[Federal Register Volume 77, Number 157 (Tuesday, August 14, 2012)]
[Rules and Regulations]
[Pages 48680-48732]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-17906]
[[Page 48679]]
Vol. 77
Tuesday,
No. 157
August 14, 2012
Part III
Department of Commerce
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Patent and Trademark Office
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37 CFR Part 42
Changes to Implement Inter Partes Review Proceedings, Post-Grant Review
Proceedings, and Transitional Program for Covered Business Method
Patents; Final Rule
Federal Register / Vol. 77 , No. 157 / Tuesday, August 14, 2012 /
Rules and Regulations
[[Page 48680]]
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DEPARTMENT OF COMMERCE
Patent and Trademark Office
37 CFR Part 42
[Docket No. PTO-P-2011-0083]
RIN 0651-AC71
Changes to Implement Inter Partes Review Proceedings, Post-Grant
Review Proceedings, and Transitional Program for Covered Business
Method Patents
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 create the new inter
partes review proceeding, post-grant review proceeding, and
transitional post-grant review proceeding for covered business method
patents, to be conducted before the Patent Trial and Appeal Board
(Board). These provisions of the AIA will take effect on September 16,
2012, one year after the date of enactment.
DATES: Effective Date: September 16, 2012.
Applicability Dates: The changes for inter partes review
proceedings apply to any patent issued before, on, or after September
16, 2012 (subpart B).
The changes for post-grant review proceedings generally apply to
patents issuing from applications subject to first-inventor-to-file
provisions of the AIA (subpart C). In addition, the Chief
Administrative Patent Judge may, in the interests-of-justice, order an
interferences commenced before September 16, 2012, to be dismissed
without prejudice to the filing of a petition for post-grant review.
See 42.200(d) and Sec. 6(f)((3)(A) of the AIA.
The changes for transitional program for covered business method
patents apply to any covered business method patent issued before, on,
or after September 16, 2012 (subpart D).
FOR FURTHER INFORMATION CONTACT: Michael P. Tierney, Lead
Administrative Patent Judge, Sally G. Lane, Administrative Patent
Judge, Sally C. Medley, Administrative Patent Judge, Robert A. Clarke,
Administrative Patent Judge, and Joni Y. Chang, 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 inter partes review proceedings, post-
grant review proceedings, and transitional post-grant review
proceedings for covered business method patents. The USPTO is engaged
in a transparent process to create a timely, cost-effective alternative
to litigation. Moreover, the rules are 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 would provide a set of rules relating to
Board trial practice for inter partes review proceedings, post-grant
review proceedings, and transitional post-grant review proceedings for
covered business method patents.
Summary of Major Provisions: Consistent with section 6 of the AIA,
this final rule sets forth for inter partes review: (1) The
requirements for a petition to institute an inter partes review of a
patent; (2) the standards for showing of sufficient grounds to
institute an inter partes review; (3) the standards for instituting an
inter partes review; (4) the procedures for conducting an inter partes
review that permits a patent owner response, a submission of written
comments, and an oral hearing; (5) the standards and procedures for
discovery and for the patent owner to move to amend the patent; and (6)
the time periods for completing the review (subpart B of 37 CFR part
42).
Consistent with section 6 of the AIA, this final rule sets forth
for post-grant review: (1) The requirements for a petition to institute
a post-grant review of a patent; (2) the standards for showing of
sufficient grounds to institute a post-grant review; (3) the standards
for instituting a post-grant review; (4) the procedures for conducting
a post-grant review that permits a patent owner response, a submission
of written comments, and an oral hearing; (5) the standards and
procedures for discovery and for the patent owner to move to amend the
patent; and (6) the time periods for completing the review (subpart C
of 37 CFR part 42).
Consistent with sections 6 and 18 of the AIA, this final rule
further sets forth for transitional post-grant review of covered
business method patents: (1) The requirements for a petition to
institute a post-grant review of a covered business method patent; (2)
the standards for showing of sufficient grounds to institute a post-
grant review of a covered business method patent; (3) the standards for
instituting a post-grant review of a covered business method patent;
(4) the procedures for conducting a post-grant review that permits a
patent owner response, a submission of written comments, and an oral
hearing; (5) the standards and procedures for discovery and for the
patent owner to move to amend the patent; and (6) the time periods for
completing the review (subpart D of 37 CFR part 42).
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 sections 6 and 18 of the AIA, 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, 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
[[Page 48681]]
(Feb. 10, 2012), to provide rules specific to derivation proceedings by
adding a new subpart E to 37 CFR part 42 (RIN 0651-AC74).
This final rule adopts the proposed rules, with modifications, set
forth in the three notices of proposed rulemaking: 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), except for definitions of the terms
``covered business method patent'' and ``technological invention''
which are set forth in a separate final rule (RIN 0651-AC75). The
definition of the term ``technological invention'' was proposed in
another notice of proposed rulemaking (77 FR 7095).
In a separate final rule, the Office adopts the proposed rules,
with modifications, set forth in 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).
In a third final rule, the Office adopts the proposed definitions
of a ``covered business method patent'' and ``technological invention''
set forth in the following notices of proposed rulemaking: Changes to
Implement Transitional Program for Covered Business Method Patents, 77
FR 7080 (Feb. 10, 2012); and Transitional Program for Covered Business
Method Patents--Definition of Technological Invention, 77 FR 7095 (Feb.
10, 2012).
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) (hereafter ``Practice Guide
for Proposed Trial Rules'' 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 the AIA.
In response to the notices of proposed rulemaking and the Practice
Guide notice, the Office received 251 submissions of 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 124 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 modifications to the
proposed rules to provide clarity and to balance the interests of the
public, patent owners, patent challengers, and other interested
parties, in light of the statutory requirements and considerations,
such as the effect of the regulations on the economy, the integrity of
the patent system, the efficient administration of the Office, and the
ability of the Office to complete the proceedings timely.
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 include:
The final rule clarifies that the one-year period for completing an
inter partes or post-grant review may be adjusted by the Board in the
case of joinder (Sec. Sec. 42.100(c) and 42.200(c)).
The final rule clarifies that a petitioner must certify that it is
not estopped from requesting an inter partes or post-grant review for
the challenged claims, as opposed to the patent (Sec. Sec. 42.104(a)
and 42.204(a)).
The final rule eliminates the requirement that the petitioner must
contact the Board to discuss alternate modes of service when the
petitioner cannot effect service of the petition for inter partes,
post-grant and covered business method patent reviews (Sec. Sec.
42.105(b) and 42.205(b)). Instead, the final rule further clarifies
that (1) upon agreement of the parties, service may be made
electronically, (2) personal service is not required, and (3) service
may be by EXPRESS MAIL[supreg] or by means at least as fast and
reliable as EXPRESS MAIL[supreg] (Sec. Sec. 42.105(b) and 42.205(b)).
The time period for filing a patent owner preliminary response for
inter partes, post-grant and covered business method patent reviews is
extended from two months to three months (Sec. Sec. 42.107(b) and
42.207(b)). Likewise, the default time period for filing a patent owner
response is extended from two months to three months (Sec. Sec.
42.120(b) and 42.220(b)).
With respect to motions to amend challenged claims, the final rule
clarifies that a patent owner may file one motion to amend but only
after conferring with the Board, and it must be filed no later than the
filing of a patent owner response for inter partes, post-grant and
covered business method patent reviews (Sec. Sec. 42.121(a) and
42.221(a)). The final rule provides that an additional motion to amend
may be authorized during inter partes, post-grant and covered business
method patent reviews when there is a good cause showing or a
settlement (Sec. Sec. 42.121(c) and 42.221(c)). In addition, the final
rule clarifies that a reasonable number of substitute claims is
presumed to be one substitute claim per challenged claim, which may be
rebutted by a demonstration of need. The final rule further clarifies
that a motion to amend may be denied where: (1) The amendment does not
respond to a ground of unpatentability, or (2) the amendment seeks to
enlarge the scope of the claims of the patent or introduce new subject
matter (Sec. Sec. 42.121(a) and 42.221(a)). The final rule also
clarifies that an additional motion to amend may be authorized when
there is a good cause showing or a joint request of the petitioner and
the patent owner to materially advance a settlement (Sec. Sec.
42.121(c) and 42.221(c)). Moreover, the final rule provides that in
determining whether to authorize such an additional motion to amend,
the Board will consider whether a petitioner has submitted supplemental
information after the time period set for filing a motion to amend in
Sec. 42.121(a)(1) or 42.221(a)(1).
For joinder, the final rule clarifies that a joinder may be
requested by a patent owner or petitioner during inter partes, post-
grant or covered business method patent reviews, but provides that such
a request must be filed, as a motion, no later than one month after
institution of any review for which joinder is requested (Sec. Sec.
42.122(b) and 42.222(b)). With respect to inter partes reviews, the
time period set forth in Sec. 42.101(b) does not apply when the
petition is accompanied by a request for joinder (Sec. 42.122).
As to filing a supplemental information during inter partes, post-
grant and covered business method patent reviews, the final rule
clarifies that a request for the authorization to file a motion to
submit supplement information is made within one month of the date the
trial is instituted, and the information must be relevant to a claim
[[Page 48682]]
for which the trial has been instituted (Sec. Sec. 42.123(a) and
42.223(a)). A petitioner who seeks to submit late information, or
information that is not relevant to a claim under review, will be
required to show why the information reasonably could not have been
earlier obtained, and that consideration of the information would be in
the interests-of-justice (Sec. Sec. 42.123(b)-(c), 42.223(b)-(c)).
