[Federal Register Volume 77, Number 27 (Thursday, February 9, 2012)]
[Proposed Rules]
[Pages 6879-6914]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-2525]


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DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Parts 42 and 90

[Docket No. PTO-P-2011-0082]
RIN 0651-AC70


Rules of Practice for Trials Before the Patent Trial and Appeal 
Board and Judicial Review of Patent Trial and Appeal Board Decisions

AGENCY: United States Patent and Trademark Office, Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The United States Patent and Trademark Office (Office or 
USPTO) proposes new rules of practice to implement the provisions of 
the Leahy-Smith America Invents Act that provide for trials before the 
Patent Trial and Appeal Board (Board). The proposed rules would provide 
a consolidated set of rules relating to Board trial practice for inter 
partes review, post-grant review, the transitional program for covered 
business method patents, and derivation proceedings. The proposed rules 
would also provide a consolidated set of rules to implement the 
provisions of the Leahy-Smith America Invents Act related to seeking 
judicial review of Board decisions.

DATES: The Office solicits comments from the public on this proposed 
rulemaking. Written comments must be received on or before April 9, 
2012 to ensure consideration.

ADDRESSES: Comments should be sent by electronic mail message over the 
Internet addressed to: [email protected]. Comments may 
also be submitted by postal mail addressed to: Mail Stop Patent Board, 
Director of the United States Patent and Trademark Office, P.O. Box 
1450, Alexandria, VA 22313-1450, marked to the attention of ``Lead 
Judge Michael Tierney, Patent Trial Proposed Rules.''
    Comments may also be sent by electronic mail message over the 
Internet via the Federal eRulemaking Portal. See the Federal 
eRulemaking Portal Web site (http://www.regulations.gov) for additional 
instructions on providing comments via the Federal eRulemaking Portal.
    Although comments may be submitted by postal mail, the Office 
prefers to receive comments by electronic mail message over the 
Internet because sharing comments with the public is more easily 
accomplished. Electronic comments are preferred to be submitted in 
plain text, but also may be submitted in ADOBE[supreg] portable 
document format or MICROSOFT WORD[supreg] format. Comments not 
submitted electronically should be submitted on paper in a format that 
facilitates convenient digital scanning into ADOBE[supreg] portable 
document format.
    The comments will be available for public inspection at the Board 
of Patent Appeals and Interferences, currently located in Madison East, 
Ninth Floor, 600 Dulany Street, Alexandria, Virginia. Comments also 
will be available for viewing via the Office's Internet Web site 
(http://www.uspto.gov). Because comments will be made available for 
public inspection, information that the submitter does not desire to 
make public, such as an address or phone number, should not be included 
in the comments.

FOR FURTHER INFORMATION CONTACT: Michael Tierney, Lead Administrative 
Patent Judge, Scott Boalick, Lead Administrative Patent Judge, Robert 
Clarke, Administrative Patent Judge, and Joni Chang, Administrative 
Patent Judge, Board of Patent Appeals and Interferences, by telephone 
at (571) 272-9797.

SUPPLEMENTARY INFORMATION: On September 16, 2011, the Leahy-Smith 
America Invents Act was enacted into law (Pub. L. 112-29, 125 Stat. 284 
(2011)). The purpose of the Leahy-Smith America Invents Act and these 
proposed regulations is to establish a more efficient and streamlined 
patent system that will improve patent quality and limit unnecessary 
and counterproductive litigation costs. The preamble of this notice 
sets forth in detail the procedures by which the Board will conduct 
trial proceedings. The USPTO is engaged in a transparent process to 
create a timely, cost-effective alternative to litigation. Moreover, 
the rulemaking process is designed to ensure the integrity of the trial 
procedures. See 35 U.S.C. 316(b), as amended, and 35 U.S.C. 326(b). The 
proposed rules would provide a consolidated set of rules relating to

[[Page 6880]]

Board trial practice for inter partes review, post-grant review, the 
transitional program for covered business method patents, and 
derivation proceedings. See 35 U.S.C. 316(b), as amended, and 35 U.S.C. 
326(b).
    This notice proposes rules to implement the provisions of the 
Leahy-Smith America Invents Act that provide for trials to be conducted 
by the Board. In particular, the proposed rules would provide a 
consolidated set of rules relating to Board trial practice for inter 
partes review, post-grant review, derivation proceedings, and the 
transitional program for covered business method patents by adding a 
new part 42 including a new subpart A to title 37 of the Code of 
Federal Regulations. The proposed rules would also provide a 
consolidated set of rules to implement the provisions of the Leahy-
Smith America Invents Act related to seeking judicial review of Board 
decisions by adding a new part 90 to title 37 of the Code of Federal 
Regulations.
    Additionally, the Office in separate rulemakings proposes to add a 
new subpart B to 37 CFR part 42 (RIN 0651-AC71) to provide rules 
specific to inter partes review, a new subpart C to 37 CFR part 42 (RIN 
0651-AC72) to provide rules specific to post-grant review, a new 
subpart D to 37 CFR part 42 (RIN 0651-AC73; RIN 0651-AC75) to provide 
rules specific to the transitional program for covered business method 
patents, and a new subpart E to 37 CFR part 42 (RIN 0651-AC74) to 
provide rules specific to derivation proceedings. For the proposed 
rules, the Office also developed a Trial Practice Guide (which will be 
revised accordingly when the Office implements the final rules). The 
notices of proposed rulemaking and the Trial Practice Guide are 
published in this issue and the next issue (February 10, 2012) of the 
Federal Register.
    The instant notice refers to the proposed rules in subparts B 
through E of part 42 set forth in the other notices. Moreover, rather 
than repeating the statutory provisions set forth in the Leahy-Smith 
America Invents Act for the implementation of inter partes review, 
post-grant review, transitional program covered business method 
patents, and derivation that are provided in the other notices of 
proposed rulemaking, the instant notice only summarizes the provisions 
related to the Board and judicial review of Board decisions that are 
not provided in the other notices.

Patent Trial and Appeal Board

    Section 7 of the Leahy-Smith America Invents Act amends 35 U.S.C. 6 
and provides for the constitution and duties of the Patent Trial and 
Appeal Board. 35 U.S.C. 6(a), as amended, provides that the Patent 
Trial and Appeal Board members will include the Director, Deputy 
Director, Commissioner for Patents, Commissioner for Trademarks, and 
administrative patent judges. 35 U.S.C. 6(a), as amended, further 
provides that ``administrative patent judges shall be persons of 
competent legal knowledge and scientific ability and are appointed by 
the Secretary, in consultation with the Director.'' 35 U.S.C. 6(b), as 
amended, specifies that the duties of the Patent Trial and Appeal Board 
are to: (1) Review adverse decisions of examiners upon an application 
for patent; (2) review appeals of reexaminations pursuant to section 
134(b); (3) conduct derivation proceedings pursuant to 35 U.S.C. 135; 
and (4) conduct inter partes reviews and post-grant reviews pursuant to 
chapters 31 and 32 of title 35, United States Code. Further, Sec.  7 of 
the Leahy-Smith America Invents Act amends 35 U.S.C. 6 by adding 
paragraphs (c) and (d). New paragraph (c) of 35 U.S.C. 6 provides that 
each appeal, derivation proceeding, post-grant review including covered 
business method patent review, and inter partes review shall be heard 
by at least 3 members of the Board, who shall be designated by the 
Director.

Judicial Review of Patent Trial and Appeal Board Decisions

    The Leahy-Smith America Invents Act amends title 35, United States 
Code, to provide for certain changes to the provisions for judicial 
review of Board decisions, such as amending 35 U.S.C. 134, 141, 145, 
146, and 306 to change the Board's name to ``Patent Trial and Appeal 
Board'' and to provide for judicial review of the final decisions of 
the Board in inter partes reviews, post-grant reviews, covered business 
method patent reviews, and derivation proceedings. The Leahy-Smith 
America Invents Act also revises the provisions related to filing an 
appeal or commencing a civil action in interferences under 35 U.S.C. 
141 or 146, respectively.
    In particular, Sec.  3(j) of the Leahy-Smith America Invents Act 
eliminates references to interferences. Section 3(j)(1) of the Leahy-
Smith America Invents Act amends each of 35 U.S.C. 145 and 146 by 
striking the phrase ``Board of Patent Appeals and Interferences'' each 
place it appears and inserting ``Patent Trial and Appeal Board.'' 
Section (3)(j)(2)(A) of the Leahy-Smith America Invents Act amends 35 
U.S.C. 146 by: (i) Striking ``an interference'' and inserting ``a 
derivation proceeding;'' and (ii) striking ``the interference'' and 
inserting ``the derivation proceeding.'' Section (3)(j)(3) of the 
Leahy-Smith America Invents Act amends the section heading for 35 
U.S.C. 134 to read as follows: ``Sec.  134. Appeal to the Patent Trial 
and Appeal Board.'' Section (3)(j)(4) of the Leahy-Smith America 
Invents Act amends the section heading for 35 U.S.C. 146 to read as 
follows: ``Sec.  146. Civil action in case of derivation proceeding.'' 
Section (3)(j)(6) of the Leahy-Smith America Invents Act amends the 
item relating to 35 U.S.C. 146 in the table of sections for chapter 13 
of title 35, United States Code, to read as follows: ``146. Civil 
action in case of derivation proceeding.''
    Section 6(f)(3)(C) of the Leahy-Smith America Invents Act provides 
that the authorization to appeal or have remedy from derivation 
proceedings in 35 U.S.C. 141(d) and 35 U.S.C. 146, as amended, and the 
jurisdiction to entertain appeals from derivation proceedings under 28 
U.S.C. 1295(a)(4)(A), as amended, shall be deemed to extend to any 
final decision in an interference that is commenced before the 
effective date (the date that is one year after the enactment date) and 
that is not dismissed pursuant to Sec.  6(f)(3)(A) of the Leahy-Smith 
America Invents Act.
    Section 6(h)(2)(A) of the Leahy-Smith America Invents Act amends 35 
U.S.C. 306 by striking ``145'' and inserting ``144.''
    Section 7(c)(1) of the Leahy-Smith America Invents Act amends 35 
U.S.C. 141, entitled ``Appeal to Court of Appeals for the Federal 
Circuit.'' 35 U.S.C. 141(a), as amended, will provide that an applicant 
who is dissatisfied with the final decision in an appeal to the Patent 
Trial and Appeal Board under 35 U.S.C. 134(a) may appeal the Board's 
decision to the United States Court of Appeals for the Federal Circuit. 
35 U.S.C. 141(a), as amended, will further provide that, by filing an 
appeal to the United States Court of Appeals for the Federal Circuit, 
the applicant waives his or her right to proceed under 35 U.S.C. 145.
    Section 7(c)(1) of the Leahy-Smith America Invents Act amends 35 
U.S.C. 141(b) to make clear that a patent owner who is dissatisfied 
with the final decision in an appeal of a reexamination to the Patent 
Trial and Appeal Board under 35 U.S.C. 134(b) may appeal the Board's 
decision only to the United States Court of Appeals for the Federal 
Circuit.
    Section 7(c)(1) of the Leahy-Smith America Invents Act amends 35 
U.S.C. 141(c) to provide that a party to an inter partes review or a 
post-grant review

[[Page 6881]]

who is dissatisfied with the final written decision of the Patent Trial 
and Appeal Board under 35 U.S.C. 318(a) or 328(a) may appeal the 
Board's decision only to the United States Court of Appeals for the 
Federal Circuit.
    Section 7(c)(1) of the Leahy-Smith America Invents Act amends 35 
U.S.C. 141(d) to provide that a party to a derivation proceeding who is 
dissatisfied with the final decision of the Patent Trial and Appeal 
Board in the proceeding may appeal the decision to the United States 
Court of Appeals for the Federal Circuit, but such appeal shall be 
dismissed if any adverse party to such derivation proceeding, within 20 
days after the appellant has filed notice of appeal in accordance with 
35 U.S.C. 142, files notice with the Director that the party elects to 
have all further proceedings conducted as provided in 35 U.S.C. 146, as 
amended. 35 U.S.C. 141(d), as amended, will also provide that if the 
appellant does not, within 30 days after the filing of such notice by 
the adverse party, file a civil action under 35 U.S.C. 146, the Board's 
decision shall govern the further proceedings in the case.
    Section 7(c)(2) of the Leahy-Smith America Invents Act amends 28 
U.S.C. 1295(a)(4)(A) to read as follows:

    ``(A) the Patent Trial and Appeal Board of the United States 
Patent and Trademark Office with respect to a patent application, 
derivation proceeding, reexamination, post-grant review, or inter 
partes review under title 35, at the instance of a party who 
exercised that party's right to participate in the applicable 
proceeding before or appeal to the Board, except that an applicant 
or a party to a derivation proceeding may also have remedy by civil 
action pursuant to section 145 or 146 of title 35; an appeal under 
this subparagraph of a decision of the Board with respect to an 
application or derivation proceeding shall waive the right of such 
applicant or party to proceed under section 145 or 146 of title 
35;''

    Section 7(c)(3) of the Leahy-Smith America Invents Act amends 35 
U.S.C. 143 by striking the third sentence and inserting the following:

    In an ex parte case, the Director shall submit to the court in 
writing the grounds for the decision of the Patent and Trademark 
Office, addressing all of the issues raised in the appeal. The 
Director shall have the right to intervene in an appeal from a 
decision entered by the Patent Trial and Appeal Board in a 
derivation proceeding under section 135 or in an inter partes or 
post-grant review under chapter 31 or 32

    Section 7(c)(3) of the Leahy-Smith America Invents Act further 
amends 35 U.S.C. 143 by striking the last sentence.
    Section 7(e) of the Leahy-Smith America Invents Act provides that 
the amendments made by Sec.  7 of the Leahy-Smith America Invents Act 
shall take effect upon the expiration of the 1-year period beginning on 
the date of the enactment of the Leahy-Smith America Invents Act and 
shall apply to proceedings commenced on or after that effective date, 
with the following exceptions. First, that the extension of 
jurisdiction to the United States Court of Appeals for the Federal 
Circuit to entertain appeals of decisions of the Patent Trial and 
Appeal Board in reexaminations under the amendment made by Sec.  
7(c)(2) shall be deemed to take effect on the date of the enactment of 
the Leahy-Smith America Invents Act and shall extend to any decision of 
the Board of Patent Appeals and Interferences with respect to a 
reexamination that is entered before, on, or after the date of the 
enactment of this Act. Second, that the provisions of 35 U.S.C. 6, 134, 
and 141, in effect on the day before the effective date of the 
amendments made by Sec.  7 of the Leahy-Smith America Invents Act shall 
continue to apply to inter partes reexaminations requested under 35 
U.S.C. 311 before such effective date. Third, that the Patent Trial and 
Appeal Board may be deemed to be the Board of Patent Appeals and 
Interferences for purposes of appeals of inter partes reexaminations 
requested under 35 U.S.C. 311 before the effective date of the 
amendments made by Sec.  7 of the Leahy-Smith America Invents Act. And 
finally, that the Director's right under the fourth sentence of 35 
U.S.C. 143, as amended by Sec.  7(c)(3) of the Leahy-Smith America 
Invents Act, to intervene in an appeal from a decision entered by the 
Patent Trial and Appeal Board shall be deemed to extend to inter partes 
reexaminations requested under 35 U.S.C. 311 before the effective date 
of the amendments made by Sec.  7 of the Leahy-Smith America Invents 
Act.
    Section 9(a) of the Leahy-Smith America Invents Act amends 35 
U.S.C. 32, 145, 146, 154(b)(4)(A), and 293 by striking ``United States 
District Court for the District of Columbia'' each place that term 
appears and inserting ``United States District Court for the Eastern 
District of Virginia.'' Section 9(b) of the Leahy-Smith America Invents 
Act provides that amendments made by Sec.  9 of the Leahy-Smith America 
Invents Act shall take effect on the date of the enactment of this Act 
and shall apply to any civil action commenced on or after that date.

Discussion of Specific Rules

    The proposed rules would provide a consolidated set of rules 
relating to Board trial practice for inter partes review, post-grant 
review, derivation proceedings, and the transitional program for 
covered business method patents by adding a new part 42 including a new 
subpart A to title 37 of the Code of Federal Regulations. Interference 
proceedings would not be covered by a new part 42 and the rules in part 
41 governing contested cases and interferences would continue to remain 
in effect so as to not disrupt ongoing interference proceedings. 
Additionally, the proposed rules would also provide a consolidated set 
of rules to implement the provisions of the Leahy-Smith America Invents 
Act relating to filing appeals from Board decisions by adding a new 
part 90 to title 37 of Code of Federal Regulations.
    Title 37 of the Code of Federal Regulations, Parts 42 and 90, are 
proposed to be added as follows:

Part 42--Trial Practice Before the Patent Trial and Appeal Board

General

    Section 42.1: Proposed Sec.  42.1 would set forth general policy 
considerations for part 42.
    Proposed Sec.  42.1(a) would define the scope of the rules.
    Proposed Sec.  42.1(b) would provide a rule of construction for all 
the rules in proposed part 42. The proposed rule would mandate that all 
the Board's rules be construed to achieve the just, speedy, and 
inexpensive resolution of Board proceedings. This proposed rule 
reflects considerations identified in 35 U.S.C. 316(b) and 326(b), 
which state that the Office is to take into account the integrity of 
the patent system, the efficient administration of the Office, and the 
ability of the Office to complete timely the proceedings in 
promulgating regulations.
    Proposed Sec.  42.1(c) would require that decorum be exercised in 
Board proceedings, including dealings with opposing parties. Board 
officials would be similarly expected to treat parties with courtesy 
and decorum.
    Proposed Sec.  42.1(d) would provide that the default evidentiary 
standard for each issue in a Board proceeding is a preponderance of the 
evidence. This proposed rule implements the statute, which directs that 
unpatentability issues must be proven by a preponderance of the 
evidence. 35 U.S.C. 316(e), as amended, and 35 U.S.C. 326(e). The 
proposed rule is also consistent with 35 U.S.C. 135(b), which provides 
that the Director shall establish regulations requiring sufficient 
evidence to prove and rebut a claim of derivation. See Price v. Symsek, 
988 F.2d 1187, 1193 (Fed. Cir. 1993).

[[Page 6882]]

    Section 42.2: Proposed Sec.  42.2 would set forth definitions for 
Board proceedings under proposed part 42.
    The proposed definition of affidavit would provide that affidavit 
means affidavits or declarations under Sec.  1.68. The proposed 
definition also provides that a transcript of an ex parte deposition or 
a declaration under 28 U.S.C. 1746 may be used as an affidavit.
    The proposed definition of Board would rename ``the Board of Patent 
Appeals and Interferences'' to ``the Patent Trial and Appeal Board.'' 
The proposed definition would also provide that Board means a panel of 
the Board or a member or employee acting with the authority of the 
Board, consistent with 35 U.S.C. 6(b), as amended.
    The proposed definition of business day would provide that business 
day means a day other than a Saturday, Sunday, or Federal holiday 
within the District of Columbia.
    The proposed definition of confidential information would provide 
that confidential information means trade secret or other confidential 
research, development or commercial information. The proposed 
definition would be consistent with Federal Rule of Civil Procedure 
26(c)(1)(G), which provides for protective orders for trade secret or 
other confidential research, development, or commercial information.
    The proposed definition of final would provide that final means 
final for purposes of judicial review. The proposed definition would 
also provide that a decision is final only if it disposes of all 
necessary issues with regard to the party seeking judicial review, and 
does not indicate that further action is required.
    The proposed definition of hearing would make it clear that a 
hearing is a consideration of the issues involved in the trial.
    The proposed definition of involved would provide that involved 
means an application, patent, or claim that is the subject of the 
proceeding.
    The proposed definition of judgment would provide that judgment 
means a final written decision by the Board. The proposed definition is 
consistent with the requirement under 35 U.S.C. 318(a) and 328(a), as 
amended, that the Board issue final written decisions for reviews that 
are instituted and not dismissed. The proposed definition is also 
consistent with 35 U.S.C. 135(d), as amended, which provides for final 
decisions of the Board in derivation proceedings.
    The proposed definition of motion would clarify that motions are 
requests for remedies but that the term motion does not include 
petitions seeking to institute a trial.
    The proposed definition of Office would provide that Office means 
the United States Patent and Trademark Office.
    The proposed definition of panel would provide that a panel is at 
least three members of the Board. The proposed definition is consistent 
with 35 U.S.C. 6(c), as amended, that each derivation proceeding, inter 
partes review, post-grant review, covered business method patent review 
proceeding shall be heard by at least three members of the Board.
    The proposed definition of party would include at least the 
petitioner and the patent owner, as well as any applicant in a 
derivation proceeding.
    The proposed definition of petition would provide that a petition 
is a request that a trial be instituted and is consistent with the 
requirements of 35 U.S.C. 135(a) and 311, as amended, 35 U.S.C. 321.
    The proposed definition of petitioner would provide that a 
petitioner is a party requesting a trial be instituted. This proposed 
definition is consistent with the requirements of 35 U.S.C. 135(a) and 
311(a), as amended, and 35 U.S.C. 321(a), which provide that persons 
seeking the institution of a trial may do so by filing a petition.
    The proposed definition of preliminary proceeding would provide 
that a preliminary proceeding begins with the filing of a petition for 
instituting a trial and ends with a written decision as to whether a 
trial will be instituted.
    The proposed definition of proceeding would provide that a 
proceeding means a trial or preliminary proceeding. This proposed 
definition would encompass both the portion of the proceeding that 
occurs prior to institution of a trial and the trial itself.
    The proposed definition of rehearing would provide that rehearing 
means reconsideration.
    The proposed definition of trial would provide that a trial is a 
contested case instituted by the Board based upon a petition. This 
proposed definition would encompass all contested cases before the 
Board, except for interferences. The proposed definition would exclude 
interferences so that interferences would continue, without disruption, 
to use the rules provided in part 41. The existence of a contested case 
would be a predicate for authorizing a subpoena under 35 U.S.C. 24. As 
with part 41, inter partes reexaminations under 35 U.S.C. 134(c) are 
not considered contested cases for the purposes of proposed part 42. 
Similarly, written requests to make a settlement agreement available 
would not be considered contested cases.
    Section 42.3: Proposed Sec.  42.3 would set forth the jurisdiction 
of the Board in a Board proceeding.
    Proposed Sec.  42.3(a) would provide the Board with jurisdiction 
over applications and patents involved in a Board proceeding. This is 
consistent with 35 U.S.C. 6(b), as amended, which provides that the 
Board is to conduct derivation proceedings, inter partes reviews, and 
post-grant reviews. Additionally, the proposed rule is consistent with 
the Board's role in conducting the transitional program for covered 
business method patent reviews pursuant to Sec.  18 of the Leahy-Smith 
America Invents Act, as covered business method patent reviews are 
subject to 35 U.S.C. 326(c), which provides that the Board conduct the 
review.
    Proposed Sec.  42.3(b) would provide that a petition to institute a 
trial must be filed with the Board in a timely manner.
    Section 42.4: Proposed Sec.  42.4 would provide for notice of 
trial.
    Proposed Sec.  42.4(a) would specifically delegate the 
determination to institute a trial to an administrative patent judge.
    Proposed Sec.  42.4(b) would provide that the Board will send a 
notice of a trial to every party to the proceeding.
    Proposed Sec.  42.4(c) would provide that the Board may authorize 
additional modes of notice. Note that the failure to maintain a current 
correspondence address may result in adverse consequences. Ray v. 
Lehman, 55 F.3d 606, 610 (Fed. Cir. 1995) (finding notice of 
maintenance fee provided by the Office to an obsolete, but not updated, 
address of record to have been adequate).
    Section 42.5: Proposed Sec.  42.5 would set forth the conduct of 
the trial.
    Proposed Sec. Sec.  42.5(a) and (b) would permit administrative 
patent judges wide latitude in administering the proceedings to balance 
the ideal of precise rules against the need for flexibility to achieve 
reasonably fast, inexpensive, and fair proceedings. The decision to 
waive a procedural requirement, for example default times for taking 
action, would be committed to the discretion of the administrative 
patent judge. By permitting the judges to authorize relief under parts 
1, 41, and 42, the proposed rule avoids delay and permits related 
issues to be resolved in the same proceeding in a uniform and efficient 
manner.
    Proposed Sec.  42.5(c) would provide that the Board may set times 
by order. The proposed rule also provides that good cause must be shown 
for extensions of

[[Page 6883]]

time and to excuse late actions. Late action will also be excused by 
the Board if it concludes that doing so is in the interests of justice. 
This proposed requirement to show good cause to extend times and to 
file belated papers is consistent with the requirements of 35 U.S.C. 
316(a)(11), as amended, and 35 U.S.C. 326(a)(11), which provide that 
the Board issue a final decision not less than 1 year after institution 
of the review, extendable for good cause shown. The proposed rule is 
also consistent with 35 U.S.C. 135(b), as amended, which provides that 
the Director shall prescribe regulations setting forth standards for 
the conduct of derivation proceedings.
    Proposed Sec.  42.5(d) would prohibit ex parte communications about 
a proceeding with a Board member or Board employee actually conducting 
the proceeding. Under the proposed rule, the initiation of an ex parte 
communication could result in sanctions against the initiating party. 
The prohibition would include communicating with any member of a panel 
acting in the proceeding or seeking supervisory review in a proceeding 
without including the opposing party in the communication. In general, 
under these proposed rules, it would be wisest to avoid substantive 
discussions of a pending trial with a Board member or Board employee. 
The prohibition on ex parte communications would not extend to: (1) 
Ministerial communications with support staff (for instance, to arrange 
a conference call); (2) hearings in which opposing counsel declines to 
participate; (3) informing the Board in one proceeding of the existence 
or status of a related Board proceeding; or (4) reference to a pending 
case in support of a general proposition (for instance, citing a 
published opinion from a pending case or referring to a pending case to 
illustrate a systemic problem).
    Section 42.6: Proposed Sec.  42.6 would set forth the procedure for 
filing documents, including exhibits, and service.
    Proposed Sec.  42.6(a) would provide guidance for the filing of 
papers. Under proposed Sec.  42.6(a), papers to be filed would be 
required to meet standards similar to those required in patent 
prosecution, Sec.  1.52(a), and in the filings at the Federal Circuit 
under Fed. R. App. P. 32. The proposed prohibition against 
incorporation by reference would minimize the chance that an argument 
would be overlooked and would eliminate abuses that arise from 
incorporation and combination. In DeSilva v. DiLeonardi, 181 F.3d 865, 
866-67 (7th Cir. 1999), the court rejected ``adoption by reference'' as 
a self-help increase in the length of the brief and noted that 
incorporation is a pointless imposition on the court's time as it 
requires the judges to play archeologist with the record. The same 
rationale applies to Board proceedings. Cf. Globespanvirata, Inc. v. 
Tex. Instruments, Inc., 2005 WL 3077915, *1 (D. N.J. 2005) (Defendants 
provided cursory statements in motion and sought to make their case 
through incorporation of expert declaration and a claim chart. 
Incorporation by reference of argument not in motion was held to be a 
violation of local rules governing page limitations and was not 
permitted by the court); S. Indus., Inc. v. JL Audio, Inc., 29 F. Supp. 
2d 878, 881-82 (N.D. Ill. 1998) (Parties should not use line spacing, 
font size, or margins to evade page limits).
    Proposed Sec.  42.6(b) would set electronic filing as the default 
manner in which documents in a proceeding are filed with the Board. The 
procedures for electronic filings in the proposed rule would be 
consistent with the procedures for submission of electronic filings set 
forth in Sec.  2.126(b). Section 2.126(b) is a rule of the Trademark 
Trial and Appeal Board (TTAB) which provides that submissions may be 
made to the TTAB electronically according to parameters established by 
the Board and published on the Web site of the Office.
    The use of electronic filing, such as that used with the Board's 
Interference Web Portal, facilitates public accessibility and is 
consistent with the requirements of 35 U.S.C. 316(a)(1), as amended, 
and 35 U.S.C. 326(a)(1), which state that the files of a proceeding are 
to be made available to the public, except for those documents filed 
with the intent that they be sealed. Where needed, a party may file by 
means other than electronic filing but a motion explaining such a need 
must accompany the non-electronic filing. In determining whether 
alternative filing methods would be authorized, the Office would 
consider the entity size and the ability of the party to file 
electronically.
    Proposed Sec.  42.6(c) would require that exhibits be filed with 
the first document in which the exhibit is cited so as to allow for 
uniformity in citing to the record.
    Proposed Sec.  42.6(d) would prohibit the filing of duplicate 
documents absent Board authorization.
    Proposed Sec.  42.6(e) would require service simultaneous with the 
filing of the document, as well as require certificates of service. 
Additional procedures to be followed when filing documents may be 
provided via a standing order of the Board. See In re Sullivan, 362 
F.3d 1324 (Fed. Cir. 2004).
    Section 42.7: Proposed Sec.  42.7 would provide that the Board may 
vacate or hold in abeyance unauthorized papers and would limit the 
filing of duplicate papers. This proposed rule would provide a tool for 
preventing abuses that can occur in filing documents and would ensure 
that the parties and the Board are consistent in their citation to the 
underlying record.
    Section 42.8: Proposed Sec.  42.8 would provide for certain 
mandatory notices to be provided by the parties, including 
identification of the real parties in interest, related matters, lead 
and back-up counsel, and service information. The proposed rule would 
require the identification of lead and back-up counsel and service 
information. The mandatory notices concerning real parties in interest 
and related matters are consistent with the requirements of 35 U.S.C. 
315, as amended, and 35 U.S.C. 325. These statutes describe the 
relationship between the trial and other related matters and authorize, 
among other things, suspension of other proceedings before the Office 
on the same patent and lack of standing for real parties in interest 
that have previously filed civil actions against a patent for which a 
trial is requested. Mandatory notices are also needed to judge any 
subject matter estoppel triggered by a prior Board, district court, or 
U.S. International Trade Commission proceeding.
    Examples of related administrative matters that would be affected 
by a decision in the proceeding include every application and patent 
claiming, or which may claim, the benefit of the priority of the filing 
date of the party's involved patent or application as well as any ex 
parte and inter partes reexaminations for an involved patent.
    The need for identification of the real party in interest helps 
identify potential conflicts of interests for the Office. In the case 
of the Board, a conflict would typically arise when an official has an 
investment in a company with a direct interest in a Board proceeding. 
Such conflicts can only be avoided if the parties promptly provide 
information necessary to identify potential conflicts. The identity of 
a real party-in-interest might also affect the credibility of evidence 
presented in a proceeding. The Board would consider, on a case-by case 
basis, relevant case law to resolve a real party in interest or privy 
dispute that may arise during a proceeding. Further, in inter partes 
and post-grant review proceedings before the Office, the petitioner 
(including any real party-in-interest or privy of the petitioner) is

