonable efforts to conclude processing or examination 
of an application. The Office may also reduce a period of adjustment 
provided in Sec. 1.703 on the basis of conduct that interferes with the 
Office's ability to process or examine an application under the 
authority provided in 35 U.S.C. 154(b)(2)(C)(iii), even if such conduct 
is not specifically addressed in Sec. 1.704(c).
    Section 1.704(c)(1) establishes suspension of action under 
Sec. 1.103 at the applicant's request as a circumstance that 
constitutes a failure of an applicant to engage in reasonable efforts 
to conclude processing or examination of an application. Obviously, if 
action is suspended at the applicant's request, the Office is precluded 
from processing or examining the application as a result of an action 
by the applicant. Section 1.704(c)(1) also provides that in such a case 
the period of adjustment set forth in Sec. 1.703 shall be reduced by 
the number of days, if any, beginning on the date a request for 
suspension of action under Sec. 1.103 was filed and ending on the date 
of the termination of the suspension.
    Section 1.704(c)(2) establishes deferral of issuance of a patent 
under Sec. 1.314 as a circumstance that constitutes a failure of an 
applicant to engage in reasonable efforts to conclude processing or 
examination of an application. Obviously, if issuance of the patent is 
deferred under Sec. 1.314, the Office is precluded from issuing the 
application as a result of an action by the applicant. When a petition 
under Sec. 1.314 is granted, the petition decision generally states 
that the application will be held for a period of a month to await the 
filing of a paper. At the end of the period, the application is 
returned to the issue process without a further communication from the 
Office to the applicant. Section 1.704(c)(2) also provides that in such 
a case the period of adjustment set forth in Sec. 1.703 shall be 
reduced by the number of days, if any, beginning on the date a request 
for deferral of issuance of a patent under Sec. 1.314 was filed and 
ending on the issue date of the patent.
    Section 1.704(c)(3) establishes abandonment of the application or 
late payment of the issue fee as a circumstance that constitutes a 
failure of an applicant to engage in reasonable efforts to conclude 
processing or examination of an application. Obviously, if the 
application is abandoned (either by failure to prosecute or late 
payment of the issue fee), the Office is precluded from processing or 
examining the application as a result of an action or inaction by the 
applicant. Section 1.704(c)(3) also provides that in such a case the 
period of adjustment set forth in Sec. 1.703 shall be reduced by the 
number of days, if any, beginning on the date of abandonment or the 
date after the day the issue fee was due and ending on the earlier of: 
(1) The date of mailing of the decision reviving the application or 
accepting late payment of the issue fee; or (2) the date that is four 
months after the date the grantable petition to revive the application 
or accept late payment of the issue fee was filed. The phrase ``earlier 
of * * * [t]he date that is four months after the date the grantable 
petition to revive the application or accept late payment of the issue 
fee was filed'' is to place a cap (measured from the filing date of the 
grantable petition) on the reduction if the Office does not act on 
(grant) the grantable petition to revive within four months of the date 
it was filed.

[[Page 56372]]

    Section 1.704(c)(4) establishes failure to file a petition to 
withdraw a holding of abandonment or to revive an application within 
two months from the mailing date of a notice of abandonment as a 
circumstance that constitutes a failure of an applicant to engage in 
reasonable efforts to conclude processing or examination of an 
application. Any applicant who considers an application to have been 
improperly held abandoned (the reduction in Sec. 1.704(c)(3) is 
applicable to the revival of an application properly held abandoned) is 
expected to file a petition to withdraw the holding of abandonment (or 
to revive the application) within two months from the mailing date of a 
notice of abandonment. See MPEP 711.03(c), paragraph (I). Section 
1.704(c)(4) also provides that in such a case the period of adjustment 
set forth in Sec. 1.703 shall be reduced by the number of days, if any, 
beginning on the day after the date two months from the mailing date of 
a notice of abandonment and ending on the date a petition to withdraw 
the holding of abandonment or to revive the application was filed.
    Section 1.704(c)(5) establishes conversion of a provisional 
application under 35 U.S.C. 111(b) to a nonprovisional application 
under 35 U.S.C. 111(a) (pursuant to 35 U.S.C. 111(b)(5)) as a 
circumstance that constitutes a failure of an applicant to engage in 
reasonable efforts to conclude processing or examination of an 
application. Section 4801(a) of the American Inventors Protection Act 
of 1999, which provides for the conversion of a provisional application 
under 35 U.S.C. 111(b) and Sec. 1.53(c) to a nonprovisional application 
under 35 U.S.C. 111(a) and Sec. 1.53(b), is being implemented in a 
separate rulemaking. Conversion of a provisional application to a 
nonprovisional application will require the Office to reprocess the 
application (as a nonprovisional application) up to one year after the 
filing date that will be accorded to such nonprovisional application as 
a result of an action by the applicant. Section 1.704(c)(5) also 
provides that in such a case the period of adjustment set forth in 
Sec. 1.703 shall be reduced by the number of days, if any, beginning on 
the date the application was filed under 35 U.S.C. 111(b) and ending on 
the date a request in compliance with Sec. 1.53(c)(3) to convert the 
provisional application into a nonprovisional application was filed.
    Section 1.704(c)(6) establishes submission of a preliminary 
amendment or other preliminary paper less than one month before the 
mailing of an Office action under 35 U.S.C. 132 or a notice of 
allowance under 35 U.S.C. 151 that requires the mailing of a 
supplemental Office action or notice of allowance as a circumstance 
that constitutes a failure of an applicant to engage in reasonable 
efforts to conclude processing or examination of an application. If the 
submission of a preliminary amendment or other paper requires the 
Office to issue a supplemental Office action or notice of allowance, 
the submission of that preliminary amendment or other paper has 
interfered with the processing and examination of an application. 
Section 1.704(c)(6) also provides that in such a case the period of 
adjustment set forth in Sec. 1.703 shall be reduced by the lesser of 
the number of days, if any, beginning on the mailing date of the 
original Office action or notice of allowance and ending on the date of 
mailing of the supplemental Office action or notice of allowance or 
four months. The phrase ``lesser of * * * or [f]our months'' is to 
provide a four-month cap for a reduction under Sec. 1.704(c)(6) if the 
Office takes longer than four months to issue a supplemental Office 
action or notice of allowance.
    Section 1.704(c)(7) establishes submission of a reply having an 
omission (Sec. 1.135(c)) as a circumstance that constitutes a failure 
of an applicant to engage in reasonable efforts to conclude processing 
or examination of an application. Submitting a reply having an omission 
requires the Office to issue an action under Sec. 1.135(c) and await 
and process the applicant's reply to the action under Sec. 1.135(c) 
before the initial reply (as corrected) can be treated on its merits. 
Section 1.704(c)(7) also provides that in such a case the period of 
adjustment set forth in Sec. 1.703 shall be reduced by the number of 
days, if any, beginning on the date the reply having an omission was 
filed and ending on the date that the reply or other paper correcting 
the omission was filed. The reference to ``Sec. 1.135(c)'' is 
parenthetical because Sec. 1.704(c)(7) is not limited to Office actions 
under Sec. 1.135(c) but applies when the Office issues any action or 
notice indicating that a reply has an omission which must be corrected: 
e.g., (1) a decision on a petition under Sec. 1.47 dismissing the 
petition as lacking an item necessary to grant the petition; or (2) a 
notice indicating that the computer readable format sequence listing 
filed in reply to a Notice to Comply with Requirements for Patent 
Applications Containing Nucleotide Sequence and/or Amino Acid Sequence 
Disclosures (PTO-1661) does not comply with Sec. 1.821 et seq.
    Section 1.704(c)(8) establishes submission of a supplemental reply 
or other paper after a reply has been filed as a circumstance that 
constitutes a failure of an applicant to engage in reasonable efforts 
to conclude processing or examination of an application. The submission 
of a supplemental reply or other paper (e.g., an information disclosure 
statement (IDS) or petition) after an initial reply was filed requires 
the Office to restart consideration of the initial reply in view of the 
supplemental reply or other paper, which will result in a delay in the 
Office's response to the initial reply. Section 1.704(c)(8) does not 
apply to a supplemental reply or other paper that was expressly 
requested by the examiner. Section 1.704(c)(8) also provides that in 
such a case the period of adjustment set forth in Sec. 1.703 shall be 
reduced by the number of days, if any, beginning on the date the 
initial reply was filed and ending on the date that the supplemental 
reply or such other paper was filed.
    Section 1.704(c)(9) establishes submission of an amendment or other 
paper in an application containing allowed claims after a decision by 
the Board of Patent Appeals and Interferences (other than a decision 
containing a rejection under Sec. 1.196(b)) or a Federal court less 
than one month before the mailing of an Office action under 35 U.S.C. 
132 or notice of allowance under 35 U.S.C. 151 that requires the 
mailing of a supplemental Office action or supplemental notice of 
allowance as a circumstance that constitutes a failure of an applicant 
to engage in reasonable efforts to conclude processing or examination 
of an application. The submission of an amendment or other paper (e.g., 
IDS or petition) in an application after a Board of Patent Appeals and 
Interferences or court decision requires the Office to restart 
consideration of the application in view of the amendment or other 
paper, which will result in a delay in the Office's taking action on 
the application. Section 1.704(c)(9) also provides that in such a case 
the period of adjustment set forth in Sec. 1.703 shall be reduced by 
the lesser of the number of days, if any, beginning on the mailing date 
of the original Office action or notice of allowance and ending on the 
mailing date of the supplemental Office action or notice of allowance 
or four months. The phrase ``lesser of * * * or [f]our months'' is to 
provide a four-month cap for a reduction under Sec. 1.704(c)(9) if the 
Office takes longer than four months to issue a

[[Page 56373]]

supplemental Office action or notice of allowance.
    Section 1.704(c)(10) establishes submission of an amendment under 
Sec. 1.312 or other paper after a notice of allowance has been given or 
mailed as a circumstance that constitutes a failure of an applicant to 
engage in reasonable efforts to conclude processing or examination of 
an application. The submission of amendments (or other papers) after an 
application is allowed causes substantial interference with the patent 
issue process. See Filing of Continuing Applications, Amendments, or 
Petitions after Payment of Issue Fee, Notice, 1221 Off. Gaz. Pat. 
Office 14 (Apr. 6, 1999); and Patents to Issue More Quickly After Issue 
Fee Payment, Notice, 1220 Off. Gaz. Pat. Office 42 (Mar. 9, 1999). 
Thus, to continue to permit applicants to submit an amendment or other 
paper after a notice of allowance is mailed or given, the Office must 
establish submission of such papers as circumstances that constitute a 
failure of an applicant to engage in reasonable efforts to conclude 
processing or examination of an application. Section 1.704(c)(10) also 
provides that in such a case the period of adjustment set forth in 
Sec. 1.703 shall be reduced by the lesser of: (1) the number of days, 
if any, beginning on the date the amendment under Sec. 1.312 was filed 
and ending on the mailing date of the Office action or notice in 
response to the amendment under Sec. 1.312 or such other paper; or (2) 
four months. The phrase ``lesser of * * * or [f]our months'' is to 
provide a four-month cap for a reduction under Sec. 1.704(c)(10) if the 
Office takes longer than four months to issue an Office action or 
notice in response to the amendment under Sec. 1.312 or other paper.
    Section 1.704(c)(11) establishes further prosecution via a 
continuing application as a circumstance that constitutes a failure of 
an applicant to engage in reasonable efforts to conclude processing or 
examination of an application. Currently, a continuing application may 
be used to: (1) Obtain further examination of an invention disclosed 
and claimed in the prior application (continuation application); (2) 
obtain examination (for the first time) of an invention disclosed but 
not claimed or not elected for examination in the prior application 
(divisional application); or (3) obtain examination of an invention 
neither disclosed nor claimed in the prior application (continuation-
in-part application). The provisions of 35 U.S.C. 132(b) and Sec. 1.114 
permit an applicant to obtain further or continued examination of an 
invention disclosed and claimed in an application, which renders it 
unnecessary for an applicant whose application is eligible for patent 
term adjustment under 35 U.S.C. 154(b) to file a continuing application 
to obtain further examination of an invention disclosed and claimed in 
an application. If an applicant is filing a continuing application to 
obtain examination (for the first time) of an invention disclosed but 
not claimed or not elected for examination in the prior application or 
an invention neither disclosed nor claimed in the prior application, it 
is not appropriate for that applicant to obtain any benefit in the 
continuing application for examination delays that might have occurred 
in the prior application. Thus, the Office is establishing further 
prosecution via a continuing application as a circumstance that 
constitutes a failure of an applicant to engage in reasonable efforts 
to conclude processing or examination of an application, in that the 
period of adjustment set forth in Sec. 1.703 shall not include any 
period that is prior to the actual filing date of the application that 
resulted in the patent. Thus, if the application that resulted in the 
patent is a continuing application (including a CPA), the period of 
adjustment set forth in Sec. 1.703 (if any) will not include any period 
that is prior to the actual filing date of the application (in the case 
of a CPA, the filing date of the request for a CPA) that resulted in 
the patent.
    As discussed above, an applicant may file a CPA under Sec. 1.53(d) 
on or after May 29, 2000, for the application to be subject to the 
patent term adjustment provisions of 35 U.S.C. 154(b) as amended by 
Sec. 4402 of the American Inventors Protection Act of 1999. The period 
of patent term adjustment set forth in Sec. 1.703 (if any), however, 
will not include any period that is prior to the filing date of the 
request for that CPA.
    Section 1.704(d) provides that a paper containing only an 
information disclosure statement in compliance with Secs. 1.97 and 1.98 
will not be considered (result in a reduction) under Secs. 1.704(c)(6), 
1.704(c)(8), 1.704(c)(9), or 1.704 (c)(10) if it is accompanied by a 
certification that each item of information contained in the 
information disclosure statement was cited in a communication from a 
foreign patent office in a counterpart application and that this 
communication was not received by any individual designated in 
Sec. 1.56(c) more than thirty days prior to the filing of the 
information disclosure statement. This provision will permit applicants 
to submit information cited in a communication from a foreign patent 
office in a counterpart application to the Office without a reduction 
in patent term adjustment if an information disclosure statement is 
promptly (within thirty days of receipt of the communication) submitted 
to the Office. Obviously, compliance with the certification requirement 
of Sec. 1.704(d) does not substitute for compliance with any relevant 
requirement of Secs. 1.97 or 1.98. Section 1.704(d) also provides that 
this thirty-day period is not extendable.
    Section 1.704(e) provides that submission of an application for 
patent term adjustment under Sec. 1.705(b) (with or without request 
under Sec. 1.705(c) for reinstatement of reduced patent term 
adjustment) will not be considered a failure to engage in reasonable 
efforts to conclude prosecution (processing or examination) of the 
application under Sec. 1.704(c)(10). Due to the time constraints on the 
Office under 35 U.S.C. 154(b)(1)(A)(iv) and (B) to complete its patent 
term adjustment determination and issue the patent, the Office must 
require applicants to follow the specific procedure set forth in 
Sec. 1.705 for requesting reconsideration of the Office's initial 
patent term adjustment determination and for requesting reinstatement 
of patent term adjustment reduced under Sec. 1.704(b). Thus, while 
submission of an application for patent term adjustment under 
Sec. 1.705(b) (regardless of whether it contains a request under 
Sec. 1.705(c) for reinstatement of reduced patent term adjustment) will 
interfere with the patent printing process, submission of the 
application will not be considered a failure to engage in reasonable 
efforts to conclude prosecution (processing or examination) of the 
application under Sec. 1.704 (c)(10). Other papers concerning patent 
term adjustment (e.g., status letters, untimely applications for patent 
term adjustment, requests for reconsideration of the Office's decisions 
on applications for patent term adjustment, petitions under 
Secs. 1.181, 1.182, or 1.183 concerning patent term adjustment, or 
miscellaneous letters concerning patent term adjustment), however, will 
be considered a failure to engage in reasonable efforts to conclude 
prosecution (processing or examination) of the application under 
Sec. 1.704(c)(10).
    Section 1.705 implements the provisions of 35 U.S.C. 154(b)(3) and 
(b)(4)(B).
    Section 1.705(a) indicates that the notice of allowance will 
include notification of any patent term adjustment under 35 U.S.C. 
154(b) (35 U.S.C. 154(b)(3)(B)(i)). Since the Office now issues over 
160,000 patents each year, the only practical way to make the

[[Page 56374]]