For covered business method patent reviews, the final rule defines
the term ``charged with infringement'' to mean ``a real and substantial
controversy regarding infringement of a covered business method patent
such that the petitioner would have standing to bring a declaratory
judgment action in Federal court'' (Sec. 42.302(a)). In addition, the
final rule clarifies that a petitioner may challenge a claim based on
the specific statutory grounds permitted under 35 U.S.C. 282(b)(2) or
(3), except as modified by section 18(a)(1)(C) of the AIA (Sec.
42.304(b)).
Discussion of Relevant Provisions of the AIA
Inter Partes Review
Section 6 of the AIA is entitled ``POST-GRANT REVIEW PROCEEDINGS''
(Pub. L. 112-29, 125 Stat. 284, 299-305 (2011)). Section 6(a) of the
AIA, entitled ``INTER PARTES REVIEW,'' amends chapter 31 of title 35,
United States Code, also entitled ``INTER PARTES REVIEW.'' In
particular, section 6(a) of the AIA amends 35 U.S.C. 311-318 and adds
35 U.S.C. 319.
Section 6(a) of the AIA amends 35 U.S.C. 311, entitled ``Inter
partes review.'' 35 U.S.C. 311(a), as amended, provides that, subject
to the provisions of chapter 31 of title 35, United States Code, a
person who is not the owner of a patent may file a petition with the
Office to institute an inter partes review of the patent. As amended,
35 U.S.C. 311(a) also provides that the Director will establish, by
regulation, 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. 35 U.S.C. 311(b), as amended,
provides that a petitioner in an inter partes review may request to
cancel as unpatentable one or more claims of a patent only on a ground
that could be raised under 35 U.S.C. 102 or 103 and only on the basis
of prior art consisting of patents or printed publications. As amended,
35 U.S.C. 311(c) provides that a petition for inter partes review may
be filed after the later of either: (1) The date that is nine months
after the grant of a patent or issuance of a reissue of a patent; or
(2) if a post-grant review is instituted under chapter 32 of title 35,
United States Code, the date of the termination of that post-grant
review.
The grounds for seeking an inter partes review will be limited
compared with post-grant review. The grounds for seeking inter partes
review are limited to issues raised under 35 U.S.C. 102 or 103 and only
on the basis of prior art consisting of patents or printed
publications. In contrast, the grounds for seeking post-grant review
include any ground that could be raised under 35 U.S.C. 282(b)(2) or
(3). Such grounds for post-grant review include grounds that could be
raised under 35 U.S.C. 102 or 103 including those based on prior art
consisting of patents or printed publications. Other grounds available
for post-grant review include 35 U.S.C. 101 and 112, with the exception
of compliance with the best mode requirement.
Section 6(a) of the AIA amends 35 U.S.C. 312, entitled
``Petitions.'' 35 U.S.C. 312(a), as amended, provides that a petition
filed under 35 U.S.C. 311, as amended, may be considered only if
certain conditions are met. First, the petition must be accompanied by
payment of the fee established by the Director under 35 U.S.C. 311, as
amended. Second, the petition must identify all real parties in
interest. Third, the petition must identify, in writing and with
particularity, each claim challenged, the grounds on which the
challenge to each claim is based, and the evidence that supports the
grounds for the challenge to each claim, including: (A) Copies of
patents and printed publications that the petitioner relies upon in
support of the petition and (B) affidavits or declarations of
supporting evidence and opinions, if the petitioner relies on expert
opinions. Fourth, the petition must provide such other information as
the Director may require by regulation. Fifth, the petitioner must
provide copies of any of the documents required under paragraphs (2),
(3), and (4) of 35 U.S.C. 312(a), as amended, to the patent owner or,
if applicable, the designated representative of the patent owner. 35
U.S.C. 312(b), as amended, provides that, as soon as practicable after
the receipt of a petition under 35 U.S.C. 311, as amended, the Director
will make the petition available to the public.
Section 6(a) of the AIA amends 35 U.S.C. 313, entitled
``Preliminary response to petition.'' 35 U.S.C. 313, as amended,
provides that, if an inter partes review petition is filed under 35
U.S.C. 311, as amended, within a time period set by the Director, the
patent owner has the right to file a preliminary response to the
petition that sets forth reasons why no inter partes review should be
instituted based upon the failure of the petition to meet any
requirement of chapter 31 of title 35, United States Code.
Section 6(a) of the AIA amends 35 U.S.C. 314, entitled
``Institution of inter partes review.'' 35 U.S.C. 314(a), as amended,
provides that the Director may not authorize an inter partes review to
be instituted, unless the Director determines that the information
presented in the petition filed under 35 U.S.C. 311, as amended, and
any response filed under 35 U.S.C. 313, as amended, shows that there is
a reasonable likelihood that the petitioner would prevail with respect
to at least one of the claims challenged in the petition. 35 U.S.C.
314(b), as amended, provides that the Director will determine whether
to institute an inter partes review under chapter 31 of title 35,
United States Code, pursuant to a petition filed under 35 U.S.C. 311,
as amended, within three months after: (1) Receiving a preliminary
response to the petition under 35 U.S.C. 313, as amended; or (2) if no
such preliminary response is filed, the last date on which such
response may be filed. 35 U.S.C. 314(c), as amended, provides that the
Director will notify the petitioner and patent owner, in writing, of
the Director's determination under 35 U.S.C. 314(a), as amended, and
make the notice available to the public as soon as is practicable. 35
U.S.C. 314(c), as amended, also provides that the notice will include
the date on which the review will commence. 35 U.S.C. 314(d), as
amended, provides that the determination by the Director whether to
institute an inter partes review under 35 U.S.C. 314, as amended, will
be final and nonappealable.
Section 6(a) of the AIA amends 35 U.S.C. 315, entitled ``Relation
to other proceedings or actions.'' As amended, 35 U.S.C. 315(a)(1)
provides that an inter partes review may not be instituted if, before
the date on which the petition for review is filed, the petitioner or
real party-in-interest had filed a civil action challenging the
validity of a claim of the patent. As amended, 35 U.S.C. 315(a)(2)
provides for an automatic stay of a civil action brought by the
petitioner or real party-in-interest challenging the validity of a
claim of the patent and filed on or after the date on which the
petition for inter partes review was filed, until certain specified
conditions are met. 35 U.S.C. 315(a)(3), as amended, provides that a
counterclaim challenging the validity of a claim of a patent does not
constitute a civil action challenging the validity of a claim of a
patent for
[[Page 48683]]
purposes of 35 U.S.C. 315(a), as amended.
As amended, 35 U.S.C. 315(b) provides that an inter partes review
may not be instituted if the petition requesting the proceeding is
filed more than one year after the date on which the petitioner, real
party-in-interest, or privy of the petitioner is served with a
complaint alleging infringement of the patent. However, the time
limitation set forth in 35 U.S.C. 315(b), as amended, does not apply to
a request for joinder under 35 U.S.C. 315(c), as amended.
As amended, 35 U.S.C. 315(c) provides that if the Director
institutes an inter partes review, the Director may, in the Director's
discretion, join as a party to that inter partes review any person who
properly files a petition under 35 U.S.C. 311, as amended, that the
Director, after receiving a preliminary response under 35 U.S.C. 313,
as amended, or the expiration of the time for filing such a response,
determines that the petition warrants the institution of an inter
partes review under 35 U.S.C. 314, as amended.
As amended, 35 U.S.C. 315(d) provides that, notwithstanding 35
U.S.C. 135(a), as amended, 251, and 252, and chapter 30 of title 35,
United States Code, 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.
As amended, 35 U.S.C. 315(e)(1) provides that the petitioner in an
inter partes review of a claim in a patent under chapter 31 of title
35, United States Code, that results in a final written decision under
35 U.S.C. 318(a), as amended, or the real party-in-interest or privy of
the petitioner, may not request or maintain a proceeding before the
Office with respect to that claim on any ground that the petitioner
raised or reasonably could have raised during that inter partes review.
35 U.S.C. 315(e)(2), as amended, provides for estoppel against an inter
partes review petitioner, or the real party-in-interest or privy of the
petitioner, in certain civil actions and certain other proceedings
before the United States International Trade Commission if that inter
partes review results in a final written decision under 35 U.S.C.
318(a), as amended.
Section 6(a) of the AIA amends 35 U.S.C. 316, entitled ``Conduct of
inter partes review.'' As amended, 35 U.S.C. 316(a) provides that the
Director will prescribe regulations: (1) Providing that the file of any
proceeding under chapter 31 of title 35, United States Code, will be
made available to the public, except that any petition or document
filed with the intent that it be sealed will, if accompanied by a
motion to seal, be treated as sealed pending the outcome of the ruling
on the motion; (2) setting forth the standards for the showing of
sufficient grounds to institute a review under 35 U.S.C. 314(a), as
amended; (3) establishing procedures for the submission of supplemental
information after the petition is filed; (4) establishing and governing
inter partes review under chapter 31 of title 35, United States Code,
and the relationship of such review to other proceedings under title
35, United States Code; (5) setting forth standards and procedures for
discovery of relevant evidence, including that such discovery will be
limited to: (A) The deposition of witnesses submitting affidavits or
declarations, and (B) what is otherwise necessary in the interest of
justice; (6) prescribing sanctions for abuse of discovery, abuse of
process, or any other improper use of the proceeding, such as to harass
or to cause unnecessary delay or an unnecessary increase in the cost of
the proceeding; (7) providing for protective orders governing the
exchange and submission of confidential information; (8) providing for
the filing by the patent owner of a response to the petition under 35
U.S.C. 313, as amended, after an inter partes review has been
instituted, and requiring that the patent owner file with such
response, through affidavits or declarations, any additional factual
evidence and expert opinions on which the patent owner relies in
support of the response; (9) setting forth standards and procedures for
allowing the patent owner to move to amend the patent under 35 U.S.C.
