Section 1704 of the Government Paperwork Elimination Act, Pub. L. No. 105-277, 112 Stat. 2681-750 (1998), mandated that Federal Executive agencies provide, by October 21, 2003, “(1) for the option of the electronic maintenance, submission, or disclosure of information, when practicable as a substitute for paper; and (2) for the use and acceptance of electronic signatures, when practicable.” As defined in § 1710 of the Act, an electronic signature means “a method of signing an electronic message that—(A) identifies and authenticates a particular person as the source of the electronic message; and (B) indicates such person's approval of the information contained in the electronic message.” 112 Stat. at 2681-751.

The MSPB for some time has been accepting and processing requests submitted by electronic mail (e-mail) under the Freedom of Information and Privacy Acts. The Board has also experimented on a limited basis with accepting pleadings filed as electronic attachments to e-mail in the appeals that come before it. These interim regulations represent the Board's first agency-wide use of electronic filing in case adjudication.

The Board recently announced that it had forwarded to the Office of Management and Budget a proposed information collection: e-Appeal, a new electronic application for filing an appeal with the Board; and MSPB Form 185, a revised MSPB paper Appeal Form. 68 FR 44971 (July 31, 2003). This interim rule makes e-Appeal and Form 185 effective in Board proceedings. It also introduces filing by electronic mail.

Participation in electronic filing (e-Filing) is voluntary. An individual may still initiate a Board appeal by filing a paper appeal by any of the conventional means. Similarly, no party is obligated to participate in e-Filing during the course of a Board proceeding.

Part of the reason for issuing an interim rule is that the electronic case filing procedures we now institute are themselves interim in nature. Our long-term goal is to conduct all e-Filing through the Internet, including both the pleadings filed by the parties with the Board, and the notices, orders, and decisions issued by the Board to the parties. In the future, e-Filing will include automatic notice of filing, and parties will be able to view and download pleadings and Board documents from our Web site. At the present time, however, the only part of e-Filing that is Web-enabled is the initiation of an appeal through e-Appeal.

e-Appeal is an interactive Web application that allows appellants or their representatives to create and submit appeals using an interview format. The application includes Help and Question and Answer links appropriate to each section of the interview.

As part of the e-Appeal process, an individual creates a unique user ID and password, which constitutes his or her electronic signature. The filer can print a copy of the appeal either at the time of filing or afterward. The Board will send an electronic confirmation that it has received and is processing the appeal.

Under the interim rule, electronic filing after the commencement of a Board proceeding will be limited to filing and receiving documents via e-mail. To participate, a party must file an election with the Board which lists the e-mail address from which pleadings will be filed, and to which pleadings and Board documents may be sent. An election to engage in e-Filing, which may itself be filed by e-mail, constitutes consent to accept electronic service of pleadings and Board documents. Such an election also permits a party to file pleadings electronically, but a party who has elected e-Filing may still opt to file any pleading by conventional means. An election to engage in e-Filing may be terminated at any point in a Board proceeding.

Sending a pleading from the designated e-mail address constitutes an electronic signature. Parties can submit a declaration made under penalty of perjury (equivalent to an affidavit) electronically, as described in paragraph (n) of new § 1201.5.

A party who has elected to engage in e-Filing files a pleading by sending an e-mail to the appropriate Board office. If the other party has also elected e-Filing, service of that party is accomplished by including the party in the address portion of the e-mail. If the other party has not elected e-Filing, service is by conventional means. The Board will confirm receipt of e-mailed pleadings by sending a return e-mail.

Especially where both parties elect to participate, e-Filing should permit faster case processing because the Board and the parties will receive filings the same day they are submitted. This is particularly important for pleadings filed with the Clerk of the Board in Washington, D.C., because mailed pleadings are first sent to Ohio for irradiation. Where only one party elects to engage in e-Filing, the Board will set deadlines so that the party filing and receiving documents by conventional means will have adequate time to prepare and file a response.

Our interim rule allows electronic pleadings to be filed in “any widely-used electronic format.” We believe that e-Filing should require as little specialized equipment, software, and expertise as possible. Ideally, all a person should require is a personal computer equipped with a word-processing application, a Web browser, and access to e-mail and the Internet. Keeping technical requirements to a minimum is important in Board proceedings because a significant proportion of the parties appearing before us are representing themselves, or are represented by non-attorneys. To require specialized equipment and software, or significant computer expertise, would preclude many parties from participating in e-Filing. If the Board or receiving party has difficulty viewing or printing an electronic pleading, the regulations require informal attempts to resolve the problem. If such efforts are unsuccessful, the filing party must serve the pleading by conventional means.

The Board expects that the primary pleading in most e-Filings will consist of an electronic attachment to the e-mail such as a word-processing file. However, we will allow the submission of very brief pleadings, one or two paragraphs, in the body of the e-mail message. The reason for this restriction is a concern that the formatting of the pleading may be adversely affected, making it difficult to read. We ask that parties identify the nature of the pleading and the appeal to which it is related in the Subject portion of the e-mail, e.g. , Appellant's Prehearing Submission in Doe v. Agency, XX-0752-03-XXXX-I-1.

Only a small proportion of the contents of an MSPB case file typically originate as electronic files created for the Board proceeding. Most are paper documents that could only be converted to electronic format by scanning. For that reason, pleadings that include both an electronic file created for the Board proceeding and one or more paper documents will be common. Such “hybrid” filings are allowed under the interim rule. When a pleading contains both an electronic component and a non-electronic component, the party files the electronic component by e-mail, and the non-electronic component by conventional means. Such a pleading is considered filed and served when all components have been filed and served. We note, however, that an e-Appeal is filed when submitted electronically, regardless of when requested attachments are filed. The reason is that our regulations do not require that an appeal include any documentation; they require information only. See 5 CFR 1201.24(a).

When paper documents have been converted to electronic format by scanning, they consume much more disk space than do electronic text files, such as word-processing files. Because transmitting and downloading image files can consume a great deal of time and resources, our regulations provide that documents that can only be converted to electronic format by scanning must be filed by traditional means when the paper document exceeds 25 pages.

Because of concerns over engine and airplane reliability, for many years 14 CFR 121.161 has generally prohibited operations of two-engine airplanes on routes including segments that are more than one hour flight time from a suitable airport. This regulation contains an exception that allows such operations when specifically authorized by the Administrator. These extended range operations with two-engine airplanes are referred to as ETOPS. Advisory Circular (AC) 120-42A describes a method for obtaining ETOPS authorization if an operator can demonstrate sufficient engine and airplane reliability. This method is based on a combination of various design features and operational and maintenance procedures. The AC states that eligibility for 120-minute ETOPS authorization is normally based on a showing of reliable operation for a minimum of 250,000 engine hours of service in the world fleet. Eligibility for 180-minute ETOPS authorization is normally based on a showing of reliable operation for at least one year in 120-minute ETOPS. The AC also describes an option for reducing the number of hours of service if adequate compensating factors are identified to give a reasonably equivalent database.

On May 18, 1994, the FAA issued Special Conditions No. 25-ANM-84 for the Boeing Model 777 series airplanes (59 FR 28234). These special conditions define requirements for 180-minute ETOPS approval concurrent with basic type certification of the airplane without the service experience outlined in AC 120-42A that would normally be necessary. These special conditions define additional safety standards that the FAA considered necessary to establish a level of safety equivalent to that provided by the airworthiness standards for non-ETOPS airplanes.

The current 777 ETOPS special conditions consist of five main elements needed to provide adequate compensation for the service experience normally required for 180-minute ETOPS eligibility described in AC 120-42A. No single element is considered sufficient by itself, but the FAA has found that the five elements combined provide an acceptable substitute for actual airline service experience. The five elements are:

1. Design for reliability

2. Lessons learned

3. Test requirements

4. Demonstrated reliability

5. Problem tracking system

A description of each of these five elements is contained in the preamble to Special Conditions No. 25-ANM-84.

On December 13, 1999, Boeing Commercial Airplane Group applied for an amendment to Type Certificate No. T00001SE to include the new Model 777-200LR and 777-300ER airplanes. The Model 777-200LR, which is a derivative version of the existing Model 777-200 series airplanes, has the following differences from the Model 777-200:

• The wingspan is increased from 199 feet, 11 inches to 212 feet, 7 inches.

• Maximum intended takeoff weight is 750,000 pounds.

• It is capable of carrying from 301 to 440 passengers.

• It has provisions for overhead crew and attendant rest areas.

• Its range capability will be up to 8,800 nautical miles (16,298 kilometers).

• It has 110,100 pounds thrust GE90 engines.

• It has a supplemental electronic tail skid.

• It has provisions for up to 3 auxiliary fuel tanks in the forward area of the aft cargo bay.

The Model 777-300ER, which is a derivative of the Model 777-300 airplanes, has the following differences from the Model 777-300:

• The wingspan is increased from 199 feet, 11 inches to 212 feet, 7 inches.

• Maximum intended takeoff weight is 750,000 pounds.

• It is capable of carrying from 359 to 550 passengers.

• It has provisions for overhead crew and attendant rest areas.

• Its range capability will be up to 7,250 nautical miles (13,427 kilometers).

• It has 115,300 pound thrust GE90 engines.

• It has a supplemental electronic tail skid.

• It has a semi-levered main landing gear.

Both models are currently approved under Type Certificate No. T00001SE.

For the Model 777-300ER and Model 777-200LR, Boeing has proposed certain changes to the ETOPS special conditions in order to take into account the experience from the original baseline Model 777 engine programs and to eliminate any unnecessary burden from the airplane demonstration testing required by paragraph (e)(7) of those special conditions.

Under the provisions of 14 CFR 21.101, Boeing must show that the Boeing Model 777 series airplanes meet the applicable provisions of the regulations incorporated by reference in Type Certificate No. T00001SE or the applicable regulations in effect on the date of application for the change to the type certificate. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The regulations incorporated by reference in Type Certificate No. T00001SE for the Boeing Model 777 series airplanes include 14 CFR part 25, as amended by Amendments 25-1 through 25-82. The original type certification basis is listed in Type Certificate Data Sheet No. T00001SE.

If the Administrator finds that the applicable airworthiness regulations ( i.e., 14 CFR part 25) do not contain adequate or appropriate safety standards for the Model 777 series airplanes because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

In addition to the applicable airworthiness regulations and special conditions, Boeing Model 777 series airplanes must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36.

Special conditions, as defined in § 11.19, are issued in accordance with § 11.38 and become part of the type certification basis in accordance with § 21.101.

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, the special conditions would also apply to the other model.

All two-engine airplanes operating under 14 CFR part 121 are required to comply with § 121.161, which states, in pertinent part, that “Unless authorized by the Administrator * * * no certificate holder may operate two-engine airplanes * * * over a route that contains a point farther than one hour flying time * * * from an adequate airport.” Advisory Circular (AC) 120-42A, “Extended Range Operation With Two-Engine Airplanes (ETOPS),” provides an acceptable means for obtaining FAA approval for two-engine airplanes to operate over a route that contains a point farther than one hour flying time from an adequate airport. The two basic objectives of this advisory circular are to establish that the airplane and its supporting systems are suitable for the extended range mission and that the maintenance and procedures to be employed in conducting ETOPS operations are adequate. This is accomplished by acquiring a substantial amount of service experience during non-ETOPS operation and then extensively evaluating this experience in the areas of systems reliability, maintenance tasks, and operating procedures. When it is determined that the appropriate reliabilities and capabilities have been achieved, the airplane is found eligible to be considered for use in ETOPS operation by an airline.