patent term adjustment determinations required by 35 U.S.C. 
154(b)(3)(B)(i) is by a computer program that uses the information 
(dates of receipt and nature of applicant correspondence and of the 
dates of mailing and nature of Office actions or notices) recorded in 
the PALM system.
    Section 1.705(b) provides that any request for review or 
reconsideration of the patent term adjustment indicated in the notice 
of allowance (except as provided in Sec. 1.705(d)) and any request for 
reinstatement of all or part of the term reduced pursuant to 
Sec. 1.704(a) must be filed no later than the payment of the issue fee 
but may not be filed earlier than the date of mailing of the notice of 
allowance. Section 1.705(b) provides that any such request must be by 
way of an application for patent term adjustment accompanied by the fee 
set forth in Sec. 1.18(e) and a statement of the facts involved. 
Section 1.705(b) also provides that such statement of facts must 
specify: (1) The basis or bases under Sec. 1.702 for the adjustment; 
(2) the relevant dates as specified in Secs. 1.703(a) through (e) for 
which an adjustment is sought and the adjustment as specified in 
Sec. 1.703(f) to which the patent is entitled; (3) whether the patent 
is subject to a terminal disclaimer and any expiration date specified 
in the terminal disclaimer; and (4) any circumstances during the 
prosecution of the application resulting in the patent that constitute 
a failure to engage in reasonable efforts to conclude processing or 
examination of such application as set forth in Sec. 1.704 (or a 
statement that there were no such circumstances). Since the Office must 
complete its determination of patent term adjustment before proceeding 
to issue the patent (35 U.S.C. 154(b)(3)(D)), the Office must require 
that such application for patent term adjustment be filed within a non-
extendable time period and setting forth with particularity why the 
Office's patent term adjustment determination is not correct. In the 
absence of these requirements, the issuance of the patent will be 
further delayed by a protracted patent term adjustment determination 
proceeding.
    Section 1.705(c) implements the provisions of 35 U.S.C. 
154(b)(3)(C). Section 1.705(c) specifically provides that a request for 
reinstatement of all or part of the period of adjustment reduced 
pursuant to Sec. 1.704(b) for failing to reply to a rejection, 
objection, argument, or other request within three months of the date 
of mailing of the Office communication notifying the applicant of the 
rejection, objection, argument, or other request must include: (1) The 
fee set forth in Sec. 1.18(f); and (2) a showing to the satisfaction of 
the Commissioner that, in spite of all due care, the applicant was 
unable to reply to the rejection, objection, argument, or other request 
within three months of the date of mailing of the Office communication 
notifying the applicant of the rejection, objection, argument, or other 
request. Section 1.705(c) also provides that the Office shall not grant 
any request for reinstatement for more than three additional months for 
each reply beyond three months of the date of mailing of the Office 
communication notifying the applicant of the rejection, objection, 
argument, or other request (35 U.S.C. 154(b)(3)(C)).
    Since the Office is obligated to provide a determination of patent 
term adjustment under 35 U.S.C. 154(b) in the notice of allowance 
(i.e., before the actual patent issue date), the Office must project 
(or estimate) the actual patent issue date and base its patent term 
adjustment determination on that projection. Thus, Sec. 1.705(d) 
provides for the situation in which the patent is issued on a date 
other than the projected date of issue and this change necessitates a 
revision of the patent term adjustment indicated in the notice of 
allowance. Section 1.705(d) specifically provides that if the patent is 
issued on a date other than the projected date of issue and this change 
necessitates a revision of the patent term adjustment indicated in the 
notice of allowance, the patent will indicate the revised patent term 
adjustment. Section 1.705(d) also provides that if the patent indicates 
a revised patent term adjustment due to the patent being issued on a 
date other than the projected date of issue, any request for 
reconsideration of the patent term adjustment indicated in the patent 
must be filed within thirty days of the date the patent issued and must 
comply with the requirements of Sec. 1.705(b)(1) and Sec. 1.705(b)(2).
    Section 1.705(e) provides that the periods set forth in this 
section are not extendable. As discussed above, the Office must set 
non-extendable time periods in Sec. 1.705 to avoid delay in the 
issuance of the patent.
    Section 1.705(f) implements the provisions of 35 U.S.C. 
154(b)(4)(B) and provides that no submission or petition on behalf of a 
third party concerning patent term adjustment under 35 U.S.C. 154(b) 
will be considered by the Office, and that any such submission or 
petition, will be returned to the third party, or otherwise disposed 
of, at the convenience of the Office.
    Response to comments: The Office received twenty-three written 
comments (from Intellectual Property Organizations, Businesses, Law 
Firms, Patent Practitioners, and others) in response to the notice of 
proposed rulemaking. Comments generally in support of a change are not 
discussed. The comments and the Office's responses to those comments 
follow:
    Comment 1: One comment argued that charging a fee as set forth in 
Sec. 1.18(e) to correct an Office error was unfair. In addition, 
several comments argued that the fee for a patent term adjustment 
calculation should be refundable if the Office does not calculate the 
term adjustment correctly.
    Response: 35 U.S.C. 154(b)(3) provides for the Office to establish 
procedures for the application for and determination of patent term 
adjustment under 35 U.S.C. 154(b). The Office will provide an initial 
determination of the patent term adjustment in the notice of allowance. 
If, however, an applicant wishes to request reconsideration of the 
initial determination in the notice of allowance, the applicant must 
file an application for patent term adjustment. 35 U.S.C. 41(d) 
authorizes the Office to establish a fee to recover the estimated 
average cost of treating applications for patent term adjustment (as 
well as a fee for treating a request for reinstatement of patent term 
adjustment), and the cost of treating an application for patent term 
adjustment is about the same regardless of whether the Office's initial 
determination of patent term adjustment indicated in the notice of 
allowance is correct. In any event, refunding the fee under 
Sec. 1.18(e) when the application for patent term adjustment is correct 
would: (1) Require the Office to raise the fee set forth in 
Sec. 1.18(e) (to enable the Office to recover the same aggregate 
amount); and (2) add further complication to a review process that must 
take place in a limited period of time.
    Comment 2: One comment argued that the fees under Secs. 1.18(e) and 
(f) should be reduced for small entities.
    Response: As discussed above, 35 U.S.C. 41(d) authorizes the Office 
to establish a fee to recover the estimated average cost of treating 
applications for patent term adjustment (as well as a fee for treating 
a request for reinstatement of patent term adjustment). The small 
entity discount in 35 U.S.C. 41(h)(1) applies only to fees charged 
under 35 U.S.C. 41(a) and (b). Thus, the Office has no authority to 
apply the small entity discount to the fees set forth in Secs. 1.18(e) 
and (f).
    Comment 3: One comment noted that the heading of Sec. 1.701 was 
inconsistent with Sec. 1.701(e), and suggested that ``and before May 
29, 2000'' be added to the heading of Sec. 1.701.

[[Page 56375]]

    Response: The phrase ``and before May 29, 2000'' has been added to 
the heading of Sec. 1.701.
    Comment 4: Several comments argued that for purposes of 
Sec. 1.702(a)(1), a restriction requirement or an election of species 
requirement should not be considered a notification under 35 U.S.C. 
132. The comments stated an Office action containing only a restriction 
requirement or an election of species requirement should be issued only 
after there has been an attempt to make the restriction requirement or 
the election of species requirement by telephone, and that treating a 
restriction requirement or election of species requirement as an action 
under 35 U.S.C. 132 will further exacerbate a concern of applicants 
that a restriction requirement is not proper.
    Response: The comment cannot be adopted. The Office did not 
``decide'' to treat restriction requirements and election of species 
requirements as notifications under 35 U.S.C. 132; they are 
notifications under 35 U.S.C. 132.
    In considering whether a restriction requirement under 35 U.S.C. 
121 was appealable under 35 U.S.C. 134, the Court of Customs and Patent 
Appeals (CCPA) noted that: (1) 35 U.S.C. 121 denoted its procedure as a 
``requirement''; (2) 35 U.S.C. 132 stated that the Commissioner shall 
give notice to the applicant whenever ``any claim for a patent is 
rejected, or any objection or requirement made''; and (3) 35 U.S.C. 134 
provided for an appeal only by an applicant whose claims have been 
``twice rejected.'' See In re Hengehold, 440 F.2d 1395, 1402-03, 169 
USPQ 473, 479 (CCPA 1971). Thus, the CCPA concluded that Congress 
intended to differentiate between objections and requirements (under 35 
U.S.C. 132) and actual rejections of claims (under 35 U.S.C. 132) and 
made appeal applicable only to the latter. See Hengehold, 440 F.2d at 
1403, 169 USPQ at 479. Since the CCPA discussed and differentiated 
between rejections, objections, and requirements under 35 U.S.C. 132 in 
determining whether a restriction requirement was appealable under 35 
U.S.C. 134, the CCPA must have considered a restriction requirement to 
be a requirement under 35 U.S.C. 132, thus making a written restriction 
(or election) requirement a notification under 35 U.S.C. 132. See also 
Digital Equipment Corp. v. Diamond, 653 F.2d 701, 713 n.13, 210 USPQ 
521, 535-36 n.13 (1st Cir. 1981) (citing 35 U.S.C. 132 when noting that 
the terms ``requirement'' and ``objection'' are distinct from 
``rejection'' (as used in title 35, U.S.C.) and that requirements and 
objections were not appealable under 35 U.S.C. 134).
    In addition, the Office has long considered (at least implicitly) a 
written restriction requirement containing no action on the merits to 
be a notice under 35 U.S.C. 132. MPEP 710.02(b) instructs examiners to 
set a shortened statutory period for reply of one month for a written 
restriction requirement containing no action on the merits under the 
authority given by 35 U.S.C. 133 (35 U.S.C. 133 would not apply to the 
period for reply to a written restriction requirement, if a written 
restriction requirement containing no action on the merits is not a 
notice under 35 U.S.C. 132).
    The Office encourages examiners to make an oral restriction 
requirement. Many applicants, however, prefer a written restriction 
requirement because it gives them more time to consider the 
requirement.
    Comment 5: One comment requested a definition of the term 
``original application'' as used in Sec. 1.702(f) and asked whether the 
term refers to a parent application or a divisional or continuation. 
Several comments expressed confusion as to whether term adjustment for 
a first-filed application would result in the same term adjustment in a 
continuation of that application. One comment suggested that the term 
``applications other than reissue applications'' be used instead of 
``original applications.''
    Response: An ``original application'' is any application other than 
a reissue application. See Guidelines Concerning the Implementation of 
Changes to 35 U.S.C. 102(g) and 103(c) and the Interpretation of the 
Term ``Original Application'' in the American Inventors Protection Act 
of 1999, 1233 Off. Gaz. Pat. Office 54 (Apr. 11, 2000). Thus, the term 
``original application'' includes a continuing application 
(continuation, divisional, or continuation-in-part, whether the 
application is filed under Sec. 1.53(b) or as a continued prosecution 
application under Sec. 1.53(d)), and the national stage of an 
international application. Since a request for continued examination 
under 35 U.S.C. 132(b) and Sec. 1.114 is not an application (but a 
submission in a previously filed application), the term ``original 
application'' does not include a request for continued examination 
under 35 U.S.C. 132(b) and Sec. 1.114.
    While 35 U.S.C. 154(b) does not use the term ``original 
application,'' its provisions concern the situation in which the issue 
of an original patent is delayed due to the failure of the Office to 
take certain actions in the application that issued as the patent. 
Patent term adjustment events in one application may not be relied upon 
as giving rise to patent term adjustment in another application, even 
if the other application claims the benefit of the first application 
under 35 U.S.C. 120, 121, or 365(c) (i.e., patent term adjustment 
events in a parent application do not carry over to a child 
application).
    Comment 6: One comment stated that Sec. 1.702(f) should also 
provide that the provisions apply to international applications in 
which the requirements of 35 U.S.C. 371 are met on or after May 29, 
2000.
    Response: The date on which an international application fulfills 
the requirements of 35 U.S.C. 371 is not the filing date, or even 
relevant to the filing date, of the international application. Section 
4405 of the American Inventors Protection Act of 1999 provides that the 
amendments relating to patent term adjustment shall apply to any 
application filed on or after May 29, 2000, but does not provide that 
its patent term adjustment provisions apply to international 
applications filed before May 29, 2000, that complied with the 
requirements of 35 U.S.C. 371 on or after May 29, 2000.
    Comment 7: As to Sec. 1.703(a)(6), one comment requested 
clarification as to whether the filing of a priority document would be 
an ``outstanding requirement'' which would cause a delay in the 
beginning of the ``four months after payment of the issue fee and all 
outstanding requirements were satisfied'' period. The comment argued 
that filing of a priority document should not be considered an 
outstanding requirement because if the priority document is not filed 
the patent simply issues without the priority claim (the application is 
not abandoned).
    Response: Section 1.55 has been amended to eliminate the need for a 
petition to accept a priority document filed after payment of the issue 
fee, as well as the need for the Office to evaluate the priority claim 
before a patent is granted. Therefore, the filing of a priority 
document (and processing fee) is not considered an outstanding 
requirement under 35 U.S.C. 154(b)(1)(A)(iv) and Sec. 1.703(a)(6).
    Comment 8: One comment objected to the exclusion from the three-
year period in Sec. 1.703(b)(1) of the period of time in which a 
request for continued examination under 35 U.S.C. 132(b) and Sec. 1.114 
is processed. The comment argues that filing a request for continued 
examination should not preclude an applicant from obtaining a term 
adjustment for printing delays of a patent.

[[Page 56376]]

    Response: 35 U.S.C. 154(b)(1)(B) provides that an applicant may 
receive a term adjustment if the application is not issued within three 
years of the filing date of the application, excluding (among other 
things) any time consumed by continued examination requested under 35 
U.S.C. 132(b). Once a request for continued examination under 35 U.S.C. 
132(b) and Sec. 1.114 is filed in an application, any further 
processing or examination of the application, including granting of a 
patent, is by virtue of the continued examination given to the 
application under 35 U.S.C. 132(b) and Sec. 1.114. Nevertheless, if a 
request for continued examination is filed in an application, the 
applicant may still accrue patent term adjustment under 35 U.S.C. 
154(b)(1)(A) or (C). Accordingly, if two years after the filing date of 
an application, a request for continued examination is filed, and three 
years after the filing date of the application, the issue fee is paid 
(and all outstanding requirements are satisfied), but the patent does 
not issue as a patent until four years after the application's filing 
date, applicant may be entitled to an eight-month term adjustment 
because the application did not issue within four months of payment of 
the issue fee. Since the request for continued examination was filed 
within three years of the filing date of the application, applicant 
cannot accrue any term adjustment under the ``three-year'' statutory 
basis (35 U.S.C. 154(b)(1)(B)), but may accrue patent term adjustment 
under the other bases (e.g., 35 U.S.C. 154(b)(1)(A)(iv)).
    Comment 9: One comment asked whether ``a final decision in favor of 
applicant'' as used in Sec. 1.703(e) and ``a decision in the 
[appellate] review reversing an adverse determination of 
patentability'' as used in 35 U.S.C. 154(b)(1)(C)(iii) is limited to 
successful appeals on purely statutory grounds or would also include 
non-statutory grounds (e.g., obviousness-type double patenting).
    Response: A ``final decision in favor of applicant'' is understood 
to include any final decision of the Board of Patent Appeals and 
Interferences or Federal court that reverses all of the rejections of 
at least one claim (without subjecting the claim to a new rejection). 
The type of rejection (i.e., whether the rejection is based upon a 
statutory or judicial basis) is not relevant.
    Comment 10: A number of comments objected to the provision in 
Sec. 1.703(f) that the certificate of mailing date under Sec. 1.8 will 
not be used for determining when applicant is considered to ``respond 
to a notice from the Office making any rejection, objection argument or 
other request.'' The comments included suggestions, objections, or 
arguments that: (1) the date set forth in the Sec. 1.8 statement should 
be used as the date when applicant is considered to have responded 
within three months of the Office action; (2) applicants should not be 
compelled to hand-carry papers to the Office or to use the Express Mail 
service of the United States Postal Service in order to be able to meet 
the three-month timeliness goal or reduce a period of time in which 
they are considered to have ``failed to engage in reasonable efforts to 
conclude processing or examination of an application''; (3) a 
certificate of mailing is now accepted for purposes of a filing date; 
(4) using the date of receipt rather than the date of mailing by a 
practitioner would require the Office to keep ``separate books'' of the 
date of mailing and date of receipt of papers; and (5) United States 
Postal Service delays are insignificant compared to Office mailroom 
delays.
    Response: The suggestion is not adopted. The date indicated on a 
certificate of mailing is used only to determine whether the 
correspondence is timely (including whether any extension of the time 
and fee are required) so as to avoid abandonment of the application or 
termination or dismissal of proceedings. The actual date of receipt of 
the correspondence in the Office is used for all other purposes. See 
Sec. 1.8(a). In addition, a certificate of mailing date under Sec. 1.8 
cannot be relied upon for purposes of according a filing date to a 
patent application. See Sec. 1.8(a)(2)(i)(A). Rather, correspondence is 
considered filed in the Office on the date of its actual receipt in the 
Office (Sec. 1.6(a)) or the date it was deposited with the United 
States Postal Service under Sec. 1.10 as shown by the ``date-in'' on 
the Express Mail mailing label. Nevertheless, Sec. 1.8 will continue to 
be used in determining whether correspondence is timely filed and 
whether an extension of time and fee for an extension of time are due.
    Section 1.703(f) does not compel applicants to hand-carry papers to 
the Office or to use the Express Mail service of the United States 
Postal Service to ensure that correspondence is received within three 
months of an Office action and avoid a reduction in any patent term 
adjustment. Most correspondence that can be submitted using the benefit 
of Sec. 1.8 can also be submitted to the Office by facsimile 
transmission (Sec. 1.6(d)) to avoid mail delays and ensure that 
correspondence is received within three months of an Office action or 
notice. In addition, applicants can also mail correspondence with 
sufficient time to ensure that the correspondence is received in the 
Office (and stamped with a date of receipt) before the expiration of 
the three-month period. Applicants who chose to use first-class mail at 
the end of the period for reply instead of a quicker means of 
submitting correspondence to the Office have no complaint concerning 
consequences of their decision on patent term adjustment.
    The Office practice of using the date of receipt of papers rather 
than the date of mailing of papers as the filing date of the papers is 
well established and changing this practice would have undesirable 
results. For example, when a notice of appeal is filed, the filing date 
accorded the notice of appeal is the date of receipt of the notice of 
appeal in the Office, not the certificate of mailing date under 
Sec. 1.8 indicated on the notice of appeal. An appeal brief must then 
be filed within two months of the date of receipt of the notice of 
appeal. See Sec. 1.191(a) and MPEP 1206. If the suggested change to 
Office practice were adopted, the date on the certificate of mailing 
under Sec. 1.8 would be used as the ``receipt date'' of the notice of 
appeal to determine whether applicant replied within three months of 
the Office action for patent term adjustment purposes, and the appeal 
brief would be required to be filed within two months of the date on 
the certificate of mailing under Sec. 1.8 (now the ``receipt date'), 
unless the period for reply to the Office action is later. For many 
applicants, this would lead to the appeal brief being required to be 
filed several days earlier, which would be an undesirable result.
    The certificate of mailing date is not recorded in the Office's 
PALM system. The Office's PALM system records contain a single date: 
the date of receipt in the Office (as defined by Sec. 1.6). The 
certificate of mailing date may be noted on the date received/mailed 
column of the contents of the application's file wrapper with an entry 
such as ``1-31-00 (c.o.m. 1/26/00).'' Thus, adopting the suggested 
change to Sec. 1.703(f) would require the Office to keep ``separate 
books'' of the date of mailing and date of receipt of correspondence.
    Finally, whether United States Postal Service delays are 
insignificant compared to Office mailroom delays is immaterial. The 
purpose of the patent term adjustment provisions of the American 
Inventors Protection Act of 1999 is to compensate applicants for 
certain administrative delays by the Office, and any delays (whether 
significant or insignificant) by United States Postal Service in 
delivering