[[Page 6884]]

estopped from relitigating any ground that was or reasonably could have 
been raised. See 35 U.S.C. 315(e)(1), as amended, and 35 U.S.C. 
325(e)(1). What constitutes a real party-in-interest or privy is a 
highly fact-dependent question. See generally 18A Wright & Miller Fed. 
Prac. & Proc. Sec. Sec.  4449, 4451; Taylor v. Sturgell, 553 U.S. 880 
(2008). While many factors can lead to a determination that a 
petitioner was a real party-in-interest or privy in a previous 
proceeding, actual control or the opportunity to control the previous 
proceeding is an important clue that such a relationship existed. See, 
e.g., Taylor, 553 U.S. at 895; see generally 18A Wright & Miller Sec.  
4451. Factors for determining actual control or the opportunity to 
control include existence of a controlling interest in the petitioner.
    Section 42.9: Proposed Sec.  42.9 would permit action by an 
assignee to the exclusion of an inventor. Orders permitting an assignee 
of a partial interest to act to the exclusion of an inventor or co-
assignee would rarely be granted, and such orders would typically issue 
only when the partial assignee was in a proceeding against its co-
assignee. Ex parte Hinkson, 1904 Comm'r. Dec. 342.
    Section 42.10: Proposed Sec.  42.10(a) would provide that the Board 
may require a party to designate a lead counsel. The proposed rule 
would remind parties to designate back-up counsel who can conduct 
business on behalf of the lead counsel as instances arise where lead 
counsel may be unavailable.
    Proposed Sec.  42.10(b) would provide that a power of attorney must 
be filed for counsel not of record in the party's involved patent or 
application.
    Proposed Sec.  42.10(c) would allow for pro hac vice representation 
before the Board subject to such conditions as the Board may impose. 
The Board may recognize counsel pro hac vice during a proceeding upon a 
showing of good cause. Proceedings before the Office can be technically 
complex. For example, it is expected that amendments to a patent will 
be sought. Consequently, the grant of a motion to appear pro hac vice 
is a discretionary action taking into account the specifics of the 
proceedings. Similarly, the revocation of pro hac vice is a 
discretionary action taking into account various factors, including 
incompetence, unwillingness to abide by the Office's Rules of 
Professional Conduct, and incivility.
    The proposed rule, if adopted, would allow for this practice in the 
new proceedings authorized by the Leahy-Smith America Invents Act.
    Proposed Sec.  42.10(d) would provide a limited delegation to the 
Board under 35 U.S.C. 2(b)(2) and 32 to regulate the conduct of counsel 
in Board proceedings. The proposed rule would delegate to the Board the 
authority to conduct counsel disqualification proceedings while the 
Board has jurisdiction over a proceeding. The rule would delegate to 
the Chief Administrative Patent Judge the authority to make final a 
decision to disqualify counsel in a proceeding before the Board for the 
purposes of judicial review. This delegation would not derogate from 
the Director the prerogative to make such decisions, nor would it 
prevent the Chief Administrative Patent Judge from further delegating 
authority to an administrative patent judge.
    Proposed Sec.  42.10(e) provides that counsel may not withdraw from 
a proceeding before the Board unless the Board authorizes such 
withdrawal.
    Section 42.11: Proposed Sec.  42.11 would remind parties, and 
individuals associated with the parties, of their duty of candor and 
good faith to the Office as honesty before the Office is essential to 
the integrity of the proceeding.
    Section 42.12: Proposed Sec.  42.12 would provide rules for 
sanctions in trial proceedings before the Board. 35 U.S.C. 316(a)(6), 
as amended, and 35 U.S.C. 326(a)(6) require that the Director prescribe 
sanctions for abuse of discovery, abuse of process, and any other 
improper use of the proceeding in inter partes review, post-grant 
review, and covered business method patent review proceedings. The 
proposed rule is also consistent with 35 U.S.C. 135(b), as amended, 
which provides that the Director shall prescribe regulations setting 
standards for the conduct of derivation proceedings.
    Proposed Sec.  42.12(a) would identify types of misconduct for 
which the Board may impose sanctions. The proposed rule would 
explicitly provide that misconduct includes failure to comply with an 
applicable rule, abuse of discovery, abuse of process, improper use of 
the proceeding and misrepresentation of a fact. An example of a failure 
to comply with an applicable rule includes failure to disclose a prior 
relevant inconsistent statement.
    Proposed Sec.  42.12(b) would recite the list of sanctions that may 
be imposed by the Board.
    Section 42.13: Proposed Sec.  42.13 would provide a uniform system 
of citation to authority. The proposed rule would codify existing Board 
practice and extends it to trial proceedings. Under the proposed rule, 
a citation to a single source, in the priority order set out in the 
rule, would be sufficient, thus minimizing the citation burden on the 
public.
    Section 42.14: Proposed Sec.  42.14 would provide that the record 
of a proceeding be made available to the public, except as otherwise 
ordered. An exception to public availability would be those documents 
or things accompanied by a motion to seal the document or thing. The 
proposed rule reflects the provisions of 35 U.S.C. 316(a)(1), as 
amended, and 35 U.S.C. 326(a)(1), which require that inter partes 
review and post-grant review files be made available to the public, 
except that any petition or document filed with the intent that it be 
sealed, if accompanied by a motion to seal, be treated as sealed 
pending the outcome of the ruling on the motion to seal.

Fees

    Sections 10(d) and (e) of the Leahy-Smith America Invents Act set 
out a process that must be followed when the Office is using its 
authority under section 10(a) to set or adjust patent fees. See Public 
Law 112-29, 125 Stat. at 317-18. This process does not feasibly permit 
the fees described herein to be in place by September 16, 2012 (the 
effective date of many of the Board procedures required by the Leahy-
Smith America Invents Act and described herein). Therefore, the Office 
is setting these fees pursuant to its authority under 35 U.S.C. 
41(d)(2) in this rule making, which provides that fees for all 
processing, services, or materials relating to patents not specified in 
35 U.S.C. 41 are to be set at amounts to recover the estimated average 
cost to the Office of such processing, services, or materials. See 35 
U.S.C. 41(d)(2).
    The Office is also in the process of developing a proposal to 
adjust patent fees under section 10 of the Leahy-Smith America Invents 
Act. The fees proposed in this notice will be revisited in furtherance 
of the Director's fee setting efforts in this area.
    Section 42.15: Proposed Sec.  42.15 would set fees for the new 
trial proceedings.
    Proposed Sec.  42.15(a) would set the fee for a petition to 
institute an inter partes review of a patent based upon the number of 
challenged claims, and reflects the requirements of 35 U.S.C. 311 and 
312(a), as amended, that the Director set fees for the petition and 
that the petition be accompanied by payment of the fee established. 
Basing the fees on the number of claims challenged allows for ease of 
calculation and reduces the chance of insufficient payment. Further, 
the proposed fees are generally reflective of the complexity of

[[Page 6885]]

the case because the number of claims often impacts the complexity of 
the petition and increases the demands placed on the patent owner as 
well as the deciding officials. Cf. In re Katz Interactive Call 
Processing Patent Litig., 639 F.3d 1303, 1309 (Fed. Cir. 2011) 
(limiting number of asserted claims is appropriate to efficiently 
manage a case).
    To understand the scope of a dependent claim, the claims from which 
the dependent claim depends must be construed along with the dependent 
claim. Accordingly, for fee calculation purposes, each claim challenged 
will be counted as well as any claim from which a claim depends, unless 
the parent claim is also separately challenged. The following examples 
are illustrative.

    Example 1:  Claims 1-30 are challenged where each of claims 2-30 
are dependent claims and depend only upon claim 1. There are 30 
claims challenged for purposes of fee calculation.
    Example 2:  Claims 20-40 are challenged where each of claims 20-
40 are dependent claims and depend only upon claim 1. As claims 20-
40 depend from claim 1, claim 1 counts toward the total number of 
claims challenged. Thus, there are 21 claims challenged for fee 
calculation purposes.
    Example 3: Claims 1, 11-20, and 31-40 are challenged. Each of 
claims 1 and 31-40 are independent claims. Each of claims 11-20 are 
dependent claims and depend upon claim 9, which in turn depends upon 
claim 8, which in turn depends upon claim 1. As claims 11-20 depend 
upon parent claims 8 and 9, claims 8 and 9 would count as challenged 
claims towards the total number of claims challenged. As claim 1 is 
separately challenged, it would not count twice towards the total 
number of claims challenged. Thus, there are 23 claims challenged 
for fee calculation purposes.
    Example 4:  Claims 1, 11-20, and 31-40 are challenged. Each of 
claims 1 and 31-40 are independent claims. Claim 11 depends upon 
claim 1 and claims 12-20 depend upon claim 11. As each of the 
challenged claims is based on a separately challenged independent 
claim, we need not include any further claims for fee calculations 
purposes. Thus, there are 21 challenged claims.

    Proposed Sec.  42.15(b) would set the fee for a petition to 
institute a post-grant review or a covered business method patent 
review of a patent based upon the number of challenged claims, and 
would reflect the requirements of 35 U.S.C. 321, as amended, and 35 
U.S.C. 322(a) that the Director set fees for the petition and that the 
petition be accompanied by payment of the fee established. The analysis 
of the number of claims challenged for fee calculation purposes would 
be the same as for proposed Sec.  42.15(a).
    Item (C) of the Rulemaking Considerations section of this notice, 
infra, provides the Office's analysis of the cost to provide the 
services requested for each of the proceedings.
    Proposed Sec.  42.15(c) would set the fee for a petition to 
institute a derivation proceeding in the amount of $400. Derivation 
proceedings concern allegations that an inventor named in an earlier 
application, without authorization, derived the claimed invention from 
an inventor named in the petition. The fee is set to recover the 
treatment of the petition as a request to transfer jurisdiction from 
the examining corps to the Board and not the costs of instituting and 
performing the derivation trial which is necessary to complete the 
examination process for the applicant seeking the derivation.
    Proposed Sec.  42.15(d) would set the fee for filing written 
requests to make a settlement agreement available in the amount of 
$400.

Petition and Motion Practice

    Section 42.20: Proposed Sec.  42.20(a) would provide that relief, 
other than a petition to institute a trial, must be in the form of a 
motion. The proposed rule is consistent with the requirements of 35 
U.S.C. 316(a)(1) and 316(d), as amended, and 35 U.S.C. 326(a)(1) and 
326(d) which provide that requests to seal a document and requests to 
amend the patent be filed in the form of a motion.
    Proposed Sec.  42.20(b) would provide that motions will not be 
entered absent Board authorization, and authorization may be provided 
in an order of general applicability or during the proceeding. 
Generally, the Board expects that authorization would follow the 
current Board practice where a conference call would be required before 
an opposed motion is filed as quite often the relief requested in such 
motions can be granted (or denied) in a conference call. This practice 
has significantly increased the speed and reduced the costs in 
contested cases.
    Proposed Sec.  42.20(c) would place the burden of proof on the 
moving party. A motion that fails to justify the relief on its face 
could be dismissed or denied without regard to subsequent briefing.
    Proposed Sec.  42.20(d) would provide that the Board may order 
briefing on any issue appropriate for a final written determination on 
patentability. Specifically, 35 U.S.C. 318(a), as amended, and 328(a) 
require that where a review is instituted and not dismissed the Board 
shall issue a final written decision with respect to the patentability 
of any patent claim challenged by the petitioner and any new claim 
added. The proposed rule would provide for Board ordered briefing where 
appropriate in order to efficiently and effectively render its final 
decision on patentability.
    Section 42.21: Proposed Sec.  42.21(a) would provide that the Board 
may require a party to file a notice stating the relief it requests and 
the basis for that relief in Board proceedings. The proposed rule would 
make clear that a notice must contain sufficient detail to serve its 
notice function. The proposed rule would provide an effective mechanism 
for administering cases efficiently and placing opponents on notice.
    Proposed Sec.  42.21(b) would state the effect of a notice. The 
proposed rule would make it clear that failure to state a sufficient 
basis for relief would warrant a denial of the request.
    Proposed Sec.  42.21(c) would permit correction of a notice after 
the time set for filing the notice, but would set a high threshold for 
entry of the correction, i.e., if the entry was in the interests of 
justice. The proposed rule is consistent with 35 U.S.C. 316(a)(11), as 
amended, and 35 U.S.C. 326(a)(11), which require good cause be shown to 
extend the time for entering a final decision. In determining whether 
good cause is shown, the Board would be permitted to consider the 
ability of the Board to complete timely the proceeding should the 
request be granted. Hence, requests made at the outset of a proceeding 
would be more likely to demonstrate good cause than requests made later 
in the proceeding.
    Section 42.22: Proposed Sec.  42.22 concerns the general content of 
motions.
    Proposed Sec.  42.22(a) would require that each petition or motion 
be filed as a separate paper to reduce the chance that an argument 
would be overlooked and reduce the complexity of any given paper. 
Proposed Sec.  42.22(a)(1)-(3) would provide for a statement of precise 
relief requested, a statement of material facts, and statement of the 
reasons for relief. Vague arguments and generic citations to the record 
are fundamentally unfair to an opponent and do not provide sufficient 
notice to an opponent and creates inefficiencies for the Board.
    Proposed Sec.  42.22(b) would require the movant to make showings 
ordinarily required for the requested relief in other parts of the 
Office. Many actions, particularly corrective actions like changes in 
inventorship, filing reissue applications, and seeking a retroactive 
foreign filing license, are governed by other rules of the Office. By 
requiring the same showings the proposed rule would keep practice 
uniform throughout the Office.
    Proposed Sec.  42.22(c) would provide that a petition or motion 
shall contain

[[Page 6886]]

a statement of facts with specific citations to the portions of the 
record that support a particular fact. Providing specific citations to 
the record gives notice to an opponent of the basis for the fact and 
provides the Board the information necessary for effective and 
efficient administration of the proceeding.
    Proposed Sec.  42.22(d) would allow the Board to order additional 
showings or explanations as a condition for authorizing a motion. 
Experience has shown that placing conditions on motions helps provide 
guidance to the parties as to what issues and facts are of particular 
importance and ensures that the parties are aware of controlling 
precedent that should be addressed in a particular motion.
    Section 42.23: Proposed Sec.  42.23 would provide that oppositions 
and replies must comply with the content requirements for a motion and 
that a reply may only respond to arguments raised in the corresponding 
opposition. Oppositions and replies may rely upon appropriate evidence 
to support the positions asserted. Reply evidence, however, must be 
responsive and not merely new evidence that could have been presented 
earlier to support the movant's motion.
    Section 42.24: Proposed Sec.  42.24 would provide page limits for 
petitions, motions, oppositions, and replies. 35 U.S.C. 316(b), as 
amended, and 35 U.S.C. 326(b) provide considerations that are to be 
taken into account when prescribing regulations, including the 
integrity of the patent system, the efficient administration of the 
Office, and the ability to timely complete the trials. The page limits 
proposed in this rule are consistent with these considerations.
    Federal courts routinely use page limits in managing motions 
practice as ``[e]ffective writing is concise writing.'' Spaziano v. 
Singletary, 36 F.3d 1028, 1031 n.2 (11th Cir. 1994). Many district 
courts restrict the number of pages that may be filed in a motion 
including, for example, the District of Delaware, the District of New 
Jersey, the Eastern District of Texas, the Northern, Central, and 
Southern Districts of California, and the Eastern District of Virginia.
    Federal courts have found that page limits ease the burden on both 
the parties and the courts, and patent cases are no exception. Eolas 
Techs., Inc. v. Adobe Sys., Inc., No. 6:09-CV-446, at 1 (E.D. Tex. 
Sept. 2, 2010) (``The Local Rules' page limits ease the burden of 
motion practice on both the Court and the parties.''); Blackboard, Inc. 
v. Desire2Learn, Inc., 521 F. Supp. 2d 575, 576 (E.D. Tex. 2007) (The 
parties ``seem to share the misconception, popular in some circles, 
that motion practice exists to require federal judges to shovel through 
steaming mounds of pleonastic arguments in Herculean effort to uncover 
a hidden gem of logic that will ineluctably compel a favorable ruling. 
Nothing could be farther from the truth.''); Broadwater v. Heidtman 
Steel Prods., Inc., 182 F. Supp. 2d 705, 710 (S.D. Ill. 2002) 
(``Counsel are strongly advised, in the future, to not ask this Court 
for leave to file any memoranda (supporting or opposing dispositive 
motions) longer than 15 pages. The Court has handled complicated patent 
cases and employment discrimination cases in which the parties were 
able to limit their briefs supporting and opposing summary judgment to 
10 or 15 pages.'' (Emphasis omitted)).
    The Board's experience with page limits in interference motions 
practice is consistent with that of the federal courts. The Board's use 
of page limits has shown it to be beneficial without it being unduly 
restrictive for the parties. Page limits have encouraged the parties to 
focus on dispositive issues, easing the burden of motions practice on 
the parties and on the Board.
    The Board's experience with page limits in interference practice is 
informed by its use of different approaches over the years. In the 
early 1990s, page limits were not routinely used for motions, and the 
practice suffered from lengthy and unacceptable delays. To reduce the 
burden on the parties and on the Board and thereby reduce the time to 
decision, the Board instituted page limits in the late 1990s for every 
motion. Page limit practice was found to be effective in reducing the 
burdens on the parties and improving decision times at the Board. In 
2006, the Board revised the page limit practice and allowed unlimited 
findings of fact and generally limited the number of pages containing 
argument. Due to abuses of the system, the Board recently reverted back 
to page limits for the entire motion (both argument and findings of 
fact).
    Proposed Sec.  42.24(a) would provide specific page limits for 
petitions and motions. The proposed rule would set a limit of 50 pages 
for petitions requesting inter partes reviews and derivation 
proceedings, 70 pages for petitions requesting post-grant review and 
covered business method patent reviews, and 15 pages for motions.
    The Board's current practice in interferences is to limit motions 
for judgment on priority of invention to 50 pages, miscellaneous 
motions to 15 pages and other motions to 25 pages. Hence, non-priority 
motions for judgment of unpatentability are currently limited to 25 
pages. The Board's current page limits are consistent with the 25 page 
limits in the Northern, Central, and Southern Districts of California, 
and the Middle District of Florida and exceed the limits in the 
District of Delaware (20), the Northern District of Illinois (15), the 
District of Massachusetts (20), the Eastern District of Michigan (20), 
the Southern District of Florida (20), and the Southern District of 
Illinois (20).
    In a typical proceeding before the Board, a party may be authorized 
to file: A single motion for unpatentability based on prior art; a 
single motion for unpatentability based upon failure to comply with 35 
U.S.C. 112, lack of written description and/or enablement; and 
potentially another motion for lack of compliance with 35 U.S.C. 101, 
although a 35 U.S.C. 101 motion may be required to be combined with the 
35 U.S.C. 112 motion. Each of these motions is currently limited to 25 
pages in length, unless good cause is shown that the page limits are 
unduly restrictive for a particular motion.
    A petition requesting the institution of a trial proceeding would 
be similar to motions currently filed with the Board. Specifically, 
petitions to institute a trial seek a final written decision that the 
challenged claims are unpatentable, where derivation is a form of 
unpatentability. Accordingly, a petition to institute a trial based on 
prior art would under current practice be limited to 25 pages, and by 
consequence, a petition raising unpatentability based on prior art and 
unpatentability under 35 U.S.C. 101 and/or 112 would be limited to 50 
pages.
    Under the proposed rules, an inter partes review petition would be 
based upon any grounds identified in 35 U.S.C. 311(b), as amended, 
i.e., only a ground that could be raised under 35 U.S.C. 102 or 103 and 
only on the basis of patents or printed publications. Generally, under 
current practice, a party is limited to filing single prior art 
motions, limited to 25 pages in length. The proposed rule would provide 
up to 50 pages in length for a motion requesting inter partes review. 
Thus, as the proposed page limit doubles the default page limit 
currently set for a motion before the Board, a 50 page limit is 
considered sufficient in all but exceptional cases and is consistent 
with the considerations provided in 35 U.S.C. 316(b), as amended.
    Under the proposed rules, a post-grant review petition would be 
based upon any grounds identified in 35 U.S.C. 321(b), e.g., failure to 
comply with 35 U.S.C. 101, 102, 103, and 112 (except

[[Page 6887]]

best mode). Under current practice, a party would be limited to filing 
two or three motions, each limited to 25 pages, for a maximum of 75 
pages. Where there is more than one motion for unpatentability based 
upon different statutory grounds, the Board's experience is that the 
motions contain similar discussions of technology and claim 
constructions. Such overlap is unnecessary where a single petition for 
unpatentability is filed. Thus, the 70 proposed page limit is 
considered sufficient in all but exceptional cases.
    Covered business method patent review is similar in scope to that 
of post-grant review as there is substantial overlap in the statutory 
grounds permitted for review. Thus, the proposed page limit for 
proposed covered business method patent reviews of 70 pages is the same 
as that proposed for post-grant review.
    Petitions to institute derivation proceedings raise a subset of the 
issues that are currently raised in interferences in a motion for 
judgment on priority of invention. Currently, motions for judgment on 
priority of invention, including issues such as conception, 
corroboration, and diligence, are generally limited to 50 pages in 
length. Thus, the 50 proposed page limit is considered sufficient in 
all but exceptional cases.
    The proposed rule would provide that petitions to institute a trial 
must comply with the stated page limits but may be accompanied by a 
motion that seeks to waive the page limits. The petitioner must show in 
the motion how a waiver of the page limits is in the interests of 
justice. A copy of the desired non-page limited petition must accompany 
the motion. Generally, the Board would decide the motion prior to 
deciding whether to institute the trial.
    Current Board practice provides a limit of 25 pages for other 
motions and 15 pages for miscellaneous motions. The Board's experience 
is that such page limits are sufficient for the filing parties and do 
not unduly burden the opposing party and the Board. Petitions for 
instituting a trial would generally replace the current practice of 
filing motions for unpatentability. Most motions for relief are 
expected to be similar to the current interference miscellaneous motion 
practice. Accordingly, the proposed rule would provide a 15 page limit 
for motions as this is considered sufficient for most motions but may 
be adjusted where the limit is determined to be unduly restrictive for 
the relief requested. A party may contact the Board and arrange for a 
conference call to discuss the need for additional pages for a 
particular motion. Except for a motion to waive the page limit 
accompanying a petition seeking review, any motion to waive a page 
limit must be granted in advance of filing a motion, opposition or 
reply for which the waiver is necessary.
    Proposed Sec.  42.24(b) would provide page limits for oppositions. 
Current interference practice provides an equal number of pages for an 
opposition as its corresponding motion. This is generally consistent 
with motions practice in federal courts. The proposed rule would 
continue the current practice.
    Proposed Sec.  42.24(c) would provide page limits for replies. 
Current interference practice provides a 15-page limit for priority 
motion replies, a 5 page limit for miscellaneous (procedural) motion 
replies, and a 10 page limit for all other motions. The proposed rule 
is consistent with current interference practice for procedural 
motions. The proposed rule would provide a 15 page limit for reply to 
petitions requesting a trial, which the Office believes is sufficient 
based on current practice. Current interference practice has shown that 
such page limits do not unduly restrict the parties and, in fact, 
provide sufficient flexibility to parties to not only reply to the 
motion but also help to focus on the issues.
    Section 42.25: Proposed Sec.  42.25 would provide default times for 
filing oppositions and replies. The expectation, however, is that the 
Board would tailor times appropriate to each case as opposed to relying 
upon the default times set by rule.