When Boeing was developing the Model 777 series airplane, it proposed that the Model 777 be approved for ETOPS operation simultaneously with the issuance of the basic type certificate. At that time, procedures did not exist for a finding of this type. The proposed issuance of ETOPS type design approval at certification would have precluded using accumulation of service experience, as outlined in AC 120-42A, as a means to meet ETOPS approval requirements. So an alternative method was devised that provided an adequate level of inherent airplane reliability for ETOPS. It is important to note that the requirements for certification of the airplane regarding the design's suitability for ETOPS operation, as described in those special conditions, relate to type certification approval only. Advisory Circular 120-42A contains guidance regarding operational and maintenance practices criteria that must be met by the operator before ETOPS operations can be conducted. It is incumbent upon the operator to apply for operational approval in accordance with appropriate guidance issued by the FAA for such approvals. Compliance with these special conditions does not constitute operational approval.

Special Conditions No. 25-ANM-84 contained the additional safety standards that the Administrator considered necessary to establish a level of safety equivalent to that provided by the airworthiness standards for transport category airplanes for non-ETOPS airplanes. Experience with those special conditions since issuance has provided the FAA with additional data to justify an amendment to Special Conditions No. 25-ANM-84 as described in this document.

Boeing has requested the FAA to revise certain parts of the test requirements of Special Conditions No. 25-ANM-84 defined in paragraph (e). The FAA has concurred that some changes are justified based on an analysis of previous experience applying those special conditions to the original three engine types approved for installation on the Model 777 airplane. The specific changes to those requirements and the justification for each proposed change are discussed below.

The FAA has concluded from a review of in-service experience of the Model 777 series airplanes that the 3000-cycle engine and propulsion system test required by paragraph (e)(6) of Special Conditions No. 25-ANM-84 provides an adequate opportunity to discover cyclic-related failure modes associated with the design, provided that an adequate post-test evaluation is conducted to find conditions that could result in an inflight shutdown, power loss, or inability to control engine thrust. An FAA review of the test data from the 3000-cycle tests for the three original engine types installed on the Model 777 series airplanes has shown that most of the early in-service Model 777 engine failure modes could have been discovered had Boeing and the engine manufacturers conducted a more thorough teardown inspection and analysis of the 3000-cycle test engine and propulsion system hardware. Part conditions noted in the teardown inspection reports for the three baseline Model 777 engine types did later occur in service, and they resulted in engine inflight shutdowns or airplane diversions. However, because the specific condition of those 3000-cycle test parts had been characterized as minor deviations from normal, no specific investigations into how they might progress in service had been required as a prerequisite for ETOPS approval.

Special Conditions No. 25-ANM-84 currently do not require a post-test teardown inspection. However, all three engine companies, in cooperation with Boeing, conducted post-test teardown inspections on the original baseline engines installed on the Model 777 series airplanes based on their own experience of what would constitute an adequate evaluation. In order to provide a consistent standard for a post-test evaluation of the 3000-cycle test hardware, the FAA considers that a change to paragraph (e)(6) to require a complete teardown inspection of the engine and airplane nacelle test hardware after completion of the test is necessary. The inspection must include an analysis of any abnormal conditions found. The analysis must consider the possible consequences of similar occurrences in service to determine if they might become sources of engine inflight shutdowns, power loss, or inability to control engine thrust. The intent of this change to paragraph (e)(6) is to require further design analysis to catch potential sources of engine inflight shutdowns or diversions.

For similar reasons, we consider that adding a new subparagraph (e)(7)(v) to require a post-test external and internal visual inspection of the airplane demonstration test engines and propulsion system hardware is needed. An analysis of the inspection results must identify any potential sources of engine inflight shutdown. Appropriate corrective actions must be performed in accordance with the provisions of the special conditions.

Boeing proposed to delete the word complete from the description of the airplane nacelle package required for the 3000-cycle test. The rationale for this proposed change was that without the term complete, it is still understood that the test is intended to be a propulsion system test inclusive of the engine buildup items, but some allowance is made for configuration differences necessary to accommodate the test setup. The FAA is concerned that, without this qualifier, it is not clear what nacelle hardware must be installed for this test. It could be misinterpreted in such a way that, for instance, a functioning thrust reverser need not be installed. Therefore, the FAA has concluded that the word complete must remain in the requirement. However, we agree with Boeing that those configuration differences associated with test instrumentation and test stand interfaces with the engine nacelle package may be excluded, and we have added that qualification to the requirement in order to clarify this intent.

Number of Test Airplanes: Boeing has proposed a change to paragraph (e)(7) to allow the use of more than one airplane to comply with the airplane demonstration test requirement (three test airplanes for the current Model 777-300ER program). Boeing's justification includes the argument that using multiple airplanes is an enhancement to the ETOPS validation program that takes into account airplane-to-airplane variation. The value of obtaining ETOPS data on multiple airplanes versus one is the increased sample size. The FAA agrees that increasing the number of test airplanes in the airplane demonstration test would provide a better evaluation of airplane-to-airplane variability. The limited experience obtained during the airplane demonstration test program is not really sufficient to evaluate end-of-life wear-out failure modes, so accumulating all of the time and cycles on one airplane is not necessary. The main program schedule benefit from using multiple flight test airplanes is that testing can be completed in a shorter period. The FAA agrees to a change to paragraph (e)(7) to require that one or more airplanes must complete the airplane demonstration test required by that paragraph.

Capability Demonstration vs. Reliability Demonstration: The 1000-cycle airplane demonstration test requirement was developed with the intent of exposing the airplane to the conditions where the greatest numbers of inflight shutdowns occur. Most inflight shutdowns occur during takeoff and climb. The failure modes associated with these takeoff- and climb-related shutdowns tend to be cyclic in nature for a couple of reasons. 1 For failure modes where the risk of failure increases with engine thrust, the takeoff portion of the flight is most critical. Failure modes that occur due to improper maintenance or engine servicing, for instance loss of engine oil due to improper assembly of an oil tube connection, also tend to occur early in the flight. A larger number of airplane flights increases the exposure to these types of failures. The FAA considered a cyclic test to be the most appropriate airplane validation test for the original Model 777 ETOPS special conditions. However, as stated above, we now consider that the 3000-cycle engine and propulsion system test required by paragraph (e)(6) provides an adequate opportunity to discover cyclic-related failure modes associated with the design when the test hardware goes through an appropriate level of post-test teardown and inspection.

For inflight shutdowns where improper maintenance is a main causal factor, the 1000-cycle airplane demonstration test provides multiple opportunities for these types of failures to occur. However, the maintenance procedure validation program required by paragraph (d)(2) is intended to minimize the probability of these occurrences. The airplane used for the airplane demonstration test provides opportunities to demonstrate those maintenance tasks associated with the normal operation of the airplane. The FAA considers that these demonstrations can be accomplished in fewer than 1000 cycles.

Although the fewest inflight shutdowns occur during cruise, this is the phase of flight that is most important to an ETOPS operation. Traditionally, the FAA and industry have avoided trying to differentiate between those inflight shutdowns that may occur during cruise from those that would only occur in a non-ETOPS environment. The main reason for this approach in existing ETOPS policy is that by correcting all causes of inflight shutdowns, the overall integrity of the propulsion system is assured. Since adequate cyclic exposure would be evaluated by an enhanced 3000-cycle engine demonstration test, as proposed for paragraph (e)(6) of these special conditions, the FAA has concluded that the airplane validation program should emphasize exposure to the cruise phase of flight. During the three 1000-cycle tests conducted for the original Model 777 engine installation certification programs, only 91 of the total 1000 cycles were of durations of two hours or more. Since the intent of paragraph (e)(7) is to simulate an actual airline operation, this would better be accomplished through longer duration flight cycles. Long duration flight exposure provides additional confidence in the design against those cruise-related failure modes that cannot be evaluated in a cyclic test environment. Such failure modes could include freezing of entrapped water condensation or binding of propulsion system components, neither of which would likely occur in a sea level test facility.

Based on these considerations, the FAA has determined that the airplane demonstration test requirement should be refocused on those conditions that are most prevalent in an ETOPS operating environment. Those conditions include long flights to a variety of airports with broad variations of airport elevation, temperature, and humidity. It is also important that these flights expose the airplane to several enroute climbs, such as may occur with a fully loaded Model 777-300ER on a long-range flight, and a number of single engine diversions. As such, the airplane demonstration test requirement of paragraph (e)(7) is revised to more clearly state the objectives of the test program. Those objectives include demonstrations that the aircraft, its components, and equipment are capable of long-range operations and airplane diversions, including engine-inoperative diversions, and function properly during those operations and diversions. This change in focus constitutes a significant departure from the original purpose of the 1000-cycle airplane demonstration test requirement, as discussed in the preamble to Special Conditions No. 25-ANM-84.

In order to further justify this change in philosophy for the airplane demonstration test requirement from being a demonstration of “reliability” to a demonstration of “capability,” the FAA reviewed the original intent of Special Conditions No. 25-ANM-84, as documented in the preamble to those special conditions. The purpose of this review was to assess whether the assumptions we made in justifying the special conditions are still valid, or whether they should be revised based on ETOPS certification experience since their issuance in June 1994.

In the preamble to Special Conditions No. 25-ANM-84, the FAA stated that:

The basic premise behind the engine and airplane demonstration tests required by paragraphs (e)(6) and (e)(7) of the original special conditions was that those tests would provide a final validation of an “inherent” level of reliability that was the product of an enhanced design and test process. This is similar to the purpose of the function and reliability testing required by § 21.35(b)(2). The FAA's expectation for these tests was that no significant failures would occur. The probability of significant design failures occurring on a one-airplane flight test is so low that if any do occur, that would be indicative of a design that is not suitable for ETOPS approval. This expectation is contained in the “type and frequency” requirement of special conditions paragraph (h)(1). Statistical reliability studies have shown that a much larger database would be required to validate a design's true reliability with a significant degree of confidence.

No major engine failures occurred during the 1000-cycle airplane demonstration tests for any of the three engine types certified on the Model 777 series airplane, although several engine design problems were discovered during other certification testing that affected the start and conduct of those tests. The Reliability Assessment Board (RAB) evaluated each of these design problems in compliance with paragraph (g) of the special conditions, and found the Model 777 to be suitable for ETOPS type design approval with the incorporation of corrective actions identified in Appendix 1 of the RAB final recommendation reports for the three engine types. There were hardware similarities between engines with the original certified thrust ratings and follow-on higher-thrust-rated engines, and the FAA certified each of those follow-on engine derivatives for ETOPS in consideration of those hardware similarities. The FAA accepted the original baseline engine test programs as showing compliance with the 3000-cycle propulsion system ground test and 1000-cycle airplane demonstration test requirements for the follow-on derivative engines. Although the 3000-cycle and 1000-cycle tests were not repeated for those follow-on derivative engines, Boeing and the engine companies completed reduced ground and flight test demonstrations tailored to the design changes being introduced in compliance with the Test Features requirement of special conditions paragraph (c)(4). Therefore, the follow-on engine derivatives are not included in this analysis of the 1000-cycle airplane demonstration test requirement.

The Boeing Model 777-200 series airplane powered by Pratt & Whitney PW4077 engines was approved for ETOPS on May 30, 1995 and entered service in June 1995. By all accounts, it was a very successful new model introduction. This was followed by ETOPS approval of the Model 777-200 series airplanes powered by General Electric GE90-77B and Rolls-Royce RB211-Trent 877-17 engines in October 1996. The inflight shutdown (IFSD) rate for all three engine types was zero for at least the first year in service. The Pratt & Whitney PW4000 series engines reached a peak 12-month rolling average engine IFSD rate of .018/1000 hours in October 1996. The General Electric GE90 series engines reached a peak of .021 for one month in July 1998 and the Rolls-Royce Trent series engines reached a peak of .016 in December 1997. Although the inflight shutdown rates stayed within the allowable .02/1000 hour standard for 180-minute ETOPS, significant design problems were discovered on each engine type after ETOPS approval.