316(d), as amended, to cancel a challenged claim or propose a
reasonable number of substitute claims, and ensure that any information
submitted by the patent owner in support of any amendment entered under
35 U.S.C. 316(d), as amended, is made available to the public as part
of the prosecution history of the patent; (10) providing either party
with the right to an oral hearing as part of the proceeding; (11)
requiring that the final determination in an inter partes review will
be issued not later than one year after the date on which the Director
notices the institution of a review under chapter 31 of title 35,
United States Code, except that the Director may, for good cause shown,
extend the one-year period by not more than six months, and may adjust
the time periods in this paragraph in the case of joinder under 35
U.S.C. 315(c), as amended; (12) setting a time period for requesting
joinder under 35 U.S.C. 315(c), as amended; and (13) providing the
petitioner with at least one opportunity to file written comments
within a time period established by the Director.
As amended, 35 U.S.C. 316(b) provides that in prescribing
regulations under 35 U.S.C. 316, as amended, the Director will 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 complete the proceedings instituted under
chapter 31 of title 35, United States Code timely.
As amended, 35 U.S.C. 316(c) provides that the Patent Trial and
Appeal Board will, in accordance with 35 U.S.C. 6, conduct each inter
partes review instituted under chapter 31 of title 35, United States
Code.
As amended, 35 U.S.C. 316(d)(1) provides that during an inter
partes review instituted under chapter 31 of title 35, United States
Code, the patent owner may file one motion to amend the patent in one
or more of the following ways: (A) Cancel any challenged patent claim;
and (B) for each challenged claim, propose a reasonable number of
substitute claims. As amended, 35 U.S.C. 316(d)(2) provides that
additional motions to amend may be permitted upon the joint request of
the petitioner and the patent owner to advance materially the
settlement of a proceeding under 35 U.S.C. 317, as amended, or as
permitted by regulations prescribed by the Director. 35 U.S.C.
316(d)(3), as amended, provides that an amendment under 35 U.S.C.
316(d), as amended, may not enlarge the scope of the claims of the
patent or introduce new matter.
As amended, 35 U.S.C. 316(e) provides that in an inter partes
review instituted under chapter 31 of title 35, United States Code, the
petitioner has the burden of proving a proposition of unpatentability
by a preponderance of the evidence.
Section 6(a) of the AIA amends 35 U.S.C. 317, entitled
``Settlement.'' 35 U.S.C. 317(a), as amended, provides that an inter
partes review instituted under chapter 31 of title 35, United States
Code, will be terminated with respect to any petitioner upon the 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. 35 U.S.C. 317(a), as amended, also provides that if the inter
partes review is terminated with respect to a petitioner under 35
U.S.C. 317, as amended, no estoppel under 35 U.S.C.
[[Page 48684]]
315(e), as amended, will attach to the petitioner, or to the real
party-in-interest or privy of the petitioner, on the basis of that
petitioner's institution of that inter partes review. As amended, 35
U.S.C. 317(a) further provides that if no petitioner remains in the
inter partes review, the Office may terminate the review or proceed to
a final written decision under 35 U.S.C. 318(a), as amended.
As amended, 35 U.S.C. 317(b) provides that any agreement or
understanding between the patent owner and a petitioner, including any
collateral agreements referred to in the agreement or understanding,
made in connection with, or in contemplation of, the termination of an
inter partes review under 35 U.S.C. 317, as amended, will be in writing
and a true copy of such agreement or understanding will be filed in the
Office before the termination of the inter partes review as between the
parties. As amended, 35 U.S.C. 317(b) also provides that, at the
request of a party to the proceeding, the agreement or understanding
will be treated as business confidential information, will be kept
separate from the file of the involved patents, and will be made
available only to Federal Government agencies on written request, or to
any person on a showing of good cause.
Section 6(a) of the AIA amends 35 U.S.C. 318, entitled ``Decision
of the Board.'' As amended, 35 U.S.C. 318(a) provides that if an inter
partes review is instituted and not dismissed under chapter 31 of title
35, United States Code, the Patent Trial and Appeal Board will issue a
final written decision with respect to the patentability of any patent
claim challenged by the petitioner and any new claim added under 35
U.S.C. 316(d), as amended. As amended, 35 U.S.C. 318(b) provides that
if the Patent Trial and Appeal Board issues a final written decision
under 35 U.S.C. 318(a), as amended, and the time for appeal has expired
or any appeal has terminated, the Director 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 by operation of the
certificate any new or amended claim determined to be patentable. As
amended, 35 U.S.C. 318(c) provides that any proposed amended or new
claim determined to be patentable and incorporated into a patent
following an inter partes review under chapter 31 of title 35, United
States Code, will have the same effect as that specified in 35 U.S.C.
252 for reissued patents on the right of any person who made,
purchased, or used within the United States, or imported into the
United States, anything patented by such proposed amended or new claim,
or who made substantial preparation therefor, before the issuance of a
certificate under 35 U.S.C. 318(b), as amended. As amended, 35 U.S.C.
318(d) provides that the Office will make available to the public data
describing the length of time between the institution of, and the
issuance of, a final written decision under 35 U.S.C. 318(a), as
amended, for each inter partes review.
Section 6(a) of the AIA adds 35 U.S.C. 319, entitled ``Appeal.'' 35
U.S.C. 319 provides that a party dissatisfied with the final written
decision of the Patent Trial and Appeal Board under 35 U.S.C. 318(a),
as amended, may appeal the decision pursuant to 35 U.S.C. 141-144. 35
U.S.C. 319 also provides that any party to the inter partes review will
have the right to be a party to the appeal.
Section 6(c) of the AIA is entitled ``REGULATIONS AND EFFECTIVE
DATE.'' Section 6(c)(1) of the AIA provides that the Director will, not
later than the date that is one year after the date of the enactment of
the AIA, issue regulations to carry out chapter 31 of title 35, United
States Code, as amended by section 6(a) of the AIA.
Section 6(c)(2)(A) of the AIA provides that the amendments made by
section 6(a) of the AIA will take effect upon the expiration of the
one-year period beginning on the date of the enactment of the AIA, and
will apply to any patent issued before, on, or after that effective
date.
Section 6(c)(2)(B) of the AIA provides that the Director may impose
a limit on the number of inter partes reviews that may be instituted
under chapter 31 of title 35, United States Code, during each of the
first four one-year periods in which the amendments made by section
6(a) of the AIA are in effect, if such number in each year equals or
exceeds the number of inter partes reexaminations that are ordered
under chapter 31 of title 35, United States Code, in the last fiscal
year ending before the effective date of the amendments made by section
6(a) of the AIA.
Section 6(c)(3) of the AIA provides a transition provision for the
granting, conduct, and termination of inter partes reexaminations on or
after the effective date of the AIA. The Office, in a separate
rulemaking, revised the rules governing inter partes reexamination to
implement the transition provision that changes the standard for
granting a request for inter partes reexamination, and to reflect the
termination of inter partes reexamination, effective September 16,
2012. See Revision of Standard for Granting an Inter partes
Reexamination Request, 76 FR 59055 (Sept. 23, 2011) (final rule).
Post-Grant Review
Post-grant review may be sought in more circumstances than inter
partes review. The grounds for seeking post-grant review include any
ground that could be raised under 35 U.S.C. 282(b)(2) or (3), except as
modified by section 18(a)(1)(C) of the AIA. Such grounds for post-grant
review include grounds that could be raised under 35 U.S.C. 102 or 103
including those based on prior art consisting of patents or printed
publications. Other grounds available for post-grant review include 35
U.S.C. 101 and 112, with the exception of compliance with the best mode
requirement. In contrast, the grounds for seeking inter partes review
are limited to issues raised under 35 U.S.C. 102 or 103 and only on the
basis of prior art consisting of patents or printed publications.
Section 6 of the AIA is entitled ``POST-GRANT REVIEW PROCEEDINGS.''
Section 6(d) of the AIA, entitled ``POST-GRANT REVIEW,'' adds chapter
32 of title 35, United States Code, also entitled ``POST-GRANT
REVIEW.'' In particular, Sec. 6(d) adds 35 U.S.C. 321-329. Pub. L.
112-29, 125 Stat. 284, 305-311 (2011).
Section 6(d) of the AIA adds 35 U.S.C. 321, entitled ``Post-grant
review.'' 35 U.S.C. 321(a) provides that, subject to the provisions of
chapter 32 of title 35, United States Code, a person who is not the
owner of a patent may file a petition with the Office to institute a
post-grant review of the patent. 35 U.S.C. 321(a) also provides that
the Director will establish by regulation 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 post-grant review.
35 U.S.C. 321(b) provides that a petitioner in a post-grant review may
request to cancel as unpatentable one or more claims of a patent on any
ground that could be raised under 35 U.S.C. 282(b)(2) or (3) (relating
to invalidity of the patent or any claim). 35 U.S.C. 321(c) provides
that a petition for post-grant review may only be filed not later than
the date that is nine months after the date of the grant of the patent
or of the issuance of a reissue patent.
Section 6(d) of the AIA adds 35 U.S.C. 322, entitled ``Petitions.''