Testimony and Production

    The proposed rules would provide limitations for discovery and 
testimony. Unlike in proceedings under the Federal Rules of Civil 
Procedure, the burden of justifying discovery in Board proceedings 
would lie with the party seeking discovery.
    Proceedings before the Board differ from most civil litigation in 
that the proponent of an argument before the Board generally has access 
to relevant evidence that is comparable to its opponent's access. 
Consequently, the expense and complications associated with much of 
discovery can be avoided. For instance, since rejections are commonly 
based on the contents of the specification or on publicly available 
references, there is no reason to presume that the patent owner has 
better access to evidence of unpatentability on these grounds than the 
petitioner. Exceptions occur particularly when the ground of 
unpatentability arises out of conduct, particularly conduct of a 
purported inventor. In such cases, discovery may be necessary to prove 
such conduct, in which case the proponent of the evidence may move for 
additional discovery. The Board may impose conditions on such discovery 
to prevent abuse.
    Section 42.51: Proposed Sec.  42.51(a) would provide for limited 
discovery in the trial consistent with the goal of providing trials 
that are timely, inexpensive, and fair. The proposed rule is consistent 
with 35 U.S.C. 316(a)(5), as amended, and 326(a)(5), which provide for 
discovery of relevant evidence but limit the scope of the discovery, 
and 35 U.S.C. 135(b), as amended, which provides that the Director 
shall prescribe regulations setting forth standards for the conduct of 
derivation proceedings.
    Proposed Sec.  42.51(b)(1) and (b)(2) would provide for routine 
discovery of exhibits cited in a paper or testimony and provide for 
cross examination of affidavit testimony without the need to request 
authorization from the Board. The proposed rule would eliminate many 
routine discovery requests and disputes. The rule would not require a 
party to create materials or to provide materials not cited.
    Proposed Sec.  42.51(b)(3) would ensure the timeliness of the 
proceedings by requiring that parties, and individuals associated with 
the parties, provide information that is inconsistent with a position 
advanced by the patent owner or petitioner during the course of the 
proceeding. The Office recognizes that this requirement may differ from 
the proposed changes to Sec.  1.56. But, Board experience has shown 
that the information covered by proposed 42.51(b)(3) is typically 
sought through additional discovery and that such information leads to 
the production of relevant evidence. However, this practice of 
authorizing additional discovery for such information risks significant 
delay to the proceeding and increased burdens on both the parties and 
the Office. To avoid these issues, and to reduce costs and insure the 
integrity and timeliness of the proceeding, the proposed rule makes the 
production of such information routine. Similarly, while the Office 
recognizes that some parties may be hesitant to use the new proceedings 
because of this requirement, the benefit of the requirement outweighs 
any impact on participation. Lastly this requirement does not override 
legally-recognized privileges such as attorney-client or attorney work 
product.
    The proposed rule would require that the information be provided as 
a petition, motion, opposition, reply, preliminary patent owner 
response, or

[[Page 6888]]

patent owner response to petition. The proposed rule would also require 
that the party submitting the information specify the relevance of the 
document, where the relevant information appears in the document and, 
where applicable, how the information is pertinent to the claims. This 
information aids the Board in rendering decisions in trial proceedings 
within statutory timeframes. See 35 U.S.C. 316(a)(11) and 318(a), as 
amended, and 35 U.S.C. 326(a)(11) and 328(a). The identification of 
portions of the document relied upon and the pertinence of the 
information aids the Board's efficient and effective administration of 
the proceeding by making the information accessible to the Board as 
opposed to having the Board play archeologist with the record. See 
DeSilva v. DiLeonardi, 181 F.3d at 866-67.
    Proposed Sec.  42.51(c) would provide for additional discovery. 
Additional discovery increases trial costs and increases the 
expenditures of time by the parties and the Board. To promote effective 
discovery, the proposed rule would require a showing that the 
additional discovery sought in a proceeding other than a post-grant 
review is in the interests of justice, which would place an affirmative 
burden upon a party seeking the discovery to show how the proposed 
discovery would be productive. A separate rule (Sec.  42.224) governs 
additional discovery in post-grant proceedings. The Board's 
interference experience, however, is that such showings are often 
lacking and authorization for additional discovery is expected to be 
rare.
    The proposed interests-of-justice standard for additional discovery 
is consistent with considerations identified in 35 U.S.C. 316(b), as 
amended, including the efficient administration of the Board and the 
Board's ability to complete timely trials. Further, the proposed 
interests-of-justice standard is consistent with 35 U.S.C. 316(a)(5), 
as amended, which states that discovery other than depositions of 
witnesses submitting affidavits and declarations be what is otherwise 
necessary in the interests of justice.
    While the Board will employ an interests-of-justice standard in 
granting additional discovery in inter partes reviews and derivation 
proceedings, new subpart C will provide that a good cause standard will 
be employed in post-grant reviews, and by consequence, in covered 
business method patent reviews. Good cause and interests of justice are 
closely related standards, but the interests-of-justice standard is 
slightly higher than good cause. While a good cause standard requires a 
party to show a specific factual reason to justify the needed 
discovery, under the interests-of-justice standard, the Board would 
look at all relevant factors. Specifically, to show good cause, a party 
would be required to make a particular and specific demonstration of 
fact. Under the interests-of-justice standard, the moving party would 
also be required to show that it was fully diligent in seeking 
discovery and that there is no undue prejudice to the non-moving party. 
In contrast, the interests-of-justice standard covers considerable 
ground, and in using such a standard, the Board expects to consider 
whether the additional discovery is necessary in light of the totality 
of the relevant circumstances.
    Proposed Sec.  42.52 would provide procedures for compelling 
testimony. Under 35 U.S.C. 23, the Director may establish rules for 
affidavit and deposition testimony. Under 35 U.S.C. 24, a party in a 
contested case may apply for a subpoena to compel testimony in the 
United States, but only for testimony to be used in the contested case. 
Proposed Sec.  42.52(a) would require the party seeking a subpoena to 
first obtain authorization from the Board; otherwise, the compelled 
evidence would not be admitted in the proceeding. Proposed Sec.  
42.52(b) would impose additional requirements on a party seeking 
testimony or production outside the United States because the use of 
foreign testimony generally increases the cost and complexity of the 
proceeding for both the parties and the Board. The Board would give 
weight to foreign deposition testimony to the extent warranted in view 
of all the circumstances, including the laws of the foreign country 
governing the testimony.
    Section 42.53: Proposed Sec.  42.53 would provide for the taking of 
testimony. To minimize costs, direct testimony would generally be taken 
in the form of an affidavit. Cross-examination testimony and redirect 
testimony would generally come in the form of a deposition transcript. 
If the nature of the testimony makes direct observation of witness 
demeanor necessary or desirable, the Board might authorize or even 
require that the testimony be presented live or be video-recorded in 
addition to filing of the required transcript. Cf. Applied Research 
Sys. ARS Holdings N.V. v. Cell Genesys Inc., 68 USPQ2d 1863 (B.P.A.I. 
2003) (non-precedential). The proponent of the witness would be 
responsible for the cost of producing the witness for the deposition. 
The parties would have latitude in choosing the time and place for the 
deposition, provided the location is in the United States and the time 
falls within a prescribed testimony period.
    Proposed Sec.  42.53(c)(2) would provide for the time period for 
cross-examination and would set a norm for the conference proposed in 
Sec.  42.53(c)(1). A party seeking to move the deposition outside this 
period would need to show good cause.
    Proposed Sec.  42.53(d) would require that the party calling the 
witness initiate a conference with the Board at least five business 
days before a deposition with an interpreter is taken. Board experience 
suggests that the complexity of foreign language depositions can be so 
great that in many cases the resulting testimony is not useful to the 
fact-finder. To avoid a waste of resources in the production of an 
unhelpful record, the proposed rules would require that the Board 
approve of the deposition format in advance. Occasionally the Board 
will require live testimony where the Board considers the demeanor of a 
witness critical to assessing credibility.
    Proposed Sec.  42.53(e) would provide for the manner of taking 
testimony.
    Proposed Sec.  42.53(e)(1) would require that each witness before 
giving deposition testimony be duly sworn according to law by the 
officer before whom the deposition is to be taken. Proposed Sec.  
42.53(e)(1) would also require that the officer be authorized to take 
testimony under 35 U.S.C. 23.
    Proposed Sec.  42.53(e)(2) would require that testimony be taken in 
answer to interrogatories with any questions and answers recorded in 
their regular order by the officer, or by some other disinterested 
person in the presence of the officer, unless the presence of the 
officer is waived on the record by agreement of all parties.
    Proposed Sec.  42.53(e)(3) would require that any exhibits used 
during the deposition be numbered as required by Sec.  42.63(b), and 
must, if not previously served, be served at the deposition. Proposed 
Sec.  42.53(e)(3) would also provide that exhibits objected to be 
accepted pending a decision on the objection.
    Proposed Sec.  42.53(e)(4) would require that all objections be 
made at the time of the deposition to the qualifications of the officer 
taking the deposition, the manner of taking it, the evidence presented, 
the conduct of any party, and that any other objection to the 
deposition be noted on the record by the officer.
    Proposed Sec.  42.53(e)(5) would require the witness to read and 
sign (in the form of an affidavit) a transcript of the

[[Page 6889]]

deposition after the testimony has been transcribed, unless the parties 
otherwise agree in writing, the parties waive reading and signature by 
the witness on the record at the deposition, or the witness refuses to 
read or sign the transcript of the deposition.
    The certification of proposed Sec.  42.53(e)(6)(vi) would provide a 
standard for disqualifying an officer from administering a deposition. 
The use of financial interest as a disqualification, however, would be 
broader than the employment interest currently barred. Payment for 
ordinary services rendered in the ordinary course of administering the 
deposition and preparing the transcript would not be a disqualifying 
financial interest. An interest acknowledged by the parties on the 
record without objection would not be a disqualifying interest.
    Proposed Sec.  42.53(e)(7) would require the proponent of the 
testimony to file the transcript of the testimony. If the original 
proponent of the testimony declined to file the transcript (for 
instance, because that party no longer intended to rely on the 
testimony), but another party wished to rely on the testimony, the 
party that wishes to file the testimony would become the proponent and 
would be permitted to file the transcript as its own exhibit.
    Section 42.54: Proposed Sec.  42.54 would provide for protective 
orders. 35 U.S.C. 316(a)(7), as amended, and 35 U.S.C. 326(a)(7) 
require that the Director prescribe rules that provide for protective 
orders governing the exchange and submission of confidential 
information. Proposed Sec.  42.54 would provide such protective orders 
and follows the procedure set forth in the Federal Rule of Civil 
Procedure 26(c)(1).
    Section 42.55: Proposed Sec.  42.55 would allow a petitioner filing 
confidential information to file, concurrently with the filing of the 
petition, a motion to seal as to the confidential information. The 
petitioner must serve the patent owner the confidential information and 
may do so under seal. The patent owner may access the confidential 
information prior to institution of a trial by agreeing to the terms of 
the proposed protective order contained in the motion to seal. The 
institution of the trial would constitute a grant of the motion to seal 
unless otherwise ordered by the Board. The proposed rule seeks to 
streamline the process of seeking protective orders prior to the 
institution of the review while balancing the need to protect 
confidential information against an opponent's need to access 
information used to challenge the opponent's claims.
    Section 42.56: Confidential information that is subject to a 
protective order ordinarily would become public 45 days after denial of 
a petition to institute a trial or 45 days after final judgment in a 
trial. Proposed Sec.  42.56 would allow a party to file a motion to 
expunge from the record confidential information prior to the 
information becoming public. Proposed Sec.  42.56 reflects the 
considerations identified in 35 U.S.C. 316(b), as amended, and 35 
U.S.C. 326(b), which state that the Office is to take into account the 
integrity of the patent system in promulgating regulations. The 
proposed rule balances the needs of the parties to submit confidential 
information with the public interest in maintaining a complete and 
understandable file history for public notice purposes. Specifically, 
there is an expectation that information be made public where the 
existence of the information is referred to in a decision to grant or 
deny a request to institute a review or identified in a final written 
decision. As such, the proposed rule would encourage parties to redact 
sensitive information, where possible, rather than seeking to seal 
entire documents.
    Section 42.61: Proposed Sec.  42.61 would provide for the 
admissibility of evidence. Proposed Sec.  42.61(a) would make the 
failure to comply with the rules a basis for challenging admissibility 
of evidence. Proposed Sec.  42.61(b) would not require certification as 
a condition for admissibility when the evidence is a record of the 
Office that is accessible to all parties. This proposed rule would 
avoid disputes on what otherwise would be technical noncompliance with 
the rules. Proposed Sec.  42.61(c) would provide that the specification 
and drawings are admissible only to prove what the specification and 
drawings describe. This proposed rule would address a recurring problem 
in which a party mistakenly relies on a specification to prove a fact 
other than what the specification says. This proposed rule would make 
clear that a specification of an application or patent involved in a 
proceeding is admissible as evidence only to prove what the 
specification or patent describes. If there is data in the 
specification upon which a party intends to rely to prove the truth of 
the data, an affidavit by an individual having first-hand knowledge of 
how the data was generated (i.e., the individual who performed an 
experiment reported as an example in the specification) must be filed. 
Wojciak v. Nishiyama, 61 USPQ2d 1576, 1581 (B.P.A.I. 2001).
    Section 42.62: Proposed Sec.  42.62 would adopt a modified version 
of the Federal Rules of Evidence. The proposed rule would adopt the 
more formal evidentiary rules used in district courts in view of the 
adversarial nature of the proceedings before the Board. The Federal 
Rules of Evidence embrace a well-developed body of case law and are 
familiar to the courts charged with reviewing Board decisions in 
contested cases.
    Section 42.63: Proposed Sec.  42.63 would provide that all evidence 
is to be submitted as an exhibit. For instance, the proposed rule would 
provide that an exhibit filed with the petition must include the 
petition's name and a unique exhibit number, for example: POE EXHIBIT 
1001. For exhibits not filed with the petition, the proposed rule would 
require the exhibit label to include the party's name followed by a 
unique exhibit number, the names of the parties, and the trial number, 
in the format of the following example:

OWENS EXHIBIT 2001, Poe v. Owens and Trial IPR2011OCT-00001.

    Section 42.64: Proposed Sec.  42.64 would provide procedures for 
challenging the admissibility of evidence. In a district court trial, 
an opponent may object to evidence, and the proponent may have an 
opportunity to cure the basis of the objection. The proposed rule 
offers a similar, albeit limited, process for objecting and curing in a 
trial at the Board.
    Proposed Sec.  42.64(a) would provide that objections to the 
admissibility of deposition evidence must be made during the 
deposition. Proposed Sec.  42.64(b) would provide guidance as to 
objections and supplemental evidence for evidence other than deposition 
testimony. The default time for serving an objection to evidence other 
than testimony would be ten business days after service of the evidence 
for evidence in the petition and five business days for subsequent 
objections, and the party relying on evidence to which an objection was 
timely served would have ten business days after service of the 
objection to cure any defect in the evidence. The Board would not 
ordinarily address an objection unless the objecting party filed a 
motion to exclude under proposed Sec.  42.64(c) because the objection 
might have been cured or might prove unimportant in light of subsequent 
developments. Proposed Sec.  42.64(d) would permit a party to file a 
motion in limine to obtain a ruling on admissibility.
    Section 42.65: Proposed Sec.  42.65 would provide rules for expert 
testimony, tests, and data.

[[Page 6890]]

    Proposed Sec.  42.65(a) would remind parties that unsupported 
expert testimony may be given little or no weight. Rohm & Haas Co. v. 
Brotech Corp., 127 F.3d 1089, 1092 (Fed. Cir. 1997). United States 
patent law is not an appropriate topic for expert testimony before the 
Board, and expert testimony pertaining thereto would not be admitted 
under the proposed rule.
    Proposed Sec.  42.65(b) would provide guidance on how to present 
tests and data. A party should not presume that the technical 
competence of the trier-of-fact extends to a detailed knowledge of the 
test at issue.

Oral Argument, Decision and Settlement

    Section 42.70: Proposed Sec.  42.70 would provide guidance on oral 
arguments.
    Proposed Sec.  42.70(a) would provide that a party may request oral 
argument on an issue raised in a paper. The time for requesting oral 
argument would be set by the Board.
    Proposed Sec.  42.70(b) would provide that a party serve 
demonstrative exhibits at least five business days before the oral 
argument. Experience has shown that parties are more effective in 
communicating their respective positions at oral argument when 
demonstrative exhibits have been exchanged prior to the hearing. 
Cumbersome exhibits, however, tend to detract from the user's argument 
and would be discouraged. The use of a compilation with each 
demonstrative exhibit separately tabbed would be encouraged, 
particularly when a court reporter is transcribing the oral argument 
because the tabs provide a convenient way to record which exhibit is 
being discussed. It is helpful to provide a copy of the compilation to 
each member of the panel hearing the argument so that the judges may 
better follow the line of argument presented.
    Section 42.71: Proposed Sec.  42.71 would provide for decisions on 
petitions and motions.
    Proposed Sec.  42.71(a) would provide that a petition or motion may 
be taken up in any order so that issues may be addressed in a fair and 
efficient manner. This rule is consistent with 35 U.S.C. 316(b), as 
amended, and 35 U.S.C. 326(b), which state that, among other things, 
that the Director shall consider the efficient administration of the 
Office in prescribing regulations. Further, such a practice was noted 
with approval in Berman v. Housey, 291 F.3d 1345, 1352 (Fed. Cir. 
2002).
    Proposed Sec.  42.71(b) would provide for interlocutory decisions. 
The proposed rule would make clear that a decision short of judgment is 
not final, but a decision by a panel would govern the trial. Experience 
has shown that the practice of having panel decisions bind further 
proceedings has eliminated much of the uncertainty and added cost that 
result from deferring any final decision until the end of the 
proceeding. In such instances, a party dissatisfied with an 
interlocutory decision on motions should promptly seek rehearing rather 
than waiting for a final judgment. A panel could, when the interests of 
justice require it, reconsider its decision at any time in the 
proceeding prior to final judgment. A belated request for rehearing 
would rarely be granted, however, because its untimeliness would 
detract from the efficiencies that result from making interlocutory 
decisions binding.
    Proposed Sec.  42.71(c) would provide for rehearings and would set 
times for requesting rehearing. Since 35 U.S.C. 6(b), as amended, 
requires a panel decision for finality, a party should request 
rehearing by a panel to preserve an issue for judicial review. The 
panel would then apply the deferential abuse-of-discretion standard to 
decisions on rehearing.
    Section 42.72: Proposed Sec.  42.72 would provide for termination 
of a trial pursuant to 35 U.S.C. 317(a), as amended, and 35 U.S.C. 
327(a), which provide for termination of a trial with respect to a 
petitioner upon joint request of the petitioner and the patent owner, 
unless the Office has decided the merits of the proceeding before the 
request for termination is filed.
    Section 42.73: Proposed Sec.  42.73 would provide for judgment.
    Proposed Sec.  42.73(a) would provide that a judgment disposes of 
all issues that were, or by motion could have been, properly raised and 
decided.
    Proposed Sec.  42.73(b) would provide guidance as to the conditions 
under which the Board would infer a request for adverse judgment.
    Proposed Sec.  42.73(c) would provide for recommendations for 
further action by an examiner or the Director.
    Proposed Sec.  42.73(d) would provide for estoppel.
    Proposed Sec.  42.73(d)(1) would apply to non-derivation proceeding 
trials and is consistent with 35 U.S.C. 315(e)(1), as amended, and 35 
U.S.C. 325(e)(1), which provide for estoppel in proceedings before the 
Office where a final written decision was entered under 35 U.S.C. 
318(a), as amended, or 35 U.S.C. 328(a).
    Proposed Sec.  42.73(d)(2) would provide estoppel provisions in 
derivation proceedings. The proposed rule would also be consistent with 
35 U.S.C. 135(d), as amended, which provides for the effect of a final 
decision in a derivation proceeding. Proposed Sec.  42.73(d)(2) differs 
from proposed Sec.  42.73(d)(1) to take into account the differences in 
statutory language between 35 U.S.C. 135(d) and 315(e)(1), as amended, 
and 35 U.S.C. 325(e)(2).
    Proposed Sec.  42.73(d)(3) would apply estoppel against a party 
whose claim was cancelled or who requested an amendment to the 
specification or drawings that was denied.
    Section 42.74: Proposed Sec.  42.74 would provide guidance on 
settling proceedings before the Board. 35 U.S.C. 135(e) and 317, as 
amended, and 35 U.S.C. 327 will govern settlement of Board trial 
proceedings but do not expressly govern pre-institution settlement.
    Proposed Sec.  42.74(a) would reflect that the Board is not a party 
to a settlement agreement and may take any necessary action, including 
determination of patentability notwithstanding a settlement. This 
proposed rule is consistent with 35 U.S.C. 135(e), as amended, where 
the Board is not required to follow the settlement agreement if it is 
inconsistent with the evidence. The proposed rule is also consistent 
with 35 U.S.C. 317, as amended, and 35 U.S.C. 327, which provide that 
the Board may proceed to a final written decision even if no petitioner 
remains in the proceeding.
    Proposed Sec.  42.74(b) would provide that settlement agreements 
must be in writing and filed with the Board prior to termination of the 
proceeding. This proposed rule is consistent with 35 U.S.C. 317(b), as 
amended, and 327(b), which require the agreement to be in writing and 
filed before termination of the proceeding. The proposed rule is also 
consistent with 35 U.S.C. 135(e), as amended, which provides that 
parties may seek to terminate the derivation proceeding by filing a 
written statement.
    Proposed Sec.  42.74(c) would provide that a party to a settlement 
may request that the settlement be kept separate from an involved 
patent or application. The proposed rule is consistent with the 
requirements of 35 U.S.C. 135(e) and 317(b), as amended, and 35 U.S.C. 
327(b).

Certificate

    Section 42.80: Proposed Sec.  42.80 provides for issuance and 
publication of a certificate after the Board issues a final decision 
and the time for appeal has expired or an appeal has terminated. The 
proposed rule would be consistent with 35 U.S.C. 318, as amended, and 
35 U.S.C. 328.

[[Page 6891]]

Part 90--Judicial Review of Patent Trial and Appeal Board Decisions

    The Leahy-Smith America Invents Act amends chapter 13 of title 35, 
United States Code, to provide for certain changes to the provisions 
for judicial review of Board decisions. A new part 90 of title 37, Code 
of Federal Regulations is proposed to be added to permit consolidation 
of rules relating to court review of Board decisions and to simplify 
reference to such practices. The proposed rules in part 90 would also 
implement the provisions of the Leahy-Smith America Invents Act 
associated with judicial review of agency actions addressed by the 
Leahy-Smith America Invents Act.
    Current Sec. Sec.  1.301 through 1.304, which relate to rules of 
practice in patent cases, would be removed from part 1 and relocated to 
part 90. Paraphrasing of the statute in those rules would be eliminated 
in the proposed new rules in favor of directing the reader to the 
relevant statutory provisions. This change would avoid the need for the 
Office to amend the rules when statutory amendments are made. It would 
also avoid undue public reliance on the Office's paraphrase of 
statutory text. The proposed rules in part 90 would better state the 
existing practice and are not intended to change the existing practice 
except as explicitly provided.
    Section 90.1: Proposed Sec.  90.1 would clarify the scope of the 
proposed rules in part 90. The proposed rules in part 90 would be 
limited to rules governing the procedure by which a party dissatisfied 
with the final decision in an appeal to the Patent Trial and Appeal 
Board under 35 U.S.C. 134 may seek judicial review of the Patent Trial 
and Appeal Board decision pursuant to Chapter 13 of title 35, United 
States Code. This would include judicial review of the Patent Trial and 
Appeal Board decisions arising out of ex parte prosecution. The 
proposed rules in part 90 would not apply to other avenues for judicial 
review of Office decisions that may be available, such as appeals from 
Trademark Trial and Appeal Board decisions pursuant to Sec.  2.145, 
civil actions brought pursuant to the Administrative Procedure Act, or 
mandamus actions. The title of part 90 would indicate that this part 
would apply only to judicial review of Patent Trial and Appeal Board 
decisions.
    Proposed Sec.  90.1 would clarify that the rules in effect on July 
1, 2012, would continue to govern appeals from inter partes 
reexamination proceedings. Section 7(e) of the Leahy-Smith America 
Invents Act maintains the statutory provisions governing inter partes 
reexaminations requested under 35 U.S.C. 311, and the review provision 
of 35 U.S.C. 141 for Board decisions arising out of such 
reexaminations, as they existed at the time the Leahy-Smith America 
Invents Act was enacted. Accordingly, the Office will continue to apply 
the regulations as they existed when the Leahy-Smith America Invents 
Act was enacted (or as subsequently modified prior to July 1, 2012) for 
those proceedings. Further, Sec.  3(n)(2) of the Leahy-Smith America 
Invents Act provides that the provisions of 35 U.S.C. 135 ``as in 
effect on the day before the effective date set forth in paragraph (1) 
of this subsection'' shall apply to certain applications. Thus, 
interference proceedings will still be available for a limited period 
for certain applications under the Leahy-Smith America Invents Act. 
Regarding judicial review of Board decisions arising out of such 
interferences, Sec.  7(c) and (e) of the Leahy-Smith America Invents 
Act makes review by the Federal Circuit available under 35 U.S.C. 141 
only for proceedings commenced before September 16, 2012. Similarly, 
Sec.  3 of the Leahy-Smith America Invents Act makes review of 
interference decisions by a district court under 35 U.S.C. 146 
available only if the provisions of Sec.  3(n)(1) of the Leahy-Smith 
America Invents Act are not satisfied. That is because if the involved 
application contains a claim satisfying the terms of Sec.  3(n)(1) of 
the Leahy-Smith America Invents Act (e.g., a continuation-in-part 
application), then Sec.  3(j) of the Leahy-Smith America Invents Act--
changing 35 U.S.C. 146 from review of ``an interference'' to review of 
``a derivation proceeding''--applies, and district court review of a 
decision arising out an interference proceeding under 35 U.S.C. 135 
will not be available. To the extent that an interference proceeding 
under 35 U.S.C. 135 is available and judicial review of that decision 
is available, the Office will continue to apply the regulations as they 
existed when the Leahy-Smith America Invents Act was enacted (or as 
subsequently modified prior to July 1, 2012) to those proceedings. 
Lastly, note that certain interferences may be deemed to be eligible 
for judicial review as though they were derivation proceedings. See 
Sec.  6(f)(3) of the Leahy-Smith America Invents Act.
    Section 90.2: Proposed Sec.  90.2 would address notice and service 
requirements associated with notices of appeal and civil actions 
seeking judicial review of Board decisions. The proposed rule would 
combine the notice and service requirements of current Sec. Sec.  
1.301, 1.302, and 1.303 for proceedings addressed by those rules. 
Paraphrasing of the statute in those rules would be eliminated in 
proposed Sec.  90.2 in favor of directing the reader to the relevant 
statutory provisions to streamline the rules and prevent confusion. The 
proposed rule would also include references to pertinent statutory 
provisions or court rules that apply in such court proceedings. 
Proposed Sec.  90.2 would further add provisions associated with 
judicial review of Board decisions in inter partes reviews, post-grant 
reviews, covered business method patent reviews, and derivation 
proceedings.
    Proposed Sec.  90.2 would require parties filing an appeal under 35 
U.S.C. 141, initiating a civil action pursuant to 35 U.S.C. 146, or 
electing under 35 U.S.C. 141(d) to proceed under 35 U.S.C. 146, to file 
a copy of the notice of appeal, complaint, or notice of election, 
respectively, with the Board in the appropriate manner provided in 
Sec.  41.10(a), 41.10(b), or 42.6(b). The proposed rule would also 
require that a complaint under 35 U.S.C. 146 be filed with the Board no 
later than five business days after filing the complaint in district 
court. These requirements would ensure that the Board is aware of such 
proceedings and would prevent further action within the Office 
consistent with the Board decision at issue in the appeal or civil 
action. Proposed Sec.  90.2 would further require that the complaint be 
filed with the Office pursuant to Sec.  104.2 within the same five 
business day time period. That requirement similarly assures that the 
Office has adequate notice of the pending judicial review proceeding.
    Section 90.3: Proposed Sec.  90.3 would address the time for filing 
a notice of appeal under 35 U.S.C. 142 and a notice of election under 
35 U.S.C. 141(d), as amended, and the commencement of a civil action.
    Proposed Sec.  90.3(a) would address the time for filing a notice 
of appeal or a civil action seeking judicial review of a Board 
decision. The proposed rule would extend the period for filing a notice 
of appeal or a civil action under Sec.  1.304 to sixty-three (63) days. 
This proposed change would avoid confusion regarding that period, which 
was two months except when the two-month period included February 28, 
in which case the period was two months and one day. The proposed 
sixty-three (63) day period would result in the deadline for filing a 
notice of appeal or a civil action falling on the same day of the week 
as the Board decision. Thus, the proposed rule would minimize 
calculations regarding extensions of time pursuant to

[[Page 6892]]

35 U.S.C. 21(b), which applies when the time period ends on a Saturday, 
Sunday, or Federal holiday in the District of Columbia, by eliminating 
the possibility that a Saturday or Sunday would be the final day of the 
period.
    Proposed Sec.  90.3(a) would also remove language regarding the 
time for cross-appeals from Sec.  1.304. Instead, the proposed rule 
would refer to the pertinent rules in the Federal Rules of Appellate 
Procedure and the Rules for the United States Court of Appeals for the 
Federal Circuit to avoid confusion or inconsistency. The proposed rule 
would also add a reference to 35 U.S.C. 141(d) for both the relevant 
time for filing a notice of election under that statute and the 
relevant time for commencing a civil action pursuant to a notice of 
election under that statute.
    Proposed Sec.  90.3(b) and (c) would incorporate provisions from 
current Sec.  1.304 addressing computation of time and extensions of 
time.