During the first two years after ETOPS approval of each engine type on the Model 777 series airplanes, the FAA was concerned that the design problems being discovered may have indicated a failure of the early ETOPS process to identify those failure modes before they occurred in service. Some failure modes had the potential to result in inflight shutdowns had they occurred under different circumstances or had they not been detected during maintenance for unassociated reasons. A summary of the actual problem reports for these inflight shutdowns and other events, which were submitted in compliance with paragraph (f) of these special conditions, is contained in Table 1. Had every one of those events resulted in an engine inflight shutdown, the resulting IFSD rates for each engine type would have been significantly higher. Boeing, the engine manufacturers, the FAA, and other regulatory authorities worked together to prevent additional inflight occurrences of these failure types. The actual inflight shutdown rates prove that these early in-service problems were successfully managed to maintain the safety of 777 ETOPS operations worldwide.

As part of the process of reviewing existing methods for ETOPS approval, the FAA also analyzed data from the initial in-service period for Boeing Model 737-600, 737-700, and 737-800 airplanes powered by CFM56-7 engines. As a group, these variants of the Model 737 were referred to as the 737 Next Generation, or “737NG.” Even though early ETOPS special conditions were not issued, the 737NG was chosen for this analysis because it followed an ETOPS approval process program that was very similar to what Boeing is proposing for the Model 777-300ER airplane. Several months after entry into service, however, the 737NG did not exhibit an acceptable level of propulsion system reliability for ETOPS approval. Early ETOPS special conditions were intended to identify a design not suitable for ETOPS approval prior to type certification.

Boeing proposed in 1994, prior to the Model 777's type certification, that the 737NG be certified as an early ETOPS airplane in a manner similar to the Model 777, but without all of the testing required in the Model 777 special conditions. Since the success of the Model 777 program was still an unknown at the time of Boeing's request for the 737NG, the FAA did not agree to Boeing's proposed changes to the airplane demonstration test requirement. Early ETOPS special conditions for the 737NG were never issued. Even so, Boeing proceeded with those elements of the Model 777 special conditions that the company had proposed to accomplish. These included the relevant experience assessment, design requirements assessment, 3000-cycle propulsion system ground test, and enhanced problem reporting and resolution.

Although the FAA never issued special conditions for the 737NG program, we agreed that the elements from the Model 777 special conditions that Boeing did accomplish justified a reduction in the service experience normally required for ETOPS type design approval, as outlined in AC 120-42A. Boeing presented the following information in support of its request for a reduction in service experience required for ETOPS certification.

• “Design involved lessons learned, similar to 777 Early ETOPS process.

• “APU most thoroughly tested in Allied Signal history—more than 3000-cycle ground test, including hot/cold exposure.

• “Propulsion system subjected to 3000-cycle ground test, intentionally unbalanced, with three 180-minute diversion cycles.

• “Flight testing included a Southwest Airlines 50-cycle demonstration, using airline crews and maintenance. During the Function and Reliability testing, 61 ETOPS cycles were conducted with three single engine 180-minute diversions.

• “A proposed ETOPS problem tracking and resolution system, similar to that used on the 777 that will remain in effect until the fleet attains 250,000 engine fleet hours.”

In its analysis of the 737NG approval process, the FAA noted that these program elements, at the time, had been accomplished with good results. The engines and airplane system had performed well during the test programs, with results comparable to the Model 777 test fleet (all engines). The in-service 737NG airplanes had achieved a 98.96% dispatch reliability rate after 45 days in service, better than any previous Boeing airplane. Boeing's proposal included an accumulation of 15,000 fleet engine hours of service experience before requesting ETOPS approval. At that time, there would be three airplanes with more than 1000 flight cycles, the total 737NG fleet would have accumulated more than 20,000 flight cycles, and the high-time airplane/engines would have more than 2000 flight cycles. During the 737NG approval process, the FAA concurred with Boeing's proposal to require 15,000 hours of service experience based on the following:

• “The FAA has agreed to the concept that ETOPS at entry into service can be achieved by appropriate design and testing as evidenced by the 777 special conditions, which have now been validated through actual service experience,

• “The 737NG/CFM56-7B airframe/engine configuration is a derivative/evolution of the existing 737-300/400/500 which through extensive service experience has demonstrated exceptional reliability, and, is approved for 120-minute ETOPS,

• “Except for the lack of a dedicated 1000-cycle ETOPS test program, design and testing of the 737NG/CFM56-7B mirrors what was done on the 777 to satisfy Early-ETOPS approval,

• “The additional 15,000 engine hour in-service evaluation plus the fact that three 180-minute single engine diversions were performed during Function and Reliability testing more than compensates for the omission of a 1000-cycle test,

• “The satisfactory performance of the 737NG/CFM56-7B airframe/engine configuration during the certification testing, and

• “The proven ability of Boeing to satisfactorily manage ETOPS airworthiness of the 777 fleet in the face of problems encountered in service. The 737NG proposal includes a problem tracking and resolution system that will remain in effect for a full 250,000 engine hours.”

The Model 737-700 was the first variant of the 737NG to enter service, in December 1997. Section 4.2 of the FAA-approved 120-minute ETOPS Airplane Assessment Report for the Model 737-700, Boeing Document Number D033A003, Revision B, states that the Model 737-700 was designed, manufactured, and tested for extended range operations at entry into service. The following additional supporting statements were also made.

No significant propulsion system design problems occurred during any of the testing described above. Two inflight shutdowns did occur during certification flight testing. One was caused by an indication fault within the electronic engine control that was corrected with a simple software change. The other was caused by an inappropriate flight test condition.

Boeing stated in the Model 737-700's 120-minute ETOPS Airplane Assessment Report that the fleet reached the 15,000-hour mark during the month of April 1998. At that time, there had been no inflight shutdowns in service. However, on May 9, 1998, before the FAA had completed its assessment of the airplane for ETOPS approval, the first inflight shutdown occurred. A second inflight shutdown occurred during the month of May, and the fleet exceeded the accepted 120-minute ETOPS standard of .05 inflight shutdowns per 1000 engine hours. Three inflight shutdowns occurred in June 1998, and one in July 1998. The peak inflight shutdown rate during this period was .085/1000 hours at the end of June 1998, which clearly did not meet the minimum standard for ETOPS type design approval.

The six engine inflight shutdowns were caused by three different failure root causes. Boeing and CFMI, the engine manufacturer, undertook aggressive actions to correct each of these design problems as they occurred. The high rate of fleet hourly accumulation during this period, however, resulted in new ETOPS reportable events occurring faster than the known problems could be corrected. This delayed FAA consideration of the Model 737-700 for ETOPS approval until the problems were brought under control. A consequence of the high rate of fleet hourly accumulation was that, with no additional inflight shutdowns, the inflight shutdown rate decreased rapidly and was within the ETOPS type design approval standard by the end of 1998. The FAA approved the Model 737-600/-700/-800 (737NG) for 120-minute ETOPS approximately one year after entry into service with over 300,000 engine-hours of service experience and an inflight shutdown rate of .020/1000 hours.

In comparing the 737NG experience with that of the Model 777, the FAA observes that there is a fleet hourly accumulation rate above which aggressive problem management to qualify for early ETOPS certification may become resource prohibitive. Therefore, when certifying an airplane/engine combination that will be entering service with a high production rate resulting in a rapid accumulation of engine hours, manufacturers may find it more cost-effective to use the service experience criteria of AC 120-42A than to follow the rigorous requirements of the early ETOPS process.

As stated earlier, the Model 777 ETOPS special conditions were designed to “result in a level of airplane reliability that is equivalent to the level of reliability previously found to be acceptable based upon service experience.” As previously noted, the current Model 777 ETOPS special conditions consist of five main elements needed to provide adequate compensation for the service experience normally required for 180-minute ETOPS eligibility described in AC 120-42A. No single element is considered sufficient by itself, but the FAA has found that the five elements combined provide an acceptable substitute for actual airline service experience. The five elements are:

1. Design for reliability.

2. Lessons learned.

3. Test requirements.

4. Demonstrated reliability.

5. Problem tracking system.

Even though the overall objective is a level of airplane and propulsion system reliability that is equivalent to that achieved through service experience, we considered the uncertainty of actually achieving that goal in the development of these special conditions. The first three elements focus on designing an airplane to eliminate sources of engine inflight shutdowns and diversions to the greatest practical extent. This is accomplished by an overall design philosophy to preclude sources of engine inflight shutdowns and diversions using the manufacturer's experience with earlier designs to identify successful and unsuccessful design features. The additional testing required by the special conditions focuses on exposing the design to conditions that in the past have contributed to engine failures, such as high engine vibration or repeated exposure to humid and inclement weather on the ground followed by long-range operation at the extreme cold temperatures at high altitude. These design and test elements do not assure a level of reliability that is equivalent to that based on service experience. Instead, they result in an acceptable level of inherent design reliability from which we can successfully manage ETOPS fleet safety once the airplane enters service.

The fourth element, “demonstrated reliability,” provides the FAA with a standard by which to judge a design against existing ETOPS-approved airplanes. This gives the FAA a standard from which to withhold ETOPS approval from airplanes that experience significant failures during certification testing, demonstrating that they are not suitable for ETOPS. However, it does not by itself guarantee that designs showing no significant failures during flight testing will have adequate reliability for ETOPS.

To manage fleet safety after ETOPS approval, we rely on the fifth element of the ETOPS special conditions. Paragraph (f) of the special conditions requires a problem tracking system for the prompt identification of those problems that could impact ETOPS safety. The FAA uses this enhanced problem reporting system to work with the airplane and engine manufacturers to aggressively manage and correct significant design problems identified after ETOPS approval. This requirement is the “catch-all” for those design flaws that are not caught by the other elements of the special conditions during airplane design and testing.

The first in-service inflight shutdown of the Model 737-700 variant of the 737NG did not occur until the fleet had accumulated approximately 30,000 engine-hours. The FAA could not have expected that a complete 1000-cycle airplane demonstration test would have had a better chance of discovering the types of problems that occurred in service on the 737NG than the nearly 30,000 hours accumulated on multiple airplanes and engines prior to the first inflight engine shutdown. While significant propulsion system failures occurring during type certification testing, including the additional testing required by the ETOPS special conditions, may indicate that a design is not yet ready to enter ETOPS service, the 737NG experience shows that the reverse cannot be stated with a significant degree of confidence. A lack of significant failures during certification testing does not in itself assure an ETOPS-suitable design at entry into service.

The Model 777 experience shows that a relatively small fleet can be managed successfully during the initial service period based on the data provided by the enhanced problem tracking system required by special conditions paragraph (f). The 737NG experience shows that a larger fleet may require a much more resource-intensive fleet management program. However, had the 737NG received its ETOPS approval as originally proposed prior to its first inflight shutdown in service, the problem reporting system that Boeing had in place gave the FAA timely identification of the problems causing inflight shutdowns so that we could have required appropriate corrective action through the airworthiness directive process to maintain ETOPS safety. Such airworthiness directives could have required the operators to incorporate design changes prior to further ETOPS flight or withdrawn ETOPS approval.

Although we cannot be certain that an airplane approved for ETOPS under the special conditions will have the same maturity at original type certification as an airplane that we have approved based on service experience, our experience with the Model 777 and the 737NG confirms that the five elements of the special conditions, in conjunction with the FAA's normal safety oversight processes, adequately compensate for that uncertainty.

The changes to the engine demonstration test and the airplane demonstration test include enhanced post-test inspection requirements and are intended to address our experience with the original ETOPS special conditions, which identified several shortcomings in the original test requirements. These changes are needed to more clearly focus the testing on the objective of exposing the engines and airplane to those operating conditions that give us the best chance of identifying underlying major design flaws that could jeopardize ETOPS safety in service. These changes provide a better evaluation of the design than the existing requirements, including the 1000-cycle airplane flight test as previously conducted.

The FAA therefore is changing the purpose of the airplane demonstration test requirement of paragraph (e)(7) from a demonstration of reliability to a demonstration of airplane capability under the types of ETOPS operational and diversion scenarios discussed in this document. The requirements of that airplane demonstration test have been changed accordingly.

In response to Boeing's request, the FAA is deleting paragraph (e)(7)(ii), which currently requires the installation of the engine and propulsion system from the 3000-cycle engine demonstration test required by paragraph (e)(6), or another suitable aged engine, on the 1000-cycle demonstration test airplane for a minimum of 500 cycles. Boeing provided the following information in support of its request for deleting the aged engine requirement.

