[Federal Register Volume 77, Number 157 (Tuesday, August 14, 2012)]
[Rules and Regulations]
[Pages 48612-48678]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-17900]



[[Page 48611]]

Vol. 77

Tuesday,

No. 157

August 14, 2012

Part II





Department of Commerce





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Patent and Trademark Office





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37 CFR Parts 1, 42 and 90





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

  Federal Register / Vol. 77, No. 157 / Tuesday, August 14, 2012 / 
Rules and Regulations  

[[Page 48612]]


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DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Parts 1, 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: Final rule.

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SUMMARY: The United States Patent and Trademark Office (Office or 
USPTO) is revising the rules of practice to implement the provisions of 
the Leahy-Smith America Invents Act (``AIA'') that provide for trials 
before the Patent Trial and Appeal Board (Board). This final rule 
provides 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. This 
final rule also provides a consolidated set of rules to implement the 
provisions of the AIA related to seeking judicial review of Board 
decisions.

DATES: Effective Date: The changes in this final rule take effect on 
September 16, 2012.

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

SUPPLEMENTARY INFORMATION: Executive Summary: Purpose: On September 16, 
2011, the AIA was enacted into law (Pub. L. 112-29, 125 Stat. 284 
(2011)). The purpose of the AIA and this final rule 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). This final rule provides 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. See 35 U.S.C. 316(b), as amended, 
and 35 U.S.C. 326(b).
    Summary of Major Provisions: Consistent with sections 3, 6, 7, and 
18 of the AIA, this final rule sets forth: (1) The evidentiary 
standards, procedure, and default times for conducting trial 
proceedings; (2) the fees for requesting reviews; (3) the procedure for 
petition and motion practice; (4) the page limits for petitions, 
motions, oppositions, and replies; (5) the standards and procedures for 
discovery of relevant evidence, including the procedure for taking and 
compelling testimony; (6) the sanctions for abuse of discovery, abuse 
of process, or any other improper use of the proceeding; (7) the 
procedure for requesting oral hearings; (8) the procedure for 
requesting rehearing of decisions and filing appeals; (9) the procedure 
for requesting joinder; and (10) the procedure to make file records 
available to the public that include the procedures for motions to 
seal, protective orders for confidential information, and requests to 
treat settlement as business confidential information.
    Costs and Benefits: This rulemaking is not economically 
significant, but is significant, under Executive Order 12866 (Sept. 30, 
1993), as amended by Executive Order 13258 (Feb. 26, 2002) and 
Executive Order 13422 (Jan. 18, 2007).
    Background: To implement the changes set forth in sections 3, 6, 7, 
and 18 of the AIA that are related to administrative trials and 
judicial review of Board decisions, the Office published the following 
notices of proposed rulemaking: (1) Rules of Practice for Trials before 
the Patent Trial and Appeal Board and Judicial Review of Patent Trial 
and Appeal Board Decisions, 77 FR 6879 (Feb. 9, 2012), to 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, and judicial 
review of Board decisions by adding new parts 42 and 90 including a new 
subpart A to title 37 of the Code of Federal Regulations (RIN 0651-
AC70); (2) Changes to Implement Inter Partes Review Proceedings, 77 FR 
7041 (Feb. 10, 2012), to provide rules specific to inter partes review 
by adding a new subpart B to 37 CFR part 42 (RIN 0651-AC71); (3) 
Changes to Implement Post-Grant Review Proceedings, 77 FR 7060 (Feb. 
10, 2012), to provide rules specific to post-grant review by adding a 
new subpart C to 37 CFR part 42 (RIN 0651-AC72); (4) Changes to 
Implement Transitional Program for Covered Business Method Patents, 77 
FR 7080 (Feb. 10, 2012), to provide rules specific to the transitional 
program for covered business method patents by adding a new subpart D 
to 37 CFR part 42 (RIN 0651-AC73); (5) Transitional Program for Covered 
Business Method Patents--Definition of Technological Invention, 77 FR 
7095 (Feb. 10, 2012), to add a new rule that sets forth the definition 
of technological invention for determining whether a patent is for a 
technological invention solely for purposes of the transitional program 
for covered business method patents (RIN 0651-AC75); and (6) Changes to 
Implement Derivation Proceedings, 77 FR 7028 (Feb. 10, 2012), to 
provide rules specific to derivation proceedings by adding a new 
subpart E to 37 CFR part 42 (RIN 0651-AC74).
    Additionally, the Office published a Patent Trial Practice Guide 
for the proposed rules in the Federal Register to provide the public an 
opportunity to comment. Practice Guide for Proposed Trial Rules, 77 FR 
6868 (Feb. 9, 2012) (Request for Comments) (``Practice Guide'' or 
``Office Patent Trial Practice Guide''). The Office envisions 
publishing a revised Patent Trial Practice Guide for the final rules. 
The Office also hosted a series of public educational roadshows, across 
the country, regarding the proposed rules for the implementation of 
AIA.
    In response to the notices of proposed rulemaking and the Office 
Patent Trial Practice Guide notice, the Office received 251 submissions 
offering written comments from intellectual property organizations, 
businesses, law firms, patent practitioners, and others, including a 
United States senator who was a principal author of section 18 of the 
AIA. The comments provided support for, opposition to, and diverse 
recommendations on the proposed rules. The Office appreciates the 
thoughtful comments, and has considered and analyzed the comments 
thoroughly. The Office's responses to the comments are provided in the 
228 separate responses based on the topics raised in the 251 comments 
in the Response to Comments section infra.
    In light of the comments, the Office has made appropriate 
modifications to the proposed rules to provide clarity and to take into 
account the interests of the public, patent owners, patent challengers, 
and other interested parties, with the statutory requirements and 
considerations, such as the effect of the regulations on the economy, 
the

[[Page 48613]]

integrity of the patent system, the efficient administration of the 
Office, and the ability of the Office to complete the proceedings 
timely. The Office has decided to proceed with several separate final 
rules to implement the changes set forth in sections 3, 6, 7, and 18 of 
the AIA that are related to administrative trials and judicial review 
of Board decisions. This final rule adopts the proposed changes, with 
modifications, set forth in the Rules of Practice for Trials before the 
Patent Trial and Appeal Board and Judicial Review of Patent Trial and 
Appeal Board Decisions (77 FR 6879).

Differences Between the Final Rule and the Proposed Rule

    The major differences between the rules as adopted in this final 
rule and the proposed rules are as follows:
    The final rule clarifies that the term ``Board'' also means ``a 
Board member or employee acting with the authority of the Board'' for 
petition decisions and interlocutory decisions, and it means ``a panel 
of the Board'' for final written decisions under 35 U.S.C. 135(d) and 
318(a), as amended, and 35 U.S.C. 328(a) (Sec.  42.2).
    With respect to the mode of service, the final rule clarifies that 
service may be made electronically upon agreement of the parties, or 
otherwise, by EXPRESS MAIL[supreg] or means at least as fast and 
reliable as EXPRESS MAIL[supreg] (Sec.  42.6(e)).
    As to mandatory notices, the requirement for filing the notices as 
separate papers has been eliminated (Sec.  42.8(b)).
    With respect to recognizing counsel pro hac vice, the final rule 
specifies that the Board may recognize counsel pro hac vice during a 
proceeding upon a showing of good cause, subject to the condition that 
lead counsel be a registered practitioner and to any other conditions 
as the Board may impose (Sec.  42.10(c)). The final rule further 
provides an example to clarify that, where the lead counsel is a 
registered practitioner, a motion for appearance, pro hac vice, by 
counsel who is not a registered practitioner may be granted upon 
showing that counsel is an experienced litigating attorney and has an 
established familiarity with the subject matter at issue in the 
proceeding (Sec.  42.10(c)).
    In addition, the final rule clarifies that parties and individuals 
involved in the proceeding, as opposed to those merely ``associated 
with the parties,'' have a duty of candor and good faith to the Office 
during the course of a proceeding (Sec.  42.11).
    As to citations of authority, the final rule eliminates the 
requirements for citing decisions to the United States Reports and the 
West Reporter System (Sec.  42.13). Instead, the final rule expresses a 
preference for these sources.
    While this final rule adopts the proposed base fees for petitions 
challenging 20 claims or fewer, the final rule eliminates the fee 
escalation in block increments of ten claims by establishing flat fees 
per each challenged claim in excess of 20 claims for inter partes 
reviews, post-grant reviews, and covered business method patent reviews 
(Sec.  42.15(a) and (b)). In a separate rulemaking in which the Office 
proposes to set and adjust fees pursuant to section 10 of the AIA, the 
Office is proposing a limited subsidization of the petition fees, and a 
staged fee structure, which would permit a refund of a portion of the 
petition fees in cases where a review is not instituted.
    This final rule also clarifies that the excess claims fees set 
forth in 35 U.S.C. 41(a)(2) are required where a motion to amend 
presents a certain number of additional claims (Sec.  42.15(e) and 
(f)).
    As to the proposed page limits, the final rule increases the 
proposed page limits by ten pages for petitions, patent owner 
preliminary responses, and patent owner responses (Sec.  42.24), 
eliminates the requirement of presenting claim charts in double spacing 
(Sec.  42.6(a)(2)(iii)), and eliminates the requirement for a statement 
of material facts with respect to petitions and motions (Sec.  42.22). 
These collective modifications will permit parties to have greater 
flexibility in presenting their cases and in responding to petitions 
and motions.
    As to discovery provisions, the final rule clarifies that the 
parties may agree to additional discovery between themselves without 
prior authorization from the Board (Sec.  42.51(b)(2)). Likewise, the 
final rule additionally provides where the parties agree to mandatory 
discovery requiring initial disclosures, parties may automatically, 
upon the institution, take discovery of the information identified in 
the initial disclosures (Sec.  42.51(a)(1)). In this regard, the final 
rule also provides that where the parties fail to agree, a party may 
seek the mandatory discovery of the initial disclosures by motion 
(Sec.  42.51(a)(2)).
    As to routine discovery, the final rule eliminates the requirement 
to explain the relevance of the information that is inconsistent with a 
position advanced by the party, and eliminates the noncumulative 
requirement (proposed Sec.  42.51(b)(3)). The final rule further limits 
the scope to relevant information, as opposed to any noncumulative 
information, that is inconsistent with a position advanced by the party 
during the proceeding (Sec.  42.51(b)(1)(iii), previously proposed 
Sec.  42.51(b)(3)). In that regard, the final rule also tailors the 
scope by stating expressly that the requirement does not make 
discoverable anything otherwise protected by legally recognized 
privileges, and the requirement only extends to inventors, corporate 
officers, and persons involved in the preparation or filing of the 
documents (Sec.  42.51(b)(1)(iii)). The final rule further clarifies 
that the party must serve, rather than file, the relevant information 
(Sec.  42.51(b)(1)(iii)).
    Additionally, the final rule provides the parties the flexibility 
to agree on the service of exhibits (Sec.  42.51(b)(1)(i)). The final 
rule also provides a new provision for production of documents (Sec.  
42.51(c)).
    As to the taking of testimony, the final rule permits parties to 
agree, without prior authorization of the Board, to video recording 
testimony (Sec.  42.53(a)), and taking uncompelled deposition testimony 
outside the United States (Sec.  42.53(b)(3)). The final rule provides 
the default time limits for direct examination, cross-examination, and 
redirect examination for compelled deposition testimony, as well as 
cross-examination, redirect examination, and re-cross examination for 
uncompelled direct deposition testimony (Sec.  42.53(c)). In the case 
of direct deposition testimony, the final rule clarifies that if there 
is no conference with the Board, the party seeking the direct testimony 
must serve the required information and documents at least ten days 
prior to the deposition (Sec.  42.53(d)(3)). The final rule provides a 
new provision for an additional party seeking to take direct testimony 
of a third party witness (Sec.  42.53(b)(5)(iv)). As to admissibility 
of evidence, the final rule eliminates the provision for motions in 
limine (proposed Sec.  42.64(d)).
    As to protective orders governing the exchange and submission of 
confidential information, the final rule clarifies that either the 
petitioner or patent owner may file a motion to seal containing a 
proposed protective order, such as the default protective order set 
forth in the Office Patent Trial Practice Guide (Sec.  42.54(a)). 
Similarly, the final rule clarifies that confidential information in a 
petition may be accessed by the patent owner prior to the institution 
by: (1) Agreeing to the terms of the protective order requested by the 
petitioner, (2) agreeing to the terms of a protective order that the 
parties file jointly, or (3) obtaining entry of a protective order by 
the Board (Sec.  42.55).
    Regarding decisions by the Board, the final rule clarifies that 
while decisions

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on whether to institute a trial (including decisions not to institute a 
trial and decisions to institute a trial based on one or some of the 
grounds of unpatentability asserted in the petition) are final and 
nonappealable to the Federal courts, a party may request a rehearing 
before the Board (Sec. Sec.  42.71(c) and (d)). The final rule also 
clarifies that a judgment includes a final written decision by the 
Board, or a termination of a proceeding (Sec.  42.2). Additionally, the 
final clarifies that a judgment, except in the case of a termination, 
disposes all issues that were, or by motion reasonably could have been, 
raised and decided (Sec.  42.73(a)).
    As to the estoppel provisions, the final rule clarifies that a 
petitioner who has not settled, or the real party in interest or privy 
of such petitioner, is estopped in the Office from requesting or 
maintaining a proceeding with respect to a claim for which it has 
obtained a final written decision on patentability in an inter partes 
review, post-grant review, or a covered business method patent review 
on any ground that the petitioner raised or reasonably could have 
raised during the trial (Sec.  42.73(d)(1)). Further, the final rule 
tailors the provisions to provide that a patent applicant or patent 
owner whose claim is canceled is precluded from taking action 
inconsistent with the adverse judgment, including obtaining in any 
patent: (1) A claim that is not patentably distinct from the finally 
refused or cancelled claim; and (2) an amendment of a specification or 
drawing that was denied during the trial (Sec.  42.73(d)(3)). In this 
regard, the final rule also eliminates the provision precluding 
obtaining a patent for a claim that could have been filed (proposed 
Sec.  42.73(d)(3)(ii)).
    Discussion of Relevant Provisions of the AIA:
    This final rule refers to the rules in subparts B through E of part 
42 set forth in other final rules (RIN 0651-AC71, RIN 0651-AC74, and 
RIN 0651-AC75). Moreover, rather than repeating the statutory 
provisions set forth in the AIA for the implementation of inter partes 
review, post-grant review, transitional program covered business method 
patents, and derivation that are provided in the other final rules, the 
instant final rule only summarizes the provisions related to the Board 
and judicial review of Board decisions that are not provided in the 
other final rules and provides the general framework for conducting 
trials.

Patent Trial and Appeal Board

    Section 7 of the AIA 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 in patent applications; (2) review appeals of 
reexaminations pursuant to 35 U.S.C. 134(b); (3) conduct derivation 
proceedings pursuant to 35 U.S.C. 135, as amended; and (4) conduct 
inter partes reviews and post-grant reviews pursuant to chapters 31 and 
32 of title 35, United States Code. Further, section 7 of the AIA 
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 three members of the Board, 
who shall be designated by the Director.

Judicial Review of Patent Trial and Appeal Board Decisions

    The AIA 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 AIA 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, section 3(j) of the AIA eliminates references to 
interferences. Section 3(j)(1) of the AIA 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 AIA 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 AIA 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 
AIA 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 AIA 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 AIA 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 section 6(f)(3)(A) of the AIA.
    Section 6(h)(2)(A) of the AIA amends 35 U.S.C. 306 by striking 
``145'' and inserting ``144.''
    Section 7(c)(1) of the AIA amends 35 U.S.C. 141, entitled ``Appeal 
to Court of Appeals for the Federal Circuit.'' 35 U.S.C. 141(a), as 
amended, provides 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, 
further provides 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 AIA 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 AIA amends 35 U.S.C. 141(c) to provide that 
a party to an inter partes review or a post-grant review who is 
dissatisfied with the final written decision of the Patent Trial and 
Appeal Board under 35 U.S.C. 318(a), as amended, or 35 U.S.C. 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 AIA 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

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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, also provides 
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 AIA 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 AIA 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 AIA further amends 35 U.S.C. 143 by striking 
the last sentence.
    Section 7(e) of the AIA provides that the amendments made by 
section 7 of the AIA shall take effect upon the expiration of the one-
year period beginning on the date of the enactment of the AIA and shall 
apply to proceedings commenced on or after that effective date, with 
the following exceptions. First, 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 section 7(c)(2) shall be 
deemed to take effect on the date of the enactment of the AIA 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, 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 section 7 of the AIA shall continue to apply 
to inter partes reexaminations requested under 35 U.S.C. 311 before 
such effective date. Third, 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 section 7 of the 
AIA. And finally, the Director's right under the fourth sentence of 35 
U.S.C. 143, as amended by section 7(c)(3) of the AIA, 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 
section 7 of the AIA.
    Section 9(a) of the AIA 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 AIA provides that amendments made by section 9 of 
the AIA 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

    This final rule provides 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 final rule also provides a consolidated set of rules 
to implement the provisions of the AIA 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 
added as follows:

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

General

    Section 42.1: Section 42.1 would set forth general policy 
considerations for part 42.
    Section 42.1(a) defines the scope of the rules.
    Section 42.1(b) provides a rule of construction for all the rules 
in part 42. The rule mandates that all the Board's rules be construed 
to achieve the just, speedy, and inexpensive resolution of Board 
proceedings. This final rule reflects 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, the 
efficient administration of the Office, and the ability of the Office 
to complete the proceedings timely in promulgating regulations.
    Section 42.1(c) requires that decorum be exercised in Board 
proceedings, including dealings with opposing parties. Board officials 
similarly would be expected to treat parties with courtesy and decorum.
    Section 42.1(d) provides that the default evidentiary standard for 
each issue in a Board proceeding is a preponderance of the evidence. 
The 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 rule is also consistent 
with 35 U.S.C. 135(b), as amended, 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).
    Section 42.2: Section 42.2 sets forth definitions for Board 
proceedings under part 42.
    The definition of affidavit provides that affidavit means 
affidavits or declarations under Sec.  1.68. The 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 definition of Board would rename ``the Board of Patent Appeals 
and Interferences'' to ``the Patent Trial and Appeal Board.'' The 
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. Further, for petition decisions and 
interlocutory decisions, Board means a Board member or employee acting 
with the authority of the Board. For final written decisions under 35

[[Page 48616]]

U.S.C. 135(d) and 318(a), as amended, and 35 U.S.C. 328(a), Board means 
a panel of the Board.
    The definition of business day provides that business day means a 
day other than a Saturday, Sunday, or Federal holiday within the 
District of Columbia.
    The definition of confidential information provides that 
confidential information means trade secret or other confidential 
research, development or commercial information. The definition is 
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 definition of final provides that final means final for 
purposes of judicial review. The definition also provides 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 definition of hearing makes it clear that a hearing is a 
consideration of the issues involved in the trial.
    The definition of involved provides that involved means an 
application, patent, or claim that is the subject of the proceeding.
    The definition of judgment provides that judgment means a final 
written decision by the Board, or a termination of a proceeding. The 
definition is consistent with the requirement under 35 U.S.C. 318(a), 
as amended, and 35 U.S.C. 328(a), as amended, that the Board issue 
final written decisions for reviews that are instituted and not 
dismissed. The 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 definition of motion clarifies that motions are requests for 
remedies but that the term motion does not include petitions seeking to 
institute a trial.
    The definition of Office provides that Office means the United 
States Patent and Trademark Office.
    The definition of panel provides that a panel is at least three 
members of the Board. The definition is consistent with 35 U.S.C. 6(c), 
as amended, that each derivation proceeding, inter partes review, post-
grant review, and covered business method patent review proceeding 
shall be heard by at least three members of the Board.
    The definition of party includes at least the petitioner and the 
patent owner, as well as any applicant or assignee in a derivation 
proceeding.
    The definition of petition provides 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 definition of petitioner provides that a petitioner is a party 
requesting a trial be instituted. This 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 definition of preliminary proceeding provides 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 definition of proceeding provides that a proceeding means a 
trial or preliminary proceeding. This definition encompasses both the 
portion of the proceeding that occurs prior to institution of a trial 
and the trial itself.
    The definition of rehearing provides that rehearing means 
reconsideration.
    The definition of trial provides that a trial is a contested case 
instituted by the Board based upon a petition. This definition 
encompasses all contested cases before the Board, except for 
interferences. The definition excludes interferences so that 
interferences will continue, without disruption, to use the rules 
provided in part 41. The existence of a contested case is 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 part 42. Similarly, written 
requests to make a settlement agreement available are not considered 
contested cases.
    Section 42.3: Section 42.3 sets forth the jurisdiction of the Board 
in a Board proceeding.
    Section 42.3(a) provides 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 rule is consistent with the 
Board's role in conducting the transitional program for covered 
business method patent reviews pursuant to section 18 of the AIA, as 
covered business method patent reviews are subject to 35 U.S.C. 326(c), 
which provides that the Board conduct the review.
    Section 42.3(b) provides that a petition to institute a trial must 
be filed with the Board consistent with any time period required by 
statute.
    Section 42.4: Section 42.4 provides for notice of trial.
    Section 42.4(a) specifically delegates the determination to 
institute a trial to the Board.
    Section 42.4(b) provides that the Board will send a notice of a 
trial to every party to the proceeding.
    Section 42.4(c) provides 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: Section 42.5 sets forth the conduct of the trial.
    Sections 42.5(a) and (b) 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) 
is committed to the discretion of the administrative patent judge. By 
permitting the judges to authorize relief under parts 1, 41, and 42, 
the rule avoids delay and permits related issues to be resolved in the 
same proceeding in a uniform and efficient manner.
    Section 42.5(c) provides that the Board may set times by order. The 
rule also provides that good cause must be shown for extensions of 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 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 one year after institution of the review, 
extendable for good cause shown. The 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.
    Section 42.5(d) prohibits ex parte communications about a 
proceeding with a Board member or Board employee actually conducting 
the proceeding. Under the rule, the initiation of such an ex parte 
communication may result in sanctions against the initiating party. The 
prohibition includes communicating with any member of a panel acting in

[[Page 48617]]

the proceeding or seeking supervisory review in a proceeding by 
contacting the judge's supervisor, without including the opposing party 
in the communication. In general, under these rules, it is important to 
avoid substantive discussions of a pending trial with a Board member or 
Board employee. The prohibition on ex parte communications does 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 concern).
    Section 42.6: Section 42.6 sets forth the procedure for filing 
documents, including exhibits, and service.
    Section 42.6(a) provides guidance for the filing of papers. Under 
Sec.  42.6(a), papers to be filed are 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 
prohibition against incorporation by reference minimizes the chance 
that an argument would be overlooked and eliminates 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 
its 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).
    Section 42.6(b) sets electronic filing as the default manner in 
which documents in a proceeding are filed with the Board. The 
procedures for electronic filings in the rule is 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 will 
consider the entity size and the ability of the party to file 
electronically.
    Section 42.6(c) requires 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.
    Section 42.6(d) prohibits the filing of duplicate documents absent 
Board authorization.
    Section 42.6(e) requires service simultaneous with the filing of 
the document, as well as requiring certificates of service. Service may 
be made electronically upon agreement of the parties, otherwise service 
may be by EXPRESS MAIL[supreg] or by means at least as fast and 
reliable as EXPRESS MAIL[supreg]. 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: Section 42.7 provides that the Board may vacate or 
hold in abeyance unauthorized papers and limits the filing of duplicate 
papers. The rule provides a tool for preventing abuses that can occur 
in filing documents and ensures that the parties and the Board are 
consistent in their citation to the underlying record.
    Section 42.8: Section 42.8 provides 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 rule requires 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 previously have 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 will be affected by 
a decision in the proceeding include every application and patent that 
claims, 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 identification of the real party-in-interest helps identify 
potential conflicts of interest 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 will 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, as discussed in further 
detail in the Office Patent Trial Practice Guide. 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 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 financially controlling interest in the petitioner.
    Section 42.9: Section 42.9 permits 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 rarely 
will be granted, and such orders will typically issue only when the

[[Page 48618]]

partial assignee was in a proceeding against its co-assignee. Ex parte 
Hinkson, 1904 Comm'r. Dec. 342.
    Section 42.10: Section 42.10(a) requires a party to designate a 
lead counsel and back-up counsel who can conduct business on behalf of 
the lead counsel as instances arise where lead counsel may be 
unavailable.
    Section 42.10(b) provides that a power of attorney must be filed 
for counsel not of record in the party's involved patent or 
application.
    Section 42.10(c) allows for pro hac vice representation before the 
Board subject to the condition that lead counsel be a registered 
practitioner and to any other conditions as the Board may impose. The 
Board may recognize counsel pro hac vice during a proceeding upon a 
showing of good cause. For example, where the lead counsel is a 
registered practitioner, a motion to appear pro hac vice by counsel who 
is not a registered practitioner may be granted upon showing that 
counsel is an experienced litigating attorney and has an established 
familiarity with the subject matter at issue in the proceeding.
    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 rule allows for pro hac vice practice in the new proceedings 
authorized by the AIA. Individuals appearing pro hac vice under Sec.  
42.10(c) are subject to the USPTO Code of Professional Responsibility 
set forth in Sec. Sec.  10.20 et seq. and disciplinary jurisdiction 
under Sec.  11.19(a).
    Section 42.10(d) provides 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 rule delegates to the Board the authority to conduct 
counsel disqualification proceedings while the Board has jurisdiction 
over a proceeding. The rule delegates 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 does 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 Board also may refer a matter to the 
Office of Enrollment and Discipline for investigation and, if 
warranted, further proceedings under Sec. Sec.  11.19 et seq.
    Section 42.10(e) provides that counsel may not withdraw from a 
proceeding before the Board unless the Board authorizes such 
withdrawal.
    Section 42.11: Section 42.11 reminds parties, and individuals 
involved in the proceeding, 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: Section 42.12 provides 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 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.
    Section 42.12(a) identifies types of misconduct for which the Board 
may impose sanctions. The rule explicitly provides 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.
    Section 42.12(b) recites the list of sanctions that may be imposed 
by the Board.
    Section 42.13: Section 42.13 provides a uniform system of citation 
to authority. The rule codifies existing Board practice and extends it 
to trial proceedings. Under the rule, a citation to a single source, in 
the priority order set out in the rule, is sufficient, thus minimizing 
the citation burden on the public.
    Section 42.14: Section 42.14 provides that the record of a 
proceeding be made available to the public, except as otherwise 
ordered. An exception to public availability is those documents or 
things accompanied by a motion to seal the document or thing. The 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 AIA 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 Pub. L. 112-29, 125 Stat. at 317-18. 
This process would not feasibly permit adoption of fees for the 
services described herein to be in place by September 16, 2012 (the 
effective date of many of the Board procedures required by the AIA and 
described herein). Therefore, the Office is instead setting fees for 
these services pursuant to its authority under 35 U.S.C. 41(d)(2) in 
this rulemaking, 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 a separate rulemaking proposing to set or 
adjust patent fees subsequently under section 10 of the AIA. 
Consequently, the fees set in this Final Rule will be superseded by the 
fees ultimately set in the section 10 rulemaking.
    Section 42.15: Section 42.15 sets fees for the new trial 
proceedings.
    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

[[Page 48619]]

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 fees for filing a petition for inter partes review 
are: $27,200 for requesting review of 20 or fewer claims and $600 for 
each claim in excess of 20 for which review is sought. 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 and 
$800 for each claim in excess of 20 for which review is sought.
    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 fee would increase $75 per claim in excess of 
20. 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 about 100 hours of judge time would be 
required. An additional two hours of judge time for each claim in 
excess of 20 would be required.
    For a petition for post-grant or covered business method patent 
review with 20 or fewer challenged claims, it is anticipated that about 
130 hours of judge time will be required. An additional slightly under 
three hours of judge time for each claim in excess of 20 would be 
required.
    Section 42.15(a) sets 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. Public comments that the Board 
should more strictly group claims in appropriate cases have resulted in 
an adjustment from the proposed regulations to a final flat estimated 
aggregate cost of $600 per requested claim in excess of 20 for inter 
partes review and $800 per requested claim in excess of 20 claim for 
post-grant review.
    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 21-40 are challenged where each of claims 21-40 
are dependent claims and depend only upon claim 1. As claims 21-40 
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, there are 
21 challenged claims.
    Section 42.15(b) sets 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 (B)(5) 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.
    Section 42.15(c) sets 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. 35 U.S.C. 135, as amended, does not require a 
fee be charged for a derivation proceeding. Accordingly, 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.
    Section 42.15(d) sets the fee for filing written requests to make a 
settlement agreement available in the amount of $400.
    Section 42.15(e) and (f) recite the statutory fees due when a 
patent owner presents additional claims during a review. See 35 U.S.C. 
41(a)(2)(A)(i) and (ii).

Petition and Motion Practice

    Section 42.20: Section 42.20(a) provides that relief, other than a 
petition to institute a trial, must be in the form of a motion. The 
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.
    Section 42.20(b) provides 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 with a written order 
reflective of the results of the call. This practice has significantly 
increased the speed and reduced the costs in contested cases.
    Section 42.20(c) places the burden of proof on the moving party. A 
motion that fails to justify the relief on its face

[[Page 48620]]

could be dismissed or denied without regard to subsequent briefing.
    Section 42.20(d) provides 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 35 U.S.C. 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 rule provides for Board-ordered briefing where appropriate 
in order to efficiently and effectively render its final decision on 
patentability.
    Section 42.21: Section 42.21(a) provides 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 rule makes clear that a 
notice must contain sufficient detail to serve its notice function. The 
rule provides an effective mechanism for administering cases 
efficiently and placing opponents on notice.
    Section 42.21(b) states the effect of a notice. The rule makes it 
clear that failure to state a sufficient basis for relief would warrant 
a denial of the request.
    Section 42.21(c) permits correction of a notice after the time set 
for filing the notice, but sets a high threshold for entry of the 
correction, i.e., if the entry was in the interests of justice. The 
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 will be permitted to consider the ability of the Board to 
complete the proceeding timely should the request be granted. Hence, 
requests made at the outset of a proceeding will be more likely to 
demonstrate good cause than requests made later in the proceeding.
    Section 42.22: Section 42.22 concerns the general content of 
motions.
    Section 42.22(a) requires 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. Sections 
42.22(a)(1) and (a)(2) provide for a statement of precise relief 
requested, 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.
    Section 42.22(b) requires 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 rule keeps practice uniform throughout the Office.
    Section 42.22(c) provides that a petition or motion may include 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.
    Section 42.22(d) allows 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: Section 42.23 provides 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: Section 42.24 provides page limits for petitions, 
motions, patent owner preliminary responses, patent owner responses, 
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 the 
trials timely. The page limits set forth 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 contested cases 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 contested cases 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).
    Section 42.24(a) provides specific page limits for petitions and 
motions.

[[Page 48621]]

The rule sets a limit of 60 pages for petitions requesting inter partes 
reviews and derivation proceedings, 80 pages for petitions requesting 
post-grant reviews and covered business method patent reviews, and 15 
pages for motions.
    The Board's current practice in contested cases 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 currently heard by 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 final rule, an inter partes review petition will 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 rule provides up to 60 pages in 
length for a motion requesting inter partes review. Thus, as the page 
limit more than doubles the default page limit currently set for a 
motion before the Board, a 60-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 final rule, 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 80-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 page limit for covered business 
method patent reviews of 80 pages is the same as that for post-grant 
review.
    Petitions to institute derivation proceedings raise a subset of the 
issues that are currently raised in contested cases 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 60-page limit is considered sufficient in all but 
exceptional cases.
    The rule provides 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 contested cases miscellaneous 
motion practice. Accordingly, the rule provides 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, patent owner 
preliminary response, patent owner response, opposition, or reply for 
which the waiver is thought to be necessary.
    Section 42.24(b) provides page limits for patent owner preliminary 
response, patent owner responses, and oppositions. Current contested 
cases 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 rule would continue the current 
practice.
    Section 42.24(c) provides page limits for replies. Current 
contested cases 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 rule is consistent with 
current contested cases practice for procedural motions. The rule 
provides a 15-page limit for reply to petitions requesting a trial, 
which the Office believes is sufficient based on current practice. 
Current contested cases 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: Section 42.25 provides 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

    As a summary, this final rule provides 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.