Rulemaking Considerations

    A. Administrative Procedure Act (APA): This notice proposes rules 
of practice concerning the procedure for requesting an inter partes 
review, post-grant review, covered business method patent review, or a 
derivation, and the trial process after initiation of such a review. 
The notice also proposes changes to the rule of practice to consolidate 
the procedure for appeal of a decision by the Board and to require that 
a copy of the notice of appeal, notice of election, and complaint be 
provided to the Board. The changes being proposed in this notice do not 
change the substantive criteria of patentability. These proposed 
changes involve rules of agency practice and procedure and/or 
interpretive rules. See Bachow Commc'ns Inc. v. FCC, 237 F.3d 683, 690 
(D.C. Cir. 2001) (rules governing an application process are procedural 
under the Administrative Procedure Act); Inova Alexandria Hosp. v. 
Shalala, 244 F.3d 342, 350 (4th Cir. 2001) (rules for handling appeals 
were procedural where they did not change the substantive standard for 
reviewing claims); Nat'l Org. of Veterans' Advocates v. Sec'y of 
Veterans Affairs, 260 F.3d 1365, 1375 (Fed. Cir. 2001) (rule that 
clarifies interpretation of a statute is interpretive).
    Accordingly, prior notice and opportunity for public comment are 
not required pursuant to 5 U.S.C. 553(b) or (c) (or any other law), and 
thirty-day advance publication is not required pursuant to 5 U.S.C. 
553(d) (or any other law). See Cooper Techs. Co. v. Dudas, 536 F.3d 
1330, 1336-37 (Fed. Cir. 2008) (stating that 5 U.S.C. 553, and thus 35 
U.S.C. 2(b)(2)(B), does not require notice and comment rule making for 
``interpretative rules, general statements of policy, or rules of 
agency organization, procedure, or practice'') (quoting 5 U.S.C. 
553(b)(A)). The Office, however, is publishing these changes and the 
Initial Regulatory Flexibility Act analysis, below, for comment as it 
seeks the benefit of the public's views on the Office's proposed 
implementation of these provisions of the Leahy-Smith America Invents 
Act.
    B. Regulatory Flexibility Act: The Office estimates that 460 
petitions for inter partes review, 50 petitions for post-grant review 
and covered business method patent review combined, and 50 petitions 
for derivation proceedings will be filed in fiscal year 2013. This will 
be the first fiscal year in which review proceedings will be available 
for an entire fiscal year, and derivation proceedings will be available 
for more than 6 months. The estimate for inter partes review petitions 
is partially based on the number of inter partes reexamination requests 
under 37 CFR 1.915 that have been filed in fiscal years 2010 and 2011.
    The Office received 281 requests for inter partes reexamination in 
fiscal year 2010. See Table 13B of the United States Patent and 
Trademark Office Performance and Accountability Report for Fiscal Year 
2010, available at http://www.uspto.gov/about/stratplan/ar/2010/USPTOFY2010PAR.pdf.
    The Office received 374 requests for inter partes reexamination in 
fiscal year 2011. See Table 14B of the United States Patent and 
Trademark Office Performance and Accountability Report for Fiscal Year 
2011, available at http://www.uspto.gov/about/stratplan/ar/2011/USPTOFY2011PAR.pdf.
    Additionally, the Office takes into consideration the recent growth 
rate in the number of requests for inter partes reexamination, the 
projected growth due to an expansion in the number of eligible patents 
under the inter partes review provisions of the Leahy-Smith America 
Invents Act (see Sec.  6(c)), and the more restrictive filing time 
period in 35 U.S.C. 315(b) as amended by the Leahy-Smith America 
Invents Act.
    In fiscal year 2013, it is expected that no post-grant review 
petitions will be received, other than those filed under the 
transitional program for covered business method patents. Thus, the 
estimated number of post-grant review petitions including covered 
business method patent review petitions is based on the number of inter 
partes reexamination requests filed in fiscal year 2011 for patents 
having an original classification in class 705 of the United States 
Patent Classification System. Class 705 is the classification for 
patents directed to data processing in the following areas: financial, 
business practice, management, or cost/price determination. See http://www.uspto.gov/web/patents/classification/uspc705/sched705.pdf.
    The following is the class definition and description for Class 
705:

    This is the generic class for apparatus and corresponding 
methods for performing data processing operations, in which there is 
a significant change in the data or for performing calculation 
operations wherein the apparatus or method is uniquely designed for 
or utilized in the practice, administration, or management of an 
enterprise, or in the processing of financial data.
    This class also provides for apparatus and corresponding methods 
for performing data processing or calculating operations in which a 
charge for goods or services is determined.
    This class additionally provides for subject matter described in 
the two paragraphs above in combination with cryptographic apparatus 
or method.
    Subclasses 705/300-348 were established prior to complete 
reclassification of all project documents. Documents that have not 
yet been reclassified have been placed in 705/1.1. Until 
reclassification is finished a complete search of 705/300-348 should 
include a search of 705/1.1. Once the project documents in 705/1.1 
have been reclassified they will be moved to the appropriate 
subclasses and this note will be removed.

Scope of the Class

    1. The arrangements in this class are generally used for 
problems relating to administration of an organization, commodities 
or financial transactions.
    2. Mere designation of an arrangement as a ``business machine'' 
or a document as a ``business form'' or ``business chart'' without 
any particular business function will not cause classification in 
this class or its subclasses.
    3. For classification herein, there must be significant claim 
recitation of the data processing system or calculating computer and 
only nominal claim recitation of any external art environment. 
Significantly claimed apparatus external to this class, claimed in 
combination with apparatus under the class definition, which perform 
data processing or calculation operations are classified in the 
class appropriate to the external device unless specifically 
excluded therefrom.
    4. Nominally claimed apparatus external to this class in 
combination with apparatus under the class definition is classified 
in this class unless provided for in the appropriate external class.
    5. In view of the nature of the subject matter included herein, 
consideration of the classification schedule for the diverse art or 
environment is necessary for proper search.

See Classification Definitions (Feb. 2011) available at http://www.uspto.gov/web/patents/classification/uspc705/defs705.htm.

[[Page 6893]]

    Accordingly, patents subject to covered business method patent 
review are anticipated to be typically classifiable in Class 705. It is 
anticipated that the number of patents in Class 705 that do not 
qualified as covered business method patents would approximate the 
number of patents classified in other classes that do qualify.
    The Office received 20 requests for inter partes reexamination of 
patents classified in Class 705 in fiscal year 2011. The Office in 
estimating the number of petitions for covered business method patent 
review to be higher than 20 requests due to an expansion of grounds for 
which review may be requested including subject matter eligibility 
grounds, the greater coordination with litigation, and the provision 
that patents will be eligible for the proceeding regardless of filing 
date of the application which resulted in the patent. It is not 
anticipated that any post-grant review petitions will be received in 
fiscal year 2013 as only patents issuing based on certain applications 
filed on or after March 16, 2013, or certain applications involved in 
an interference proceeding commenced before September 12, 2012, are 
eligible for post-grant review. See Pub. L. 112-29, Sec.  6(f), 125 
Stat. 284, 311 (2011).
    The Office expects the number of newly declared interferences to 
decrease as some parties file inter partes review petitions rather than 
file reissue applications of their own earlier filed patents. Parties 
filing such reissue applications often seek a review of another party's 
issued patent in an interference proceeding.
    The Office has reviewed the entity status of patents for which 
inter partes reexamination was requested from October 1, 2000, to 
September 23, 2011. This data only includes filings granted a filing 
date in the particular year rather than filings in which a request was 
received in the year. The first inter partes reexamination was filed on 
July 27, 2001. A summary of that review is provided in Table 1 below. 
As shown by Table 1, patents known to be owned by a small entity 
represented 32.79% of patents for which inter partes reexamination was 
requested. Based on an assumption that the same percentage of patents 
owned by small entities will be subject to inter partes review, post-
grant review, covered business method patent review, and derivation 
proceedings, it is estimated that 151 petitions for inter partes 
review, 16 petitions for post-grant and covered business method patent 
review combined, and 16 petitions for derivation proceedings would be 
filed to seek review of patents owned by a small entity in fiscal year 
2013, the first full fiscal year that these proceedings will be 
available.

                  Table 1--Inter partes Reexamination Requests Filed With Parent Entity Type *
   [* Small entity status determined by reviewing preexamination small entity indicator for the parent patent]
----------------------------------------------------------------------------------------------------------------
                                                                                   Number filed
                                                                   Inter partes    where parent    Percent small
                           Fiscal year                             reexamination     patent is    entity type of
                                                                  requests filed   small entity        total
                                                                                       type
----------------------------------------------------------------------------------------------------------------
2011............................................................             329             123           37.39
2010............................................................             255              94           36.86
2009............................................................             240              62           25.83
2008............................................................             155              52           33.55
2007............................................................             127              35           27.56
2006............................................................              61              17           27.87
2005............................................................              59              18           30.51
2004............................................................              26               5           19.23
2003............................................................              21              12           57.14
2002............................................................               4               1           25.00
2001............................................................               1               0            0.00
                                                                           1,278             419           32.79
----------------------------------------------------------------------------------------------------------------

    Based on the number of patents issued during fiscal years 1995 
through 1999 that paid the small entity third stage maintenance fee, 
the number of patents issued during fiscal years 2000 through 2003 that 
paid the small entity second stage maintenance fee, the number of 
patents issued during fiscal years 2004 through 2007 that paid the 
first stage maintenance fee, and the number of patents issued during 
fiscal years 2008 through 2011 that paid a small entity issue fee, 
there are no less than 375,000 patents owned by small entities in force 
as of October 1, 2011.
    Furthermore, the Office recognizes that there would be an offset to 
this number for patents that expire earlier than 20 years from their 
filing date due to a benefit claim to an earlier application or due to 
a filing of a terminal disclaimer. The Office likewise recognizes that 
there would be an offset in the opposite manner due to the accrual of 
patent term extension and adjustment. The Office, however, does not 
maintain data on the date of expiration by operation of a terminal 
disclaimer. Therefore, the Office has not adjusted the estimate of 
375,000 patents owned by small entities in force as of October 1, 2011. 
While the Office maintains information regarding patent term extension 
and adjustment accrued by each patent, the Office does not collect data 
on the expiration date of patents that are subject to a terminal 
disclaimer. As such, the Office has not adjusted the estimated of 
375,000 patents owned by small entities in force as of October 1, 2011, 
for accrual of patent term extension and adjustment, because in view of 
the incomplete terminal disclaimer data issue, would be incomplete and 
any estimate adjustment would be administratively burdensome. Thus, it 
is estimated that the number of small entity patents in force in fiscal 
year 2013 will be at least 375,000.
    Based on the estimated number of patents in force, the number of 
small entity owned patents impacted by inter partes review in fiscal 
year 2013 (151 patents) would be less than 0.05% (151/375,000) of all 
patents in force that are owned by small entities. Moreover, post-grant 
and covered business method patent review and derivation would have a 
smaller impact. The USPTO nonetheless has undertaken an Initial 
Regulatory Flexibility Act Analysis of the proposed rule.
    1. Description of the Reasons That Action by the Office Is Being 
Considered: On September 16, 2011, the Leahy-Smith America Invents Act 
was

[[Page 6894]]

enacted into law (Pub. L. 112-29, 125 Stat. 284 (2011)). Section 6 of 
the Leahy-Smith America Invents Act amends chapter 31 of title 35, 
United States Code, to create a new inter partes review proceeding 
which will take effect on September 16, 2012, one year after the date 
of enactment, and eliminate inter partes reexamination (except for 
requests filed before the effective date of September 16, 2012). 
Section 6 of the Leahy-Smith America Invents Act further amends title 
35, United States Code, by adding chapter 32 to create a new post-grant 
review proceeding. Section 18 of the Leahy-Smith America Invents Act 
provides for a transitional program for covered business method patents 
which will employ the standards and procedures of the post-grant review 
proceeding with a few exceptions. Additionally, Sec.  3(i) of the 
Leahy-Smith America Invents Act amends 35 U.S.C. 135 to provide for 
derivation proceedings and eliminate the interference practice as to 
applications and patents that have an effective filing date on or after 
March 16, 2013 (with a few exceptions). For the implementation, 
Sec. Sec.  6(c) and 6(f) of the Leahy-Smith America Invents Act 
requires that the Director issue regulations to carry out chapter 31, 
as amended, and chapter 32 of title 35, United States Code, within one 
year after the date of enactment. Public Law 112-29, Sec. Sec.  6(c) 
and 6(f), 125 Stat. 284, 304 and 311 (2011). Moreover, 35 U.S.C. 
135(b), as amended, requires that the Director prescribe regulations to 
set forth the standards for conducting derivation proceedings, 
including requiring parties to provide sufficient evidence to prove and 
rebut a claim of derivation.
    2. Succinct Statement of the Objectives of, and Legal Basis for, 
the Proposed Rules: The proposed rules seek to implement inter partes 
review, post-grant review, the transitional program for covered 
business method patents, and derivation proceedings as authorized by 
the Leahy-Smith America Invents Act. The Leahy-Smith America Invents 
Act requires that the Director prescribe rules for the inter partes, 
post-grant, and covered business method patent reviews that result in a 
final determination not later than one year after the date on which the 
Director notices the institution of a proceeding. The one-year period 
may be extended for not more than 6 months if good cause is shown. See 
35 U.S.C. 316(a)(11), as amended, and 35 U.S.C. 326(a)(11). The Leahy-
Smith America Invents Act also requires that the Director, in 
prescribing rules for the inter partes, post-grant, and covered 
business method patent reviews, consider the effect of the rules on the 
economy, the integrity of the patent system, the efficient 
administration of the Office, and the ability of the Office to complete 
timely the instituted proceedings. See 35 U.S.C. 316(b), as amended, 
and 35 U.S.C. 326(b). Consistent with the time periods provided in 35 
U.S.C. 316(a)(11), as amended, and 35 U.S.C. 326(a)(11), the proposed 
rules are designed to, except where good cause is shown to exist, 
result in a final determination by the Patent Trial and Appeal Board 
within one year of the notice of initiation of the review. This one-
year review will enhance the effect on the economy, and improve the 
integrity of the patent system and the efficient administration of the 
Office.
    3. Description and Estimate of the Number of Affected Small 
Entities: The Small Business Administration (SBA) small business size 
standards applicable to most analyses conducted to comply with the 
Regulatory Flexibility Act are set forth in 13 CFR 121.201. These 
regulations generally define small businesses as those with fewer than 
a specified maximum number of employees or less than a specified level 
of annual receipts for the entity's industrial sector or North American 
Industry Classification System (NAICS) code. As provided by the 
Regulatory Flexibility Act, and after consultation with the Small 
Business Administration, the Office formally adopted an alternate size 
standard as the size standard for the purpose of conducting an analysis 
or making a certification under the Regulatory Flexibility Act for 
patent-related regulations. See Business Size Standard for Purposes of 
United States Patent and Trademark Office Regulatory Flexibility 
Analysis for Patent-Related Regulations, 71 FR 67109 (Nov. 20, 2006), 
1313 Off. Gaz. Pat. Office 60 (Dec. 12, 2006). This alternate small 
business size standard is SBA's previously established size standard 
that identifies the criteria entities must meet to be entitled to pay 
reduced patent fees. See 13 CFR 121.802. If patent applicants identify 
themselves on a patent application as qualifying for reduced patent 
fees, the Office captures this data in the Patent Application Location 
and Monitoring (PALM) database system, which tracks information on each 
patent application submitted to the Office.
    Unlike the SBA small business size standards set forth in 13 CFR 
121.201, the size standard for USPTO is not industry-specific. The 
Office's definition of a small business concern for Regulatory 
Flexibility Act purposes is a business or other concern that: (1) Meets 
the SBA's definition of a ``business concern or concern'' set forth in 
13 CFR 121.105; and (2) meets the size standards set forth in 13 CFR 
121.802 for the purpose of paying reduced patent fees, namely an 
entity: (a) Whose number of employees, including affiliates, does not 
exceed 500 persons; and (b) which has not assigned, granted, conveyed, 
or licensed (and is under no obligation to do so) any rights in the 
invention to any person who made it and could not be classified as an 
independent inventor, or to any concern which would not qualify as a 
non-profit organization or a small business concern under this 
definition. See Business Size Standard for Purposes of United States 
Patent and Trademark Office Regulatory Flexibility Analysis for Patent-
Related Regulations, 71 FR at 67112 (Nov 20, 2006), 1313 Off. Gaz. Pat. 
Office at 63 (Dec. 12, 2006).
    As discussed above, it is anticipated that 460 petitions for inter 
partes review, 50 petitions for post-grant review and covered business 
method patent review combined, and 50 petitions for derivation 
proceedings will be filed in fiscal year 2013. The Office has reviewed 
the percentage of patents for which inter partes reexamination was 
requested from October 1, 2000 to September 23, 2011. A summary of that 
review is provided in Table 1 above. As demonstrated by Table 1, 
patents known to be owned by a small entity represent 32.79% of patents 
for which inter partes reexamination was requested. Based on an 
assumption that the same percentage of patents owned by small entities 
will be subject to the new review proceedings, it is estimated that 151 
patents owned by small entities would be affected by inter partes 
review, and that 16 patents owned by small entities would be affected 
by a post-grant or covered business method patent review.
    For derivation proceedings, the Office has reviewed the percentage 
of applications and patents for which an interference was declared in 
fiscal year 2011. Applications and patents known to be owned by a small 
entity represent 19.62% of applications and patents for which 
interference was declared in FY 2011. Based on the assumption that the 
same percentage of applications and patents owned by small entities 
will be involved in a derivation proceeding, 20 small entity owned 
applications or patents would be affected by derivation proceeding.
    The USPTO estimates that 2.5% of patent owners will file a request 
for adverse judgment prior to a decision to institute and that another 
2.5% will file

[[Page 6895]]

a request for adverse judgment or fail to participate after initiation. 
Specifically, an estimated 21 patent owners will file a request for 
adverse judgment or fail to participate after institution in inter 
partes review, and an estimated 2 patent owners will do so in post-
grant and covered business method proceedings combined. Based on the 
percentage of small entity owned patents that were the subject of inter 
partes reexamination (32.79%) from October 1, 2000 to September 23, 
2011, it is estimated that 7 small entities will file such requests or 
fail to participate in inter partes review proceedings, and an 
estimated 1 small entity will do so in post-grant or covered business 
method patent review combined.
    Under the proposed rules, prior to determining whether to institute 
a review, the patent owner may file an optional patent owner 
preliminary response to the petition. Given the new time period 
requirements to file a petition for review before the Board relative to 
patent enforcement proceedings and the desire to avoid the cost of a 
trial and delays to related infringement actions, it is anticipated 
that 90% of petitions, other than those for which a request for adverse 
judgment is filed, will result in the filing of a patent owner 
preliminary response. Where an inter partes review petition is filed 
close to the expiration of the one-year period set forth in 35 U.S.C. 
315(b), as amended, a patent owner would likely be advantaged by filing 
a successful preliminary response. In view of these considerations, it 
is anticipated that 90% patent owners will file a preliminary response. 
Specifically, the Office estimates that 406 patent owners will file a 
preliminary response to an inter partes review petition, and an 
estimated 45 patent owners will file a preliminary response to a post-
grant or covered business method petition. Based on the percentage of 
small entity owned patents that were the subject of inter partes 
reexamination (32.79%), it is estimated that 133 small entities will 
file a preliminary response to an inter partes review petition, and 15 
small entities will file a preliminary response to a post-grant or 
covered business method patent review petition in fiscal year 2013.
    Under the proposed rules, the Office will determine whether to 
institute a trial within three months after the earlier of: (1) The 
submission of a patent owner preliminary response, (2) the waiver of 
filing a patent owner preliminary response, or (3) the expiration of 
the time period for filing a patent owner preliminary response. If the 
Office decides not to institute a trial, the petitioner may file a 
request for reconsideration of the Office's decision. In estimating the 
number of requests for reconsideration, the Office considered the 
percentage of inter partes reexaminations that were denied relative to 
those that were ordered (24 divided by 342, or 7%) in fiscal year 2011. 
See Reexaminations--FY 2011, http://www.uspto.gov/patents/Reexamination_operational_statistic_through_FY2011Q4.pdf. The 
Office also considered the impact of: (1) Patent owner preliminary 
responses under newly authorized in 35 U.S.C. 313, as amended, and 35 
U.S.C. 323, (2) the enhanced thresholds for instituting reviews set 
forth in 35 U.S.C. 314(a), as amended, and 35 U.S.C. 324(a), which 
would tend to increase the likelihood of dismissing a petition for 
review, and (3) the more restrictive time period for filing a petition 
for review in 35 U.S.C. 315(b), as amended, and 35 U.S.C. 325(b), which 
would tend to reduce the likelihood of dismissing a petition. Based on 
these considerations, it is estimated that 10% of the petitions for 
review (50 divided by 498) would be dismissed.
    The Office predicts that it will institute 10 derivation 
proceedings based on petitions seeking derivation filed in fiscal year 
2013. This estimate is based on the low number of interference 
proceedings declared, as well as the limited number of eligible 
applications.
    During fiscal year 2011, the Office issued 21 decisions following a 
request for reconsideration of a decision on appeal in inter partes 
reexamination. The average time from original decision to decision on 
reconsideration was 4.4 months. Thus, the decisions on reconsideration 
were based on original decisions issued from July 2010 until June 2011. 
During this time period, the Office mailed 63 decisions on appeals in 
inter partes reexamination. See BPAI Statistics--Receipts and 
Dispositions by Technology Center, http://www.uspto.gov/ip/boards/bpai/stats/receipts/index.jsp (monthly data).
    Based on the assumption that the same rate of reconsideration (21 
divided by 63 or 33.333%) will occur, the Office estimates that 19 
requests for reconsideration will be filed. Based on the percentage of 
small entity owned patents that were the subject of inter partes 
reexamination (32.79%) and the percentage of small entity owned patent 
applications or patents that were the subject of an interference 
declared in fiscal year 2010 (19.62%), it is estimated that 6 small 
entities will file a request for a reconsideration of a decision 
dismissing the petition for review or derivation in fiscal year 2013.
    The Office reviewed motions, oppositions, and replies in a number 
of contested trial proceedings before the trial section of the Board. 
The review included determining whether the motion, opposition, and 
reply were directed to patentability grounds and non-priority non-
patentability grounds. Based on the review, it is anticipated that: (1) 
Inter partes reviews will have an average of 6.92 motions, oppositions, 
and replies per trial after institution, (2) post-grant and covered 
business method patent reviews will have an average of 8.89 motions, 
oppositions, and replies per trial after institution, and (3) 
derivation proceedings will have an average of 23.4 motions, 
oppositions, and replies per trial after institution. Settlement is 
estimated to occur in 20% of instituted trials at various points of the 
trial. In trials that are settled, it is estimated that only 50% of the 
noted motions, oppositions, and replies would be filed.
    After a trial has been instituted but prior to a final written 
decision, parties to a review or derivation proceeding may request an 
oral hearing. It is anticipated that 466 requests for oral hearings 
will be filed based on the number of requests for oral hearings in 
inter partes reexamination, the stated desirability for oral hearings 
during the legislative process, and the public input received prior to 
this notice of proposed rulemaking. Based on the percentage of small 
entity owned patents that were the subject of inter partes 
reexamination (32.79%), it is estimated that 153 small entities will 
file a request for oral hearing in the reviews and derivations 
instituted in fiscal year 2013.
    Parties to a review or derivation proceeding may file requests to 
treat a settlement as business confidential, and requests for adverse 
judgment. A written request to make a settlement agreement available 
may also be filed. Parties to derivation proceedings may also file 
arbitration agreements and awards. Given the short time period set for 
conducting trials, it is anticipated that the alternative dispute 
resolution options will be infrequently used. The Office estimates that 
20 requests to treat a settlement as business confidential; 103 
requests for adverse judgment, default adverse judgment, or settlement 
notices; and 2 arbitration agreements and awards will be filed. The 
Office also estimates that 20 requests to make a settlement available 
will be filed. Based on the percentage of small entity owned patents 
that were the subject of inter partes reexamination (32.79%) and the 
percentage of small entity owned patent

[[Page 6896]]

applications or patents that were the subject of an interference 
declared in fiscal year 2010 (19.62%), it is estimated that 7 small 
entities will file a request to treat a settlement as business 
confidential, 34 small entities will file a request for adverse 
judgment, default adverse judgment notices, or settlement notices, and 
1 small entity will file an arbitration agreement and award in the 
reviews and derivations instituted in fiscal year 2013.
    Parties to a review or derivation proceeding may seek judicial 
review of the final decision of the Board. Historically, 33% of 
examiner's decisions in inter partes reexamination proceedings have 
been appealed to the Board. It is anticipated that 16% of final 
decisions of the Board would be appealed. The reduction in appeal rate 
is based on the higher threshold for institution, the focused process, 
and the experience of the Board in conducted contested cases. 
Therefore, it is estimated that 56 parties would seek judicial review 
of the final decisions of the Board in reviews and derivations 
instituted in fiscal year 2013. In addition, appeals in other final 
decisions of the Board are anticipated to continue at the same rate, 
but with a higher base rate of final decisions. Based on this 
expectation, it is estimated that 138 parties would seek judicial 
review of other final decisions of the Board. Furthermore, based on the 
percentage of small entity owned patents that were the subject of inter 
partes reexamination (32.79%) and the percentage of small entity owned 
patent applications or patents that were the subject of an interference 
declared in fiscal year 2010 (19.62%), it is estimated that 18 small 
entities would seek judicial review of final decisions of the Board in 
the reviews and derivations instituted in fiscal year 2013.
    4. Description of the Reporting, Recordkeeping, and Other 
Compliance Requirements of the Proposed Rule, Including an Estimate of 
the Classes of Small Entities Which Will Be Subject to the Requirement 
and the Type of Professional Skills Necessary for Preparation of the 
Report or Record: Based on the filing trends of inter partes 
reexamination requests, it is anticipated that petitions for review 
will be filed across all technologies with approximately 50% being 
filed in electrical technologies, approximately 30% in mechanical 
technologies, and the remaining 20% in chemical technologies and 
design. However, covered business method patent reviews would be 
limited to business method patents that are not patents for 
technological inventions. Under the proposed rules, a person who is not 
the owner of a patent may file a petition to institute a review of the 
patent, with a few exceptions. Given this, it is anticipated that a 
petition for review is likely to be filed by an entity practicing in 
the same or similar field as the patent. Therefore, it is anticipated 
that 50% of the petitions for review will be filed in the electronic 
field, 30% in the mechanical field, and 20% in the chemical or design 
fields.
    Based on the trends of declared contested cases in fiscal year 
2011, it is anticipated that petitions for derivation will be filed 
across all technologies with approximately 16% in electrical 
technologies, approximately 17% in mechanical technologies, and the 
remaining 67% in chemical technologies and design. A derivation 
petition is likely to be filed by an entity practicing in the same or 
similar field as the patent. Therefore, it is anticipated that 16% of 
the petitions for review will be filed in the electronic field, 17% in 
the mechanical field, and 67% in the chemical or design fields.
    Preparation of the petition would require analyzing the patent 
claims, locating evidence supporting arguments of unpatentability, and 
preparing the petition seeking review of the patent. This notice 
provides the proposed procedural requirements that are common for the 
new trials. Additional requirements are provided in contemporaneous 
trial specific proposed rulemaking. The procedures for petitions to 
institute an inter partes review are proposed in Sec. Sec.  42.5, 42.6, 
42.8, 42.11, 42.13, 42.20, 42.21, 42.22, 42.24(a)(1), 42.63, 42.65, and 
42.101 through 42.105. The procedures for petitions to institute a 
post-grant review are proposed in Sec. Sec.  42.5, 42.6, 42.8, 42.11, 
42.13, 42.20, 42.21, 42.22, 42.24(a)(2), 42.63, 42.65, and 42.201 
through 42.205. The procedures for petitions to institute a covered 
business method patent review are proposed in Sec. Sec.  42.5, 42.6, 
42.8, 42.11, 42.13, 42.20, 42.21, 42.22, 42.24(a)(3), 42.63, 42.65, 
42.203, 42.205, and 42.302 through 42.304. The procedures for petitions 
to institute a derivation proceeding are proposed in Sec. Sec.  42.5, 
42.6, 42.8, 42.11, 42.13, 42.20, 42.21, 42.22, 42.24(a)(4),42.63, 
42.65, and 42.402 through 42.406.
    The skills necessary to prepare a petition for review and to 
participate in a trial before the Patent Trial and Appeal Board would 
be similar to those needed to prepare a request for inter partes 
reexamination, to represent a party in an inter partes reexamination, 
and to represent a party in an interference proceeding before the 
Patent Trial and Appeal Board. The level of skill is typically 
possessed by a registered patent practitioner having devoted 
professional time to the particular practice area, typically under the 
supervision of a practitioner skilled in the particular practice area. 
Where authorized by the Board, a non-registered practitioner may be 
admitted pro hac vice, on a case-by-case basis based on the facts and 
circumstances of the trial and party, as well as the skill of the 
practitioner.
    The cost of preparing a petition for inter partes review is 
anticipated to be the same as the cost for preparing a request for 
inter partes reexamination. The American Intellectual Property Law 
Association's AIPLA Report of the Economic Survey 2011 reported that 
the average cost of preparing a request for inter partes reexamination 
was $46,000. Based on the work required to prepare and file such a 
request, the Office considers the reported cost as a reasonable 
estimate. Accordingly, the Office estimates that the cost of preparing 
a petition for inter partes review would be $46,000 (including expert 
costs).
    The cost of preparing a petition for post-grant or covered business 
method patent review is estimated to be 33.333% higher than the cost of 
preparing a petition for inter partes review because the petition for 
post-grant or covered business method patent review may seek to 
institute a proceeding on additional grounds such as subject matter 
eligibility. Therefore, the Office estimates that the cost of preparing 
a petition for post-grant or covered business method patent review 
would be $61,333. It is expected that petitions for derivation would 
have the same complexity and cost as a petition for post-grant review 
because derivation proceedings raise issues of conception and 
communication, which have similar complexity to the issues that can be 
raised in a post-grant review, i.e., public use, sale and written 
description. Thus, the Office estimates that the cost of preparing a 
petition for derivation would also be $61,333.
    The filing of a petition for review would also require payment by 
the petitioner of the appropriate petition fee to recover the aggregate 
cost for providing the review. The appropriate petition fee would be 
determined by the number of claims for which review is sought and the 
type of review. The proposed fees for filing a petition for inter 
partes review are: $27,200 for requesting review of 20 or fewer claims, 
$34,000 to request review of 21 to 30 claims, $40,800 to request review 
of 31 to 40 claims, $54,400 to request review