Review of the aged engine data from the baseline Model 777 program showed that the nature of the findings, which occurred on the aged engines, was not related to the aging of the engines. Instead, the findings were related to the variation that occurs during manufacturing, assembly, etc. This lesson learned on the aged engines is consistent for each engine manufacturer's baseline Model 777 ETOPS test program.

The lack of findings related to the aging of an engine in the ETOPS flight test program has been demonstrated three times. Based on this consistent demonstration, there is no further need to maintain the requirement for an aged engine in the flight test program. Additionally, flying more airplane/engine combinations will provide increased opportunities for evaluating potential problem areas.

Boeing reported nine events (EE-1 Reports) which occurred during the aged engine portions of the 1000-cycle tests for the three baseline engine types, with an explanation of why the aged engine requirement was not necessary in order to identify each failure. Boeing stated that the lack of any EE-1 reports from the post-test inspections is an indication that there were no significant findings from the aged engine testing.

The original intent of the aged engine requirement was to expose the 3000-cycle test engine, or equivalent, to inflight conditions that cannot be simulated in a ground test environment. This would further validate the propulsion system design out to an age beyond 3000 cycles. Boeing data available at the time the ETOPS special conditions were developed indicated that 95% of all new significant failure modes occur on airplane propulsion systems with 3000 cycles or less. That concept is still valid. The lack of specific findings on the aged engine during the 1000-cycle airplane validation test only confirms the validity of the Reliability Assessment Board's conclusion that those baseline Model 777 engine installations were suitable for 180-minute ETOPS. A number of significant events during the 1000-cycle test program would have jeopardized that conclusion.

The question that the FAA considers to be more relevant is whether or not a greater benefit would come from a more thorough teardown inspection and analysis of the 3000-cycle test engine and propulsion system hardware than from this additional level of validation. In this regard, the FAA agrees with Boeing that other test articles may provide sufficient experience to uncover the majority of age-related problems independent of the additional exposure provided by the 1000-cycle test inflight exposure.

In consideration of the need to perform a detailed analysis of the 3000-cycle test engine and the extra expense of using a parallel 3000-cycle test engine as “another suitable aged engine,” the FAA agrees that the requirement for installation of an aged engine on the ETOPS test airplane can be eliminated provided significantly improved processes are used to analyze the condition of the 3000-cycle test and airplane demonstration test engines at the conclusion of these tests, as reflected in the revised paragraphs (e)(6) and (e)(7).

We are also incorporating the following revisions to the special conditions.

Re-identification of paragraph (e)(7)(iii) as (e)(7)(iv) and revision of the requirement that the 1000-cycle test airplane be operated and maintained using the recommended operations and maintenance procedures to recognize that more than one test airplane may be used.

Replacement of the reference to the “1000-cycle ETOPS test” with “Airplane Demonstration Test” in paragraph (g)(2) in order to be consistent with the changes to paragraph (e)(7).

Replacement of the reference to the “1000-flight-cycle ETOPS test” with “Airplane Demonstration Test” in paragraph (h)(1) in order to be consistent with the changes to paragraph (e)(7).

Notice of Proposed Special Conditions No. 25-03-04-SC for the Boeing Model 777 series airplanes was published in the Federal Register on June 13, 2003 (68 FR 35335), with a correction to the original publication issued on June 23, 2003 (68 FR 37205). Four comments were received, and all of them concur with the special conditions as proposed. Therefore, the special conditions are adopted as proposed.

For clarity, the revised sections of the original Special Conditions No. 25-ANM-84 are printed below. The final special conditions are printed in their entirety, with revisions incorporated, at the end of this document. Portions of the special conditions that remain unchanged are discussed in the preamble to the original Special Conditions No. 25-ANM-84 (59 FR 28234).

(e)(6) Engine Demonstration Test. One engine of each type to be certificated with the airplane must complete 3000 equivalent airplane operational cycles. The engine must be configured with a complete airplane nacelle package for this demonstration, including engine-mounted equipment except for any configuration differences necessary to accommodate test instrumentation and test stand interfaces with the engine nacelle package. At completion of the engine demonstration test, the engine and airplane nacelle test hardware must undergo a complete teardown inspection. This inspection must be conducted in a manner to identify abnormal conditions that could become potential sources of engine inflight shutdown. An analysis of any abnormal conditions found must consider the possible consequences of similar occurrences in service to determine if they may become sources of engine inflight shutdowns, power loss, or inability to control engine thrust. Any potential sources of engine inflight shutdown identified must be corrected in accordance with paragraph (g)(2).

(e)(7) Airplane Demonstration Test. In addition to the function and reliability testing required by 14 CFR 21.35(b)(2), for each engine type to be certificated with the airplane, one or more airplanes must complete flight testing which demonstrates that the aircraft, its components, and equipment, are capable of and function properly during long range operations and airplane diversions, including engine-inoperative diversions.

(i) The flight conditions must expose the airplane to representative operational variations based on the airplane's system and equipment design and the intended use of the airplane including:

(A) Engine inoperative maximum length diversions to demonstrate the airplane and propulsion system's capability to safely conduct a diversion.

(B) Non-normal conditions to demonstrate the airplane's capability to safely divert under worst case probable system failure conditions.

(C) Simulated airline operations including normal cruise altitudes, step climbs, and maximum expected flight durations out of and into a variety of departure and arrival airports.

(D) Diversions to worldwide airports representative of those intended as operational alternates.

(E) Repeated exposure to humid and inclement weather on the ground followed by long-range operation at normal cruise altitude.

(ii) The flight testing must validate expected airplane flying qualities and performance considering engine failure, electrical power losses, etc. The testing must demonstrate the adequacy of remaining airplane systems and performance and flightcrew ability to deal with an emergency considering remaining flight deck information following expected failure conditions.

(iii) The engine-inoperative diversions must be evenly distributed among the number of engines in the applicant's flight test program.

(iv) The test airplane(s) must be operated and maintained using the recommended operations and maintenance manual procedures during the airplane demonstration test.

(v) At completion of the airplane demonstration test, the test engines and engine-mounted equipment must undergo a complete external on-wing visual inspection. The engines must also undergo a complete internal visual inspection. These inspections must be conducted in a manner to identify abnormal conditions that could become potential sources of engine inflight shutdowns. An analysis of any abnormal conditions found must consider the possible consequences of similar occurrences in service to determine if they may become sources of engine inflight shutdowns. Any potential sources of engine inflight shutdown that are identified must be corrected in accordance with paragraph (g)(2).

(g)(2) The FAA Reliability Assessment Board will review and evaluate the data from the problem tracking and resolution system to establish compliance with the requirements of paragraph (h). The board will evaluate the overall type design for ETOPS suitability as demonstrated in flight test, and the Airplane Demonstration Test,

(h)(1) For the engine and airplane systems, the type and frequency of failures that occur during the airplane flight test program and the Airplane Demonstration Test must be consistent with the type and frequency of failures or malfunctions that would be expected to occur on presently certified 180-minute ETOPS airplanes. The failures to be considered are those associated with system components that conform to the type design requested for certification. The Reliability Assessment Board will determine compliance with this requirement based on an evaluation of the problem reporting system data, considering system redundancies, failure significance, problem resolution, and engineering judgment.

As discussed above, these special conditions are applicable to Boeing Model 777 series airplanes. Should The Boeing Company apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the special conditions would apply to that model as well.

Under standard practice, the effective date of final special conditions would be 30 days after the date of publication in the Federal Register ; however, as flight testing addressed by the changes incorporated into these final special conditions is imminent for the Boeing Model 777-200LR and 777-300ER series airplanes, the FAA finds that good cause exists to make these special conditions effective upon issuance.

This action affects only certain novel or unusual design features on Boeing Model 777 series airplanes. It is not a rule of general applicability, and it affects only the applicant who applied to the FAA for approval of these features on the airplane.

In addition to the airworthiness requirements of 14 CFR part 25, the Model 777 airplane must comply with the following requirements in order to be eligible for Extended Range Operation with Two-Engine Airplanes (ETOPS) without the requisite operating experience specified in Advisory Circular (AC) 120-42A:

(a) Introduction. An approved ETOPS Type Design Assessment Plan covering the engine and each applicable airplane system must be established. The specific methods that will be used to substantiate compliance with the requirements of these special conditions must be defined in the plan. Specific systems that will undergo the complete analysis, testing, and development program tracking defined in paragraph (c) of these special conditions must be identified. Other airplane systems that may contribute to the overall safety of an ETOPS operation, but that do not warrant the rigorous type design requirements and relevant experience assessments defined in paragraph (c) of these special conditions, must be identified and agreed to by the FAA. Compliance must be shown for these other systems with all provisions of these special conditions, except paragraph (c). In showing compliance with these special conditions, tests and analyses conducted to substantiate compliance with the basic airworthiness standards of part 25 may be referenced, if applicable.

(b) Engine Assessment. (1) The ETOPS eligibility of the engine must be determined specifically for the airplane installation for which early ETOPS type design approval is requested.

(2) Procedures for an engine condition monitoring program must be defined and validated at the time of ETOPS type design approval. The engine condition monitoring program must be able to predict when an engine is no longer capable of providing, within certified engine operating limits, the maximum thrust required for a single engine diversion.

(c) ETOPS Type Design Assessment. (1) Design Requirements Assessment. 14 CFR part 25, including applicable amendments, defines most of the requirements necessary to design an airplane that is suitable for ETOPS operation, as long as the ETOPS mission is considered in applying these requirements for all anticipated dispatch configurations. In addition to these requirements, the propulsion system must be designed to preclude failures or malfunctions that could result in an engine inflight shutdown. The applicant must identify and list methods of compliance for each of the applicable ETOPS requirements, including those specific part 25 requirements for which methods of compliance relative to the ETOPS mission are different from those traditionally used for two-engine airplanes. Paragraph (c)(3) of these special conditions lists certain design feature categories that may be affected by a consideration of the ETOPS mission in the design of these systems. The effects of the applicable ETOPS requirements on the design of any of those design feature categories listed in paragraph (c)(3) must be specifically addressed by this assessment.

(2) Relevant Experience Assessment. For each system covered by the ETOPS Type Design Assessment, there must be an assessment of the relevant design, manufacturing, and operational problems experienced on previous airplanes built by the applicant. The assessment must include the applicable relevant service experience of vendor supplied systems or, to the extent possible, the service experience of components on aircraft built by other manufacturers. Specific corrective actions taken to preclude similar problems from occurring on the new airplane must be identified.

(3) Design Features. (i) The applicant must define any design features implemented to comply with the design requirements listed in paragraph (c)(1). Consideration of the following design feature categories must be specifically addressed:

(A) Airplane capabilities and capacities of the ETOPS mission;

(B) Fuel system integrity, including consideration of uncontained main engine rotor burst and fuel availability as affected by cross-feed capability and electrical power to pumps and other components;

(C) Fuel quantity indication to the flightcrew, including alerts that consider the fuel required to complete the mission, abnormal fuel management or transfer between tanks, and possible fuel leaks between the tanks and the main engines;

(D) Communication systems for the ETOPS environment;

(E) Navigation systems for the ETOPS environment;

(F) Minimum single engine cruise altitude capability; and

(G) Failure tolerant designs of cockpit indicating systems or avionics systems to prevent unnecessary airplane diversions.

(ii) The applicant must define the specific design features used to address problems identified in the relevant service experience assessment of paragraph (c)(2).

(4) Test Features. The applicant must define specific new tests, or enhanced tests, that will be used to assure engine and airplane system design integrity. These test features may be derived from the requirements assessment of paragraph (c)(1) and the relevant service experience assessment of paragraph (c)(2).

(5) Analysis Features. The applicant must define specific new analyses, or enhanced analyses, that will be used to assure engine and airplane system design integrity. These analysis features may be derived from the requirements assessment of paragraph (c)(1) and the relevant service experience assessment of paragraph (c)(2).