[[Page 48622]]

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 manage the proceeding and to 
prevent abuse.
    Section 42.51: Section 42.51(a) provides for mandatory initial 
disclosures. Where parties agree to mandatory discovery requiring the 
initial disclosures set forth in the Office Patent Trial Practice 
Guide, the parties may automatically, upon the institution of the 
trial, take discovery of the information identified in the initial 
disclosures. The parties must submit the agreement by no later than the 
filing of the patent owner preliminary response or the expiration of 
the time period for filing such a response. Where the parties fail to 
agree to such discovery, a party may seek such discovery by motion.
    Section 42.51(b) provides for limited discovery in the trial 
consistent with the goal of providing trials that are timely, 
inexpensive, and fair. The rule is consistent with 35 U.S.C. 316(a)(5), 
as amended, and 35 U.S.C. 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.
    Sections 42.51(b)(1)(i) and (ii) 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 rule eliminates many routine 
discovery requests and disputes. The rule will not require a party to 
create materials or to provide materials not cited.
    Section 42.51(b)(1)(iii) would ensure the timeliness of the 
proceedings by requiring that a party to serve relevant information 
that is inconsistent with a position advanced by the party during the 
course of the proceeding, concurrent with the filing of the document or 
thing that contains the inconsistency. The requirement extends to 
inventors, corporate officers, and persons involved in the preparation 
or filing of documents in a 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 Sec.  42.51(b)(1)(iii) is typically sought 
through additional discovery and that such information leads to the 
production of relevant evidence. However, the 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 rule makes the 
production of such information routine. Lastly, this requirement does 
not override legally recognized privileges such as attorney-client or 
attorney work product. The rule expressly states that requirement does 
not make discoverable anything otherwise protected by legally 
recognized privileges such as attorney client or attorney work product.
    Section 42.51(b)(2) provides for additional discovery. Additional 
discovery increases trial costs and increases the expenditures of time 
by the parties and the Board. The parties may agree to additional 
discovery between themselves. Where the parties fail to agree, however, 
the 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 
review proceedings.
    The 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 trials timely. Further, the 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.
    Section 42.51(c) provides for production of documents. 
Specifically, except as otherwise ordered by the Board, a party 
producing documents and things is required to either provide copies to 
the opposing party or make the documents and things available for 
inspection and copying at a reasonable time and location in the United 
States.
    Section 42.52: Section 42.52 provides procedures for compelling 
testimony. Under 35 U.S.C. 23, the Director may establish rules for 
affidavit and deposition testimony. 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. See 35 U.S.C. 24. 
Section 42.52(a) requires the party seeking a subpoena to first obtain 
authorization from the Board; otherwise, the compelled evidence would 
not be admitted in the proceeding. Section 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: Section Sec.  42.53 provides 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. 
Parties may agree to video-recorded testimony, but may not submit such 
testimony without prior authorization of the Board. If the nature of 
the testimony makes direct observation of witness demeanor necessary or 
desirable, the Board may

[[Page 48623]]

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 
will be responsible for the cost of producing the witness for the 
deposition. The parties will 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. Occasionally, 
the Board will require live testimony where the Board considers the 
demeanor of a witness critical to assessing credibility.
    Section 42.53(c)(1) provides that unless stipulated by the parties 
or ordered by the Board, direct examination, cross-examination, and 
redirect examination for compelled deposition testimony will be subject 
to the following time limits: Seven hours for direct examination, four 
hours for cross-examination, and two hours for redirect examination.
    Section 42.53(c)(2) provides that unless stipulated by the parties 
or ordered by the Board, cross-examination, redirect examination, and 
re-cross examination for uncompelled direct deposition testimony will 
be subject to the following time limits: seven hours for cross-
examination, four hours for redirect examination, and two hours for re-
cross examination.
    Section 42.53(d)(2) provides for the time period for cross-
examination and sets a norm for the conference in Sec.  42.53(d)(1). A 
party seeking to move the deposition outside this period would need to 
show good cause.
    Section 42.53(e) requires 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. Based on the Board's 
experience, non-English language depositions can be highly complex. In 
order to ensure such depositions are productive and to minimize 
unnecessary cost and delay, prior Board authorization is required.
    Section 42.53(f) provides for the manner of taking testimony.
    Section 42.53(f)(1) requires that each witness, before giving 
deposition testimony, be duly sworn according to law by the officer 
before whom the deposition is to be taken. Section 42.53(f)(1) also 
requires that the officer be authorized to take testimony under 35 
U.S.C. 23.
    Section 42.53(f)(2) requires that testimony be taken 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.
    Section 42.53(f)(3) requires that any exhibits used during the 
deposition be numbered as required by Sec.  42.63(c), and must, if not 
previously served, be served at the deposition. Section 42.53(f)(3) 
also provides that exhibits objected to be accepted pending a decision 
on the objection.
    Section 42.53(f)(4) requires 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.
    Section 42.53(f)(5) requires the witness to read and sign (in the 
form of an affidavit) a transcript of the 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 Sec.  42.53(f)(6)(vi) provides 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 will not be a disqualifying interest.
    Except where the parties agree otherwise, Sec.  42.53(f)(7) 
requires 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 wishes to rely on the 
testimony, the party that wishes to file the testimony will become the 
proponent and will be permitted to file the transcript as its own 
exhibit.
    Section 42.54: Section 42.54 provides 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. Section 42.54 
provides such protective orders and follows the procedure set forth in 
Federal Rule of Civil Procedure 26(c)(1).
    Section 42.55: Section 42.55 allows 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 may serve the patent owner the confidential information and 
may file the information 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 will constitute a grant of the 
motion to seal, unless otherwise ordered by the Board. The 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 will become public 45 days after denial of 
a petition to institute a trial or 45 days after final judgment in a 
trial. Section 42.56 allows a party to file a motion to expunge from 
the record confidential information prior to the information becoming 
public. Section 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 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 rule encourages parties to redact 
sensitive information, where possible, rather than seeking to seal 
entire documents.
    Section 42.61: Section 42.61 provides for the admissibility of 
evidence. Section 42.61(a) makes the failure to comply with the rules a 
basis for challenging admissibility of evidence. Section 42.61(b) does 
not require certification as a condition for admissibility when the 
evidence is a record of the Office that is accessible to all parties. 
The rule avoids disputes on what otherwise would be technical 
noncompliance with the rules. Section 42.61(c) provides that the 
specification and drawings of a U.S. patent application or patent are 
admissible only to prove what the specification and

[[Page 48624]]

drawings describe. The rule addresses a recurring problem in which a 
party mistakenly relies on a specification to prove a fact other than 
what the specification says. The rule makes 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: Section 42.62 adopts a modified version of the 
Federal Rules of Evidence. The rule adopts 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: Section 42.63 provides that all evidence is to be 
submitted as an exhibit. For instance, the rule provides 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 rule requires 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
Trial IPR2011OCT-00001

    Section 42.64: Section 42.64 provides 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 rule offers a similar, albeit 
limited, process for objecting and curing in a trial at the Board.
    Section 42.64(a) provides that objections to the admissibility of 
deposition evidence must be made during the deposition. Section 
42.64(b) provides 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 served timely would 
have ten business days after service of the objection to cure any 
defect in the evidence. The Board will not ordinarily address an 
objection, unless the objecting party filed a motion to exclude under 
Sec.  42.64(c), because the objection might have been cured or might 
prove unimportant in light of subsequent developments.
    Section 42.65: Section 42.65 provides rules for expert testimony, 
tests, and data.
    Section 42.65(a) reminds 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 rule.
    Section 42.65(b) provides 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: Section 42.70 provides guidance on oral argument.
    Section 42.70(a) provides 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.
    Section 42.70(b) provides 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: Section 42.71 provides for decisions on petitions 
and motions.
    Section 42.71(a) provides 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).
    Section 42.71(b) provides for interlocutory decisions. The rule 
makes 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. Thus, 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.
    A decision on whether to institute a trial is final and 
nonappealable, consistent with 35 U.S.C. 314(d), as amended, and 35 
U.S.C. 324(e). However, pursuant to Sec.  42.71(d), a party may request 
a rehearing of that decision.
    Section 42.71(d) provides 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: Section 42.72 provides 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: Section 42.73 provides for judgment.
    Section 42.73(a) provides that a judgment, except in the case of a 
termination, disposes of all issues that were, or by motion reasonably 
could have been, raised and decided.
    Section 42.73(b) provides guidance as to the conditions under which 
the Board would infer a request for adverse judgment.
    Section 42.73(c) provides for recommendations for further action by 
an examiner or the Director.

[[Page 48625]]

    Section 42.73(d) provides for estoppel.
    Section 42.73(d)(1) applies 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).
    Section 42.73(d)(2) sets forth estoppel provisions in derivation 
proceedings. The rule is also consistent with 35 U.S.C. 135(d), as 
amended, which provides for the effect of a final decision in a 
derivation proceeding. Section 42.73(d)(2) differs from 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).
    Section 42.73(d)(3) applies estoppel against a party whose claim 
was cancelled or who requested an amendment to the specification or 
drawings that was denied. The rule is consistent with 35 U.S.C. 
316(a)(4), as amended, and 326(a)(4), which require that the Office 
prescribe regulations establishing and governing the reviews and the 
relationship of such reviews to other proceedings under title 35.
    Section 42.74: Section 42.74 provides 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.
    Section 42.74(a) reflects that the Board is not a party to a 
settlement agreement and may take any necessary action, including 
determination of patentability notwithstanding a settlement. The 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 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.
    Section 42.74(b) provides that settlement agreements must be in 
writing and filed with the Board prior to termination of the 
proceeding. The 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 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.
    Section 42.74(c) provides that a party to a settlement may request 
that the settlement be kept separate from an involved patent or 
application. The 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: Section 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 rule is 
consistent with 35 U.S.C. 318, as amended, and 35 U.S.C. 328.

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

    The AIA 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 added to permit consolidation of rules relating to 
court review of Board decisions and to simplify reference to such 
practices. The rules in part 90 also implement the provisions of the 
AIA associated with judicial review of agency actions addressed by the 
AIA.
    Current Sec. Sec.  1.301 through 1.304, which relate to rules of 
practice in patent cases, are removed from part 1 and relocated to part 
90. Paraphrasing of the statute in those rules is eliminated in the new 
rules in favor of directing the reader to the relevant statutory 
provisions. This change avoids the need for the Office to amend the 
rules when statutory amendments are made. It also avoids undue public 
reliance on the Office's paraphrase of statutory text. The rules in 
part 90 better state the existing practice and are not intended to 
change the existing practice except as explicitly provided.
    Section 90.1: Section 90.1 clarifies the scope of the rules in part 
90. The rules in part 90 are 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 includes judicial 
review of the Patent Trial and Appeal Board decisions arising out of ex 
parte prosecution. The rules in part 90 will 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 indicates that 
this part applies only to judicial review of Patent Trial and Appeal 
Board decisions.
    Section 90.1 clarifies that the rules in effect on July 1, 2012, 
will continue to govern appeals from inter partes reexamination 
proceedings. Section 7(e) of the AIA maintains the statutory provisions 
governing inter partes reexaminations requested under 35 U.S.C. 311, as 
amended, 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 AIA 
was enacted. Accordingly, the Office will continue to apply the 
regulations as they existed when the AIA was enacted (or as 
subsequently modified prior to July 1, 2012) for those proceedings. 
Further, section 3(n)(2) of the AIA 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 AIA. Regarding 
judicial review of Board decisions arising out of such interferences, 
section 7(c) and (e) of the AIA makes review by the Federal Circuit 
available under 35 U.S.C. 141 only for proceedings commenced before 
September 16, 2012. Similarly, section 3 of the AIA makes review of 
interference decisions by a district court under 35 U.S.C. 146 
available only if the provisions of section 3(n)(1) of the AIA are not 
satisfied. That is because if the involved application contains a claim 
satisfying the terms of section 3(n)(1) of the AIA (e.g., a 
continuation-in-part application), then section 3(j) of the AIA--
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 AIA 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 section 6(f)(3) of the 
AIA.
    Section 90.2: Section 90.2 addresses notice and service 
requirements associated with notices of appeal and civil actions 
seeking judicial review of Board decisions. The rule combines the 
notice and service requirements of

[[Page 48626]]

current Sec. Sec.  1.301, 1.302, and 1.303 for proceedings addressed by 
those rules. Paraphrasing of the statute in those rules is eliminated 
in Sec.  90.2 in favor of directing the reader to the relevant 
statutory provisions to streamline the rules and prevent confusion. The 
rule also includes references to pertinent statutory provisions or 
court rules that apply in such court proceedings. Section 90.2 further 
adds provisions associated with judicial review of Board decisions in 
inter partes reviews, post-grant reviews, covered business method 
patent reviews, and derivation proceedings. Section 90.2 requires 
parties filing a notice of appeal in such proceedings to provide 
sufficient information (such as a statement of the issues to be raised 
in the appeal) to allow the Director to determine whether to exercise 
the right to intervene in the appeal pursuant to 35 U.S.C. 143. The 
Office believes that such a requirement imposes no additional burden on 
the party filing the notice, other than filing a copy of its brief 
statement of the issues, as it must provide a brief statement of the 
issues to the Federal Circuit in its docketing statement (see Fed. Cir. 
Form 26) and again in its brief (see Fed. Cir. R. 28(a)(5)). The 
requirement, therefore, merely requires parties to provide similar 
information to the Office at a slightly earlier stage in the 
proceedings.
    Section 90.2 requires 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 rule also requires 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 ensure 
that the Board is aware of such proceedings and prevent further action 
within the Office consistent with the Board decision at issue in the 
appeal or civil action. Section 90.2 further requires 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: Section 90.3 addresses 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.
    Section 90.3(a) addresses the time for filing a notice of appeal or 
a civil action seeking judicial review of a Board decision. The rule 
extends the period for filing a notice of appeal or a civil action 
under Sec.  1.304 to sixty-three (63) days. This change avoids 
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 sixty-three (63) day period results 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 rule minimizes 
calculations regarding extensions of time pursuant to 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.
    Section 90.3(a) also removes language regarding the time for cross-
appeals from Sec.  1.304. Instead, the rule refers 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 rule also adds 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.
    Section 90.3(b) and (c) incorporates provisions from Sec.  1.304 
addressing computation of time and extension of time.

Response to Comments

    As discussed previously, the Office received 251 written 
submissions of comments from intellectual property organizations, 
businesses, law firms, patent practitioners, and others. The comments 
provided support for, opposition to, and diverse recommendations on the 
proposed rules. The Office appreciates the thoughtful comments, and has 
considered and analyzed the comments thoroughly.
    The Office's responses to the comments that are directed to 
specifically inter partes review proceedings (77 FR 7041), post-grant 
review proceedings (77 FR 7060), and transitional post-grant review 
proceedings for covered business method patents (77 FR 7080) are 
provided in a separate final rule (RIN 0651-AC71). Additionally, the 
Office's responses to the comments that are directed to the definitions 
of the terms ``covered business method patent'' and ``technological 
invention'' are provided in another separate final rule (RIN 0651-
AC75). The Office's responses to other comments that are directed to 
the consolidated set of rules relating to Board trial practice and 
judicial review of Board decisions are provided as follows:

Policy (Sec.  42.1)

    Comment 1: One comment suggested that the rules should clarify that 
the burden of persuasion does not shift to the patentee.
    Response: Section 42.1(d) provides that the default evidentiary 
standard for each issue in a Board proceeding is a preponderance of the 
evidence. A petitioner has the burden of proving the proposed ground of 
unpatentability as to the challenged patent claims by a preponderance 
of evidence. 35 U.S.C. 316(e), as amended, and 35 U.S.C. 326(e). In the 
event that a patent owner files a motion to amend the claims, the 
patent owner must include a statement of the precise relief requested 
and a full statement of the reasons for the relief requested, including 
a detailed explanation of the significance of the amended claims (e.g., 
a statement that clearly points out the patentably distinct features 
for the proposed new or amended claims). See Sec.  42.22.
    Comment 2: One comment stated that the ``just, speedy, and 
inexpensive'' standard set forth in Sec.  42.1(b) is inconsistent with 
the AIA.
    Response: The Office believes that the standard for construction of 
the rules to secure the just, speedy, and inexpensive resolution of 
every proceeding as provided in Sec.  42.1(b) is consistent with 35 
U.S.C. 316(b), as amended, and 35 U.S.C. 326(b) which provide that 
``[i]n prescribing regulations under this section, the Director shall 
consider the effect of any such regulation on the economy, the 
integrity of the patent system, the efficient administration of the 
Office, and the ability of the Office to timely complete proceedings 
instituted under this chapter.'' The Office has taken into account 
these considerations identified in the AIA in promulgating the rules 
and believes the standards and procedures set forth in this final rule 
will enhance efficiency of the review proceedings.
    Comment 3: One comment questioned whether Sec. Sec.  1.4(a)(2) and 
1.25, related to signature requirements and deposit accounts, will be 
amended to incorporate inter partes review, post-grant review, covered 
business method review, and derivation proceedings.
    Response: Section 42.1 lists several sections of part 1, including 
Sec. Sec.  1.4(a)(2) and 1.25, and states that those sections also 
apply to proceedings before the Board. Further, the Office, in a 
separate

[[Page 48627]]

rulemaking, is amending Sec.  1.4 in view of the AIA. See Changes to 
Implement Miscellaneous Post Patent Provisions of the Leahy-Smith 
America Invents Act, 77 FR 442 (January 5, 2012) (Notice of proposed 
rulemaking). However, no amendment to Sec.  1.25 is necessary.

Definitions (Sec.  42.2)

    Comment 4: One comment recommended that the Office should state in 
the rules that reexaminations are not considered as ``involved'' 
proceedings, and inter partes reexaminations are considered as 
``contested'' cases.
    Response: The rules of practice for reexaminations are set forth in 
part 1 of the CFR, rather than part 42. As stated previously in the 
discussion for Sec.  42.2, inter partes reexaminations are not 
considered contested cases, unless consolidated with a contested case.
    Comment 5: One comment suggested that the word ``trial'' should be 
replaced with the word ``proceeding.''
    Response: This comment is not adopted. The definitions of ``trial'' 
and ``proceeding'' as set forth in Sec.  42.2 are consistent with the 
AIA. As stated previously, a proceeding starts when a petitioner files 
a petition for instituting a trial. A trial is a part of the proceeding 
that starts when the Board issues a written decision to institute a 
review.
    Comment 6: One comment suggested that the phrase ``motion means a 
request for relief other than by petition'' should be revised to 
eliminate ``other than by petition.''
    Response: This comment is not adopted because a petition by 
definition is not a motion.
    Comment 7: One comment suggested changing the definition of 
``party'' to include ``assignee of any applicant.''
    Response: This comment is adopted to the extent that the definition 
of ``party'' set forth in Sec.  42.2, as adopted in this final rule, 
includes any ``assignee of the involved application.''
    Comment 8: One comment requested clarification of the term 
``contested case.''
    Response: Inter partes review, post-grant review, covered business 
method review, and derivation proceedings are contested cases for the 
purposes of part 42.
    Comment 9: One comment requested clarification on whether part 42 
incorporates the requirements of part 41.
    Response: 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 Chapter 37 are incorporated by reference into 
part 42. The requirements of part 41, however, have not been 
incorporated into part 42.
    Comment 10: One comment suggested changing ``rehearing'' to 
``reconsideration'' in situations where the reconsideration is not by a 
panel.
    Response: This comment is not adopted. The definition of 
``rehearing'' as set forth in Sec.  42.2 is consistent with 35 U.S.C. 
6(c).

Jurisdiction (Sec.  42.3)

    Comment 11: Several comments suggested that the phrase ``in a 
timely manner'' in proposed Sec.  42.3(b) should be changed to 
``consistent with any time period required by statute.''
    Response: The comments are adopted.
    Comment 12: A comment suggested that proposed Sec.  42.3(a) should 
be deleted because the AIA does not authorize the Office to govern 
activities of the parties after Board decisions.
    Response: Section 42.3 provides that the Board may exercise 
exclusive jurisdiction within the Office over every involved 
application and patent during the proceeding. The Office believes that 
Sec.  42.3(a) is consistent with 35 U.S.C. 6(c) and 315(d), as amended, 
and 35 U.S.C. 325(d). Under 35 U.S.C. 6(c), the Board may grant a 
rehearing of a Board decision.
    Comment 13: One comment suggested that the statement ``[a]ny claim 
or issue not included in the authorization for review is not part of 
the trial'' in the Office Patent Trial Practice Guide should be added 
to proposed Sec.  42.3.
    Response: The written decision to institute a trial will define the 
scope of the review in each proceeding and it is envisioned that claims 
and issues not identified in the written decision will not form a part 
of the trial.
    Comment 14: One comment requested clarification of the process and 
procedure for handling multiple proceedings involving the same patent, 
specifically when the Office will stay, transfer, consolidate or 
terminate a reexamination or reissue application.
    Response: The Office will consider whether to stay, transfer, 
consolidate or terminate a copending reexamination or reissue 
application that involves the same subject patent on a case-by-case 
basis depending on the particular facts of each case. Factors that may 
be considered include a request made by a court, a request by the first 
petitioner for termination of the first review in view of strength of 
the second petition, and whether the petitioner requesting joinder has 
offered to pay the patent owner's costs.

Notice of Trial (Sec.  42.4)

    Comment 15: One comment suggested that proposed Sec.  42.4 should 
be clarified to specify what address the Office will use to send a 
party the notice of trial and when these additional modes of notice 
would be used, and whether the modes are supplemental or substitutes 
for the notice specified in Sec.  42.4(b).
    Response: The Office will send the notice to the address of record 
and, when necessary, e.g., when the address of record appears to be 
outdated, may use an additional mode of notice.
    Comment 16: One comment stated that the notice of trial appears to 
be redundant because the decision will contain an authorization to act, 
obviating any notice of trial.
    Response: 35 U.S.C. 314(c), as amended, and 324(d) require the 
Director to provide notice of the trial.
    Comment 17: One comment suggested that the Board should include in 
the notice a statement of the claim construction applied by the Board 
in making the decision to institute and that it will be used by the 
parties during the trial and also that the Board should take cognizance 
of any district court and U.S. International Trade Commission claim 
constructions.
    Response: Consistent with 35 U.S.C. 314(c), as amended, and 35 
U.S.C. 324(d), the Office will provide a written determination of 
whether to institute a trial when deciding a petition. Where claim 
construction is in dispute, the Office envisions that the Board will 
provide an initial claim construction for the trial. Consideration of 
constructions applied in other proceedings will be part of the 
determination, but whether the same construction will be applied will 
be a case-by-case determination.

Conduct of the Proceeding (Sec.  42.5)

    Comment 18: Two comments requested guidance as to how extensions of 
time should be requested and one suggested that proposed Sec.  42.5 
should be modified to state that such requests are made by motion, but 
that no opposition is allowed.
    Response: The Office envisions that requests for extensions of time 
will be made during a conference call with the Board and the opposing 
party (i.e., an oral motion would be made). A decision on the request 
will be made during the call or shortly thereafter, without the need 
for the parties to file any briefing on the issue.
    Comment 19: One comment requested clarification of the 
circumstances under which the rules may be modified and whether it 
could be by motion or only by Board discretion and another suggested 
incorporation of an objective standard for when the Board would 
undertake this action. This comment also suggested that the proposed 
rule be

[[Page 48628]]

changed to ``a member of the Board defined in 35 U.S.C. 6(a).''
    Response: This comment is not adopted. Under the rule, the Board 
may determine a proper course of conduct where a situation arises that 
is not specifically covered or may waive or suspend a rule with 
conditions if circumstances warrant. If a party wishes the Board to 
provide it relief under the rule, the party must move for the Board to 
do so. Sec.  42.20(a). Whether the Board exercises its discretion is 
determined on a case-by-case basis.
    Comment 20: One comment suggested the times exemplified in the 
Office Patent Trial Practice Guide times should be incorporated into 
this rule as default times, leaving the Board discretion to alter them 
if needed.
    Response: Default filing times for the filing of oppositions and 
replies are set forth in Sec.  42.25. Under the rule, the time for the 
filing of any authorized motions will be set after conferring with the 
parties, Sec.  42.25(a), to allow the Board to consider what is 
appropriate under the particular circumstances of the proceeding. The 
times set out in the Office Patent Trial Practice Guide are intended to 
give parties a general idea of how the ordinary proceeding will be 
conducted.
    Comment 21: One comment requested guidance as to what would be 
considered ``good cause'' or ``in the interests of justice,'' 
justifying an extension of time or a late submission to avoid 
inconsistent application of the rule.
    Response: Whether a party has met a ``good cause'' or ``interests 
of justice'' standard is specific to the particular facts of the 
proceeding and must be made on a case-by-case basis. An example where 
times may be extended is where, through no fault of either party, 
relevant information comes to light that requires briefing that could 
not occur in the allotted times for taking action.
    Comment 22: One comment suggested adding a provision to the rule 
requiring that all substantive communications with the Board are to be 
recorded.
    Response: Under the rules, there is no prohibition on the parties 
providing for a record of any oral communications between the parties 
and the Board. Whether resources will allow for the providing of a 
record by the Board has not been determined at this time.
    Comment 23: One comment stated that proposed Sec.  42.5 is 
inconsistent with the AIA, which reserves the ``good cause'' standard 
to the special situations of third party access to an agreement in 
respect of settlement, and extension of a proceeding to up to 18 
months.
    Response: The comment is not adopted. The AIA does not explicitly 
reserve the ``good cause'' standard only for those situations mentioned 
in the statute.
    Comment 24: One comment suggested that proposed Sec.  42.5 be 
modified to deal with a situation where, if an electronic filing 
problem arises and if the due date is not extendable by the parties, 
and if a Board member cannot be reached that day, the party that 
encounters the problem may notify opposing counsel that it will not be 
filing that day but will be filing the next day and will schedule a 
conference call the next morning to obtain a one-day extension for both 
parties. Another comment suggested that the Board have staff available 
after hours to rule on extension requests when the Office electronic 
filing system malfunctions.
    Response: Under the appropriate circumstances, a party may file in 
paper. Sec.  42.6(b)(2)(i). In the Board's experience, an 
administrative patent judge will be available during business hours to 
consider whether to grant an extension in these circumstances. In the 
unlikely event that an administrative patent judge is not available to 
rule on the extension, the rules allow for the granting of an extension 
the day after the paper is due, which includes situations where 
electronic filing problems are shown to have occurred.

Filing of Documents, Including Exhibits; Service (Sec.  42.6)

    Comment 25: Some comments suggested that proposed Sec.  42.6(a) 
should be made consistent with current Sec.  41.106 on font size and 
spacing requirements. One comment also suggested limiting content of 
papers based on word count.
    Response: The Office adopts proposed Sec.  42.6(a) in this final 
rule without any modifications. Both current Sec. Sec.  41.106 and 
42.6(a) require double spacing and therefore do not appear to be 
inconsistent. The rule regarding font size is based on readability 
considerations. The requirement is also consistent with Rule 32(a)(5) 
of the Federal Rules of Appellate Procedure. The Office considered a 
word count limit, but determined that the best practice, based on fee 
setting and IT considerations, is a page limit. Use of a word count is 
more difficult and complex to administer than use of a page limit. 
Therefore, the suggested change to limit content of papers based on 
word count is not adopted.
    Comment 26: One comment suggested that proposed Sec.  42.6(a)(4) is 
confusing regarding signature requirements, since Sec. Sec.  1.33 and 
11.18(a), to which the rule refers, do not contain information 
regarding signature requirements. The comment suggested amending the 
rule to provide for S-signatures in addition to ink signatures.
    Response: The Office adopts proposed Sec.  42.6(a)(4) in this final 
rule without any modifications. Section 42.6(a)(4) refers to Sec. Sec.  
1.33 and 11.18(a), which in turn do specify signature requirements, 
including S-signatures. See Sec.  11.18(a) (referencing Sec.  
1.4(d)(1)). Therefore, no change has been made.
    Comment 27: One comment suggested that proposed Sec.  42.6(d) 
should provide for exceptions and that the rule should be rewritten 
such that pleadings may be identified as exhibits.
    Response: The rule prevents the parties from filing multiple copies 
of the same papers and labeling the same papers with different numbers. 
The Office's experience is that the rule will aid in avoiding confusion 
and maintaining an efficient record. The Office, therefore, adopts 
proposed Sec.  42.6(d) in this final rule without any modifications.
    Comment 28: Some comments suggested that the proposed rule be 
amended to specify the types of acceptable service. One comment 
suggested that service should be by electronic mail. One comment sought 
clarification on what is meant by simultaneous service.
    Response: The Office has made modifications to Sec.  42.6(e) to 
provide that upon the agreement of the parties, service may be made 
electronically. The Office anticipates that, in most situations, papers 
will be filed electronically. Sec.  42.6(b)(1). Clarification on filing 
and electronic service of documents will be provided according to 
parameters established by the Board and published on the Web site of 
the Office.
    Comment 29: One comment suggested that it is not clear whether 
``filed separately'' in Sec.  42.6(e)(3)(ii) refers to uploaded as a 
separate file in the electronic filing system, filed as a separate 
electronic transaction, or filed on a different day or in a different 
context.
    Response: Filed separately means apart from a document. See Sec.  
42.6(e)(4)(ii). The two documents may be filed on the same day and in 
the same electronic submission.

Management of the Record (Sec.  42.7)

    Comment 30: Several comments requested clarification on whether 
proposed Sec.  42.7(b) includes actions in reexaminations and reissue 
applications when the subject patent is concurrently under the Board's 
jurisdiction in an

[[Page 48629]]

inter partes review, post-grant review, or derivation proceeding. One 
comment expressed concern that the proposed rule may be inconsistent 
with 35 U.S.C. 305 which requires that all ex parte reexamination 
proceedings be conducted with special dispatch. Another comment was in 
favor of the proposed rules with respect to jurisdiction and management 
of the record.
    Response: The Office envisions that the Board will consider the 
statutory provisions governing the various proceedings and reconcile 
them in an appropriate manner when exercising its discretion to vacate 
or hold in abeyance a non-Board action. As to the issue of whether the 
proposed rule is inconsistent with the AIA, 35 U.S.C. 315(d), as 
amended, provides that

    [n]otwithstanding sections 135(a), 251, and 252, and chapter 30, 
during the pendency of an inter partes review, if another proceeding 
or matter involving the patent is before the Office, the Director 
may determine the manner in which the inter partes review or other 
proceeding or matter may proceed, including providing for stay, 
transfer, consolidation, or termination of any such matter or 
proceeding.

Likewise, 35 U.S.C. 325(d) provides the same authority for post-grant 
review and covered business method patent review. It is important to 
note that the Board may exercise the authority under 35 U.S.C. 315(d), 
as amended, or 35 U.S.C. 325(d) notwithstanding chapter 30 of U.S.C. 
title 35, including the special dispatch provision of 35 U.S.C. 305. 
Therefore, Sec.  42.7(b) is consistent with 35 U.S.C. 315(d), as 
amended, and 35 U.S.C. 325(d), and is not in conflict with 35 U.S.C. 
305. The Board will take the special dispatch requirement into 
consideration before vacating or holding in abeyance any non-Board 
action directed to a reexamination proceeding.