[[Page 56377]]

correspondence to the Office is not a delay by the Office.
    Comment 11: One comment was received objecting to the provision in 
Sec. 1.703(f) as unfair because applicants were responsible for a reply 
within a set time from the mailing date by the Office, whereas the 
Office is held to a standard for reply from the filing date of papers 
filed by the applicant.
    Response: 35 U.S.C. 154(b)(2)(C)(ii) establishes the standard of 
reply by applicants to within three months of the date a notice is 
given or mailed to applicants. In addition, 35 U.S.C. 154(b)(1)(A)(i) 
and (ii) measure the deadline for the Office's reply from the date an 
application or a reply is filed. These different standards established 
by Congress are considered important because they are both dates that 
are contained in the Office's PALM system records.
    Comment 12: One comment also stated that if the certificate of 
mailing date was not used for establishing a date of receipt under 
Sec. 1.703(f), the patent term adjustment procedure would be more 
difficult because applicant would not know when the paper was received 
by the Office.
    Response: Applicants may use a postcard receipt to establish when a 
paper is received by the Office. Not only does a postcard receipt 
provide evidence of a date of receipt, but it also provides prima facie 
evidence of receipt in the Office of all items listed thereon on the 
date stamped by the Office. See MPEP 503. In addition, applicants may 
check the Office's PALM system records (which shows the date of receipt 
of papers) through the Patent Application Information Retrieval (PAIR) 
system at http://pair.uspto.gov.
    If the date of mailing under Sec. 1.8 were to be used for 
determining if applicant has replied within three months of the date of 
an Office action, the Office's PALM system would have to record two 
different dates for patent term adjustment calculation purposes. This 
is because the measurements of whether the Office has taken action 
within a set time would not run from the same date (e.g., fourteen 
months from the filing date of the application or four months of the 
date on which a reply was filed or an appeal is taken). Such a patent 
term adjustment calculation would be unnecessarily complex.
    Comment 13: One comment stated that the reduction in Sec. 1.703(f) 
for failure to reply within three months even where the Office sets a 
longer period is a subtle point which should be mentioned in the rules 
as well as being stated in any communication setting a period for reply 
of longer than three months.
    Response: The suggestion to expressly mention in any communication 
warning applicants that any reply not received within three months of 
an Office action may result in a reduction to any patent term 
adjustment, even where the Office action sets forth a longer period for 
reply, has been adopted. The Office is planning to modify forms used by 
patent examiners to include this warning.
    Comment 14: One comment argued that the phrase ``processing or 
examination'' in 35 U.S.C. 154(b)(2)(C) (ii) and (iii) means the same 
thing as ``prosecution'' in 35 U.S.C. 154(b)(2)(C)(i).
    Response: The Office agrees with this interpretation of 35 U.S.C. 
154(b)(2)(C). Section 1.704(a) uses the term ``prosecution (processing 
or examination)'' for this reason.
    Comment 15: One comment objected to Sec. 1.704(b), arguing that 
foreign applicants, especially those from non-English speaking 
countries, need more time to reply to an Office action than United 
States applicants and argued that one additional month should be 
considered as not being a failure to engage in reasonable efforts to 
conclude prosecution.
    Response: The language in Sec. 1.704(b) is taken directly from 35 
U.S.C. 154(b)(2)(C)(ii), wherein Congress stated that a delay in a 
reply beyond three months is per se a failure to engage in reasonable 
efforts. Moreover, Congress provided that if applicant makes a showing 
that in spite of all due care applicant was unable to reply within the 
three-month period, the adjustment may be reinstated. Since Congress 
provided that applicants must make a showing explaining that the delay 
was in spite of all due care for a reply beyond three months not to be 
a failure to engage in reasonable efforts, the Office cannot by rule 
provide that a reply within a longer period is not failure to engage in 
reasonable efforts to conclude prosecution (absent a showing explaining 
that the delay was in spite of all due care).
    Comment 16: Another comment objected to the use of ``or given'' in 
the phrase ``measuring such three-month period from the date the notice 
or action was mailed or given to the applicant'' in Sec. 1.704(b), and 
argued that Sec. 1.2 requires all correspondence to be in writing, and 
allowing an oral restriction requirement to start a period for the 
applicant to reply would not be consistent with Sec. 1.2. In addition, 
the comment argued that sometimes a message is left on an answering 
machine and such a message should not be considered notice of an 
objection or other requirement.
    Response: The phrase ``measuring such three-month period from the 
date the notice [or action] was mailed or given to the applicant'' 
(emphasis added) is taken almost directly from 35 U.S.C. 
154(b)(2)(C)(ii). The Office is using the statutory language ``mailed 
or given,'' rather than ``mailed,'' because the Office envisions that 
it may one day issue (or ``give'') actions or notices by means other 
than mailing (e.g., by facsimile transmission or e-mail message over 
the Internet). The Office, however, does not envision that it would 
issue (or ``give'') actions or notices by non-written means (e.g., a 
telephone conversation). Thus, a telephone message left on an answering 
machine would not constitute the giving notice of an objection or other 
requirement.
    Comment 17: One comment suggested that setting forth ``strict 
examples'' in Sec. 1.704(c) of circumstances of when applicant has 
failed to engage in reasonable efforts to conclude prosecution (or 
processing or examination) of an application is inconsistent with the 
legislative intent of Congress in enacting the provisions of 35 U.S.C. 
154(b)(2)(C)(iii). The comment suggested that a reduction of patent 
term adjustment under 35 U.S.C. 154(b)(2)(C) should occur to prevent 
only ``the few applicants who engage in intentional or unjustifiable 
delay tactics'' from abusing the system, such that ``only the most 
egregious and obvious delay tactics will go unrewarded,'' citing to 
H.R. Rep. No. 105-39 at 66 (1997). The comment suggested that the 
regulations are so strict as to require the applicant to be a 
``perfect'' applicant rather than a ``diligent'' or ``reasonable'' 
applicant. The comment suggested that the Office should instead review 
each application on a case-by-case basis to determine a reduction of 
patent term adjustment is warranted due to the applicant's failure to 
engage in reasonable efforts to conclude prosecution (or processing or 
examination) of an application.
    Response: 35 U.S.C. 154(b)(2)(C) provides that: (1) The Office is 
to prescribe regulations establishing the circumstances that constitute 
a failure of an applicant to engage in reasonable efforts to conclude 
processing or examination of an application (35 U.S.C. 
154(b)(2)(C)(iii)); and (2) the period of patent term adjustment under 
35 U.S.C. 154(b)(1) shall be reduced by a period equal to the period of 
time during which the applicant failed to engage in reasonable efforts 
to conclude prosecution of an application (35 U.S.C.

[[Page 56378]]

154(b)(2)(C)(i)). Thus, promulgating regulations that set forth 
``strict examples'' of circumstances of when applicant has failed to 
engage in reasonable efforts to conclude prosecution (or processing or 
examination) of an application (rather than considering applications on 
an ad hoc or case-by-case basis) is not only consistent with 35 U.S.C. 
154(b)(2)(C), it is what the Office is required to do under 35 U.S.C. 
154(b)(2)(C)(iii).
    The cited House Report (H.R. Rep. No. 105-39) is of questionable 
reliability in interpreting the patent term adjustment provisions of 
the American Inventors Protection Act of 1999 concerning the Office's 
authority to prescribe regulations establishing the circumstances that 
constitute a failure of an applicant to engage in reasonable efforts to 
conclude processing or examination of an application (35 U.S.C. 
154(b)(2)(C)(iii)). H.R. Rep. No. 105-39 is the Committee Report for 
the 21st Century Patent System Improvement Act, H.R. 400, 105th Cong., 
(1997), which was passed by the House of Representatives on April 23, 
1997, but was not enacted into law.
    The American Inventors Protection Act of 1999 is title IV of the 
Intellectual Property and Communications Omnibus Reform Act of 1999 (S. 
1948), and S. 1948 was incorporated and enacted into law as part of 
Pub. L. 106-113. The Conference Report for H.R. 3194, 106th Cong., 1st. 
Sess. (1999), which resulted in Pub. L. 106-113, does not contain any 
discussion (other than the incorporated language) of S. 1948. See H.R. 
Conf. Rep. No. 106-497, at 37 and 1089-174 (1999). A section-by-section 
analysis of S. 1948, however, was printed in the Congressional Record 
at the request of Senator Lott. See 145 Cong. Rec. S14,708-26 (1999) 
(daily ed. Nov. 17, 1999). This section-by-section analysis of the 
patent term adjustment provisions of the American Inventors Protection 
Act of 1999 provides, in relevant part, that:

    Subtitle D amends the provisions in the Patent Act that 
compensate patent applicants for certain reductions in patent term 
that are not the fault of the applicant. The provisions that were 
initially included in the term adjustment provisions of patent bills 
in the 105th Congress only provided adjustments for up to 10 years 
for secrecy orders, interferences, and successful appeals. Not only 
are these adjustments too short in some cases, but no adjustments 
were provided for administrative delays caused by the [Office] that 
were beyond the control of the applicant. Accordingly, subtitle D 
removes the 10 year caps from the existing provisions, adds a new 
provision to compensate applicants fully for [Office]-caused 
administrative delays, and, for good measure, includes a new 
provision guaranteeing diligent applicants at least a 17-year term 
by extending the term of any patent not granted within three years 
of filing. Thus, no patent applicant diligently seeking to obtain a 
patent will receive a term of less than the 17 years as provided 
under the pre-GATT standard; in fact, most will receive considerably 
more. Only those who purposely manipulate the system to delay the 
issuance of their patents will be penalized under subtitle D, a 
result that the Conferees believe entirely appropriate.
* * * * *
    Section 4402 amends [35 U.S.C.] 154(b) of the Patent Act 
covering term.
    First, new [35 U.S.C.] 154(b)(1)(A)(i)-(iv) guarantees day-for-
day restoration of term lost as a result of delay created by the 
[Office] when the [Office] fails to:
    (1) Make a notification of the rejection of any claim for a 
patent or any objection or argument under [35 U.S.C.] 132, or give 
or mail a written notice of allowance under [35 U.S.C.] 151, within 
14 months after the date on which a non-provisional application was 
actually filed in the [Office];
    (2) Respond to a reply under [35 U.S.C.] 132, or to an appeal 
taken under [35 U.S.C.] 134, within four months after the date on 
which the reply was filed or the appeal was taken;
    (3) Act on an application within four months after the date of a 
decision by the Board of Patent Appeals and Interferences under [35 
U.S.C.] 134 or 135 or a decision by a Federal court under [35 
U.S.C.] 141, 145, or 146 in a case in which allowable claims remain 
in the application; or
    (4) Issue a patent within four months after the date on which 
the issue fee was paid under [35 U.S.C.] 151 and all outstanding 
requirements were satisfied.
    Further, subject to certain limitations, infra, [35 U.S.C.] 
154(b)(1)(B) guarantees a total application pendency of no more than 
three years. Specifically, day-for-day restoration of term is 
granted if the [Office] has not issued a patent within three years 
after ``the actual date of the application in the United States.'' 
This language was intentionally selected to exclude the filing date 
of an application under the Patent Cooperation Treaty (PCT). 
Otherwise, an applicant could obtain up to a 30-month extension of a 
U.S. patent merely by filing under PCT, rather than directly in the 
[Office], gaining an unfair advantage in contrast to strictly 
domestic applicants. Any periods of time--
    (1) Consumed in the continued examination of the application 
under [35 U.S.C.] 132(b);
    (2) Lost due to an interference under [35 U.S.C.] 135(a), a 
secrecy order under [35 U.S.C.] 181, or appellate review by the 
Board of Patent Appeals and Interferences or by a Federal court 
(irrespective of the outcome); and
    (3) Incurred at the request of an applicant in excess of the 
three months to respond to a notice from the Office permitted by [35 
U.S.C.] 154(b)(2)(C)(ii) unless excused by a showing by the 
applicant under [35 U.S.C.] 154(b)(3)(C) that in spite of all due 
care the applicant could not respond within three months shall not 
be considered a delay by the [Office] and shall not be counted for 
purposes of determining whether the patent issued within three years 
from the actual filing date.
    Day-for-day restoration is also granted under new [35 U.S.C.] 
154(b)(1)(C) for delays resulting from interferences, secrecy 
orders, and appeals by the Board of Patent Appeals and Interferences 
or a Federal court in which a patent was issued as a result of a 
decision reversing an adverse determination of patentability.
    Section 4402 imposes limitations on restoration of term. In 
general, pursuant to [35 U.S.C.] 154(b)(2)(A)-(C), total adjustments 
granted for restorations under [35 U.S.C. 154](b)(1) are reduced as 
follows:
    (1) To the extent that there are multiple grounds for extending 
the term of a patent that may exist simultaneously (e.g., delay due 
to a secrecy order under [35 U.S.C.] 181 and administrative delay 
under [35 U.S.C.] 154(b)(1)(A)), the term should not be extended for 
each ground of delay but only for the actual number of days that the 
issuance of a patent was delayed;
    (2) The term of any patent which has been disclaimed beyond a 
date certain may not receive an adjustment beyond the expiration 
date specified in the disclaimer; and
    (3) Adjustments shall be reduced by a period equal to the time 
in which the applicant failed to engage in reasonable efforts to 
conclude prosecution of the application, based on regulations 
developed by the Director, and an applicant shall be deemed to have 
failed to engage in such reasonable efforts for any periods of time 
in excess of three months that are taken to respond to a notice from 
the Office making any rejection or other request;
    New [35 U.S.C.] 154(b)(3) sets forth the procedures for the 
adjustment of patent terms. [35 U.S.C. 154(b)](3)(A) empowers the 
Director to establish regulations by which term extensions are 
determined and contested. Paragraph (3)(B) requires the Director to 
send a notice of any determination with the notice of allowance and 
to give the applicant one opportunity to request reconsideration of 
the determination. Paragraph (3)(C) requires the Director to 
reinstate any time the applicant takes to respond to a notice from 
the Office in excess of three months that was deducted from any 
patent term extension that would otherwise have been granted if the 
applicant can show that he or she was, in spite of all due care, 
unable to respond within three months. In no case shall more than an 
additional three months be reinstated for each response. Paragraph 
(3)(D) requires the Director to grant the patent after completion of 
determining any patent term extension irrespective of whether the 
applicant appeals.
    New [35 U.S.C.] 154(b)(4) regulates appeals of term adjustment 
determinations made by the Director. Paragraph (4)(A) requires a 
dissatisfied applicant to seek remedy in the District Court for the 
District of Columbia under the Administrative Procedures Act within 
180 days after the grant of the patent. The Director shall alter the 
term of the patent to reflect any final judgment. Paragraph (4)(B) 
precludes a third party from challenging the determination of a 
patent term prior to patent grant.


[[Page 56379]]


See 145 Cong. Rec. S14,718 (footnotes omitted).

    In addition, since the patent term adjustment provisions of the 
American Inventors Protection Act of 1999 contained in Pub. L. 106-113 
are identical to the patent term adjustment provisions in title IV of 
the Intellectual Property and Communications Omnibus Reform Act of 1999 
(H.R. 1554), the joint statement in the Conference Report for H.R. 1554 
may also be useful in interpreting the patent term adjustment 
provisions of the American Inventors Protection Act of 1999. The joint 
statement in the Conference Report for H.R. 1554 contains an identical 
discussion of its patent term adjustment provisions. See H.R. Conf. 
Rep. No. 106-464, at 125-27 (1999).
    The language relied upon for the position that the provisions of 
Sec. 1.704(c) (establishing the circumstances that constitute a failure 
of an applicant to engage in reasonable efforts to conclude processing 
or examination of an application) are inconsistent with the legislative 
intent of Congress in enacting the provisions of 35 U.S.C. 
154(b)(2)(C)(iii) is not included in either the section-by-section 
analysis of S. 1948 by Senator Lott or the Conference Report for H.R. 
1554 (H.R. Conf. Rep. No. 106-464). In addition, while H.R. 400 is one 
of the forerunners of the patent term adjustment provisions enacted 
into law in the American Inventors Protection Act of 1999, the 
provision concerning the establishment of circumstances that constitute 
a failure of an applicant to engage in reasonable efforts to conclude 
processing or examination of an application contained in the American 
Inventors Protection Act of 1999 is not the same as the corresponding 
provision in H.R. 400.
    In any event, the provisions of Sec. 1.704(c) do not require an 
applicant to be ``perfect'' or even ``diligent'' when prosecuting an 
application to avoid a reduction of patent term adjustment; 
Sec. 1.704(c) simply requires that an applicant refrain from engaging 
in actions or inactions that prevent or interfere with the Office's 
ability to process or examine an application. An applicant who is 
engaging in actions or inactions that prevent or interfere with the 
Office's ability to process or examine an application cannot reasonably 
be characterized as ``engag[ing] in reasonable efforts to conclude 
processing or examination of an application'' (35 U.S.C. 
154(b)(2)(C)(i)).
    That conduct (an action or inaction) has been established in 
Sec. 1.704 as circumstances constituting a failure of an applicant to 
engage in reasonable efforts to conclude processing or examination of 
an application should not be taken as an indication that such conduct 
is unreasonable per se. If Congress considered taking longer than three 
months to reply to an Office action or notice to be unreasonable per 
se, Congress would simply have amended title 35, U.S.C., to provide a 
statutory period of three months to reply to all Office actions or 
notices. The patent statute (and specifically the fee extension 
provisions of 35 U.S.C. 41(a)(8)), however, permits applicants to take 
longer than three months to reply to an Office action or notice even in 
the absence of showing that, in spite of all due care, the applicant 
was unable to reply within a three-month period. Nevertheless, 35 
U.S.C. 154(b)(2)(C)(ii) provides that an applicant shall be deemed to 
have failed to engage in reasonable efforts to conclude prosecution for 
the cumulative total of any periods of time in excess of three months 
that are taken to reply to any notice or action by the Office making 
any rejection, objection, argument, or other request. Thus, Congress 
concluded that there is conduct during the prosecution of an 
application that is not unreasonable per se, but which is a failure to 
engage in reasonable efforts to conclude processing or examination of 
an application. Conversely, that conduct is permitted by the patent 
statute and rules of practice does not imply that such conduct is not a 
failure to engage in reasonable efforts to conclude processing or 
examination of an application.
    Comment 18: One comment objected to Sec. 1.704(c) as being overly 
broad and not being limited to the situations where applicant's actions 
or inactions have hindered the Office's ability to process or examine 
the application. Several other comments argued that Sec. 1.704(c) sets 
off an applicant delay against unrelated Office delays (e.g., one 
comment noted that if in an application the Office does not issue a 
first Office action until fifteen months after the application's filing 
date and later applicant files a notice of appeal followed by an appeal 
brief two months later, and an examiner's answer is mailed two months 
after the appeal brief is filed, the applicant would receive no term 
adjustment, and argued that there was ``no logical reason'' for such a 
setoff). Another comment argued that the result is that applicants are 
penalized twice for actions which are characterized as a failure to 
engage in reasonable efforts to conclude prosecution: once because 
their patent issues later than it would have had the applicant not 
delayed and a second time because they receive a lesser term adjustment 
than they would have without their delay.
    Response: Section 1.704 as adopted (i.e., not adopting proposed 
Secs. 1.704(c)(6), 1.704(c)(7), 1.704(c)(8), 1.704(c)(9), and 
1.704(c)(13)) will result in fewer situations in which patent term 
adjustment is reduced by an action or inaction that did not cause or 
contribute to the patent term adjustment.
    Nevertheless, 35 U.S.C. 154(b) provides that the period of patent 
term adjustment under 35 U.S.C. 154(b)(1) ``shall be reduced by a 
period equal to the period of time during which the applicant failed to 
engage in reasonable efforts to conclude prosecution of the 
application.'' See 35 U.S.C. 154(b)(2)(C)(i). 35 U.S.C. 154(b)(1)(C)(i) 
does not require the applicant's action or inaction (that amounts to a 
failure to engage in reasonable efforts to conclude prosecution of the 
application) to have caused or contributed to patent term adjustment 
for the period of adjustment to be reduced due to such action or 
inaction. The patent term adjustment provisions of 35 U.S.C. 154(b) 
create a balanced system allowing for patent term adjustment due to 
Office delays for a reasonably diligent applicant. Since the public has 
an interest in the technology disclosed and covered by a patent being 
available to the public at the earliest possible date, it is 
appropriate to reduce patent term adjustment by any period of time 
during which applicant failed to engage in reasonable efforts to 
conclude prosecution of the application, regardless of whether the 
applicant's actions or inactions caused or contributed to patent term 
adjustment.
    Comment 19: One comment objected to Sec. 1.704(c) not being limited 
to the proposed sixteen enumerated events that would result in 
reduction in term adjustment, but being also applicable to situations 
where an applicant acts in a manner which would delay the conclusion of 
prosecution (arguing, e.g., that an applicant should not have to accept 
a ``picture claim'' or face a reduction to any term adjustment). In 
addition, the comment stated that it is unclear what petitions the 
Office considers meritless since the Office does not publish petition 
decisions.
    Response: The Office anticipates that some applicants will seek out 
ways to manipulate the system to their advantage no matter how 
exhaustive a listing of circumstances the Office were to set forth in 
Sec. 1.704(c). Thus, the Office must provide that the enumerated 
circumstances in Sec. 1.704(c) are