(6) Manufacturing, Maintenance, or Operational (Other) Features. The applicant must define specific new, or enhanced, manufacturing processes or procedures, and maintenance or operational procedures that are being implemented to assure engine and airplane system integrity. These “other” features may be derived from the requirements assessment of paragraph (c)(1) of this section and the relevant service experience assessment of paragraph (c)(2).

(d) Additional ETOPS Analysis Requirements. (1) Performance and Failure Analyses. Engine and airplane performance and failure analyses required for certification must be expanded to consider ETOPS mission requirements, including exposure times associated with a 180-minute single-engine diversion and a subsequent 15-minute hold in the terminal airspace at the diversion airport. Consideration must be given to crew workload and operational implications of continued operation with failure effects for an extended period of time. The rationale and all assumptions used in the analyses must be documented, justified, and validated, including maintenance interval and maintainability assumptions.

(2) Maintenance and Flight Operations Evaluation. The Type Design Assessment Plan must contain a program to systematically detect and correct problems occurring as a result of improper execution of maintenance or flight operations. Corrective actions for any problems found must be identified and implemented through the Problem Tracking and Resolution System required by paragraph (f).

(3) Manufacturing Variability. The Type Design Assessment Plan must contain a program to minimize potential manufacturing problems. The plan should address early validation of tooling and procedures, as well as any related problems, as identified in paragraph (c)(2). Corrective actions for problems that impact the safe operation of the airplane must be identified and implemented through the problem tracking and resolution system required by paragraph (f).

(e) Additional ETOPS Test Requirements. As part of, or in addition to, the testing identified in paragraph (c)(4), the following specific test requirements apply:

(1) Configuration Requirements. All testing defined in paragraph (e) must be conducted with the configuration proposed for certification, and must include sufficient interfacing system hardware and software to simulate the actual airplane installation.

(2) Completion of Applicable Failure Analyses. Failure analyses required for ETOPS type design approval must be submitted to the FAA prior to the start of the testing defined in paragraph (e).

(3) Vibration Testing. Vibration testing must be conducted on the complete installed engine configuration to demonstrate that no damaging resonances exist within the operating envelope of the engine that could lead to component, part, or fluid line failures. The complete installed engine configuration includes the engine, nacelle, engine mounted components, and engine mounting structure up the strut to wing interface.

(4) New Technology Demonstration Testing. Testing must be conducted to substantiate the suitability of any technology new to the applicant, including substantially new manufacturing techniques.

(5) Auxiliary Power Unit Demonstration Test. If requesting credit for APU backup electrical power generation, one auxiliary power unit (APU), of the type to be certificated with the airplane, must complete 3000 equivalent airplane operational cycles.

(6) Engine Demonstration Test. One engine of each type to be certificated with the airplane must complete 3000 equivalent airplane operational cycles. The engine must be configured with a complete airplane nacelle package for this demonstration, including engine-mounted equipment except for any configuration differences necessary to accommodate test instrumentation and test stand interfaces with the engine nacelle package. At completion of the engine demonstration test, the engine and airplane nacelle test hardware must undergo a complete teardown inspection. This inspection must be conducted in a manner to identify abnormal conditions that could become potential sources of engine inflight shutdown. An analysis of any abnormal conditions found must consider the possible consequences of similar occurrences in service to determine if they may become sources of engine inflight shutdowns, power loss, or inability to control engine thrust. Any potential sources of engine inflight shutdown identified must be corrected in accordance with paragraph (g)(2).

(7) Airplane Demonstration Test. In addition to the function and reliability testing required by 14 CFR 21.35(b)(2), for each engine type to be certificated with the airplane, one or more airplanes must complete flight testing which demonstrates that the aircraft, its components, and equipment, are capable of and function properly during long range operations and airplane diversions, including engine-inoperative diversions.

(i) The flight conditions must expose the airplane to representative operational variations based on the airplane's system and equipment design and the intended use of the airplane including:

(A) Engine inoperative maximum length diversions to demonstrate the airplane and propulsion system's capability to safely conduct a diversion.

(B) Non-normal conditions to demonstrate the airplane's capability to safely divert under worst case probable system failure conditions.

(C) Simulated airline operations including normal cruise altitudes, step climbs, and maximum expected flight durations out of and into a variety of departure and arrival airports.

(D) Diversions to worldwide airports representative of those intended as operational alternates.

(E) Repeated exposure to humid and inclement weather on the ground followed by long-range operation at normal cruise altitude.

(ii) The flight testing must validate expected airplane flying qualities and performance considering engine failure, electrical power losses, etc. The testing must demonstrate the adequacy of remaining airplane systems and performance and flightcrew ability to deal with an emergency considering remaining flight deck information following expected failure conditions.

(iii) The engine-inoperative diversions must be evenly distributed among the number of engines in the applicant's flight test program.

(iv) The test airplane(s) must be operated and maintained using the recommended operations and maintenance manual procedures during the airplane demonstration test.

(v) At completion of the airplane demonstration test, the test engines and engine-mounted equipment must undergo a complete external on-wing visual inspection. The engines must also undergo a complete internal visual inspection. These inspections must be conducted in a manner to identify abnormal conditions that could become potential sources of engine inflight shutdowns. An analysis of any abnormal conditions found must consider the possible consequences of similar occurrences in service to determine if they may become sources of engine inflight shutdowns. Any potential sources of engine inflight shutdown that are identified must be corrected in accordance with paragraph (g)(2).

(f) Problem Tracking System. An FAA-approved problem tracking system must be established to address problems encountered on the engine and airplane systems that could affect the safety of ETOPS operations.

(1) The system must contain a means for the prompt identification of those problems that could impact the safety of ETOPS operations in order that they may be resolved in a timely manner.

(2) The system must contain the process for the timely notification to the responsible FAA office of all relevant problems encountered, and corrective actions deemed necessary, in a manner that allows for appropriate FAA review of all planned corrective actions.

(3) The system must be in effect during the phases of airplane development that will be used to assess early ETOPS eligibility, and for at least the first 250,000 engine-hours of fleet operating experience after the airplane enters revenue service. For the revenue service period, this system must define the sources and content of in-service data that will be made available to the manufacturers in support of the problem tracking system. The content of the data provided must include, as a minimum, the data necessary to evaluate the specific cause of all service incidents reportable under Sec. 21.3(c) of part 21, in addition to any other failure or malfunction that could prevent safe flight and landing of the airplane, or affect the ability of the crew to cope with adverse operating conditions.

(4) Corrective actions for all problems discovered during the development and certification test program that could affect the safety of ETOPS operations, or the intended function of systems whose use is relied upon to accomplish the ETOPS mission, must be identified and implemented in accordance with paragraph (g)(2). If, during the certification program, it is discovered that a fault has developed that requires significant rework of manufacturing, maintenance, and/or operational procedures, the FAA will review the ETOPS suitability of the affected system and interfacing hardware and identify any additional actions to be accomplished to substantiate the corrective actions.

(5) For each engine type to be certificated with the airplane, the system must include provisions for an accelerated engine cyclic endurance test program that will accumulate cycles on one representative production-equivalent propulsion system in advance of the high-cycle revenue fleet engine. This test program will assist the applicant and the FAA in identifying and correcting problems before they occur in revenue service. This program must be in place for, at a minimum, the first 250,000 engine-hours of fleet operating experience after the airplane enters revenue service. The representative production-equivalent propulsion system may, at the manufacturer's discretion, be used for other fleet support activities.

(g) Reliability Assessment Board. (1) An FAA Reliability Assessment Board will be formed to evaluate the suitability of the airplane for ETOPS approval and make a recommendation to the Manager, Transport Airplane Directorate, regarding the adequacy of the type design for 180-minute ETOPS operation. The purpose of this board will be:

(i) To periodically review the development and certification flight test program accomplishments from both type design and operational perspectives;

(ii) To ensure that all specific problems, as well as their implications on the effectiveness of the Early ETOPS process, are resolved; and

(iii) To assess the design suitability for ETOPS. The board will consider design, maintenance, manufacturing, and operational aspects of the type design when finding suitability for ETOPS approval.

(2) The FAA Reliability Assessment Board will review and evaluate the data from the problem tracking and resolution system to establish compliance with the requirements of paragraph (h). The board will evaluate the overall type design for ETOPS suitability as demonstrated in flight test, and the Airplane Demonstration Test, considering all resolutions of problems. The following suitability criteria will be applied:

(i) Sources of engine shutdown/thrust loss, engine anomalies, or airplane system problems that have a potential significant adverse effect on in-service safety will be resolved.

(ii) Resolutions are identified for all items in paragraph (i) with analysis and/or testing to show all resolutions are effective. These resolutions may be accomplished through one or more of the following categories:

(iii) The resolutions of paragraphs (i) and (ii) will be incorporated prior to entry into service.

(iv) The engine shutdown history of the test program indicates that the engine reliability of the configuration is suitable for the ETOPS approval being considered.

(v) Where interim resolutions having operational impact are defined, the cumulative effect must be determined to be acceptable.

(vi) System or component failures experienced during the program are consistent with the assumptions made in the failure analyses.

(h) Reliability Demonstration Acceptance Criteria.

(1) For the engine and airplane systems, the type and frequency of failures that occur during the airplane flight test program and the Airplane Demonstration Test must be consistent with the type and frequency of failures or malfunctions that would be expected to occur on presently certified 180-minute ETOPS airplanes. The failures to be considered are those associated with system components that conform to the type design requested for certification. The Reliability Assessment Board will determine compliance with this requirement based on an evaluation of the problem reporting system data, considering system redundancies, failure significance, problem resolution, and engineering judgment.

(2) Corrective action for any of the following classes of problems occurring during the testing identified in paragraph (h)(1) that requires a major system redesign would delay ETOPS type design approval, or result in approval of a reduced single-engine diversion time, unless corrective action has been substantiated to, and accepted by, the FAA Reliability Assessment Board:

(i) Any source of unplanned inflight shutdown or loss of thrust.

(ii) Any problem that jeopardizes the safety of an airplane diversion.

(3) The FAA Reliability Assessment Board must determine that the suitability criteria of paragraph (g)(2) have been met.

(i) Demonstration of Compliance. In order to be eligible for 180-minute ETOPS type design approval, the following conditions apply:

(1) The engine assessment has been completed and eligibility for ETOPS operation has been approved by the FAA Engine Certification Office.

(2) All design, manufacturing, maintenance, operational, and other features necessary to meet the ETOPS requirements of paragraph (c)(1), and to resolve the problems identified in paragraph (c)(2), have been successfully implemented.

(3) The identified test and analysis features in paragraph (c)(4) and (c)(5) have been shown to be effective in validating the successful implementation of the features in paragraph (i)(2).

(4) The additional analysis requirements of paragraph (d) have been completed and the results have been approved.

(5) The additional test requirements of paragraph (e) have been successfully completed.

(6) All significant problems identified in accordance with paragraph (f) have been resolved, and fixes substantiated to be effective have been implemented.

(7) The accelerated engine cyclic endurance test program of paragraph (f)(5) must be in place.

(8) Compliance with the reliability demonstration acceptance criteria of paragraph (h) has been found by the Reliability Assessment Board.

The Census Bureau is responsible for collecting, compiling, and publishing export trade statistics for the United States under the provisions of Title 13, United States Code (U.S.C.), chapter 9, section 301. The paper Shipper's Export Declaration (SED) and the AES are the primary media used for collecting such trade data, and the information contained therein is used by the Census Bureau for statistical purposes only. This information is exempt from public disclosure under the provisions of Title 13, U.S.C., chapter 9, section 301(g). The SED and AES records also are used for export control purposes under Title 50, U.S.C., and Title 22, U.S.C., to detect and prevent the export of certain critical or sensitive commodities to unauthorized destinations or end-users.