Mandatory Notices (Sec.  42.8)

    Comment 31: One comment objected to the separate paper requirement 
in proposed Sec.  42.8(b).
    Response: This comment has been adopted. The requirement for filing 
the mandatory notices on separate papers has been eliminated in this 
final rule.
    Comment 32: One comment noted that proposed Sec.  42.8(b)(3) is 
inconsistent with proposed Sec.  42.10(a) as one is mandatory and the 
other is permissive.
    Response: Section 42.10(a), as adopted in this final rule, contains 
the mandatory language so that it is consistent with Sec.  42.8(b)(3).
    Comment 33: One comment requested clarification on whether service 
must be effected by the service information provided in the mandatory 
notice under proposed Sec.  42.8(b)(4).
    Response: If service is required (e.g., Sec.  42.21), service must 
be effected by the service information provided in the mandatory notice 
under Sec.  42.8(b)(4), unless otherwise ordered by the Board or agreed 
upon by the parties.
    Comment 34: One comment suggested that the Office should provide 
examples or more information on the ``related matters'' provision of 
Sec.  42.8, specifically whether the requirement encompasses non-U.S. 
matters.
    Response: Similar to current Sec.  41.37(c)(1)(ii) for ex parte 
appeals, Sec.  42.8(b)(2) requires each party to identify any other 
judicial or administrative matter that would affect, or be affected by, 
a decision in the proceeding. Thus, any statement that complies with 
current Sec.  41.37(c)(1)(ii) most likely would also comply with Sec.  
42.8(b)(2). As stated in the Office Patent Trial Practice Guide, 
judicial matters include actions involving the patent in federal court. 
Administrative matters that would be affected by a decision in the 
proceeding may include every application and patent claiming the 
benefit of the filing date of the party's involved patent or 
application, as well as any reexaminations for an involved patent. 
Further, such matters may also include any prior-filed domestic or 
foreign application for which priority is claimed by the party's 
involved patent or application.
    Comment 35: One comment suggested that the 21-day time period set 
forth in proposed Sec.  42.8(a)(3) for updating the mandatory notices 
should be shortened to seven days.
    Response: This comment is not adopted. The Office encourages the 
parties to notify the Office and other parties of any changes as soon 
as possible, especially address and counsel changes, so that papers 
will be delivered to the correct address and person. The Office, 
however, believes that the 21-day time periods will provide sufficient 
time for the parties to take appropriate action.

Action by Patent Owner (Sec.  42.9)

    Comment 36: One comment suggested that the term ``subject'' as 
opposed to ``involved'' should be used throughout proposed Sec.  42.9.
    Response: This comment is not adopted. The term ``involved'' is 
clearly defined in Sec.  42.2 as ``an application, patent, or claim 
that is the subject of the proceeding.'' Therefore, it is not necessary 
to replace ``involved'' with ``subject.''
    Comment 37: One comment suggested that the word ``inventor'' in 
proposed Sec.  42.9(b) should be deleted because if an inventor is not 
a part owner, the part owner should be able to act to the exclusion of 
that inventor as in proposed Sec.  42.9(a).
    Response: This comment is not adopted. The word ``inventor'' in 
Sec.  42.9(b) is necessary because Sec.  42.9(a) provides only for an 
owner of the entire interest acting to the exclusion of the inventor, 
as opposed to an owner of a part interest.

Counsel (Sec.  42.10)

    Comment 38: There were a number of comments on the pro hac vice 
provision of Sec.  42.10(c). Several comments suggested limiting 
representation to registered practitioners in view of the technically, 
legally and procedurally complex nature of the proceedings. Other 
comments suggested that pro hac vice representation be permitted, but 
only in very limited circumstances. Several comments also suggested 
that the rule should require that the lead counsel be a registered 
practitioner, or that a registered practitioner be involved in the 
proceeding. Another comment suggested that the burden to both parties 
be considered before permitting pro hac vice representation. Another 
comment suggested that any party admitted pro hac vice should expressly 
agree to be bound by part 10 of the Office's regulations, to certify 
that they had read and are familiar with the relevant statutes, rules 
of practice, standing order, and inter partes rules, and that they are 
personally able to represent the client competently in the proceeding 
under Rule 10.76.
    Response: The Office agrees that a motion to appear pro hac vice by 
counsel who is not a registered practitioner will be granted in limited 
circumstances, e.g., where a practitioner is an experienced litigator 
who is familiar with the subject matter involved in the proceeding. 
Although the Board may authorize a person other than a registered 
practitioner who possesses appropriate qualifications to appear as 
counsel in a proceeding, Sec.  42.10(c), as adopted in this final rule, 
provides that the lead counsel in such a proceeding must be a 
registered practitioner. The admission of a party pro hac vice may be 
made subject to conditions as suggested by the comment in appropriate 
circumstances. Compliance with all of the suggested conditions in all 
cases, however, would not be appropriate such as when the party 
requesting admission had previously been admitted in another proceeding 
and had demonstrated a high degree of competence.

[[Page 48630]]

    Comment 39: Several comments were directed to clarifying the roles 
of lead and back-up counsel. One comment contained a proposal for 
multiple back-up counsel or that additional attorneys receive access to 
communications.
    Response: The comment suggesting multiple back-up counsel is not 
adopted. Based on the experience of the Office in contested cases, 
designating one lead counsel and one back-up counsel by each party 
should result in more efficient and effective case management. The 
Office expects that lead counsel will, and back-up counsel may, 
participate in all hearings and conference calls with the Board and 
will sign all papers submitted in the proceeding. In addition, the role 
of back-up counsel is to conduct business with the Office on behalf of 
lead counsel when lead counsel is not available. Actions not conducted 
before the Office (e.g., taking of depositions) may be conducted by 
lead or back-up counsel. In response to one comment, for efficiency, it 
is expected that all communications from the Office will be directed to 
lead counsel only, unless informed in advance that lead counsel is not 
available, in which case communications will be with back-up counsel. 
The Office envisions that lead and back-up counsel may provide access 
to the electronic records to other practitioners representing their 
client. It is also envisioned that the access granted to the other 
practitioners by the lead or back-up counsel may also be rescinded by 
the lead or back-up counsel without consultation with the Board.
    Comment 40: Several comments were directed to disqualifications and 
withdrawals under Sec.  42.10(d) and (e), and sought clarification of 
those provisions in the rules.
    Response: The comment is noted, but not adopted. It is important in 
contested proceedings that the public record reflect who is acting as 
counsel for the parties. Thus, under Sec.  42.10(b) a power of attorney 
must be filed designating counsel not already of record in the 
prosecution. The withdrawal provision is applicable to lead counsel, 
back-up counsel, and all other counsel of record. The Office 
understands the concerns of one comment regarding the impact of 
disqualification on the proceedings. Motions to disqualify opposing 
counsel are disfavored because they cause delay and are sometimes 
abused. However, should disqualification of a party's counsel be 
necessary, it is expected that the Board will adopt reasonable measures 
to protect the party during the transition to new counsel.
    Comment 41: One comment requested that situations where counsel 
would be disqualified pursuant to Sec.  42.10(d) be provided in the 
MPEP or other material.
    Response: The determination whether to disqualify counsel is based 
on the facts and circumstances of the case, including any response by 
counsel to the allegation. Some situations, however, are likely to 
trigger consideration of whether to disqualify a counsel, e.g., 
egregious misconduct.
    Comment 42: One comment suggested that Sec.  42.10(e) requires an 
attorney to invent circumstances requiring disqualification in order to 
be permitted to withdraw from representation.
    Response: Section 42.10(e) does not require that an attorney be 
disqualified by the Board in order for the Board to authorize 
withdrawal. Authorization of attorney withdrawal under Sec.  42.10 
would be based on the facts in the case including the time remaining 
for a response, the ability of new counsel to complete the proceeding 
competently and timely, and desire of the real party in interest to be 
represented by new counsel.

Duty of Candor (Sec.  42.11)

    Comment 43: Several comments expressed concern about the scope of 
the proposed rule in comparison to Sec.  1.56 and Sec. Sec.  1.555 and 
1.933. Specifically, the lack of nexus between the proceeding and 
individuals with a duty of candor and good faith was questioned.
    Response: The comment is adopted. Section 42.11, as adopted, 
imposes a duty of candor and good faith only if an individual is 
involved in the proceeding. The scope of the duty is comparable to the 
obligations toward the tribunal imposed by Rule 11 of the Federal Rules 
of Civil Procedure.
    Comment 44: One comment suggested that it was unclear how 
violations of the duty by the petitioner would be enforced, 
particularly when the violation is discovered after the proceeding has 
terminated.
    Response: During the proceeding, an appropriate sanction under 
Sec.  42.12 may be sought and at any time, including after the final 
written decision, the matter may be submitted to the Office of 
Enrollment and Discipline, or an appropriate sanction under Sec.  42.12 
may be sought as the Board has both statutory and inherent authority to 
enforce its protective order. 35 U.S.C. 316(a)(6), as amended, and 35 
U.S.C. 326(a)(6).

Sanctions (Sec.  42.12)

    Comment 45: One comment expressed agreement with the Board's using 
its sanction authority when necessary to curb abuses in proceedings.
    Response: The rule provides that the Board may impose a sanction on 
a party for abusing the proceeding. The Office hopes that such a 
sanction is rarely needed.
    Comment 46: One comment asked for guidance regarding sanctions 
including how the sanctioned party can appeal such a sanction, the 
basis for the Office's authority to take patent term from a patent 
owner (either through a mandatory disclaimer or a judgment) absent a 
decision on the merits of a petition, the basis for the Office's 
authority to cause estoppel to attach to a petitioner absent a decision 
on the merits of a petition, and under what circumstances the Office 
will impose sanctions. The comment suggested that the Office consider 
additional sanctions directed to an attorney and/or firm responsible 
for the misconduct.
    Response: Section 42.12 identifies types of misconduct and 
sanctions for misconduct. Sections 90.1, 90.2 and 90.3 provide for 
judicial review of decisions by the Patent Trial and Appeal Board. If 
appropriate, the misconduct may be reported to the Office of Enrollment 
and Discipline for consideration of a sanction directed to the attorney 
or firm. Based on past experience, the Board expects such instances to 
be rare. Authority for the Board's sanctions include 35 U.S.C. 
316(a)(6), as amended, and 35 U.S.C. 326(a)(6).

Citation of Authority (Sec.  42.13)

    Comment 47: Several comments were critical of the requirements of 
citing decisions to the United States Reports and West Reporter System, 
and suggested that proposed Sec. Sec.  42.13(a) and (b) be modified as 
a preference.
    Response: The comment is adopted.
    Comment 48: A few comments recommended that the requirement for a 
copy of the cited non-binding authority be eliminated because it is a 
burden and such an authority is electronically accessible.
    Response: This comment is not adopted. Non-binding authority should 
be used sparingly. The Office cannot assume that a cited non-binding 
authority is readily accessible electronically. A party who wishes to 
cite a non-binding authority would already have a copy, and therefore 
providing the Office with a copy should not be a burden.

Public Availability (Sec.  42.14)

    Comment 49: The comments generally supported proposed Sec.  42.14. 
One comment, however, suggested special

[[Page 48631]]

procedures for handling invention dates in derivation proceedings. 
Another suggested the simultaneous filing of confidential and non-
confidential/redacted versions of material for which confidentiality is 
sought. Another suggested additional procedures to retain 
confidentiality after a motion to strike is denied.
    Response: The comments are noted, but not adopted. The rule 
reflects the Congressional mandate of an open record expressed in the 
provisions of the AIA amending 35 U.S.C. 316(a) and adding 35 U.S.C. 
326(a). Those provisions require that the Director prescribe 
regulations providing that inter partes review and post-grant review 
files ``shall 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, will be treated as sealed pending the 
outcome of the ruling on the motion. The Office anticipates that, in 
any particular proceeding, the need for procedures for sealing certain 
types of confidential information or certain documents, beyond those 
mandated by the statute, will be addressed by a motion to the Board 
under Sec.  42.54. It is also envisioned that a motion to seal could be 
accompanied by both a request to return the material should the motion 
to seal be denied as well as a redacted version of the material 
accompanied with a contingent motion to rely on the material as 
redacted should the motion to seal be denied.

Fees (Sec.  42.15)

    Comment 50: Several comments supported the fee structure and fee 
amounts proposed.
    Response: The Office adopts the proposed fee structure and base fee 
amounts in this final rule, with modifications to the fees for 
challenged claims in excess of 20 claims.
    Comment 51: Several comments suggested that the Office return or 
refund part of the trial proceeding fees paid to recover the cost of 
trial after institution in the proceedings if the Director does not 
institute a trial or to charge a fee only if a trial progresses to the 
point that additional effort is required of the Board.
    Response: The comment has been adopted in part in that the Office 
is proposing a staged fee structure for trial proceedings in a separate 
rulemaking implementing section 10 of the AIA. The Office, however, 
cannot adopt the proposal in this final rule. The fees set in this 
notice are being set to recover the aggregate cost of conducting the 
proceedings using the authority provided in 35 U.S.C. 41(d)(2). 
Moreover, unlike 35 U.S.C. 312(c) in effect on September 15, 2012, 
there is no additional authority provided in 35 U.S.C. 311-319 in 
effect on September 16, 2012, to refund fees paid should review not be 
instituted. The Director's authority to refund fees under 35 U.S.C. 42 
is limited to fees that were paid by mistake or in excess of that owed. 
Moreover, in contrast to 35 U.S.C. 311(b) and 312(c) in effect on 
September 15, 2012, the AIA does not provide for refund of any part of 
the fee when the Director determines that a review should not be 
initiated.
    Comment 52: Several comments suggested that the Board 
underestimated the number of claims that will stand or fall together 
and should consider adopting processes for greater efficiency where 
large numbers of claims are presented in a petition. One of the 
comments suggested charging on a claim-by-claim basis because the 
proposed blocks of claims may result in more claims being requested 
after a block of claims is breached.
    Response: The comments have been adopted. Section 42.15, as adopted 
in this final rule, provides a flat fee of $600 for inter partes 
review, and $800 for post-grant review or a covered business method 
patent review, for each claim in excess of 20 claims. The modification 
to the proposed rule is based on public input that the Office should 
expect more claims to stand or fall together. The Office will continue 
to monitor the costs associated with a large number of claims to 
determine if the fee needs to be reset or if other procedures need to 
be adopted.
    Comment 53: Several comments suggested that the process be revised 
to control costs to the Office by limiting the process before the Board 
to considering the initial petition, conducting an oral hearing and 
issuing a final decision or by minimizing actions by the Board beyond 
those actions.
    Response: The final rules have adopted many cost saving features. 
The AIA, however, explicitly provides for motion-based proceedings and 
requires that the effect on economy rather than merely the Board be 
considered in prescribing regulations. 35 U.S.C. 316(d), as amended, 
and 35 U.S.C. 326(d) provide for a motions practice before the Board 
during the trial, which is inconsistent with the suggestion. 35 U.S.C. 
316(b), as amended, and 35 U.S.C. 326(b) require that the effect of any 
regulation on the economy be considered, which includes limiting 
discovery where appropriate.
    Comment 54: Several comments suggested that patent applicant will 
likely file a large number of claims to increase the filing fee for the 
new trial proceedings.
    Response: This comment has been adopted in part. The Office has 
reduced the fee for petitions challenging more than 20 claims.
    Comment 55: Several comments suggested that the fee for the new 
trial proceedings be set at a low level and that no additional fees be 
charged for seeking review of more than 20 claims.
    Response: The Director's authority to set fees for service under 35 
U.S.C. 41(d)(2) does not provide for setting fees below cost. Setting a 
single fee regardless of the cost to process a petition is inconsistent 
with the requirement of 35 U.S.C. 311(a), as amended, and 35 U.S.C. 
321(a) to set more than one fee for each petition, and the requirement 
of 35 U.S.C. 312(a)(1), as amended, and 35 U.S.C. 322(a)(1) that the 
fee be provided with the petition. The Office is proposing a limited 
subsidization of the review proceeding fees in a separate rulemaking 
implementing section 10 of the AIA.
    Comment 56: A comment suggested that single-claim challenges are 
likely based on the statutory estoppel provisions and the fee setting 
in order to avoid the escalating fees for additional claims.
    Response: The comment directed to the statutory estoppel provisions 
is not germane to this notice, which does not concern those provisions. 
Further, to the extent the comment was directed to the fee setting, the 
suggestion is inconsistent with both the proposed and final regulation 
as both impose a single fee for challenging the first 20 claims in a 
patent.
    Comment 57: Several comments suggested that the fee charged be 
based on the number of grounds asserted in a petition rather than the 
number of claims challenged.
    Response: The comments were not adopted. Determining how many 
grounds of unpatentability actually are asserted in a petition cannot 
always be determined with certainty, while determining the number of 
claims being challenged can be determined definitely. Using an 
uncertain process to determine the fee due on filing a petition for 
review likely will increase costs and uncertainty for the petitioner, 
patent owner and the Office.
    Comment 58: One comment questioned how claims should be counted if 
review of a dependent claim is requested and if review of its parent 
claim(s) is not requested, and how a challenged multiple dependent 
claim would be counted.

[[Page 48632]]

    Response: The number of claims for which review is requested is 
increased by the number of claims from which a claim depends if the 
petition seeks review of a dependent claim, but not all of the claims 
from which it depends. For example, where patent claim 4 depends from 
claim 3, claim 3 depends from claim 2, and claim 2 depends from 
independent claim 1, and the petition requests only review of claims 1 
and 4, the proper claim count would be 4. Any multiple dependent claim 
will be counted as a single claim.
    Comment 59: Several comments suggested the Office apply the small 
entity discount to the petition fees.
    Response: The suggestion is not adopted. The Office's authority to 
apply a small entity discount to fees authorized by 35 U.S.C. 41 is 
provided in 35 U.S.C. 41(h). This authority does not permit the Office 
to provide a small entity discount on fees set under 35 U.S.C. 
41(d)(2).
    Comment 60: One comment suggested that the fee for filing a 
petition for review be discounted if the petition seeks review of 
claims that are not separately patentable.
    Response: The comment is not adopted. While a patent owner may 
effectively waive any argument that a claim is separately patentable, 
the petitioner's determination as to which claims stand or fall 
together is not binding on the patent owner. For example, a 
petitioner's determination that species specific claims 2-10 should 
stand or fall with genus claim 1 for purposes of the prior art, and the 
same claims which stand or fall with specific claim 10 for purposes of 
written description or enablement, may not be credited.
    Moreover, even the patent owner's argument that claims stand or 
fall with claim 1 may be ineffective where the additional claims have a 
later effective filing date. In this situation, it may be appropriate 
to find claim 1 patentable, while holding the additional claims 
unpatentable.

Petition and Motion Practice, Generally (Sec.  42.20)

    Comment 61: One comment suggested that careful and active 
management of post-grant proceedings by the Board, particularly in 
connection with discovery and management of the amendment process, will 
result in early focusing of the issues and prevent the waste of time 
and harassment that might otherwise result from the party-managed 
discovery common in the Federal courts.
    Response: The rules provide for an efficient and controlled 
procedure to secure the just, speedy, and inexpensive resolution of 
every proceeding coming before the Board. Sec.  42.1(a).
    Comment 62: One comment suggested that prior to the first 
conference call with the Board contemplated under Sec.  42.20, the 
petitioner and the patentee should be required to meet to try to 
resolve issues such as claim interpretation, level of skill, whether 
the alleged prior art identified is in fact prior art, and what factual 
issues the patentee intends to raise to reduce issues that must be 
decided within the proceeding.
    Response: Under the rules, the parties may agree to meet and 
resolve issues among themselves prior to the conference call, where 
appropriate, the Board may require the parties to meet and confer prior 
to the initial conference call. It has been the Board's experience that 
parties' willingness to resolve issues among themselves often results 
in a less expensive, faster resolution of the proceeding.
    Comment 63: One comment expressed support for active management of 
the proceedings, consistent with the statutory purpose of the AIA to 
create a mechanism for resolving patentability disputes that is more 
efficient and cost-effective than district court litigation.
    Response: The rules provide for an efficient and controlled 
procedure to secure the just, speedy, and inexpensive resolution of 
every proceeding coming before the Board. Sec.  42.1(a).
    Comment 64: One comment suggested expanding subsection (b) of the 
rule to indicate when authorization is not required, e.g., motions for 
rehearing, motions to seal, motions to extend page limits, and when 
authorization is required.
    Response: The comment is not adopted. Authorization is required for 
the filing of each motion either through Board order or as specified by 
rule, e.g., a motion to seal (Sec.  42.54(a)) and a motion to expunge 
confidential information (Sec.  42.56). As contemplated under the 
rules, once a proceeding is initiated, the Board may provide blanket 
authorization to file certain types of motions depending on the 
particular circumstances of the proceeding. Sec.  42.20(b).
    Comment 65: One comment suggested that authorization not be 
required for the single motion to amend as permitted by statute.
    Response: Under the rules, authorization is not required to file 
the single motion to amend the claims permitted by statute. Sec. Sec.  
42.121(a) and 42.221(a). The rules instead require that the patent 
owner confer with the Board prior to the filing of the motion to 
discuss compliance with the statutory requirement that a reasonable 
number of substitute claims be proposed. 35 U.S.C. 316(a)(9), as 
amended, and 35 U.S.C. 326(a)(9).
    Comment 66: One comment suggested that proposed Sec.  42.20 be 
modified to state that ``Relief must be requested in the form of a 
motion'' and ``A motion, other than a petition to institute a 
proceeding, will not be entered without Board authorization.''
    Response: The comment is not adopted. Under the rules, relief, 
other than a petition, must be requested by a motion. A petition is not 
considered a motion since it has distinct requirements.
    Comment 67: One comment suggested that proposed Sec.  42.20 not be 
adopted in view of estoppel that accompanies the review proceedings and 
the briefing included in Sec.  42.20(d) that may unnecessarily burden 
participants with redundant briefing issues and that may allow parties 
to present new arguments and otherwise add expense to the participants.
    Response: This comment is not adopted. Under the rules, additional 
briefing ordered by the Board will take into account securing the just, 
speedy, and inexpensive resolution of the proceeding. Sec.  42.1(b).
    Comment 68: One comment suggests that the Office adopt the practice 
under current interference practice where observations and replies are 
simply papers authorized by the Standing Order, noting that certain 
requirements of the rule, e.g., statement of material facts, would not 
seem to be necessary for observations.
    Response: The Office envisions that the Scheduling Order will 
authorize certain types of papers, including observations. Material 
facts are no longer required to be part of a motion. Sec. Sec.  
42.22(a)(2) and 42.22(c).
    Comment 69: One comment suggests that the rules should specify the 
content requirements of a joinder request and set a time period for the 
patent owner to file a preliminary response to a joinder request and 
that the Office Patent Trial Practice Guide should list exemplary 
factors that the Board will consider when exercising its discretion 
under 35 U.S.C. 315(c), as amended, and 35 U.S.C. 325(c).
    Response: This comment is not adopted. Under the rules, a request 
for joinder must be made by way of authorized motion and the final 
rules provide for such motions. Sec.  42.122(b). The requirements for a 
motion are found in Sec.  42.22. Factors that may be considered in 
entertaining a motion for joinder include a request made by a

[[Page 48633]]

court, a request by the first petitioner for termination of the first 
review in view of the strength of the second petition, and whether the 
petitioner requesting joinder has offered to pay the patent owner's 
costs.

Notice of Basis for Relief (Sec.  42.21)

    Comment 70: Several comments suggested that the Board should 
clarify, in either the preamble or the Office Patent Trial Practice 
Guide, that a purpose of requiring a notice of basis for relief under 
Sec.  42.21 is to help the Board decide whether it should authorize the 
filing of the underlying motion.
    Response: The notice serves to provide notice to an opponent and 
the Board of the relief a party is seeking. The notice allows the Board 
to consider whether the filing of a motion should be authorized and an 
opponent to consider whether it would oppose such a filing.
    Comment 71: One comment suggested that the Board should be liberal 
in its application of Sec.  42.21(c), so as not to elevate formalities 
over substance such that so long as the motion is reasonably within the 
scope of the notice, the Board will address the motion on its merits.
    Response: Under the rule, a notice must include sufficient detail 
to place the Board and each party on notice of the precise relief 
requested. In the Board's experience, the greater detail provided in 
the notice the more likely it is the party will be authorized to file a 
motion seeking the relief requested. If a party wishes to file a motion 
and is uncertain as to whether it is within the scope of a motion 
listed on its notice and authorized to be filed, it should seek 
clarification from the Board in the form of a conference call prior to 
filing the motion.
    Comment 72: Several comments suggested that notice of motions 
should be deleted as unnecessary. Section 42.20 already provides that 
the motion may not be filed without prior authorization.
    Response: The comments are not adopted. The notice provision aids 
the Board and an opponent and works in tandem with Sec.  42.20. In the 
Board's experience, the notice has been a useful tool for preparation 
of conference calls for both the parties and the Board. The notice 
provides a written record of the relief requested from the perspective 
of the requesting party and allows for a more productive conference 
call as the administering judge and the opposing party can consider the 
relief that is being requested prior to any call. The notice allows 
parties to confer prior to the conference call and perhaps resolve 
issues preemptively.
    Comment 73: One comment suggested that the rule be revised to 
remove the ``interests of justice'' standard at Sec.  42.21(d).
    Response: This comment is not adopted. The rule is designed to 
discourage a party from withholding notice to the Board or to another 
party, either intentionally or inadvertently, such that it is able to 
gain an unfair advantage.

Content of Petitions and Motions (Sec.  42.22)

    Comment 74: Several comments suggested that a statement of material 
facts should not be required.
    Response: The comment has been adopted. The Office has made 
modifications to the rule regarding a statement of material facts in 
petitions and motions. In particular, the rule has been clarified to 
state that a petition or motion may, but is not required to, include a 
statement of material facts.
    Comment 75: One comment suggested that the rule should be revised 
to provide that material facts are presented in an appendix rather than 
in a brief.
    Response: The comment is not adopted. However, the Office 
understands the concerns expressed and has made modifications to the 
rule regarding a statement of material facts in petitions and motions. 
In particular, the rule has been clarified to state that a petition or 
motion may, but is not required to, include a statement of material 
facts. Rather than requiring a statement of material facts to be 
presented in petitions or motions, whether in the main body or in an 
appendix, the submission of a statement of material facts has been made 
optional. The Office believes this change gives greater flexibility to 
the parties than requiring the statement of material facts to appear in 
an appendix.
    Comment 76: One comment suggested that all issues relating to 
admissibility of evidence should be raised in the petitioner's and 
patentee's responses and replies, rather than through later motion 
practice.
    Response: Issues relating to credibility and the weight of the 
evidence may be raised in responses and replies. To the extent a party 
seeks to exclude the evidence in dispute, a party is to raise the issue 
in a motion to exclude. Motions to exclude help identify and focus the 
admissibility issue in dispute and are best handled later in the 
proceeding as many issues that arise early in the proceeding are no 
longer relevant at the time the motion to exclude is filed.

Oppositions and Replies (Sec.  42.23)

    Comment 77: Several comments supported the proposed rule. One 
comment stated that proposed Sec.  42.23 should be adopted.
    Response: The proposed rule has been adopted in this final rule.
    Comment 78: One comment suggested that if the Office retains the 
requirement that all papers contain a statement of material facts, 
Sec.  42.23 should be revised to clarify which material facts are to be 
addressed in oppositions and replies and that Sec.  42.23 be revised to 
provide that material facts are to be presented in an appendix rather 
than in the body of a brief.
    Response: The comment is not adopted because the Office has not 
retained the requirement that all papers contain a statement of 
material facts. The Office has made modifications to the rule regarding 
a statement of material facts in petitions and motions. In particular, 
the rule has been clarified to state that a petition or motion may, but 
is not required to, include a statement of material facts. Rather than 
requiring a statement of material facts to be presented in petitions or 
motions, whether in the main body or in an appendix, the submission of 
a statement of material facts has been made optional. The Office 
believes this change gives greater flexibility to the parties than 
requiring the statement of material facts to appear in an appendix.
    Comment 79: One comment suggested that the rule should 
affirmatively state that a party has the right to file an opposition to 
a motion and that the movant has the right to file a reply to an 
opposition unless otherwise directed by the Board or the rules.
    Response: The comment is not adopted. Section 42.23 permits 
oppositions and replies.
    Comment 80: One comment suggested modifying Sec.  42.23 to state 
that oppositions and replies must include a statement responding to 
each material fact.
    Response: Section 42.23 provides that oppositions and replies must 
include a statement identifying material facts in dispute where the 
underlying motion contains such a statement. The Office believes that 
it is not necessary to respond to those that are not in dispute. Thus, 
section 42.23 also provides that any material fact not specifically 
denied may be considered admitted. The Office believes that this 
approach is more efficient for parties in identifying disputes of 
material fact.

Page Limits for Petitions, Motions, Oppositions, and Replies (Sec.  
42.24)

    Comment 81: Several comments supported the page limit structure and 
the page limits proposed. One comment specifically urged adoption of 
Sec.  42.24(c).