35 U.S.C. 322(a) provides that a petition filed under 35 U.S.C. 321 may
be considered
[[Page 48685]]
only if: (1) The petition is accompanied by payment of the fee
established by the Director under 35 U.S.C. 321; (2) the petition
identifies all real parties in interest; (3) the petition identifies,
in writing and with particularity, each claim challenged, the grounds
on which the challenge to each claim is based, and the evidence that
supports the grounds for the challenge to each claim, including (A)
copies of patents and printed publications that the petitioner relies
upon in support of the petition and (B) affidavits or declarations of
supporting evidence and opinions, if the petitioner relies on other
factual evidence or on expert opinions; (4) the petition provides such
other information as the Director may require by regulation; and (5)
the petitioner provides copies of any of the documents required under
paragraphs (2), (3), and (4) of 35 U.S.C. 322(a) to the patent owner
or, if applicable, the designated representative of the patent owner.
35 U.S.C. 322(b) provides that, as soon as practicable after the
receipt of a petition under 35 U.S.C. 321, the Director will make the
petition available to the public.
Section 6(d) of the AIA adds 35 U.S.C. 323, entitled ``Preliminary
response to petition.'' 35 U.S.C. 323 provides that, if a post-grant
review petition is filed under 35 U.S.C. 321, the patent owner has the
right to file a preliminary response to the petition, within a time
period set by the Director, that sets forth reasons why no post-grant
review should be instituted based upon the failure of the petition to
meet any requirement of chapter 32 of title 35, United States Code.
Section 6(d) of the AIA adds 35 U.S.C. 324, entitled ``Institution
of post-grant review.'' 35 U.S.C. 324(a) provides that the Director may
not authorize a post-grant review to be instituted, unless the Director
determines that the information presented in the petition filed under
35 U.S.C. 321, if such information is not rebutted, would demonstrate
that it is more likely than not that at least one of the claims
challenged in the petition is unpatentable. 35 U.S.C. 324(b) provides
that the determination required under 35 U.S.C. 324(a) may also be
satisfied by a showing that the petition raises a novel or unsettled
legal question that is important to other patents or patent
applications. 35 U.S.C. 324(c) provides that the Director will
determine whether to institute a post-grant review under chapter 32 of
title 35, United States Code, pursuant to a petition filed under 35
U.S.C. 321 within three months after: (1) Receiving a preliminary
response to the petition under 35 U.S.C. 323; or (2) if no such
preliminary response is filed, the last date on which such response may
be filed. 35 U.S.C. 324(d) provide that the Director will notify the
petitioner and patent owner, in writing, of the Director's
determination under 35 U.S.C. 324(a) or (b), and will make such notice
available to the public as soon as is practicable. 35 U.S.C. 324(d)
also provides that such notice will include the date on which the
review will commence. 35 U.S.C. 324(e) provides that the determination
by the Director whether to institute a post-grant review under 35
U.S.C. 324 will be final and nonappealable.
Section 6(d) of the AIA adds 35 U.S.C. 325, entitled ``Relation to
other proceedings or actions.'' 35 U.S.C. 325(a)(1) provides that a
post-grant review may not be instituted under chapter 32 of title 35,
United States Code, if, before the date on which the petition for such
a review is filed, the petitioner or real party-in-interest filed a
civil action challenging the validity of a claim of the patent. 35
U.S.C. 325(a)(2) provides for an automatic stay of a civil action
brought by the petitioner or real party-in-interest challenging the
validity of a claim of the patent and filed on or after the date on
which the petition for post-grant review was filed, until certain
specified conditions are met. 35 U.S.C. 325(a)(3) provides that a
counterclaim challenging the validity of a claim of a patent does not
constitute a civil action challenging the validity of a claim of a
patent for purposes of 35 U.S.C. 325(a).
35 U.S.C. 325(b) provides that if a civil action alleging
infringement of a patent is filed within three months after the date on
which the patent is granted, the court may not stay its consideration
of the patent owner's motion for a preliminary injunction against
infringement of the patent on the basis that a petition for post-grant
review has been filed or instituted under chapter 32 of title 35,
United States Code.
35 U.S.C. 325(c) provides that if more than one petition for a
post-grant review under chapter 32 of title 35, United States Code, is
properly filed against the same patent and the Director determines that
more than one of these petitions warrants the institution of a post-
grant review under 35 U.S.C. 324, the Director may consolidate such
reviews into a single post-grant review.
35 U.S.C. 325(d) provides that, notwithstanding 35 U.S.C. 135(a),
251, and 252, and chapter 30 of title 35, United States Code, during
the pendency of any post-grant review under chapter 32 of title 35,
United States Code, if another proceeding or matter involving the
patent is before the Office, the Director may determine the manner in
which the post-grant review or other proceeding or matter may proceed,
including providing for the stay, transfer, consolidation, or
termination of any such matter or proceeding. 35 U.S.C. 325(d) also
provides that, in determining whether to institute or order a
proceeding under chapter 32 of title 35, United States Code, chapter 30
of title 35, United States Code, or chapter 31 of title 35, United
States Code, the Director may take into account whether the same or
substantially the same prior art or arguments previously were presented
to the Office and reject the petition on that basis.
35 U.S.C. 325(e)(1) provides that the petitioner in a post-grant
review of a claim in a patent under chapter 32 of title 35, United
States Code, that results in a final written decision under 35 U.S.C.
328(a), or the real party-in-interest or privy of the petitioner, may
not request or maintain a proceeding before the Office with respect to
that claim on any ground that the petitioner raised or reasonably could
have raised during that post-grant review. 35 U.S.C. 325(e)(2) provides
for estoppel against a post-grant review petitioner, or the real party-
in-interest or privy of the petitioner, in certain civil actions and
certain other proceedings before the United States International Trade
Commission if that post-grant review results in a final written
decision under 35 U.S.C. 328(a).
35 U.S.C. 325(f) provides that a post-grant review may not be
instituted under chapter 32 of title 35, United States Code, if the
petition requests cancellation of a claim in a reissue patent that is
identical to or narrower than a claim in the original patent from which
the reissue patent was issued, and the time limitations in 35 U.S.C.
321(c) would bar filing a petition for a post-grant review for such
original patent.
Section 6(d) of the AIA adds 35 U.S.C. 326, entitled ``Conduct of
post-grant review.'' 35 U.S.C. 326(a) provides that the Director will
prescribe regulations: (1) Providing that the file of any proceeding
under chapter 32 of title 35, United States Code, will be made
available to the public, except that any petition or document filed
with the intent that it be sealed will, if accompanied by a motion to
seal, be treated as sealed pending the outcome of the ruling on the
motion; (2) setting forth the standards for the showing of sufficient
grounds to institute a review under 35 U.S.C. 324(a) and (b); (3)
establishing procedures for the submission of supplemental information
after the petition is filed; (4) establishing and governing a post-
grant review under
[[Page 48686]]
chapter 32 of title 35, United States Code, and the relationship of
such review to other proceedings under title 35, United States Code;
(5) setting forth standards and procedures for discovery of relevant
evidence, including that such discovery will be limited to evidence
directly related to factual assertions advanced by either party in the
proceeding; (6) prescribing sanctions for abuse of discovery, abuse of
process, or any other improper use of the proceeding, such as to harass
or to cause unnecessary delay or an unnecessary increase in the cost of
the proceeding; (7) providing for protective orders governing the
exchange and submission of confidential information; (8) providing for
the filing by the patent owner of a response to the petition under 35
U.S.C. 323 after a post-grant review has been instituted, and requiring
that the patent owner file with such response, through affidavits or
declarations, any additional factual evidence and expert opinions on
which the patent owner relies to support the response; (9) setting
forth standards and procedures for allowing the patent owner to move to
amend the patent under 35 U.S.C. 326(d) to cancel a challenged claim or
propose a reasonable number of substitute claims, and ensuring that any
information submitted by the patent owner in support of any amendment
entered under 35 U.S.C. 326(d) is made available to the public as part
of the prosecution history of the patent; (10) providing either party
with the right to an oral hearing as part of the proceeding; (11)
requiring that the final determination in any post-grant review be
issued not later than one year after the date on which the Director
notices the institution of a proceeding under chapter 32 of title 35,
United States Code, except that the Director may, for good cause shown,
extend the one-year period by not more than six months, and may adjust
the time periods in this paragraph in the case of joinder under 35
U.S.C. 325(c); and (12) providing the petitioner with at least one
opportunity to file written comments within a time period established
by the Director.
35 U.S.C. 326(b) provides that in prescribing regulations under 35
U.S.C. 326, the Director will 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 complete timely proceedings instituted under chapter 32 of title 35,
United States Code.
35 U.S.C. 326(c) provides that the Patent Trial and Appeal Board
will, in accordance with 35 U.S.C. 6, conduct each post-grant review
instituted under chapter 32 of title 35, United States Code.
35 U.S.C. 326(d)(1) provides that during a post-grant review
instituted under chapter 32 of title 35, United States Code, the patent
owner may file a single motion to amend the patent in one or more of
the following ways: (A) Cancel any challenged patent claim; and/or (B)
for each challenged claim, propose a reasonable number of substitute
claims. 35 U.S.C. 326(d)(2) provides that additional motions to amend
may be permitted upon the joint request of the petitioner and the
patent owner to advance materially the settlement of a proceeding under
35 U.S.C. 327, or upon the request of the patent owner for good cause
shown. 35 U.S.C. 326(d)(3) provides that an amendment under 35 U.S.C.