On December 1, 2000, the United Nations General Assembly adopted Resolution 55/56. Provisions of Resolution 55/56 charged the international community with developing proposals and procedures to address the potential negative impact of illicit trade in rough diamonds on world peace, safety, and security. Trade in rough diamonds has in the past been linked to the finance of armed conflicts in certain world areas, specifically in some African nations (referred to as “conflict” diamonds). Funds derived from the sale of rough diamonds have been used by rebel groups to finance military activities, overthrow legitimate governments, commit atrocities against unarmed civilians, and subvert international efforts to promote peace and stability within and among the governments of nations.

This trade, if allowed to continue, poses a serious threat to the economies of many producing, processing, exporting, and importing states. Representatives of nations with a stake in resolving the problem of “conflict” diamonds, including the United States, along with members of the diamond industry and concerned nongovernmental institutions, have worked together for nearly 3 years to develop a certification scheme, designed to control the worldwide movement of illicit rough diamonds. This process, which culminated in the Interlaken Declaration of November 5, 2002, launched the Kimberley Process. Under the Kimberley Process, participating nations or entities, in cooperation with industry, will establish internal control systems designed to eliminate “conflict” diamonds from shipments of rough diamonds imported into and exported from their territories.

Public Law 108-19, April 25, 2003, 117 stat. 631, known as the “Clean Diamond Trade Act,” implements the Kimberley Process in the United States by authorizing the President to prohibit the importation into or the exportation from the United States of any rough diamond, from whatever source, unless the rough diamond is controlled through the Kimberley Process Certification Scheme. Executive Order 13312, signed on July 29, 2003, implements these prohibitions, effective July 30, 2003. In accordance with section 15 of the Clean Diamond Trade Act, the President certified in a letter to Congress on July 29, 2003, that an applicable waiver granted by the World Trade Organization is in effect until December 31, 2006.

Section 6 of Public Law 108-19 names the Census Bureau as the exporting authority for the purposes of the Clean Diamond Trade Act. This requires the Census Bureau to validate the Kimberley Process Certificate (the Certificate) for exports of rough diamonds by verifying that an Internal Transaction Number (ITN) provided by the AES is shown on the Certificate. The ITN is the confirmation number provided by the AES when the data transmission for exports of rough diamonds is accepted. Shipments of rough diamonds from the United States must also meet additional Department of the Treasury exporting requirements identified in the Office of Foreign Assets Control's (OFAC) Rough Diamonds Control Regulations, Title 31, Code of Federal Regulations (CFR), part 592. Section 8 of Public Law 108-19 authorizes the Bureau of Customs and Border Protection and the Bureau of Immigration and Customs Enforcement to enforce the provisions of the Clean Diamond Trade Act. OFAC also has enforcement authority pursuant to section 5(a) of the Clean Diamond Trade Act and the Rough Diamonds Control Regulations (31 CFR part 592).

To comply with the requirements of the Act and Executive Order 13312, which implements the Clean Diamond Trade Act, the Census Bureau is amending the appropriate sections of the FTSR to specify the requirements for the mandatory electronic filing via the AES for exports of rough diamonds.

The Census Bureau is revising the following sections of the FTSR:

• Section 30.1 is amended to require mandatory filing via AES for exports of rough diamonds;

• Section 30.2 is amended to stipulate that electronic SED filing through the AES is subject to export control regulations;

• Section 30.55 is amended to require filing through AES for all exports of rough diamonds regardless of value;

• Section 30.58 is amended to require filing through AES for exports of rough diamonds destined for Canada;

• Section 30.60 is amended to require mandatory participation in the AES for filers of information on exports of rough diamonds;

• Section 30.61 is amended to require full reporting, that is, reporting of all required information under the AES filing Option 2, prior to exportation for shipments of rough diamonds;

• Section 30.63 is amended to specify the Harmonized System subheadings for rough diamond exports subject to the Clean Diamond Trade Act and the Rough Diamonds Control Regulations (31 CFR part 592) and required to be reported through the AES;

• Section 30.65 is amended to specify the requirements for annotating commercial documents with the proper proof of filing citation when exports of rough diamonds are filed through the AES, and to require the reporting of an AES confirmation number on the Kimberley Process Certificate; and

• Section 30.95 is amended to specify penalty provisions mandated by the Clean Diamond Trade Act.

The Departments of State and Homeland Security concur with the provisions contained in this notice of final rulemaking.

Executive Order 13312 addresses further threats to international peace and security by the trade in conflict diamonds and implements Public Law 108-19, the Clean Diamond Trade Act. This final rule is issued in response to Public Law 108-19 and is exempt from requirements of section 553 of the Administrative Procedures Act because it deals with a foreign affairs function of the United States (5 U.S.C. 553 (a)(1)). Therefore, the Census Bureau is not required to solicit public comment on this rule or provide a delay in the rule's effective date. No other law requires a notice of proposed rulemaking and an opportunity for public comment on this rule.

Because a notice and opportunity for public comment are not required by 5 U.S.C. 553, or any other law for a rule regarding a foreign affairs function, a Regulatory Flexibility Analysis is not required and has not been prepared (5 U.S.C. 603 (a)).

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 (PRA), unless that collection of information displays a current, valid Office of Management and Budget (OMB) control number. In accordance with the PRA, 44 U.S.C., chapter 35, OMB has approved on July 22, 2003, with control number 0607-0152, the collection of all information associated with the AES and the SED under this rule. We estimate that each electronic SED will take approximately 3 minutes to complete; we estimate that each paper SED will take approximately 11 minutes to complete. A decrease of 31 burden hours accounts for the difference in time it takes to complete an AES transaction versus filling out a paper SED.

This rule has been determined to be significant for purposes of Executive Order 12866.

Anthony Products Co., 5600 Peck Rd., Arcadia, CA 91006, has informed FDA that it has transferred ownership of, and all rights and interest in, the following 12 approved NADAs and one approved ANADA to Cross Vetpharm Group, Ltd., Broomhill Rd., Tallaght, Dublin 24, Ireland.

Accordingly, the agency is amending the regulations in 21 CFR 520.1720a, 522.480, 522.540, 522.1010, 522.1720, 522.1883, 522.1962, 522.2063, and 529.1044a to reflect the transfer of ownership. Sections 522.1883 and 522.1962 are also being revised to reflect a current format.

Following these changes of sponsorship, Anthony Products Co. is no longer the sponsor of an approved application. Accordingly, § 510.600(c) is being amended to remove the entries for Anthony Products Co.

This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808.

During the September-October 2002 meeting of the Governing Bodies of the World Intellectual Property Organization (WIPO), the PCT Assembly adopted various amendments to the Regulations under the PCT that enter into force on January 1, 2004. The amended PCT Regulations were published in the PCT Gazette of December 5, 2002 (49/2002), in Section IV, at pages 25004-61. The purposes of these amendments are to: (1) Improve coordination of international search (Chapter I of the PCT) and international preliminary examination (Chapter II of the PCT) through the provision of an enhanced international search and preliminary examination system; (2) simplify the PCT by changing the concept and operation of the designation system and the fee system; and (3) simplify signature and other filing requirements.

Enhanced International Search and Preliminary Examination System: Under the enhanced international search and preliminary examination system, the written opinion currently established during the Chapter II procedure by the International Preliminary Examining Authority (IPEA) has been added to the Chapter I procedure. Accordingly, the International Searching Authority (ISA) will be responsible for establishing a preliminary and non-binding written opinion on whether the claimed invention appears to be novel, to involve an inventive step and to be industrially applicable. In the event that a Demand for international preliminary examination is timely filed by applicant, the written opinion of the ISA will be considered to be the written opinion of the IPEA. If a Demand is not timely filed, the written opinion of the ISA will form the basis for the issuance, by the International Bureau (IB) on behalf of the ISA, of an “International Preliminary Report on Patentability (Chapter I of the Patent Cooperation Treaty)” (“IPRP”), which will be communicated to all designated Offices and made available for public inspection after the expiration of thirty months from the priority date.

Under the revised system, the time limit for filing a Demand for international preliminary examination has changed. Specifically, the Demand must be filed within the later of: (1) Three months from issuance of the international search report and the written opinion of the ISA (or, if a search cannot be made, of the declaration under Article 17.2(a)); or (2) twenty-two months from the priority date. See PCT Rule 54 bis .1(a). Any Demand made after the expiration of this time limit will be considered as if it had not been submitted. See PCT Rule 54 bis .1(b). Any arguments or amendments in response to the written opinion of the ISA must be submitted within the time limit for filing the Demand to ensure consideration by the IPEA. It is noted that applicants may still desire to file the Demand prior to the expiration of nineteen months from the priority date in order to delay entry into the national stage for those few remaining Contracting States that have taken a reservation to the thirty-month time limit in Article 22(1).

As in current PCT Chapter II procedures, the IPEA will still establish an international preliminary examination report, though the report will now bear the title “International Preliminary Report on Patentability (Chapter II of the Patent Cooperation Treaty).” This report will be established within the applicable time limit under PCT Rule 69 (usually within twenty-eight months from the priority date).

Under the revised system, payment of the international preliminary examination fee and handling fee is not required until the later of one month from the filing of the Demand or twenty-two months from the priority date. See PCT Rules 57.3(a) and 58.1(b). However, where the IPEA and the ISA are the same and the IPEA wishes to start examination at the same time as the international search, the IPEA may require that the examination and handling fees be paid within one month of an invitation by the IPEA to pay such fees. See PCT Rule 57.3(c).

Automatic Indication of All Designations Possible under the PCT; Relaxed Signature and other Filing Requirements; Simplified Fee System: Under the amendments to the Regulations of the PCT, upon filing an international application, applicant will obtain automatic and all-inclusive coverage of all designations available under the PCT, including all kinds of protection as well as both national and regional patent protection. See PCT Rule 4.9. Similarly, the mere filing of a Demand will constitute the election of all designated States. See PCT Rule 53.7. Thus, applicants need not, at the time of filing the international application, specifically designate individual Contracting States, or choose certain kinds of protection or indicate expressly whether national or regional protection is sought. Such matters will be resolved in the national phase.

This automatic and all-inclusive designation system overcomes a current pitfall for applicants who have inadvertently omitted specific designations upon filing the international application and such designations were not, or could not be, timely confirmed under PCT Rule 4.9(c). For example, if the original international application papers did not contain at least one designation, an international filing date could not be accorded as of the initial receipt date of the application papers. See PCT Article 11(1)(iii)(b). Furthermore, even in those applications containing at least one designation, PCT Rule 4.9(b) required that any additional States and/or additional kinds of protection be confirmed by the submission of a written notice, accompanied by payment of the appropriate confirmation fee, within a relatively short time period ( i.e. , fifteen months from the priority date). This time period was frequently overlooked by applicants. Under the new system of automatic designations/elections, the current procedures for precautionary designations and later elections become unnecessary and have been eliminated from the PCT Rules. This will reduce the workload on the PCT Receiving Office (RO) and IPEA by eliminating processing of precautionary designations and later elections, as well as petitions relating to omitted designations.

As a further benefit of the automatic designation system is the simplification of the PCT fee system. Under the current PCT fee structure, both a “basic” fee and a “designation” fee are required. Moreover, these fees are due at different times in different amounts depending on when they are paid. Under the new system, these fees have been eliminated in favor of a single international filing fee (comprised of two fee components, a first fee component for up to thirty sheets of paper and a second fee component for sheets of paper in excess of thirty) due at one time.

As a consequence of the automatic designation system, applicant/inventors will have to be named in the international application. To alleviate hardships with regard to obtaining signatures of all the applicants named on the Request, PCT Rule 26 has been amended to provide that, for purposes of Article 14(a)(i), the international application will be considered as signed in accordance with the PCT Regulations if the Request has been signed by at least one applicant. See PCT Rule 26.2 bis (a). In addition, if there is more than one applicant, PCT Rule 26.2 bis (b) provides that, for purposes of PCT Article 14(1)(a)(ii), it is sufficient that the identifying information ( i.e. , address, residence and nationality) be provided for only one applicant who is entitled under PCT Rule 19.1 to file the international application with the RO. This means that for purposes of filing an international application with the United States Receiving Office (RO/US) as the competent RO, this information must be provided with respect to at least one applicant who is a citizen or resident of the United States. Notwithstanding the amendments to PCT Rule 26, a designated/elected Office may still require applicants to furnish, during the national stage, confirmation of the international application by the signature of any applicant who has not signed the Request and any missing identifying information. See PCT Rule 51 bis .1(a).