[[Page 48634]]

Another comment stated that the precise number of pages is not 
critical, except that a reasonable limit needs to be imposed. One 
comment stated that the page limits are reasonable. Another comment 
stated that a major problem with inter partes reexamination is that 
there is no page limit on the size of the request which frustrates the 
Office's ability to do its job well and handicaps the patent owner who 
must then respond. One comment recognized that certain rules, even if 
unpopular, are necessary to contain the costs of litigating the new 
trial procedures.
    Response: The proposed page-limit structure has been adopted, and 
Sec.  42.24, as adopted in this final rule, permits higher page limit 
amounts. Not only have certain page limits been increased, but also the 
amount of space available for claim charts has been doubled and the 
requirement for a statement of material facts has been eliminated. 
These collective changes will permit a party to have a great deal of 
flexibility in presenting its case and in responding to the opposing 
party. Together, these changes are far more effective than a mere 
increase of page limits standing alone. In particular, the page limits 
are increased to 60 pages for a petition requesting inter partes review 
or derivation (a 20% increase) and 80 pages for a petition requesting 
post-grant review or covered business method patent review (a 14% 
increase). Likewise, because Sec.  42.24(b) provides that page limits 
for oppositions are the same as those for corresponding petitions, the 
page limits are increased to 60 pages for an opposition to a petition 
requesting inter partes review (a 20% increase) and 80 pages for an 
opposition to a petition requesting post-grant review (a 14% increase). 
As discussed with respect to Sec.  42.6, single spacing may be used for 
claim charts rather than double spacing--which results in a doubling of 
the space available to present claim charts. In addition, as discussed 
with respect to Sec.  42.22, a statement of material facts no longer is 
required in petitions or motions.
    Comment 82: Several comments suggested that the page limits should 
be increased. One comment suggested that the page limits be increased 
to approximately 85 pages for inter partes review petitions and 120 
pages for post-grant review petitions. Some comments suggested the 
Office adopt the page limits of, and one comment suggested the Office 
adopt the formatting requirements of, inter partes reexamination.
    Response: The comment has been adopted in part. The Office has made 
modifications to the proposed page limits. In particular, the page 
limits are increased to 60 pages for a petition requesting inter partes 
review and 80 pages for a petition requesting post-grant review. As 
discussed with respect to Sec.  42.6, single spacing may be used for 
claim charts rather than double spacing. In addition, as discussed with 
respect to Sec.  42.22, a statement of material facts is no longer 
required. These collective changes will permit a party to have a great 
deal of flexibility in presenting its case and in responding to the 
opposing party. Together, these changes are far more effective than a 
mere increase of page limits standing alone.
    Comment 83: Several comments suggested that the page limits should 
apply equally to petitioner and patent owner. One comment noted that 
Sec.  42.204(b)(3) requires the petitioner to state how the challenged 
claim is to be construed and suggests that Sec.  42.207 should provide 
the patent owner with a corresponding opportunity to rebut the 
petitioner's proffered construction. Another comment stated that the 
patent owner should be able to use the full number of pages within the 
limit even if the petitioner uses fewer than the allowed number of 
pages. One comment stated that, because the patent owner is permitted 
to have a preliminary response and a response after institution, patent 
owner will have twice the number of pages to address the issues. The 
comment further stated that the ability of the patent owner to present 
a motion to amend will further increase the number of pages for the 
patent owner to present its case.
    Response: The proposed rules implicitly provided petitioner and 
patent owner equal page limits because a patent owner's preliminary 
response would have been filed as an opposition, which has the same 
page limit as those for corresponding petition. In view of the 
comments, Sec.  42.24(b), as adopted in this final rule, adds new 
provisions that expressly provide that the page limits for a patent 
owner's preliminary response and a patent owner's response are the same 
as the page limits for the petition. Section 42.24 does not limit a 
party to a page limit based upon the number of pages used by another 
party. Also, a patent owner's preliminary response and a patent owner's 
response are not ordinarily expected to address the exact same issues. 
A patent owner's preliminary response is limited to setting forth the 
reasons why no review should be instituted. In the patent owner's 
response, any ground for unpatentability not already denied may be 
addressed. Under Sec.  42.24(b), a petitioner will be provided with an 
equal number of pages to oppose a motion to amend as the patent owner 
is provided in making the motion to amend.
    Comment 84: One comment suggested that Sec.  42.24 be modified to 
address expressly and set forth a page limit for patent owner 
responses.
    Response: This comment has been adopted. The Office modified the 
rule to expressly provide that the page limits for a patent owner's 
preliminary response, or response, to a petition are the same as the 
page limits for the petition.
    Comment 85: Several comments noted that page limits impact the 
rights of the parties and the ability of the parties to fully present 
arguments, especially in view of the estoppel provisions of 35 U.S.C. 
315(e), as amended, and 35 U.S.C. 325(e). One comment stated that page 
limits will increase inefficiency and costs by forcing a petitioner to 
file multiple co-pending reviews if a petitioner only is able to 
effectively address a small subset of claims within the page limits. 
Several comments suggested that practitioners will move away from the 
proceedings if the page limits are too restrictive.
    Response: The Office has made modifications to the proposed rules 
regarding page limits. In addition, the Office has made modifications 
to the proposed rules regarding the line spacing of claim charts to 
permit single spacing rather than double spacing and has eliminated the 
requirement for a statement of material facts. These collective changes 
will permit a party to have a great deal of flexibility in presenting 
its case and in responding to the opposing party. Together, these 
changes are far more effective than a mere increase of page limits 
standing alone. Furthermore, petitioners and patent owners may seek 
waiver of the page limits in appropriate circumstances.
    Comment 86: Several comments suggested that the page limits should 
be removed. One comment suggested that page limits for claim charts 
should be removed. Several comments stated that there should be no page 
limit for petitions, noting that there are no page limits for requests 
for inter partes reexamination.
    Response: The comment is not adopted. In promulgating the rules, 
the Office is to consider the integrity of the proceedings, the 
efficient operation of the Office, and ability to complete the 
proceedings timely. Allowing petitioners to file petitions and/or claim 
charts without page limits places a severe burden upon both the patent 
owner and the Board, and will affect

[[Page 48635]]

adversely the patent owner's ability to respond effectively to the 
patentability challenges and the Board's ability to complete the 
proceeding timely. Page limits assist the Board in effectively managing 
the proceeding without being unduly restrictive of the parties. The 
Office has made modifications to the proposed rules regarding page 
limits. In addition, the Office has made modifications to the proposed 
rules regarding the line spacing of claim charts to permit single 
spacing rather than double spacing and has eliminated the requirement 
for a statement of material facts.
    Comment 87: Several comments suggested that certain components of 
petitions, motions, oppositions, and replies should either be excluded 
from the page limits or counted separately. One comment suggested that 
required portions should not be counted toward the page limits. Several 
comments suggested that separate page limits should apply for claim 
charts, claim construction arguments, and statement of material facts. 
One comment suggested the Office promulgate a rule that claim charts 
not include attorney argument or introduce new evidence.
    Response: In promulgating the rules, the Office is to consider the 
integrity of the proceedings, the efficient operation of the Office, 
and ability to complete the proceedings timely. Although the Office 
understands the concerns expressed, allowing petitioners to file 
petitions where certain portions are exempt from page limits places a 
severe burden upon both the patent owner and the Board, and will affect 
adversely the patent owner's ability to effectively respond to the 
patentability challenges and the Board's ability to complete the 
proceeding timely. Page limits assist the Board in effectively managing 
the proceeding without being unduly restrictive of the parties. A rule 
prohibiting attorney argument or new evidence in claim charts would be 
difficult to enforce without inordinate expenditure of Board resources. 
The Office has made modifications to the proposed rules regarding page 
limits. In addition, the Office has made modifications to the proposed 
rules regarding the line spacing of claim charts to permit single 
spacing rather than double spacing and has eliminated the requirement 
for a statement of material facts.
    Comment 88: Several comments suggested that a word count should be 
used in place of a page limit.
    Response: The comment is not adopted. A word count is more 
difficult and complex to administer than a page limit.
    Comment 89: One comment suggested that a substantial fee should be 
charged for submissions exceeding the page limit in order to encourage 
brevity without adopting a prescriptive rule.
    Response: The comment is not adopted. Because the fee amounts for 
exceeding page limits in post-institution submissions cannot be known 
at the filing of the petition, the proposed fee is inconsistent with 
the requirement of 35 USC 312(a)(1) and 322(a)(1) that the fee be 
provided with the petition by the petitioner. It is noted that Sec.  
42.24(a)(2) provides that the petitioner may seek waiver of the 
petition page limits in appropriate circumstances.
    Comment 90: Several comments suggested modification be made to the 
page limit waiver process. Some comments suggested that, because 
petitioner may lose the right to file a petition due to the passing of 
a statutory deadline if a motion to waive page limits is denied, the 
Office should implement a rule allowing the filing of a page limit 
compliant petition within a designated period of time after a motion to 
waive page limits is denied. One comment suggested that exceptions to 
the page limits should be allowed when numerous claims need to be 
addressed. One comment stated that there is no meaningful opportunity 
to seek a waiver of page limits in advance of the petition filing. One 
comment suggested that ``the interests of justice'' standard for page 
limit waivers should be lowered to ``good cause,'' and also suggested 
that ``good cause'' should be presumed to exist when there is a payment 
of a fee for the review of extra claims.
    Response: Section 42.24(a)(2) provides 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 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 
to waive the page limits. Generally, the Board would decide the motion 
to waive page limits prior to deciding whether to institute the trial. 
The Office understands the concerns expressed, however, because both 
the page-limited petition and non-page limited petition must accompany 
the motion to waive page limits, there is no need for a rule regarding 
the filing date of later-filed page limit compliant petitions. Section 
42.24(a)(2) provides that any other motion to waive page limits must be 
granted in advance of filing the motion, opposition, or reply for which 
the waiver is sought. Each motion to waive page limits will be decided 
on the particular facts presented on a case-by-case basis. However, 
exceptions to the page limits are not anticipated to be granted 
commonly. Lowering the standard from ``the interests of justice'' to 
``good cause'' likely would result in a large increase in the number of 
page limit waivers granted, with corresponding adverse impact on the 
ability of the Board to complete the proceeding effectively and timely.
    Comment 91: Several comments suggested that the page limits should 
be based on the complexity of the proceeding. Several comments 
suggested that the page limits should be based, in whole or in part, on 
the number of claims challenged and consequently the fees paid. Several 
comments suggested that the page limits be based, in whole or in part, 
on the number of grounds raised or number of proposed rejections in a 
petition. One comment suggested that, to the extent that determining 
the number of grounds raised can be subjective, a rule adopting such an 
approach should include clear examples of what constitutes a separate 
ground of unpatentability. One comment suggested that the Office 
require a table of contents identifying each separate ground of 
unpatentability with corresponding headings in the body of the 
petition. One comment suggested the Office encourage practitioners to 
present different grounds of unpatentability in the order in which they 
most easily satisfy the threshold.
    Response: These comments are not adopted. Providing for additional 
pages merely because additional claims are added to a petition where 
the pages are used on the primary target claims would reduce the page 
limit rule effect in many proceedings and reduce the ability of the 
Office to conclude proceedings timely. Where a petitioner can 
demonstrate how a waiver of the page limit is in the interests of 
justice, a motion to waive the page limit should be considered. 
Alternatively, the filing of multiple petitions directed to subsets of 
related claims should be considered.
    In addition, determining how many grounds of unpatentability 
actually are asserted in a petition cannot always be done with 
certainty, while a fixed number of pages can be determined with 
certainty. Using an uncertain process to determine the page limit for 
filing a petition for review or other submission will be difficult to 
administer and likely will increase costs and uncertainty for the 
petitioner, patent owner and the Office.
    However, the Office has made modifications to the proposed rules 
regarding page limits. In addition, the

[[Page 48636]]

Office has made modifications to the proposed rules regarding the line 
spacing of claim charts to permit single spacing rather than double 
spacing and has eliminated the requirement for a statement of material 
facts.
    Comment 92: Several comments noted that district court litigation 
is not analogous to a trial under the AIA. One comment suggested that 
interferences are not analogous to trials under the AIA. Some comments 
noted that in Federal courts issues are often broken across multiple 
briefs and negotiations. Some comments noted that Federal courts often 
do not impose limits on claim charts. Another comment noted that 
petitions under the AIA seem more analogous to complaints, for which 
page limits are rarely, if ever, applied by Federal courts.
    Response: The Office recognizes that differences exist between 
trials under the AIA and Federal District Court litigation, as well as 
interferences. Among other things, Congress intended that trials under 
the AIA proceed more rapidly and at lower cost than Federal District 
Court litigation. However, the Office believes that the use of page 
limits in Federal courts and in contested cases is instructive when 
looking to trials under the AIA. The Office does not intend a one-to-
one correspondence with either Federal District Court litigation 
practice or contested cases practice. However, page limits have 
assisted tribunals in effectively managing proceedings without being 
unduly restrictive of the parties.
    Comment 93: A comment asked whether pages in an affidavit filed 
with a petition, motion, opposition, or reply would be counted toward 
the applicable page limit and whether the Office would place page 
limits on supporting affidavits.
    Response: Section 42.24(a) provides that the page limits for 
petitions and motions do not include an appendix of exhibits. Section 
42.24(b) provides that the page limits for oppositions are the same as 
those for corresponding petitions or motions. Section 42.24(c) provides 
that the page limits for replies do not include an appendix of 
exhibits. Accordingly, an affidavit filed in an appendix of exhibits to 
a petition, motion, opposition, or reply would not be counted toward 
the applicable page limits.

Default Filing Times (Sec.  42.25)

    Comment 94: One comment recommended that the patent owner should be 
permitted to extend the time for response on a very low showing of good 
cause because the petitioner would have ample time to build its case. 
However, a few comments noted that the example in the Practice Guide 
for Proposed Trial Rules provides a nine-month time frame for the 
patent owner to prepare its response with a four-month time period to 
take discovery, whereas the petitioner has only two months to reply to 
the patent owner's response that may include amended claims, secondary 
considerations of nonobviousness, and other evidence. One comment 
requested a longer time period for a party who is located outside the 
United States. In addition, one comment suggested that the Scheduling 
Order be issued after the initial conference, where the administrative 
patent judge has reviewed and made a determination on what motions will 
be authorized, and the parties would work out an acceptable schedule. 
One comment suggested that the reviews should be structured to minimize 
the number of miscellaneous motions.
    Response: At the time of institution, the Board will enter a 
Scheduling Order that sets due dates for the proceeding. About one 
month from the date of institution, an initial conference call will be 
held to discuss the motions that the parties intend to file and to 
determine whether any adjustment to the Scheduling Order is needed. The 
Scheduling Order may be adjusted depending on the particular facts of 
each case, such as whether the patent owner will be filing a motion to 
amend or any secondary considerations of nonobviousness, and whether 
the petitioner would need additional time for taking discovery or 
filing a reply. The Board will conduct the proceeding in a streamlined 
manner taking into account the complexity of the proceeding and 
ensuring that the trial is completed within one year of institution, 
including minimizing any unnecessary miscellaneous motions.
    Comment 95: One comment suggested that the oral hearing should not 
be scheduled sooner than 45 days from the last reply to provide the 
parties sufficient time to prepare.
    Response: When a party requests an oral hearing, the party may 
recommend a date for the oral hearing. The Board will take into 
consideration the party's availability and whether sufficient time is 
provided.
    Comment 96: One comment suggested that the Office should not take 
the full three-month time period to determine whether to institute a 
review.
    Response: The Office will attempt to decide petitions to institute 
a review as quickly as practical before the expiration of the three-
month statutory period.

Discovery (Sec.  42.51)

    Comment 97: Several comments expressed concern that the proposed 
rules for discovery do not provide sufficient default limits on the 
scope and procedures for discovery. Further, several comments expressed 
concern that the scope of discovery and procedures would be decided on 
a case-by-case basis by the Board and that the Office should eliminate 
the need for discovery motions where the parties agreed to the 
additional discovery.
    Response: The comments are adopted in part. The Office's rules 
provide for routine discovery and additional discovery. Routine 
discovery is designed to place the parties on a level playing field and 
to streamline the process. Additional discovery is that discovery that 
goes beyond the routine and, unless the parties agree to the additional 
discovery, would require a joint conference call with the Board to 
discuss a party's request for the additional discovery.
    The Office adopts the suggestions to provide further detail on 
routine and additional discovery, including providing default time 
limits on the duration of depositions, providing for mandatory initial 
disclosures and eliminating discovery requests where the parties are in 
agreement. Discovery issues, however, will be decided on a case-by-case 
basis where there is a disagreement amongst the parties.
    The AIA requires the Director of the USPTO to consider the effect 
of the regulations on the economy, the integrity of the patent system, 
the efficient administration of the Office, and the ability to complete 
inter partes and post-grant review timely in promulgating regulations. 
Moreover, 35 U.S.C. 316(a)(5), as amended, and 35 U.S.C. 326(a)(5) 
limit the authority of the Director to authorize discovery. In 
particular, 35 U.S.C. 316(a)(5), as amended, and 35 U.S.C. 326(a)(5) 
limit the authority of the Director to promulgate regulations 
authorizing discovery. 35 U.S.C. 316(a)(5), as amended, states that 
discovery shall be limited to depositions of witnesses submitting 
affidavits and declarations and what is otherwise necessary in the 
interests of justice. 35 U.S.C. 326(a)(5) similarly limits the 
Director's authority to provide for discovery only if it is limited to 
evidence directly related to factual assertions advanced by either 
party. The legislative history for these provisions provides that 
additional discovery be restricted to particular limited situations 
justified by the special circumstances of the case. The legislative 
history further states that it

[[Page 48637]]

was anticipated that the Office would be conservative in its grants of 
discovery due to the time deadline constraints on the proceedings. 154 
CONGRESSIONAL RECORD S9988-9, (daily ed. Sept. 27, 2008) (statement of 
Sen. Kyl); see also 157 Cong. Rec. S1376 (daily ed. Mar. 8, 2011) 
(incorporating prior 2008 statement). Consistent with the statutory 
provisions and the legislative history, the Office's rules provide that 
additional discovery will be ascertained on a case-by-case basis taking 
into account the special circumstances of the proceeding.
    Comment 98: Several comments expressed support for the limited 
discovery provided for in the proposed rules to avoid the time-
consuming and costly discovery battles that are typical of district 
court litigation. Other comments suggested that discovery was too 
limited and that a limited number of automatic discovery mechanisms 
should be put forth in the rules.
    Response: The comments are adopted in part. The Office has 
considered the comments favoring additional automatic discovery against 
those cautioning against the increased costs and delays associated with 
broader discovery. 35 U.S.C. 316(a)(5), as amended, and 35 U.S.C. 
326(a)(5) require the Office to promulgate standards and procedures for 
the limited discovery of relevant evidence. 35 U.S.C. 316(a)(6), as 
amended, and 35 U.S.C. 326(a)(6) require sanctions will be provided for 
abuse of discovery, which cautions against overly broad discovery. 
Further, the legislative history states that the Office is anticipated 
to be conservative in its grants of discovery due to time constraints 
on the proceedings. On balance, the Office believes that the rules 
provide the proper standards for discovery where the parties fail to 
agree amongst themselves as to additional discovery but the Office 
acknowledges the benefits to providing additional discovery where the 
parties are in agreement. Accordingly, although the Office does not 
adopt a specific number of automatic interrogatories, production 
requests and depositions due to concerns over imposing costs and 
potential delays upon a party desiring a quicker, lower cost 
alternative to district court litigation, the Office has rewritten the 
rules to provide for mandatory initial disclosures and additional 
discovery where the parties agree to such discovery. Further, 
additional discovery will be available even in the event that the 
parties do not agree to the scope of the additional discovery, but such 
requests will be handled on a case-by-case basis taking into account 
the specific facts presented.
    Comment 99: One comment suggested that the Office promulgate a rule 
that parties may use conference calls with the Board to resolve 
disputes regarding their discovery obligations in a timely way.
    Response: The comment is adopted in part. A party seeking relief 
other than by petition is to request relief via a ``motion,'' which can 
be as simple as arranging a conference call with the Board. Sec.  
42.20. The Board envisions handling joint conference calls in an 
expeditious manner, especially for discovery disputes where the parties 
need resolution in order to continue development of their respective 
cases. In particular, the Board expects to resolve many issues via 
conference calls so as to ensure the timely resolution of the 
proceeding in a cost-effective manner.
    Comment 100: One comment asked for clarification that the Board 
will uphold all recognized privileges and immunities against disclosure 
of otherwise discoverable information.
    Response: The comment is adopted, although no change to the rule is 
required. The Board intends to recognize privileges and immunities 
normally available under the Federal Rules of Evidence. See Sec.  
42.62.
    Comment 101: Several comments requested that patent owners be 
assured of at least three months of discovery once review is 
instituted.
    Response: The comments are adopted. The rules of practice for inter 
partes review and post-grant review have been modified to provide 
patent owners with a default time of three months after institution to 
file a patent owner response. Sec. Sec.  42.120(b) and 42.220(b). The 
Office envisions patent owners taking discovery during the three months 
after institution so that they may prepare and file their patent owner 
response.
    Comment 102: Several comments requested that discovery commence 
immediately upon institution of the proceedings.
    Response: The comments are adopted in part. The Office envisions 
that a Scheduling Order will be entered concurrent with a decision to 
institute a proceeding. The Scheduling Order will set due dates for the 
proceeding taking into account the complexity of the proceeding, but 
ensuring that the trial is completed within one year of institution. 
The Office envisions that the Scheduling Order will authorize the 
patent owner to begin taking routine discovery immediately of the 
petitioner's witnesses submitting affidavits or declarations. The 
Office, however, does not incorporate a specific time for the 
commencement of discovery as there may be certain cases where discovery 
would be taken prior to commencement, e.g., additional discovery may be 
authorized prior to institution, where patent owner raises sufficient 
concerns regarding the petitioner's certification of standing.
    Comment 103: Several comments were directed to the sequencing of 
discovery as between the petitioner and the patent owner. Certain 
comments spoke favorably of sequencing, whereas another comment opposed 
sequencing expressing the view that sequencing would unnecessarily 
complicate proceedings by requiring the Board to police multiple 
discovery deadlines.
    Response: The comments favoring sequencing are adopted in part. The 
Office Patent Trial Practice Guide contains a proposed Scheduling Order 
that utilizes sequenced discovery whereby parties can conduct 
meaningful discovery before they are required to submit their 
respective motions and oppositions. In choosing to provide sequenced 
discovery in the proposed Scheduling Order, the Office took into 
account public commentary identifying the benefits associated with such 
a procedure. In particular, sequenced discovery allows for convergence 
of the issues as the trial progresses, and therefore, reduces the 
burdens on the parties and the Board. Rather than including this in the 
rules, however, the Office has elected to provide for sequencing in the 
Scheduling Order so that the parties may, where appropriate, agree to 
another schedule for discovery.
    Comment 104: Several comments suggested that certain information 
appearing in the Practice Guide for Proposed Trial Rules be 
incorporated into the rules. Examples of this are the use of conference 
calls and the concept of sequenced discovery.
    Response: The Office Patent Trial Practice Guide is intended to 
advise the public on the general framework of the regulations. The 
guide will be updated to reflect the final rules. Providing general 
guidance in a practice guide, as opposed to the rules themselves, 
allows for flexibility for efficient case management and is consistent 
with the considerations identified in 35 U.S.C. 316(b), as amended, and 
35 U.S.C. 326(b) that the rules take into account the efficient 
operation of the Office and the ability to complete the proceedings in 
a timely manner. The Office expects that the Board will make liberal 
use of joint conference calls coupled with expeditious decision making 
on procedural issues to ensure the timely completion of the 
proceedings.

[[Page 48638]]

    Comment 105: A comment asked for clarification whether Sec.  1.56 
applied during a proceeding.
    Response: Proceedings, not being applications for patents, are not 
subject to Sec.  1.56.
    Comment 106: Several comments addressed the interplay between the 
Office's discovery rules and the statutory estoppel for the 
proceedings. One comment asked for guidance in the rules as to how such 
provisions would apply where a party was unable to discover evidence or 
bring a claim because discovery was limited by the Board or the 
applicable rules.
    Response: 35 U.S.C. 315(e)(1), as amended, and 35 U.S.C. 325(e)(1) 
provide for petitioner estoppel on issues raised or those that 
reasonably could have been raised during the proceeding. Where an issue 
reasonably could not have been raised during a proceeding, no estoppel 
would occur.
    Comment 107: One comment stated that live testimony on inequitable 
conduct is not to be considered in a trial.
    Response: This comment is adopted in part. Inequitable conduct is 
not a basis for seeking the institution of a trial before the Board. 
However, 35 U.S.C. 316(a)(6), as amended, and 35 U.S.C. 326(a)(6) 
provide that the Office may determine and is allowed to prescribe 
sanctions for misconduct, such as abuse of process, or any other 
improper use of the proceeding, such as to harass or cause unnecessary 
delay or an unnecessary increase in the cost of the proceeding.
    Comment 108: Several comments requested that the Office provide for 
the presentation of rebuttal evidence at the oral hearing and provide 
guidance with respect to the interplay between the rebuttal evidence 
and hearing under the Administrative Procedures Act.
    Response: Generally, rebuttal evidence will be submitted prior to 
the hearing such that an opponent will have sufficient time to identify 
and brief admissibility challenges to the rebuttal evidence. As such, 
hearings typically will reflect an oral argument explaining arguments 
already made and supported in the existing record. Occasionally, where 
requested, the Board may order live witness testimony before an 
administrative patent judge, when it is necessary to resolve discovery 
disputes or where witness demeanor is particularly important, but it is 
envisioned that such live testimony will occur prior to the hearing, 
rather than during the hearing. In an appropriate case, however, where 
an appropriate showing has been made, live testimony would be taken at 
a hearing before the Board.
    Comment 109: Several comments recommended setting discovery limits 
by way of rule or in a Standing Order.
    Response: The comments are adopted in part. The Office has modified 
several discovery rules to provide additional default limits on 
discovery. Further, the Office envisions providing guidance on 
discovery in the Office's Scheduling Order, which would accompany a 
decision to institute a proceeding.
    Comment 110: Several comments expressed concern that the mechanism 
for obtaining additional discovery was too cumbersome, requiring 
authorization from the Board.
    Response: The comments are adopted in part. The Office has modified 
the proposed rule. Section 42.51, as adopted in this final rule, 
permits parties to agree to certain mandatory initial disclosures, from 
which the parties would then automatically take discovery of the 
information identified in the initial disclosures. Additionally, Sec.  
42.51, as adopted, allows parties to agree to additional discovery 
between themselves at any time. By allowing the parties to agree to 
certain mandatory initial disclosures and additional discovery, the 
final rule seeks to streamline the discovery process and reduces the 
need for Board involvement on issues where the parties are in 
agreement.
    Comment 111: Several comments suggested that certain discovery 
procedures under the Federal Rules of Civil Procedure should be 
available in the new procedures. In particular, several comments 
specifically identified Rule 30(b)(6) of the Federal Rules of Civil 
Procedure.
    Response: The comments are adopted in part. Additional discover 
under Sec.  42.51 which is consistent with 35 U.S.C. 316(a)(5), as 
amended, and 35 U.S.C. 326(a)(5), is limited. As discussed previously, 
Sec.  42.51, as adopted in this final rule, allows parties to agree to 
mandatory initial disclosures and additional discovery, thereby 
allowing the parties flexibility in their approach to discovery.
    Comment 112: Several comments urged the adoption of mandatory 
initial disclosures, and automatic discovery mechanisms without having 
to receive authorization from the Board. Other comments however, urged 
the Office to avoid the use of automatic disclosures as it would 
complicate the Office's ability to complete the proceedings within one 
year.
    Response: The comments are adopted in part. Additional disclosure 
under Sec.  42.51 which is consistent with 35 U.S.C. 316(a)(5), as 
amended, and 35 U.S.C. 326(a)(5), is limited. Accordingly, providing 
for mandatory initial disclosures in all cases, including those where 
the parties do not consent to such disclosures, is not consistent with 
the statute, or with legislative intent in enacting the AIA as a less 
expensive and more efficient alternative to infringement litigation in 
Federal court. In any event, Sec.  42.51, as adopted in this final 
rule, provides a new provision in paragraph (a), which permits 
mandatory initial disclosures by agreement of the parties. Furthermore, 
under the revised rule, the parties may agree to additional discovery 
at any time. Additionally, where only one party seeks mandatory initial 
disclosure, the party may file a motion requesting such initial 
disclosures upon a showing that such disclosures are in the interests 
of justice for inter partes review and for good cause in post-grant 
review. See 35 U.S.C. 316(a)(5), as amended, and 35 U.S.C. 326(a)(5).
    Comment 113: Several comments expressed concern that in cases 
involving public use and on-sale issues or objective evidence of non-
obviousness, it might be appropriate to require initial disclosures of 
all relevant documents and all persons with knowledge of the facts and 
other special discovery procedures.
    Response: The comment is adopted in part. The final rule provides a 
new provision in Sec.  42.51(a), which permits mandatory initial 
disclosures by agreement of the parties. Section 42.51(a), as adopted 
in this final rule, further provides that where the parties fail to 
agree to mandatory initial disclosures, a party may seek such 
disclosures by motion. The party would first arrange for a conference 
call with the Board to have the issue resolved in an expeditious 
manner. A party seeking such initial disclosures would be required to 
identify the sought-after discovery and explain the need for the 
disclosures, e.g., why the disclosures were necessary in the interests 
of justice or good cause, as appropriate, and the party opposing the 
request would be provided an opportunity to respond. When determining 
whether to grant such a motion, the Office will take into account the 
nature of the specific disclosures requested (e.g., public use, on 
sale, and objective evidence of non-obviousness), as well as the 
party's access to the information sought (e.g., public versus non-
public information). While the Office declines to adopt a per se rule 
regarding disclosures of specific categories of information, as fact 
patterns will vary from case-to-case, the Office does require the 
disclosure of

[[Page 48639]]

information concerning inconsistent statements. Specifically, the 
Office requires the disclosure under Sec.  42.51(b)(1)(iii) of non-
privileged evidence that is inconsistent with a position advanced 
during the proceeding, such that relevant evidence is brought forward 
in a timely manner to ensure the orderly development of the issues and 
minimize the likelihood of later disputes.
    Comment 114: One comment suggested rewriting proposed Sec.  
42.51(b) stating that section (b) is grammatically ambiguous as 
subsection (3) begins with a partial sentence whereas subsections (1) 
and (2) begin with complete sentences.
    Response: The comment is adopted. Sections 42.51(b) (1) and (2), as 
adopted in this final rule, are internally consistent and begin with 
incomplete sentences, ``(1) Routine discovery'' and ``(2) Additional 
discovery.''
    Comment 115: One comment states that Section 42.51(b)(1) should be 
clarified to allow exhibits cited by an affiant under cross-examination 
to be served within a period of time after the cross-examination.
    Response: Section 42.51(b)(1), as adopted in this final rule, 
provides that unless previously served or otherwise by agreement of the 
parties, exhibits must be served with the citing paper or testimony.
    Comment 116: One comment suggested that Sec.  42.51(b)(1) should be 
deleted and replaced with a requirement that all exhibits be served.
    Response: The provision in proposed Sec.  41.51(b)(1) provides that 
exhibits cited in a paper or in testimony must be served with the 
citing paper or testimony unless previously served. The Office adopts 
the proposed provision without any modification in Sec.  41.51(b)(1)(i) 
of the final rule, as the suggested modification by the comment would 
not require parties to serve concurrent with the citing paper or 
testimony.
    Comment 117: One comment suggested that cross-examination of 
witnesses in proposed Sec.  42.51(b) should not be identified as 
discovery.
    Response: Under 35 U.S.C. 316(a)(5), as amended, the Office is 
required to promulgate standards and procedures for discovery including 
the deposition of witnesses submitting affidavits or declarations. 
Consistent with the statutory requirement, cross-examination of 
witnesses is considered discovery for purposes of the proceedings 
before the Board.
    Comment 118: Several comments recommended discovery obligations, 
such as those provided in proposed Sec.  42.51(b)(3) (which has been 
redesignated as Sec.  42.51(b)(1)(iii) in this final rule), be targeted 
to the need to disclose information known to the propounding party that 
is inconsistent with, or which may tend to rebut positions being taken 
by that party. Several comments suggested specific language to help 
calibrate the proposed rule so as to avoid overbreadth. Additionally, 
other comments suggested eliminating the proposed rule as 
counterproductive to the efficiency of the proceeding.
    Response: The Office appreciates the thoughtful comments and has 
carefully considered those comments that suggested that the rule should 
be eliminated as well as those that suggested that the rule should be 
modified to better target its scope. To ensure the orderly development 
of the issues, and further the efficient resolution of the proceeding, 
Sec.  42.51(b)(1)(iii), as adopted in the final rule, requires a party 
to provide relevant information that is inconsistent with a position 
advanced by the party during the proceeding. The Office, however, 
understands the concerns expressed in the comments regarding the broad 
scope of the requirement in the proposed rule. Accordingly, Sec.  
42.51(b)(1)(iii), as adopted, limits the scope by: (1) Excluding 
anything otherwise protected by legally recognized privileges, (2) 
eliminating the use of the word ``noncumulative,'' (3) eliminating the 
requirement that a party specify the relevance of the information, and 
(4) limiting the rule to only inventors, corporate officers, and 
persons involved in the preparation of filing of documents in a 
proceeding.
    The following situations exemplify instances where disclosures are 
to be made. Example 1: Where a petitioner relies upon an expert 
affidavit alleging that a method described in a patent cannot be 
carried out, the petitioner would be required to provide any non-
privileged work undertaken by, or on behalf of, the petitioner that is 
inconsistent with the contentions in the expert's affidavit. Example 2: 
where a patent owner relies upon surprising and unexpected results to 
rebut an allegation of obviousness, the patent owner should provide the 
petitioner with non-privileged evidence that is inconsistent with the 
contention of unexpected properties.
    Comment 119: Several comments expressed a concern that a party 
under proposed Sec.  42.51(b)(3) (redesignated as Sec.  
42.51(b)(1)(iii)) would have an affirmative duty to characterize the 
information disclosed.
    Response: The Office understands the concern. Therefore, Sec.  
42.51(b)(1)(iii), as adopted in this final rule, does not contain the 
proposed requirement that the party specifies the relevance of the 
information.
    Comment 120: Several comments expressed concern that proposed Sec.  
42.51(b)(3) (redesignated as Sec.  42.51(b)(1)(iii)) regarding routine 
discovery of information on inconsistent statements did not require 
disclosure until after a proceeding had been instituted.
    Response: The comments have been adopted. Section 42.51(b)(1)(iii), 
as adopted in this final rule, provides that relevant information under 
the rule is to be served concurrent with the document or thing that 
contains the inconsistency.
    Comment 121: Several comments indicated that proposed Sec.  
42.51(b)(3) (redesignated as Sec.  42.51(b)(1)(iii)) may discourage the 
use of the review proceedings and that disputes might arise as to 
whether information was cumulative or inconsistent.
    Response: The comments have been adopted in part. Section 
42.51(b)(1)(iii), as adopted in this final rule, limits the scope and 
the individuals subject to the requirement. For example, the term 
``cumulative'' has been removed from the proposed rule. The Office, 
however, did not adopt the suggestion to remove the term ``inconsistent 
statement'' from the rule. The term ``inconsistent statement'' is one 
that is well recognized in the field, as it appears in the Federal 
Rules of Evidence, which will have general applicability to the 
proceedings (see Sec.  42.62). For example, FRE 613 and 806 permit 
courts to admit evidence of a ``declarant's inconsistent statement or 
conduct.''
    Comment 122: Several comments suggested that the petitioner should 
be required to make disclosures of all evidence of which it is aware 
that may bear on the resolution of the issues raised in the petition. 
In contrast, other comments suggested that the Office should not 
require any duty to disclose information beyond Sec.  1.56, while 
others suggested that the Office should limit the information to only 
that which is material under Therasense. Additionally, other comments 
suggested that the information sought could be obtained by employing a 
more liberal standard for routine additional discovery.
    Response: The Office appreciates the varying points of view on 
what, if any, information the Office should require a party to 
disclose. Consistent with 35 U.S.C. 316(b), as amended, and 35 U.S.C. 
326(b), the Office seeks to ensure that the information sought is 
suitably