[[Page 6897]]

of 41 to 50 claims, $68,000 to request review of 51 to 60 claims, and 
an additional $27,200 to request review of additional groups of 10 
claims. The fees for filing a petition for post-grant or covered 
business method patent review would be: $35,800 to request review of 20 
or fewer claims, $44,750 to request review of 21 to 30 claims, $53,700 
to request review of 31 to 40 claims, $71,600 to request review of 41 
to 50 claims, $89,500 to request review of 51 to 60 claims, and an 
additional $35,800 to request review of additional groups of 10 claims.
    In setting fees, the estimated information technology cost to 
establish the process and maintain the filing and storage system 
through 2017 is to be recovered by charging each petition an IT fee 
that has a base component of $1,705 for requests to review 20 or fewer 
claims. The IT component fees would be $2,122 for requesting review of 
21-30 claims, $2,557 for requesting review of 31-40 claims, $3,409 for 
requesting review of 41-50 claims, $4,267 for requesting review of 51-
60 claims, and an additional $1,705 for requesting review of additional 
groups of 10 claims. The remainder of the fee is to recover the cost 
for judges to determine whether to institute a review and conduct the 
review, together with a proportionate share of indirect costs, e.g., 
rent, utilities, additional support, and administrative costs. Based on 
the direct and indirect costs, the fully burdened cost per hour for 
judges to decide a petition and conduct a review is estimated to be 
$258.32.
    For a petition for inter partes review with 20 or fewer challenged 
claims, it is anticipated that 98.7 hours of judge time would be 
required. For 21 to 30 challenged claims, an additional 24.7 hours is 
anticipated for a total of 123.4 hours of judge time. For 31 to 40 
challenged claims, an additional 49.3 hours is anticipated for a total 
of 148 hours of judge time. For 41 to 50 challenged claims, an 
additional 98.7 hours is anticipated for a total of 197.4 hours of 
judge time. For 51 to 60 claims, an additional 148 hours is anticipated 
for a total of 246.7 hours of judge time. The increase in adjustment 
reflects the added complexity that typically occurs as more claims are 
in dispute.
    For a petition for post-grant or covered business method patent 
review with 20 or fewer challenged claims, it is anticipated that 132 
hours of judge time will be required. For 21 to 30 challenged claims, 
an additional 33 hours is anticipated for a total of 165 hours of judge 
time. For 31 to 40 challenged claims, an additional 66 hours is 
anticipated for a total of 198 hours of judge time. For 41 to 50 
challenged claims, an additional 132 hours is anticipated for a total 
of 264 hours of judge time. For 51 to 60 challenged claims, an 
additional 198 hours is anticipated for a total of 330 hours of judge 
time. The increase in adjustment reflects the added complexity that 
typically occurs as more claims are in dispute.
    The proposed rules would permit the patent owner to file a 
preliminary response to the petition setting forth the reasons why no 
review should be initiated. The procedures for a patent owner to file a 
preliminary response as an opposition are proposed in Sec. Sec.  42.6, 
42.8, 42.11, 42.13, 42.21, 42.23, 42.24(b), 42.51, 42.52, 42.53, 42.54, 
42.63, 42.64, 42.65, 42.107, 42.120, 42.207, and 42.220. The patent 
owner is not required to file a preliminary response. The Office 
estimates that the preparation and filing of a patent owner preliminary 
response would require 100 hours of professional time and cost $34,000 
(including expert costs). The AIPLA Report of the Economic Survey 2011 
reported that the average cost for inter partes reexamination including 
of the request ($46,000), the first patent owner response, and third 
party comments was $75,000 (see I-175) and the median billing rate for 
professional time of $340 per hour for attorneys in private firms (see 
8). Thus, the cost of the first patent owner reply and the third party 
statement is $29,000. The Office finds these costs to be reasonable 
estimates. The patent owner reply and third party statement, however, 
occur after the examiner has made an initial threshold determination 
and made only the appropriate rejections. Accordingly, it is 
anticipated that filing a patent owner preliminary response to a 
petition for review would cost more than the initial reply in a 
reexamination, an estimated $34,000 (including expert costs).
    The Office will determine whether to institute a trial within three 
months after the earlier of: (1) The submission of a patent owner 
preliminary response, (2) the waiver of filing a patent owner 
preliminary response, or (3) the expiration of the time period for 
filing a patent owner preliminary response. If the Office decides not 
to institute a trial, the petitioner may file a request for 
reconsideration of the Office's decision. It is anticipated that a 
request for reconsideration will require 80 hours of professional time 
to prepare and file, for a cost of $27,200. This estimate is based on 
the complexity of the issues and desire to avoid time bars imposed by 
35 U.S.C. 315(b), as amended, and 35 U.S.C. 325(b).
    Following institution of a trial, the parties may be authorized to 
file various motions, e.g., motions to amend and motions for additional 
discovery. Where a motion is authorized, an opposition may be 
authorized, and where an opposition is authorized, a reply may be 
authorized. The procedures for filing a motion are proposed in 
Sec. Sec.  42.6, 42.8, 42.11, 42.13, 42.21, 42.22, 42.24(a)(5), 42.51, 
42.52, 42.53, 42.54, 42.63, 42.64, 42.65, 42.121, 42.221, 42.123, and 
42.223. The procedures for filing an opposition are proposed in 
Sec. Sec.  42.6, 42.8, 42.11, 42.13, 42.21, 42.23, 42.24(b), 42.51, 
42.52, 42.53, 42.54, 42.63, 42.64, 42.65, 42.107, 42.120, 42.207, and 
42.220. The procedures for filing a reply are proposed in Sec. Sec.  
42.6, 42.8, 42.11, 42.13, 42.21, 42.23, 42.24(c), 42.51, 42.52, 42.53, 
42.54, 42.63, and 42.65. As discussed previously, the Office estimates 
that the average inter partes review will have 6.92 motions, 
oppositions, and replies after institution. The average post-grant or 
covered business method patent review will have 8.89 motions, 
oppositions, and replies after institution. The average derivation 
proceeding is anticipated to have 23.4 motions, oppositions, and 
replies after institution.
    The AIPLA Report of the Economic Survey 2011 reported that the 
average cost in contested cases before the trial section of the Board 
prior to the priority phase was $322,000 per party. Because of the 
overlap of issues in patentability grounds, it is expected that the 
cost per motion will decline as more motions are filed in a proceeding. 
It is estimated that a motion, opposition, or reply in a derivation 
would cost $34,000 (including expert costs) which is estimated by 
dividing the total public cost for all motions in current contested 
cases divided by the estimated number of motions in derivations under 
35 U.S.C. 135, as amended. The cost of a motion, opposition, or reply 
in a post-grant review is estimated at $44,200 (including expert 
costs), reflecting the reduction in overlap between motions relative to 
derivation. The cost of a motion, opposition or reply in an inter 
partes review would be $47,600 (including expert costs). Based on the 
work required to file and prepare such briefs, the Office considers the 
reported cost as a reasonable estimate.
    After a trial has been instituted but prior to a final written 
decision, parties to a review or derivation proceeding may request an 
oral hearing. The procedure for filing requests for oral argument is 
proposed in Sec.  42.70. The AIPLA Report of the Economic Survey 2011 
reported that the third quartile cost of an ex parte appeal with an 
oral

[[Page 6898]]

argument is $12,000, while the third quartile cost of an ex parte 
appeal without an oral argument is $6,000. In view of the reported 
costs, which the Office finds reasonable, and the increased complexity 
of an oral hearing with multiple parties, it is estimated that the cost 
per party for oral hearings would be $6,800 or $800 more than the 
reported third quartile cost for an ex parte oral hearing.
    Parties to a review or derivation proceeding may file requests to 
treat a settlement as business confidential, request for adverse 
judgment, and arbitration agreements and awards. A written request to 
make a settlement agreement available may also be filed. The procedures 
to file requests that a settlement be treated as business confidential 
are proposed in Sec. Sec.  42.74(c) and 42.409. The procedures to file 
requests for adverse judgment are proposed in Sec.  42.73(b). The 
procedures to file arbitration agreements and awards are proposed Sec.  
42.410. The procedures to file requests to make a settlement agreement 
available are proposed in Sec.  42.74(c)(2). It is anticipated that 
requests to treat a settlement as business confidential will require 2 
hours of professional time or $680. It is anticipated that requests for 
adverse judgment will require 1 hour of professional time or $340. It 
is anticipated that arbitration agreements and awards will require 4 
hours of professional time or $1,360. It is anticipated that requests 
to make a settlement agreement available will require 1 hour of 
professional time or $340. The requests to make a settlement agreement 
available will also require payment of a fee of $400 specified in 
proposed Sec.  42.15(d). The fee proposed would be the same as 
currently set forth in Sec.  41.20(a) for petitions to the Chief 
Administrative Patent Judge.
    Parties to a review proceeding may seek judicial review of the 
judgment of the Board. The procedures to file notices of judicial 
review of a Board decision, including notices of appeal and notices of 
election provided for in 35 U.S.C. 141, 142, 145, and 146, are proposed 
in Sec. Sec.  90.1 through 90.3. The submission of a copy of a notice 
of appeal or a notice of election is anticipated to require 6 minutes 
of professional time at a cost of $34.
    5. Description of Any Significant Alternatives to the Proposed 
Rules Which Accomplish the Stated Objectives of Applicable Statutes and 
Which Minimize Any Significant Economic Impact of the Rules on Small 
Entities:
    Size of petitions and motions: The Office considered whether to 
apply a page limit and what an appropriate page limit would be. The 
Office does not currently have a page limit on inter partes 
reexamination requests. The inter partes reexamination requests from 
October 1, 2010 to June 30, 2011, averaged 246 pages. Based on the 
experience of processing inter partes reexamination requests, the 
Office finds that the very large size of the requests has created a 
burden on the Office that hinders the efficiency and timeliness of 
processing the requests, and creates a burden on patent owners. The 
quarterly reported average processing time from the filing of a request 
to the publication of a reexamination certificate ranged from 28.9 
months to 41.7 months in fiscal year 2009, from 29.5 months to 37.6 
months in fiscal year 2010, and from 31.9 to 38.0 months in fiscal year 
2011. See Reexaminations--FY 2011, http://www.uspto.gov/patents/Reexamination_operational_statistic_through_FY2011Q4.pdf.
    By contrast, the Office has a page limit on the motions filed in 
contested cases, except where parties are specifically authorized to 
exceed the limitation. The typical contested case proceeding is subject 
to a standing order that sets a 50 page limit for motions and 
oppositions on priority, a 15 page limit for miscellaneous motions 
(Sec.  41.121(a)(3)) and oppositions (Sec.  41.122), and a 25 page 
limit for other motions (Sec.  41.121(a)(2)) and oppositions to other 
motions. In typical proceedings, replies are subject to a 15 page limit 
if directed to priority, 5 page limit for miscellaneous issues, and 10 
page limit for other motions. The average contested case was terminated 
in 10.1 months in fiscal year 2009, in 12 months in fiscal year 2010, 
and 9 months in fiscal year 2011. The percentage of contested cases 
terminated within 2 years was 93.7% in fiscal year 2009, 88.0% in 
fiscal year 2010, and 94.0% in fiscal year 2011. See BPAI Statistics--
Performance Measures, http://www.uspto.gov/ip/boards/bpai/stats/perform/index.jsp.
    Comparing the average time period for terminating a contested case, 
10.0 to 12.0 months, with the average time period, during fiscal years 
2009 through 2011, for completing an inter partes reexamination, 28.9 
to 41.7 months, indicates that the average interference takes from 24% 
(10.0/41.7) to 42% (12.0/28.9) of the time of the average inter partes 
reexamination. While several factors contribute to the reduction in 
time, limiting the size of the requests and motions is considered a 
significant factor. Proposed Sec.  42.24 would provide page limits for 
petitions, motions, oppositions, and replies. 35 U.S.C. 316(b), as 
amended, and 35 U.S.C. 326(b) provide considerations that are to be 
taken into account when prescribing regulations including the integrity 
of the patent system, the efficient administration of the Office, and 
the ability to complete timely the trials. The page limits proposed in 
these rules are consistent with these considerations.
    Federal courts routinely use page limits in managing motions 
practice as ``[e]ffective writing is concise writing.'' Spaziano v. 
Singletary, 36 F.3d 1028, 1031 n.2 (11th Cir. 1994). Many district 
courts restrict the number of pages that may be filed in a motion 
including, for example, the District of Delaware, the District of New 
Jersey, the Eastern District of Texas, the Northern, Central, and 
Southern Districts of California, and the Eastern District of Virginia.
    Federal courts have found that page limits ease the burden on both 
the parties and the courts, and patent cases are no exception. Eolas 
Techs., Inc. v. Adobe Sys., Inc., No. 6:09-CV-446, at 1 (E.D. Tex. 
Sept. 2, 2010) (``The Local Rules' page limits ease the burden of 
motion practice on both the Court and the parties.''); Blackboard, Inc. 
v. Desire2Learn, Inc., 521 F. Supp. 2d 575, 576 (E.D. Tex. 2007) (The 
parties ``seem to share the misconception, popular in some circles, 
that motion practice exists to require federal judges to shovel through 
steaming mounds of pleonastic arguments in Herculean effort to uncover 
a hidden gem of logic that will ineluctably compel a favorable ruling. 
Nothing could be farther from the truth.''); Broadwater v. Heidtman 
Steel Prods., Inc., 182 F. Supp. 2d 705, 710 (S.D. Ill. 2002) 
(``Counsel are strongly advised, in the future, to not ask this Court 
for leave to file any memoranda (supporting or opposing dispositive 
motions) longer than 15 pages. The Court has handled complicated patent 
cases and employment discrimination cases in which the parties were 
able to limit their briefs supporting and opposing summary judgment to 
10 or 15 pages.'' (Emphasis omitted)).
    The Board's contested cases experience with page limits in motions 
practice is consistent with that of the federal courts. The Board's use 
of page limits has shown it to be beneficial without being unduly 
restrictive for the parties. Page limits have encouraged the parties to 
focus on dispositive issues, easing the burden of motions practice on 
the parties and on the Board.
    The Board's contested cases experience with page limits is informed 
by its use of different approaches over the years. In the early 1990s, 
page limits were not routinely used for motions, and the practice 
suffered from lengthy

[[Page 6899]]

and unacceptable delays. To reduce the burden on the parties and on the 
Board and thereby reduce the time to decision, the Board instituted 
page limits in the late 1990s for every motion. Page limit practice was 
found to be effective in reducing the burdens on the parties and 
improving decision times at the Board. In 2006, the Board revised the 
page limit practice and allowed unlimited findings of fact and 
generally limited the number of pages containing argument. Due to 
abuses of the system, the Board recently reverted back to page limits 
for the entire motion (both argument and findings of fact).
    The Board's current page limits are consistent with the 25 page 
limits in the Northern, Central, and Southern Districts of California, 
and the Middle District of Florida and exceed the limits in the 
District of Delaware (20), the Northern District of Illinois (15), the 
District of Massachusetts (20), the Eastern District of Michigan (20), 
the Southern District of Florida (20), and the Southern District of 
Illinois (20).
    In a typical proceeding before the Board, a party may be authorized 
to file a single motion for unpatentability based on prior art, a 
single motion for unpatentability based upon failure to comply with 35 
U.S.C. 112, lack of written description, and/or enablement, and 
potentially another motion for lack of compliance with 35 U.S.C. 101, 
although a 35 U.S.C. 101 motion may be required to be combined with the 
35 U.S.C. 112 motion. Each of these motions is currently limited to 25 
pages in length, unless good cause is shown that the page limits are 
unduly restrictive for a particular motion.
    A petition requesting the institution of a trial proceeding would 
be similar to motions currently filed with the Board. Specifically, 
petitions to institute a trial seek a final written decision that the 
challenged claims are unpatentable, where derivation is a form of 
unpatentability. Accordingly, a petition to institute a trial based on 
prior art would, under current practice, be limited to 25 pages, and by 
consequence, a petition raising unpatentability based on prior art and 
unpatentability under 35 U.S.C. 101 and/or 112 would be limited to 50 
pages.
    Under the proposed rules, an inter partes review petition would be 
based upon any grounds identified in 35 U.S.C. 311(b), as amended, 
i.e., only a ground that could be raised under 35 U.S.C. 102 or 103 and 
only on the basis of patents or printed publications. Generally, under 
current practice, a party is limited to filing a single prior art 
motion, limited to 25 pages in length. The proposed rule would provide 
up to 50 pages in length for a motion requesting inter partes review. 
Thus, as the proposed page limit doubles the default page limit 
currently set for a motion before the Board, a 50 page limit is 
considered sufficient in all but exceptional cases and is consistent 
with the considerations provided in 35 U.S.C. 316(b), as amended.
    Under the proposed rules, a post-grant review petition would be 
based upon any grounds identified in 35 U.S.C. 321(b), e.g., failure to 
comply with 35 U.S.C. 101, 102, 103, and 112 (except best mode). Under 
current practice, a party would be limited to filing two or three 
motions, each limited to 25 pages, for a maximum of 75 pages. Where 
there is more than one motion for unpatentability based upon different 
statutory grounds, the Board's experience is that the motions contain 
similar discussions of technology and claim constructions. Such overlap 
is unnecessary where a single petition for unpatentability is filed. 
Thus, the proposed 70 page limit is considered sufficient in all but 
exceptional cases.
    Covered business method patent review is similar in scope to that 
of post-grant review, as there is substantial overlap in the statutory 
grounds permitted for review. Thus, the proposed page limit for 
proposed covered business method patent reviews is 70 pages, which is 
the same as that proposed for post-grant review.
    Petitions to institute derivation proceedings raise a subset of 
issues that are currently raised in interferences in a motion for 
judgment on priority of invention. Currently, motions for judgment on 
priority of invention, including issues such as conception, 
corroboration, and diligence, are generally limited to 50 pages. Thus, 
the proposed 50 page limit is considered sufficient in all but 
exceptional cases.
    The proposed rule would provide that petitions to institute a trial 
must comply with the stated page limits but may be accompanied by a 
motion that seeks to waive the page limits. The petitioner must show in 
the motion how a waiver of the page limits is in the interests of 
justice. A copy of the desired non-page limited petition must accompany 
the motion. Generally, the Board would decide the motion prior to 
deciding whether to institute the trial.
    Current Board practice provides a limit of 25 pages for other 
motions and 15 pages for miscellaneous motions. The Board's experience 
is that such page limits are sufficient for the parties filing them and 
do not unduly burden the opposing party or the Board. Petitions to 
institute a trial would generally replace the current practice of 
filing motions for unpatentability, as most motions for relief are 
expected to be similar to the current interference miscellaneous motion 
practice. Accordingly, the proposed 15 page limit is considered 
sufficient for most motions but may be adjusted where the limit is 
determined to be unduly restrictive for the relief requested.
    Proposed Sec.  42.24(b) would provide page limits for oppositions 
filed in response to motions. Current contested case practice provides 
an equal number of pages for an opposition as its corresponding motion. 
This is generally consistent with motions practice in federal courts. 
The proposed rule would continue the current practice.
    Proposed Sec.  42.24(c) would provide page limits for replies. 
Current contested case practice provides a 15 page limit for priority 
motion replies, a 5 page limit for miscellaneous (procedural) motion 
replies, and a 10 page limit for all other motions. The proposed rule 
is consistent with current contested case practice for procedural 
motions. The proposed rule would provide a 15 page limit for reply to 
petitions requesting a trial, which the Office believes is sufficient 
based on current practice. Current contested case practice has shown 
that such page limits do not unduly restrict the parties and, in fact, 
have provided sufficient flexibility to parties to not only reply to 
the motion but also help to focus on the issues. Thus, it is 
anticipated that default page limits would minimize the economic impact 
on small entities by focusing on the issues in the trials.
    The Leahy-Smith America Invents Act requires that the Director, in 
prescribing rules for the inter partes, post-grant, and covered 
business method patent reviews, consider the effect of the rules on the 
economy, the integrity of the patent system, the efficient 
administration of the Office, and the ability of the Office to complete 
timely the instituted proceedings. See 35 U.S.C. 316(b), as amended, 
and 35 U.S.C. 326(b). In view of the actual results of the duration of 
proceedings in inter partes reexamination (without page limits) and 
contested cases (with page limits), proposing procedures with 
reasonable page limits would be consistent with the objectives set 
forth in the Leahy-Smith America Invents Act. Based on our experience 
on the time needed to complete a non-page limited proceeding, the 
option of non-page limited proceedings was not adopted.
    Fee Setting: 35 U.S.C. 311(a), as amended, and 35 U.S.C. 321(a) 
require the Director to establish fees to be paid

[[Page 6900]]

by the person requesting the review in such amounts as the Director 
determines to be reasonable, considering the aggregate costs of the 
review. In contrast to current 35 U.S.C. 311(b) and 312(c), the Leahy-
Smith America Invents Act requires the Director to establish more than 
one fee for reviews based on the total cost of performing the reviews, 
and does not provide for refund of any part of the fee when the 
Director determine that the review should not be initiated.
    35 U.S.C. 312(a)(1), as amended, and 35 U.S.C. 322(a)(1) further 
require that the fee established by the Director under 35 U.S.C. 
311(a), as amended, or 35 U.S.C. 321 accompany the petition on filing. 
Accordingly, in interpreting the fee setting authority in 35 U.S.C. 
311(a), as amended, and 35 U.S.C. 321(a), it is reasonable that the 
Director should set a number of fees for filing a petition based on the 
anticipated aggregate cost of conducting the review depending on the 
complexity of the review, and require payment of the fee upon filing of 
the petition.
    Based on experience with contested cases and inter partes 
reexamination proceedings, the following characteristics of requests 
were considered as potential factors for fee setting as each would 
likely impact the cost of providing the new services. The Office also 
considered the relative difficulty in administrating each option in 
selecting the characteristics for which different fees should be paid 
for requesting review.
    I. Adopted Option. Number of claims for which review is requested. 
The number of claims often impacts the complexity of the request and 
increases the demands placed on the deciding officials. Cf. In re Katz 
Interactive Call Processing Patent Litig., 639 F.3d 1303, 1309 (Fed. 
Cir. 2011) (limiting number of asserted claims is appropriate to manage 
a patent case efficiently). Moreover, the number of claims for which 
review is requested can be easily determined and administered, which 
avoids delays in the Office and the impact on the economy or patent 
system that would occur if an otherwise meritorious request is refused 
due to improper fee payment. Any subsequent petition would be time 
barred in view 35 U.S.C. 315(b), as amended, or 35 U.S.C. 325.
    II. Alternative Option I. Number of grounds for which review is 
requested. The Office has experience with large numbers of cumulative 
grounds being presented in inter partes reexaminations which often add 
little value to the proceedings. Allowing for a large number of grounds 
to be presented on payment of an additional fee(s) is not favored. 
Determination of the number of grounds in a request may be contentious 
and difficult and may result in a large amount of high-level petition 
work. As such, the option would have a negative impact on small 
entities. Moreover, interferences instituted in the 1980s and early 
1990s suffered from this problem as there was no page limit for motions 
and the parties had little incentive to focus the issues for decision. 
The resulting interference records were often a collection of disparate 
issues and evidence. This led to lengthy and unwarranted delays in 
deciding interference cases as well as increased costs for parties and 
the Office. Accordingly, this alternative is inconsistent with 
objectives of the Leahy-Smith America Invents Act that the Director, in 
prescribing rules for the inter partes, post-grant, and covered 
business method patent reviews, consider the effect of the rules on the 
economy, the integrity of the patent system, the efficient 
administration of the Office, and the ability of the Office to complete 
timely the instituted proceedings.
    III. Alternative Option II. Pages of argument. The Office has 
experience with large requests in inter partes reexamination in which 
the merits of the proceedings could have been resolved in a shorter 
request. Allowing for unnecessarily large requests on payment of an 
additional fee(s) is not favored. Moreover, determination of what 
should be counted as ``argument'' as compared with ``evidence'' has 
often proven to be contentious and difficult as administered in the 
current inter partes reexamination appeal process.
    In addition, the trial section of the Board recently experimented 
with motions having a fixed page limit for the argument section and an 
unlimited number of pages for the statement of facts. Unlimited pages 
for the statement of facts led to a dramatic increase in the number of 
alleged facts and pages associated with those facts. For example, one 
party used approximately 10 pages for a single ``fact'' that merely cut 
and pasted a portion of a declarant's cross-examination. Based upon the 
trial section's experience with unlimited pages of facts, the Board 
recently reverted back to a fixed page limit for the entire motion 
(argument and facts). Accordingly, this alternative is inconsistent 
with objectives of the Leahy-Smith America Invents Act that the 
Director, in prescribing rules for the inter partes, post-grant, and 
covered business method patent reviews, consider the effect of the 
rules on the economy, the integrity of the patent system, the efficient 
administration of the Office, and the ability of the Office to complete 
timely the instituted proceedings.
    IV. Alternative Option III. The Office considered an alternative 
fee setting regime in which fees would be charged at various steps in 
the review process, a first fee on filing of the petition, a second fee 
if instituted, a third fee on filing a motion in opposition to amended 
claims, etc. The alternative fee setting regime would hamper the 
ability of the Office to complete timely reviews, would result in 
dismissal of pending proceedings with patentability in doubt due to 
non-payment of required fees by third parties, and would be 
inconsistent with 35 U.S.C. 312, as amended, and 35 U.S.C. 322 that 
require the fee established by the Director be paid at the time of 
filing the petition. Accordingly, this alternative is inconsistent with 
objectives of the Leahy-Smith America Invents Act that the Director, in 
prescribing rules for the inter partes, post-grant, and covered 
business method patent reviews, consider the effect of the rules on the 
economy, the integrity of the patent system, the efficient 
administration of the Office, and the ability of the Office to complete 
timely the instituted proceedings.
    V. Alternative Option IV. The Office considered setting reduced 
fees for small and micro entities and to provide refunds if a review is 
not instituted. The Office shall set the fee to recover the cost of 
providing the services under 35 U.S.C. 41(d)(2)(a). Fees set under this 
authority are not reduced for small entities, see 35 U.S.C. 42(h)(1), 
as amended. Moreover, the Office does not have authority to refund fees 
that were not paid by mistake or in excess of that owed. See 35 U.S.C. 
42(d).
    Discovery: The Office considered a procedure for discovery similar 
to the one available during district court litigation. Discovery of 
that scope has been criticized sharply, particularly when attorneys use 
discovery tools as tactical weapons, which hinder the ``just, speedy, 
and inexpensive determination of every action and proceedings.'' See 
Introduction to An E-Discovery Model Order, available at http://www.cafc.uscourts.gov/images/stories/announcements/Ediscovery_Model_Order.pdf. Accordingly, this alternative would have been inconsistent 
with objectives of the Leahy-Smith America Invents Act that the 
Director, in prescribing rules for the inter partes, post-grant, and 
covered business method patent reviews, consider the effect of the 
rules on the economy, the integrity of the patent