PCT Rule 90.4 has been revised to permit the RO, ISA, or IPEA to waive the requirement for a power of attorney, except in instances of applicant initiated withdrawals under PCT Rule 90 bis .

Title 37 of the Code of Federal Regulations, Part 1, is amended as follows:

Section 1.14: Sections 1.14(g)(1)(ii) and 1.14(g)(3) are amended to exclude members of the public from obtaining a copy of the written opinion of the United States International Searching Authority (ISA/US) until the expiration of thirty months from the priority date of the international application. Under PCT Rule 44 ter .1 (as amended), the ISA is not permitted to allow access to the written opinion of the ISA before the expiration of thirty months from the priority date unless authorized by the applicant.

Section 1.413: Section 1.413(c) is amended to reflect the additional major function of the ISA/US of preparing and transmitting written opinions.

Section 1.421: Section 1.421(b) is amended to remove reference to § 1.425 (§ 1.425 is removed). Under PCT Rule 26.2 bis (a) (as amended), the international application will be considered to satisfy the signature requirement for purposes of PCT Article 14(1)(a)(i) if the request is signed by at least one applicant (except that all of the applicants' signatures will still be required for withdrawals, see discussion of § 1.421(g)). Accordingly, the current requirement in § 1.425 that the failure of an inventor to sign the request in an international application designating the United States will only be excused where the inventor could not be found or reached after diligent effort or refused to sign the request will no longer be applicable. Section 1.421(b) is also amended to include the requirement of § 1.424 that joint inventors must jointly apply for an international application. Section 1.424 is removed ( see discussion of § 1.424).

Section 1.421(c) is amended as a consequence of the change to PCT Rule 4.9, as the United States will always be designated upon filing of an international application.

Section 1.421(d) is amended to reflect the change to PCT Rule 90.4(d) permitting the RO to waive the requirement for a separate power of attorney.

Section 1.421(f) is amended to clarify that for purposes of requests under PCT Rule 92 bis to effect a change in an indication concerning the applicant, agent or common representative, such requests may be required to be signed by all applicants.

Section 1.421(g) is amended to remove the text of PCT Rule 92 bis as unnecessary and to clarify that for purposes of withdrawals under PCT Rule 90 bis of the international application, designations, priority claim, demand or elections, the request for withdrawal must be signed by all applicants. Furthermore, where the request for withdrawal is signed by an attorney, agent, or common representative, a power of attorney from the applicants appointing that attorney, agent or common representative will be required. This clarification is consistent with PCT Rule 90.4(e) (as amended), which prohibits the RO, ISA, IPEA, and IB from waiving the separate power of attorney requirement in cases of withdrawals under Rule 90 bis. An exception to this signature requirement is made in cases where an inventor cannot be found or reached after diligent effort. See PCT Rule 90 bis .5(b).

Section 1.424: This section is removed. The requirement in § 1.424 regarding the naming of joint inventors in international applications will be moved to § 1.421(b). The further requirement relating to signature requirements of joint inventors, including reference to § 1.425, will no longer be applicable ( see discussion of § 1.421(b)).

Section 1.425: This section is removed ( see discussion of § 1.421(b)).

Section 1.431: Section 1.431(b)(3) is amended to remove reference to § 1.424 (§ 1.424 is removed). Sections 1.431(c) and (d) are amended to reflect the new fee structure applicable to international applications under revised PCT Rule 15. Specifically, the international “basic fee” and “designation fee” have been combined into a single “international filing fee.” In addition, the late payment fee provision of § 1.431(c)(1) is amended as a consequence of this new fee structure, consistent with amended PCT Rule 16 bis. 2.

Section 1.432: Section 1.432 is amended to reflect the change to PCT Rule 4.9, which provides that the filing of the request shall constitute: (1) The designation of all Contracting States that are bound by the PCT on the international filing date; (2) an indication that for those States for which PCT Articles 43 or 44 apply, the filing of the request constitutes an indication for the grant of every kind of protection which is available by way of the designation of that State; and (3) an indication that the international application is, for those States to which PCT Article 45(1) applies, for the grant of a regional patent and also, unless PCT Article 45(2) applies, a national patent. As a consequence of the “automatic” designation system provided under revised PCT Rule 4.9, the procedure under former PCT Rule 4.9(b) and (c) regarding confirmation of precautionary designations has been eliminated from that rule, and therefore, is removed from § 1.432.

Section 1.434: Section 1.434(d) is amended to remove the requirement that international applications designating the United States must include the address and the signature of the inventor except as provided by §§ 1.421(d), 1.422, 1.423 and 1.425. Under PCT Rule 26.2 bis (as amended), if there is more than one applicant, it is sufficient that the request is signed by only one of them, and that the address is provided with respect to one of the applicants who is entitled, in accordance with Rule 19.1, to file the international application with the RO. Section 1.434(d)(3) is also redesignated as new § 1.434(e) for clarity.

Section 1.445: Section 1.445(a)(1) is amended to increase the transmittal fee from $240.00 to $300.00. 35 U.S.C. 376(b) authorizes the Office to (inter alia) prescribe the transmittal fee, search fee, supplemental search fee, and preliminary examination fee for PCT international applications. This transmittal fee amount more accurately reflects the Office's actual average costs of processing international applications, and is also consistent with the filing fee for applications under 35 U.S.C. 111(a) proposed by the Office in the 21st Century Strategic Plan (information concerning the Office's 21st Century Strategic Plan is available on the Office's Internet Web site http://www.uspto.gov).

Section 1.445(a)(2)(i) is amended to reduce the search fee charged by the ISA/US where there is a corresponding prior U.S. application filed under 35 U.S.C. 111(a) from $450 to $300. Section 1.445(a)(2)(i) is also amended to clarify the conditions for obtaining benefit of the reduced search fee where there is such a prior corresponding application.

Pursuant to PCT Rule 42.1, the ISA/US has, in most cases, only three months to establish the International Search Report. In order for the ISA/US to be able to utilize the benefits of a search conducted in a prior corresponding application filed under 35 U.S.C. 111(a), the Office must be informed of the prior corresponding application in sufficient time and in such manner so as to permit the Office to utilize the search and examination conducted in the prior application. Accordingly, § 1.445(a)(2)(i) is amended to require applicants to timely furnish adequate identifying information of the prior U.S. application in order to qualify for the lower search fee. Specifically, applicant must identify the prior nonprovisional application by U.S. application number upon filing the international application, if such number is known. If such number is not known, then applicant must identify the prior application by filing date, title, and name of applicant (and preferably the application docket number) so that the Office will be able to identify the prior application.

Section 1.445(a)(2)(ii) is amended to increase the search fee charged by the ISA/US in situations not covered by § 1.445(a)(2)(i) from $700 to $1,000. This search fee amount more accurately reflects the Office's actual average costs of searching international applications in situations not covered by § 1.445(a)(2)(i). This search fee amount is higher than the search fee amount for applications under 35 U.S.C. 111(a) as proposed by the Administration because of additional costs associated with both searching international applications and the preparation and transmittal of a written opinion of the ISA. Additionally, international applications must be searched (and examined) under the PCT unity of invention standard, where applications under 35 U.S.C. 111(a) are searched (and examined) under the restriction standard set forth in 35 U.S.C. 121. Moreover, the search fee set forth in § 1.445(a)(2)(i) must also cover preparation of a written opinion (the “International Preliminary Report on Patentability (Chapter I of the Patent Cooperation Treaty)” (“IPRP”)) under the revised system.

In addition, the fee charged by the ISA/US for searching an additional invention is increased from $210 to $1,000. This amount more accurately reflects the Office's actual average costs of searching and examining additional inventions. In this regard, it is noted that the search fee and the supplemental search fee charged by every other international searching authority are the same (except for the ISA/JP, which charges a supplemental search fee that is only slightly lower than the search fee).

Section 1.445(a)(4) is deleted, as confirmation fees will no longer be applicable.

Section 1.445(b) is amended to reflect the combining of the basic and designation fees into a single “international filing fee”.

Section 1.455: Section 1.455(b) is amended to be consistent with PCT Rule 90.4 as it relates to the manner of appointment of agent, attorney or common representative.

Section 1.480: Section 1.480(a) is amended to reflect the new time limits in PCT Rule 57.3 and 58.2 for submitting the handling and preliminary examination fees.

Section 1.480(d) is added, consistent with PCT Rule 53.7 (as amended), to provide that the filing of a Demand shall constitute the election of all Contracting States that are designated and bound by Chapter II of the Treaty on the international filing date. Accordingly, it will no longer be necessary to specify in the Demand those States that are elected.

Section 1.480(e) is added to provide that any Demand filed after the expiration of the applicable time limit in PCT Rule 54 bis .1(a) shall be considered as if it had not been submitted. See PCT Rule 54 bis .1(b) (as amended).

Section 1.481: Section 1.481(a) is amended to provide that the handling fee and preliminary examination fee that are due are those fees in effect on the date of payment of the handling and preliminary examination fees. See PCT Rules 57.3(d) and 58.1(b).

Section 1.482: Section 1.482(a)(1) is amended to increase the preliminary examination fee charged by the IPEA/US from $490 to $600 if the international search fee was paid to the United States Patent and Trademark Office as an ISA (the preliminary examination fee charged by the IPEA/US if the international search fee was not paid to the United States Patent and Trademark Office as an ISA will remain at $750). This increase is necessary to cover the additional cost associated with conducting the preliminary examination by the IPEA/US.

For the same reason, as well as reasons set forth with regard to the increase in the supplemental search fee under § 1.445(a)(3), § 1.482(a)(2) is amended to increase the additional preliminary examination fee for examining additional inventions to $600 (regardless of whether the international search fee was paid to the United States Patent and Trademark Office as an ISA).

Section 1.482(b) is amended to refer to revised PCT Rule 57 as it relates to handling fee requirements.

Section 1.484: Section 1.484(b) is amended to refer to revised PCT Rule 69.1 as to when the IPEA/US may start international preliminary examination. PCT Rule 69.1 was revised to prohibit the IPEA from starting preliminary examination until it is in possession of, inter alia, the written opinion of the ISA. PCT Rule 69.1 provides for two exceptions to this requirement. Both exceptions apply when the IPEA and the ISA for the international application are the same authority. The first exception permits the IPEA to start examination at the same time as the international search, subject to certain limitations. See PCT Rule 69.1(b). The second exception occurs when the ISA considers the conditions under PCT Article 34(2)(c)(i) to (iii) to be fulfilled. In such cases, a written opinion by the ISA need not be established. See PCT Rule 69.1(b) bis .

Sections 1.484(e) through (g) are redesignated as §§ 1.484(g) through (i), respectively. Section 1.484(e) now provides, consistent with PCT Rule 66.1 bis , that the written opinion of the ISA shall be considered to be the written opinion of the IPEA/US.

Section 1.484(f) now provides that the IPEA may establish further written opinions, subject to the conditions specified in § 1.484(d). Establishment of additional written opinions by the IPEA is provided for in PCT Rule 66.4(a).

Section 1.484(g) is amended as a consequence of the amendment to § 1.484(f).

Section 1.484(h) is amended to provide clarification regarding conducting personal and telephonic interviews with the examiner under the revised system.