[[Page 48640]]

targeted to ensure the orderly development of the issues, and further 
the efficient resolution of the proceeding. The information sought by 
the final rule typically is sought through discovery, which risks 
significant delay to the proceeding and increased burdens on both 
parties. To avoid these issues, and to reduce costs and ensure the 
integrity and timeliness of the proceeding, the production of the 
targeted information is made routine. Sec.  42.51(b)(1)(iii).
    In promulgating the rule, the Office has considered the various 
standards proposed in the comments, e.g., Sec.  1.56, Therasense, all 
information relating to secondary considerations, etc. The Federal 
Rules of Evidence (FRE) provide for the treatment of inconsistent 
statements, e.g., FRE 613 and FRE 806. The Office has generally adopted 
the FRE as applying to the proceedings before the Board. The Office 
elects to employ the ``inconsistent statement'' standard for the 
routine discovery of information, as such terminology is already 
employed in the Office's rules of evidence.
    Comment 123: One comment requested clarification as to how proposed 
Sec.  42.51(b)(3) (redesignated as Sec.  42.51(b)(1)(iii)) would be 
policed during the proceeding.
    Response: Section 42.51(b)(1)(iii) is a discovery provision. 35 
U.S.C. 316(a)(6), as amended, and 35 U.S.C. 326(a)(6) require that the 
Office promulgate rules that prescribe sanctions for abuse of 
discovery. Section 42.12(a)(5) provides that the Board may impose 
sanctions against a party for abuse of discovery.
    Comment 124: One comment stated that the relevant statutes, 35 
U.S.C. 316(a)(5), as amended, and 35 U.S.C. 326(a)(5) do not permit 
discovery of information that typically leads to the production of 
relevant evidence.
    Response: Section 42.51(b)(1)(iii), as adopted in this final rule, 
limits the information that must be served to relevant information that 
is inconsistent with a position advanced by the party during the 
proceeding.
    As to the statutory basis, 35 U.S.C. 316(a)(5), as amended, and 35 
U.S.C. 326(a)(5) provide that the Office is to set forth the standards 
and procedures for discovery of relevant evidence. Further, 35 U.S.C. 
316(a)(5), as amended, does limit additional discovery to that which is 
necessary in the interests of justice, but the Office believes that it 
is necessary in the interests of justice that a party provide its 
opponent with information inconsistent with a position the party has 
taken. For example, absent Sec.  42.51(b)(1)(iii), a petitioner could 
allege that the claims are unpatentable based upon an intervening prior 
art where 35 U.S.C. 120 benefit is allegedly lacking due to an 
enablement problem based on selected petitioner test data showing a 
lack of enablement. While a patent owner could obtain evidence of a 
petitioner's contrary test data through additional discovery once the 
trial is instituted, the Office believes that the better course of 
action is to have the petitioner provide any inconsistent test data 
earlier in the process, such that the patent owner could potentially 
address the inconsistency in its preliminary patent owner response.
    Additionally, even if 35 U.S.C. 316(a)(5), as amended, and 35 
U.S.C. 326(a)(5) did not permit the Office to set a standard for 
discovery of inconsistent information, 35 U.S.C. 316(a)(4), as amended, 
and 35 U.S.C. 326(a)(4) provide that the Office is to prescribe 
regulations establishing and governing the proceedings. Further, 35 
U.S.C. 316(a)(6), as amended, and 35 U.S.C. 326(a)(6) require the 
Office to prescribe sanctions for abuse of process, including causing 
unnecessary delay or an unnecessary increase in the cost of the 
proceeding.
    Comment 125: One comment requested clarification as to whether 
proposed Sec.  42.51(b)(3) (redesignated as Sec.  42.51(b)(1)(iii)) 
would extend to information that is not otherwise admissible, such as 
test data published in a U.S. patent.
    Response: Section 42.51(b)(1)(iii), as adopted in this final rule, 
specifies the relevant information is to be served, but not filed. The 
admissibility of the information served would not be an issue in the 
proceeding unless, and until, a party seeks to rely upon the 
information served.
    Comment 126: One comment suggested modifying the language in 
proposed Sec.  42.51(b)(3) (redesignated as Sec.  42.51(b)(1)(iii)) to 
state that the information be ``directly related to a position 
advanced.''
    Response: The comment has been adopted in part. Section 
42.51(b)(1)(iii), as adopted in this final rule, limits the scope of 
the requirement to relevant information that is inconsistent with a 
position advanced by the party during the proceeding.
    Comment 127: One comment suggested that proposed Sec.  42.51(b)(3) 
(redesignated as Sec.  42.51(b)(1)(iii)) would cause parties to submit 
far more information than the Board would find useful and could be used 
to circumvent page limits. Another comment suggested that the 
information be served on the opposing party and have the receiving 
party determine whether the document should be relied upon in the 
proceeding.
    Response: The Office agrees with the insights provided in the 
comments. Section 42.51(b)(1)(iii), as adopted in this final rule, 
provides that the information is to be served, as opposed to filed.
    Comment 128: One comment suggested that proposed Sec.  42.51(b)(3) 
(redesignated as Sec.  42.51(b)(1)(iii)) would require information not 
reasonably calculated to lead to relevant information. Examples 
include, arguing in the alternative, having a change in strategy due to 
information received during the proceeding or taking action 
inconsistent with the prosecution history.
    Response: Section 42.51(b)(1)(iii), as adopted, does not preclude a 
party from arguing in the alternative or changing strategy based upon 
new information received, but requires that a prior inconsistent 
statement be served on the opponent. It is suggested, however, that a 
party seeking to change its strategy, or take action inconsistent with 
its prior statements, provide the Office with an explanation for the 
change in position, as the fact that a party's position has changed may 
be relevant to a disposition of the issues.
    Comment 129: Several comments suggested that additional discovery 
standards, interests-of-justice and good cause, be made clearer. For 
example, one comment suggested that the language of the rule more 
closely track the explanations used in the comments accompanying the 
proposed rules.
    Response: The interests-of-justice standard for additional 
discovery is required under 35 U.S.C. 316(a)(5), as amended. The good 
cause standard is a slightly lower standard than the interests-of-
justice standard and was selected to reflect the increased need for 
discovery given the broader range of issues presented in post-grant 
reviews. The good cause standard commonly is used in the discovery 
context. For example, Federal Rules of Civil Procedure, Rule 26(b)(1), 
provides that for good cause, a court may order discovery of any matter 
relevant to the subject matter involved in the action. Accordingly, the 
Office chooses not to modify the language of the rule, as the 
interests-of-justice terminology is a statutory requirement and the 
good cause terminology represents a recognized civil procedure standard 
for discovery.
    Comment 130: One comment suggested that additional discovery be 
permitted when it was needed to respond to a new issue raised by an 
opponent.

[[Page 48641]]

    Response: The comment is adopted in part. The Board will evaluate 
whether additional discovery is needed on a case-by-case basis, which 
would include considering whether the additional discovery was 
necessary to respond to a new issue raised.
    Comment 131: One comment suggested that proposed Sec.  42.51 be 
revised to provide that the interests of justice include a showing that 
the evidence requested is not available to the movant after diligent 
inquiry, a showing as to why the evidence is necessary to establish a 
prima facie case for relief, and that there would be no undue burden to 
the non-moving party.
    Response: The comment is adopted in part. The interests-of-justice 
standard is required by 35 U.S.C. 316(a)(5), as amended. The Board will 
evaluate whether additional discovery is necessary in the interests of 
justice on a case-by-case basis, which would include consideration of 
the factors identified in the comment.
    Comment 132: Several comments sought further clarification of the 
``interests-of-justice'' standard for obtaining additional discovery in 
inter partes review and derivation proceedings under proposed Sec.  
42.51(c) (redesignated as Sec.  42.51(b)(2)) and the ``good cause'' 
standard applicable to post-grant review proceedings under Sec.  
42.224.
    Response: The interests-of-justice and good cause standards were 
set by Congress. Good cause and interests-of-justice standards 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.
    Comment 133: One comment suggested that the phrase ``[e]xcept in 
post grant reviews'' in proposed Sec.  42.51(c)(1) (redesignated as 
Sec.  42.51(b)(2)) is unclear and provided a specific edit.
    Response: The comment has been adopted in part. Section 
42.51(b)(2)(i), as adopted, contains the specific language suggested in 
the comment, placed at the end of the sentence, as opposed to the 
beginning of the sentence.
    Comment 134: One comment suggested that the Board should permit 
additional discovery on issues where one party had the luxury of time 
to develop fully its position while the other party has not. The 
comment also suggested that in evaluating discovery requests the Board 
take into account whether the patent owner is opposing a no-document 
prior art challenge.
    Response: The comments are adopted. The final rule provides that 
additional discovery, where the parties cannot agree, will be decided 
on a case-by-case basis taking into account the particular facts of the 
case. A party may bring the facts identified in the comment to the 
Board's attention in requesting the additional discovery, as facts that 
weigh in favor of granting a particular request.
    Comment 135: One comment suggested rewording proposed Sec.  
42.51(c)(2) (redesignated as Sec.  42.51(b)(2)(ii)) to allow production 
of documents and things referred to during cross-examination.
    Response: Section 42.51(b)(2)(ii), as adopted in this final rule, 
allows a party taking cross-examination to obtain production of 
documents and things of an opponent's witness, or during authorized 
compelled testimony, should the witness have the document or thing at 
the cross-examination. The production of documents and things referred 
to during cross-examination is considered additional discovery that a 
party may request, with the requests handled on a case-by-case basis, 
taking into account the various factors, including whether a specific 
document was identified, or a broad category of documents was referred 
to during cross-examination.
    Comment 136: One comment requested clarification as to whether the 
discovery in proposed Sec.  42.51(c)(2) (redesignated as Sec.  
42.51(b)(2)(ii)) was additional discovery subject to the interests-of-
justice or good cause standards.
    Response: Section 42.51(b)(2)(ii) provides for additional 
discovery, as it is discovery that is in addition to the routine 
discovery that a party would normally be able to obtain. Additional 
discovery is subject to the interests-of-justice and good cause 
standards. Yet, where a party's witness has a non-privileged document 
or thing and has referred to it during their testimony, the interests-
of-justice and good cause standards would generally weigh in favor of 
producing the document or thing to the opponent taking the cross-
examination.

Compelling Testimony and Production (Sec.  42.52)

    Comment 137: Several comments were directed to discovery of 
witnesses and documents in foreign countries. Some comments urged that 
foreign witnesses and documents be required to be made available in the 
United States, whereas others comments suggested that the Office should 
refrain from specifying a site. Others commented that because the AIA 
extends the scope of prior art to activities in foreign countries, the 
additional requirements for compelling foreign testimony or document 
production, as well as any restrictions on the time or location of 
taking testimony outside the United States, should be removed.
    Response: The comments are adopted to the extent that they are 
directed to requiring foreign witnesses to appear and foreign documents 
to be produced in the United States, except where the parties agree 
otherwise. Specifically, Sec.  42.53(b)(3), as adopted, provides that 
uncompelled deposition testimony outside the United States may be taken 
by joint agreement of the parties or as the Board specifically directs. 
The new provision in Sec.  42.51(c) provides that all document 
production will be in the United States, unless otherwise ordered by 
the Board.
    Foreign discovery is costly and increases the complexity of 
proceedings for the parties as well as the Board. Therefore, 
notwithstanding the fact that foreign discovery may, in certain cases, 
be necessary to develop prior art or other issues in the proceeding, it 
should not be routine. Accordingly, the requirement in Sec.  42.52 that 
there be a greater showing to compel the production of foreign 
witnesses and documents is considered appropriate.
    Comment 138: One comment requested that the Office confirm that 
where a motion contains the necessary information and the request for 
discovery otherwise satisfies the relevant discovery requirements under 
proposed Sec.  42.51 and, if applicable, proposed Sec.  42.224, the 
motion will be granted.
    Response: The Office envisions that a timely request filed under 
Sec.  42.52 containing the necessary information and meeting the 
requirements for additional discovery will be granted.
    Comment 139: One comment sought clarification that the procedures 
to compel discovery apply only to discovery from parties to the trial 
or

[[Page 48642]]

party-controlled witnesses or documents.
    Response: The procedures of Sec.  42.52 apply to non-parties. See 
35 U.S.C. 23-24 (authorizing compelled testimony in contested cases in 
the USPTO).
    Comment 140: Several comments suggested that foreign witnesses and 
documents not made available in the United States be inadmissible.
    Response: The comment is adopted in part. Foreign discovery, 
although important in some cases, may be costly and burdensome, but an 
exception is appropriate for those cases where the parties agree to 
uncompelled testimony. As to foreign witnesses that are presumably 
under the control of a party (e.g., employees, consultants, and 
experts), it is reasonable to require that party to produce them in the 
United States for cross-examination. As for third-party witnesses whose 
testimony is proffered by a party, the proffering party should be 
expected to make every effort to produce the witness in the United 
States, or at least be willing to bear the expenses of conducting a 
foreign deposition. While the failure to make documents and witnesses 
available in the United States is a factor in determining whether or 
not to exclude the evidence, no such per se rule of inadmissibility is 
adopted.

Taking Testimony (Sec.  42.53)

    Comment 141: Several comments suggested that the Office set a 
default location for testimony in the United States, whereas others 
urged the Office to refrain from specifying a site.
    Response: The final rule does not set a default location for 
testimony other than to provide the default that testimony is to occur 
within the United States. The Office weighed the benefits of selecting 
a specific default location, but determined that such a selection could 
potentially benefit a particular region of the country to the detriment 
of others.
    Comment 142: Several comments favored setting time limits on 
deposition testimony in the rules.
    Response: The comments are adopted. In general, in situations where 
direct testimony of a witness is being taken by deposition, the Office 
believes based on the public's input and the Board's experience in 
other proceedings that seven hours is a reasonable default time limit 
for the completion of the direct testimony, with four hours for cross-
examination and two for redirect. Sec.  42.53(c). Where direct 
testimony is submitted by affidavit, a seven-hour default limit on 
cross-examination and four hours for redirect would normally be 
appropriate, with an additional two hours for re-cross if necessary. 
Id.
    Comment 143: Several comments suggested that the parties should be 
able to take and submit video-recorded testimony without prior 
authorization of the Board.
    Response: The comment is adopted in part. Section 42.53(a), as 
adopted, allows testimony to be video-recorded where the parties agree 
to such. The submission of the video-recorded testimony, however, 
remains subject to Board approval, as the submission of potentially 
long, unedited video evidence in Office proceedings would be contrary 
to the considerations identified in 35 U.S.C. 316(b), as amended, and 
35 U.S.C. 326(b) including the efficient operation of the Office and 
the timely completion of the proceedings.
    Comment 144: One comment requested that proposed Sec.  42.53 
provide for the submission of errata sheets and provide guidance on 
what is and is not acceptable in an errata sheet.
    Response: The Board's experience with errata sheets is that parties 
tend to disagree on what is and is not considered an errata sheet. For 
example, there have been instances where a party has attempted to 
change a deponent's answer from ``yes'' to ``no'' over the objection of 
the opponent. Accordingly, the final rules do not provide for the 
submission of errata sheets, however, where a party believes that the 
submission of an errata sheet is necessary to the proceeding, the party 
may arrange for a conference call with the Board to discuss the matter.
    Comment 145: Several comments suggested that proposed Sec.  
42.53(c)(5) (redesignated as Sec.  42.53(d)(5)) should allow a party 
seeking to take testimony outside of the scope of direct for third 
party witnesses to provide a counter notice.
    Response: The comment is adopted. Section 42.53(d)(5), as adopted, 
provides a new provision that allows additional parties to a deposition 
to provide a counter notice.
    Comment 146: One comment suggested that proposed Sec. Sec.  
42.53(c)(3)-(5) be replaced by provisions similar to Rule 30 of the 
Federal Rules of Civil Procedure.
    Response: In promulgating the rules, the Office has considered the 
Federal Rules of Civil Procedure, which pertain to Federal courts. Rule 
30 of the Federal Rules of Civil Procedure governs depositions by oral 
examination and identifies, among other things, when a deposition may 
be taken without leave. Further, 35 U.S.C. 316(a)(5), as amended, and 
35 U.S.C. 326(a)(5) provide for discovery before the Office and differ 
from that of Federal courts. For example, 35 U.S.C. 316(a)(5), as 
amended, provides that depositions, other than for those of affiants 
and declarants, must be necessary in the interests of justice. 
Additionally, unlike district courts, direct testimony before the 
Office is typically in the form of an affidavit or declaration. The 
Office chooses not to adopt the Federal Rules of Civil Procedure on 
discovery given the different standards for discovery between the 
Office and Federal courts, and the goal of providing a quicker, less 
costly alternative to Federal District Court litigation. The Office 
has, however, considered the Federal Rules of Civil Procedure and 
adopted those portions that aid in streamlining and converging the 
issues for resolution.
    Comment 147: One comment suggested that proposed Sec. Sec.  
42.53(c)(1) and (c)(3) (redesignated as Sec. Sec.  42.53(d)(1) and 
(d)(3) in this final rule), when read together, leave the due date in 
Sec.  42.53(c)(3) undefined. Another comment suggested that the party 
seeking the deposition should be required to serve a notice of the 
deposition at least ten business days before the deposition.
    Response: Section 42.53(d)(4), as adopted in this final rule, 
provides that a party seeking a deposition must file a notice of 
deposition at least ten business days before a deposition.
    Comment 148: One comment suggested that to avoid filing motions to 
exclude testimony upon which neither party will rely, the time for 
filing motions to exclude should generally be set after the parties' 
substantive papers have been filed with the Board.
    Response: The Office agrees that the time to file a motion to 
exclude should be set after the substantive papers have been filed.
    Comment 149: One comment requests clarification as to the meaning 
of the phrase ``supplemental evidence relating to the direct 
testimony'' in proposed Sec.  42.53(c)(2) (redesignated as Sec.  
42.53(d)(2) in this final rule).
    Response: The term supplemental evidence refers to additional 
proofs relating to the direct testimony.
    Comment 150: One comment requests clarification as to whether 
exhibits are to be served along with the list of exhibits in proposed 
Sec.  42.53(c)(5)(i)(C).
    Response: Section 42.53(d)(3)(i) (previously proposed Sec.  
42.53(c)(3)(i)) requires that a list and copy of each document be 
served.
    Comment 151: One comment requests clarification as to whether the 
conference identified in proposed Sec.  42.53(d) (redesignated as Sec.  
42.53(e) in

[[Page 48643]]

this final rule) must be initiated at least five business days before 
the deposition or whether the conference call must merely occur at 
least five business days before the deposition.
    Response: Section 42.53(e) requires that the request for the 
conference call must be made at least five business days before the 
deposition.
    Comment 152: One comment suggested that proposed Sec.  42.53(e)(7) 
be modified such that the parties are not required to pay for 
transcripts if they do not want them.
    Response: Section 42.53(f)(7) (previously proposed Sec.  
42.53(e)(7)) provides that a copy of the transcript will be made 
available to all parties. Section 42.53(g) (previously proposed Sec.  
42.53(f)) provides that the proponent of the direct testimony will bear 
the costs associated with the testimony, such as the costs associated 
with providing a transcript. The rule is designed to provide a default 
that avoids issues that may arise where one party consistently refuses 
to pay for transcripts of its witnesses.
    Comment 153: One comment suggested that proposed Sec. Sec.  
42.53(e)(4) and 42.53(e)(8) (redesignated as Sec. Sec.  42.53(f)(4) and 
(f)(8) in this final rule) should be consolidated.
    Response: Sections 42.53(f)(1) through (f)(8) provide a 
chronological order to the manner of taking deposition testimony 
beginning with (f)(1) and ending with (f)(8) and consolidation of the 
rules would be contrary to the chronology of the rules.
    Comment 154: One comment seeks confirmation that proposed Sec.  
42.53(f) (redesignated as Sec.  42.53(g)) does not include attorney 
fees.
    Response: Section 42.53(g) requires that the proponent of the 
direct testimony pays the costs associated with the testimony for 
cross-examination but does not include attorney fees.
    Comment 155: One comment suggested that the term 
``interrogatories'' as used in proposed Sec.  42.53(e)(2), now final 
Sec.  42.53(f)(2), be replaced with the term ``questions.''
    Response: The comment is adopted in part. To avoid any possible 
confusion, the term interrogatories is removed from the rule.
    Comment 156: One comment suggested revising proposed Sec.  
42.53(e)(6)(v) (redesignated as Sec.  42.53(f)(6)(v)) to state ``where 
the office recorded the deposition and day and hour at the location of 
the officer, when the deposition began and ended.''
    Response: Section 42.53(f)(6)(v), as adopted, provides that the 
officer shall prepare a certificate identifying where the deposition 
was taken and the day and hour when the deposition began and ended. The 
location is the location of the witness.
    Comment 157: One comment suggested that proposed Sec.  42.53(e)(7) 
(redesignated as Sec.  42.53(f)(7)) be rewritten to allow the parties 
to agree that copies of the transcript need not be provided to all 
parties.
    Response: The comment is adopted. Section 42.53(f)(7), as adopted, 
adds ``Except where the parties agree otherwise.''
    Comment 158: One comment requested that the Office make a 
ministerial change to point to the exhibit number provision of Sec.  
42.63(c) instead of proposed Sec.  42.63(b), which concerns 
translations.
    Response: The comment is adopted. Section 42.53(f)(3), previously 
proposed Sec.  42.53(e)(3), now points to Sec.  42.63(c).
    Comment 159: One comment requested clarification as to how expert 
testimony was to be submitted into the record and if the expert's 
qualifications would be subject to challenge.
    Response: Expert testimony will be submitted into the record in the 
form of an exhibit. Generally, where a party seeks to rely upon an 
expert, the direct testimony will be by declaration with cross-
examination of the expert taken by an opponent. A party challenging an 
expert's qualifications may question the expert's qualifications during 
cross-examination and can raise the challenges in its oppositions and, 
where appropriate, in a motion to exclude evidence.
    Comment 160: One comment requested clarification as to whether the 
Board would appoint neutral experts as under the Federal Rules of 
Evidence 706.
    Response: The Office does not envision appointing neutral expert 
witnesses and notes that all Board members are required to have both 
competent legal knowledge and scientific ability. 35 U.S.C. 6.
    Comment 161: Several comments expressed concern about who should 
bear the burden and expense of producing witnesses for direct or cross-
examination. The comments related both to domestic and foreign 
witnesses.
    Response: These comments generally are adopted. The Office 
recognizes that deposition testimony is relatively expensive. To 
minimize costs, the rules provide that uncompelled direct testimony is 
by affidavit. All other testimony (including cross-examination and 
redirect) is by deposition. The burden and expense of producing a 
witness for redirect or cross-examination should normally fall on the 
party presenting the witness. Thus, a party presenting a witness's 
testimony by affidavit should arrange to make the witness available for 
cross-examination. This would apply to witnesses employed by a party as 
well as experts and non-party witnesses. If there are associated 
expenses such as expert witness fees or travel, those should be borne 
by the party presenting the testimony. Should the witness's testimony 
be presented by deposition, the same rules would apply, and the witness 
fees and expenses should be borne by the producing party.

Protective Order (Sec.  42.54)

    Comment 162: There were numerous comments on the proposed 
protective order guidelines and rules. Several comments were directed 
to the use of confidential information in other proceedings including 
other proceedings in the Office and in the district courts. Several 
comments also suggested that the rule should be modified to be more 
consistent with the Practice Guide for Proposed Trial Rules.
    Response: In view of the comments, the Office has modified the 
proposed provision to clarify that a party including a patent owner may 
file confidential information by filing a motion to seal containing a 
proposed protective order, such as the default protective order set 
forth in the Office Patent Trial Practice Guide. Section 42.54, as 
adopted, is no longer limited to confidential information sought by 
discovery.
    The comments seeking to permit the use of confidential information 
in other proceedings are not adopted. The Office expects that, unlike 
actions for patent infringement in Federal court, the great majority of 
evidence in these contested proceedings will be non-confidential. In 
proposing a default protective order, therefore, the Office attempted 
to strike the proper balance between protecting the discloser's 
confidential information in the relatively few number of cases, and the 
rights of others to use that information. Thus, the acknowledgment 
under the default protective order in the Office Patent Trial Practice 
Guide requires an undertaking that a person receiving confidential 
information in connection with a proceeding will use the information 
only in connection with that proceeding. Section (h) of the guidelines 
makes it clear, however, that counsel for a party who receives 
confidential information will not be restricted from representing that 
party in any other proceeding before the Office. However, confidential 
information received in a proceeding may not be used in any other USPTO 
proceeding in which the providing party

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is not also a party. This is believed to be adequate protection of the 
discloser's rights. Should more or less disclosure be desired the 
available remedy is a motion to the Board to amend the standard 
protective order. To further protect confidentiality, once entered a 
protective order remains in effect unless and until modified by the 
Board.
    Comment 163: Several comments suggested that a petitioner may gain 
an unfair advantage over a patent owner by unilaterally limiting a 
patent owner's ability to seek advice and counsel in preparing a patent 
owner's preliminary response by drafting an onerous protective order.
    Response: Where the parties cannot agree to a protective order, a 
conference call with the Board may be arranged to guide the parties. 
Moreover, the default time period to provide a preliminary response has 
been revised to a three-month period in this notice, which should 
provide patent owners with sufficient time to seek modification of the 
order and prepare a response.
    Comment 164: Several comments proposed additions to the default 
order, such as special provisions for software, provisions governing 
use of confidential information at depositions, ``claw back'' 
provisions for inadvertently produced privileged information, and 
additional categories of protection for highly confidential 
information.
    Response: The Office appreciates the comments for additions to the 
protective order, but believes that they are more appropriate to 
district court patent infringement litigation. The Office does not 
expect these situations to arise frequently in these contested 
proceedings. But should the parties desire more or less protection than 
that provided by the default order, the parties are always free to 
stipulate to other protective order terms to the extent provided by 
law. The purpose of the default order is to encourage the parties to 
reach such agreements promptly, as lengthy disputes over complex 
protective order provisions are inconsistent with the legislative goal 
of providing a more efficient, less costly alternative.
    Comment 165: One comment suggested that the signed acknowledgments 
under the default order be served on opposing counsel.
    Response: While it might be useful to a party to know who has 
access to its confidential information, the usual practice is not to 
serve such acknowledgments except in the case of experts. The rationale 
is to protect the confidentiality of those working on the case.
    Comment 166: One comment suggested that it was not clear that 
paragraph 2(A) of the proposed order applies to corporations.
    Response: The comment is noted. The cited paragraph refers to 
``[p]ersons who are owners of a patent.'' This would include 
corporations.
    Comment 167: One comment suggested that each party should serve on 
the other party a copy of the signed acknowledgment from each party who 
obtains access to confidential information.
    Response: Barring evidence that the cost to the parties of 
providing a copy of the acknowledgment would be outweighed by its 
benefit, the Office will not add this requirement. Parties, however, 
may agree to a modified protective order including this requirement.
    Comment 168: One comment suggested providing an additional category 
of protection for highly confidential information that is accessible by 
outside counsel. The suggestion added that broader access to this 
information should only be grantable after a hearing.
    Response: The Board may, for good cause, issue an order that 
information only be accessible by outside counsel. See Sec.  
42.54(a)(7).

Confidential Information in a Petition (Sec.  42.55)

    Comment 169: Several comments were directed to the stated 
procedures for handling a motion to seal accompanied by a proposed 
protective order filed with the petition. These comments expressed 
concern that such motions could give an unfair advantage to the 
petitioner because the patent owner would have to agree to the terms of 
the proposed order to get access to the sealed information. Several 
comments suggested that serving the confidential disclosures by the 
petitioner be delayed while protective order issues are resolved.
    Response: The comments are adopted in part. The Office has modified 
the proposed rule such that the petitioner must file, but need not 
serve, the confidential information under seal. Further, the final rule 
does not require that the patent owner agree to the terms of the 
petitioner's proposed protective order to get access to the sealed 
information. Rather, where the petitioner requests entry of a 
protective order other than the default protective order in the Office 
Patent Trial Practice Guide, the patent owner may access the 
information where the patent owner (1) agrees to the terms of the 
protective order requested by the petitioner; (2) agrees to the terms 
of a protective order that the parties file jointly; or (3) obtains 
entry of a protective order (e.g., the default protective order).
    Comment 170: One comment suggested that a petitioner should be 
permitted to file confidential information in a petition with a proviso 
that if the accompanying motion to seal be denied, the confidential 
material would be returned and would not be admitted in the proceeding.
    Response: A petition may be accompanied with a motion to seal and a 
contingent motion to supplement the petition with the confidential 
information with the proviso that the material in the contingent motion 
to supplement be returned if the motion to seal be denied.
    Comment 171: One comment suggested that proposed Sec.  42.55 did 
not set forth the manner or procedure for effectuating service under 
seal nor indicate how the petitioner would be protected from 
intentional or unintentional disclosure. The comment suggested that the 
patent owner agreement to the protective order should occur prior to 
service.
    Response: The suggestion is adopted. Section 42.55, as adopted, 
requires filing, but not service, of the confidential material 
accompanying a motion to seal and a proposed protective order.

Expungement of Confidential Information (Sec.  42.56)

    Comment 172: One comment suggested that the default process should 
be that confidential information submitted in a proceeding and 
decisions by the Office should be confidential. The comment also 
suggested that any confidential material should be destroyed following 
the trial unless a petition to unseal is filed within 45 days of 
decision by the Office, or that at a minimum that petitions to expunge 
should be granted in all but extraordinary circumstances.
    Response: 35 U.S.C. 316(a)(1), as amended, and 35 U.S.C. 326 (a)(1) 
mandate that the Director in prescribing regulations shall provide that 
the file ``shall be made available to the public. * * *'' Section 42.56 
allows a party to file a motion to expunge confidential information, 
either after denial of a petition to institute a trial or after a final 
judgment in a trial. If no motion is filed, or if the motion is denied, 
however, the information becomes available to the public. The rule 
balances the parties' interest in maintaining confidentiality with the 
public's interest in maintaining a complete and open record of the 
proceedings and the basis for Board

[[Page 48645]]

decisions. The final rule encourages parties to seek to redact 
sensitive information, where possible, rather than seeking to seal 
entire documents.
    Comment 173: One comment expressed concern that confidential 
information subject to a protective order submitted in a proceeding may 
become public while a motion to expunge is pending as an opposition may 
be filed 30 days after service of a motion to expunge.
    Response: The Office believes this situation would not to lead to 
disclosure of material that would appropriately be expunged. Normally, 
all such information would be made public 45 days after denial of a 
petition to institute a trial or 45 days after final judgment in a 
trial. Should a motion to expunge be pending as the deadline 
approaches, the moving party should immediately bring this to the 
attention of the Board and seek to expedite the motion or to notice the 
public that access to one or more papers will be delayed.

Admissibility (Sec.  42.61)

    Comment 174: One comment suggested that proposed Sec.  42.61(c) was 
misleading and difficult to apply as the rule provides that 
specifications of U.S. patents and applications are considered hearsay 
where a party intends to rely upon the data or drawings to prove the 
truth of the data.
    Response: United States patents present hearsay issues when offered 
to prove the truth of the matters they disclose. As an example, the 
disclosure of test data in a patent is hearsay when offered in a trial 
to prove what was tested and what the results were. To make this 
distinction clear, the rule states that the specification and drawings 
of a United States patent or patent application are admissible evidence 
only to prove what they describe. As further explained in Sec.  
42.61(c), ``[i]f there is data in the specification or the drawing upon 
which a party intends to rely to prove the truth of the data, an 
affidavit of a person having first-hand knowledge of how the data was 
generated must be filed.'' As with any evidentiary matter, the precise 
application of the rule in a particular proceeding will be handled 
based upon the facts presented.