[[Page 56380]]

exemplary (and not exhaustive) to avoid always being one step behind 
such applicants.
    As discussed above, the Office plans to calculate patent term 
adjustment with a computer program that uses the PALM system records of 
the dates of receipt and nature of applicant correspondence and of the 
dates of mailing and nature of Office actions or notices. This 
automated approach will not lend itself to basing a reduction of patent 
term adjustment on circumstances not enumerated in Sec. 1.704(c) except 
in the most peculiar situations (e.g., unsuccessfully seeking 
reconsideration or judicial review of a petition decision designated as 
final agency action). Finally, while the Office does not submit 
petition decisions for publication in the United States Patent 
Quarterly as a matter of course, the Office does post a variety of 
petition decisions on its Internet Web site (on the FOIA Web page, FOIA 
Reading Room (http://www.uspto.gov/web/offices/com/sol/foia/readroom.htm), Final Decisions of the Office of the Commissioner).
    Comment 20: One comment argued that the reduction in 
Sec. 1.704(c)(1) being equal to the time between the date a request for 
suspension of action under Sec. 1.103 was filed and ending on the date 
the suspension was terminated should only be applied against any period 
where an adjustment is caused (e.g., against the three-year period).
    Response: As discussed above, 35 U.S.C. 154(b)(2)(C)(i) provides 
that the Office shall reduce any term adjustment by the period of time 
in which applicant has failed to engage in reasonable efforts to 
conclude prosecution, regardless of whether the applicant's actions or 
inactions caused or contributed to patent term adjustment.
    Comment 21: One comment stated that making the period of reduction 
in Sec. 1.704(c)(2) equal to the time between the date a request for 
deferral from issuance is filed to the date of issue of the patent was 
unfair because it includes the time in which the patent is printed. 
Another comment argued that the period should only be used to reduce a 
period of adjustment under Sec. 1.703(a)(6) and (b) (failure to issue a 
patent within four months of the issue fee and compliance with all 
formal requirements, and failure to issue a patent within three years 
of the filing date of the application).
    Response: An applicant can avoid any reduction of patent term 
adjustment under Sec. 1.703(c)(2) by refraining from requesting that 
the Office suspend or defer action in the application. An applicant who 
affirmatively seeks a deferral of action by the Office should not 
complain that such a request has resulted in a reduction of any patent 
term adjustment due to administrative delays by the Office.
    Comment 22: One comment stated that the proposal to make the period 
of reduction in Sec. 1.704(c)(3) run from the date of abandonment to 
the date a favorable decision is mailed was unfair. The comment 
suggested that the applicant should not be charged with periods beyond 
four months from the date a petition is filed (as provided in proposed 
Sec. 1.704(c)(15)).
    Response: The suggestion is adopted to the extent described below. 
In many applications, the first-filed petitions to revive an 
application or to accept late payment is not grantable and further 
evidence, a terminal disclaimer or a fee is required before it can be 
granted. The Office of Petitions may call the applicant and request the 
necessary item, have the applicant send it by facsimile transmission, 
and then grant the petition on the same day. Section 1.704(c)(3) has 
been revised to state that the period of reduction will be the number 
of days, if any, beginning on the date of abandonment or the date after 
the date the issue fee was due and ending on the earlier of: (1) the 
date of mailing of the decision reviving the application or accepting 
late payment of the issue fee Sec. 1.703; or (2) the date that is four 
months after the date the grantable petition to revive the application 
or accept late payment of the issue fee was filed.
    Comment 23: One comment argued that the periods of reduction in 
Sec. 1.704(c)(3) and (c)(4) should be combined and that the period 
should be reinstated if the abandonment was not the fault of applicant. 
Another comment argued that a reduction should apply only if the 
abandonment was unintentional (not unavoidable).
    Response: The suggestions are not adopted. The provisions of 
Sec. 1.704(c)(3) relate to situations in which the application was in 
fact abandoned, but the abandonment was either unavoidable or 
unintentional (permitting revival of the application). If an 
application is not properly held abandoned (is not in fact abandoned), 
the applicant should not petition to revive under Sec. 1.137, but 
should petition to have the (improper) holding of abandonment 
withdrawn. The provisions of Sec. 1.704(c)(4) relate to where the 
holding of abandonment is withdrawn because applicant has shown, for 
example, that the application became abandoned because the Office 
mailed a communication to the incorrect address, or applicant did not 
receive the communication. When a petition to withdraw the holding of 
abandonment is granted, the application is treated as never having been 
abandoned, but where an application is revived the period in which the 
application was abandoned is a failure to engage in reasonable efforts 
to conclude prosecution. Since the two concepts are different, they 
have been separated into separate paragraphs of Sec. 1.704.
    Section 1.704(c)(3) applies regardless of whether the abandonment 
was unavoidable or just unintentional (but not unavoidable). The 
abandonment of an application as a result of actions or inactions 
within the control of applicant (and outside the control of the Office) 
does not preclude a finding of unavoidable delay. See, e.g., In re 
Lonardo, 17 USPQ2d 1455 (Comm'r Pat. 1990)(delay caused by deception of 
applicant by applicant's representative); Ex parte Pratt, 1887 Dec. 
Comm'r Pat. 31 (1887)(delay caused by error by representative's 
clerical staff); In re Katrapat, A.G., 6 USPQ2d 1863 (Comm'r Pat. 
1988)(same). Such action, however, is still considered a failure to 
engage in reasonable efforts to conclude prosecution of the 
application.
    Comment 24: Another comment argued that the reduction in 
Sec. 1.704(c)(4) was unfair because it will generate a need for 
applicant to file a petition under Sec. 1.705.
    Response: The Office is mindful that if a petition to withdraw the 
holding of abandonment is granted, the Office's PALM system records 
should be checked to ensure that the correct term adjustment 
determination is made. As discussed above, applicants may check the 
Office's PALM system records for their applications through PAIR at 
http://pair.uspto.gov (and are encouraged to do so). For example, if 
applicant shows that a reply was filed in the Office on March 2, but 
the March 2 reply was never matched with the file, when the petition to 
withdraw the holding of abandonment is granted, the receipt of a paper 
on March 2 should be recorded on the Office's PALM system records. An 
applicant who receives a Notice of Abandonment and does not request 
that the holding be withdrawn within two months of the mailing date of 
the notice, however, is considered to have failed to engage in 
reasonable efforts to conclude prosecution and it is appropriate to use 
this period under Sec. 1.704(c)(3) as a reduction.
    Comment 25: One comment generally agreed with Sec. 1.704(c)(4), but 
objected to a ``blameless applicant'' who never received a Notice of 
Abandonment experiencing a reduction in term

[[Page 56381]]

adjustment because they did not reply to the Notice within two months.
    Response: The Office currently issues over 160,000 patents each 
year. The only practical way to perform the calculations required by 
the patent term adjustment provisions of 35 U.S.C. 154 (and its 
implementation regulations) is by a program using the information 
contained in the PALM system. If the patent term adjustment were to be 
manually calculated for each application, the time required for the 
term adjustment calculation could exceed the time required to otherwise 
process the application. In order to minimize the cost of the patent 
term adjustment determination and conserve resources for examination of 
the application (e.g., the prior art search and a decision of whether 
the claims are patentable), it is imperative that as much of the 
computation be done using the Office's automated information systems. 
The computer program must rely upon the information in the Office's 
PALM system records for the dates of receipt of applicant 
correspondence and the dates of mailing of Office actions or notices 
and of the nature of such applicant correspondence and Office actions 
or notices. As discussed above, applicants may check the Office's PALM 
system records for their applications through the PAIR system at http://pair.uspto.gov (and are encouraged to do so).
    Comment 26: Two comments argued that in Sec. 1.704(c)(5), the 
reduction for conversion of a provisional application to a non-
provisional application should only offset periods of adjustment in 
Sec. 1.703(a)(1) and (b) (the fourteen-month and three-year 
provisions).
    Response: 35 U.S.C. 154(b)(2)(C)(i) provides that the period of 
adjustment ``shall be reduced by a period equal to the period of time 
during which the applicant failed to engage in reasonable efforts to 
conclude prosecution of the application.'' In any event, requesting 
conversion of a provisional application into a nonprovisional 
application is a poor choice for any applicant interested in maximizing 
patent term. See Changes to Application Examination and Provisional 
Application Practice, Interim Rule, 65 FR 14865, 14866 (Mar. 20, 2000), 
1233 Off. Gaz. Pat. Office 47, 47 (Apr. 11, 2000). In addition, 
converting a provisional application into a nonprovisional application 
(rather than simply processing a nonprovisional application that claims 
the benefit of the provisional application's filing date) requires 
exception processing by the Office. As discussed above, applicants who 
prosecute applications in a manner that requires exception handling by 
the Office have no complaint concerning the negative patent term 
impacts that result from their poor choices.
    Comment 27: Several comments argued that the provisions of 
Sec. 1.704(c)(6) reducing patent term adjustment for all the time taken 
by an applicant to complete the requirements of a patent application 
were an unfair penalty. The comments argued that there should be a 
relationship between the reduction and an adjustment, that the Office 
should be able to demonstrate that the actions of the applicant 
resulted in delays in examination of that application, and that it was 
not unreasonable to file an application as soon as possible and to file 
an executed oath or declaration, formal drawings or a translation of 
the application at a later date. Another comment argued that the 
provisions of Sec. 1.704(c)(6) penalized an applicant for the Office's 
delay in assigning an application number. Another comment argued that 
it is better for the Office for the applicant to wait until a Notice to 
File Missing Parts of Application is received than for the applicant to 
file the missing parts after filing the application and without a copy 
of a Notice to File Missing Parts of Application, and that the 
reduction should be measured from the mailing date of the notice.
    Response: The Office has revised Sec. 1.704 to eliminate proposed 
Sec. 1.704(c)(6), such that missing parts (missing filing fee, oath or 
declaration, and missing English language translation of a non-English 
language application) and application formalities (specification on 
papers in compliance with Sec. 1.52, title and abstract in compliance 
with Sec. 1.72, drawings in compliance with Sec. 1.84, and sequence 
listings in compliance with Sec. 1.821 et seq.) are treated under 
Sec. 1.704(b). Thus, any patent term adjustment will be reduced if an 
applicant does not supply the missing part or correct the informality 
within three months of the Office action or notice requiring the 
missing part or correction of the informality.
    Comment 28: One comment argued that 35 U.S.C. 154(b)(2)(C)(ii) 
provides that a reply filed within three months of the date of an 
Office action or notice setting forth a requirement should not result 
in any patent term adjustment penalty. The comment also argued that 
since the eighteen-month publication rules permit a redacted 
application to be filed up to sixteen months from the priority date, 
the requirement for papers to be filed for purposes any earlier than 
this date was not justified. Another comment argued that the provisions 
of proposed Sec. 1.704(c)(6) were too strict and that applicants should 
be given three months to complete formal requirements after receiving 
notice of the necessary formal requirements. The comment argues that a 
period of three months after the Office makes any rejection, objection 
or other request should be considered prima facie reasonable. Another 
comment argued that the period in which an applicant is considered to 
have ``failed to engage in reasonable efforts'' should begin with the 
date on which applicant is given notice of the defect.
    Response: While the Office has revised Sec. 1.704 such that missing 
parts and application formalities are treated under Sec. 1.704(b) (as 
discussed above), this revision to Sec. 1.704 is not required by the 
provisions of 35 U.S.C. 154(b)(2)(C). Since 35 U.S.C. 154(b)(2)(C)(iii) 
provides for the Office to prescribe regulations establishing the 
circumstances that constitute a failure of an applicant to engage in 
reasonable efforts to conclude processing or examination of an 
application, 35 U.S.C. 154(b)(2)(C)(ii) cannot be considered exhaustive 
of the circumstances for which an applicant may be determined to have 
failed to engage in reasonable efforts to conclude processing or 
examination of an application. If the Office determines that treating 
missing parts and application formalities under Sec. 1.704(b) is 
causing the Office to miss the time periods set forth in 35 U.S.C. 
154(b)(1), the Office will need to reconsider its original proposal to 
treat missing parts and application formalities as a failure to engage 
in reasonable efforts to conclude processing or examination without 
regard to whether the applicant has been given a prior reminder or 
notice to supply the missing part or correct the informality.
    As to the provisions for a redacted application to be filed up to 
sixteen months from the earliest priority date or filing date of the 
application, these provisions are not relevant to whether filing 
components of an application after the filing date of the application 
is a failure to engage in reasonable efforts to conclude processing or 
examination of an application. The timing of when a redacted 
application is filed is irrelevant to the prosecution of an application 
because the filing of a redacted copy of an application is completely 
unrelated to prosecution of the application.
    Comment 29: One comment suggested that the missing parts practice 
in the Office of Initial Patent Examination (OIPE) be expanded to 
include examination of components required for

[[Page 56382]]

eighteen-month publication so as to minimize any term adjustment 
reductions.
    Response: The Office plans to modify the review in OIPE to include 
items necessary for publication of applications.
    Comment 30: Another comment argued that proposed Sec. 1.704(c)(6) 
was in conflict with the diligence requirements of Sec. 1.47 and 
frustrates a fundamental objective of patent law (i.e., encouraging an 
applicant to file a patent application as soon as possible). The 
comment argues that because inventorship is not determined until the 
claims are finalized and because of the requirement for diligence under 
Sec. 1.47, it is not possible to file a petition under Sec. 1.47 for 
months after an application is filed.
    Response: As discussed above, the Office has revised Sec. 1.704 to 
eliminate proposed Sec. 1.704(c)(6), such that missing parts (missing 
filing fee, oath or declaration, and missing English language 
translation) are treated under Sec. 1.704(b), in that any patent term 
adjustment will be reduced if an applicant does not supply a missing 
filing fee, oath or declaration, or English-language translation within 
three months of the Office notice requiring the filing fee, oath or 
declaration, or English-language translation.
    In the event that one or all of the inventors refuse to execute the 
oath or declaration, the Office cannot process the application for 
publication or examine the application until the party filing the 
application on behalf of the inventor(s) establishes that he or she is 
the appropriate applicant and that the requirements of 35 U.S.C. 116 
and 118 have been met. Thus, if one or all of the inventors refuse to 
execute the oath or declaration, a grantable petition under Sec. 1.47 
must be filed within three months of the Office notice requiring an 
executed oath or declaration (e.g., a Notice to File Missing Parts of 
Application (PTO-1533)) to avoid a reduction of any patent term 
adjustment under Sec. 1.704(b). While the patent law does encourage the 
filing of a patent application as soon as possible (e.g., to avoid a 
bar under 35 U.S.C. 102(b)), Sec. 1.47 (35 U.S.C. 116 and 118) was not 
intended to give applicants a longer time to prepare an application for 
filing. See Ex parte Sassin, 1906 Dec. Comm'r Pat 205, 206 (1906).
    Comment 31: Several comments argued that the provisions of proposed 
Sec. 1.704(c)(7) unfairly discriminated against PCT applicants and 
ignored the legislative history of the Act. These comments suggested 
that the Office should define, for purposes of patent term adjustment, 
the ``actual filing date'' as the date that all requirements for entry 
into the national stage are met. Another comment argued that the 
provisions of proposed Sec. 1.704(c)(7) and (c)(8) undermine the 
benefits provided by the international phase procedure under the PCT. 
This comment also: (1) suggested that any period of patent term 
adjustment under the three-year pendency provision of 35 U.S.C. 
154(b)(1)(B) be reduced by the number of days (if any) beginning on the 
date on which the national phase commences under 35 U.S.C. 371(b) or 
(f) and ending on the day the applicant completes the requirements for 
entry into the national phase; (2) observed that events that occur in 
the international phase advance prosecution because formalities are 
resolved, a search is conducted, and preliminary examination is begun; 
(3) argued that proposed Sec. 1.704(c)(7) will force applicants to 
forgo their entitlements under the treaty or risk a reduction in a term 
adjustment, and that applicants under the PCT will be in a worse 
position than regular national applicants; and (4) noted that someone 
who files a ``bypass'' application (an application under 35 U.S.C. 111 
claiming the benefit of the international application under 35 U.S.C. 
120) instead of entering the national phase under 35 U.S.C. 371 will 
not have the international phase used as a reduction to any term 
adjustment. The comments also argued that the provisions of proposed 
Sec. 1.704(c)(8) were unfair for the same reasons as stated for 
proposed Sec. 1.704(c)(7). Finally, several comments requested 
clarification of, or made suggestions, for the language of proposed 
Sec. 1.704(c)(7) and proposed Sec. 1.704(c)(8).
    Response: The Office is interpreting the phrase ``actual filing 
date of the application in the United States'' in 35 U.S.C. 
154(b)(1)(B) to mean the date the national stage commenced under 35 
U.S.C. 371(b) or (f) in the case of an international application. The 
Office originally interpreted the phrase ``actual filing date of the 
application in the United States'' in 35 U.S.C. 154(b)(1)(B) to mean 
the international filing date of the application under PCT Article 
11(3) and 35 U.S.C. 363 in the case of an international application. 
See Changes to Implement Patent Term Adjustment Under Twenty-Year 
Patent Term, 65 FR at 17220, 1233 Off. Gaz. Pat. Office at 113. Further 
consideration of this position, however, leads to the conclusion that: 
(1) the interpretation of the phrase ``actual filing date of the 
application in the United States'' in 35 U.S.C. 154(b)(1)(B) to be the 
filing date of the international application under PCT Article 11(3) 
and 35 U.S.C. 363 in the case of an international application is 
inconsistent with the legislative history of 35 U.S.C. 154(b)(1)(B) and 
is incongruous with the provisions of 35 U.S.C. 154(b)(1)(A)(i)(II) and 
(B)(iii); and (2) the phrase ``actual filing date of the application in 
the United States'' in 35 U.S.C. 154(b)(1)(B) must mean the date the 
national stage commenced under 35 U.S.C. 371(b) or (f) in the case of 
an international application.
    Without resort to guides to interpretation (e.g., legislative 
history, other provisions of title 35, U.S.C., or the PCT), the phrase 
``actual filing date of the application in the United States'' appears 
to mean that the three-year period specified in 35 U.S.C. 154(b)(1)(B) 
is measured from the date the application is actually filed (i.e., 
physically received) in the United States Patent and Trademark Office. 
That is, the phrase ``actual filing date of the application in the 
United States'' appears to mean the date that the application itself is 
physically received in the United States Patent and Trademark Office, 
regardless of whether it is an application filed under 35 U.S.C. 111(a) 
or an international application filed under PCT Article 11.
    As discussed above, the American Inventors Protection Act of 1999 
was enacted into law as part of Pub. L. 106-113. The Conference Report 
for H.R. 3194 (which resulted in Pub. L. 106-113) does not contain any 
discussion (other than the incorporated language) of the American 
Inventors Protection Act of 1999 (title IV of S. 1948). See H.R. Conf. 
Rep. No. 106-497, at 37 and 1089-174 (1999). A section-by-section 
analysis of S. 1948, however, was printed in the Congressional Record 
at the request of Senator Lott. See 145 Cong. Rec. S14,708-26 
(1999)(daily ed. Nov. 17, 1999). The section-by-section analysis 
explained that:

day-for-day restoration of term is granted if the [Office] has not 
issued a patent within three years after ``the actual date of the 
application in the United States.'' This language was intentionally 
selected to exclude the filing date of an application under the 
Patent Cooperation Treaty (PCT). Otherwise, an applicant could 
obtain up to a 30-month extension of a U.S. patent merely by filing 
under PCT, rather than directly in the [Office], gaining an unfair 
advantage in contrast to strictly domestic applicants.

See 145 Cong. Rec. at S14,718.