[[Page 6901]]

system, the efficient administration of the Office, and the ability of 
the Office to complete timely the instituted proceedings.
    Additional discovery increases trial costs and increases the 
expenditures of time by the parties and the Board. The Board's 
experience in contested cases, however, is that such showings are often 
lacking and authorization for additional discovery is expected to be 
rare. While an interests-of-justice standard would be employed in 
granting additional discovery in inter partes reviews and derivation 
proceedings, the post-grant review and covered business method patent 
review would employ a good cause standard in granting additional 
discovery.
    To promote effective discovery, the proposed rule would require a 
showing that additional requested discovery would be productive in 
inter partes reviews and derivation proceedings. An interests-of-
justice standard for additional discovery is proposed for inter partes 
reviews and derivation proceedings. This standard is consistent with 
the considerations identified in 35 U.S.C. 316(b) and 135(b), as 
amended, including the efficient administration of the Board and the 
Board's ability to complete timely trials. Further, the proposed 
interests-of-justice standard is consistent with 35 U.S.C. 316(a)(5), 
as amended, which states that discovery other than depositions of 
witnesses submitting affidavits and declarations be what is otherwise 
necessary in the interests of justice.
    Good cause and interests of justice are closely related standards, 
but the interests-of-justice standard is slightly higher than good 
cause. While a good cause standard requires a party to show a specific 
factual reason to justify the needed discovery, under the interests-of-
justice standard, the Board would look at all relevant factors. 
Specifically, to show good cause, a party would be required to make a 
particular and specific demonstration of fact. Under the interests-of-
justice standard, the moving party would also be required to show that 
it was fully diligent in seeking discovery and that there is no undue 
prejudice to the non-moving party. The interests-of-justice standard 
covers considerable ground, and in using such a standard, the Board 
expects to consider whether the additional discovery is necessary in 
light of the totality of the relevant circumstances.
    The Office is proposing a default scheduling order to provide 
limited discovery as a matter of right and provide parties with the 
ability to seek additional discovery on a case-by-case basis. In 
weighing the need for additional discovery, should a request be made, 
the Board would consider the economic impact on the opposing party. 
This would tend to limit additional discovery where a party is a small 
entity.
    Pro Hac Vice: The Office considered whether to allow counsel to 
appear pro hac vice. In certain cases, highly skilled, but non-
registered, attorneys have appeared satisfactorily before the Board in 
contested cases. The Board may recognize counsel pro hac vice during a 
proceeding upon a showing of good cause. The Board may impose 
conditions in recognizing counsel pro hac vice, including an agreement 
that counsel is bound by the Office's Code of Professional 
Responsibility. Proceedings before the Office can be technically 
complex. The grant of a motion to appear pro hac vice is a 
discretionary action taking into account the specifics of the 
proceedings. Similarly, the revocation of pro hac vice is a 
discretionary action taking into account various factors, including 
incompetence, unwillingness to abide by the Office's Code of 
Professional Responsibility, prior findings of misconduct before the 
Office in other proceedings, and incivility.
    The Board's past practice has required the filing of a motion by a 
registered patent practitioner seeking pro hac vice representation 
based upon a showing of: (1) How qualified the unregistered 
practitioner is to represent the party in the proceeding when measured 
against a registered practitioner, and, (2) whether the party has a 
genuine need to have the particular unregistered practitioner represent 
it during the proceeding. This practice has proven effective in the 
limited number of contested cases where such requests have been 
granted. The proposed rule, if adopted, would allow for this practice 
in the new proceedings authorized by the Leahy-Smith America Invents 
Act.
    The proposed rules would provide a limited delegation to the Board 
under 35 U.S.C. 2(b)(2) and 32 to regulate the conduct of counsel in 
Board proceedings. The proposed rule would delegate to the Board the 
authority to conduct counsel disqualification proceedings while the 
Board has jurisdiction over a proceeding. The rule would also delegate 
to the Chief Administrative Patent Judge the authority to make final a 
decision to disqualify counsel in a proceeding before the Board for the 
purposes of judicial review. This delegation would not derogate from 
the Director the prerogative to make such decisions, nor would it 
prevent the Chief Administrative Patent Judge from further delegating 
authority to an administrative patent judge.
    The Office considered broadly permitting practitioners not 
registered to practice by the Office to represent parties in trial as 
well as categorically prohibiting such practice. A prohibition on the 
practice would be inconsistent with the Board's experience, and more 
importantly, might result in increased costs particularly where a small 
entity has selected its district court litigation team for 
representation before the Board and has a patent review filed after 
litigation efforts have commenced. Alternatively, broadly making the 
practice available would create burdens on the Office in administering 
the trials and in completing the trial within the established time 
frame, particularly if the selected practitioner does not have the 
requisite skill. In weighing the desirability of admitting a 
practitioner pro hac vice, the economic impact on the party in interest 
would be considered which would tend to increase the likelihood that a 
small entity could be represented by a non-registered practitioner. 
Accordingly, the alternatives to eliminate pro hac vice practice or to 
permit it more broadly would have been inconsistent with objectives of 
the Leahy-Smith America Invents Act that the Director, in prescribing 
rules for the inter partes, post-grant, and covered business method 
patent reviews, consider the effect of the rules on the economy, the 
integrity of the patent system, the efficient administration of the 
Office, and the ability of the Office to complete timely the instituted 
proceedings.
    Threshold for Instituting a Review: The Office considered whether 
the threshold for instituting a review could be set as low as or lower 
than the threshold for ex parte reexamination. This alternative could 
not be adopted in view of the statutory requirements in 35 U.S.C. 314, 
as amended, and 35 U.S.C. 324.
    Default Electronic Filing: The Office considered a paper filing 
system and a mandatory electronic filing system (without any 
exceptions) as alternatives to the proposed requirement that all papers 
are to be electronically filed, unless otherwise authorized.
    Based on the Office's experience, a paper based filing system 
increases delay in processing papers, delay in public availability, and 
the chance that a paper may be misplaced or made available to an 
improper party if confidential. Accordingly, the alternative of a paper 
based filing system would have been inconsistent with objectives of the 
Leahy-Smith

[[Page 6902]]

America Invents Act that the Director, in prescribing rules for the 
inter partes, post-grant, and covered business method patent reviews, 
consider the effect of the rules on the economy, the integrity of the 
patent system, the efficient administration of the Office, and the 
ability of the Office to complete timely the instituted proceedings.
    An electronic filing system (without any exceptions) that is 
rigidly applied would result in unnecessary cost and burdens, 
particularly where a party lacks the ability to file electronically. By 
contrast, if the proposed option is adopted, it is expected that the 
entity size and sophistication would be considered in determining 
whether alternative filing methods would be authorized.
    6. Identification, to the Extent Practicable, of All Relevant 
Federal Rules Which May Duplicate, Overlap, or Conflict With the 
Proposed Rules:
    37 CFR 1.99 provides for the submission of information after 
publication of a patent application during examination by third 
parties.
    37 CFR 1.171-1.179 provide for applications to reissue a patent to 
correct errors, including where a claim in a patent is overly broad.
    37 CFR 1.291 provides for the protest against the issuance of a 
patent during examination.
    37 CFR 1.321 provides for the disclaimer of a claim by a patentee.
    37 CFR 1.501 and 1.502 provide for ex parte reexamination of 
patents. Under these rules, a person may submit to the Office prior art 
consisting of patents or printed publications that are pertinent to the 
patentability of any claim of a patent, and request reexamination of 
any claim in the patent on the basis of the cited prior art patents or 
printed publications. Consistent with 35 U.S.C. 302-307, ex parte 
reexamination rules provide a different threshold for initiation, 
require the proceeding to be conducted by an examiner with a right of 
appeal to the Patent Trial and Appeal Board, and allow for limited 
participation by third parties.
    37 CFR 1.902-1.997 provide for inter partes reexamination of 
patents. Similar to ex parte reexamination, inter partes reexamination 
provides a procedure in which a third party may request reexamination 
of any claim in a patent on the basis of the cited prior art patents 
and printed publication. The inter partes reexamination practice will 
be eliminated, except for requests filed before the effective date, 
September 16, 2012. See Sec.  6(c)(3)(C) of the Leahy-Smith America 
Invents Act.
    Other countries have their own patent laws, and an entity desiring 
a patent in a particular country must make an application for patent in 
that country, in accordance with the applicable law. Although the 
potential for overlap exists internationally, this cannot be avoided 
except by treaty (such as the Paris Convention for the Protection of 
Industrial Property, or the Patent Cooperation Treaty (PCT)). 
Nevertheless, the Office believes that there are no other duplicative 
or overlapping foreign rules.
    The notice also proposes changes to the rule of practice to 
consolidate the procedure for notifying the Office and other parties in 
the proceeding when a party seeks judicial review of a Board decision. 
In fiscal year 2010, the Board issued 7,312 decisions, and only 61 
notices of appeal were filed with the Office and no civil action was 
commenced. In fiscal year 2011, the Board issued 7,551 decisions, and 
only 100 notices of appeal were filed with the Office and 7 civil 
actions were commenced. As such, the average rate for fiscal years 2010 
and 2011 was 1.13% ((61/7,312 + 107/7,551)/2 x 100). Based on current 
projections with additional resources, it is anticipated that the Board 
will issue 10,500 decisions in fiscal year 2013. Thus, it is estimated 
that 137 notices of appeal (and notices of election) would be filed 
with the Office. Historically, one third of inter partes reexamination 
proceedings have been appealed to the Board. Based on an assumption 
that the appeal rate from the Board for the new proceedings will be 50% 
of the historic rate, 57 additional notices of appeal will be filed 
based on the new trials sought in fiscal year 2013. Based on the 
percentage of small entity owned patents that were the subject of inter 
partes reexamination (32.79%) and the percentage of small entity owned 
patent applications or patents that were the subject of an interference 
declared in fiscal year 2010 (19.62%), it is estimated that 63 small 
entities will be required to file notices of appeal and notices of 
elections.
    The proposed rule also requires that a copy of the notice of appeal 
or notice of election and complaint be provided to the Board, thus an 
additional 194 (137 + 57) copies would be required.
    C. Executive Order 12866 (Regulatory Planning and Review): This 
rulemaking has been determined to be significant for purposes of 
Executive Order 12866 (Sept. 30, 1993), as amended by Executive Order 
13258 (Feb. 26, 2002) and Executive Order 13422 (Jan. 18, 2007).
    The Office estimates that the aggregate burden of the proposed 
rules for implementing the new review procedures is approximately $80.6 
million for fiscal year 2013. The USPTO considered several factors in 
making this estimate.
    Based on the petition and other filing requirements for initiating 
a review proceeding, the USPTO initially estimated the burden of the 
proposed rules on the public to be $209,131,529 in fiscal year 2013, 
which represents the sum of the estimated total annual (hour) 
respondent cost burden ($190,280,456) plus the estimated total annual 
non-hour respondent cost burden ($18,851,073) provided in Item (O)(II) 
of the Rulemaking Considerations section of this notice, infra. 
However, since the Leahy-Smith America Invents Act also eliminates 
inter partes reexamination practice (except for requests filed before 
the effective date of September 16, 2012) and interference practice as 
to applications and patents that have an effective filing date on or 
after March 16, 2013, (with a few exceptions), the burden of the 
proposed rules should be offset by the eliminations of these 
proceedings and their associated burdens.
    It is estimated that 460 new requests for inter partes 
reexamination would have been filed in FY 2012 if the Leahy-Smith 
America Invents Act had not been enacted. This estimate is based on the 
number of proceedings filed in fiscal years 2011 (374), 2010 (280), and 
2009 (258). Elimination of 460 proceedings reduces the public's burden 
to pay filing fees by $4,048,000 (460 filings with an $8,800 filing fee 
due) and the public's burden to prepare requests by $21,160,000 (460 
filings with $46,000 average cost to prepare). Based on the assumption 
that 93% of the requests would be ordered (consistent with the fiscal 
year 2011 grant rate), the burden to conduct the proceeding until close 
of prosecution will reduce the public's burden by $89,880,000 (428 
proceedings that would be estimated to be granted reexamination 
multiplied by $210,000 which is average cost cited in the AIPLA Report 
of the Economic Survey 2011 per party cost until close of prosecution 
reduced by the $46,000 request preparation cost). Additionally, the 
burden on the public to appeal to the Board would be reduced by 
$5,358,000 (based on an estimate that 141 proceedings would be appealed 
to the Board which is estimated based on the number of granted 
proceedings (428) and the historical rate of appeal to the Board (\1/
3\) and an average public cost of $38,000). Thus, $120,446,000 in 
public burden will be eliminated by the elimination of new filings of 
inter partes reexamination (the sum of $4,048,000 (the filing fees), 
$21,160,000 (the cost of

[[Page 6903]]

preparing requests), $89,880,000 (the prosecution costs), plus 
$5,358,000 (the burden to appeal to the Board)).
    The public burden due to a reduction in the number of interferences 
declared, from 64 to 51, is estimated at $9,484,400 based on the 
assumption that the current percentage of interferences decided in the 
preliminary phase (80%) would continue on the lower number of 
proceedings instituted and based on cost to the public. To calculate 
this public burden due to a reduction in the number of interferences 
declared ($9,484,400), the following information was used. The average 
public burden for a two party interference decided in the preliminary 
phase reported in the AIPLA Report of the Economic Survey 2011 is 
$644,000 (if decided in the preliminary phase) and $1,262,000 (if 
decided after the preliminary phase). It is estimated that had the 
Leahy-Smith America Invents Act not been enacted, 52 interferences 
would have been decided in the preliminary phase, and 12 would have 
been decided after the preliminary phase, equating to a public burden 
of $48,632,000 ((52 multiplied by $644,000 equals $33,488,000), plus 
(12 multiplied by $1,262,000 equals $15,144,000) for a total of 
$48,632,000). It is estimated that 51 interferences will be instituted 
in fiscal year 2013, at an average public burden of $767,600 (80% of 
$644,000 plus 20% of $ 1,262,000) per interference, or a total of 
$39,147,600 (51 multiplied by $767,600). Accordingly, it is estimated 
that burden to the public due to the reduction of interferences would 
be the total public burden for interferences of $48,632,000 minus total 
public burden for estimated interferences for fiscal year 2013 of 
$39,147,600, or $9,484,400.
    Thus, a total of $129,930,400 in public burden will be eliminated 
by the reduction in the number of interferences that would be declared 
and by eliminating new filings of inter partes reexamination (this 
total is a sum of the following identified above: Elimination of filing 
fees ($4,048,000), cost of preparing requests ($21,160,000), 
prosecution costs until close of prosecution ($89,880,000), burden to 
appeal to the Board ($5,358,000) in new inter partes reexamination 
proceedings, and the reduction in interference burden ($9,484,400)). 
Therefore, the estimated aggregate burden of the proposed rules for 
implementing the new review proceedings would be $79,201,129 
($209,131,529 minus $129,930,400) in fiscal year 2013.
    The USPTO expect several benefits to flow from the Leahy-Smith 
America Invents Act and these proposed rules. It is anticipated that 
the proposed rules will reduce the time for reviewing patents at the 
USPTO. Specifically, 35 U.S.C. 316(a), as amended, and 35 U.S.C. 326(a) 
provide that the Director prescribe regulations requiring a final 
determination by the Board within one year of initiation, which may be 
extended for up to six months for good cause. In contrast, currently 
for inter partes reexamination, the average time from the filing to the 
publication of a certificate ranged from 28.9 to 41.7 months during 
fiscal years 2009-2011. See Reexaminations--FY 2011, http://www.uspto.gov/patents/Reexamination_operational_statistic_through_FY2011Q4.pdf.
    Likewise, it is anticipated that the proposed rules will minimize 
duplication of efforts. In particular, the Leahy-Smith America Invents 
Act provides more coordination between district court infringement 
litigation and inter partes review to reduce duplication of efforts and 
costs. For instance, 35 U.S.C. 315(b), as amended, will require that a 
petition for inter partes review be filed within one year of the date 
of service of a complaint alleging infringement of a patent. By 
requiring the filing of an inter partes review petition earlier than a 
request for inter partes reexamination, and by providing shorter 
timelines for inter partes review compared with reexamination, it is 
anticipated that the current high level of duplication between 
litigation and reexamination will be reduced.
    The AIPLA Report of the Economic Survey 2011 reports that the total 
cost of patent litigation where the damages at risk are less than 
$1,000,000 average $916,000, where the damages at risk are between 
$1,000,000 and $25,000,000 average $2,769,000, and where the damages at 
risk exceed $25,000,000 average $6,018,000. There may be a significant 
reduction in overall burden if, as intended, the Leahy-Smith America 
Invents Act and the proposed rules reduce the overlap between review at 
the USPTO of issued patents and validity determination during patent 
infringement actions. Data from the United States district courts 
reveals that 2,830 patent cases were filed in 2006, 2,896 in 2007, 
2,909 in 2008, 2,792 in 2009, and 3,301 in 2010. See U.S. Courts, 
Judicial Business of the United States Courts, www.uscourts.gov/uscourts/Statistics/JudicialBusiness/2010/appendices/C02ASep10.pdf 
(last visited Nov. 11, 2011) (hosting annual reports for 1997 through 
2010). Thus, the Office estimates that no more than 3,300 patent cases 
(the highest number of yearly filings between 2006 and 2010 rounded to 
the nearest 100) are likely to be filed annually. The aggregate burden 
estimate above ($79,201,056) was not offset by a reduction in burden 
based on improved coordination between district court patent litigation 
and the new inter partes review proceedings.
    D. Executive Order 13563 (Improving Regulation and Regulatory 
Review): The Office has complied with Executive Order 13563. 
Specifically, the Office has, to the extent feasible and applicable: 
(1) Made a reasoned determination that the benefits justify the costs 
of the rule; (2) tailored the rule to impose the least burden on 
society consistent with obtaining the regulatory objectives; (3) 
selected a regulatory approach that maximizes net benefits; (4) 
specified performance objectives; (5) identified and assessed available 
alternatives; (6) involved the public in an open exchange of 
information and perspectives among experts in relevant disciplines, 
affected stakeholders in the private sector, and the public as a whole, 
and provided online access to the rule making docket; (7) attempted to 
promote coordination, simplification, and harmonization across 
government agencies and identified goals designed to promote 
innovation; (8) considered approaches that reduce burdens and maintain 
flexibility and freedom of choice for the public; and (9) ensured the 
objectivity of scientific and technological information and processes.
    E. Executive Order 13132 (Federalism): This rulemaking does not 
contain policies with federalism implications sufficient to warrant 
preparation of a Federalism Assessment under Executive Order 13132 
(Aug. 4, 1999).
    F. Executive Order 13175 (Tribal Consultation): This rulemaking 
will not: (1) Have substantial direct effects on one or more Indian 
tribes; (2) impose substantial direct compliance costs on Indian tribal 
governments; or (3) preempt tribal law. Therefore, a tribal summary 
impact statement is not required under Executive Order 13175 (Nov. 6, 
2000).
    G. Executive Order 13211 (Energy Effects): This rulemaking is not a 
significant energy action under Executive Order 13211 because this 
rulemaking is not likely to have a significant adverse effect on the 
supply, distribution, or use of energy. Therefore, a Statement of 
Energy Effects is not required under Executive Order 13211 (May 18, 
2001).
    H. Executive Order 12988 (Civil Justice Reform): This rulemaking 
meets applicable standards to minimize litigation, eliminate ambiguity, 
and reduce burden as set forth in sections

[[Page 6904]]

3(a) and 3(b)(2) of Executive Order 12988 (Feb. 5, 1996). This 
rulemaking carries out a statute designed to lessen litigation. See 
H.R. Rep. No. 112-98, at 45-48.
    I. Executive Order 13045 (Protection of Children): This rulemaking 
does not concern an environmental risk to health or safety that may 
disproportionately affect children under Executive Order 13045 (Apr. 
21, 1997).
    J. Executive Order 12630 (Taking of Private Property): This 
rulemaking will not effect a taking of private property or otherwise 
have taking implications under Executive Order 12630 (Mar. 15, 1988).
    K. Congressional Review Act: Under the Congressional Review Act 
provisions of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801-808), prior to issuing any final rule, the United 
States Patent and Trademark Office will submit a report containing the 
final rule and other required information to the U.S. Senate, the U.S. 
House of Representatives, and the Comptroller General of the Government 
Accountability Office. The changes in this notice are not expected to 
result in an annual effect on the economy of 100 million dollars or 
more, a major increase in costs or prices, or significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or the ability of United States-based enterprises to 
compete with foreign based enterprises in domestic and export markets. 
Therefore, this notice is not expected to result in a ``major rule'' as 
defined in 5 U.S.C. 804(2).
    L. Unfunded Mandates Reform Act of 1995: The changes proposed in 
this notice do not involve a Federal intergovernmental mandate that 
will result in the expenditure by State, local, and tribal governments, 
in the aggregate, of 100 million dollars (as adjusted) or more in any 
one year, or a Federal private sector mandate that will result in the 
expenditure by the private sector of 100 million dollars (as adjusted) 
or more in any one year, and will not significantly or uniquely affect 
small governments. Therefore, no actions are necessary under the 
provisions of the Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 
1501-1571.
    M. National Environmental Policy Act: This rulemaking will not have 
any effect on the quality of the environment and is thus categorically 
excluded from review under the National Environmental Policy Act of 
1969. See 42 U.S.C. 4321-4370h.
    N. National Technology Transfer and Advancement Act: The 
requirements of section 12(d) of the National Technology Transfer and 
Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because 
this rulemaking does not contain provisions which involve the use of 
technical standards.
    O. Paperwork Reduction Act: The Paperwork Reduction Act of 1995 (44 
U.S.C. 3501-3549) requires that the USPTO consider the impact of 
paperwork and other information collection burdens imposed on the 
public. This proposed rulemaking involves information collection 
requirements which are subject to review by the Office of Management 
and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3549). The collection of information involved in this notice has 
been submitted to OMB under OMB control number 0651-00xx. The proposed 
collection will be available at the OMB's Information Collection Review 
Web site at: www.reginfo.gov/public/do/PRAMain.
    The USPTO is submitting the information collection to OMB for its 
review and approval because this notice of proposed rulemaking will add 
the following to a collection of information:
    (1) Petitions to institute an inter partes review (Sec. Sec.  42.5, 
42.6, 42.8, 42.11, 42.13, 42.20, 42.21, 42.22, 42.24(a)(1), 42.63, 
42.65, and 42.101 through 42.105);
    (2) Petitions to institute a post-grant review (Sec. Sec.  42.5, 
42.6, 42.8, 42.11, 42.13, 42.20, 42.21, 42.22, 42.24(a)(2), 42.63, 
42.65, and 42.201 through 42.205);
    (3) Petitions to institute a covered business method patent review 
(Sec. Sec.  42.5, 42.6, 42.8, 42.11, 42.13, 42.20, 42.21, 42.22, 
42.24(a)(3), 42.63, 42.65, 42.203, 42.205, and 42.302 through 42.304);
    (4) Petitions to institute a derivation proceeding (Sec. Sec.  
42.5, 42.6, 42.8, 42.11, 42.13, 42.20, 42.21, 42.22, 42.24(a)(4),42.63, 
42.65, and 42.402 through 42.406);
    (5) Motions (Sec. Sec.  42.6, 42.8, 42.11, 42.13, 42.21, 42.22, 
42.24(a)(5), 42.51, through 42.54, 42.63, 42.64, 42.65, 42.121, 42.221, 
42.123, and 42.223);
    (6) Oppositions (Sec. Sec.  42.6, 42.8, 42.11, 42.13, 42.21, 42.23, 
42.24(b), 42.51, 42.52, 42.53, 42.54, 42.63, 42.64, 42.65, 42.107, 
42.120, 42.207, and 42.220);
    (7) Replies provided for in 35 U.S.C. 135 and 311-318, as amended, 
and new 35 U.S.C. 319 and 321-329 (Sec. Sec.  42.6, 42.8, 42.11, 42.13, 
42.21, 42.23, 42.24(c), 42.51, 42.52, 42.53, 42.54, 42.63, and 42.65); 
and
    (8) Notices of judicial review of a Board decision, including 
notices of appeal and notices of election provided for 35 U.S.C. 141, 
142, 145 and 146 (Sec. Sec.  90.1 through 90.3).
    The proposed rules also permit filing requests for oral argument 
(Sec.  42.70) provided for in 35 U.S.C. 316(a)(10), as amended, and 35 
U.S.C. 326(a)(10), requests for rehearing (Sec.  42.71(c)), requests 
for adverse judgment (Sec.  42.73(b)), requests that a settlement be 
treated as business confidential (Sec.  42.74(b) and 42.409) provided 
for in 35 U.S.C. 317, as amended, and 35 U.S.C. 327, and arbitration 
agreements and awards (Sec.  42.410) to a collection of information.
    I. Abstract: The USPTO is required by 35 U.S.C. 131 and 151 to 
examine applications and, when appropriate, issue applications as 
patents.
    Chapter 31 of title 35, United States Code, in effect on September 
16, 2012, provides for inter partes review proceedings allowing third 
parties to petition the USPTO to review the patentability of an issued 
patent under 35 U.S.C. 102 and 103 based on patents and printed 
publications. If a trial is initiated by the USPTO based on the 
petition, as authorized by the USPTO, additional motions may be filed 
by the petitioner. A patent owner may file a response to the petition 
and if a trial is instituted, as authorized by the USPTO, may file 
additional motions.
    Chapter 32 of title 35 U.S.C. in effect on September 16, 2012, 
provides for post-grant review proceeding allowing third parties to 
petition the USPTO to review the patentability of an issued patent 
under any ground authorized under 35 U.S.C. 282(b)(2). If a trial is 
initiated by the USPTO based on the petition, as authorized by the 
USPTO, additional motions may be filed by the petitioner. A patent 
owner may file a response to the petition and if a trial is instituted, 
as authorized by the USPTO, may file additional motions.
    Section 18 of the Leahy-Smith America Invents Act provides for a 
transitional program for covered business method patents, which will 
employ the standards and procedures of the post-grant review proceeding 
with a few exceptions. 35 U.S.C. 135 in effect on March 16, 2013, 
provides for petitions to institute a derivation proceeding at the 
USPTO for certain applications. The new rules for initiating and 
conducting these proceedings are proposed in this notice as new part 42 
of title 37 of the Code of Federal Regulations.
    In estimating the number of hours necessary for preparing a 
petition to institute an inter partes review, the USPTO considered the 
estimated cost of preparing a request for inter partes reexamination 
($46,000), the median billing rate ($340/hour), and the observation 
that the cost of inter partes