Applicability of Federal Rules of Evidence (Sec.  42.62)

    Comment 175: One comment suggested that the evidentiary rules of 
other agencies be considered before adopting the Federal Rules of 
Evidence.
    Response: The Office has considered the various options available 
and decided that the Federal Rules of Evidence are the appropriate 
evidentiary rules for the proceedings. The Federal Rules of Evidence 
provide a well-developed body of recognized case law that is reasonable 
for the Office to draw upon in administering these trial rules. 
Moreover, the courts charged with reviewing Board decisions are 
familiar with those rules.
    Comment 176: One comment suggested that the Office remove the first 
definition of the term ``hearing'' from Sec.  42.62(c).
    Response: The Office appreciates that the situation identified in 
the comment, the need to define the term ``hearing'' under Federal Rule 
of Evidence 804(a)(5) will not arise often. The Office, however, 
declines to adopt the suggestion to remove the reference to 
``hearing,'' as there will be situations, albeit infrequent, that would 
implicate FRE 804(a)(5).
    Comment 177: One comment suggested that the Office should define 
what sections of the Federal Rules of Evidence, which encompasses both 
civil and criminal matters, would not be appropriate for the 
proceedings under proposed Sec.  42.62(b).
    Response: The comment is not adopted. Based on the Board's 
experience, patent practitioners generally have known which portions of 
the Federal Rules of Evidence are related to patent proceedings. It 
would not be helpful, nor necessary, to list expressly all of the non-
relevant evidence rules in the patent rules of practice.
    Comment 178: One comment suggested revising proposed Sec.  42.62 to 
clarify that the terms ``civil action,'' ``civil proceeding'' and 
``action'' in the Federal Rules of Evidence would include both pre- and 
post-institution actions.
    Response: Section 42.62, as adopted in this final rule, provides 
that a reference in the Federal Rules of Evidence to a ``civil 
action,'' ``civil proceeding'' and ``action'' means a proceeding before 
the Board under part 42 of the rules.

Form of Evidence (Sec.  42.63)

    Comment 179: One comment requested guidance on the use of evidence 
from other proceedings, including affidavits, deposition, and trial 
testimony from administrative and other USPTO proceedings.
    Response: Issues involving the use of prior testimony and other 
evidence from prior or parallel proceedings are highly fact specific. 
There are evidentiary issues governed by the Federal Rules of Evidence. 
See, e.g., Fed. R. Evid. 804(b)(1), ``Former Testimony.'' There may 
also be confidentiality issues if the information is subject to a 
protective order limiting the use of the information. Accordingly, the 
Office declines to adopt a per se rule regarding the treatment of 
evidence in parallel proceedings.
    Comment 180: One comment noted that proposed Sec.  42.63 defines 
evidence as including affidavits and transcripts of depositions, but 
transcripts of ex parte depositions already are included in the 
definition of affidavits.
    Response: The Office agrees that the term ``affidavits'' and 
transcripts of depositions overlap with respect to ex parte 
depositions. The Office believes, however, that the majority of 
deposition transcripts will be inter partes. Accordingly, the Office 
adopts the proposed provision without any modification.
    Comment 181: One comment agreed with proposed Sec.  42.63(b), which 
provides that where a party relies upon a document or is required to 
produce a document in a language other than English, a translation will 
be provided. Another comment, however, suggested that the burden of 
translation should be placed on the party that is requesting or relying 
on the information in the foreign language.
    Response: All proceedings before the Board will be conducted in 
English; thus, unless accompanied by an English language translation, 
documents in a non-English language will not be considered by the 
Board. The intent, however, is not to require a translation into 
English language of every document produced under Sec.  42.52, but 
translations must be provided for (1) those documents produced in 
discovery under Sec.  42.51; and (2) all documents relied on, or 
otherwise used, during the proceedings.
    Comment 182: Several comments also expressed concern with the 
applicability of Sec.  42.6 to exhibits that are pre-existing documents 
such as United States patents and to aspects of the exhibit list.
    Response: The rules provide that the spacing and type font 
requirements of Sec.  42.6 apply only to documents ``created for the 
proceeding.''
    Comment 183: One comment suggested revising proposed Sec.  42.63(e) 
to provide that the exhibit list should note any gaps in the numbering 
of actually filed exhibits.
    Response: Section 42.63(e) provides that each party will maintain 
an exhibit list. The exhibit list will note where an exhibit is not 
filed. The Office believes that the rule provides the relief requested 
in the comment as the

[[Page 48646]]

notations for exhibit numbers that were created, but no exhibit filed, 
will identify any gaps in exhibit numbering.
    Comment 184: One comment noted that the rules do not specify that 
the exhibit list is submitted or exchanged with the other parties to 
the proceeding.
    Response: The comment is adopted. Section 42.63(e), as adopted in 
this final rule, provides that a current exhibit list is to be served 
whenever evidence is served and the current exhibit list is to be filed 
when filing exhibits.

Objection; Motion To Exclude (Sec.  42.64)

    Comment 185: One comment requested that proposed Sec.  42.64(b)(2), 
which provides for the submission of supplemental evidence, allow a 
party to submit substitute declarations bearing the same exhibit number 
but clearly marked as substitutes and that the list of exhibits simply 
list the substitute exhibit.
    Response: The comment is adopted, although no modification to the 
proposed rule is required. Section 42.64(b)(2) allows parties to submit 
substitute declarations as supplemental evidence in the manner 
identified in the comment.
    Comment 186: Several comments request that the Office provide 
additional guidance in the Office Patent Trial Practice Guide as to how 
motions to exclude are to be used, and on the procedure for obtaining 
additional discovery.
    Response: The Office will provide additional guidance on motions to 
exclude and the procedure for obtaining additional discovery in the 
update to the Office Patent Trial Practice Guide.
    Comment 187: Several comments requested clarification as to the 
distinction between a motion to exclude evidence and a motion in 
limine.
    Response: The Office appreciates the comments and Sec.  42.64, as 
adopted in this final rule, refers only to motions to exclude.
    Comment 188: One comment requests that, to avoid witness coaching, 
the Office limit attorney objections during cross-examination to only 
``objection, form'' or ``objection, leading.'' Objections other than 
the two identified objections would be deemed waived.
    Response: The Office expects to publish guidance on cross-
examination practices in the Office Patent Trial Practice Guide. As 
noted in the comment, cross-examination should be question-and-answer 
process between the examining lawyer and the witness and not between 
the examining and defending lawyers. It is the witness, and not the 
lawyer, who is testifying.
    Comment 189: One comment noted that the title for proposed Sec.  
42.64(a) appeared to exclude objections to direct deposition testimony.
    Response: The Office has modified the proposed rule. Section 
42.64(a), as adopted in this final rule, recites deposition evidence as 
its title, which includes both direct and cross-examination testimony.
    Comment 190: One comment stated that the ten-business day deadline 
in Sec.  42.64(b) for objections to evidence submitted during a 
preliminary proceeding was too short a period of time.
    Response: It is important to note that 35 U.S.C. 316(a)(11), as 
amended, and 326(a)(11) require the Office to promulgate regulations 
ensuring that final determinations are to be issued not more than one 
year after institution of the review, except for good cause. Further, 
35 U.S.C. 316(b), as amended, and 326(b) identify considerations that 
are to be taken into account in promulgating the rules including the 
efficient operation of the Office and the ability of the Office to 
complete the proceedings timely. The Office has set a ten-business day 
limitation for objections after institution to ensure the timeliness of 
the proceeding as a party may submit supplemental evidence within ten 
business days of timely served objections. The Office expects to have 
an initial conference call with the parties one month after the trial 
has been instituted to discuss the motions that the parties intend to 
file and determine if any adjustment needs to be made to the Scheduling 
Order. Based upon the time deadlines for completing the proceedings, 
the Office retains the ten-business day requirement.

Oral Argument (Sec.  42.70)

    Comment 191: One comment generally supported proposed Sec.  42.70.
    Response: Proposed Sec.  42.70 is adopted.
    Comment 192: One comment suggested that, prior to oral argument, 
each party should be required to submit a summary of the issues, facts, 
and law to the Board similar to a pre-trial brief in Federal District 
Court.
    Response: Section 42.70 requires that a request for oral argument 
specify the issues to be argued. On a case-by-case basis, the Board may 
determine that the additional briefing discussed in the comment is 
desired. However, such briefing may not be required in every case 
depending upon the particular facts and issues presented. Accordingly, 
the suggested pre-argument briefing is not made mandatory and will 
remain within the discretion of the Board to order depending on the 
particular facts and issues presented in each case.
    Comment 193: Several comments stated that it was unclear when oral 
argument would be held and suggested that the rule specify when oral 
argument would occur. One comment suggested the rule specify when oral 
argument would occur in relation to the request. Another comment 
suggested that parties be assured that oral argument will not be 
scheduled sooner than 45 days following the last reply to be filed in 
the proceedings.
    Response: Section 42.70 provides that oral argument will be at a 
time set by the Board. Once requested, oral argument will be scheduled 
by the Board on a case-by-case basis. Generally, it is anticipated that 
oral argument will be scheduled at a time after discovery and amendment 
motions are completed. Oral argument ordinarily will be scheduled so as 
to give the parties ample time to prepare. When a party requests an 
oral argument, the party may recommend a date for the oral argument and 
may provide additional reasons in support of the recommendation. The 
Board will take into consideration the party's availability and whether 
sufficient time is provided when scheduling oral argument.
    Comment 194: One comment stated that the term oral argument as used 
in Sec.  42.70 is more limited than the term oral hearing as used in 
the statute, and that a limitation or restriction on the presentation 
of live testimony is contrary to the statute which requires that either 
party be provided with the right to a hearing. The comment stated that 
the Office should explicitly permit and provide adequate time for a 
party to present witnesses and allow for cross-examination during the 
hearing.
    Response: Section 42.70 does not exclude live testimony. The 
Office, however, does not expect live testimony to be presented 
ordinarily at oral argument. Whether live testimony will be allowed at 
the oral argument will be determined by the Board on a case-by-case 
basis according to the individual circumstances of the case.
    Comment 195: One comment stated that the Office must provide 
adequate time for each side to present its issues during the oral 
argument. The comment stated that several hours or several days is more 
consistent with Congressional intent rather than the Federal Circuit 
appellate review model the Office appears to have adopted. Another 
comment stated that the short length of oral argument is a serious 
problem for parties.

[[Page 48647]]

    Response: Section 42.70 does not set a time for oral argument. The 
time allocated for oral argument will be set by the Board on a case-by-
case basis according to the individual circumstances of the case. When 
a party requests an oral argument, the party may recommend a time to be 
allocated for the oral argument and may provide additional reasons in 
support of the recommendation. The Board will take recommendations into 
consideration when setting the time allocated for oral argument.

Decision on Petitions or Motions (Sec.  42.71)

    Comment 196: A few comments suggested that proposed Sec.  42.2 or 
42.71 should be revised to indicate that a panel, rather than a single 
Board member, has the authority to decide petitions and motions because 
35 U.S.C. 6(c) requires that each inter partes review and post-grant 
review be heard by at least three members of the Board.
    Response: The Office agrees that final written decisions under 35 
U.S.C. 135(d) and 318(a), as amended and 35 U.S.C. 328(a) will be 
entered by a panel. For clarification, Sec.  42.2, as adopted in this 
final rule, provides that, for final written decisions under 35 U.S.C. 
135(d) and 318(a), as amended, and 35 U.S.C. 328(a), ``Board'' means a 
panel of the Board. As to other decisions in a trial proceeding, 
however, the AIA does not require a panel to decide petitions to 
institute a trial or motions. Further, 35 U.S.C. 135(a) and 314, as 
amended, and 35 U.S.C. 324 provide that the Director shall determine 
whether to institute a derivation proceeding, inter partes review, and 
post-grant review, respectively. Additionally, 35 U.S.C. 6(b)(3) and 
(4) provide that the Board shall conduct derivation proceedings, inter 
partes reviews, and post-grant reviews. The authorities to determine 
whether to institute a trial and conduct a trial have been delegated to 
a Board member or employee acting with the authority of the Board. As 
such, Sec.  42.2, as adopted in this final rule, also provides that, 
for petition decisions and interlocutory decisions, ``Board'' means a 
Board member or employee acting with the authority of the Board.
    Comment 197: One comment suggested that the standard of review for 
a rehearing of a non-panel decision should be de novo because 35 U.S.C. 
6(c) requires that each inter partes review and post-grant review be 
heard by at least three members of the Board, and thereby no deference 
should be accorded. But, several other comments were in favor of the 
standard of review set forth in proposed Sec.  42.71(c).
    Response: As discussed previously, the AIA does not require a panel 
to decide petitions to institute a trial or motions. The authorities to 
determine whether to institute a trial and conduct a trial have been 
delegated to a Board member or employee acting with the authority of 
the Board. Moreover, 35 U.S.C. 135(a) and 314(d), as amended, and 35 
U.S.C. 324(e) provide that the determination by the Director whether to 
institute a derivation proceeding, inter partes review, or post-grant 
review shall be final and nonappealable. Further, 35 U.S.C. 6(c) 
provides that only the Board may grant rehearings. Therefore, the de 
novo standard for rehearing a non-panel decision in a trial before the 
Office is not required.
    Comment 198: A few comments requested clarification on requests for 
rehearing of a decision not to institute a review, and suggested that a 
rehearing of such a decision should be decided by a different 
administrative patent judge or panel that includes at least the Chief 
Administrative Patent Judge. One comment requested clarification on 
requests for rehearing of a decision to institute a review on some of 
the proposed grounds of unpatentability, but not all, and suggested a 
rule that would provide for rehearings and appeals of such a decision. 
Another comment requested clarification on whether a decision not to 
institute is a final and non-appealable decision.
    Response: In view of the comments, the Office added a paragraph to 
the rule for petition decisions to clarify that a party may request a 
rehearing of a petition decision, but the decision is nonappealable. 
Sec.  42.71(c) and (d). A decision to institute (including a decision 
that denies a ground of unpatentability) is a nonfinal decision. A 
request for rehearing a decision to institute, thus, must be filed 
within 14 days of the entry of the decision. In contrast, a decision 
not to institute is a final decision, and therefore a request for 
rehearing such a decision must be filed within 30 days of the decision. 
When rehearing a petition decision, the Office envisions that the 
decision will typically be reviewed by a panel of at least three 
administrative patent judges that may include the Chief Administrative 
Patent Judge. Under 35 U.S.C. 135(a) and 314(d), as amended, and 35 
U.S.C. 324(e), a determination of whether to institute a review is 
final and nonappealable to the Federal Courts.
    Comment 199: Two comments suggested that a request for rehearing of 
a panel decision should be decided by a panel having at least one 
member not on the original panel that rendered the decision. One 
comment requested clarification whether a request for rehearing is 
required. Other comments were in support of the rehearing practice.
    Response: A request for rehearing of a panel decision may be 
decided by the same panel that entered the original decision. The 
Office envisions that the Board's rehearing practice for proceedings 
under part 42 will be consistent with the current Board practice used 
for appeals arising from original patent applications, reissue 
applications, ex parte reexamination, inter partes reexamination, as 
well as rehearing practice used in interference proceedings, and other 
contested cases.
    Comment 200: One comment stated that the Office should set time 
frames for decisions on motions.
    Response: Sections 42.100(c) and 42.200(c) provide that an inter 
partes review, post-grant review, or covered business method review 
shall be administered such that pendency before the Board after 
institution is normally no more than one year. The time can be extended 
by up to six months for good cause by the Chief Administrative Patent 
Judge. As such, the Board will decide motions filed in an inter partes 
review, post-grant review, or covered business method review and 
provide a final written decision consistent with the time periods set 
forth in Sec. Sec.  42.100(c) and 42.200(c).
    Comment 201: One comment suggested that interlocutory decisions of 
an individual administrative patent judge should be merged 
automatically into the final decision and judgment of the panel.
    Response: Interlocutory decisions generally are related to 
procedural matters (e.g., whether to recognize counsel pro hac vice), 
and thereby should not necessarily be included in a final written 
decision on the patentability of the involved claims. In appropriate 
situations, the Board may incorporate an interlocutory decision into a 
final written decision.
    Comment 202: One comment recommended that a section on the ``final 
written decision'' be added to the rules.
    Response: Judgment is defined as a final written decision by the 
Board or a termination of a proceeding (Sec.  42.2) and is provided for 
in Sec.  42.73.
    Comment 203: One comment strongly agreed that the Board's decision 
not to institute a review should include a statement as to why the 
requirements were not met.
    Response: The Office appreciates the comment. The Office envisions 
that decisions not to institute a review will

[[Page 48648]]

typically provide sufficient notice to the parties.

Termination of Trial (Sec.  42.72)

    Comment 204: One comment suggested that proposed Sec.  42.72 should 
enumerate the limited circumstances provided by statute under which a 
proceeding may be terminated without rendering a judgment, and stated 
that consolidation and appropriateness should not be grounds for 
termination.
    Response: As amended, 35 U.S.C. 318(a) and 35 U.S.C. 328(a) provide 
that if an inter partes review or post-grant review is instituted and 
not dismissed, the Board shall issue a final written decision. The 
Office recognizes that the AIA expressly provides a few situations 
where a review may be terminated (e.g., 35 U.S.C. 317(a), as amended, 
and 35 U.S.C. 328(a)). However, the AIA does not expressly provide all 
of the situations in which a review may be terminated or dismissed. For 
instance, in the rare situation where the issue of whether the 
petitioner has standing is raised after institution, the Board would 
need the flexibility to terminate or dismiss the review, if 
appropriate. Moreover, 35 U.S.C. 315(d), as amended, and 35 U.S.C. 
325(d) provide that if another proceeding or matter involving the 
patent is before the Office, the Director may determine the manner in 
which the review or other proceeding or matter may proceed, including 
providing for stay, transfer, consolidation, or termination of any such 
matter or proceeding. For instance, when the Board is consolidating two 
proceedings, the Board may terminate one of the proceedings and proceed 
to a final written decision in the other proceeding. Therefore, Sec.  
42.72 is consistent with the AIA, providing the Board the flexibility 
to terminate a trial in appropriate situations.
    Comment 205: One comment recommended that the Board should be 
required to terminate the trial upon the filing of a settlement 
agreement of the parties and, if necessary, institute a new ex parte 
proceeding to address any substantial new question, so that the parties 
could avoid the potential risk of an unpatentability decision and 
estoppel.
    Response: 35 U.S.C. 317(a), as amended, and 35 U.S.C. 327(a) 
provide that if no petitioner remains in the inter partes review or 
post-grant review, the Office may terminate the review or proceed to a 
final written decision. The rule is consistent with the AIA to provide 
the Board with the flexibility to terminate the review or proceed to a 
final written decision depending on the particular facts of each 
proceeding.

Judgment (Sec.  42.73)

    Comment 206: One comment suggested that the phrase ``could have 
properly been, raised and decided'' in proposed Sec.  42.73(a) should 
be revised to include the word ``reasonably.''
    Response: This comment is adopted. Section 42.73(a), as adopted in 
this final rule, provides that ``[a] judgment, except in the case of a 
termination, disposes of all issues that were, or by motion reasonably 
could have been, raised and decided.''
    Comment 207: A few comments requested additional guidance on the 
circumstances when the Board would proceed to a final written decision 
if no petitioner remains in the review to facilitate more effective 
negotiation for settlement agreements.
    Response: The Board will consider the particular facts of each 
case. For instance, if the records clearly show that the challenged 
claims are unpatentable and the patent owner has not yet filed a patent 
owner response and/or amendment, the Board may continue the proceeding 
to allow the patent owner an opportunity to file its patent owner 
response and/or amendment.
    Comment 208: One comment urged the Office to eliminate the concept 
of judgment and replace it with certificates and requested 
clarification as to the relationships between a judgment, the final 
written decision, and certificates.
    Response: The comment is not adopted. The concepts of judgment and 
certificates are fundamentally different. The term ``judgment'' is 
defined as a final written decision by the Board (Sec.  42.2) and a 
judgment disposes of all issues that were, or by motion reasonably 
could have been, raised and decided (Sec.  42.73). Consistent with 35 
U.S.C. 318(b), as amended, and 35 U.S.C. 328(b), Sec.  42.80 provides 
that the Office will issue and publish a certificate after the Board 
issues a final written decision in a proceeding, and the time for 
appeal has expired or any appeal has terminated. Therefore, the concept 
of judgment should not be replaced by certificates.
    Comment 209: A few comments questioned whether proposed Sec.  
42.73(d)(1) exceeds statutory authority, and suggested that the rule be 
revised to reflect accurately the limited statutory scope of estoppel. 
However, one comment was in support of the proposed rule regarding 
petitioner estoppel.
    Response: In view of the comments, the Office has modified the 
proposed provision of Sec.  42.73(d)(1) to reflect the statutory 
language more closely.
    Comment 210: One comment stated that the Office is not precluded 
from instituting a covered business method review of a patent that 
previously was reviewed by a district court or by the Office in a 
reexamination.
    Response: The comment is consistent with the public law and 
codified statutory provisions relating to covered business method 
reviews.
    Comment 211: A few comments requested the Office provide guidance 
on the meaning of ``that the petitioner raised or reasonably could have 
raised.'' Another comment suggested that if a party was not able to 
obtain adequate discovery on an issue or if the Board does not decide 
on the issue during the proceeding, such an issue should not be 
considered as an issue that reasonably could have been raised.
    Response: The Office will interpret the phrase consistent with the 
legislative intent and relevant case law. As noted in the legislative 
history, the estoppel provisions in 35 U.S.C. 315(e), as amended, and 
35 U.S.C. 325(e) are to prevent abusive serial challenges to patents. 
The statutory language ``any ground that the petitioner raised or 
reasonably could have raised during that inter partes review'' provided 
in 35 U.S.C. 315(e), as amended, is similar to the pre-AIA language in 
35 U.S.C. 315(c). In the context of inter partes reexamination, where 
the examiner made a final determination not to adopt the grounds of 
rejection proposed by a third party requester in the reexamination, the 
third party requester may be estopped from asserting the same 
references in the district court to establish invalidity of the patent 
claims. See, e.g., Bettcher Indus., Inc. v. Bunzl USA, Inc., 661 F.3d 
629, 636 (Fed. Cir. 2011). In addition, the legislative history of the 
AIA shows why Congress added the modifier ``reasonably'':

    The present bill also softens the could-have-raised estoppel 
that is applied by inter partes review against subsequent civil 
litigation by adding the modifier ``reasonably.'' It is possible 
that courts would have read this limitation into current law's 
estoppel. Current law, however, is also amenable to the 
interpretation that litigants are estopped from raising any issue 
that it would have been physically possible to raise in the inter 
partes reexamination, even if only a scorched-earth search around 
the world would have uncovered the prior art in question. Adding the 
modifier ``reasonably'' ensures that could-have-raised estoppel 
extends only to that prior art which a skilled searcher conducting a 
diligent search reasonably could have been expected to discover.

157 Cong. Rec. S1375 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl) 
(emphasis added).

    Comment 212: One comment suggested that the Office Patent Trial

[[Page 48649]]

Practice Guide or rules should expand upon the claim-by-claim 
application of both proposed grounds of rejection and impact of 
estoppel, and the Office should consider the effect of estoppel on ex 
parte reexaminations as they are based on prior art, not claims.
    Response: The Office will provide additional information in the 
next revision of the Office Patent Trial Practice Guide, which the 
Office plans to update in view of the final rules. As to ex parte 
reexaminations, the Office will apply the estoppel in accordance with 
35 U.S.C. 315(e), as amended, and 35 U.S.C. 325(e).
    Comment 213: A number of comments questioned whether there is 
statutory basis for the patent owner estoppel provisions set forth in 
proposed Sec.  42.73(d)(3). Several comments specifically stated that 
proposed Sec.  42.73(d)(3)(ii) is inconsistent with the AIA and other 
statutory provisions, and exceeds the scope of the common law doctrines 
of claim preclusion and issue preclusion. Several comments suggested 
alternative language for the rule. For instance, two comments suggested 
that the proposed rule should be revised to be limited to claims that 
are not patentably distinct from the claims held to be unpatentable in 
the proceeding. On the other hand, several other comments were in favor 
of proposed Sec.  42.73(d)(3). According to those comments, it is 
reasonable for the Office to limit recapture of substantially similar 
claim limitations, and the estoppel provision is consistent with the 
interference estoppel.
    Response: In view of the comments, the Office modified the proposed 
rule. As adopted in this final rule, Sec.  42.73(d)(3) does not contain 
the provision that a patent applicant or owner may not obtain in a 
patent ``[a] claim that could have been filed in response to any 
properly raised ground of unpatentability for a finally refused or 
cancelled claim.'' Additionally, the Office modified the provision that 
was proposed in Sec.  42.73(d)(3)(i) to ``[a] claim that is not 
patentably distinct from the finally refused or cancelled claim.''
    Under 35 U.S.C. 316(a)(4), as amended, and 35 U.S.C. 326(a)(4), the 
Office is required to prescribe regulations setting forth the 
relationship between the review and other proceedings in the Office 
(e.g., examination). Section 42.73(d)(3)(i), as adopted in this final 
rule, merely provides estoppel against claims that are patentably 
indistinct from those claims that were lost, and claim amendments that 
were presented and denied, during a trial. In other words, the patent 
owner may subsequently present in a continuing or reissue application 
claims that are patentably distinct from such claims. As such, Sec.  
42.73(d)(3) set forth in this final rule is consistent with the AIA, 
other statutory provisions, the common law related to estoppel, and the 
common law related to the recapture rule. See, e.g., In re Deckler, 977 
F.2d 1449, 1452 (Fed. Cir. 1992); In re Clement, 131 F.3d 1464, 1468 
(Fed. Cir. 1997) (the recapture rule prevents a patentee from regaining 
through reissue the subject matter that the patentee surrendered in an 
effort to obtain allowance of the claim).
    Comment 214: One comment requested clarification on whether 
proposed Sec.  42.73(d)(3) applies to derivation proceedings.
    Response: Paragraph (d)(3) of Sec.  42.73 applies to derivation 
proceedings, inter partes review, post-grant review, and covered 
business method review.
    Comment 215: A few comments suggested that the Office should 
examine the claim on the merits in the subsequent proceeding, rather 
than applying the patent owner estoppel.
    Response: The Office will examine a claim presented in a subsequent 
proceeding on the merits and apply the estoppel if the claim is not 
patentably distinct from the finally refused or cancelled claim, 
similar to a ground of rejection based on res judicata (see, e.g., MPEP 
Sec.  706.03(w)).

Settlement (Sec.  42.74)

    Comment 216: Several comments suggested that a standard higher than 
a good cause standard be set for a member of the public to obtain 
access to a settlement agreement particularly for the settlements in 
inter partes review, or post-grant review, or that the good cause 
standard should be interpreted to rarely permit access to a settlement 
that includes confidential material.
    Response: Under 35 U.S.C. 135(e) and 317(b), as amended, and 35 
U.S.C. 327(b), the Office is required to make the settlement agreement 
available upon a showing of good cause, and therefore, the comments 
cannot be adopted.
    Comment 217: Several comments suggested that the regulations should 
require or set a presumption that the proceeding would be terminated by 
the Board if all petitioners in a proceeding have settled.
    Response: The comments have not been adopted because 35 U.S.C. 
317(a), as amended, and 35 U.S.C. 327(a) provide that if no petitioner 
remains in the review as a result of a settlement, the Office may 
terminate or proceed to rendering final written decision. Further, 35 
U.S.C. 135(e) and (f), as amended, provide some discretion to continue 
aspects of a proceeding. The statutory language for inter partes and 
post-grant review confers discretion to the Office in determining based 
on the facts in a particular review whether to terminate or proceed to 
final written decision. In certain circumstances, conditioning 
termination on the filing of a related paper may be appropriate. For 
example, where the patent owner has agreed that the claims in dispute 
are unpatentable, termination appropriately may be conditioned on the 
submission of a disclaimer of the claims in dispute.
    Comment 218: One comment suggested that the patentability of a 
patent should not be subject to settlement.
    Response: As provided in 35 U.S.C. 317(a), as amended, and 35 
U.S.C. 327(a), if no petitioner remains in the review as a result of a 
settlement, the Office may terminate or proceed to rendering final 
written decision. The statutory language confers discretion to the 
Office in determining based on the facts in a particular review whether 
to terminate or proceed to final written decision. Therefore, 
patentability is not subject to settlement. Moreover, the termination 
of a review because of a settlement has no statutory estoppel effect. 
See 35 U.S.C. 317(a), as amended, and 35 U.S.C. 327(a). Similarly, 35 
U.S.C. 135(e) and (f), as amended, specifically provide discretion to 
consider patentability after an agreement.
    Comment 219: One comment suggested that the statutory requirement 
to show good cause to provide access to a settlement be defined in the 
regulations as met only by compliance with a valid court or agency 
order requiring production of the particular agreement or production in 
response to an appropriate Freedom of Information Act request.
    Response: The comment is not adopted. Under 35 U.S.C. 317(b), as 
amended, and 35 U.S.C. 328(b), the Office is required to provide access 
to another Federal agency on request; thus, the proposal to require an 
order by the other agency is not adopted. The proposal to provide 
access when an appropriate Freedom of Information Act request is made 
by other than a Federal agency without a showing of good cause, is 
inconsistent with 35 U.S.C. 317(b), as amended, and 327(b).
    Comment 220: One comment suggested that a settlement must always be 
entered by the Office without further conditions or consideration by 
the Office. The comment also suggested that proposed Sec.  42.74(a) was 
inconsistent with the requirement to enter settlements.

[[Page 48650]]

    Response: The suggestion to revise Sec.  42.74(a) is not adopted. 
It is agreed that any settlement agreement that is consistent with the 
statutory requirements must be entered by the Office. However, 35 
U.S.C. 317(a), as amended, and 35 U.S.C. 327(a) specifically provide 
that the Office may proceed to a final written opinion even where no 
petitioner remains in the review. Accordingly, providing that the Board 
may independently determine any question of jurisdiction, 
patentability, or Office practice is consistent with the Office's 
statutory authority to continue a review in the absence of any 
petitioner following entry of a settlement.
    Comment 221: One comment suggested that the costs of the proceeding 
after settlement by all petitioners should not be recovered from the 
fee paid by the petitioner.
    Response: 35 U.S.C. 311(a) and 321(a) require that the fee set be 
reasonable in view of the aggregate costs of the review. Where the 
Office determines that the review should continue to a final written 
decision after the last petitioner is removed from the review as a 
result of a settlement, the Office continues to be engaged in a review. 
Accordingly the fee paid by the petitioner must be set based on the 
aggregate costs regardless of any settlement as the Office may continue 
the review.
    Comment 222: Two comments suggested that parties should be 
permitted to file redacted copies of the settlement agreement and that 
the copy as redacted would be accessible to the public.
    Response: 35 U.S.C. 317(b), as amended, and 35 U.S.C. 327(b) 
require that a true copy of the agreement be filed in the Office and 
that the agreement would be available to other Federal agencies on 
written request or to any person on a showing of good cause. It is 
required by 35 U.S.C. 135(e), as amended, that a copy of any agreement 
be provided on such request, and similarly provides that the agreement 
would be available to other Federal agencies on written request or to 
any person on a showing of good cause.

Certificate (Sec.  42.80)

    Comment 223: One comment suggested that the Office should modify 
the rule to refer to the ``final determination'' rather than a ``final 
written decision.''
    Response: 35 U.S.C. 318(b), as amended, and 35 U.S.C. 328(b) 
require the Office to issue a certificate when the Board issues a final 
written decision. Therefore, Sec.  42.80 is consistent with the 
statutory provision.
    Comment 224: One comment suggested that the Office should deem the 
final written decision as the certificate.
    Response: The comment is not adopted. 35 U.S.C. 318(b), as amended, 
and 35 U.S.C. 328(b) require the Office to issue a certificate when the 
Board issues a final written decision. Therefore, Sec.  42.80 is 
consistent with the statutory provision.
    Comment 225: One comment requested clarification whether the Office 
will sua sponte incorporate limitations of base claim and intervening 
claims where a dependent claim has been allowed, and if not, provide an 
opportunity to the patent owner to rewrite the claim in proper form for 
issuance in the certificate.
    Response: The Office will not sua sponte rewrite claims. Dependent 
patent claims that are determined to be patentable need not be 
rewritten even if the parent claim was canceled.

Judicial Review of Board Decision (Sec.  90.1)

    Comment 226: One comment suggested that the Office has no authority 
to decline to conduct interferences based on 35 U.S.C. 141 and 146.
    Response: The Office agrees with the comment that suggested that 
the Office does not have ``authority to decline to conduct 
interferences, on the basis that Congress has not provided judicial 
review to correct the Board's errors under existing 35 U.S.C. 141 and 
146.'' The discussion cited by the comment relates solely to part 90 of 
the regulations, which governs only the judicial review of 
interferences. Thus, the discussion does not purport to address when 
the Director will declare an interference or what regulations will 
govern the conduct of such an interference. As explained in the notice 
of proposed rulemaking (77 FR 6879, 6882), the Office will continue to 
apply the pertinent regulations in part 41 governing the declaration 
and conduct of interferences in effect on July 1, 2012.