Response to comments: The Office published a notice proposing changes to the rules of practice to conform them to certain amendments made to the Regulations under the Patent Cooperation Treaty (PCT) that will take effect on January 1, 2004. See January 2004 Revision of Patent Cooperation Treaty Application Procedure, 68 FR 32441 (May 30, 2003), 1271 Off. Gaz. Pat. Office 147 (June 24, 2003) (proposed rule). The Office received two written comments (one from an intellectual property organization and another by a patent practitioner) in response to this notice. The comments and the Office's responses to the comments follow:

Comment 1: One comment suggested that § 1.14 should provide that the written opinion of the International Searching Authority is available to third parties upon publication of the international application instead of at thirty months as provided in § 1.14.

Response: The suggestion has not been adopted. PCT Rule 44 ter .1, which is set to enter into force on January 1, 2004, provides that the International Searching Authority, unless requested or authorized by the applicant, shall not allow access to the written opinion of the International Searching Authority by any person before the expiration of thirty months from the priority date. Therefore, the suggested change to § 1.14 would be inconsistent with the requirements of the PCT.

Comment 2: One comment suggested that the rules be amended to provide that if applicant timely files a Demand with Article 34 amendments to the claims, the examiner be required to render a new written opinion. The comment indicates that without such a provision, the IPEA/US, in adopting the written opinion as established by the ISA, will be delivering to applicants written opinions which are totally inconsistent with the claims as amended.

Response: The suggestion has been adopted in part. Under the enhanced search and examination system, the IPEA/US will not deliver to applicants a written opinion which does not take into account the claims as amended. In general, under the procedures established under the enhanced search and examination system, a written opinion will be established by the ISA, and upon filing of a Demand by applicant, that written opinion will be considered to be the first written opinion of the IPEA. In turn, any amendments under PCT Article 34 which are timely filed, either with or subsequent to the Demand, will be considered to be a response to that written opinion. In response to the Demand and any amendments, the IPEA/US will then issue one of the following: (1) A further written opinion under § 1.484(f) if such is warranted; or (2) an international preliminary examination report under § 1.484(g). In both instances, the response by the IPEA will fully take into consideration any amendments which have been timely filed by the applicant.

Comment 3: One comment also opposed the proposed changes in the PCT fees set forth in §§ 1.445 and 1.482. First, the comment indicated that the transmittal, search, and preliminary examination fees proposed in §§ 1.445 and 1.482 would be sixty percent higher than the filing fee, search fee, and examination fee proposed in the 21st Century Strategic Plan. Second, the comment indicated that an applicant must also pay the preliminary examination fee to obtain the “same benefits” under PCT Chapters I and II. The comment further indicated that a truer picture of the proposed fee change is revealed by comparing the existing and revised transmittal, search, and international preliminary examination fees on an item-by-item basis.

Response: The Office indicated that the $300 transmittal fee amount in proposed § 1.445(a)(1) would be consistent with the filing fee for applications under 35 U.S.C. 111(a) proposed by the Office in the 21st Century Strategic Plan ($300). The Office did not state that the sum of the transmittal, search, and international preliminary examination fees would be consistent with the sum of the filing fee, search fee, and examination fees for applications under 35 U.S.C. 111(a) proposed by the Office in the 21st Century Strategic Plan. The Office proposed search and examination fee amounts for international applications that are in certain situations higher than the corresponding fees for applications under 35 U.S.C. 111(a) because: (1) There are additional costs associated with searching international applications and international preliminary examination under the enhanced international search and preliminary examination system ( see January 2004 Revision of Patent Cooperation Treaty Application Procedure , 68 FR 32441, 32444 (May 30, 2003), 1271 Off. Gaz. Pat. Office 147, 149 (June 24, 2003) (proposed rule)); and (2) the examination fee for applications under 35 U.S.C. 111(a) proposed by the Office in the 21st Century Strategic Plan does not recover the Office's cost of examining applications and is subsidized by fees that are not applicable during the PCT international stage ( see H.R. Rep. 108-241, at 15 (2003)).

The comment correctly notes that a PCT applicant must also pay the preliminary examination fee to amend the claims in an international application and obtain a written opinion reflecting the amended claims. Nevertheless, it is the Office's experience that PCT applicants who file a Demand for international preliminary examination rarely include an amendment under PCT Article 34 with the Demand. Therefore, the enhanced international search and preliminary examination system will reduce costs for most PCT applicants by providing them with the benefits they seek from PCT Chapter II, namely, an extension (from twenty to thirty months) of the time limit for entering the national stage and a written opinion indicating whether the claims are in compliance with PCT Article 33(2)-(4), without requiring them to file a timely Demand for international preliminary examination and pay the international preliminary examination fee.

When making an item-by-item comparison of the existing transmittal, search, and international preliminary examination fees with the revised transmittal, search, and international preliminary examination fees, one would readily appreciate the following: The enhanced international search and preliminary examination system reduces costs for most PCT applicants by providing them with the benefits they seek from PCT Chapter II without requiring them to pay the international preliminary examination fee. The Office's costs for searching international applications are higher under the enhanced international search and preliminary examination system because international applications must be searched (and examined) under the PCT unity of invention standard and the search fee must also cover the preparation of a written opinion. The Office's costs for international preliminary examination will be higher in certain situations under the enhanced international search and preliminary examination system because the Office will be required to provide an international preliminary examination on the basis of one or more amendments under PCT Article 34 since applicants filing a Demand under the revised system will likely be doing so to obtain a positive “International Preliminary Report on Patentability (Chapter II of the Patent Cooperation Treaty)” and thus will file one or more amendments under PCT Article 34 in the international application (under the former system, the majority of Demands were filed for the sole purpose of extending the national stage entry period and thus were filed without any substantial amendments to the claims). Finally, the fees set forth in former §§ 1.445 and 1.482 for search and examination of additional inventions were far too low to recover the Office's actual average cost for search and examination of additional inventions.

Rule Making Considerations: Regulatory Flexibility Act: The USPTO published a proposed rule and certified that an initial Regulatory Act Analysis was not required. Only one comment was received which objected, in general, to the fee increases and made no reference to any impact of the fee increases on small entities. The Deputy General Counsel for General Law of the United States Patent and Trademark Office has certified to the Chief Counsel for Advocacy of the Small Business Administration that changes in this final rule will not have a significant economic impact on a substantial number of small entities (Regulatory Flexibility Act, 5 U.S.C. 605(b)).

The changes in this final rule primarily implement corresponding changes required to conform United States rules for international applications to the amendments to the PCT Regulations, which become effective on January 1, 2004. The amendments to the PCT Regulations will simplify the PCT application process and fee structure. The changes to the PCT international stage fees are to adjust these fees to be in alignment with the actual average costs of conducting a PCT search and international preliminary examination under the new process.

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

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

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

The title, description and respondent description of the information collection is shown below with an estimate of the annual reporting burden. Included in the estimate is the time for reviewing instructions, gathering and maintaining the data needed, and completing and reviewing the collection of information.

OMB Number: 0651-0021.

Title: Patent Cooperation Treaty.

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

Type of Review: Approved through December of 2003.

Affected Public: Individuals or households, business or other for-profit institutions, not-for-profit institutions, farms, Federal Government and State, Local and Tribal Governments.

Estimated Number of Respondents: 331,407.

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

Estimated Total Annual Burden Hours: 401,202.

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

OMB Number: 0651-0031.

Title: Patent Processing (Updating).

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

Type of Review: Approved through July of 2006.

Affected Public: Individuals or households, business or other for-profit institutions, not-for-profit institutions, farms, Federal Government and State, Local and Tribal Governments.

Estimated Number of Respondents: 2,208,339.

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

Estimated Total Annual Burden Hours: 830,629 hours.

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

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

Interested persons are requested to send comments regarding these information collections, including suggestions for reducing this burden, to Robert J. Spar, Director, Office of Patent Legal Administration, United States Patent and Trademark Office, P.O. Box 1450, Alexandria, Virginia, 22313-1450, or to the Office of Information and Regulatory Affairs 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.

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The 2003 Pacific halibut PSC limit for vessels using trawl was established as 2,000 metric tons (mt) by the final 2003 harvest specifications for groundfish of the GOA (68 FR 9924, March 3, 2003).

The Administrator, Alaska Region, has determined, in accordance with § 679.21(d)(7)(i), that vessels engaged in directed fishing for groundfish with trawl gear in the GOA have caught the 2003 Pacific halibut PSC limit. Therefore, NMFS is closing the directed fishery for groundfish by vessels using trawl gear in the GOA, except for directed fishing for pollock by vessels using pelagic trawl gear in those portions of the GOA that remain open to directed fishing for pollock.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is contrary to the public interest. This requirement is contrary to the public interest as it would delay the closure of the fishery, lead to exceeding the 2003 Pacific halibut PSC limit and therefore reduce the public's ability to use and enjoy the fishery resource.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

This action is required by § 679.20 and is exempt from review under Executive Order 12866.

The IFQ Cost Recovery Program is managed by the NMFS, Alaska Region, Restricted Access Management (RAM). Regulations implementing the IFQ Cost Recovery Program were published in the Federal Register on March 20, 2000 (65 FR 14919) and amended by publication in the Federal Register on January 28, 2002 (67 FR 4100). Under the regulations, an IFQ permit holder incurs a cost recovery fee liability for each pound of IFQ halibut or sablefish landed on his/her permit(s). The regulations included recordkeeping and reporting requirements at §679.5(l)(7) necessary to implement the IFQ Cost Recovery Program. See 65 FR 14923 (March 20, 2000), amended at 67 FR 4130 (January 28, 2002). A final rule published in the Federal Register on July 29, 2003, implemented additional amendments to §679.5(l) as NMFS intended, but erroneously removed §679.5(l)(7) in its entirety (68 FR 9907). NMFS intended to amend § §679.5(l)(1) through (l)(6), but amendatory instruction number 4 incorrectly removed §679.5(l)(7). This final rule restores §679.5(l)(7) to the recordkeeping and reporting regulations implementing the IFQ Cost Recovery Program.

This final rule must be effective by October 15 to collect information necessary to carry out the IFQ Cost Recovery Program. Under § 679.5(l)(7), an IFQ Registered Buyer that also operates as a shoreside processor and receives and purchases IFQ landings of sablefish or halibut must submit annually to NMFS a complete IFQ Buyer Report for each reporting period in which the Registered Buyer receives IFQ fish. A complete IFQ Buyer Report must be postmarked or received by the Regional Administrator by October 15 following the reporting period in which the IFQ Registered Buyer receives the IFQ fish. Submission of these reports is essential to implementation of the IFQ Cost Recovery Program.

The Administrator, Alaska Region, NMFS (Regional Administrator), has determined that this final rule is necessary for the conservation and management of the groundfish fisheries of the BSAI and GOA. The Regional Administrator also has determined that this action is consistent with the Magnuson-Stevens Act and other applicable laws.

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

By this action, NMFS restores the IFQ Cost Recovery Program recordkeeping and reporting requirements that had been in effect from March 15, 2000, to August 28, 2003, when they were erroneously rescinded. The rescission has had no substantive effect on the conduct of persons subject to these recordkeeping and reporting requirements because, the information gathered for the report is collected as part of normal business practices. Additionally, the October 15 deadline for submission of the IFQ Buyer Report had not yet arrived so participants in this fishery have not missed any relevant deadlines.

Accordingly, the Assistant Administrator for Fisheries finds good cause to waive prior notice and opportunity for public comment pursuant to 5 U.S.C. 553(b)(B) because prior notice and opportunity for public comment is unnecessary: neither the erroneous rescission nor this final rule has a substantive effect on the conduct of regulated persons. Because the affected industry gathers this information as part of their normal business practices, additional time is not required to allow them to come into compliance since they are already undertaking the obligation. The Assistant Administrator for Fisheries also finds that there exists good cause to waive the requirement of a 30 day delay in the effective date of this rule pursuant to 5 U.S.C. 553(d)(3), in order to allow participants in the fishery to meet the next deadline for submission of reports.

This rule contains collection-of-information requirements subject to the Paperwork Reduction Act (PRA) and which have been approved by the Office of Management and Budget (OMB) under OMB Control Number 0648-0398 (see 65 FR 14922, col. 1; March 20, 2000).

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