[[Page 6905]]

reexamination has risen the fastest of all litigation costs since 2009 
in the AIPLA Report of the Economic Survey 2011. It was estimated that 
a petition for an inter partes review and an inter partes reexamination 
request would cost the same to the preparing party ($46,000). Since 
additional grounds are provided in post-grant review or covered 
business method patent review, the Office estimates the cost of 
preparing a petition to institute a review will be 33.333% more than 
the estimated cost of preparing a request for inter partes 
reexamination, or $61,333.
    In estimating the number of hours necessary for preparing motions 
after instituting and participating in the review, the USPTO considered 
in the AIPLA Report of the Economic Survey 2011 which reported the 
average cost of a party to a two-party interference to the end of the 
preliminary motion phase ($322,000) and inclusive of all costs 
($631,000). The Office considered that the preliminary motion phase is 
a good proxy for patentability reviews since that is the period of 
current contested cases before the trial section of the Board where 
most patentability motions are currently filed.
    The USPTO also reviewed recent contested cases before the trial 
section of the Board to make estimates on the average number of motions 
for any matter including priority, the subset of those motions directed 
to non-priority issues, the subset of those motions directed to non-
priority patentability issues, and the subset of those motions directed 
to patentability issues based on a patent or printed publication on the 
basis of 35 U.S.C. 102 or 103. The review of current contested cases 
before the trial section of the Board indicated that approximately 15% 
of motions were directed to prior art grounds, 18% of motions were 
directed to other patentability grounds, 27% were directed to 
miscellaneous issues, and 40% were directed to priority issues. It was 
estimated that the cost per motion to a party in current contested 
cases before the trial section of the Board declines because of overlap 
in subject matter, expert overlap, and familiarity with the technical 
subject matter. Given the overlap of subject matter, a proceeding with 
fewer motions will have a somewhat less than proportional decrease in 
costs since the overlapping costs will be spread over fewer motions.
    It is estimated that the cost of an inter partes review would be 
60% of the cost of current contested cases before the trial section of 
the Board to the end of the preliminary motion period. An inter partes 
review should have many fewer motions since only one party will have a 
patent that is the subject of the proceeding (compared with each party 
having at least a patent or an application in current contested cases 
before the trial section of the Board). Moreover, fewer issues can be 
raised since inter partes review will not have priority-related issues 
that must be addressed in current contested cases before the trial 
section of the Board. Consequently, a 60% weighting factor should 
capture the typical costs of an inter partes review.
    It is estimated that the cost of a post-grant review or covered 
business method patent review would be 75% of the cost of current 
contested cases before the trial section of the Board to the end of the 
preliminary motion period. The basis for this estimate is similar to 
the basis for the inter partes review estimate. Since more 
patentability issues may be raised in the petition, the cost for these 
trials is expected to be somewhat higher. Again, a 75% weighting factor 
should capture the typical costs of a post-grant review or a covered 
business method patent review.
    Derivations will be more like current contested cases before the 
trial section of the Board inasmuch as they may have a period which 
sets the stage for determining derivation and a derivation period. One 
half of derivations are anticipated to end in the preliminary motion 
period, while the other half are anticipated to proceed to decision on 
derivation. While it is recognized that fewer than half of all current 
contested cases before the trial section of the Board proceed to a 
priority decision, derivation contests are often more protracted than 
other current contested cases before the trial section of the Board. 
The costs associated with derivations through the preliminary motion 
period and through the derivation period should be comparable to the 
corresponding costs of current contested cases before the trial section 
of the Board.
    The title, description, and respondent description of the 
information collection are shown below with an estimate of the annual 
reporting burdens. Included in this estimate is the time for reviewing 
instructions, gathering and maintaining the data needed, and completing 
and reviewing the collection of information. The principal impact of 
the proposed changes in this notice of proposed rulemaking is to 
implement the changes to Office practice necessitated by Sec. Sec.  
3(i), 6, and 18 of the Leahy-Smith America Invents Act.
    The public uses this information collection to request review and 
derivation proceedings and to ensure that the associated fees and 
documentation are submitted to the USPTO.

II. Data

    Needs and Uses: The information supplied to the USPTO by a petition 
to institute a review or derivation as well as the motions authorized 
following the institution is used by the USPTO to determine whether to 
initiate a review under 35 U.S.C. 314, as amended, or 35 U.S.C. 324 or 
derivation proceeding under 35 U.S.C. 135, as amended, and to prepare a 
final decision under 35 U.S.C. 135 or 318, as amended, or 35 U.S.C. 
328.
    OMB Number: 0651-00xx.
    Title: Patent Review and Derivation Proceedings.
    Form Numbers: None.
    Type of Review: New Collection.
    Likely Respondents/Affected Public: Individuals or households, 
businesses or other for profit, not-for-profit institutions, farms, 
Federal Government, and state, local, or tribal governments.
    Estimated Number of Respondents/Frequency of Collection: 1120 
respondents and 4,967 responses per year.
    Estimated Time per Response: The USPTO estimates that it will take 
the public from 0.1 to 180.4 hours to gather the necessary information, 
prepare the documents, and submit the information to the USPTO.
    Estimated Total Annual Respondent Burden Hours: 559,648.4 hours per 
year.
    Estimated Total Annual (Hour) Respondent Cost Burden: $190,280,456 
per year. The USPTO expects that the information in this collection 
will be prepared by attorneys. Using the professional rate of $340 per 
hour for attorneys in private firms, the USPTO estimates that the 
respondent cost burden for this collection will be approximately 
$190,280,456 per year (559,648.4 hours per year multiplied by $340 per 
hour).
    Estimated Total Annual Non-Hour Respondent Cost Burden: $18,851,073 
per year. There are no capital start-up or maintenance costs associated 
with this information collection. However, this collection does have 
annual (non-hour) costs in the form of filing fees and postage costs 
where filing via mail is authorized. It is estimated that filing via 
mail will be authorized in one inter partes review petition filing and 
3 subsequent papers. There are filing fees associated with petitions 
for inter partes review, post-grant review, and covered business method 
patent review and for requests to treat a settlement as business 
confidential. The total filing fees for this collection are calculated 
in the

[[Page 6906]]

accompanying table. The USPTO estimates that filings authorized to be 
filed via mail will be mailed to the USPTO by Express Mail using the 
U.S. Postal Service's flat rate envelope, which can accommodate varying 
submission weights, estimated in this case to be 16 ounces for the 
petitions and two ounces for the other papers. The cost of the flat 
rate envelope is $18.30. The USPTO estimates that the total postage 
cost associated with this collection will be approximately $73 per 
year. The USPTO estimates that the total fees associated with this 
collection will be approximately $18,851,073 per year.
    Therefore, the total cost burden in fiscal year 2013 is estimated 
to be $209,131,529 (the sum of the estimated total annual (hour) 
respondent cost burden ($190,280,456) plus the estimated total annual 
non-hour respondent cost burden ($18,851,073)).

----------------------------------------------------------------------------------------------------------------
                                                                 Estimated  time     Estimated       Estimated
                              Item                                for  response       annual      annual  burden
                                                                    (in hours)       responses         hours
----------------------------------------------------------------------------------------------------------------
Petition for inter partes review...............................            135.3             460          62,238
Petition for post-grant review or covered business method                  180.4              50           9,020
 patent review.................................................
Petition for derivation........................................            180.4              50           9,020
Reply to initial inter partes review petition..................            100               406          40,600
Reply to initial post-grant review or covered business method              100                45           4,500
 patent review.................................................
Request for Reconsideration....................................             80               146          11,680
Motions, replies and oppositions after institution in inter                140             2,453         343,420
 partes review.................................................
Motions, replies and oppositions after institution in post-                130               342          44,460
 grant review or covered business method patent review.........
Motions, replies and oppositions in derivation proceeding......            120               210          25,200
Request for oral hearing.......................................             20               466           9,320
Request to treat a settlement as business confidential.........              2                20              40
Request for adverse judgment, default adverse judgment or                    1               103             103
 settlement....................................................
Arbitration agreement and award................................              4                 2               8
Request to make a settlement agreement available...............              1                20              20
Notice of judicial review of a Board decision (e.g., notice of               0.1 hour        194            19.4
 appeal under 35 U.S.C. 142)...................................
                                                                ------------------------------------------------
    Totals.....................................................  ...............           4,967       559,648.4
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                                     Estimated                       Estimated
                              Item                                    annual        Fee amount    annual  filing
                                                                     responses                         costs
----------------------------------------------------------------------------------------------------------------
Petition for inter partes review................................             460         $35,800     $16,468,000
Petition for post-grant review or covered business method patent              50          47,100       2,355,000
 review.........................................................
Petition for derivation.........................................              50             400          20,000
Reply to inter partes review petition...........................             406               0               0
Reply to post-grant review or covered business method patent                  45               0               0
 review petition................................................
Request for Reconsideration.....................................             146               0               0
Motions, replies and oppositions after initiation in inter                 2,453               0               0
 partes review..................................................
Motions, replies and oppositions after initiation in post-grant              342               0               0
 review or covered business method patent review................
Motions, replies and oppositions in derivation proceeding.......             210               0               0
Request for oral hearing........................................             466               0               0
Request to treat a settlement as business confidential..........              20               0               0
Request for adverse judgment, default adverse judgment or                    103               0               0
 settlement.....................................................
Arbitration agreement and awards................................               2               0               0
Request to make a settlement agreement available................              20             400           8,000
Notice of judicial review of a Board decision (e.g., notice of               194               0               0
 appeal under 35 U.S.C. 142)....................................
                                                                 -----------------------------------------------
    Totals......................................................           4,967  ..............      18,851,000
----------------------------------------------------------------------------------------------------------------

III. Solicitation

    The agency is soliciting comments to: (1) Evaluate whether the 
proposed information requirement is necessary for the proper 
performance of the functions of the agency, including whether the 
information will have practical utility; (2) evaluate the accuracy of 
the agency's estimate of the burden; (3) enhance the quality, utility, 
and clarity of the information to be collected; and (4) minimize the 
burden of collecting the information on those who are to respond, 
including by using appropriate automated, electronic, mechanical, or 
other technological collection techniques or other forms of information 
technology.
    Interested persons are requested to send comments regarding this 
information collection by April 9, 2012, to: (1) The Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
New Executive Office Building, Room 10202, 725 17th Street NW., 
Washington, DC 20503, Attention: Nicholas A. Fraser, the Desk Officer 
for the United States Patent and Trademark Office, and via email at 
[email protected]; and (2) The Board of Patent Appeals and 
Interferences by electronic mail message over the Internet addressed to 
[email protected], or by mail addressed to: Mail Stop 
Patent Board, Director of the United States Patent and Trademark 
Office, P.O. Box 1450, Alexandria, VA 22313-1450, marked to the 
attention of ``Lead Judge Michael Tierney, Patent Trial Proposed 
Rules.''
    Notwithstanding any other provision of law, no person is required 
to respond

[[Page 6907]]

to nor shall a person be subject to a penalty for failure to comply 
with a collection of information subject to the requirements of the 
Paperwork Reduction Act unless that collection of information displays 
a currently valid OMB control number.

List of Subjects

37 CFR Part 42

    Administrative practice and procedure, Inventions and patents, 
Lawyers.

37 CFR Part 90

    Administrative practice and procedure, Inventions and patents, 
Lawyers.

Proposed Amendments to the Regulatory Text

    For the reasons stated in the preamble, the Under Secretary of 
Commerce for Intellectual Property and Director of the United States 
Patent and Trademark Office proposes to amend 37 CFR chapter I as 
follows:
    1. Add part 42 to read as follows:

PART 42--TRIAL PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD

Sec.
Subpart A--Trial Practice and Procedure

General

42.1 Policy.
42.2 Definitions.
42.3 Jurisdiction.
42.4 Notice of trial.
42.5 Conduct of the proceeding.
42.6 Filing of documents, including exhibits; service.
42.7 Management of the record.
42.8 Mandatory notices.
42.9 Action by patent owner.
42.10 Counsel.
42.11 Duty of candor.
42.12 Sanctions.
42.13 Citation of authority.
42.14 Public availability.

Fees

42.15 Fees.

Petition and Motion Practice

42.20 Generally.
42.21 Notice of basis for relief.
42.22 Content of petitions and motions.
42.23 Oppositions and replies.
42.24 Page limits for petitions, motions, oppositions and replies.
42.25 Default filing times.

Testimony and Production

42.51 Discovery.
42.52 Compelling testimony and production.
42.53 Taking testimony.
42.54 Protective order.
42.55 Confidential information in a petition.
42.56 Expungement of confidential information.
42.61 Admissibility.
42.62 Applicability of the Federal Rules of Evidence.
42.63 Form of evidence.
42.64 Objection; motion to exclude; motion in limine.
42.65 Expert testimony; tests and data.

Oral Argument, Decision, and Settlement

42.70 Oral argument.
42.71 Decision on petitions or motions.
42.72 Termination of trial.
42.73 Judgment.
42.74 Settlement.

Certificate

42.80 Certificate.
Subpart B--[Reserved]

    Authority:  35 U.S.C. 2(b)(2), 6, 21, 23, 41, 135, 311, 312, 
316, 321-326 and Leahy-Smith America Invents Act, Pub. L. 112-29, 
sections 6(c), 6(f) and 18, 125 Stat. 284, 304, 311, and 329 (2011).

Subpart A--Trial Practice and Procedure

General


Sec.  42.1  Policy.

    (a) Scope. Part 42 governs proceedings before the Patent Trial and 
Appeal Board. Sections 1.4, 1.7, 1.14, 1.16, 1.22, 1.23, 1.25, 1.26, 
1.32, 1.34, and 1.36 of this chapter also apply to proceedings before 
the Board, as do other sections of part 1 of this chapter that are 
incorporated by reference into this part.
    (b) Construction. This part shall be construed to secure the just, 
speedy, and inexpensive resolution of every proceeding.
    (c) Decorum. Every party must act with courtesy and decorum in all 
proceedings before the Board, including in interactions with other 
parties.
    (d) Evidentiary standard. The default evidentiary standard is a 
preponderance of the evidence.


Sec.  42.2  Definitions.

    The following definitions apply to this part:
    Affidavit means affidavit or declaration under Sec.  1.68 of this 
chapter. A transcript of an ex parte deposition or a declaration under 
28 U.S.C. 1746 may be used as an affidavit.
    Board means the Patent Trial and Appeal Board. Board means a panel 
of the Board or a member or employee acting with the authority of the 
Board.
    Business day means a day other than a Saturday, Sunday, or Federal 
holiday within the District of Columbia.
    Confidential information means trade secret or other confidential 
research, development or commercial information.
    Final means final for the purpose of judicial review. A decision is 
final only if it disposes of all necessary issues with regard to the 
party seeking judicial review, and does not indicate that further 
action is required.
    Hearing means consideration of the trial.
    Involved means an application, patent, or claim that is the subject 
of the proceeding.
    Judgment means a final written decision by the Board.
    Motion means a request for relief other than by petition.
    Office means the United States Patent and Trademark Office.
    Panel means at least three members of the Board.
    Party means at least the petitioner and the patent owner and, in a 
derivation proceeding, any applicant.
    Petition is a request that a trial be instituted.
    Petitioner means the party filing a petition requesting that a 
trial be instituted.
    Preliminary Proceeding begins with the filing of a petition for 
instituting a trial and ends with a written decision as to whether a 
trial will be instituted.
    Proceeding means a trial or preliminary proceeding.
    Rehearing means reconsideration.
    Trial means a contested case instituted by the Board based upon a 
petition. A trial begins with a written decision notifying the 
petitioner and patent owner of the institution of the trial. The term 
trial specifically includes a derivation proceeding under 35 U.S.C. 
135; an inter partes review under Chapter 31 of title 35, United States 
Code; a post-grant review under Chapter 32 of title 35, United States 
Code; and a transitional business-method review under section 18 of the 
Leahy-Smith America Invents Act. Patent interferences are administered 
under part 41 and not under part 42 of this title, and therefore are 
not trials.


Sec.  42.3  Jurisdiction.

    (a) The Board may exercise exclusive jurisdiction within the Office 
over every involved application and patent during the proceeding, as 
the Board may order.
    (b) A petition to institute a trial must be filed with the Board in 
a timely manner.


Sec.  42.4  Notice of trial.

    (a) Institution of trial. The Board institutes the trial on behalf 
of the Director.
    (b) Notice of a trial will be sent to every party to the 
proceeding. The entry of the notice institutes the trial.
    (c) The Board may authorize additional modes of notice, including:

[[Page 6908]]

    (1) Sending notice to another address associated with the party, or
    (2) Publishing the notice in the Official Gazette of the United 
States Patent and Trademark Office or the Federal Register.


Sec.  42.5  Conduct of the proceeding.

    (a) The Board may determine a proper course of conduct in a 
proceeding for any situation not specifically covered by this part and 
may enter non-final orders to administer the proceeding.
    (b) The Board may waive or suspend a requirement of parts 1, 41, 
and 42 and may place conditions on the waiver or suspension.
    (c) Times--(1) Setting times. The Board may set times by order. 
Times set by rule are default and may be modified by order. Any 
modification of times will take any applicable statutory pendency goal 
into account.
    (2) Extension of time. A request for an extension of time must be 
supported by a showing of good cause.
    (3) Late action. A late action will be excused on a showing of good 
cause or upon a Board decision that consideration on the merits would 
be in the interests of justice.
    (d) Ex parte communications. Communication regarding a specific 
proceeding with a Board member defined in 35 U.S.C. 6(a) is not 
permitted unless both parties have an opportunity to be involved in the 
communication.


Sec.  42.6  Filing of documents, including exhibits; service.

    (a) General format requirements. (1) Page size must be 8\1/2\ inch 
x 11 inch except in the case of exhibits that require a larger size in 
order to preserve details of the original.
    (2) In documents, including affidavits, created for the proceeding:
    (i) Markings must be in black or must otherwise provide an 
equivalent dark, high-contrast image;
    (ii) Either a proportional or monospaced font may be used:
    (A) The proportional font must be 14-point or larger, and
    (B) The monospaced font must not contain more than 4 characters per 
centimeter (10 characters per inch);
    (iii) Double spacing must be used except in headings, tables of 
contents, tables of authorities, indices, signature blocks, and 
certificates of service. Block quotations may be 1.5 spaced, but must 
be indented from both the left and the right margins; and
    (iv) Margins must be at least 2.5 centimeters (1 inch) on all 
sides.
    (3) Incorporation by reference; combined documents. Arguments must 
not be incorporated by reference from one document into another 
document. Combined motions, oppositions, replies, or other combined 
documents are not permitted.
    (4) Signature; identification. Documents must be signed in 
accordance with Sec. Sec.  1.33 and 11.18(a) of this title, and should 
be identified by the trial number (where known).
    (b) Modes of filing--(1) Electronic filing. Unless otherwise 
authorized, submissions are to be made to the Board electronically via 
the Internet according to the parameters established by the Board and 
published on the Web site of the Office.
    (2)(i) Filing by means other than electronic filing. A document 
filed by means other than electronic filing must:
    (A) Be accompanied by a motion requesting acceptance of the 
submission; and
    (B) Identify a date of transmission where a party seeks a filing 
date other than the date of receipt at the Board.
    (ii) Mailed correspondence shall be sent to: Mail Stop PATENT 
BOARD, Patent Trial and Appeal Board, United States Patent and 
Trademark Office, P.O. Box 1450, Alexandria, Virginia 22313-1450.
    (c) Exhibits. Each exhibit must be filed with the first document in 
which it is cited except as the Board may otherwise order.
    (d) Previously filed paper. A document already in the record of the 
proceeding must not be filed again, not even as an exhibit or an 
appendix, without express Board authorization.
    (e) Service--(1) Simultaneous with filing. Each document filed with 
the Board, if not previously served, must be served simultaneously on 
each opposing party.
    (2) Counsel of record. If a party is represented by counsel of 
record in the proceeding, service must be on counsel.
    (3) Certificate of service. (i) Each document, other than an 
exhibit, must include a certificate of service at the end of that 
document. Any exhibit filed with the document may be included in the 
certification for the document.
    (ii) For an exhibit filed separately, a transmittal letter 
incorporating the certificate of service must be filed. If more than 
one exhibit is filed at one time, a single letter should be used for 
all of the exhibits filed together. The letter must state the name and 
exhibit number for every exhibit filed with the letter.
    (iii) The certificate of service must state:
    (A) The date and manner of service; and
    (B) The name and address of every person served.


Sec.  42.7  Management of the record.

    (a) The Board may expunge any paper directed to a proceeding or 
filed while an application or patent is under the jurisdiction of the 
Board that is not authorized under this part or in a Board order or 
that is filed contrary to a Board order.
    (b) The Board may vacate or hold in abeyance any non-Board action 
directed to a proceeding while an application or patent is under the 
jurisdiction of the Board unless the action was authorized by the 
Board.


Sec.  42.8  Mandatory notices.

    (a) Each notice listed in paragraph (b) of this section must be 
filed with the Board:
    (1) By the petitioner, as part of the petition;
    (2) By the patent owner, or applicant in the case of derivation, 
within 21 days of service of the petition; or
    (3) By either party, within 21 days of a change of the information 
listed in paragraph (b) of this section stated in an earlier paper.
    (b) Each of the following notices must be filed as a separate paper 
with a caption identical to the title of the paragraph:
    (1) Real party-in-interest. Identify each real party-in-interest 
for the party.
    (2) Related matters. Identify any other judicial or administrative 
matter that would affect, or be affected by, a decision in the 
proceeding.
    (3) Lead and back-up counsel. If the party is represented by 
counsel, then counsel must be identified.
    (4) Service information. Identify (if applicable):
    (i) An electronic mail address;
    (ii) A postal mailing address;
    (iii) A hand-delivery address, if different than the postal mailing 
address;
    (iv) A telephone number; and
    (v) A facsimile number.


Sec.  42.9  Action by patent owner.

    (a) Entire interest. An owner of the entire interest in an involved 
application or patent may act to the exclusion of the inventor (see 
Sec.  3.73(b) of this title).
    (b) Part interest. An owner of a part interest in the subject 
patent may move to act to the exclusion of an inventor or a co-owner. 
The motion must show the inability or refusal of an inventor or co-
owner to prosecute the proceeding or other cause why it is in the 
interests of justice to permit the owner of a part interest to act in 
the trial. In granting the

[[Page 6909]]

motion, the Board may set conditions on the actions of the parties.


Sec.  42.10  Counsel.

    (a) If a party is represented by counsel, the party should 
designate a lead counsel and a back-up counsel who can conduct business 
on behalf of the lead counsel.
    (b) A power of attorney must be filed with the designation of 
counsel, except the patent owner should not file an additional power of 
attorney if the designated counsel is already counsel of record in the 
subject patent or application.
    (c) The Board may recognize counsel pro hac vice during a 
proceeding upon a showing of good cause, subject to such conditions as 
the Board may impose.
    (d) A panel of the Board may disqualify counsel for cause after 
notice and opportunity for hearing. A decision to disqualify is not 
final for the purposes of judicial review until certified by the Chief 
Administrative Patent Judge.
    (e) Counsel may not withdraw from a proceeding before the Board 
unless the Board authorizes such withdrawal.


Sec.  42.11  Duty of candor.

    Parties and individuals associated with the parties have a duty of 
candor and good faith to the Office during the course of a proceeding.


Sec.  42.12  Sanctions.

    (a) The Board may impose a sanction against a party for misconduct, 
including:
    (1) Failure to comply with an applicable rule or order in the 
proceeding;
    (2) Advancing a misleading or frivolous argument or request for 
relief;
    (3) Misrepresentation of a fact;
    (4) Engaging in dilatory tactics;
    (5) Abuse of discovery;
    (6) Abuse of process; or
    (7) Any other improper use of the proceeding, including actions 
that harass or cause unnecessary delay or an unnecessary increase in 
the cost of the proceeding.
    (b) Sanctions include entry of:
    (1) An order holding facts to have been established in the 
proceeding;
    (2) An order expunging, or precluding a party from filing a paper;
    (3) An order precluding a party from presenting or contesting a 
particular issue;
    (4) An order precluding a party from requesting, obtaining, or 
opposing discovery;
    (5) An order excluding evidence;
    (6) An order providing for compensatory expenses, including 
attorney fees;
    (7) An order requiring terminal disclaimer of patent term; or
    (8) Judgment in the trial or dismissal of the petition.


Sec.  42.13  Citation of authority.

    (a) For any United States Supreme Court decision, citation must be 
to the United States Reports.
    (b) For any decision other than a United States Supreme Court 
decision, citation must be to the West Reporter System.
    (c) Citations to authority must include pinpoint citations whenever 
a specific holding or portion of an authority is invoked.
    (d) Non-binding authority should be used sparingly. If the 
authority is not an authority of the Office and is not reproduced in 
the United States Reports or the West Reporter System, a copy of the 
authority should be provided.


Sec.  42.14  Public availability.

    The record of a proceeding, including documents and things, shall 
be made available to the public, except as otherwise ordered. A party 
intending a document or thing to be sealed shall file a motion to seal 
concurrent with the filing of the document or thing to be sealed. The 
document or thing shall be provisionally sealed on receipt of the 
motion and remain so pending the outcome of the decision on the motion.

Fees


Sec.  42.15  Fees.

    (a) On filing a petition for inter partes review of a patent, 
payment of the following fee is due based upon the number of challenged 
claims:
    (1) 1 to 20 claims--$27,200.00.
    (2) 21 to 30 claims--$34,000.00.
    (3) 31 to 40 claims-- $40,800.00.
    (4) 41 to 50 claims-- $54,400.00.
    (5) 51 to 60 claims-- $68,000.00.
    (6) Additional fee for each additional 10 claims or portion
    thereof--$27,200.00.
    (b) On filing a petition for post-grant review or covered business 
method patent review of a patent, payment of the following fee is due 
based upon the number of challenged claims:
    (1) 1 to 20 claims--$35,800.00.
    (2) 21 to 30 claims--$44,750.00.
    (3) 31 to 40 claims--$53,700.00.
    (4) 41 to 50 claims--$71,600.00.
    (5) 51 to 60 claims--$89,500.00.
    (6) Additional fee for each additional 10 claims or portion 
thereof--$35,800.00.
    (c) On the filing of a petition for a derivation proceeding a fee 
of:--$400.00.
    (d) Any request requiring payment of a fee under this part, 
including a written request to make a settlement agreement available:--
$400.00.

Petition and Motion Practice


Sec.  42.20  Generally.

    (a) Relief. Relief, other than a petition requesting the 
institution of a trial, must be requested in the form of a motion.
    (b) Prior authorization. A motion will not be entered without Board 
authorization. Authorization may be provided in an order of general 
applicability or during the proceeding.
    (c) Burden of proof. The moving party has the burden of proof to 
establish that it is entitled to the requested relief.
    (d) Briefing. The Board may order briefing on any issue involved in 
the trial.


Sec.  42.21  Notice of basis for relief.