326(d) may not enlarge the scope of the claims of the patent or
introduce new matter. 35 U.S.C. 326(e) provides that in a post-grant
review instituted under chapter 32 of title 35, United States Code, the
petitioner will have the burden of proving a proposition of
unpatentability by a preponderance of the evidence.
Section 6(d) of the AIA adds 35 U.S.C. 327, entitled
``Settlement.'' 35 U.S.C. 327(a) provides that a post-grant review
instituted under chapter 32 of title 35, United States Code, will be
terminated with respect to any petitioner upon the 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.
35 U.S.C. 327(a) also provides that if the post-grant review is
terminated with respect to a petitioner under 35 U.S.C. 327, no
estoppel under 35 U.S.C. 325(e) will attach to the petitioner, or to
the real party-in-interest or privy of the petitioner, on the basis of
that petitioner's institution of that post-grant review. 35 U.S.C.
327(a) further provides that if no petitioner remains in the post-grant
review, the Office may terminate the post-grant review or proceed to a
final written decision under 35 U.S.C. 328(a).
35 U.S.C. 327(b) provides that any agreement or understanding
between the patent owner and a petitioner, including any collateral
agreements referred to in such agreement or understanding, made in
connection with, or in contemplation of, the termination of a post-
grant review under 35 U.S.C. 327 will be in writing, and a true copy of
such agreement or understanding will be filed in the Office before the
termination of the post-grant review as between the parties. 35 U.S.C.
327(b) also provides that at the request of a party to the proceeding,
the agreement or understanding will be treated as business confidential
information, will be kept separate from the file of the involved
patents, and will be made available only to Federal Government agencies
on written request, or to any person on a showing of good cause.
Section 6(d) of the AIA adds 35 U.S.C. 328, entitled ``Decision of
the Board.'' 35 U.S.C. 328(a) provides that if a post-grant review is
instituted and not dismissed under chapter 32 of title 35, United
States Code, the Patent Trial and Appeal Board will issue a final
written decision with respect to the patentability of any patent claim
challenged by the petitioner and any new claim added under 35 U.S.C.
326(d).
35 U.S.C. 328(b) provides that if the Patent Trial and Appeal Board
issues a final written decision under 35 U.S.C. 328(a) and the time for
appeal has expired or any appeal has terminated, the Director 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 by
operation of the certificate any new or amended claim determined to be
patentable.
35 U.S.C. 328(c) provides that any proposed amended or new claim
determined to be patentable and incorporated into a patent following a
post-grant review under chapter 32 of title 35, United States Code,
will have the same effect as that specified in 35 U.S.C. 252 for
reissued patents on the right of any person who made, purchased, or
used within the United States, or imported into the United States,
anything patented by such proposed amended or new claim, or who made
substantial preparation therefor, before the issuance of a certificate
under 35 U.S.C. 328(b).
35 U.S.C. 328(d) provides that the Office will make available to
the public data describing the length of time between the institution
of, and the issuance of, a final written decision under 35 U.S.C.
328(a) for each post-grant review.
Section 6(d) of the AIA adds 35 U.S.C. 329, entitled ``Appeal.'' 35
U.S.C. 329 provides that a party dissatisfied with the final written
decision of the Patent Trial and Appeal Board under 35 U.S.C. 328(a)
may appeal the decision pursuant to 35 U.S.C. 141-144. 35 U.S.C. 329
also provides that any party to the post-grant review will have the
right to be a party to the appeal.
Section 6(f) of the AIA is entitled ``REGULATIONS AND EFFECTIVE
[[Page 48687]]
DATE.'' Section 6(f)(1) of the AIA provides that the Director will, not
later than the date that is one year after the date of the enactment of
the AIA, issue regulations to carry out chapter 32 of title 35, United
States Code, as added by section 6(d) of the AIA.
Section 6(f)(2)(A) of the AIA provides that the amendments made by
section 6(d) of the AIA will take effect upon the expiration of the
one-year period beginning on the date of the enactment of the AIA and,
except as provided in section 18 of the AIA and in section 6(f)(3) of
the AIA, will apply only to patents described in section 3(n)(1) of the
AIA. Section 3(n) of the AIA is entitled ``EFFECTIVE DATE.'' Section
3(n)(1) of the AIA provides:
(n) EFFECTIVE DATE.--
(1) IN GENERAL.--Except as otherwise provided in this section,
the amendments made by this section shall take effect upon the
expiration of the 18-month period beginning on the date of the
enactment of this Act, and shall apply to any application for
patent, and to any patent issuing thereon, that contains or
contained at any time--
(A) a claim to a claimed invention that has an effective filing
date as defined in section 100(i) of title 35, United States Code,
that is on or after the effective date described in this paragraph;
or
(B) a specific reference under section 120, 121, or 365(c) of
title 35, United States Code, to any patent or application that
contains or contained at any time such a claim.
For example, the post-grant review provisions will apply to patents
issued from applications that have an effective filing date on or after
March 16, 2013, eighteen months after the date of enactment.
Section 6(f)(2)(B) of the AIA provides that the Director may impose
a limit on the number of post-grant reviews that may be instituted
under chapter 32 of title 35, United States Code, during each of the
first four one-year periods in which the amendments made by section
6(d) of the AIA are in effect.
Section 6(f)(3) of the AIA is entitled ``PENDING INTERFERENCES.''
Section 6(f)(3)(A) of the AIA provides that the Director will
determine, and include in the regulations issued under section 6(f)(1)
of the AIA, the procedures under which an interference commenced before
the effective date set forth in section 6(f)(2)(A) of the AIA is to
proceed, including whether such interference: (i) Is to be dismissed
without prejudice to the filing of a petition for a post-grant review
under chapter 32 of title 35, United States Code; or (ii) is to proceed
as if the AIA had not been enacted.
Section 6(f)(3)(B) of the AIA provides that, for purposes of an
interference that is commenced before the effective date set forth in
section 6(f)(2)(A) of the AIA, the Director may deem the Patent Trial
and Appeal Board to be the Board of Patent Appeals and Interferences,
and may allow the Patent Trial and Appeal Board to conduct any further
proceedings in that interference.
Section 6(f)(3)(C) of the AIA provides that the authorization to
appeal or have remedy from derivation proceedings in sections 141(d)
and 146 of title 35, United States Code, as amended, and the
jurisdiction to entertain appeals from derivation proceedings in 28
U.S.C. 1295(a)(4)(A), as amended, will be deemed to extend to any final
decision in an interference that is commenced before the effective date
set forth in section 6(f)(2)(A) of the AIA and that is not dismissed
pursuant to this paragraph.
Transitional Program for Covered Business Method Patents
Section 18 of the AIA provides that the Director will promulgate
regulations establishing and implementing a transitional program for
the review of covered business method patents. Section 18(a)(1) of the
AIA provides that the transitional proceeding will be regarded as a
post-grant review under chapter 32 of title 35 United States Code and
will employ the standards and procedures as a post-grant review,
subject to certain exceptions. For instance, a petitioner in a covered
business method patent review may request to cancel as unpatentable one
or more claims of a patent on any ground that could be raised under 35
U.S.C. 282(b)(2) or (3) (relating to invalidity of the patent or any
claim), except as modified by section 18(a)(1)(C) of the AIA (see 35
U.S.C. 321(b)). Additionally, the determination by the Director of
whether to institute a covered business method patent review will be
final and nonappealable (see 35 U.S.C. 324(e)). Section 18(a)(1)(A) of
the AIA provides that 35 U.S.C. 321(c) and 35 U.S.C. 325(b), (e)(2),
and (f) will not apply to a transitional proceeding.
Section 18(a)(1)(B) of the AIA specifies that a person may not file
a petition for a transitional proceeding with respect to a covered
business method patent unless the person or person's real party-in-
interest or privy has been sued for infringement of the patent or has
been charged with infringement under that patent.
Section 18(a)(1)(C) of the AIA further provides that limited prior
art shall apply for those challenged covered business method patents
granted under first-to-invent provisions. Specifically, section
18(a)(1)(C) provides that a petitioner in a transitional proceeding who
challenges the validity of 1 or more claims in a covered business
method patent on a ground raised under section 102 or 103 of title 35,
United States Code, as in effect on the day before the effective date
set forth in section 3(n)(1), may support such ground only on the basis
of prior art that is described by section 102(a) of such title (as in
effect on the day before such effective date); or prior art that
discloses the invention more than 1 year before the date of the
application for patent in the United States; and would be described by
section 102(a) of such title (as in effect on the day before the
effective date set forth in section 3(n)(1)) if the disclosure had been
made by another before the invention thereof by the applicant for
patent.
Section 18 of the AIA provides that the Director may institute a
transitional proceeding only for a patent that is a covered business
method patent. Section 18(d)(1) of the AIA specifies that a covered
business method patent is a patent that claims a method or
corresponding apparatus for performing data processing or other
operations used in the practice, administration, or management of a
financial product or service, except that the term does not include
patents for technological inventions. Section 18(d)(2) provides that
the Director will issue regulations for determining whether a patent is
for a technological invention.
The AIA provides that the transitional program for the review of
covered business method patents will take effect on September 16, 2012,
one year after the date of enactment, and applies to any covered
business method patent issued before, on, or after September 16, 2012.
Section 18 of the AIA and the regulations issued under section 18 are
repealed on September 16, 2020. Section 18 of the AIA and the
regulations issued will continue to apply after September 16, 2020, to
any petition for a transitional proceeding that is filed before
September 16, 2020. The Office will not consider a petition for a
transitional proceeding that is filed on or after September 16, 2020.