    The legislative history of 35 U.S.C. 154(b)(1)(B) is clear that the 
phrase ``actual filing date of the application in the United States'' 
in 35 U.S.C. 154(b)(1)(B) does not mean (but was

[[Page 56383]]

intentionally selected to exclude) the date on which the international 
application was filed under the PCT. The interpretation of the phrase 
``actual filing date of the application in the United States'' in 35 
U.S.C. 154(b)(1)(B) as meaning the filing date of the application under 
the PCT (PCT Article 11(3)) would defeat the plain intent of Congress 
to ``exclude the filing date of an application under the [PCT]'' and 
would permit (rather than avoid) the use of the PCT to give an 
applicant an advantage in obtaining a longer patent term adjustment 
compared to a similarly processed and examined application filed under 
35 U.S.C. 111(a). Therefore, the interpretation of the phrase ``actual 
filing date of the application in the United States'' in 35 U.S.C. 
154(b)(1)(B) as not meaning the filing date of the application under 
the PCT (PCT Article 11(3)) is consistent with the legislative history 
of 35 U.S.C. 154(b)(1)(B).
    In addition, the interpretation of the phrase ``actual filing date 
of the application in the United States'' in 35 U.S.C. 154(b)(1)(B) as 
meaning the filing date of the application under the PCT is incongruous 
with the provision in 35 U.S.C. 154(b)(1)(B)(iii). 35 U.S.C. 
154(b)(1)(B) provides that if the pendency of an application is more 
than three years from the actual filing date of the application, the 
term of the patent issuing from the application shall be extended one 
day for each day after the end of the three-year period, but that 
certain time periods are excluded from the three-year period. 35 U.S.C. 
154(b)(1)(B)(iii) specifically provides that time consumed by delays in 
the processing of the application by the Office requested by applicant 
are excluded from this three-year period. The interpretation of the 
phrase ``actual filing date of the application in the United States'' 
in 35 U.S.C. 154(b)(1)(B) as meaning the ``international filing date'' 
under PCT Article 11(3) leads to the result that an applicant is able 
to obtain a delay in paying fees and filing papers and in the 
processing of the application by using the PCT (MPEP 1893), and obtain 
term adjustment based upon the three-year period being measured from 
the international filing date (i.e., without the delay being excluded 
from the three-year period as with other applicant-elected delays). 
This result is incongruous with the provisions in 35 U.S.C. 
154(b)(1)(B)(iii) that time consumed by delays in the processing of the 
application by the Office requested by applicant are excluded from this 
three-year period.
    The interpretation of the phrase ``actual filing date of the 
application in the United States'' in 35 U.S.C. 154(b)(1)(B) as meaning 
the filing date of the application under the PCT is also incongruous 
with the provision in 35 U.S.C. 154(b)(1)(A)(i)(II) where a date later 
than the filing date of the application under the PCT is used. Each of 
35 U.S.C. 154(b)(1)(A)(i) and 154(b)(1)(B) provide that an applicant 
may be entitled to patent term adjustment if the Office fails to take 
certain action within a specified time period: (1) provide at least one 
of an Office action under 35 U.S.C. 132 or notice of allowance under 35 
U.S.C. 151 within fourteen months (35 U.S.C. 154(b)(1)(A)(i)); or (2) 
issue a patent within three years (35 U.S.C. 154(b)(1)(B)). For 
applications filed under 35 U.S.C. 111(a), the fourteen-month period 
begins with the filing date of the application (35 U.S.C. 
154(b)(1)(A)(i)(I)), but for applications that enter the national stage 
under 35 U.S.C. 371, the fourteen-month period begins with the date on 
which the international application fulfilled the requirements of 35 
U.S.C. 371 (35 U.S.C. 154(b)(1)(A)(i)(II)), which can be more than 
thirty months after the international filing date of the application.
    As discussed above, Congress recognized that national processing of 
an international application is delayed by up to thirty months under 
the PCT filing system. Interpreting the phrase ``actual filing date of 
the application in the United States'' in 35 U.S.C. 154(b)(1)(B) as 
meaning the filing date of the application under the PCT would require 
the conclusion that Congress considered the Office's failure to issue a 
patent within thirty-six months of the filing date of an international 
application under 35 U.S.C. 363 to constitute an unusual administrative 
delay (35 U.S.C. 154(b)(1)(B)), but did not consider the Office's 
failure to initially act on the application to be an unusual 
administrative delay unless the Office did not issue either an Office 
action under 35 U.S.C. 132 or notice of allowance under 35 U.S.C. 151 
within forty-four (thirty plus fourteen) months of the filing date of 
an international application under 35 U.S.C. 363 (35 U.S.C. 
154(b)(1)(A)(i)(II)). 35 U.S.C. 131 and 151, however, require the 
Office to examine an application and issue a notice of allowance under 
35 U.S.C. 151 before issuing a patent on the application. Thus, the 
interpretation of the ``actual filing date of the application in the 
United States'' to mean the filing date under 35 U.S.C. 363 requires 
the conclusion that Congress intended an odd if not absurd result: that 
the Office is expected to be able to issue a patent quicker (within 
thirty-six months of the filing date under 35 U.S.C. 363) than it is 
expected to be able to initially act on the application (within forty-
four months of the filing date under 35 U.S.C. 363).
    The legislative history of 35 U.S.C. 154(b)(1)(B) specifically 
indicates that Congress wanted to avoid the situation in which an 
applicant could gain an extension of ``up to'' thirty months merely by 
filing the application under the PCT system. See 145 Cong. Rec. at 
S14,718 ([o]therwise, an applicant could obtain up to a 30-month 
extension of a U.S. patent merely by filing under PCT, rather than 
directly in the [Office], gaining an unfair advantage in contrast to 
strictly domestic applicants). While 35 U.S.C. 154(b)(1)(A)(i)(II) ties 
its fourteen-month period to fulfillment of the requirements of 35 
U.S.C. 371 in the case of an international application, the PCT and 35 
U.S.C. 371 permit applicants to delay fulfillment of the requirements 
of 35 U.S.C. 371 beyond thirty months (rather than ``up to'' thirty 
months). The PCT (PCT Article 39(1)(a)), however, allows an applicant 
to obtain a delay of up to thirty months in commencement of the 
national stage (35 U.S.C. 371(b)) by the timely filing of a demand for 
international preliminary examination. Therefore, the legislative 
history of 35 U.S.C. 154(b)(1)(B) indicates that the phrase ``actual 
filing date of the application in the United States'' as used in 35 
U.S.C. 154(b)(1)(B) means the date the national stage commenced under 
35 U.S.C. 371(b) or (f) in the case of an international application.
    In addition, while the international phase of an international 
application is not entirely devoid of activity, the Office does not 
(and cannot) begin examination of the application as provided for in 35 
U.S.C. 131 and 132 until after it has entered that national stage of 
processing under 35 U.S.C. 371(b) or (f). See PCT Articles 23 and 40. 
Therefore, it is consistent with the legislative history of 35 U.S.C. 
154(b) to not take the period prior to commencement of the national 
stage into account in determining whether the Office is meeting any of 
the time frames for examination of the application provided for in 35 
U.S.C. 154(b)(1).
    35 U.S.C. 363 does provide, in relevant part, that ``[a]n 
international application designating the United States shall have the 
effect, from its international filing date under [PCT Article 11], of a 
national application for patent regularly filed in the [Office].'' The 
legislative history of 35 U.S.C. 363 indicates that an international 
application designating the United

[[Page 56384]]

States, regardless of whether it was filed in this or any other 
contracting country, has the effect, from its international filing 
date, of a regular national application for patent filed in the United 
States Patent and Trademark Office, and that the international filing 
date of an international application would be considered as the actual 
filing date in the United States Patent and Trademark Office (except as 
provided in 35 U.S.C. 102(e)). See H.R. Rep. No. 94-592, at 9 (1975), 
reprinted in 1975 U.S.C.C.A.N. 1220, 1228. Nevertheless, the phrase 
``shall have the effect'' of having an earlier filing date (the 
international filing date) as used in the patent statute does not 
necessarily mean that the actual filing date of the application is the 
earlier filing date (the international filing date). See In re Hilmer, 
359 F.2d 859, 149 USPQ 480 (CCPA 1966) (discusses distinction in the 
patent statute between an actual filing date having the same effect of 
such a filing date).
    In addition, PCT Article 11(3) provides, in relevant part, that 
``any international application fulfilling the requirements listed in 
[PCT Article 11(1)(i) through (iii)] and accorded an international 
filing date shall have the effect of a regular national application in 
each designated State as of the international filing date, which date 
shall be considered to be the actual filing date in each designated 
State.'' Read in conjunction with the provisions of PCT Article 11(3), 
the phrase ``actual filing date of the application in the United 
States'' in 35 U.S.C. 154(b)(1)(B) might appear to mean the filing date 
of the international application under PCT Article 11(3) and 35 U.S.C. 
363 in the case of an international application. Nevertheless, it is 
not appropriate to mechanically interpret the phrase ``actual filing 
date of the application in the United States'' in 35 U.S.C. 154(b) in 
light of PCT Article 11(3) when that interpretation is at odds with the 
legislative history of this provision of 35 U.S.C. 154(b)(1)(B) and the 
provisions of 35 U.S.C. 154(b)(1)(A)(i)(II) and (B)(iii).
    The Office will continue to interpret the phrase ``from the date on 
which the application for the patent was filed in the United States'' 
in 35 U.S.C. 154(a)(2) (and former 35 U.S.C. 154(b)(3)(B)) as meaning 
the international filing date under PCT Article 11(3) and 35 U.S.C. 363 
in the case of an international application.
    If the phrase ``actual filing date of the application in the United 
States'' as used in 35 U.S.C. 154(b)(1)(B) were to be interpreted to 
mean any date other than the date the national stage commenced under 35 
U.S.C. 371(b) or (f) in the case of an international application, the 
Office would have to consider the failure to fulfill the requirements 
of 35 U.S.C. 371 to be a circumstance constituting a failure to engage 
in reasonable efforts to conclude prosecution (or processing or 
examination) of an application in an international application and 
reduce the period of any patent term adjustment by the period beginning 
on the ``actual filing date of the application in the United States'' 
of the application and ending on the date the application fulfilled the 
requirements of 35 U.S.C. 371. The interpretation of the phrase 
``actual filing date of the application in the United States'' as used 
in 35 U.S.C. 154(b)(1)(B) to mean the date the national stage commenced 
under 35 U.S.C. 371(b) or (f) in the case of an international 
application, however, renders it unnecessary to provide that any period 
of patent term adjustment under the three-year pendency provision of 35 
U.S.C. 154(b)(1)(B) be reduced by the number of days (if any) beginning 
on the date on which the national phase commences under 35 U.S.C. 
371(b) and ending on the day the applicant completes the requirements 
for entry into the national phase. After commencement of national stage 
processing, delays in fulfilling the requirements of 35 U.S.C. 371 will 
be treated under Sec. 1.704(b).
    Finally, the interpretation of the phrase ``actual filing date of 
the application in the United States'' as used in 35 U.S.C. 
154(b)(1)(B) to mean the date the national stage commenced under 35 
U.S.C. 371(b) or (f) in the case of an international application, 
rather than establishing the failure to fulfill the requirements of 35 
U.S.C. 371 as a circumstance constituting a failure to engage in 
reasonable efforts to conclude prosecution (or processing or 
examination) of an application, will not force applicants to forgo 
their entitlements under the treaty or risk a reduction in a term 
adjustment, and will place PCT applicants in a similar position to 
``regular'' national applicants or applicants who chose to file a 
``bypass'' application (an application under 35 U.S.C. 111 claiming 
priority under 35 U.S.C. 120 to the international application) instead 
of entering the national phase under 35 U.S.C. 371.
    Comment 32: Several comments argued that the formalities covered by 
proposed Sec. 1.704(c)(9) (which subjects an applicant to reduction of 
any term adjustment if, for example, the application papers cannot be 
scanned, an abstract is not submitted or does not comply with the 
rules, printable drawings are not filed or a sequence listing is not 
filed in appropriate computer readable form) usually do not delay 
examination. The comments also expressed concern that the defect would 
not be objected to in initial examination, and only later by the patent 
examiner. The comments argue that there should be no failure to engage 
reduction if the defect is not noted during initial examination, 
especially if the defect only arises after a restriction requirement 
which makes a revision to the title, for example, necessary. Several 
comments alleged that the proposed Sec. 1.704(c)(9) required formal 
drawings to be included on filing.
    Response: The Office has revised Sec. 1.704 such that application 
formalities (specification on papers in compliance with Sec. 1.52, 
title and abstract in compliance with Sec. 1.72, drawings in compliance 
with Sec. 1.84, and sequence listings in compliance with Sec. 1.821 et 
seq.) are treated under Sec. 1.704(b). Thus, any patent term adjustment 
will be reduced if an applicant does not correct the informality within 
three months of the Office action or notice requiring the missing part 
or correction of the informality.
    Comment 33: One comment argued that the reduction in proposed 
Sec. 1.704(c)(10) (Sec. 1.704(c)(6) as adopted) was excessive because 
there was no requirement for the Office to treat the preliminary paper 
within a set time. The comment argues that any time beyond one month 
from the filing of the preliminary amendment for the Office to issue a 
supplemental action should not be considered a failure to engage in 
reasonable efforts to conclude processing of an application. One 
comment argued that the proposal left an ``immense loophole for 
unlimited PTO delay'' and suggested that any reduction be limited to 
the lesser of (a) the proposed period or (b) the sum of (i) the time 
between the original Office action and the request for a supplement 
action plus (ii) the lesser of four months and the time between the 
filing of the request and the issuance of the supplemental action. 
Another comment argued that the reduction should be limited to four 
months.
    Response: Section 1.704(c)(6) as adopted provides that the period 
of adjustment set forth in Sec. 1.703 shall be reduced by the lesser of 
the number of days, if any, beginning on the mailing date of the 
original Office action or notice of allowance and ending on the date of 
mailing of the supplemental Office action or notice of allowance or 
four months (emphasis added). An applicant filing a preliminary 
amendment or other paper at a time close to when a first Office action 
is

[[Page 56385]]

expected is encouraged to check with the Office (e.g., through PAIR at 
http://pair.uspto.gov) before mailing in the paper. If the application 
is charged to a patent examiner, the examiner should be informed of the 
paper and the paper should be submitted to the examiner by facsimile 
transmission in order to reduce the likelihood of the examiner having 
to issue a supplemental Office action.
    Applicants do not generally ask the Office to issue a supplemental 
Office action and Sec. 1.704(c)(6) is not directed to this situation. 
Instead, Sec. 1.704(c)(6) is directed to the situation, for example, in 
which an amendment is filed in February and then a supplemental 
amendment is filed in March, but is not in the file when the examiner 
prepares a reply in April. If the examiner then prepares another Office 
action in May to treat the March amendment, the reduction under 
Sec. 1.704(c)(6) would be one month, the time between the April Office 
action and the May Office action.
    Comment 34: As to proposed Sec. 1.704(c)(11) (Sec. 1.704(c)(7) as 
adopted), the proposal that patent term adjustment will be reduced for 
the time period between submission of an initial reply and a reply in 
compliance with Sec. 1.135(c) was criticized as creating an incentive 
for the examiner to find a reply non-responsive when a four-month 
deadline is not met. The comment suggests that other options be 
considered, including setting an upper limit of four months for this 
situation.
    Response: Patent examiner performance plans hold examiners 
responsible for acting on applications within specified time frames. 
Patent examiner performance plans, however, do not hold examiners 
responsible for the patent term adjustment that may result in their 
applications. Thus, an examiner should not be overly mindful of the 
patent term adjustment implications of their actions. If a reply is 
filed that does not address each and every objection, rejection or 
other requirement made by the examiner, then the reply is not 
responsive to the Office action and the time between the filing of the 
incomplete reply and the date the omission was supplied is the period 
of time in which applicant's actions resulted in the Office not being 
able to complete processing or examination of the application.
    While Office practice is to treat a bona fide but non-responsive 
reply by issuing a notice setting a one-month (or thirty-day) period 
for reply and permitting applicants to obtain up to five additional 
months under Sec. 1.136(a), the Office could have changed this practice 
(as part of implementing the patent term adjustment provisions of the 
American Inventors Protection Act of 1999) to set a one-month (or 
thirty-day) non-extendable period for supplying omissions in a reply. 
The Office elected to retain the relatively liberal practice for 
treating such non-responsive replies. To provide applicants with this 
extended period within which to supply an omission, however, the Office 
must provide that any patent term adjustment will be reduced by the 
period of time between the date the incomplete reply was filed and the 
date the omission was supplied. Since both the filing of a reply that 
is complete and the filing of any supplement necessary to a reply 
having an omission are within the control of the applicant, there is no 
need for a four-month upper limit.
    Comment 35: As to proposed Sec. 1.704(c)(12) (Sec. 1.704(c)(8) as 
adopted), one comment argued that the submission of supplemental 
replies should not be construed as a failure to engage in reasonable 
efforts because sometimes the supplemental reply expedites resolution 
of the issues.
    Response: Section 1.704(c)(8) as adopted contains an exclusion for 
``a supplemental reply or other paper expressly requested by the 
examiner.'' Thus, a supplemental reply or other paper expressly 
requested by the examiner (e.g., a supplemental amendment carrying into 
effect agreements reached between the applicant and the examiner) will 
not be considered a failure to engage in reasonable efforts to conclude 
processing or examination of an application, where the filing of a 
supplemental reply or other paper that was not expressly requested by 
the examiner will be considered a failure to engage in reasonable 
efforts to conclude processing or examination of an application.
    Comment 36: Several other comments addressed proposed 
Sec. 1.704(c)(12), arguing that an information disclosure statement 
filed within three months of applicant learning of the prior art should 
not be construed as a failure to engage in reasonable efforts because 
this event is beyond the control of the applicant.
    Response: The filing of an information disclosure statement (or 
supplemental reply) after the filing of a reply will significantly 
interfere with the Office's ability to meet the time frame set forth in 
35 U.S.C. 154(b)(1)(A)(ii) and 154(b)(1)(B) and Sec. 1.702(a)(2) and 
(b). Nevertheless, the Office considers it appropriate to permit 
applicants to submit information cited in a communication from a 
foreign patent office in a counterpart application to the Office 
without a reduction in patent term adjustment if an information 
disclosure statement is submitted to the Office within thirty days (not 
three months) of the date the communication from the foreign patent 
office was received by an individual designated in Sec. 1.56(c). While 
this time period is considerably shorter than the three-month period 
provided in Sec. 1.97(e), a non-extendable thirty-day time period is 
necessary to avoid substantial interference with the time frame imposed 
on the Office by 35 U.S.C. 154(b)(1)(A)(ii).
    Comment 37: One comment argued that proposed Sec. 1.704(c)(12) 
would result in a request for filing an assignment being used to reduce 
the period of adjustment.
    Response: Assignment papers should be mailed to BOX ASSIGNMENT and 
should not be placed into an application file. See MPEP 303. As a 
result, the filing of a cover sheet for an assignment and an assignment 
would not be used in the patent term adjustment determination. 
Furthermore, a Notice of Non-Recordation (MPEP 302.09) is not a notice 
related to the processing or examination of a patent application and 
will not be used in the patent term adjustment determination.
    Comment 38: Several comments stated that it was manifestly unfair 
for a term adjustment to be reduced by the time between filing a notice 
of appeal and the appeal brief in proposed Sec. 1.704(c)(13). Several 
of these comments suggested that the time between two months after the 
notice of appeal and filing of the appeal brief be used as a failure to 
engage reduction. One of the comments suggested that applicants be 
given at least one month between notice of appeal and filing of the 
appeal brief before further delays begin to be considered a failure to 
engage. Another comment argued that proposed Sec. 1.704(c)(13) was 
unfair because a notice of appeal is a desirable means of avoiding 
paying extension of time fees. The comment further argued that if the 
appeal is successful, the time taken to file an appeal brief should not 
be considered a failure to engage in reasonable efforts to conclude 
processing or examination of the application unless more than a 
reasonable amount of time is taken to file the appeal brief. Several 
comments suggested that the taking of an appeal begins with the filing 
of the appeal brief and not with the filing of a notice of appeal. One 
of these comments stated that the Office's treating an appeal as having 
been taken when the notice of appeal is filed but reducing any patent 
term adjustment by the period between