    (a) Notice of request for relief. The Board may require a party to 
file a notice stating the relief it requests and the basis for its 
entitlement to relief. A notice must include sufficient detail to place 
the Board and each opponent on notice of the precise relief requested. 
A notice is not evidence except as an admission by a party-opponent.
    (b) Filing and service. The Board may set the times and conditions 
for filing and serving notices required under this section. The Board 
may provide for the notice filed with the Board to be maintained in 
confidence for a limited time.
    (c) Effect. If a notice under paragraph (a) of this section is 
required:
    (1) A failure to state a sufficient basis for relief may result in 
a denial of the relief requested;
    (2) A party will be limited to filing motions consistent with the 
notice; and
    (3) Ambiguities in the notice will be construed against the party.
    (d) Correction. A party may move to correct its notice. The motion 
should be filed promptly after the party becomes aware of the basis for 
the correction. A correction filed after the time set for filing 
notices will only be entered if entry would serve the interests of 
justice.


Sec.  42.22  Content of petitions and motions.

    (a) Each petition or motion must be filed as a separate paper and 
must include:
    (1) A statement of the precise relief requested;
    (2) A statement of material facts (see paragraph (c) of this 
section); and
    (3) A full statement of the reasons for the relief requested, 
including a detailed explanation of the significance of the evidence 
including material facts, and the governing law, rules, and precedent.
    (b) Relief requested. Where a rule in part 1 of this title 
ordinarily governs the

[[Page 6910]]

relief sought, the petition or motion must make any showings required 
under that rule in addition to any showings required in this part.
    (c) Statement of material facts. Each material fact shall be set 
forth as a separately numbered sentence with specific citations to the 
portions of the record that support the fact.
    (d) The Board may order additional showings or explanations as a 
condition for authorizing a motion (see Sec.  42.20(b)).


Sec.  42.23  Oppositions and replies.

    (a) Oppositions and replies must comply with the content 
requirements for motions and must include a statement identifying 
material facts in dispute. Any material fact not specifically denied 
may be considered admitted.
    (b) All arguments for the relief requested in a motion must be made 
in the motion. A reply may only respond to arguments raised in the 
corresponding opposition.


Sec.  42.24  Page limits for petitions, motions, oppositions, and 
replies.

    (a) Petitions and motions. (1) The following page limits for 
petitions and motions apply and include the required statement of facts 
in support of the petition or motion. The page limit does not include a 
table of contents, a table of authorities, a certificate of service, or 
appendix of exhibits.
    (i) Petition requesting inter partes review: 50 pages
    (ii) Petition requesting post-grant review: 70 pages
    (iii) Petition requesting covered business method patent review: 70 
pages
    (iv) Petition requesting derivation proceeding: 50 pages
    (v) Motions: 15 pages.
    (2) Petitions to institute a trial must comply with the stated page 
limits but may be accompanied by a motion to waive the page limits. The 
petitioner must show in the motion how a waiver of the page limits is 
in the interests of justice and must append a copy of proposed petition 
exceeding the page limit to the motion. If the motion is not granted, 
the proposed petition exceeding the page limit may be expunged or 
returned. Any other motion to waive page limits must be granted in 
advance of filing a motion, opposition or reply for which the waiver is 
necessary.
    (b) Oppositions. The page limits for oppositions are the same as 
those for corresponding petitions or motions. The page limits do not 
include a listing of facts which are admitted, denied, or cannot be 
admitted or denied.
    (c) Replies. The following page limits for replies apply and 
include the required statement of facts in support of the reply. The 
page limits do not include a table of contents, a table of authorities, 
a listing of facts which are admitted, denied, or cannot be admitted or 
denied, a certificate of service, or appendix of exhibits.
    (1) Replies to patent owner responses to petitions: 15 pages
    (2) Replies to motions: 5 pages.


Sec.  42.25  Default filing times.

    (a) A motion may only be filed according to a schedule set by the 
Board. The default times for acting are:
    (1) An opposition is due one month after service of the motion; and
    (2) A reply is due one month after service of the opposition.
    (b) A party should seek relief promptly after the need for relief 
is identified. Delay in seeking relief may justify a denial of relief 
sought.

Testimony and Production


Sec.  42.51  Discovery.

    (a) Limited discovery. A party is not entitled to discovery except 
as authorized in this subpart. The parties may agree to discovery 
between themselves at any time.
    (b) Routine discovery. Except as the Board may otherwise order:
    (1) Unless previously served, any exhibit cited in a paper or in 
testimony must be served with the citing paper or testimony.
    (2) Cross examination of affidavit testimony is authorized within 
such time period as the Board may set.
    (3) Unless previously served, noncumulative information that is 
inconsistent with a position advanced by the patent owner or petitioner 
during the proceeding. The information is to be filed as soon as 
practicable in a motion identifying supplemental information or as part 
of a petition, motion, opposition, reply, preliminary patent owner 
response to petition, or patent owner response to petition. The party 
submitting the information must specify the relevance of the 
information, including where the information is presented in a document 
and, where applicable, how the information is pertinent to the claims.
    (c) Additional discovery. (1) A party may move for additional 
discovery. Except in post-grant reviews, the moving party must show 
that such additional discovery is in the interests of justice. The 
Board may specify conditions for such additional discovery.
    (2) When appropriate, a party may obtain production of documents 
and things during cross examination of an opponent's witness or during 
authorized compelled testimony under Sec.  42.52.


Sec.  42.52  Compelling testimony and production.

    (a) Authorization required. A party seeking to compel testimony or 
production of documents or things must file a motion for authorization. 
The motion must describe the general relevance of the testimony, 
document, or thing, and must:
    (1) In the case of testimony, identify the witness by name or 
title; and
    (2) In the case of a document or thing, the general nature of the 
document or thing.
    (b) Outside the United States. For testimony or production sought 
outside the United States, the motion must also:
    (1) In the case of testimony. (i) Identify the foreign country and 
explain why the party believes the witness can be compelled to testify 
in the foreign country, including a description of the procedures that 
will be used to compel the testimony in the foreign country and an 
estimate of the time it is expected to take to obtain the testimony; 
and
    (ii) Demonstrate that the party has made reasonable efforts to 
secure the agreement of the witness to testify in the United States but 
has been unsuccessful in obtaining the agreement, even though the party 
has offered to pay the travel expenses of the witness to testify in the 
United States.
    (2) In the case of production of a document or thing. (i) Identify 
the foreign country and explain why the party believes production of 
the document or thing can be compelled in the foreign country, 
including a description of the procedures that will be used to compel 
production of the document or thing in the foreign country and an 
estimate of the time it is expected to take to obtain production of the 
document or thing; and
    (ii) Demonstrate that the party has made reasonable efforts to 
obtain the agreement of the individual or entity having possession, 
custody, or control of the document or thing to produce the document or 
thing in the United States but has been unsuccessful in obtaining that 
agreement, even though the party has offered to pay the expenses of 
producing the document or thing in the United States.


Sec.  42.53  Taking testimony.

    (a) Form. Uncompelled direct testimony must be submitted in the 
form of an affidavit. All other testimony, including testimony 
compelled under 35 U.S.C. 24, must be in the form of a deposition 
transcript. In addition, the

[[Page 6911]]

Board may authorize or require live or video-recorded testimony.
    (b) Time and location. (1) Uncompelled direct testimony may be 
taken at any time to support a petition, motion, opposition, or reply; 
otherwise, testimony may only be taken during a testimony period set by 
the Board.
    (2) Except as the Board otherwise orders, during the testimony 
period, deposition testimony may be taken at any reasonable time and 
location within the United States before any disinterested official 
authorized to administer oaths at that location.
    (3) Deposition testimony outside the United States may only be 
taken as the Board specifically directs.
    (c) Notice of deposition. (1) Prior to the taking of deposition 
testimony, all parties to the proceeding must agree on the time and 
place for taking testimony. If the parties cannot agree, the party 
seeking the testimony must initiate a conference with the Board to set 
a time and place.
    (2) Cross-examination should ordinarily take place after any 
supplemental evidence relating to the direct testimony has been filed 
and more than a week before the filing date for any paper in which the 
cross-examination testimony is expected to be used. A party requesting 
cross-examination testimony of more than one witness may choose the 
order in which the witnesses are to be cross-examined.
    (3) In the case of direct deposition testimony, at least 3 business 
days prior to the conference in paragraph (c)(1) of this section, the 
party seeking the direct testimony must serve:
    (i) A list and copy of each document under the party's control and 
on which the party intends to rely; and
    (ii) A list of, and proffer of reasonable access to, anything other 
than a document under the party's control and on which the party 
intends to rely.
    (4) The party seeking the deposition must file a notice of the 
deposition at least 2 business days before a deposition.
    (5) Scope and content--(i) For direct deposition testimony, the 
notice limits the scope of the testimony and must list:
    (A) The time and place of the deposition;
    (B) The name and address of the witness;
    (C) A list of the exhibits to be relied upon during the deposition; 
and
    (D) A general description of the scope and nature of the testimony 
to be elicited.
    (ii) For cross-examination testimony, the scope of the examination 
is limited to the scope of the direct testimony.
    (iii) The notice must list the time and place of the deposition.
    (6) Motion to quash--Objection to a defect in the notice is waived 
unless the objecting party promptly seeks authorization to file a 
motion to quash.
    (d) Deposition in a foreign language. If an interpreter will be 
used during the deposition, the party calling the witness must initiate 
a conference with the Board at least 5 business days before the 
deposition.
    (e) Manner of taking deposition testimony. (1) Before giving 
deposition testimony, each witness shall be duly sworn according to law 
by the officer before whom the deposition is to be taken. The officer 
must be authorized to take testimony under 35 U.S.C. 23.
    (2) The testimony shall be taken in answer to interrogatories with 
any questions and answers recorded in their regular order by the 
officer, or by some other disinterested person in the presence of the 
officer, unless the presence of the officer is waived on the record by 
agreement of all parties.
    (3) Any exhibits used during the deposition must be numbered as 
required by Sec.  42.63(b), and must, if not previously served, be 
served at the deposition. Exhibits objected to shall be accepted 
pending a decision on the objection.
    (4) All objections made at the time of the deposition to the 
qualifications of the officer taking the deposition, the manner of 
taking it, the evidence presented, the conduct of any party, and any 
other objection to the deposition shall be noted on the record by the 
officer.
    (5) When the testimony has been transcribed, the witness shall read 
and sign (in the form of an affidavit) a transcript of the deposition 
unless:
    (i) The parties otherwise agree in writing;
    (ii) The parties waive reading and signature by the witness on the 
record at the deposition; or
    (iii) The witness refuses to read or sign the transcript of the 
deposition.
    (6) The officer shall prepare a certified transcript by attaching a 
certificate in the form of an affidavit signed and sealed by the 
officer to the transcript of the deposition. Unless the parties waive 
any of the following requirements, in which case the certificate shall 
so state, the certificate must state:
    (i) The witness was duly sworn by the officer before commencement 
of testimony by the witness;
    (ii) The transcript is a true record of the testimony given by the 
witness;
    (iii) The name of the person who recorded the testimony and, if the 
officer did not record it, whether the testimony was recorded in the 
presence of the officer;
    (iv) The presence or absence of any opponent;
    (v) The place where the deposition was taken and the day and hour 
when the deposition began and ended;
    (vi) The officer has no disqualifying interest, personal or 
financial, in a party; and
    (vii) If a witness refuses to read or sign the transcript, the 
circumstances under which the witness refused.
    (7) The officer must promptly provide a copy of the transcript to 
all parties. The testimony must be filed by proponent as an exhibit.
    (8) Any objection to the content, form, or manner of taking the 
deposition, including the qualifications of the officer, is waived 
unless made on the record during the deposition and preserved in a 
timely filed motion to exclude.
    (f) Costs. Except as the Board may order or the parties may agree 
in writing, the proponent of the direct testimony shall bear all costs 
associated with the testimony, including the reasonable costs 
associated with making the witness available for the cross-examination.


Sec.  42.54  Protective order.

    (a) A party or any person from whom discovery of confidential 
information is sought may file a motion to seal where the motion to 
seal contains a proposed protective order. The motion must include a 
certification that the moving party has in good faith conferred or 
attempted to confer with other affected parties in an effort to resolve 
the dispute. The Board may, for good cause, issue an order to protect a 
party or person from disclosing confidential information, including, 
but not limited to, one or more of the following:
    (1) Forbidding the disclosure or discovery;
    (2) Specifying terms, including time and place, for the disclosure 
or discovery;
    (3) Prescribing a discovery method other than the one selected by 
the party seeking discovery;
    (4) Forbidding inquiry into certain matters, or limiting the scope 
of disclosure or discovery to certain matters;
    (5) Designating the persons who may be present while the discovery 
is conducted;
    (6) Requiring that a deposition be sealed and opened only by order 
of the Board;
    (7) Requiring that a trade secret or other confidential research, 
development, or commercial information not be revealed or be revealed 
only in a specified way; and

[[Page 6912]]

    (8) Requiring that the parties simultaneously file specified 
documents or information in sealed envelopes, to be opened as the Board 
directs.
    (b) [Reserved].


Sec.  42.55  Confidential information in a petition.

    A petitioner filing confidential information with a petition may, 
concurrent with the filing of the petition, file a motion to seal with 
a proposed protective order as to the confidential information. The 
petitioner may serve the confidential information under seal. The 
patent owner may only access the sealed confidential information prior 
to the institution of the trial by agreeing to the terms of the 
proposed protective order. The institution of the requested trial will 
constitute a grant of the motion to seal unless otherwise ordered by 
the Board.


Sec.  42.56  Expungement of confidential information.

    After denial of a petition to institute a trial or after final 
judgment in a trial, a party may file a motion to expunge confidential 
information from the record.


Sec.  42.61  Admissibility.

    (a) Evidence that is not taken, sought, or filed in accordance with 
this subpart is not admissible.
    (b) Records of the Office. Certification is not necessary as a 
condition to admissibility when the evidence to be submitted is a 
record of the Office to which all parties have access.
    (c) Specification and drawings. A specification or drawing of a 
United States patent application or patent is admissible as evidence 
only to prove what the specification or drawing describes. If there is 
data in the specification or a drawing upon which a party intends to 
rely to prove the truth of the data, an affidavit by an individual 
having first-hand knowledge of how the data was generated must be 
filed.


Sec.  42.62  Applicability of the Federal Rules of Evidence.

    (a) Generally. Except as otherwise provided in this subpart, the 
Federal Rules of Evidence shall apply to a proceeding.
    (b) Exclusions. Those portions of the Federal Rules of Evidence 
relating to criminal proceedings, juries, and other matters not 
relevant to proceedings under this subpart shall not apply.
    (c) Modifications in terminology. Unless otherwise clear from 
context, the following terms of the Federal Rules of Evidence shall be 
construed as indicated:
    Appellate court means United States Court of Appeals for the 
Federal Circuit.
    Civil action, civil proceeding, and action mean trial.
    Courts of the United States, U.S. Magistrate, court, trial court, 
trier of fact, and judge mean Board.
    Hearing means as defined in Federal Rule of Evidence 804(a)(5), the 
time for taking testimony.
    Judicial notice means official notice.
    Trial or hearing in Federal Rule of Evidence 807 means the time for 
taking testimony.
    (d) In determining foreign law, the Board may consider any relevant 
material or source, including testimony, whether or not submitted by a 
party or admissible under the Federal Rules of Evidence.


Sec.  42.63  Form of evidence.

    (a) Exhibits required. Evidence consists of affidavits, transcripts 
of depositions, documents, and things. All evidence must be filed in 
the form of an exhibit.
    (b) Translation required. When a party relies on a document or is 
required to produce a document in a language other than English, a 
translation of the document into English and an affidavit attesting to 
the accuracy of the translation must be filed with the document.
    (c) Exhibit numbering. Each party's exhibits must be uniquely 
numbered sequentially in a range the Board specifies. For the 
petitioner, the range is 1001-1999, and for the patent owner, the range 
is 2000-2999.
    (d) Exhibit format. An exhibit must conform with the requirements 
for papers in Sec.  42.6 and the requirements of this paragraph.
    (1) Each exhibit must have an exhibit label.
    (i) An exhibit filed with the petition must include the 
petitioner's name followed by a unique exhibit number.
    (ii) For exhibits not filed with the petition, the exhibit label 
must include the party's name followed by a unique exhibit number, the 
names of the parties, and the trial number.
    (2) When the exhibit is a paper:
    (i) Each page must be uniquely numbered in sequence; and
    (ii) The exhibit label must be affixed to the lower right corner of 
the first page of the exhibit without obscuring information on the 
first page or, if obscuring is unavoidable, affixed to a duplicate 
first page.
    (e) Exhibit list. Each party must maintain an exhibit list with the 
exhibit number and a brief description of each exhibit. If the exhibit 
is not filed, the exhibit list should note that fact.


Sec.  42.64  Objection; motion to exclude; motion in limine.

    (a) Cross-examination deposition. An objection to the admissibility 
of deposition evidence must be made during the deposition. Evidence to 
cure the objection must be provided during the deposition, unless the 
parties to the deposition stipulate otherwise on the deposition record.
    (b) Other than cross-examination deposition. For evidence other 
than cross-examination deposition evidence:
    (1) Objection. Any objection to evidence submitted during a 
preliminary proceeding must be served within 10 business days of the 
institution of the trial. Once a trial has been instituted, any 
objection must be served within 5 business days of service of evidence 
to which the objection is directed. The objection must identify the 
grounds for the objection with sufficient particularity to allow 
correction in the form of supplemental evidence.
    (2) Supplemental evidence. The party relying on evidence to which 
an objection is timely served may respond to the objection by serving 
supplemental evidence within ten business days of service of the 
objection.
    (c) Motion to exclude. A motion to exclude evidence must be filed 
to preserve any objection. The motion must identify the objections in 
the record in order and must explain the objections.
    (d) Motion in limine. A party may file a motion in limine for a 
decision on the admissibility of evidence.


Sec.  42.65  Expert testimony; tests and data.

    (a) Expert testimony that does not disclose the underlying facts or 
data on which the opinion is based is entitled to little or no weight. 
Testimony on United States patent law or patent examination practice 
will not be admitted.
    (b) If a party relies on a technical test or data from such a test, 
the party must provide an affidavit explaining:
    (1) Why the test or data is being used;
    (2) How the test was performed and the data was generated;
    (3) How the data is used to determine a value;
    (4) How the test is regarded in the relevant art; and
    (5) Any other information necessary for the Board to evaluate the 
test and data.

Oral Argument, Decision, and Settlement


Sec.  42.70  Oral argument.

    (a) Request for oral argument. A party may request oral argument on 
an issue raised in a paper at a time set by the

[[Page 6913]]

Board. The request must be filed as a separate paper and must specify 
the issues to be argued.
    (b) Demonstrative exhibits must be served at least 5 business days 
before the oral argument and filed no later than the time of the oral 
argument.


Sec.  42.71  Decision on petitions or motions.

    (a) Order of consideration. The Board may take up petitions or 
motions for decisions in any order, may grant, deny, or dismiss any 
petition or motion, and may enter any appropriate order.
    (b) Interlocutory decisions. A decision on a motion without a 
judgment is not final for the purposes of judicial review. A panel 
decision on an issue will govern the trial. If a decision is not a 
panel decision, the party may request that a panel rehear the decision. 
When rehearing a non-panel decision, a panel will review the decision 
for an abuse of discretion.
    (c) Rehearing. A party dissatisfied with a decision may file a 
request for rehearing. The burden of showing a decision should be 
modified lies with the party challenging the decision. The request must 
specifically identify all matters the party believes the Board 
misapprehended or overlooked, and the place where each matter was 
previously addressed in a motion, an opposition, or a reply. A request 
for rehearing does not toll times for taking action. Any request must 
be filed:
    (1) Within 14 days of the entry of non-final decision; or
    (2) Within 30 days of the entry of a final decision.


Sec.  42.72  Termination of trial.

    The Board may terminate a trial without rendering judgment, where 
appropriate, including where the trial is consolidated with another 
proceeding or pursuant to a joint request under 35 U.S.C. 317(a) or 
327(a).


Sec.  42.73  Judgment.

    (a) A judgment disposes of all issues that were, or by motion could 
have properly been, raised and decided.
    (b) Request for adverse judgment. A party may request judgment 
against itself at any time during a proceeding. Actions construed to be 
a request for adverse judgment include:
    (1) Disclaimer of the involved application or patent;
    (2) Cancellation or disclaimer of a claim such that the party has 
no remaining claim in the trial;
    (3) Concession of unpatentability or derivation of the contested 
subject matter; and
    (4) Abandonment of the contest.
    (c) Recommendation. The judgment may include a recommendation for 
further action by an examiner or by the Director.
    (d) Estoppel--(1) Petitioner other than in derivation proceeding. A 
petitioner, or the real party in interest or privy of the petitioner, 
is estopped in the Office from taking an action that is inconsistent 
with a judgment as to any ground that the petitioner raised or 
reasonably could have raised during the trial, except that estoppel 
shall not apply to a petitioner, or to the real party in interest or 
privy of the petitioner who has settled under 35 U.S.C. 317 or 327.
    (2) In a derivation, the losing party who could have properly moved 
for relief on an issue, but did not so move, may not take action in the 
Office after the judgment that is inconsistent with that party's 
failure to move, except that a losing party shall not be estopped with 
respect to any contested subject matter for which that party was 
awarded a favorable judgment.
    (3) Patent applicant or owner. A patent applicant or owner whose 
claim is canceled is precluded from taking action inconsistent with the 
adverse judgment, including obtaining in any patent:
    (i) A claim to substantially the same invention as the finally 
refused or cancelled claim;
    (ii) A claim that could have been filed in response to any properly 
raised ground of unpatentability for a finally refused or cancelled 
claim; or
    (iii) An amendment of a specification or of a drawing that was 
denied during the trial proceeding.


Sec.  42.74  Settlement.

    (a) Board role. The parties may agree to settle any issue in a 
proceeding, but the Board is not a party to the settlement and may 
independently determine any question of jurisdiction, patentability, or 
Office practice.
    (b) Agreements in writing. Any agreement or understanding between 
the parties made in connection with, or in contemplation of, the 
termination of a proceeding shall be in writing and a true copy shall 
be filed with the Board before the termination of the trial.
    (c) Request to keep separate. A party to a settlement may request 
that the settlement be treated as business confidential information and 
be kept separate from the files of an involved patent or application. 
The request must be filed with the settlement. If a timely request is 
filed, the settlement shall only be available:
    (1) To a Government agency on written request to the Board; or
    (2) To any other person upon written request to the Board to make 
the settlement agreement available, along with the fee specified in 
Sec.  42.15(d) and on a showing of good cause.

Certificate


Sec.  42.80  Certificate.

    After the Board issues a final written decision in an inter partes 
review, post-grant review, or covered business method patent review and 
the time for appeal has expired or any appeal has terminated, the 
Office will issue and publish a certificate canceling any claim of the 
patent finally determined to be unpatentable, confirming any claim of 
the patent determined to be patentable, and incorporating in the patent 
any new or amended claim determined to be patentable by operation of 
the certificate.
    2. Part 90 is added to read as follows:

PART 90--JUDICIAL REVIEW OF PATENT TRIAL AND APPEAL BOARD DECISIONS

Sec.
90.1 Scope.
90.2 Notice; service.
90.3 Time for appeal or civil action.

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


Sec.  90.1  Scope.

    The provisions herein govern judicial review for Patent Trial and 
Appeal Board decisions under chapter 13 of title 35, United States 
Code. Judicial review of decisions arising out of inter partes 
reexamination proceedings that are requested under 35 U.S.C. 311, and 
where available, judicial review of decisions arising out of 
interferences declared pursuant to 35 U.S.C. 135 continue to be 
governed by the pertinent regulations in effect on July 1, 2012.


Sec.  90.2  Notice; service.

    (a) For an appeal under 35 U.S.C. 141. (1) In all appeals, the 
notice of appeal required by 35 U.S.C. 142 must be filed with the 
Director of the United States Patent and Trademark Office as provided 
in Sec.  104.2 of this title. A copy of the notice of appeal must also 
be filed with the Patent Trial and Appeal Board in the appropriate 
manner provided in Sec.  41.10(a), 41.10(b), or 42.6(b).
    (2) In all appeals, the party initiating the appeal must comply 
with the requirements of the Federal Rules of Appellate Procedure and 
Rules for the United States Court of Appeals for the Federal Circuit, 
including:
    (i) Serving the requisite number of copies on the Court; and
    (ii) Paying the requisite fee for the appeal.
    (3) Additional requirements. (i) In appeals arising out of an ex 
parte reexamination proceeding ordered

[[Page 6914]]

pursuant to Sec.  1.525, notice of the appeal must be served as 
provided in Sec.  1.550(f) of this title.
    (ii) In appeals arising out of an inter partes review, a post-grant 
review, a covered business method patent review, or a derivation 
proceeding, notice of the appeal must be served as provided in Sec.  
42.6(e) of this title.
    (b) For a notice of election under 35 U.S.C. 141(d) to proceed 
under 35 U.S.C. 146. (1) Pursuant to 35 U.S.C. 141(d), if an adverse 
party elects to have all further review proceedings conducted under 35 
U.S.C. 146 instead of under 35 U.S.C. 141, that party must file a 
notice of election with the United States Patent and Trademark Office 
as provided in Sec.  104.2.
    (2) A copy of the notice of election must also be filed with the 
Patent Trial and Appeal Board in the manner provided in Sec.  42.6(b).
    (3) A copy of the notice of election must also be served where 
necessary pursuant to Sec.  42.6(e).
    (c) For a civil action under 35 U.S.C. 146. The party initiating an 
action under 35 U.S.C. 146 must file a copy of the complaint no later 
than five business days after filing the complaint in district court 
with the Patent Trial and Appeal Board in the manner provided in Sec.  
42.6(b), and the Office of the Solicitor pursuant to Sec.  104.2. 
Failure to comply with this requirement can result in further action 
within the United States Patent and Trademark Office consistent with 
the final Board decision.


Sec.  90.3  Time for appeal or civil action.

    (a) Filing deadline--(1) For an appeal under 35 U.S.C. 141. The 
notice of appeal filed pursuant to 35 U.S.C. 142 must be filed with the 
Director of the United States Patent and Trademark Office no later than 
sixty-three (63) days after the date of the final Board decision. Any 
notice of cross-appeal is controlled by Rule 4(a)(3) of the Federal 
Rules of Appellate Procedure, and any other requirement imposed by the 
Rules of the United States Court of Appeals for the Federal Circuit.
    (2) For a notice of election under 35 U.S.C. 141(d). The time for 
filing a notice of election under 35 U.S.C. 141(d) is governed by 35 
U.S.C. 141(d).
    (3) For a civil action under 35 U.S.C. 145 or 146. (i) A civil 
action must be commenced no later than sixty-three (63) days after the 
date of the final Board decision.
    (ii) The time for commencing a civil action pursuant to a notice of 
election under 35 U.S.C. 141(d) is governed by 35 U.S.C. 141(d).
    (b) Time computation--(1) Rehearing. A timely request for rehearing 
will reset the time for appeal or civil action to no later than sixty-
three (63) days after action on the request. Any subsequent request for 
rehearing from the same party in the same proceeding will not reset the 
time for seeking judicial review, unless the additional request is 
permitted by order of the Board.
    (2) Holidays. If the last day for filing an appeal or civil action 
falls on a Federal holiday in the District of Columbia, the time is 
extended pursuant to 35 U.S.C. 21(b).
    (c) Extension of time. (1) The Director, or his designee, may 
extend the time for filing an appeal, or commencing a civil action, 
upon written request if:
    (i) Requested before the expiration of the period for filing an 
appeal or commencing a civil action, and upon a showing of good cause; 
or
    (ii) Requested after the expiration of the period for filing an 
appeal of commencing a civil action, and upon a showing that the 
failure to act was the result of excusable neglect.
    (2) The request must be filed as provided in Sec.  104.2 of this 
title.

    Dated: January 31, 2012.
David J. Kappos,
Under Secretary of Commerce for Intellectual Property and Director of 
the United States Patent and Trademark Office.
[FR Doc. 2012-2525 Filed 2-8-12; 8:45 am]
BILLING CODE 3510-16-P