Discussion of Specific Rules
Title 37 of the Code of Federal Regulations (CFR), Chapter I, part
42, Subparts B, C, and D are added as follows:
Subpart B--Inter Partes Review
Section 42.100: Section 42.100 sets forth policy considerations for
inter partes review proceedings.
Section 42.100(a) provides that an inter partes review is a trial
and subject
[[Page 48688]]
to the rules set forth in subpart A of title 42, Code of Federal
Regulations.
Section 42.100(b) provides that a claim in an unexpired patent
shall be given its broadest reasonable construction in light of the
specification in which it appears. This rule is consistent with the
provisions of 35 U.S.C. 316, as amended, which provides for the
promulgation of rules, including rules establishing and governing the
proceeding and the relationship of the proceeding to other proceedings,
the standards for instituting the proceeding, and standards and
procedures for allowing a patent owner to amend the patent, as well as
35 U.S.C. 318, as amended, which provides that the Board will enter a
final written decision on patentability. This rule is also consistent
with longstanding established principles of claim construction before
the Office. In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364
(Fed. Cir. 2004); In re Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984).
As explained in Yamamoto, a party's ability to amend claims to avoid
prior art--which exists in these proceedings (Sec. 42.121)--
distinguishes Office proceedings from district court proceedings and
justifies the broadest reasonable interpretation standard for claim
interpretation. Yamamoto, 740 F.2d at 1572.
Section 42.100(c) provides a one-year time frame for administering
the proceeding after institution, with up to a six-month extension for
good cause. The one-year period may be adjusted by the Board in the
case of joinder. This rule is consistent with 35 U.S.C. 316(a)(11), as
amended.
Section 42.101: Section 42.101 provides who may file a petition for
inter partes review.
Section 42.101(a) provides that a party or real party-in-interest
must file a petition prior to the filing of a civil action challenging
the validity of a claim of the patent. The rule follows the statutory
language of 35 U.S.C. 315(a), as amended, which provides that inter
partes reviews are barred by prior filing of such a civil action.
Section 42.101(b) provides that a petition may not be filed more
than one year after the date on which the petitioner, the petitioner's
real party-in-interest, or a privy of the petitioner was served with a
complaint alleging infringement. The rule follows the statutory
language of 35 U.S.C. 315(b), as amended, which provides a one-year
time limit after date of service of complaint.
Section 42.101(c) provides that a petition may not be filed where
the petitioner, the petitioner's real party-in-interest, or a privy of
the petitioner is estopped from challenging the claims on the grounds
identified in the petition. The rule is consistent with 35 U.S.C.
325(e)(1) and 315(e)(1), as amended, which provide for estoppel based
upon a final written decision in a post-grant review, a covered
business method patent review, or inter partes review.
Section 42.102: Section 42.102 provides a timeliness requirement
for filing an inter partes review petition.
Section 42.102(a) provides that a petition for inter partes review
must be filed consistent with the requirements set forth in 35 U.S.C.
311(c), as amended. Petitions requesting the institution of an inter
partes review that are filed nine months after the grant of the patent
or of the issuance of the reissue patent, but prior to the institution
of a post-grant review would be considered timely filed. Additionally,
petitions filed after termination of a post-grant review would be
considered timely.
Section 42.102(b) provides that the Director may set a limit on the
number of inter partes reviews that may be instituted during each of
the first four one-year periods after inter partes review takes effect.
This rule is consistent with section 6(c)(2)(B) of the AIA, which
provides for graduated implementation of inter partes reviews. The
Office, however, does not expect to limit the number of petitions for
inter partes review at this time.
Section 42.103: Section 42.103 sets forth the fee requirement for
filing an inter partes review petition.
Section 42.103(a) provides that a fee under Sec. 42.15(a) must
accompany a petition for inter partes review.
Section 42.103(b) provides that that no filing date will be
accorded until full payment is received. This rule is consistent with
35 U.S.C. 312(a)(1), as amended, which provides that a petition may
only be considered if the petition is accompanied by the payment of the
fee established by the Director.
Section 42.104: Section 42.104 provides for the content of
petitions to institute an inter partes review. The rule is consistent
with 35 U.S.C 312(a)(4), as amended, which allows the Director to
prescribe regulations concerning the information provided with the
petition.
Section 42.104(a) provides that a petition must demonstrate that
the petitioner has standing. To establish standing, a petitioner, at a
minimum, must certify that the patent is available for inter partes
review and that the petitioner is not barred or estopped from
requesting an inter partes review challenging the patent claims. This
requirement is to ensure that a party has standing to file the inter
partes review and would help prevent spuriously-instituted inter partes
reviews. Facially improper standing will be a basis for denying the
petition without proceeding to the merits of the petition.
Section 42.104(b) requires that the petition identify the precise
relief requested for the claims challenged. Specifically, the rule
requires that the petition identify each claim being challenged, the
specific grounds on which each claim is challenged, how the claims are
to be construed, why the claims as construed are unpatentable under the
identified grounds, and the exhibit numbers of the evidence relied upon
with a citation to the portion of the evidence that is relied upon to
support the challenge. This rule is consistent with 35 U.S.C.
312(a)(3), as amended, which requires that the petition identify, in
writing and with particularity, each claim challenged, the grounds on
which the challenge to each claim is based, and the evidence supporting
the challenge. It is also consistent with 35 U.S.C. 312(a)(4), as
amended, which allows the Director to require additional information as
part of the petition. The rule provides an efficient means for
identifying the legal and factual basis for satisfying the threshold
for instituting inter partes review and provides the patent owner with
notice as to the basis for the challenge to the claims.
Section 42.104(c) provides that a petitioner seeking to correct
clerical or typographical mistakes in a petition could file a motion to
correct the mistakes. The rule also provides that the grant of such a
motion would not alter the filing date of the petition.
Section 42.105: Section 42.105 provides petition and exhibit
service requirements in addition to the service requirements of Sec.
42.6.
Section 42.105(a) requires that the petitioner serve the patent
owner at the correspondence address of record for the subject patent
and permits service at any other address known to the petitioner as
likely to effect service as well. Once a patent has issued,
communications between the Office and the patent owner often suffer.
Ray v. Lehman, 55 F.3d 606 (Fed. Cir. 1995) (patentee's failure to
maintain correspondence address contributed to failure to pay
maintenance fee and therefore expiration of the patent). While the rule
requires service at the correspondence address of record in the patent,
the petitioner will already be in communication with the patent owner,
in many cases, at a better service address than the correspondence
address of record for the subject patent.
[[Page 48689]]
Section 42.105(b), as adopted in this final rule, provides that
upon agreement of the parties, service may be made electronically, and
service may be made by EXPRESS MAIL[supreg] or by means at least as
fast and reliable as EXPRESS MAIL[supreg]. Personal service is not
required.
Section 42.106: Section 42.106 provides for the filing date
requirements of an inter partes review petition.
Section 42.106(a) specifies the requirements for a complete
petition. 35 U.S.C. 312(a), as amended, states that a petition may only
be considered when the petition identifies all the real parties in
interest, when a copy of the petition is provided to the patent owner
or the owner's representative and the petition is accompanied by the
fee established by the Director. Consistent with the statute, the rule
requires that a petition to institute an inter partes review will not
be accorded a filing date until the petition: (1) Complies with Sec.
42.104; (2) is served upon the patent owner at the correspondence
address of record provided in Sec. 42.105(a); and (3) is accompanied
by the fee set forth in Sec. 42.15(a).
Section 42.106(b) provides petitioners a one month time frame to
correct defective petitions to institute an inter partes review. The
rule is consistent with the requirement of 35 U.S.C. 312(a), as
amended, that the Board may not consider a petition that fails to meet
the statutory requirements for a petition. In determining whether to
grant a filing date, the Board will review the petitions for procedural
compliance. Where a procedural defect is noted, e.g., failure to state
the claims being challenged, the Board will notify the petitioner that
the petition was incomplete and identify any non-compliance issues.
Section 42.107: Section 42.107 sets forth the procedure in which
the patent owner may file a preliminary response.
Section 42.107(a) provides that the patent owner may file a
preliminary response to the petition. The rule is consistent with 35
U.S.C. 313, as amended, which provides for such a response.
Section 42.107(b) provides that the due date for the preliminary
response to the petition is no later than three months from the date of
the notice that the request to institute an inter partes review has
been granted a filing date. This rule is consistent with 35 U.S.C. 313,
as amended, which provides that the Director shall set a time period
for filing the patent owner preliminary response.
Under 35 U.S.C. 314(b), as amended, the Board has three months from
the filing of the patent owner preliminary response, or three months
from the date such a response was due, to determine whether to
institute the review. A patent owner seeking a shortened period for
such a determination may wish to file a patent owner preliminary
response well before the date the patent owner preliminary response is
due, or file a paper stating that no patent owner preliminary response
will be filed. No adverse inferences will be drawn where a patent owner
elects not to file a response or elects to waive the response.
Section 42.107(c) provides that the patent owner preliminary
response is not allowed to present new testimony evidence, for example,
expert witness testimony on patentability. 35 U.S.C. 313, as amended,
provides that a patent owner preliminary response set forth reasons why
no inter partes review should be instituted. In contrast, 35 U.S.C.