Rulemaking Considerations

    The rulemaking considerations for the series of final rules for 
implementing the administrative patent trials as required by the AIA 
have been considered together and are based upon the same assumptions, 
except where differences between the regulations and proceedings that 
they implement require additional or different information. Notably, 
this final rule is directed to generally procedures for administrative 
patent trials including inter partes review, post-grant review, covered 
business method patent review, and derivations.
    A. Administrative Procedure Act (APA): This final rule revises the 
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 or derivation proceeding. This final rule also revises the 
rules 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 
adopted in this notice do not change the substantive criteria of 
patentability. These changes involve rules of agency practice, 
standards and procedure and/or interpretive rules. See Bachow Commc'ns 
Inc. v. FCC, 237 F.3d 683, 690 (DC 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); JEM Broad. Co. v. F.C.C., 22 F.3d 320, 328 (DC Cir. 1994 
(The rules are not legislative because they do not ``foreclose 
effective opportunity to make one's case on the merits''). Moreover, 
sections 6 and 18 of the AIA require the Director to prescribe 
regulations for implementing the new trials.
    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, published these changes for comment as 
it seeks the benefit of the public's views on the Office's proposed 
implementation of these provisions of the AIA. See Rules of Practice 
for Trials Before the Patent Trial and Appeal Board and Judicial Review 
of Patent Trial and Appeal Board Decisions, 77

[[Page 48651]]

FR 6879 (Feb. 09, 2012) (notice of proposed rulemaking).
    The Office received one written submission of comments from the 
public regarding the Administrative Procedure Act. Each component of 
that comment directed to the APA is addressed below.
    Comment 227: One comment suggested that almost all of the proposed 
regulations were legislative and not interpretive rules. That, in turn, 
leads the USPTO to omit required steps in the rulemaking process.
    Response: At the outset, it should be noted that the Office did not 
omit any steps in the rulemaking process. Even though not legally 
required, the Office published notices of proposed rulemaking in the 
Federal Register, solicited public comment, and fully considered and 
responded to comments received. Although the Office sought the benefit 
of public comment, these rules are procedural and/or interpretive. 
Stevens v. Tamai, 366 F3d. 1325, 1333-34 (Fed. Cir. 2004) (upholding 
the Office's rules governing the procedure in patent interferences). 
The final written decisions on patentability which conclude the reviews 
will not be impacted by the regulations, adopted in this final rule, as 
the decisions will be based on statutory patentability requirements, 
e.g., 35 U.S.C. 101 and 102.
    Comment 228: One comment suggested that even if the rules are 
merely procedural, that reliance on Cooper Tech v. Dudas was not 
appropriate and therefore notice and comment was required.
    Response: These rules are consistent with the AIA requirements to 
prescribe regulations to set forth standards and procedures. The rules 
are procedural and/or interpretative. Stevens v. Tamai, 366 F3d. 1325, 
1333-34 (Fed. Cir. 2004) (upholding the Office's rules governing the 
procedure in patent interferences). The Office nevertheless published 
notices of proposed rulemaking in the Federal Register, solicited 
public comment, and fully considered and responded to comments 
received. In both the notice of proposed rulemaking and this final 
rule, the Office cites Cooper Techs. Co v. Dudas, 536 F.3d 1330, 1336, 
37 (Fed. Cir. 2008), for the proposition that 5 U.S.C. 553, and thus 35 
U.S.C. 2(b)(2)(B), does not require notice and comment rulemaking for 
``interpretive rules, general statement of policy, or rules of agency 
organization, procedure or practice.'' The Office's reliance on Cooper 
Technologies is appropriate and remains an accurate statement of 
administrative law. In any event, the Office sought the benefit of 
public comment on the proposed rules and has fully considered and 
responded to the comments received.
    B. Final Regulatory Flexibility Act Analysis: The Office estimates 
that 420 petitions for inter partes review, 50 petitions for post-grant 
review and covered business method patent review combined, and 50 
petitions for seeking institution of a derivation (derivation 
petitions) will be filed in fiscal year 2013. In fiscal year 2014, it 
is estimated that 450 inter partes review, 60 petitions for post-grant 
review and covered business method patent review combined, and 50 
derivation petitions will be filed. In fiscal year 2015, it is 
estimated that 500 inter partes review, 110 petitions for post-grant 
review and covered business method patent review combined, and 50 
derivation petitions will be filed.
    The estimate for inter partes review petitions is based partially 
on the number of inter partes reexamination requests under 37 CFR 1.915 
that have been filed in fiscal years 2010, 2011 and the first half of 
fiscal year 2012. The rate of growth of inter partes reexamination 
filing has slowed considerably in 2012 to roughly 2.6% (374 filings in 
FY 2011, 192 filings in the first half of FY 2012). Assuming some 
increase in growth rate had the AIA not been enacted, it is reasonable 
to now estimate that no more than 420 inter partes reexamination 
requests would have been filed and that a similar number of inter 
partes review will be filed in FY 2013.
    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.
    The Office received 192 requests for inter partes reexamination in 
the first half of fiscal year 2012.
    See http://www.uspto.gov/patents/stats/reexam_operational_statistics_FY12Q2.pdf.
    Additionally, the Office takes into consideration the recent 
moderate 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 section 
6(c) of the AIA, and the more restrictive filing time period in 35 
U.S.C. 315(b), as amended by the AIA.
    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

[[Page 48652]]

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 (Jan. 2012) available at http://www.uspto.gov/web/patents/classification/uspc705/defs705.htm.
    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 qualify 
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. The Office 
estimates zero growth in the number of petitions for covered business 
method review in fiscal year 2014 and 2015.
    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 16, 
2012, are eligible for post-grant review. See Public Law 112-29, Sec.  
6(f), 125 Stat. 284, 311 (2011). It is estimated that 10 petitions for 
post-grant review will be filed in fiscal year 2014 and 60 petitions 
will be filed in fiscal year 2015.
    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 may seek a review of another party's 
issued patent in an interference proceeding. The Office estimates that 
no more than 50 derivation petitions will be filed annually during FY 
2013-2015.
    The Office has updated its review of the entity status of patents 
for which inter partes reexamination was requested from October 1, 
2000, to May 18, 2012. This data only includes filings granted a filing 
date rather than filings in which a request was received. 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 32.09% 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, it is estimated that 146 petitions to 
inter partes review would be filed to seek review of patents owned by a 
small entity annually in fiscal years 2013-2015. Based on an assumption 
that the same percentage of patents owned by small entities will be 
subject to post-grant or covered business method patent review, it is 
estimated that 24 petitions for covered business method patent review 
would be filed to seek review of patents owned by a small entity 
annually in fiscal years 2013-2015.
    For derivation proceedings, the Office has reviewed the percentage 
of applications and patents for which an interference was declared in 
fiscal year 2010. 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 2010. 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 
annually during fiscal years 2013-2015.

                  Table 1--Inter partes Reexamination Requests Filed with Parent Entity Type *
----------------------------------------------------------------------------------------------------------------
                                                                               Number filed
                                                            Inter partes       where parent      Percentage of
                      Fiscal Year                          reexamination     patent is small   small entity-type
                                                           requests filed      entity type          of total
----------------------------------------------------------------------------------------------------------------
2012...................................................                226                 85              37.61
2011...................................................                369                135              36.59
2010...................................................                255                 89               34.9
2009...................................................                237                 61              25.74
2008...................................................                155                 51               32.9
2007...................................................                127                 32               25.2
2006...................................................                 61                 16              26.23
2005...................................................                 59                 20               33.9
2004...................................................                 26                  5             19.23%
2003...................................................                 21                 12             57.14%
2002...................................................                  4                  1             25.00%
2001...................................................                  1                  0              0.00%
                                                                     1,315                422              32.09
----------------------------------------------------------------------------------------------------------------
* Small entity status determined by reviewing preexamination small entity indicator for the parent patent.

    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 
small entity 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 approximately 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

[[Page 48653]]

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 
approximately 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 (135 patents) would be less than 0.05% (135/375,000) of all 
patents in force that are owned by small entities. Moreover, post-grant 
and covered business method patent review and derivation would have an 
even smaller impact.
    1. Description of the Reasons that Action by the Office is Being 
Considered: The Office is revising the rules of practice to implement 
inter partes, post-grant, transitional program for covered business 
method patent review and derivation provisions of the AIA, which take 
effect September 16, 2012, and March 16, 2013. Public Law 112-29, 
Sec. Sec.  3(n) and 6(c) and (f), 125 Stat. 284, 293, 304 and 311 
(2011). The AIA requires the Office to issue regulations to implement 
the new administrative trials.
    2. Statement of the Objectives of, and Legal Basis for, the Final 
Rules: The final rule is part of a series of rules that implement the 
new administrative trials authorized by the AIA. Specifically, this 
final rules implement inter partes review, post-grant review, the 
transitional program for covered business method patents, and some of 
the aspects of derivation proceedings as authorized by the AIA. The AIA 
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 six 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 AIA 
also requires that the Director, in prescribing rules for 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 the instituted proceedings timely. 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 rules are designed to result in a final determination 
by the Patent Trial and Appeal Board within one year of the notice of 
initiation of the review, except where good cause is shown to exist. 
This one-year review will enhance the economy, and improve the 
integrity of the patent system and the efficient administration of the 
Office.
    3. Statement of significant issues raised by the public comments in 
response to the IRFA and the Office's response to such issues: The 
Office published an IRFA analysis to consider the economic impact of 
the proposed rules on small entities. See Rules of Practice for Trials 
before the Patent Trial and Appeal Board and Judicial Review of Patent 
Trial and Appeal Board Decisions, 77 FR 6879, 6893-96 (Feb. 9, 2012). 
The Office received two written submissions of comments from the public 
concerning the Regulatory Flexibility Act. Each component of those 
comment directed to the Regulatory Flexibility Act is addressed below.
    Comment 229: One comment argued that non-office costs and burden 
should include the burden on small entity patent owners, petitioners, 
and licensees, as well as settlement burdens, disruption of businesses, 
or effects on investment, business formation or employment. The comment 
further argued that prophylactic application steps (e.g., filing of 
reissue applications) were not considered and that the offsets for 
inter partes reexamination's elimination were not appropriate.
    Response: As explained in the notice of proposed rulemaking, the 
Office notes that inter partes reexamination is the appropriate 
baseline for estimating economic impacts because the use or outcome of 
the prior reexamination process and the new trial are largely the same. 
See OMB Circular A4, (e)(3). The Office estimated that the same number 
of patents would be subject to inter partes review as would have been 
subject to inter partes reexamination. The comment did not argue that 
this estimate was unreasonable or provide an alternative estimate. 
Considering the similarities in the grounds of review and the number of 
patents subject to the proceedings, it is anticipated that the existing 
inter partes reexamination process, if not eliminated for new filings, 
would have had similar impact on the economy as the new review 
proceedings and therefore the impacts noted in the comment would simply 
replace existing analogous impacts and effects in inter partes 
reexamination. The comment argues that no offset for the replaced 
process should be considered although OMB guidance provides otherwise. 
See OMB Circular A4. Additionally, although the comment argues that the 
new proceedings may result in patent owners taking additional 
prophylactic measures that would have their own burdens for small 
businesses, any patent owner motivated by the regulations adopted in 
this final rule to take prophylactic application steps would similarly 
have been motivated to take those steps under the former inter partes 
reexamination regime. Thus, the burdens on small entity patent owners, 
petitioners, and licensees, as well as settlement burdens, disruption 
of businesses, or effects on investment, business formation or 
employment that are caused by the final rules would have been similarly 
caused by the former inter partes reexamination proceedings as the same 
effects and impacts are caused by the two types of proceedings.
    Additionally, the Office's estimates of the burden on small 
entities are likely overstated. As noted in the notice of proposed 
rulemaking, it is anticipated that the current significant overlap 
between district court litigation and inter partes reexamination may be 
reduced by improvement in the coordination between the two processes. 
See Rules of Practice for Trials before the Patent Trial and Appeal 
Board and Judicial Review of Patent Trial and Appeal Board Decisions, 
77 FR at 6903. Similarly, it is anticipated that the public burden will 
be reduced because the longer duration of the inter partes 
reexamination process will be reduced owing to the anticipated shorter 
duration of the new procedure. Id.
    Comment 230: Two comments indicated that the underlying data for 
the 98.7 hours of judge time for an inter partes review proceeding was 
not provided.
    Response: Based on the Office's experience involving similar 
proceedings, the Office estimates that, on average, an inter partes 
review

[[Page 48654]]

proceeding will require 35 hours of judge time to make a decision on 
institution, 20 hours of judge time to prepare for and conduct 
hearings, 60 hours of judge time to prepare and issue a final decision, 
and 15 hours of judge time to prepare and issue miscellaneous 
interlocutory decisions. It is also estimated that 2.5% of proceedings 
will settle before a decision of whether to institute is made and 
another 2.5% of proceedings will terminate by patent owners filing a 
default judgment motion after institution. The Office estimates that 
10% of proceedings will not be instituted and another 20% of 
proceedings will settle after institution. In settled cases it is 
estimated that 50% of the anticipated motions would not be filed. It 
should be appreciated that cases that terminate prior to the need to 
render a decision on institution, that do request an oral hearing or do 
not require a final decision because of an earlier termination result 
in an average judge time per proceeding which is less than the time 
needed to perform all possible steps in a proceeding.
    4. Description and Estimate of the Number of Affected Small 
Entities:
    A. Size Standard and Description of Entities Affected. The Small 
Business Administration's (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 at 67112 (Nov 20, 2006), 1313 Off. 
Gaz. Pat. Office at 63 (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. 
Specifically, the Office's definition of 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).
    B. Overview of Estimates of Number of Entities Affected. The rules 
will apply to any small entity that either files a petition for inter 
partes review, post-grant review, covered business method patent 
review, or derivation proceeding, or owns a patent application or 
patent subject to such review. As discussed above (which is 
incorporated here), it is anticipated that 420 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. In fiscal year 2014, it 
is estimated that 450 inter partes review, 60 petitions for post-grant 
review and covered business method patent review combined, and 50 
petitions for derivation proceedings will be filed. In fiscal year 
2015, it is estimated that 500 inter partes review, 110 petitions for 
post-grant review and covered business method patent review combined, 
and 50 petitions for derivation proceedings will be filed. The Office 
has reviewed the percentage of patents owned by small entities for 
which inter partes reexamination was requested from October 1, 2000, to 
May 18, 2012. 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 32.09% 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 146 patents owned by small entities would be 
affected annually by inter partes review, and that 24 patents owned by 
small entities would be affected annually 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 2010. 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 2010. 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 
annually during fiscal years 2013-2015.
    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 a request for adverse judgment or fail to participate 
after initiation. Specifically, an estimated 22 patent owners will 
annually file a request for adverse judgment or fail to participate 
after institution in inter partes review, and an estimated four patent 
owners will annually do so in post-grant review and covered business 
method patent review proceedings combined. Based on the percentage of 
small entity-owned patents that were the subject of inter partes 
reexamination (32.09%) from October 1, 2000, to May 18, 2012, it is 
estimated that seven small entities will annually file such requests or 
fail to participate in inter partes review proceedings, and an 
estimated one small entity will annually do so in post-grant review or 
covered business method patent review combined.
    Under the final 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

[[Page 48655]]

owner likely would be advantaged by filing a successful preliminary 
response. In view of these considerations, it is anticipated that 90% 
of patent owners will file a preliminary response. Specifically, the 
Office estimates that 401 patent owners will file a preliminary 
response to an inter partes review petition, and an estimated 64 patent 
owners will file a preliminary response to a post-grant review or 
covered business method patent review petition. Based on the percentage 
of small entity-owned patents that were the subject of inter partes 
reexamination (32.09%), it is estimated that on average 129 small 
entities will annually file a preliminary response to an inter partes 
review petition, and 21 small entities will annually file a preliminary 
response to a post-grant review or covered business method patent 
review petition in fiscal year 2013-2015.
    Under the final 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, available at 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 approximately 10% of the 
petitions for review (51 divided by 516) would be dismissed annually 
based on reviews filed during FY 2013-2015.
    The Office predicts that it will institute ten derivation 
proceedings annually based on petitions seeking derivation filed in 
fiscal years 2013-2015. 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, available at 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 30 requests for 
reconsideration (91 decisions not to institute times 33.333%) will be 
filed. Based on the percentage of small entity-owned patents that were 
the subject of inter partes reexamination (32.09%) 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 six small entities will file a request for a 
reconsideration of a decision dismissing the petition for review or 
derivation in fiscal year 2013. Further, the Office estimates that it 
will issue 321 final written decisions for inter partes reviews, 51 
final written decisions for post-grant reviews, including cover 
business method patent reviews, 6 final written decisions for 
derivation proceedings. Applying the same 33.333% rate, the Office 
estimates 126 requests for reconsiderations ((321 + 51 + 6) times 
33.333%) will be filed based on the final written decisions. Therefore, 
the Office estimates a total of 156 (30 + 126) requests for 
reconsiderations.
    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. This series of final rules adopts changes to 
permit parties to agree to certain changes from the default process 
between themselves without filing a motion with the Board. Based on the 
changes in the final rules, the estimate of the number of motions has 
been revised downwardly so that it is now anticipated that: (1) Inter 
partes reviews will have an average of 6 motions, oppositions, and 
replies per trial after institution, (2) post-grant reviews and covered 
business method patent reviews will have an average of 8 motions, 
oppositions, and replies per trial after institution, and (3) 
derivation proceedings will have an average of 20 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. The Office envisions 
that most motions will be decided in a conference call or shortly 
thereafter.
    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 484 requests for oral hearings 
will be filed annually during FY 2013-2015 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 the notice of proposed rulemaking. Based 
on the percentage of small entity-owned patents that were the subject 
of inter partes reexamination (32.09%), it is estimated that 160 small 
entity patent owners, patent applicants or petitioners will file a 
request for oral hearing in the reviews and derivations instituted 
annually during fiscal years 2013-2015.
    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 
22 requests to treat a settlement as business confidential; 118 
requests for adverse judgment, default adverse judgment, or settlement 
notices; and two arbitration agreements and awards will be filed 
annually based on petitions filed during fiscal years 2013-2015. The 
Office also estimates that 22 requests to make a settlement available 
will be filed annually based on petitions filed during fiscal years 
2013-2015. Based on the percentage of small entity-owned patents that 
were the subject of inter partes reexamination (32.09%) 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 seven small entities will file a request 
to treat

[[Page 48656]]

a settlement as business confidential, 38 small entities will file a 
request for adverse judgment, default adverse judgment notices, or 
settlement notices, and one small entity will file an arbitration 
agreement and award in the reviews and derivations instituted annually 
based on petitions filed during fiscal years 2013-2015.
    Parties to a review or derivation proceeding may seek judicial 
review of the final decision of the Board. Historically, 33% of 
examiners' decisions in inter partes reexamination proceedings have 
been appealed to the Board. Given the increased coordination with 
district court litigation, the Office has adjusted its estimate of the 
appeal rate to be 120% of the historic rate (40% of decisions). Based 
on this rate, 149 additional notices of appeal will be filed based on 
the decisions issued in the new trials annually based on petitions 
filed during fiscal years 2013-2015. Based on current projections with 
additional resources, it is anticipated that the Board will on average 
issue 18,570 decisions on appeal of applications during fiscal years 
2013-2015. Additionally it is anticipated that on average351 decisions 
in reexamination (300) and interferences (51) will be decided in fiscal 
years 2013-2015. It is estimated that 1% of decisions on appeals in 
applications and 20% of decisions on appeal in reexamination or during 
interferences would be appealed. Thus, it is estimated that 256 notices 
of appeal (and notices of election) based on decisions on appeal and 
during interferences would be filed with the Office in addition to the 
149 filed during reviews on average during fiscal years 2013-2015. 
Furthermore, based on the percentage of small entity-owned patents that 
were the subject of inter partes reexamination (32.09%) 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 47 small entities would seek judicial 
review of final decisions of the Board in the reviews (46) and 
derivation proceedings (1) instituted in fiscal year 2013.
    5. Description of the Reporting, Recordkeeping, and Other 
Compliance Requirements of the Final 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 covered 
business method patents that are not patents for technological 
inventions. Under the final rules, a person who is not the owner of a 
patent may file a petition to institute a review of that 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 electronics 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.
    This notice provides the procedural requirements that are common 
for the new trials. Additional requirements are provided in 
contemporaneous trial specific rulemaking. The procedures for petitions 
to institute an inter partes review include those set forth 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 include those set forth 
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 
include those set forth 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 include those set forth 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 and to represent a party in an inter partes reexamination 
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 depending 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.
    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 fees for filing a petition for inter partes review 
are: $27,200 for requesting review of 20 or fewer claims and $600 for 
each claim in excess of 20 for which review is sought. The fees for 
filing a petition for post-grant or covered business method patent 
review would

[[Page 48657]]

be: $35,800 to request review of 20 or fewer claims and $800 for each 
claim in excess of 20 for which review is sought.
    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 fee would increase $75 per claim in excess of 
20. 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 about 100 hours of judge time would be 
required. An additional two hours of judge time for each claim in 
excess of 20 would be required.
    For a petition for post-grant or covered business method patent 
review with 20 or fewer challenged claims, it is anticipated that about 
130 hours of judge time will be required. An additional slightly under 
three hours of judge time for each claim in excess of 20 would be 
required.
    The rules 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 set forth 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 91.6 hours of professional time and cost 
$34,000. The AIPLA Report of the Economic Survey 2011 reported that the 
average cost for inter partes reexamination including the request 
($46,000), the first patent owner response, and third party comments 
was $75,000 (see page I-175) and the mean billing rate for professional 
time of $371 per hour for attorneys in private firms (see page 8). 
Thus, the cost of the first patent owner reply and the third-party 
statement is $29,000, the balance of $75,000 minus $46,000. 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.
    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 $29,680. 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 include those set forth 
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 include 
those set forth 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 include 
those set forth 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 motions, oppositions, and replies after institution. The 
average post-grant or covered business method patent review will have 8 
motions, oppositions, and replies after institution. The average 
derivation proceeding is anticipated to have 20 motions, oppositions, 
and replies after institution. The Office envisions that most motions 
will be decided in a conference call or shortly thereafter.
    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 
set forth 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 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 18.3 hours of 
professional time ($6,800 divided by $371), 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, and requests 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 set forth in Sec. Sec.  42.74(c) and 42.409. The procedures to file 
requests for adverse judgment are set forth in Sec.  42.73(b). The 
procedures to file arbitration agreements and awards are set forth 
Sec.  42.410. The procedures to file requests to make a settlement 
agreement available are set forth in Sec.  42.74(c)(2). It is 
anticipated that requests to treat a settlement as business 
confidential will require two hours of professional time or $742. It is 
anticipated that requests for adverse judgment will require one hour of 
professional time or $371. It is anticipated that arbitration 
agreements and awards will require four hours of professional time or 
$1,484. It is anticipated that a settlement agreement will require 100 
hours of professional time or $37,100 if the parties are not also in 
litigation over the patent and one hour or $371 if the parties are in 
litigation. It is estimated that 100% of covered business method patent 
reviews and 70% of the reviews will have concurrent litigation based on 
standing requirement in covered business method patent reviews and the 
historical rate during inter partes reexamination. It is anticipated 
that requests to make a settlement agreement available will require one 
hour of professional time or $371. The requests to make a settlement 
agreement available will also require payment of a fee of $400 
specified in Sec.  42.15(d). The fee is the same as that 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,

[[Page 48658]]

including notices of appeal and notices of election provided for in 35 
U.S.C. 141, 142, 145, and 146, are set forth 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 six minutes of professional time at 
a cost of $37.10.
    6. Description of Any Significant Alternatives to the Final 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 in the administrative trials 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, available at 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, five-page limit for miscellaneous issues, and 
ten-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 nine months in fiscal year 2011. The percentage of 
contested cases terminated within two 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, available at 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 contested case 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. Section 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 the trials timely. The page limits set forth 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 further 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, and reducing costs for the parties and 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 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

[[Page 48659]]

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 final 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 rule provides up to 60 pages 
in length for a motion requesting inter partes review. Thus, as the 
page limit more than doubles the default page limit currently set for a 
motion before the Board, a 60-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 final 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 80-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 page limit for covered business 
method patent review petitions is 80 pages, which is the same as that 
for post-grant review.
    Petitions to institute derivation proceedings raise a subset of 
issues that are currently raised in contested cases 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 60-page limit is considered sufficient in all but exceptional 
cases.
    The final rule provides 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 contested cases miscellaneous 
motion practice. Accordingly, the 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.
    Section 42.24(b) provides page limits for oppositions filed in 
response to motions. Current practice for other contested cases 
provides an equal number of pages for an opposition as its 
corresponding motion. This is generally consistent with motions 
practice in Federal courts. The rule is consistent with the practice 
for other contested cases.
    Section 42.24(c) provides page limits for replies. Current practice 
for other contested cases provide a 15-page limit for priority motion 
replies, a five-page limit for miscellaneous (procedural) motion 
replies, and a ten-page limit for all other motions. The rule is 
consistent with current contested case practice for procedural motions. 
The rule provides 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 AIA 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 the instituted proceedings timely. 
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), adopting procedures with reasonable page limits is consistent 
with the objectives set forth in the AIA. 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 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 35 U.S.C. 311(b) and 312(c) in effect on September 15, 2012, the AIA 
requires the Director to establish more than one fee for reviews based 
on the total cost of performing the reviews, and does not provide 
explicitly for refund of any part of the fee when the Director 
determines that the review should not be initiated.
    Further, 35 U.S.C. 312(a)(1), as amended, and 35 U.S.C. 322(a)(1) 
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 easily can be determined and administered, which 
avoids delays in the Office and the

[[Page 48660]]

impact on the economy or patent system that would occur if an otherwise 
meritorious petition is refused due to improper fee payment. Any 
subsequent petition could 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, contested cases 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 records were often a collection of disparate issues and 
evidence. This led to lengthy and unwarranted delays in deciding 
contested cases as well as increased costs for parties and the Office. 
Accordingly, this alternative is inconsistent with objectives of the 
AIA 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 the instituted proceedings timely.
    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 ten 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 AIA 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 the instituted proceedings 
timely.
    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 (rather than collected as a single payment on filing 
of the petition) as the proceeding progresses, e.g., 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 
reviews timely, 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 to be 
paid at the time of filing the petition. Accordingly, this alternative 
is inconsistent with objectives of the AIA that the Director, in 
prescribing rules for inter partes review, post-grant review, and 
covered business method patent review, 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 
the instituted proceedings timely.
    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 is setting 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 AIA that the Director, in prescribing rules for 
the inter partes review, post-grant review, and covered business method 
patent review, 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 the instituted 
proceedings timely.
    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 
limited. While an interests-of-justice standard would be employed in 
granting additional discovery in inter partes reviews and derivation 
proceedings, the post-grant and covered business method patent reviews 
would employ a good cause standard in granting additional discovery. 
Parties may, however, agree to additional discovery amongst themselves.
    To promote effective discovery, the 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 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 trials timely. Further, the 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

[[Page 48661]]

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 sets forth 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 instances, 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 a requirement 
that counsel acknowledge 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 rule allows for this practice in the new proceedings 
authorized by the AIA.
    The rules 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 rule delegates 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 and subsequently 
a patent review is 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 AIA that the Director, in 
prescribing rules for 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 the instituted 
proceedings timely.
    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 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 AIA that the Director, in prescribing rules for inter partes 
review, post-grant review, and covered business method patent review, 
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 the instituted proceedings timely.
    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, with the option, as adopted, it is expected that the entity 
size and sophistication would be considered in determining whether 
alternative filing methods would be authorized.
    7. Identification, to the Extent Practicable, of All Relevant 
Federal Rules Which May Duplicate, Overlap, or Conflict with the Final 
Rules: The following rules also provide processes involving patent 
applications and patents:
    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

[[Page 48662]]

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 section 6(c)(3)(C) of the AIA.
    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.
    This notice also revises 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. Parties to a 
review or derivation proceeding may seek judicial review of the final 
decision of the Board. Historically, 33% of examiners' decisions in 
inter partes reexamination proceedings have been appealed to the Board. 
Given the increased coordination with district court litigation, the 
Office has adjusted its estimate of the appeal rate to be 120% of the 
historic rate (40% of decisions). Based on this rate, 149 additional 
notices of appeal will be filed based on the decisions issued in the 
new trials annually based on petitions filed during fiscal years 2013-
2015. Based on current projections with additional resources, it is 
anticipated that the Board will on average issue 18,570 decisions on 
appeal of applications during fiscal years 2013-2015. Additionally it 
is anticipated that on average 351 decisions in reexamination (300) and 
interferences (51) will be decided in fiscal years 2013-2015. It is 
estimated that 1% of decisions on appeals in applications and 20% of 
decisions on appeal in reexamination or during interferences would be 
appealed. Thus, it is estimated that 256 notices of appeal (and notices 
of election) based on decisions on appeal and during interferences 
would be filed with the Office in addition to the 149 filed during 
reviews on average during fiscal years 2013-2015.
    The 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 405 (256 + 149) 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 rules for 
implementing the new review procedures is approximately $94.1 million 
annually for fiscal years 2013-2015. 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 
rules on the public to be $213,666,384.60 in fiscal year 2013, which 
represents the sum of the estimated total annual (hour) respondent cost 
burden ($196,239,188.60) plus the estimated total annual non-hour 
respondent cost burden ($17,427,196.00) provided in Item (O)(II) of the 
Rulemaking Considerations section of this notice, infra. However, since 
the AIA 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 rules should be offset by the 
eliminations of those proceedings and their associated burdens.
    It is estimated that 420 new requests for inter partes 
reexamination would have been filed in FY 2012, 450 new requests in FY 
2014 and 500 new requests in FY 2015 if the AIA had not been enacted 
for an annual average of 456. This estimate is based on the number of 
proceedings filed in fiscal years 2011 (374), 2010 (280), 2009 (258), 
and the first half of FY 2012 (192). Elimination of 456 proceedings 
reduces the public's burden to pay filing fees by $4,012,800 (456 
filings with an $8,800 filing fee due) and the public's burden to 
prepare requests by $20,976,000 (456 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 $89,040,000 (424 proceedings that would be estimated 
to be granted reexamination multiplied by $210,000 which is the average 
cost cited in the AIPLA Report of the Economic Survey 2011 for per 
party costs 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 (424) and the historical rate of 
appeal to the Board (\1/3\) and an average public cost of $38,000). 
Thus, a reduction of $119,386,800 in public burden results from the 
elimination of new filings of inter partes reexamination (the sum of 
$3,696,000 (the filing fees), $19,320,000 (the cost of preparing 
requests), $82,110,000 (the prosecution costs), plus $4,940,000 (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 annually 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 AIA 
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 years 2013-2015 of $39,147,600, or $9,484,400.
    Thus, a total of $119,550,400 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