[[Page 56386]]

the filing of the notice of appeal and the filing of an appeal brief 
will have the effect of having the relevant four-month period run from 
the filing of the appeal brief and probably reached the result Congress 
intended, but indicated that such a practice will create client-
relation difficulty.
    Response: The Office is interpreting the phrase ``the date on 
which'' an ``appeal was taken'' in 35 U.S.C. 154(b)(1)(A)(ii) as the 
date an appeal brief in compliance with Sec. 1.192 was filed. The 
Office originally interpreted the phrase ``the date on which'' an 
``appeal was taken'' in 35 U.S.C. 154(b)(1)(A)(ii) to mean the date a 
notice of appeal to the Board of Patent Appeals and Interferences under 
35 U.S.C. 134 and Sec. 1.191 was filed. See Changes to Implement Patent 
Term Adjustment Under Twenty-Year Patent Term, 65 FR at 17217, 1233 
Off. Gaz. Pat. Office at 111. The Office has reconsidered this 
interpretation of the phrase ``the date on which'' an ``appeal was 
taken'' in 35 U.S.C. 154(b)(1)(A)(ii).
    Neither the patent statute nor the rules of practice provide any 
definition (or antecedent basis) for the phrase ``appeal was taken'' so 
as to signify whether ``the date on which'' an ``appeal was taken'' 
means the date a notice of appeal to the Board of Patent Appeals and 
Interferences under 35 U.S.C. 134 and Sec. 1.191 was filed, or whether 
it means the date the documents and fees from applicant (i.e., an 
appeal brief in compliance with Sec. 1.192) that are necessary for the 
appeal to go forward (or be ``taken'') to the Board of Patent Appeals 
and Interferences was filed. Therefore, it is necessary to resort to 
the context of this provision within the scheme of 35 U.S.C. 154(b)(1) 
and legislative history of 35 U.S.C. 154(b) to ascertain the meaning of 
this phrase.
    The interpretation of the phrase ``the date on which'' an ``appeal 
was taken'' as meaning the date a notice of appeal to the Board of 
Patent Appeals and Interferences under 35 U.S.C. 134 and Sec. 1.191 was 
filed (rather than the date an appeal brief in compliance with 
Sec. 1.192 was filed) is not consistent with the scheme of 35 U.S.C. 
154(b)(1) (A) and (B). Both 35 U.S.C. 154(b)(1) (A) and (B) set forth 
an objective time clock system. 35 U.S.C. 154(b)(1)(A) sets forth an 
objective clock system that measures the time taken by the Office to 
perform certain acts of examination when such actions are expected in 
response to actions (e.g., the filing of an application, reply to an 
Office action, payment of the issue fee) by the applicant, where 35 
U.S.C. 154(b)(1)(B) sets forth an objective clock system that measures 
overall time taken by the Office to issue the patent.
    The Office is not expected to respond to the filing of a notice of 
appeal to the Board of Patent Appeals and Interferences under 35 U.S.C. 
134 and Sec. 1.191 unless and until the applicant files the documents 
and fees (i.e., an appeal brief in compliance with Sec. 1.192) 
necessary for the appeal to go forward (or be ``taken'') to the Board 
of Patent Appeals and Interferences. Since this provision is included 
as part of the clock system of 35 U.S.C. 154(b)(1)(A) that measures the 
time taken by the Office to perform certain acts of examination when 
such actions are expected in response to actions by the applicant 
(rather than the overall clock system of 35 U.S.C. 154(b)(1)(B)), it 
would be inconsistent with the scheme of 35 U.S.C. 154(b)(1) (A) and 
(B) to have the four-month period in 35 U.S.C. 154(b)(1)(A)(ii) run at 
a time (between the filing of a notice of appeal to the Board of Patent 
Appeals and Interferences under 35 U.S.C. 134 and Sec. 1.191 and the 
filing of an appeal brief in compliance with Sec. 1.192) when the 
Office is not expected to perform any action in the application.
    The interpretation of the phrase ``the date on which'' an ``appeal 
was taken'' as meaning the date a notice of appeal to the Board of 
Patent Appeals and Interferences under 35 U.S.C. 134 and Sec. 1.191 was 
filed (rather than the date an appeal brief in compliance with 
Sec. 1.192 was filed) is also not consistent with the legislative 
history of 35 U.S.C. 154(b). As discussed above, the provisions in 35 
U.S.C. 154(b) (A) and (B) for patent term adjustment on the bases of 
administrative delays in acting on an application or issuing a patent 
evolved from legislation introduced in the 104th Congress. See Patent 
Application Publication Act of 1995, H.R. 1733, 104th Cong. (1995). 
Section 8 of H.R. 1733 simply provided for patent term adjustment (or 
extension) for ``an unusual administrative delay,'' and authorized the 
Office to ``prescribe regulations to govern the determination of the 
period of delay and the particular circumstances deemed to be an 
unusual administrative delay'' (35 U.S.C. 154(b)(1)(D)).
    The Office proposed to implement this provision of H.R. 1733 using 
a three-prong objective time clock for certain actions by the Office to 
determine whether there was ``an unusual administrative delay'' by the 
Office. Specifically, the Office proposed to define ``an unusual 
administrative delay'' by the Office as failure to: (1) act on a reply 
under Sec. 1.111 or appeal brief under Sec. 1.192 within six months of 
the date it was filed; (2) act on application with six months of the 
date of a decision under Sec. 1.196 by the Board of Patent Appeals and 
Interferences where claims stand allowed in an application or the 
nature of the decision requires further action by the examiner 
(Sec. 1.197); or (3) issue a patent within six months of the date the 
issue fee was paid or all outstanding requirements were satisfied, 
whichever is later. See Changes to Implement 18-Month Publication of 
Patent Applications, Notice of Proposed Rulemaking, 60 FR 42352, 42369-
70, 42385-86 (Aug. 15, 1995), 1177 Off. Gaz. Pat. Office 61, 76-77, 91-
91 (Aug. 15, 1995).
    The 104th Congress replaced H.R. 1733 with H.R. 3460. See Moorhead-
Schroeder Patent Reform Act, H.R. 3460, 104th Cong. (1996). The patent 
term adjustment provisions of H.R. 3460 were based upon the objective 
time clock system proposed by the Office in August of 1995, with two 
modifications: (1) an additional fourth prong (now the first prong) was 
added to also define ``an unusual administrative delay'' by the Office 
as failure to initially act on an application within fourteen months of 
its filing date; and (2) the six-month time periods were shortened to 
four months in the remaining three prongs which correspond to the three 
prongs proposed by the Office. See H.R. Rep. No. 104-784, at 19 and 33 
(1996). There is nothing in the Committee Report for H.R. 3460 to 
indicate that Congress intended the four-month period in the second 
prong of the objective time clock to run from the date a notice of 
appeal to the Board of Patent Appeals and Interferences under 35 U.S.C. 
134 and Sec. 1.191 was filed, rather than the date an appeal brief 
under Sec. 1.192 was filed (as proposed by the Office), with regard to 
measuring whether the time taken by the Office to respond to an appeal 
constituted ``an unusual administrative delay'' by the Office.
    While 35 U.S.C. 154(b) as ultimately amended by the 106th Congress 
in Pub. L. 106-113 differs dramatically from 35 U.S.C. 154(b) as it 
would have been amended by H.R. 3460, the language of 35 U.S.C. 
154(b)(1)(A)(ii) as enacted is identical to the language of 35 U.S.C. 
154(b)(1)(B)(ii) (the corresponding provision) in H.R. 3460. Since this 
objective clock system of 35 U.S.C. 154(b)(1)(A) tracks the objective 
time clock system proposed by the Office in August of 1995, and there 
is nothing in the legislative history of 35 U.S.C. 154(b) to indicate 
that Congress meant to alter this prong of the objective time clock 
(such that the time period would run from the date a notice of appeal 
to the Board of Patent Appeals and

[[Page 56387]]

Interferences under 35 U.S.C. 134 and Sec. 1.191 was filed rather than 
the date an appeal brief under Sec. 1.192 was filed), it is reasonable 
to conclude that Congress intended the phrase ``the date on which'' an 
``appeal was taken'' in 35 U.S.C. 154(b)(1)(A)(ii) to mean the date an 
appeal brief under Sec. 1.192 was filed.
    Comment 39: As to proposed Sec. 1.704(c)(14) (Sec. 1.704(c)(9) as 
adopted), several comments argued that the comments raised against 
proposed Sec. 1.704(c)(10) were also relevant. One comment argued that 
the period defined by the rule was not within the control of the 
applicant and that an upper limit for the period of adjustment (e.g., 
four months) should be set.
    Response: Section 1.704(c)(9) as adopted provides that adjustment 
set forth in Sec. 1.703 shall be reduced by the lesser of the number of 
days, if any, beginning on the day after the mailing date of the 
original Office action or notice of allowance and ending on the mailing 
date of the supplemental Office action or notice of allowance or four 
months (emphasis added).
    Comment 40: Another comment addressed proposed Sec. 1.704(c)(14) 
(Sec. 1.704(c)(9) as adopted), stating that the term ``designated'' in 
the phrase ``[s]ubmission of an amendment or other paper after a 
decision of the Board of Patent Appeals and Interferences, other than a 
decision designated as containing a new ground of rejection under 
Sec. 1.196(b) or a statement under Sec. 1.196(c)'' should not be used 
to arbitrarily deny term adjustment.
    Response: The phrase from Sec. 1.704(c)(9) as adopted addressed in 
this comment explains that a paper filed in reply to a new ground of 
rejection will not be used to reduce a term adjustment. Applicants will 
be able to timely reply to a Board of Patent Appeals and Interferences 
decision containing a new ground of rejection under Sec. 1.196(b) 
without a reduction of patent term adjustment.
    Comment 41: Several comments objected to the reference to ``or 
other paper'' in proposed Sec. 1.704(c)(15) (Sec. 1.704(c)(10) as 
adopted) because a paper filed to correct an examiner's amendment or to 
request a copy of a PTO-1449 should not be construed as a failure to 
engage in reasonable efforts to concludeprosecution. One comment 
suggested instead that only an amendment requiring further examination 
should be listed under this section.
    Response: In order to be able to perform the patent term adjustment 
calculation at the time of mailing the Notice of Allowance, the Office 
needs to have the calculation performed by a computer program using the 
Office's records of papers mailed and received as recorded in its PALM 
system. The PALM system is simply not capable of making value judgments 
concerning papers filed after allowance. In any event (as discussed 
above), all papers filed after allowance of an application 
substantially delay the Office's ability to process an application for 
a patent because the Office does not wait for payment of the issue fee 
to begin the process of preparing the application for publication as a 
patent. Section 1.704(c)(10) as adopted should deter applicants from 
filing papers after allowance which should have a beneficial impact 
upon the Office's ability to publish applications as patents more 
quickly.
    Applicants can avoid this reduction being applied to applicant's 
attempts to correct the record by making a telephone request for a 
missing copy of a PTO-1449 or other document as soon as possible after 
receipt of the Notice of Allowance. As to information disclosure 
statements filed after allowance, pursuant to Sec. 1.704(d) an 
information disclosure statement citing prior art cited in a 
communication from the foreign patent office in a counterpart 
application and filed within thirty days of the communication from the 
foreign patent office will not reduce the term of any adjustment if the 
required certification is made. In addition, a status inquiry filed 
after allowance may result in a reduction of the term adjustment. 
Applicants are encouraged to either call the Office or use the PAIR 
system (http://pair.uspto.gov) to monitor the status of an application 
rather than submitting written status inquiries.
    Comment 42: One comment argued that proposed Sec. 1.704(c)(16) 
(Sec. 1.704(c)(11) as adopted) was unnecessary because time periods 
before the filing date of an application are not relevant to patent 
term adjustment and do not constitute delays in the prosecution of the 
application. Another comment asked whether applicant delays in a prior 
application would reduce the patent term adjustment in a continuation 
application.
    Response: Delays before the filing date of an application are not 
relevant to whether an application is entitled to patent term 
adjustment, but the provision is considered necessary to remind 
applicants of this. Likewise, patent term adjustment will not be 
reduced by applicant actions or inactions (that amount to a failure to 
engage in reasonable efforts to conclude processing or examination of 
the application) occurring in a prior (or other) application.
    Comment 43: Section 1.705(a) states that the notification of any 
patent term adjustment under 35 U.S.C. 154(b) will be included on the 
notice of allowance. One comment asked whether a registered 
practitioner has an ethical duty to disclose to the Office when the 
term adjustment indicated is longer period than expected. The comment 
continues to ask whether attorneys have a similar duty to inform the 
Office when an examiner indicates subject matter as being allowable 
with a scope broader than it should be. Finally, the comment asks 
whether the ethical obligation would be any different if the pre-
printed Office form is not used to pay the issue fee and an attorney-
generated form is used instead.
    Response: The Office currently issues a notice of allowance using 
the Notice of Allowance and Issue Fee Due (PTOL-85). The Notice of 
Allowance and Issue Fee Due (PTOL-85) is printed in several parts and 
one part (PTOL-85B) may be returned with the issue fee payment in order 
to communicate the assignee and attorney data to be printed on the face 
of the patent. A registered practitioner is under a general obligation 
of candor and good faith in practice before the Office. Accordingly, if 
an examiner suggests claims that the attorney knows are not patentable, 
Sec. 10.18 precludes the attorney from adopting the examiner's 
suggestions in an amendment. Similarly, a practitioner signing the 
PTOL-85B does so pursuant to Sec. 10.18, which means, for example, that 
if assignee data is provided on the PTOL-85B, the assignee is an 
assignee of the entire interest in the application, and that the patent 
term adjustment is correct to the best of his or her knowledge, 
information and belief, formed after an inquiry reasonable under the 
circumstances. For example, if a registered practitioner receives 
determination that the application is eligible for a 1,500 day 
adjustment and the practitioner is not sure exactly what the adjustment 
should be, but believes that the adjustment should be 1,000 days, the 
practitioner does have a duty to disclose the error to the Office, 
regardless of whether the issue fee is paid using the Office-generated 
form (PTOL-85B) or an attorney-generated equivalent. In order to comply 
with this duty and where the correct adjustment is thought to be less 
than indicated by the Office, an application for term adjustment under 
Sec. 1.705(b) need not be filed. Instead, a letter could be filed with 
the issue fee payment, indicating that the term adjustment is thought 
to be longer than appropriate.

[[Page 56388]]

    Comment 44: As to Sec. 1.705(a) one comment asked if the patent 
term adjustment would be printed in the Official Gazette.
    Response: The Office has no plans at this time to add the patent 
term adjustment to the information printed in the Official Gazette.
    Comment 45: As to Sec. 1.705(b), one comment noted that the 
reference to Sec. 1.704(b) should be a reference to Sec. 1.704.
    Response: The suggestion has been adopted in part. The reference to 
Sec. 1.704(b) has been changed to a reference to Sec. 1.704(a). Section 
1.704(a) states that a patent term adjustment shall be reduced by the 
period of time in which applicant has failed to engage in reasonable 
efforts to conclude prosecution whereas Sec. 1.704(b) and (c) define 
when an applicant is determined to have failed to act in such a manner.
    Comment 46: As to Sec. 1.705(b), one comment stated that the amount 
of detail of how the patent term adjustment calculation is made was not 
stated and urged that the Office provide information as to patent term 
adjustment which applicants can check as an application is prosecuted. 
One comment asked that a copy of the patent term adjustment worksheet 
be included with the patent term adjustment determination.
    Response: The Office does plan to provide information as to how the 
patent term adjustment calculation has been made through PAIR at 
http://pair.uspto.gov. This system is now available to all patent 
applicants who have a customer number. The precise information that 
will be communicated, and when this information will be available has 
not yet been determined.
    Comment 47: One comment asked that the software algorithm for the 
patent term adjustment determination be made available to the public 
before being implemented.
    Response: The computer program written to perform the patent term 
adjustment determinations of 35 U.S.C. 154 as amended will be written 
for the Office mainframe computer using the PALM records. It is not 
anticipated that this software will be capable of being used on another 
computer. Accordingly, the computer codes are unlikely to be understood 
by someone outside of the Office. Moreover, the Office does not plan to 
initially launch a computer program that will perform all necessary 
patent term adjustment determination, but instead plans to add to the 
program in stages until it is fully functional. For example, the first 
patents to be eligible for term adjustment will be when the Office 
fails to issue a patent within four months of payment of the issue fee 
and compliance with all formal requirements. This is unlikely to occur 
before February of 2001. Accordingly, the first stage of the computer 
program should be running by November of 2000 to generate a report with 
the Issue Notification if this four-month deadline is missed. On the 
other hand, the last part of the program (failing to issue a patent 
within three years of the filing date of the application) cannot take 
place before May 29, 2003, and this final stage of the program is not 
anticipated to be operational until after the remainder of the 
programming has been completed.
    Comment 48: One comment argued that applicants should be able to 
address patent term adjustment with the filing of a reply to an Office 
action.
    Response: Although 35 U.S.C. 154(b)(3)(C) states that a showing 
that the delay was in spite of all due care may be filed prior to the 
issuance of the patent, the general framework of the 35 U.S.C. 
154(b)(3) has the Office first making a patent term adjustment 
determination and then applicant filing a request for reconsideration 
of the Office's determination (i.e., an application for term 
adjustment). Since the initial patent term adjustment determination 
will be made by the Office's computer system with the mailing of the 
Notice of Allowance and Issue Fee Due, applicant should file any 
showing explaining the reasons for a delay with any request for 
reconsideration of this determination so that the showing can be 
considered with the request for reconsideration.
    In addition, the reinstatement provision of 35 U.S.C. 154(b)(3)(C) 
applies, by its terms, only to reductions under Sec. 1.704(b) because 
the reductions under Sec. 1.704 (c)(1) through (c)(11) are not based 
upon failure to reply to an Office action or notice within three 
months. Thus, reinstatement of reduced patent term adjustment under 35 
U.S.C. 154(b)(3)(C) on the basis of a showing that the delay was in 
spite of all due care is relevant only if: (1) one of the delays 
specified in 35 U.S.C. 154(b)(1) (A) through (C) occurred during the 
application process processing; and (2) patent term adjustment accruing 
as a result of such delay survives the reductions under Sec. 1.704 
(c)(1) through (c)(11). Thus, the Office is requiring that applicants 
not address patent term adjustment until the Office makes its initial 
patent term adjustment determination in the notice of allowance to 
avoid unnecessary expenditures of resources by applicants and the 
Office in preparing and handling submissions that turn out to be 
irrelevant.
    Comment 49: As to Sec. 1.705(b), several comments asked how the 
procedure for a request for reconsideration of the term adjustment due 
to the patent issuing on a date other than the projected issue date 
will operate. One comment argued that the thirty-day time period was 
too short and that a three-month time period would be more suitable.
    Response: The Office is restricted by the provisions of 35 U.S.C. 
154(b)(4)(A) which provide that an applicant dissatisfied with a patent 
term adjustment determination has 180 days to file a civil action 
against the Office. In order for the Office to treat the request for 
reconsideration in sufficient time for the applicant to determine 
whether court review of the Office's determination is appropriate, the 
Office must require that the request for reconsideration be filed 
within thirty days of patent grant. The Office does, however, mail an 
Issue Notification about two weeks before the issue date of the patent 
and plans to revise the Issue Notification to include the patent term 
adjustment information that will be printed on the face of the patent, 
so applicants will (in most situations) have about forty-five days from 
the date of this Notice to prepare a request for reconsideration.
    Comment 50: Also as to Sec. 1.705(b), one comment asked if the 
revised patent term adjustment would be printed on the patent, and 
asked how a third party would obtain information about any revision to 
the patent term adjustment.
    Response: Any petition requesting reconsideration of a patent term 
adjustment and a decision thereon would be placed into the patent file 
wrapper and would therefore be available to the public. In addition, 
the Office is considering establishing procedures where the Office will 
issue a certificate of correction to add or correct patent term 
adjustment information printed on the face of the patent, after a 
decision on a request for reconsideration of a patent term adjustment 
determination. After the certificate of correction has issued, the 
Office is considering publishing an Official Gazette Notice of the 
revised term adjustment determination for the patent.
    Comment 51: As to Sec. 1.705(c), one comment suggested that the 
Office should issue guidelines on how the ``in spite of all due care'' 
provisions of 35 U.S.C. 154(b)(3)(C) will be interpreted. Another 
comment argued that the term ``reasonable efforts'' is more liberal 
than the term ``due diligence'' under old 35 U.S.C. 154(b) which was 
abandoned by