316(a)(8), as amended, provides for a patent owner response after
institution and requires the presentation, through affidavits or
declarations, of any additional factual evidence and expert opinions on
which the patent owner relies in support of the response. The
difference in statutory language demonstrates that 35 U.S.C. 313, as
amended, does not require the presentation of evidence in the form of
testimony in support of a patent owner preliminary response and the
rule reflects this distinction. In certain instances, however, a patent
owner may be granted additional discovery before filing its preliminary
response and submit any testimonial evidence obtained through the
discovery. For example, additional discovery may be authorized where
patent owner raises sufficient concerns regarding the petitioner's
certification of standing.
Section 42.107(d) provides that the patent owner preliminary
response cannot include any amendment. See Sec. 42.121 for filing a
motion to amend the patent after an inter partes review has been
instituted.
Section 42.107(e) provides that the patent owner may file a
statutory disclaimer under 35 U.S.C. 253(a) in compliance with Sec.
1.321(a), disclaiming one or more claims in the patent, and no inter
partes review will be instituted to review disclaimed claims.
Section 42.108: Section 42.108 provides for the institution of an
inter partes review.
35 U.S.C. 314(a), as amended, states that the Director may not
authorize an inter partes review to be instituted, unless the Director
determines that the information in the petition, and any patent owner
preliminary response, shows that there is a reasonable likelihood that
the petitioner would prevail with respect to at least one of the claims
challenged in the petition. Section 42.108 is consistent with this
statutory requirement and identifies how the Board may authorize such a
review to proceed. In considering whether to authorize the review, the
Board may take into account its ability to complete the proceeding
timely. 35 U.S.C. 316(b), as amended.
Section 42.108(a) provides that the Board may authorize the review
to proceed on all or some of the challenged claims and on all or some
of the grounds of unpatentability asserted for each claim.
Specifically, in instituting the review, the Board may authorize the
review to proceed on the challenged claims for which the threshold
requirements for the proceeding have been met. The Board will identify
the grounds upon which the review will proceed on a claim-by-claim
basis. Any claim or issue not included in the authorization for review
is not part of the review. The Office intends to publish a notice of
the institution of an inter partes review in the Official Gazette.
Section 42.108(b) provides that the Board, prior to institution of
a review, may deny some or all grounds for unpatentability on some or
all of the challenged claims. The rule is consistent with the efficient
administration of the Office, which is a consideration in prescribing
inter partes review regulations under 35 U.S.C. 316(b), as amended.
Section 42.108(c) provides that the institution is based on a
reasonable likelihood standard and is consistent with the requirements
of 35 U.S.C. 314(a), as amended. A reasonable likelihood standard is a
somewhat flexible standard that allows the judge room for the exercise
of judgment.
Section 42.120: Section 42.120 sets forth the procedure in which
the patent owner may file a patent owner response.
Section 42.120(a) provides for a patent owner response and is
consistent with the requirements of 35 U.S.C. 316(a)(8), as amended.
Section 42.120(b) provides that if no time for filing a patent
owner response to a petition is provided in a Board order, the default
time for filing the response is three months from the date the inter
partes review was instituted. The Board's experience with patent owner
responses is that three months provides a sufficient amount of time to
respond in a typical case, especially as the patent owner would already
have been provided three months to file a patent owner preliminary
response prior to institution of the inter partes review. Additionally,
the time period for response is consistent with the
[[Page 48690]]
requirement that the trial be conducted such that a final written
decision is rendered within one year of the institution of the review.
35 U.S.C. 316(a)(11), as amended.
Section 42.121: Section 42.121 provides standards and procedures
for a patent owner to file motions to amend the patent. The rule is
consistent with 35 U.S.C. 316(a)(9), as amended, which requires the
Office to promulgate rules setting forth the standards and procedures
for allowing the patent owner to amend the patent.
Section 42.121(a) makes it clear that the first motion to amend
need not be authorized by the Board. The motion will be entered so long
as it complies with the timing and procedural requirements. Additional
motions to amend will require prior Board authorization. All motions to
amend, even if entered, will not result automatically in entry of the
proposed amendment into the patent. The requirement to consult the
Board reflects the Board's need to regulate the substitution of claims
and the amendment of the patent to control unnecessary proliferation of
issues and abuses. The rule aids the efficient administration of the
Office and the timely completion of the review under 35 U.S.C. 316(b),
as amended.
Section 42.121(a) also provides that a motion to amend the claims
may be denied where the amendment does not respond to the ground of
unpatentability involved in the trial or seeks to enlarge the scope of
the claims or introduce new matter. Section 42.121(a) further provides
that a reasonable number of substitute claims is presumed to be one
substitute claim per challenged claim which may be rebutted by a
demonstration of need. The rule aids the efficient administration of
the Office and the timely completion of the review under 35 U.S.C.
316(b), as amended, and also is consistent with 35 U.S.C. 316(d)(3), as
amended, which prohibits enlarging the scope of the claims or
introducing new matter. Further, the rule is consistent with 35 U.S.C.
316(a)(9), as amended, which requires the Office to promulgate rules
setting forth the standards and procedures for the patent owner to
amend the patent.
Section 42.121(b) provides that a motion to amend the claims must
include a claim listing, show the changes clearly, and set forth: (1)
The support in the original disclosure of the patent for each claim
that is added or amended, and (2) the support in an earlier filed
disclosure for each claim for which benefit of the filing date of the
earlier filed disclosure is sought.
Under Sec. 42.121(c), a patent owner may request filing more than
one motion to amend its claims during the course of the proceeding.
Additional motions to amend may be permitted upon a demonstration of
good cause by the patent owner or a joint request of the petitioner and
the patent owner to materially advance a settlement.
In considering whether good cause is shown, the Board will take
into account how the filing of such motions would impact the timely
completion of the proceeding and the additional burden placed on the
petitioner. Specifically, belated motions to amend may cause the
integrity and efficiency of the review to suffer as the petitioner may
be required to devote significant time and resources on claims that are
of constantly changing scope. Further, due to time constraints, motions
to amend late in the process may not provide a petitioner a full and
fair opportunity to respond to the newly presented subject matter. In
determining whether to authorize such an additional motion to amend,
the Board will consider whether a petitioner has submitted supplemental
information after the time period set for filing a motion to amend in
Sec. 42.121(a)(1). Similarly, motions to amend may be permitted upon a
joint request of the petitioner and the patent owner to advance
settlement where the motion does not jeopardize the ability of the
Office to complete the proceeding timely.
Section 42.122: Section 42.122(a) is consistent with the
requirements of 35 U.S.C. 315(d), as amended, regarding multiple
proceedings involving the subject patent. When there is a question of a
stay concerning a matter for which a statutory time period is running
in one of the proceedings, it is expected that the Director would be
consulted prior to issuance of a stay, given that the stay would impact
the ability of the Office to meet the statutory deadline. For example,
it is expected that the Board would consult the Director prior to the
issuance of a stay in an ex parte reexamination proceeding where the
three-month statutory time period under 35 U.S.C. 303 is running.
Under Sec. 42.122(b), a patent owner or petitioner may request
joinder, but such a request must be filed no later than one month after
institution. Further, the time period set forth in Sec. 42.101(b)
shall not apply when the petition is accompanied by a request for
joinder. This is consistent with the last sentence of 35 U.S.C. 315(b),
as amended.
Section 42.123: Section 42.123 provides for the filing of
supplemental information. 35 U.S.C. 316(a)(3), as amended, provides
that the Director will issue regulations establishing procedures for
filing supplemental information after the petition is filed. 35 U.S.C.
314(a), as amended, provides that the institution of an inter partes
review is based upon the information filed in the petition under 35
U.S.C. 311, as amended, and any response filed under 35 U.S.C. 313, as
amended. As the institution of the inter partes review is not based
upon supplemental information, the rule provides that motions
identifying supplemental information be filed after the institution of
the inter partes review.
Subpart C--Post-Grant Review
Section 42.200: Section 42.200 sets forth policy considerations for
post-grant review proceedings.
Section 42.200(a) provides that a post-grant review is a trial and
subject to the rules set forth in subpart A of title 42, Code of
Federal Regulations.
Section 42.200(b) provides that a claim in an unexpired patent
shall be given its broadest reasonable construction in light of the
specification in which it appears. This rule is consistent with 35
U.S.C. 326, which provides for the promulgation of rules, including
rules establishing and governing the proceeding and the relationship of
the proceeding to other proceedings, the standards for instituting the
proceeding, and standards and procedures for allowing a patent owner to
amend the patent, as well as 35 U.S.C. 328, which provides that the
Board will enter a final written decision on patentability. This rule
is also consistent with longstanding established principles of claim
construction before the Office. In re Am. Acad. of Sci. Tech Ctr., 367
F.3d 1359, 1364 (Fed. Cir. 2004); In re Yamamoto, 740 F.2d 1569, 1571
(Fed. Cir. 1984). As explained in Yamamoto, a party's ability to amend
claims to avoid prior art--which exists in these proceedings (Sec.
42.221)--distinguishes Office proceedings from district court
proceedings and justifies the broadest reasonable interpretation
standard for claim interpretation. Yamamoto, 740 F.2d at 1572.
Section 42.200(c) provides a one-year timeframe for administering
the proceeding after institution, with up to a six-month extension for
good cause. The one-year period may be adjusted by the Board in the
case of joinder. This rule is consistent with 35 U.S.C. 326(a)(11).
Section 42.200(d) provides that interferences commenced within one
year of enactment of the AIA shall proceed under part 41 of 37 CFR
except as the Chief Administrative Patent Judge
[[Page 48691]]
may otherwise order in the interests-of-justice. The expectation is
that dismissal will be rarely, if ever, ordered. Hence, any case where
such an order arises would be exceptional and should be handled as its
circumstances require. This rule is consistent with section 6(f)(3) of
the AIA, which provides that the Director shall include in regulations
the procedures under which an interference commenced before the
effective date of the act is to proceed.