[[Page 48663]]

reexamination (this total is a sum of the following identified above: 
elimination of filing fees ($3,696,000), cost of preparing requests 
($19,320,000), prosecution costs until close of prosecution 
($82,110,000), burden to appeal to the Board ($4,940,000) in new inter 
partes reexamination proceedings, and the reduction in interference 
burden ($9,484,400)). Therefore, the estimated aggregate burden of the 
rules for implementing the new review proceedings would be 
$94,115,984.60 ($213,666,384.60 minus $119,550,400) in fiscal year 
2013.
    The USPTO expects several benefits to flow from the AIA and these 
rules. It is anticipated that the 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, available at http://www.uspto.gov/patents/Reexamination_operational_statistic_through_FY2011Q4.pdf.
    Likewise, it is anticipated that the rules will minimize 
duplication of efforts. In particular, the AIA 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 AIA and the 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, available at 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 
($94,115,984.60) was not offset by a reduction in burden based on 
improved coordination between district court patent litigation and the 
new inter partes review proceedings.
    The Office received two written submissions of comments from the 
public regarding Executive Order 12866. Each component of those 
comments directed to Executive Order 12866 is addressed below.
    Comment 231: Two comments suggested that the proposed rules would 
have been classified more appropriately as significant under section 
3(f)(4) of Executive Order 12866 because the proposed rules raise novel 
legal or policy issues arising out of legal mandates.
    Response: As stated in the notice of proposed rulemaking and in 
this final rule, the Office of Management and Budget designated the 
proposed rules as significant under Executive Order 12866, but not 
economically significant. The comment does not present what aspect(s) 
of the rule is believed to present novel legal or policy issues.
    Comment 232: One comment suggested that the costs, including any 
prophylactic application steps resulting from the new proceedings, were 
not calculated appropriately when the Office offset the new burdens 
with those removed by elimination of the ability to file new inter 
partes reexamination under Executive Order 12866 and that when 
appropriately calculated, the cost would exceed the $100 million 
threshold for declaring the proposed rules significant under section 
3(f)(1).
    Response: As stated in the notice of proposed rulemaking and in 
this final rule, the Office of Management and Budget designated the 
proposed rules as significant under Executive Order 12866, but not 
economically significant. The Office's baseline costs used to determine 
the increased burden of the proposed rules properly used the burden on 
the public to comply with inter partes reexamination because those 
burdens existed before the statutory change, and that process was 
eliminated and replaced by the process adopted by the AIA as 
implemented this final rule. See OMB Circular A4, section (e)(3). See 
also response to Comment 229.
    Comment 233: One comment argued that the $80,000,000 burden 
estimate is so close to $100,000,000 threshold, that, particularly in 
view of the difficulties in estimating burden, the Office should assume 
that it is likely that the proposed rules would have a $100,000,000 
impact. One comment suggested that the Office should have conducted a 
Regulatory Impact Analysis.
    Response: As stated in the notice of proposed rulemaking and in 
this final rule, the Office of Management and Budget designated the 
proposed rules as significant under Executive Order 12866, but not 
economically significant. The comment did not indicate what aspect of 
the estimate was likely to be wrong. Furthermore, $80,000,000 is twenty 
percent below the $100,000,000 threshold. Moreover, the Office's 
estimate did not take into account the reduction in burden due to 
decreased litigation. Thus, the Office's estimate is likely an 
overstatement of the estimated basis.
    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 rulemaking 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

[[Page 48664]]

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 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 set forth 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 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 0651-0069 when the notice of 
proposed rulemaking was published. The Office published the title, 
description, and respondent description of the information collection, 
with an estimate of the annual reporting burdens, in the Notice ``Rules 
of Practice for Trials before the Patent Trial and Appeal Board and 
Judicial Review of Patent Trial and Appeal Board Decisions,'' 77 FR 
6879 (Feb. 9, 2012) (notice of proposed rulemaking) (RIN 0651-AC70).
    The Office received two comments and made minor revisions to the 
requirements in the rule, as well as the burden estimates, as outlined 
below. Accordingly, the Office has resubmitted the proposed revision to 
the information collection requirements under 0651-0069. The proposed 
revision to the information collection requirements under 0651-0069 is 
available at OMB's Information Collection Web site (www.reginfo.gov/public/do/PRAMain).
    This 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 in 35 U.S.C. 
141, 142, 145 and 146 (Sec. Sec.  90.1 through 90.3).
    The 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

[[Page 48665]]

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 AIA 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 adopted 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 mean billing rate ($371/hour), and the observation that 
the cost of inter partes 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 for instituting 
review are provided in post-grant review or covered business method 
patent review compared with inter partes reexamination, 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.
    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. Thus, for inter partes review, 
considering the percentage of motions on patentability issues based on 
a patent or printed publication on the basis of 35 U.S.C. 102 or 103 
would be appropriate as grounds raised in those proceedings would be 
directed to the same issues. Similarly, for post-grant review and 
transitional proceedings for covered business methods, considering the 
percentage of motions on patentability issues would be appropriate as 
grounds raised in those proceedings would be directed to the same 
issues. 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 
such as inter partes review will have a somewhat less than proportional 
decrease in costs since the overlapping costs will be spread over fewer 
motions as compared with a derivation proceeding.
    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.
    The motions that present claims in excess of the number of claims 
in the patent and in excess of three dependent or more than 20 total 
claims also require payment of statutory fee for presenting such 
claims. See 35 U.S.C. 41(a)(2)(i) and (ii). It is estimated that 20 
percent of instituted proceedings will have one additional independent 
claim and ten additional dependent claims presented in proceedings 
filed in FY 2013. Based on the historical data for inter partes 
reexamination it is estimated that 32.09% of the patent owners 
presenting additional claims will pay small entity fee for the 
additional claims. Thus, it is estimated that 23 small entities will 
pay an additional $110.00 for an additional independent claim and 
$260.00 for ten additional claims in inter partes review proceedings in 
FY 2013. It is estimated that 48 non-small entities will pay an 
additional $220.00 for an additional independent claim and $520.00 for 
ten additional claims in inter partes review proceedings in FY 2013. It 
is estimated that three small entities will pay an additional $110.00 
for an additional independent claim and $260.00 for ten additional 
claims in post-grant review proceedings in FY 2013. It is estimated 
that six non-small entities will pay an additional $220.00 for an 
additional independent claim and $520.00 for ten additional claims in 
post-grant review proceedings in FY 2013. The total excess claim fee 
due from patent owners is estimated to be $49,580 in FY 2013.
    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 is 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

[[Page 48666]]

annual reporting burdens. Included in this estimate is the time for 
reviewing instructions, gathering and maintaining the data needed, and 
completing and reviewing the collection of information. The principal 
impact of the changes in this notice is to implement the changes to 
Office practice necessitated by sections 3(i), 6, and 18 of the AIA.
    The public uses this information collection to request review and 
derivation proceedings as well as 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: 0651-0069.
    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: 1,040 
respondents and 5,059 responses per year.
    Estimated Time per Response: The USPTO estimates that it will take 
the public from 0.1 to 165.3 hours to gather the necessary information, 
prepare the documents, and submit the information to the USPTO.
    Estimated Total Annual Respondent Burden Hours: 528,946.6 hours per 
year.
    Estimated Total Annual (Hour) Respondent Cost Burden: 
$196,239,188.60 per year. The USPTO expects that the information in 
this collection will be prepared by attorneys. Using the professional 
rate of $371 per hour for attorneys in private firms, the USPTO 
estimates that the respondent cost burden for this collection will be 
approximately $196,239,188.60 per year (528,946.6 hours per year 
multiplied by $371 per hour).
    Estimated Total Annual Non-Hour Respondent Cost Burden: 
$17,427,196.00 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 three 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 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 $18.95. The USPTO 
estimates that the total postage cost associated with this collection 
will be approximately $76 per year. The USPTO estimates that the total 
fees associated with this collection will be approximately 
$17,427,120.00 per year.
    Therefore, the total cost burden in fiscal year 2013 is estimated 
to be $213,666,384.60 (the sum of the estimated total annual (hour) 
respondent cost burden ($196,239,188.60) plus the estimated total 
annual non-hour respondent cost burden ($17,427,196.00)).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Proposed        Proposed        Proposed     Final estimated       Final
                                                         estimated time     estimated       estimated        time for        estimated         Final
                         Item                             for response       annual       annual burden      response         annual         estimated
                                                            (hours)         responses         hours          (hours)         responses     annual burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
Petition for inter partes review......................            135.3             460       62,238               124               456       56,544
Petition for post-grant review or covered business                180.4              50        9,020               165.3              73       12,066.90
 method patent review.................................
Petition for derivation...............................            180.4              50        9,020               165.3              50        8,265
Reply to initial inter partes review petition.........            100               406       40,600                91.6             401       36,731.60
Reply to initial post-grant review or covered business            100                45        4,500                91.6              64        5,862.40
 method patent review.................................
Request for Reconsideration...........................             80               141       11,280                80               156       12,480
Motions, replies and oppositions after institution in             140             2,453      343,420               140              2166      303,240
 inter partes review..................................
Motions, replies and oppositions after institution in             130               342       44,460               130               460       59,800
 post-grant review or covered business method patent
 review...............................................
Motions, replies and oppositions in derivation                    120               210       25,200               120               180       21,600
 proceeding...........................................
Request for oral hearing..............................             20               456        9,120                18.3             484        8,857.2
Request to treat a settlement as business confidential              2                18           36                 2                22           44
Request for adverse judgment, default adverse judgment              1               101          101                 1                85           85
 or settlement (parties in litigation over patent)....
Settlement parties not in litigation..................            n/a               n/a          n/a               100                33         3300
Arbitration agreement and award.......................              4                 2            8                 4                 2            8

[[Page 48667]]

 
Request to make a settlement agreement available......              1                18           18.00              1                22           22
Notice of judicial review of a Board decision (e.g.,                0.1             194           19.4               0.1             405           40.5
 notice of appeal under 35 U.S.C. 142)................
                                                       -------------------------------------------------------------------------------------------------
    Totals............................................                            4,967      559,648.4                             5,059      528,946.6
--------------------------------------------------------------------------------------------------------------------------------------------------------


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Proposed                        Proposed          Final                           Final
                                                             estimated     Proposed fee      estimated       estimated                       estimated
                          Item                                annual          amount       annual filing      annual        Fee amount     annual filing
                                                             response                          costs         responses                         costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Petition for inter partes review........................             460         $35,800     $16,468,000             456       * $31,400     $14,318,400
Petition for post-grant review or covered business                    50          47,100       2,355,000              73        * 41,400       3,022,200
 method patent review...................................
Petition for derivation.................................              50             400          20,000              50             400          20,000
Reply to inter partes review petition...................             406               0               0             401               0               0
Reply to post-grant review or covered business method                 45               0               0              64               0               0
 patent review petition.................................
Request for Reconsideration.............................             141               0               0             156               0               0
Motions, replies and oppositions after initiation in               2,453               0               0           2,086               0               0
 inter partes review with no excess claims..............
Motions in inter partes review with excess claims by                 n/a             n/a             n/a              26             370           9,620
 small entity patent owners.............................
Motions in inter partes review with excess claims by                 n/a             n/a             n/a              54             740          39,960
 other than small entity patent owners..................
Motions, replies and oppositions after initiation in                 342               0               0             471               0               0
 post-grant review or covered business method patent
 review with no excess claims...........................
Motions in post-grant review or covered business method              n/a             n/a             n/a               4             370           1,480
 patent review with excess claims by other than small
 entity patent owners...................................
Motions in post-grant review or covered business method              n/a             n/a             n/a               9             740           6,660
 patent review with excess claims by small entity patent
 owners.................................................
Motions, replies and oppositions in derivation                       210               0               0             180               0               0
 proceeding.............................................
Request for oral hearing................................             456               0               0             484               0               0
Request to treat a settlement as business confidential..              18               0               0              22               0               0
Request for adverse judgment, default adverse judgment               101               0               0             118               0               0
 or settlement..........................................
Arbitration agreement and award.........................               2               0               0               2               0               0
Request to make a settlement agreement available........              18             400           7,200              22             400           8,800
Notice of judicial review of a Board decision (e.g.,                  51               0               0             405               0               0
 notice of appeal under 35 U.S.C. 142)..................
                                                         -----------------------------------------------------------------------------------------------
    Totals..............................................           4,967                      18,851,000           5,059                      17,427,120
--------------------------------------------------------------------------------------------------------------------------------------------------------
\*\ Average.

    Notwithstanding any other provision of law, no person is required 
to respond to nor shall a person be subject to a penalty for failure to 
comply with a collection of information subject to the requirements of 
the Paperwork Reduction Act unless that collection of information 
displays a currently valid OMB control number.
    The Office received two written submissions of comments regarding 
the Paperwork Analysis Act. Each component of those comment directed 
the Paperwork Reduction Act is addressed below.
    Comment 234: One comment suggested that inter partes reexamination 
is a very poor proxy for these proceedings because there have been very 
few completed proceedings relative to all filing of inter partes 
reexaminations from 2001 to 2011 and the comment claims that the 
completed proceeding are only the least complex of proceedings which 
the comment alleges result in a sampling bias.

[[Page 48668]]

    Response: While only 305 inter partes reexamination proceedings 
have resulted in a certificate, the comment is not correct that only 
the least complex of proceedings have been completed. The number of 
filings of inter partes reexamination has increased considerably in the 
last three full years. See Rules of Practice for Trials before the 
Patent Trial and Appeal Board and Judicial Review of Patent Trial and 
Appeal Board Decisions, 77 FR at 6893. For example, in the last three 
years 824 or 64% of the 1,278 requests filed from 2001 to 2011 were 
filed. Considering that the average time from filing to certificate for 
the 305 certificates was 36.2 months and the median pendency was 32.9 
months, it would have been more appropriate for the comment to consider 
the 305 certificates that have issued compared with the filings from 
2001 to 2008. During that time period there were 467 requests filed, 14 
requests were subsequently denied a filing date, 53 requests were 
denied on the merits, 246 had concluded with a certificate by September 
30, 2011, and 154 were still pending on September 30, 2011. Of the 154 
that were still pending, only one was before the examiner after a non-
final rejection, only three had an action closing prosecution as the 
last action, and only three had a right of appeal notice as the last 
action. Most of the 154 proceedings were subject to appeal proceedings 
or were in the publication process. Accordingly, inter partes 
reexamination is an appropriate proxy.
    Comment 235: One comment suggested that for matters not 
concurrently in litigation, the Office's two hour estimate for public 
burden of settlement under the Paperwork Reduction Act was unreasonably 
low by a factor of 30-100 and must include the costs to arrive at the 
settlement in addition to the cost of submitting the agreement to the 
Office. The comment asserts that this burden is fully cognizable under 
the Paperwork Reduction Act.
    Response: This comment was adopted in part. For inter partes and 
post-grant review proceedings where the parties are not also in 
district court litigations regarding the patent, the burden has been 
increased to 100 hours per settlement as suggested as the highest 
estimate in the comment. Based partially on historical data for inter 
partes reexamination, it is estimated that 30% of reviewed patents will 
not be subject to concurrent litigation.
    By statute, any petitioner seeking review of a covered business 
method must also be in litigation regarding the patent or have been 
charged with infringement. The comment only argued that for parties not 
in litigation, the cost of settlement was too low. Therefore, this 
comment is not pertinent to this rulemaking and is not adopted.
    Any petitioner seeking review of a covered business method under 
the transitional program, however, is also in concurrent litigation. 
Thus, the estimated burden for settlement in those proceeding has not 
be revised in view of the comment.
    Comment 236: Two comments requested that the Office set forth the 
basis for the number of petitions for review.
    Response: As discussed above in item B, the Office considered the 
actual number of inter partes reexamination requests filed during FY 
2001-2011 and the anticipated number of requests in FY 2012, the number 
of such requests of patents classified in Class 705, the number of 
interferences, and the differences between reexamination and the new 
review. The Office estimated the number of reviews based on the 
historical data on the number of filings in the most analogous 
proceedings. See Transitional Program for Covered Business Method 
Patents--Definition of Technological Invention, 77 FR at 7097.
    Comment 237: One comment suggested that a projection for at least 
three years of growth in future filings is necessary because the PRA 
clearance is for three years. The comment also seeks disclosure of 
USPTO's estimation models.
    Response: The suggestion has been adopted. The Office estimates 
moderate aggregate growth for petitions seeking inter partes review and 
post-grant review, as set forth in item B above. Further, the Office 
estimates no growth for petitions seeking review under the transitional 
program for covered business method patents during the three year 
period. Calculations for these numbers are providing in the supporting 
statement for this collection. In 2013, the number of eligible patents 
will include patents for which currently in litigation. In subsequent 
years, the number of eligible patents is expected to be reduced, 
because some proceedings will have been settled, while others will have 
been stayed pending a review. At the same time, as experience in the 
procedure becomes more wide spread, the public would more likely seek a 
review. Because these two factors offset each other, the Office is 
anticipated zero growth for petitions for the covered business method 
patent review.
    Comment 238: Two comments noted that the distribution of claims for 
the review was not disclosed during the comment period. The comment 
asserts that failure to disclose underlying data in the Notice of 
Proposed Rulemaking violates the Paperwork Reduction Act (and other 
requirements).
    Response: The distribution of claims for which review will be 
requested was estimated based on the number of claims for which inter 
partes reexamination was requested in the first 60 requests filed 
during the second quarter of FY 2011 as that data was the most timely 
when the proposed rule notices were drafted. That data was publically 
available when the notice of proposed rulemaking was published and 
remains available today. See http://portal.uspto.gov/external/portal/pair. A summary of that publicly available data is provided as follows: 
40 of the 60 proceedings requested review of 20 or fewer claims; eight 
of the 60 requested review of between 21 and 30 claims; three of the 60 
requested review of between 31 and 40 claims; six of the 60 requested 
review of between 41 and 50 claims; one of the 60 requested review of 
between 51 and 60 claims; one of the 60 requested review of between 61 
and 70 claims; and one of the 60 requested review of between 91 and 100 
claims. A second group of 20 proceedings filed after September 15, 
2011, were reviewed to determine if the change to the statutory 
threshold resulted in a clear change in the number of claims for which 
review was requested. A summary of that data is provided as follows: 13 
of 20 requested review of 20 or fewer claims; three of 20 requested 
review of between 21 and 30 claims; three of 20 requested review of 
between 31 and 40 claims; and one of 20 requested review of 53 claims.
    Comment 239: One comment suggested that the estimate of the number 
of post-grant review proceedings should be doubled based on the 
analysis of the University of Houston of patent cases from 2005-2009. 
According to the comment, this analysis shows that for every 15 
decisions involving printed prior art grounds, there were 13 decisions 
involving public use, ``on sale,'' or 35 U.S.C. 112.
    Response: The suggestion is not adopted. While the Office agrees 
that many decisions involved public use, ``on sale,'' or 35 U.S.C. 112, 
the comment and the analysis by the University of Houston did not 
consider which decisions did not include a prior art grounds, but did 
include a public use, ``on sale,'' or 35 U.S.C. 112 ground. Only the 
subset of decisions including the newly available grounds could be used 
appropriately in estimating an increased rate of post-grant review 
filings relative to inter partes review.

[[Page 48669]]

The comment also did not address how the limited filing window relative 
to the filing of district court litigation for post-grant review would 
be addressed appropriately if the University of Houston study served as 
a basis for the estimates.
    Comment 240: One comment suggested that the hourly rate for 
practitioners should be raised from $340 (the median hourly rate from 
the AIPLA economical survey referenced in the notice of proposed 
rulemaking) to $500. The comment asserts that using the median hourly 
rate from the AIPLA Economic Survey of $340 is analytically wrong and 
that, at a minimum, the higher mean rate of $371 from that survey 
should be used.
    Response: The suggestion is adopted in part. The Office has adopted 
a mean hourly rate of $371 from the AIPLA Economic Survey, rather than 
the median hourly rate of $340 from that survey. The suggestion of a 
$500 hourly rate cannot be adopted because the comment did not provide 
any data to support the validity of hourly rate suggested and the 
Office believes, based on its experience, that $371 is a better 
estimate of the average hourly rate.
    Comment 241: The comments suggested that reliance on the AIPLA 
economic survey was inappropriate as the survey is flawed. The comment 
asserts that the survey is unreliable for estimating paperwork burden 
under the Information Quality Act.
    Response: In providing estimates of burden hours, the USPTO 
sometimes referenced the AIPLA economic survey report, as a benchmark 
for the estimates. While the costs reported in the survey were 
considered, the Office, in estimating the cost of the collection, also 
considered the work required to prepare and file the submissions.
    Under the USPTO's Information Quality Guidelines (ICG), the AIPLA 
economic survey report is not a ``dissemination'' of information. The 
Guidelines state that ``dissemination'' means an ``agency initiated or 
sponsored distribution of information to the public.'' USPTO's ICG, 
Section IV, A, 1. Subsection (a) further defines ``agency initiated 
distribution of information to the public'' to mean ``information that 
the agency distributes or releases which reflects, represents, or forms 
any part of the support of the policies of the agency.'' Id. at Section 
IV, A, 1, a. The USPTO did not distribute or release the AIPLA economic 
survey report.
    Likewise, the AIPLA economic survey report does not qualify as an 
``agency sponsored distribution of information'' under Subsection (b) 
of the Guidelines, which ``refers to situations where the agency has 
directed a third party to distribute or release information, or where 
the agency has the authority to review and approve the information 
before release.'' Id. at Section IV, A, 1, b. The USPTO did not 
commission the report, had no input into the structure of the report 
and does not rely exclusively upon the results of the report to arrive 
at estimates. No correction of the documents is required because the 
Office utilized the AIPLA economic survey report in formulating some 
burden estimations. No correction is required under the Information 
Quality Act.
    Comment 242: One comment suggested that the regulations imposed a 
substantial paperwork burden without a valid OMB Control Number.
    Response: The suggestion is not adopted. OMB Control number 0651-
0069 has been requested appropriately and is pending.
    Comment 243: One comment suggested that the USPTO's estimates 
systematically ignore burdens and costs associated with the attorney's 
client company.
    Response: See response to Comment 229.
    Notwithstanding any other provision of law, no person is required 
to respond to nor shall a person be subject to a penalty for failure to 
comply with a collection of information subject to the requirements of 
the Paperwork Reduction Act unless that collection of information 
displays a currently valid OMB control number.

List of Subjects

37 CFR Part 1

    Administrative practice and procedure, Courts, Freedom of 
Information, Inventions and patents, Reporting and recordkeeping 
requirements, Small Businesses.

37 CFR Part 42

    Administrative practice and procedure, Inventions and patents, 
Lawyers.

37 CFR Part 90

    Administrative practice and procedure, Inventions and patents, 
Lawyers.

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 amends chapter I of title 37 of the Code of 
Federal Regulations as follows:

PART 1--RULES OF PRACTICE IN PATENT CASES

0
1. The authority citation for 37 CFR part 1 continues to read as 
follows:

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


Sec.  1.301  [Removed and reserved]

0
2. Section 1.301 is removed and reserved.


Sec.  1.302  [Removed and reserved]

0
3. Section 1.302 is removed and reserved.


Sec.  1.303  [Removed and reserved]

0
4. Section 1.303 is removed and reserved.


Sec.  1.304  [Removed and reserved]

0
5. Section 1.304 is removed and reserved.

0
6. Part 42 is added to read as follows:

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

Subpart A--Trial Practice and Procedure

Sec.

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.

[[Page 48670]]

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, including:
    (1) For petition decisions and interlocutory decisions, a Board 
member or employee acting with the authority of the Board.
    (2) For final written decisions under 35 U.S.C. 135(d), 318(a), and 
328(a), a panel 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 to the extent 
available. 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, or a 
termination of a proceeding.
    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 or assignee of the involved 
application.
    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 
consistent with any time period required by statute.


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:
    (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 four characters 
per centimeter (ten characters per inch);
    (iii) Double spacing must be used except in claim charts, headings, 
tables

[[Page 48671]]

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, PO 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) Electronic or other mode. Service may be made 
electronically upon agreement of the parties. Otherwise, service may be 
by EXPRESS MAIL[supreg] or by means at least as fast and reliable as 
EXPRESS MAIL[supreg].
    (2) Simultaneous with filing. Each document filed with the Board, 
if not previously served, must be served simultaneously on each 
opposing party.
    (3) Counsel of record. If a party is represented by counsel of 
record in the proceeding, service must be on counsel.
    (4) 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:
    (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.  3.71 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 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 must 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 the condition that 
lead counsel be a registered practitioner and to any other conditions 
as the Board may impose. For example, where the lead counsel is a 
registered practitioner, a motion to appear pro hac vice by counsel who 
is not a registered practitioner may be granted upon showing that 
counsel is an experienced litigating attorney and has an established 
familiarity with the subject matter at issue in the proceeding.
    (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 involved in the proceeding 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;

[[Page 48672]]

    (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 one or more of the following:
    (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 to the 
United States Reports is preferred.
    (b) For any decision other than a United States Supreme Court 
decision, citation to the West Reporter System is preferred.
    (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) For each claim in excess of 20 claims...............          600.00
 

    (b) On filing a petition for post-grant review of a patent, or a 
petition for review of a covered business method patent, payment of the 
following fee is due based upon the number of challenged claims:

(1) 1 to 20 claims......................................      $35,800.00
(2) For each claim in excess of 20 claims...............          800.00
(c) On the filing of a petition for a derivation                  400.00
 proceeding a fee of:...................................
(d) Any request requiring payment of a fee under this             400.00
 part, including a written request to make a settlement
 agreement available:...................................
 

    (e) For presenting each independent claim in excess of 3 and also 
in excess of the number of claims in independent form in the patent the 
fee set forth in Sec.  1.16(h).
    (f) For presenting each claim in excess of 20 and also in excess of 
the number of claims in the patent the fee set forth in Sec.  1.16(i).

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; and
    (2) 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 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 petition or motion may 
include a statement of material fact. Each material fact preferably 
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

[[Page 48673]]

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 or patent owner response.


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 any statement of material facts 
to be admitted or denied 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: 60 pages.
    (ii) Petition requesting post-grant review: 80 pages.
    (iii) Petition requesting covered business method patent review: 80 
pages.
    (iv) Petition requesting derivation proceeding: 60 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) Patent owner responses and oppositions. The page limits set 
forth in this paragraph do not include a listing of facts which are 
admitted, denied, or cannot be admitted or denied.
    (1) The page limits for a patent owner preliminary response to 
petition are the same as the page limits for the petition.
    (2) The page limits for a patent owner response to petition are the 
same as the page limits for the petition.
    (3) The page limits for oppositions are the same as those for 
corresponding motions.
    (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 oppositions: 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) Mandatory initial disclosures.
    (1) With agreement. Parties may agree to mandatory discovery 
requiring the initial disclosures set forth in the Office Patent Trial 
Practice Guide.
    (i) The parties must submit any agreement reached on initial 
disclosures by no later than the filing of the patent owner preliminary 
response or the expiration of the time period for filing such a 
response. The initial disclosures of the parties shall be filed as 
exhibits.
    (ii) Upon the institution of a trial, parties may automatically 
take discovery of the information identified in the initial 
disclosures.
    (2) Without agreement. Where the parties fail to agree to the 
mandatory discovery set forth in paragraph (a)(1), a party may seek 
such discovery by motion.
    (b) Limited discovery. A party is not entitled to discovery except 
as provided in paragraph (a) of this section, or as otherwise 
authorized in this subpart.
    (1) Routine discovery. Except as the Board may otherwise order:
    (i) Unless previously served or otherwise by agreement of the 
parties, any exhibit cited in a paper or in testimony must be served 
with the citing paper or testimony.
    (ii) Cross examination of affidavit testimony is authorized within 
such time period as the Board may set.
    (iii) Unless previously served, a party must serve relevant 
information that is inconsistent with a position advanced by the party 
during the proceeding concurrent with the filing of the documents or 
things that contains the inconsistency. This requirement does not make 
discoverable anything otherwise protected by legally recognized 
privileges such as attorney-client or attorney work product. This 
requirement extends to inventors, corporate officers, and persons 
involved in the preparation or filing of the documents or things.
    (2) Additional discovery. (i) The parties may agree to additional 
discovery between themselves. Where the parties fail to agree, a party 
may move for additional discovery. The moving party must show that such 
additional discovery is in the interests of justice, except in post-
grant reviews where additional discovery is limited to evidence 
directly related to factual assertions advanced by either party in the 
proceeding (see Sec.  42.224). The Board may specify conditions for 
such additional discovery.
    (ii) 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.
    (c) Production of documents. Except as otherwise ordered by the 
Board, a party producing documents and things shall either provide 
copies to the opposing party or make the documents and things available 
for inspection and copying at a reasonable time and location in the 
United States.


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

[[Page 48674]]

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. Parties may agree to video-recorded testimony, but may not 
submit such testimony without prior authorization of the Board. In 
addition, the 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) Uncompelled deposition testimony outside the United States may 
only be taken upon agreement of the parties or as the Board 
specifically directs.
    (c) Duration. (1) Unless stipulated by the parties or ordered by 
the Board, direct examination, cross-examination, and redirect 
examination for compelled deposition testimony shall be subject to the 
following time limits: Seven hours for direct examination, four hours 
for cross-examination, and two hours for redirect examination.
    (2) Unless stipulated by the parties or ordered by the Board, 
cross-examination, redirect examination, and re-cross examination for 
uncompelled direct deposition testimony shall be subject to the 
following time limits: Seven hours for cross-examination, four hours 
for redirect examination, and two hours for re-cross examination.
    (d) 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 three 
business days prior to the conference in paragraph (d)(1) of this 
section, or if there is no conference, at least ten days prior to the 
deposition, 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 ten 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.
    (iv) Where an additional party seeks to take direct testimony of a 
third party witness at the time and place noticed in paragraph (d)(5) 
of this section, the additional party must provide a counter notice 
that lists the exhibits to be relied upon in the deposition and a 
general description of the scope and nature of the testimony to be 
elicited.
    (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.
    (e) 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 five business days before the 
deposition.
    (f) 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 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(c), 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

[[Page 48675]]

    (vii) If a witness refuses to read or sign the transcript, the 
circumstances under which the witness refused.
    (7) Except where the parties agree otherwise, the proponent of the 
testimony must arrange for providing a copy of the transcript to all 
other 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.
    (g) 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 may file a motion to seal where the motion to seal 
contains a proposed protective order, such as the default protective 
order set forth in the Office Patent Trial Practice Guide. 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
    (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 
institution of the requested trial will constitute a grant of the 
motion to seal unless otherwise ordered by the Board.
    (a) Default protective order. Where a motion to seal requests entry 
of the default protective order set forth in the Office Patent Trial 
Practice Guide, the petitioner must file, but need not serve, the 
confidential information under seal. The patent owner may only access 
the filed sealed information prior to the institution of the trial by 
agreeing to the terms of the default protective order or obtaining 
relief from the Board.
    (b) Protective orders other than default protective order. Where a 
motion to seal requests entry of a protective order other than the 
default protective order, the petitioner must file, but need not serve, 
the confidential information under seal. The patent owner may only 
access the sealed confidential information prior to the institution of 
the trial by:
    (1) agreeing to the terms of the protective order requested by the 
petitioner;
    (2) agreeing to the terms of a protective order that the parties 
file jointly; or
    (3) obtaining entry of a protective order (e.g., the default 
protective order).


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 a proceeding before 
the Board under part 42.
    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 2001-2999.
    (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

[[Page 48676]]

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. A current exhibit 
list must be served whenever evidence is served and the current exhibit 
list must be filed when filing exhibits.


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

    (a) Deposition evidence. 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 evidence. For evidence other than deposition evidence:
    (1) Objection. Any objection to evidence submitted during a 
preliminary proceeding must be served within ten business days of the 
institution of the trial. Once a trial has been instituted, any 
objection must be served within five 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. The motion may be 
filed without prior authorization from the Board.


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 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 five 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. 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. A panel decision on an 
issue will govern the trial.
    (c) Petition decisions. A decision by the Board on whether to 
institute a trial is final and nonappealable. A party may request 
rehearing on a decision by the Board on whether to institute a trial 
pursuant to paragraph (d) of this section. When rehearing a decision on 
petition, a panel will review the decision for an abuse of discretion.
    (d) Rehearing. A party dissatisfied with a decision may file a 
request for rehearing, without prior authorization from the Board. 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 a non-final decision or a 
decision to institute a trial as to at least one ground of 
unpatentability asserted in the petition; or
    (2) Within 30 days of the entry of a final decision or a decision 
not to institute a trial.


Sec.  42.72  Termination of trial.

    The Board may terminate a trial without rendering a final written 
decision, 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, except in the case of a termination, disposes of 
all issues that were, or by motion reasonably could have 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 requesting or maintaining a proceeding 
with respect to a claim for which it has obtained a final written 
decision on patentability in an inter partes review, post-grant review, 
or a covered business method patent review, on 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 is 
precluded from taking action inconsistent with the adverse judgment, 
including obtaining in any patent:

[[Page 48677]]

    (i) A claim that is not patentably distinct from a finally refused 
or canceled claim; or
    (ii) An amendment of a specification or of a drawing that was 
denied during the trial proceeding, but this provision does not apply 
to an application or patent that has a different written description.


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.

0
7. 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 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 provide sufficient information to 
allow the Director to determine whether to exercise the right to 
intervene in the appeal pursuant to 35 U.S.C. 143, and it 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.

[[Page 48678]]

    (2) The request must be filed as provided in Sec.  104.2 of this 
title.

    Dated: July 16, 2012.
David J. Kappos,
Under Secretary of Commerce for Intellectual Property and Director of 
the United States Patent and Trademark Office.
[FR Doc. 2012-17900 Filed 8-13-12; 8:45 am]
BILLING CODE 3510-16-P