[[Page 56389]]

Congress. The comment argued that events that should not be treated as 
a failure to engage in reasonable efforts to conclude prosecution 
include: (1) filing of responses after three months accompanied by a 
submission under the procedures of Sec. 1.132 where reasonable efforts 
to prepare the submission are shown; (2) periods of time when 
applicant's attorney is engaged in inter partes matters relating to 
pending lawsuits and interferences and other matters on his/her 
professional calendar which are appropriately given priority; (3) 
illness, vacations of reasonable length, and other appropriate reasons 
for non-attention to an application that occur in everyday life of 
applicants and attorneys, and (4) time consumed in communications 
between the applicant, the applicant's foreign agent and the 
applicant's U.S. representative when the applicant does not reside in 
the United States.
    Response: Filing a response outside of three months after an Office 
action is per se a failure to engage in reasonable efforts to conclude 
prosecution under 35 U.S.C. 154(b)(2)(C)(ii) unless applicant can 
establish that the delay was ``in spite of all due care.'' The Office 
``shall reinstate all or part of the cumulative period of time of an 
adjustment reduced under [35 U.S.C. 154(b)(2)(C)] if the applicant * * 
* makes a showing that, in spite of all due care, the applicant was 
unable to respond within the 
3-month period * * * .'' See 35 U.S.C. 154(b)(3)(C) (emphasis added). 
The ``due care'' of a reasonably prudent person standard has been 
applied in deciding petitions under the ``unavoidable delay'' standard 
of 35 U.S.C. 133. See In re Mattullath, 38 App. D.C. 497, 514-15 
(1912)(``the word `unavoidable' * * * is applicable to ordinary human 
affairs, and requires no more or greater care or diligence than is 
generally used and observed by prudent and careful men in relation to 
their most important business'') (quoting and adopting Pratt, 1887 Dec. 
Comm'r Pat. at 32-33); see also Ray v. Lehman, 55 F.3d 606, 609, 34 
USPQ2d 1786, 1787 (Fed. Cir. 1995) (``in determining whether a delay * 
* * was unavoidable, one looks to whether the party * * * exercised the 
due care of a reasonably prudent person''). While the legislative 
history of the American Inventors Protection Act of 1999 is silent as 
to the meaning of the phrase ``in spite of all due care,'' the phrases 
``all due care'' and ``unable to respond'' invoke a higher degree of 
care than the ordinary due care standard of 35 U.S.C. 133, as well as 
the ``reasonable efforts to conclude processing or examination [or 
prosecution] of an application'' standard of 35 U.S.C. 154(b)(2)(C)(i) 
and (iii). Therefore, applicants should not rely upon decisions 
relating to the ``unavoidable delay'' standard of 35 U.S.C. 133 as 
controlling in a request to reinstate reduced patent term adjustment on 
the basis of a showing that the applicant was unable to respond within 
the three-month period in spite of all due care.
    Examples of showings that may establish that the applicant was 
unable to respond within the three-month period in spite of all due 
care are as follows: (1) a showing that the original three-month period 
was insufficient to obtain the test data necessary for an affidavit or 
declaration under Sec. 1.132 that was submitted with a reply filed 
outside the original three-month period; (2) a showing that the 
applicant was unable to reply within the original three-month period 
due to a natural disaster; or (3) a showing that the applicant was 
unable to reply within the original three-month period due to illness 
or death of a sole practitioner of record who was responsible for 
prosecuting the application. Obviously, the patent term adjustment term 
reinstated would be limited to the period in which the showing 
establishes that applicant was acting with all due care to reply to the 
Office notice or action, but circumstances (outside applicant's 
control) made applicant unable to reply in spite of such due care.
    An applicant will not be able to show that he or she was unable to 
respond within the three-month period ``in spite of all due care'' if 
the response was not filed within the three-month period due to reasons 
within the control of applicant or agencies within the applicant's 
control. Examples of circumstances that would not establish that the 
applicant was unable to respond within the three-month period in spite 
of all due care are: (1) an applicant's or representative's 
preoccupation with other matters (e.g., an inter partes lawsuit or 
interference) that is given priority over the application; (2) illness 
or death of the practitioner in charge of the application if the 
practitioner is associated (in a law firm) with other practitioners 
(since the other practitioners could have taken action to reply within 
the three-month period); (3) time consumed with communications between 
the applicant and his or her representative, regardless of whether the 
applicant resides in the United States or chooses to communicate with 
the United States representative via a foreign representative; (4) 
vacation or other non-attention to an application that results in a 
failure to reply within the three-month period; (5) applicant filing a 
reply on or near the last day of the three-month period using first 
class mail with a certificate of mailing under Sec. 1.8, rather than by 
Express Mail under Sec. 1.10 or facsimile (if permitted), and the reply 
is not received (filed) in the Office until after the three-month 
period; or (6) failure of clerical employees of applicant or 
applicant's representative to properly docket the Office action or 
notice for reply or perform other tasks necessary for reply within the 
three-month period.
    Rarely is the power of attorney given to a single attorney and 
often many attorneys are given power of attorney in an application. An 
attorney in litigation, working on an interference or taking a vacation 
is generally aware of that fact before the event and should make plans 
for another to take over his work so that it is completed and filed in 
the Office within the three-month period. Thus, failure to reply within 
the three-month period in 35 U.S.C. 154(b)(2)(C)(ii) due to 
preoccupation with other matters (e.g., an inter partes lawsuit or 
interference) given priority over the application, or vacation or other 
non-attention to an application, cannot be relied upon to show that 
applicant was unable to reply ``in spite of all due care'' under 35 
U.S.C. 154(b)(3)(C).
    As to communications between an applicant and others involved in 
preparing a reply, the attorney's engagement letter with his or her 
client should impress the importance of reply within three months of 
any Office action or notice. The letter should also carefully explain 
to the client that while extensions of time are generally available to 
reply to Office actions and notices, not only will applicant have to 
bear the cost of the extension but is likely to experience a reduction 
in any patent term adjustment as well.
    Comment 52: As to Sec. 1.705(d), one comment stated that there was 
no provision in the rules for the patent to be printed with the patent 
term adjustment information thereon. Another comment asked how the 
public would be notified of a successful request for reconsideration of 
the term adjustment due to the patent issuing on a day other than a 
date projected.
    Response: Patents filed on or after June 8, 1995, are eligible for 
term adjustment for certain delays and the patent is printed with the 
term adjustment information printed thereon in the field below the 
inventor name. If for some reason the patent is not printed with the 
term adjustment or is printed with the incorrect adjustment, the Office 
procedure is to inform the patentee of

[[Page 56390]]

the error and to issue a Certificate of Correction if no objection is 
received. The Office plans to continue to print any term adjustment on 
the front page of the patent, and to issue a Certificate of Correction 
if the term adjustment is printed incorrectly.
    Comment 53: One general comment was received that with patent term 
adjustment, applicants will be less motivated to take action to 
expedite prosecution of an application, and suggested that the term 
adjustment should be shortened if the applicant does not take action to 
ensure that the application is examined.
    Response: The suggestion raises a valid objection which cannot be 
addressed with a specific rulemaking. Applicants often file status 
letters to determine if and when an application will be taken up for 
action. The time required to process and reply to a status letter takes 
away from the time that the Office has to process and reply to other 
papers and the Office does not want to create rules to encourage the 
filing of such papers.
    Comment 54: One comment argued that Sec. 1.705(f) should not 
exclude a third party from filing a submission or petition of the 
patent term adjustment. The comment argues that a potential Abbreviated 
New Drug Application (ANDA) applicant may not have another way of 
challenging the expiration date of the patent and upon filing a 
paragraph III certification, be forced to stay off the market for an 
unnecessary period of time, thereby depriving the public of lower cost 
drugs.
    Response: If the patent claims a drug product approved by the Food 
and Drug Administration, the patent will be listed in the Prescription 
and OTC Drug Product, Patent and Exclusivity Data section of the 
Approved Drug Products with Therapeutic Equivalence Evaluations (Orange 
Book) as covering the drug product and the patent expiration date will 
be given. If the expiration date listed in the Orange Book is 
incorrect, the ANDA applicant could dispute the patent expiration date 
pursuant to 21 CFR 314.53(f). If the date is not corrected, the ANDA 
applicant could institute a declaratory judgment action with respect to 
the patent. Alternatively, the ANDA applicant could address the 
situation by filing a paragraph IV certification (see Food, Drug and 
Cosmetic Act, Section 505(j)(2)(A)(vii)(IV), 21 U.S.C. 
355(j)(2)(A)(vii)(IV)), arguing that because the term adjustment is 
incorrect, the patent is unenforceable. See 21 CFR 
314.94(a)(12)(i)(A)(4).
    Pursuant to 35 U.S.C. 154(b)(4)(B) no third party may challenge or 
appeal a patent term adjustment determination prior to the grant of a 
patent. Moreover, the best time and place for the patent term 
adjustment determination to be challenged by a third party is thought 
to be during litigation between two interested parties near the 
expiration date of the patent, before consideration of the term 
adjustment.

Classification

Regulatory Flexibility Act

    The Chief Counsel for Regulation of the Department of Commerce 
certified to the Chief Counsel for Advocacy, Small Business 
Administration, that the changes in this final rule will not have a 
significant impact on a substantial number of small entities 
(Regulatory Flexibility Act, 5 U.S.C. 605(b)). This final rule 
implements the provisions of Secs. 4401 and 4402 of the American 
Inventors Protection Act of 1999. The changes in this final rule 
provide procedures for the Office's patent term adjustment 
determination and for filing an application to request reconsideration 
of the Office's patent term adjustment determination.
    The Office mails a notice of allowance in roughly 160,000 
applications each year. The Office's patent term adjustment 
determination will be a calculation based upon time periods involving 
the dates of various actions by the Office and the applicant during the 
application process. Because of the number of actions by the Office and 
the applicant during the application process, the Office anticipates 
that there will be disagreement on at least one of these dates in 
roughly fifteen percent of applications (24,000). Based upon the 
percentage of applicants who are small entities (thirty percent), the 
Office expects that 7,200 small entities will file an application 
requesting reconsideration of a patent term adjustment determination 
each year. Since a small entity applicant who exercises reasonable due 
care or diligence should be able to reply to any Office action or 
notice within three months, the Office does not anticipate that any 
small entities will file a request for reinstatement of reduced patent 
term adjustment (based upon a showing that the applicant was unable to 
reply to an Office action or notice within three months in spite of all 
due care).
    Filing an application requesting reconsideration of a patent term 
adjustment determination (as well as a request for reinstatement of 
reduced patent term adjustment) is optional. To obtain any benefit from 
an application requesting reconsideration of the Office's patent term 
adjustment determination, the applicant must plan to pay the three 
maintenance fees required by law (35 U.S.C. 41(b)) to maintain a patent 
in force until the end of the non-adjusted patent term as specified in 
35 U.S.C. 154. The current first, second, and third maintenance fees 
are $415.00, $950.00, and $1,455.00, respectively. Since the fee ($200) 
for filing an application requesting reconsideration of the Office's 
patent term adjustment determination is less than one-tenth of the 
combined cost of these three maintenance fees (and the fee ($400) for 
filing a request for reinstatement of reduced patent term adjustment is 
less than one-sixth of the combined cost of these three maintenance 
fees), there will not be a significant economic impact on a substantial 
number of small entities due to the procedures for requesting 
reconsideration of the Office's patent term adjustment determination.

Executive Order 13132

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

Executive Order 12866

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

Paperwork Reduction Act

    This final rule 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 
collection of information involved in this final rule has been reviewed 
and previously approved by OMB under OMB control number 0651-0020.
    As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), the United States Patent and Trademark Office submitted an 
information collection package to OMB for its review and approval. The 
United States Patent and Trademark Office submitted this information 
collection to OMB for its review and approval because this final rule 
adds the request for reconsideration of a patent term adjustment 
determination by the United States Patent and Trademark Office and the 
request for reinstatement of reduced patent term adjustment (based upon 
a showing that the applicant was unable to reply to an Office action or 
notice within three months in spite of all due care) provided for in 35 
U.S.C. 154(b)(3) to that collection.

[[Page 56391]]

    The title, description, and respondent description of the 
information collection is shown below with an estimate of the annual 
reporting burdens. Included in this estimate is the time for reviewing 
instructions, gathering, and maintaining the data needed, and 
completing and reviewing the collection of information. The principal 
impact of the changes in this final rule is to implement the changes to 
Office practice necessitated by Sec. 4402 of the American Inventors 
Protection Act of 1999 (enacted into law by Sec. 1000(a)(9), Division 
B, of Pub. L. 106-113).
    OMB Number: 0651-0020.
    Title: Patent Term Extension.
    Form Numbers: None.
    Type of Review: Approved through September of 2001.
    Affected Public: Individuals or households, businesses or other 
for-profit, not-for-profit institutions, farms, Federal Government, and 
state, local, or tribal governments.
    Estimated Number of Respondents: 26,857.
    Estimated Time Per Response: 1.15 hour.
    Estimated Total Annual Burden Hours: 30,902 hours.
    Needs and Uses: The information supplied to the United States 
Patent and Trademark Office by an applicant requesting reconsideration 
of a patent term adjustment determination under 35 U.S.C. 154(b) 
(Sec. 1.702 et seq.) is used by the United States Patent and Trademark 
Office to determine whether its determination of patent term adjustment 
under 35 U.S.C. 154(b) is correct, and whether the applicant is 
entitled to reinstatement of reduced patent term adjustment. The 
information supplied to the United States Patent and Trademark Office 
by an applicant seeking a patent term extension under 35 U.S.C. 156 
(Sec. 1.710 et seq.) is used by the United States Patent and Trademark 
Office, the Department of Health and Human Services, and the Department 
of Agriculture to determine the eligibility of a patent for extension 
and to determine the period of any such extension. The applicant can 
apply for patent term and interim extensions, petition the Office to 
review final eligibility decisions, withdraw patent term applications, 
and declare his or her eligibility to apply for a patent term 
extension.
    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, Special Program Law Office, United 
States Patent and Trademark Office, Washington, DC 20231, or to the 
Office of Information and Regulatory Affairs of OMB, New Executive 
Office Building, 725 17th Street, NW., Room 10235, Washington, DC 
20503, Attention: Desk Officer for the United States 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.

List of Subjects in 37 CFR Part 1

    Administrative practice and procedure, Courts, Freedom of 
Information, Inventions and patents, Reporting and recordkeeping 
requirements, Small businesses.
    For the reasons set forth in the preamble, 37 CFR part 1 is amended 
as follows:

PART 1--RULES OF PRACTICE IN PATENT CASES

    1. The authority citation for 37 CFR part 1 continues to read as 
follows:

    Authority: 35 U.S.C. 2(b)(2).


    2. Section 1.18 is amended by revising its heading and adding 
paragraphs (d), (e) and (f) to read as follows:


Sec. 1.18  Patent post allowance (including issue) fees.

* * * * *
    (d) [Reserved]
    (e) For filing an application for patent term adjustment under 
Sec. 1.705: $200.00.
    (f) For filing a request for reinstatement of all or part of the 
term reduced pursuant to Sec. 1.704(b) in an application for patent 
term adjustment under Sec. 1.705: $400.00.

    3. The heading for Subpart F of part 1 is revised to read as 
follows:

Subpart F--Adjustment and Extension of Patent Term

    4. The authority citation for Subpart F of part 1 is revised to 
read as follows:

    Authority: 35 U.S.C. 2(b)(2), 154, and 156.


    5. A new, undesignated center heading is added to Subpart F before 
Sec. 1.701 to read as follows:
Adjustment of Patent Term Due to Examination Delay

    6. Section 1.701 is amended by revising its heading and adding a 
new paragraph (e) to read as follows:


Sec. 1.701  Extension of patent term due to examination delay under the 
Uruguay Round Agreements Act (original applications, other than 
designs, filed on or after June 8, 1995, and before May 29, 2000).

* * * * *
    (e) The provisions of this section apply only to original patents, 
except for design patents, issued on applications filed on or after 
June 8, 1995, and before May 29, 2000.
    7. New Secs. 1.702 through 1.705 are added to read as follows:


Sec. 1.702  Grounds for adjustment of patent term due to examination 
delay under the Patent Term Guarantee Act of 1999 (original 
applications, other than designs, filed on or after May 29, 2000).

    (a) Failure to take certain actions within specified time frames. 
Subject to the provisions of 35 U.S.C. 154(b) and this subpart, the 
term of an original patent shall be adjusted if the issuance of the 
patent was delayed due to the failure of the Office to:
    (1) Mail at least one of a notification under 35 U.S.C. 132 or a 
notice of allowance under 35 U.S.C. 151 not later than fourteen months 
after the date on which the application was filed under 35 U.S.C. 
111(a) or fulfilled the requirements of 35 U.S.C. 371 in an 
international application;
    (2) Respond to a reply under 35 U.S.C. 132 or to an appeal taken 
under 35 U.S.C. 134 not later than four months after the date on which 
the reply was filed or the appeal was taken;
    (3) Act on an application not later than four months after the date 
of a decision by the Board of Patent Appeals and Interferences under 35 
U.S.C. 134 or 135 or a decision by a Federal court under 35 U.S.C. 141, 
145, or 146 where at least one allowable claim remains in the 
application; or
    (4) Issue a patent not later than four months after the date on 
which the issue fee was paid under 35 U.S.C. 151 and all outstanding 
requirements were satisfied.
    (b) Failure to issue a patent within three years of the actual 
filing date of the application. Subject to the provisions of 35 U.S.C. 
154(b) and this subpart, the term of an original patent shall be 
adjusted if the issuance of the patent was delayed due to the failure 
of

[[Page 56392]]

the Office to issue a patent within three years after the date on which 
the application was filed under 35 U.S.C. 111(a) or the national stage 
commenced under 35 U.S.C. 371(b) or (f) in an international 
application, but not including:
    (1) Any time consumed by continued examination of the application 
under 35 U.S.C. 132(b);
    (2) Any time consumed by an interference proceeding under 35 U.S.C. 
135(a);
    (3) Any time consumed by the imposition of a secrecy order under 35 
U.S.C. 181;
    (4) Any time consumed by review by the Board of Patent Appeals and 
Interferences or a Federal court; or
    (5) Any delay in the processing of the application by the Office 
that was requested by the applicant.
    (c) Delays caused by interference proceedings. Subject to the 
provisions of 35 U.S.C. 154(b) and this subpart, the term of an 
original patent shall be adjusted if the issuance of the patent was 
delayed due to interference proceedings under 35 U.S.C. 135(a).
    (d) Delays caused by secrecy order. Subject to the provisions of 35 
U.S.C. 154(b) and this subpart, the term of an original patent shall be 
adjusted if the issuance of the patent was delayed due to the 
application being placed under a secrecy order under 35 U.S.C. 181.
    (e) Delays caused by successful appellate review. Subject to the 
provisions of 35 U.S.C. 154(b) and this subpart, the term of an 
original patent shall be adjusted if the issuance of the patent was 
delayed due to review by the Board of Patent Appeals and Interferences 
under 35 U.S.C. 134 or by a Federal court under 35 U.S.C. 141 or 145, 
if the patent was issued pursuant to a decision reversing an adverse 
determination of patentability.
    (f) The provisions of this section and Secs. 1.703 through 1.705 
apply only to original applications, except applications for a design 
patent, filed on or after May 29, 2000, and patents issued on such 
applications.


Sec. 1.703  Period of adjustment of patent term due to examination 
delay.

    (a) The period of adjustment under Sec. 1.702(a) is the sum of the 
following periods:
    (1) The number of days, if any, in the period beginning on the day 
after the date that is fourteen months after the date on which the 
application was filed under 35 U.S.C. 111(a) or fulfilled the 
requirements of 35 U.S.C. 371 and ending on the date of mailing of 
either an action under 35 U.S.C. 132, or a notice of allowance under 35 
U.S.C. 151, whichever occurs first;
    (2) The number of days, if any, in the period beginning on the day 
after the date that is four months after the date a reply under 
Sec. 1.111 was filed and ending on the date of mailing of either an 
action under 35 U.S.C. 132, or a notice of allowance under 35 U.S.C. 
151, whichever occurs first;
    (3) The number of days, if any, in the period beginning on the day 
after the date that is four months after the date a reply in compliance 
with Sec. 1.113(c) was filed and ending on the date of mailing of 
either an action under 35 U.S.C. 132, or a notice of allowance under 35 
U.S.C. 151, whichever occurs first;
    (4) The number of days, if any, in the period beginning on the day 
after the date that is four months after the date an appeal brief in 
compliance with Sec. 1.192 was filed and ending on the date of mailing 
of any of an examiner's answer under Sec. 1.193, an action under 35 
U.S.C. 132, or a notice of allowance under 35 U.S.C. 151, whichever 
occurs first;
    (5) The number of days, if any, in the period beginning on the day 
after the date that is four months after the date of a final decision 
by the Board of Patent Appeals and Interferences or by a Federal court 
in an appeal under 35 U.S.C. 141 or a civil action under 35 U.S.C. 145 
or 146 where at least one allowable claim remains in the application 
and ending on the date of mailing of either an action under 35 U.S.C. 
132 or a notice of allowance under 35 U.S.C. 151, whichever occurs 
first; and
    (6) The number of days, if any, in the period beginning on the day 
after the date that is four months after the date the issue fee was 
paid and all outstanding requirements were satisfied and ending on the 
date a patent was issued.
    (b) The period of adjustment under Sec. 1.702(b) is the number of 
days, if any, in the period beginning on the day after the date that is 
three years after the date on which the application was filed under 35 
U.S.C. 111(a) or the national stage commenced under 35 U.S.C. 371(b) or 
(f) in an international application and ending on the date a patent was 
issued, but not including the sum of the following periods:
    (1) The number of days, if any, in the period beginning on the date 
on which a request for continued examination of the application under 
35 U.S.C. 132(b) was filed and ending on the date the patent was 
issued;
    (2)(i) The number of days, if any, in the period beginning on the 
date an interference was declared or redeclared to involve the 
application in the interference and ending on the date that the 
interference was terminated with respect to the application; and
    (ii) The number of days, if any, in the period beginning on the 
date prosecution in the application was suspended by the Office due to 
interference proceedings under 35 U.S.C. 135(a) not involving the 
application and ending on the date of the termination of the 
suspension;
    (3)(i) The number of days, if any, the application was maintained 
in a sealed condition under 35 U.S.C. 181;
    (ii) The number of days, if any, in the period beginning on the 
date of mailing of an examiner's answer under Sec. 1.193 in the 
application under secrecy order and ending on the date the secrecy 
order was removed;
    (iii) The number of days, if any, in the period beginning on the 
date applicant was notified that an interference would be declared but 
for the secrecy order and ending on the date the secrecy order was 
removed; and
    (iv) The number of days, if any, in the period beginning on the 
date of notification under Sec. 5.3(c) of this chapter and ending on 
the date of mailing of the notice of allowance under 35 U.S.C. 151; 
and,
    (4) The number of days, if any, in the period beginning on the date 
on which a notice of appeal to the Board of Patent Appeals and 
Interferences was filed under 35 U.S.C. 134 and Sec. 1.191 and ending 
on the date of the last decision by the Board of Patent Appeals and 
Interferences or by a Federal court in an appeal under 35 U.S.C. 141 or 
a civil action under 35 U.S.C. 145, or on the date of mailing of either 
an action under 35 U.S.C. 132, or a notice of allowance under 35 U.S.C. 
151, whichever occurs first, if the appeal did not result in a decision 
by the Board of Patent Appeals and Interferences.
    (c) The period of adjustment under Sec. 1.702(c) is the sum of the 
following periods, to the extent that the periods are not overlapping:
    (1) The number of days, if any, in the period beginning on the date 
an interference was declared or redeclared to involve the application 
in the interference and ending on the date that the interference was 
terminated with respect to the application; and
    (2) The number of days, if any, in the period beginning on the date 
prosecution in the application was suspended by the Office due to 
interference proceedings under 35 U.S.C. 135(a) not involving the 
application and ending on the date of the termination of the 
suspension.

[[Page 56393]]

    (d) The period of adjustment under Sec. 1.702(d) is the sum of the 
following periods, to the extent that the periods are not overlapping:
    (1) The number of days, if any, the application was maintained in a 
sealed condition under 35 U.S.C. 181;
    (2) The number of days, if any, in the period beginning on the date 
of mailing of an examiner's answer under Sec. 1.193 in the application 
under secrecy order and ending on the date the secrecy order was 
removed;
    (3) The number of days, if any, in the period beginning on the date 
applicant was notified that an interference would be declared but for 
the secrecy order and ending on the date the secrecy order was removed; 
and
    (4) The number of days, if any, in the period beginning on the date 
of notification under Sec. 5.3(c) of this chapter and ending on the 
date of mailing of the notice of allowance under 35 U.S.C. 151.
    (e) The period of adjustment under Sec. 1.702(e) is the sum of the 
number of days, if any, in the period beginning on the date on which a 
notice of appeal to the Board of Patent Appeals and Interferences was 
filed under 35 U.S.C. 134 and Sec. 1.191 and ending on the date of a 
final decision in favor of the applicant by the Board of Patent Appeals 
and Interferences or by a Federal court in an appeal under 35 U.S.C. 
141 or a civil action under 35 U.S.C. 145.
    (f) The adjustment will run from the expiration date of the patent 
as set forth in 35 U.S.C. 154(a)(2). To the extent that periods of 
adjustment attributable to the grounds specified in Sec. 1.702 overlap, 
the period of adjustment granted under this section shall not exceed 
the actual number of days the issuance of the patent was delayed. The 
term of a patent entitled to adjustment under Sec. 1.702 and this 
section shall be adjusted for the sum of the periods calculated under 
paragraphs (a) through (e) of this section, to the extent that such 
periods are not overlapping, less the sum of the periods calculated 
under Sec. 1.704. The date indicated on any certificate of mailing or 
transmission under Sec. 1.8 shall not be taken into account in this 
calculation.
    (g) No patent, the term of which has been disclaimed beyond a 
specified date, shall be adjusted under Sec. 1.702 and this section 
beyond the expiration date specified in the disclaimer.


Sec. 1.704  Reduction of period of adjustment of patent term.

    (a) The period of adjustment of the term of a patent under 
Secs. 1.703(a) through (e) shall be reduced by a period equal to the 
period of time during which the applicant failed to engage in 
reasonable efforts to conclude prosecution (processing or examination) 
of the application.
    (b) With respect to the grounds for adjustment set forth in 
Secs. 1.702(a) through (e), and in particular the ground of adjustment 
set forth in Sec. 1.702(b), an applicant shall be deemed to have failed 
to engage in reasonable efforts to conclude processing or examination 
of an application for the cumulative total of any periods of time in 
excess of three months that are taken to reply to any notice or action 
by the Office making any rejection, objection, argument, or other 
request, measuring such three-month period from the date the notice or 
action was mailed or given to the applicant, in which case the period 
of adjustment set forth in Sec. 1.703 shall be reduced by the number of 
days, if any, beginning on the day after the date that is three months 
after the date of mailing or transmission of the Office communication 
notifying the applicant of the rejection, objection, argument, or other 
request and ending on the date the reply was filed. The period, or 
shortened statutory period, for reply that is set in the Office action 
or notice has no effect on the three-month period set forth in this 
paragraph.
    (c) Circumstances that constitute a failure of the applicant to 
engage in reasonable efforts to conclude processing or examination of 
an application also include the following circumstances, which will 
result in the following reduction of the period of adjustment set forth 
in Sec. 1.703 to the extent that the periods are not overlapping:
    (1) Suspension of action under Sec. 1.103 at the applicant's 
request, in which case the period of adjustment set forth in Sec. 1.703 
shall be reduced by the number of days, if any, beginning on the date a 
request for suspension of action under Sec. 1.103 was filed and ending 
on the date of the termination of the suspension;
    (2) Deferral of issuance of a patent under Sec. 1.314, in which 
case the period of adjustment set forth in Sec. 1.703 shall be reduced 
by the number of days, if any, beginning on the date a request for 
deferral of issuance of a patent under Sec. 1.314 was filed and ending 
on the date the patent was issued;
    (3) Abandonment of the application or late payment of the issue 
fee, in which case the period of adjustment set forth in Sec. 1.703 
shall be reduced by the number of days, if any, beginning on the date 
of abandonment or the date after the date the issue fee was due and 
ending on the earlier of:
    (i) The date of mailing of the decision reviving the application or 
accepting late payment of the issue fee; or
    (ii) The date that is four months after the date the grantable 
petition to revive the application or accept late payment of the issue 
fee was filed;
    (4) Failure to file a petition to withdraw the holding of 
abandonment or to revive an application within two months from the 
mailing date of a notice of abandonment, in which case the period of 
adjustment set forth in Sec. 1.703 shall be reduced by the number of 
days, if any, beginning on the day after the date two months from the 
mailing date of a notice of abandonment and ending on the date a 
petition to withdraw the holding of abandonment or to revive the 
application was filed;
    (5) Conversion of a provisional application under 35 U.S.C. 111(b) 
to a nonprovisional application under 35 U.S.C. 111(a) pursuant to 35 
U.S.C. 111(b)(5), in which case the period of adjustment set forth in 
Sec. 1.703 shall be reduced by the number of days, if any, beginning on 
the date the application was filed under 35 U.S.C. 111(b) and ending on 
the date a request in compliance with Sec. 1.53(c)(3) to convert the 
provisional application into a nonprovisional application was filed;
    (6) Submission of a preliminary amendment or other preliminary 
paper less than one month before the mailing of an Office action under 
35 U.S.C. 132 or notice of allowance under 35 U.S.C. 151 that requires 
the mailing of a supplemental Office action or notice of allowance, in 
which case the period of adjustment set forth in Sec. 1.703 shall be 
reduced by the lesser of:
    (i) The number of days, if any, beginning on the day after the 
mailing date of the original Office action or notice of allowance and 
ending on the date of mailing of the supplemental Office action or 
notice of allowance; or
    (ii) Four months;
    (7) Submission of a reply having an omission (Sec. 1.135(c)), in 
which case the period of adjustment set forth in Sec. 1.703 shall be 
reduced by the number of days, if any, beginning on the day after the 
date the reply having an omission was filed and ending on the date that 
the reply or other paper correcting the omission was filed;
    (8) Submission of a supplemental reply or other paper, other than a 
supplemental reply or other paper expressly requested by the examiner, 
after a reply has been filed, in which case the period of adjustment 
set forth in Sec. 1.703 shall be reduced by the number of days, if any, 
beginning on the day after the date the initial reply was filed and 
ending on the date that the

[[Page 56394]]

supplemental reply or other such paper was filed;
    (9) Submission of an amendment or other paper after a decision by 
the Board of Patent Appeals and Interferences, other than a decision 
designated as containing a new ground of rejection under Sec. 1.196(b) 
or statement under Sec. 1.196(c), or a decision by a Federal court, 
less than one month before the mailing of an Office action under 35 
U.S.C. 132 or notice of allowance under 35 U.S.C. 151 that requires the 
mailing of a supplemental Office action or supplemental notice of 
allowance, in which case the period of adjustment set forth in 
Sec. 1.703 shall be reduced by the lesser of:
    (i) The number of days, if any, beginning on the day after the 
mailing date of the original Office action or notice of allowance and 
ending on the mailing date of the supplemental Office action or notice 
of allowance; or
    (ii) Four months;
    (10) Submission of an amendment under Sec. 1.312 or other paper 
after a notice of allowance has been given or mailed, in which case the 
period of adjustment set forth in Sec. 1.703 shall be reduced by the 
lesser of:
    (i) The number of days, if any, beginning on the date the amendment 
under Sec. 1.312 or other paper was filed and ending on the mailing 
date of the Office action or notice in response to the amendment under 
Sec. 1.312 or such other paper; or
    (ii) Four months; and
    (11) Further prosecution via a continuing application, in which 
case the period of adjustment set forth in Sec. 1.703 shall not include 
any period that is prior to the actual filing date of the application 
that resulted in the patent.
    (d) A paper containing only an information disclosure statement in 
compliance with Secs. 1.97 and 1.98 will not be considered a failure to 
engage in reasonable efforts to conclude prosecution (processing or 
examination) of the application under paragraphs (c)(6), (c)(8), 
(c)(9), or (c)(10) of this section if it is accompanied by a statement 
that each item of information contained in the information disclosure 
statement was cited in a communication from a foreign patent office in 
a counterpart application and that this communication was not received 
by any individual designated in Sec. 1.56(c) more than thirty days 
prior to the filing of the information disclosure statement. This 
thirty-day period is not extendable.
    (e) Submission of an application for patent term adjustment under 
Sec. 1.705(b) (with or without request under Sec. 1.705(c) for 
reinstatement of reduced patent term adjustment) will not be considered 
a failure to engage in reasonable efforts to conclude prosecution 
(processing or examination) of the application under paragraph (c)(10) 
of this section.


Sec. 1.705  Patent term adjustment determination.

    (a) The notice of allowance will include notification of any patent 
term adjustment under 35 U.S.C. 154(b).
    (b) Any request for reconsideration of the patent term adjustment 
indicated in the notice of allowance, except as provided in paragraph 
(d) of this section, and any request for reinstatement of all or part 
of the term reduced pursuant to Sec. 1.704(b) must be by way of an 
application for patent term adjustment. An application for patent term 
adjustment under this section must be filed no later than the payment 
of the issue fee but may not be filed earlier than the date of mailing 
of the notice of allowance. An application for patent term adjustment 
under this section must be accompanied by:
    (1) The fee set forth in Sec. 1.18(e); and
    (2) A statement of the facts involved, specifying:
    (i) The correct patent term adjustment and the basis or bases under 
Sec. 1.702 for the adjustment;
    (ii) The relevant dates as specified in Secs. 1.703(a) through (e) 
for which an adjustment is sought and the adjustment as specified in 
Sec. 1.703(f) to which the patent is entitled;
    (iii) Whether the patent is subject to a terminal disclaimer and 
any expiration date specified in the terminal disclaimer; and
    (iv)(A) Any circumstances during the prosecution of the application 
resulting in the patent that constitute a failure to engage in 
reasonable efforts to conclude processing or examination of such 
application as set forth in Sec. 1.704; or
    (B) That there were no circumstances constituting a failure to 
engage in reasonable efforts to conclude processing or examination of 
such application as set forth in Sec. 1.704.
    (c) Any application for patent term adjustment under this section 
that requests reinstatement of all or part of the period of adjustment 
reduced pursuant to Sec. 1.704(b) for failing to reply to a rejection, 
objection, argument, or other request within three months of the date 
of mailing of the Office communication notifying the applicant of the 
rejection, objection, argument, or other request must also be 
accompanied by:
    (1) The fee set forth in Sec. 1.18(f); and
    (2) A showing to the satisfaction of the Commissioner that, in 
spite of all due care, the applicant was unable to reply to the 
rejection, objection, argument, or other request within three months of 
the date of mailing of the Office communication notifying the applicant 
of the rejection, objection, argument, or other request. The Office 
shall not grant any request for reinstatement for more than three 
additional months for each reply beyond three months from the date of 
mailing of the Office communication notifying the applicant of the 
rejection, objection, argument, or other request.
    (d) If the patent is issued on a date other than the projected date 
of issue and this change necessitates a revision of the patent term 
adjustment indicated in the notice of allowance, the patent will 
indicate the revised patent term adjustment. If the patent indicates a 
revised patent term adjustment due to the patent being issued on a date 
other than the projected date of issue, any request for reconsideration 
of the patent term adjustment indicated in the patent must be filed 
within thirty days of the date the patent issued and must comply with 
the requirements of paragraphs (b)(1) and (b)(2) of this section.
    (e) The periods set forth in this section are not extendable.
    (f) No submission or petition on behalf of a third party concerning 
patent term adjustment under 35 U.S.C. 154(b) will be considered by the 
Office. Any such submission or petition will be returned to the third 
party, or otherwise disposed of, at the convenience of the Office.

    8. A new, undesignated center heading is added to Subpart F before 
Sec. 1.710 to read as follows:
Extension of Patent Term Due to Regulatory Review

    Dated: September 5, 2000.
Q. Todd Dickinson,
Under Secretary of Commerce for Intellectual Property and Director of 
the United States Patent and Trademark Office.
[FR Doc. 00-23263 Filed 9-15-00; 8:45 am]
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