Section 42.201: Section 42.201 provides who may file a petition for
post-grant review.
Section 42.201(a) provides that a person who is not the patent
owner may file a petition to institute a post-grant review, unless the
petitioner or real party-in-interest had already filed a civil action
challenging the validity of a claim of the patent. The rule follows the
statutory language of 35 U.S.C. 325(a)(1), which provides that post-
grant reviews are barred by prior civil action.
Section 42.201(b) provides that a petition may not be filed where
the petitioner, the petitioner's real party-in-interest, or a privy of
the petitioner is estopped from challenging the claims on the grounds
identified in the petition. The rule is consistent with 35 U.S.C.
325(e)(1) and 315(e)(1), as amended, which provide for estoppel based
upon a final written decision in a post-grant review, a covered
business method patent review, or inter partes review.
Section 42.202: Section 42.202 sets forth the timeliness
requirement for filing a post-grant review petition.
Section 42.202(a) provides that a petition for a post-grant review
of a patent must be filed no later than the date that is nine months
after the date of the grant of a patent or of the issuance of a reissue
patent. Section 42.202(a) also provides that a petition may not request
a post-grant review for a claim in a reissue patent that is identical
to or narrower than a claim in the original patent from which the
reissue patent was issued unless the petition is filed not later than
the date that is nine months after the date of the grant of the
original patent. The rule is consistent with the requirements of 35
U.S.C. 321(c).
Section 42.202(b) provides that the Director may limit the number
of post-grant reviews that may be instituted during each of the first
four one-year periods after post-grant review takes effect. This rule
is consistent with section 6(f)(2)(B) of the AIA, which provides for
graduated implementation of post-grant reviews. The Office, however,
does not expect to limit the number of petitions at this time.
Section 42.203: Section 42.203 provides that a fee must accompany a
petition for post-grant review and that no filing date will be accorded
until full payment is received. This rule is consistent with 35 U.S.C.
322(a)(1), which provides that a petition may only be considered if the
petition is accompanied by the payment of the fee established by the
Director.
Section 42.204: Section 42.204 provides for the content of
petitions to institute a post-grant review. The rule is consistent with
35 U.S.C 322(a)(4), which allows the Director to prescribe regulations
concerning the information provided with the petition.
Section 42.204(a) provides that a petition must demonstrate that
the petitioner has standing. To establish standing, a petitioner, at a
minimum, must certify that the patent is available for post-grant
review and that the petitioner is not barred or estopped from
requesting a post-grant review challenging the patent claims. This
requirement is to ensure that a party has standing to file the post-
grant review and would help prevent spuriously-instituted post-grant
reviews. Facially improper standing will be a basis for denying the
petition without proceeding to the merits of the petition.
Section 42.204(b) requires that the petition identify the precise
relief requested for the claims challenged. Specifically, the rule
requires that the petition identify each claim being challenged, the
specific grounds on which each claim is challenged, how the claims are
to be construed, how the claims as construed are unpatentable, why the
claims as construed are unpatentable under the identified grounds, and
the exhibit numbers of the evidence relied upon with a citation to the
portion of the evidence that is relied upon to support the challenge.
This rule is consistent with 35 U.S.C. 322(a)(3), which requires that
the petition identify, in writing and with particularity, each claim
challenged, the grounds on which the challenge to each claim is based,
and the evidence supporting the challenge. It is also consistent with
35 U.S.C. 322(a)(4), which allows the Director to require additional
information as part of the petition. The rule provides an efficient
means for identifying the legal and factual basis satisfying the
threshold for instituting a proceeding and provides the patent owner
with a minimum level of notice as to the basis for the challenge to the
claims.
Section 42.204(c) provides that a petitioner seeking to correct
clerical or typographical mistakes in a petition could file a
procedural motion to correct the mistakes. The rule also provides that
the grant of such a motion would not alter the filing date of the
petition.
Section 42.205: Section 42.205 provides petition and exhibit
service requirements in addition to the service requirements of Sec.
42.6.
Section 42.205(a) requires the petitioner to serve the patent owner
at the correspondence address of record for the patent, and permits
service at any other address known to the petitioner as likely to
effect service as well. Once a patent has issued, communications
between the Office and the patent owner often suffer. Ray v. Lehman, 55
F.3d 606 (Fed. Cir. 1995) (patentee's failure to maintain
correspondence address contributed to failure to pay maintenance fee
and therefore expiration of the patent). While the rule requires
service at the correspondence address of record in the patent, the
petitioner will already be in communication with the patent owner, in
many cases, at a better service address than the official
correspondence address.
Section 42.205(b), as adopted in this final rule, provides that
upon agreement of the parties, service may be made electronically, and
service may be made by EXPRESS MAIL[supreg] or by means at least as
fast and reliable as EXPRESS MAIL[supreg]. Personal service is not
required.
Section 42.206: Section 42.206 provides for the filing date
requirements of a post-grant review petition.
Section 42.206(a) sets forth the requirements for a complete
petition. 35 U.S.C. 322 states that a petition may only be considered
when the petition identifies all the real parties in interest, when a
copy of the petition is provided to the patent owner or the owner's
representative, and when the petition is accompanied by the fee
established by the Director. Consistent with the statute, the rule
requires that a complete petition be filed along with the fee and that
it be served upon the patent owner.
Section 42.206(b) provides one month to correct defective requests
to institute a post-grant review, unless the statutory deadline in
which to file a petition for post-grant review has expired. The rule is
consistent with the requirement of 35 U.S.C. 322 that the Board may not
consider a petition that fails to meet the statutory requirements for a
petition. In determining whether to grant a filing date, the Board will
review a petition for procedural compliance. Where a procedural defect
is noted, e.g., failure to state the claims being challenged, the Board
will notify the petitioner that the petition was incomplete and
identify any non-compliance issues.
[[Page 48692]]
Section 42.207: Section 42.207(a) provides that the patent owner
may file a preliminary response to the petition. The rule is consistent
with 35 U.S.C. 323, which provides for such a response.
Section 42.207(b) provides that the due date for the preliminary
response to petition is no later than three months from the date of the
notice that the request to institute a post-grant review has been
granted a filing date. This rule is consistent with 35 U.S.C. 323,
which provides that the Director shall set a time period for filing the
patent owner preliminary response.
Within three months from the filing of the patent owner preliminary
response, or three months from the date such a response was due, the
Board will determine whether to institute the review. A patent owner
seeking a shortened period for the determination may wish to file a
preliminary response well before the date the response is due, or file
a paper stating that no preliminary response will be filed. No adverse
inference will be drawn where a patent owner elects not to file a
response or elects to waive the response.
Section 42.207(c) provides that the patent owner preliminary
response may not present new testimony evidence, for example, expert
witness testimony on patentability. 35 U.S.C. 323 provides that a
patent owner preliminary response set forth reasons why no post-grant
review should be instituted. In contrast, 35 U.S.C. 326(a)(8) provides
for a patent owner response after institution and requires the
presentation, through affidavits or declarations, of any additional
factual evidence and expert opinions on which the patent owner relies
in support of the response. The difference in statutory language
demonstrates that 35 U.S.C. 323 does not permit the presentation of
evidence as a matter of right in the form of testimony in support of a
patent owner preliminary response, and the proposed rule reflects this
distinction. In certain instances, however, a patent owner may be
granted additional discovery before filing its preliminary response and
may submit any testimonial evidence obtained through the discovery. For
example, additional discovery may be authorized where the patent owner
raises sufficient concerns regarding the petitioner's certification of
standing.
Although 35 U.S.C. 324 does not require that a patent owner
preliminary response be considered, the Board expects to consider such
responses in all but exceptional cases.
Section 42.207(d) provides that the patent owner preliminary
response cannot include any amendment. See Sec. 42.221 for filing a
motion to amend the patent after a post-grant review has been
instituted.
Section 42.207(e) provides that the patent owner may file a
statutory disclaimer under 35 U.S.C. 253(a) in compliance with Sec.
1.321(a), disclaiming one or more claims in the patent, and no post-
grant review will be instituted to review disclaimed claims.
Section 42.208: Section 42.208 provides for the institution of a
post-grant review.
35 U.S.C. 324(a), as amended, states that the Director may not
authorize a post-grant review to be instituted, unless the Director
determines that the information in the petition, if such information is
not rebutted, demonstrates that it is more likely than not that at
least one of the claims challenged in the petition is unpatentable.
Alternatively, the Director may institute a post-grant review by
showing that the petition raises a novel or unsettled legal question
that is important to other patents or patent applications. Section
42.208 is consistent with this statutory requirement and identifies how
the Board may authorize such a review to proceed. In considering
whether to authorize the review, the Board may take into account its
ability to complete the proceeding timely. 35 U.S.C. 326(b).
Section 42.208(a) provides that the Board may authorize the review
to proceed on all or some of the challenged claims and on all or some
of the grounds of unpatentability asserted for each claim.
Specifically, in instituting the review, the Board may authorize the
review to proceed on the challenged claims for which the threshold
requirements for the proceeding have been met. The Board may identify
which of the grounds the review will proceed upon on a claim-by-claim
basis. Any claim or issue not included in the authorization for review
would not be part of the post-grant review. The Office intends to
publish a notice of the institution of a post-grant review in the
Official Gazette.
Section 42.208(b) provides that the Board, prior to institution of
a review, may deny some or all grounds for unpatentability on some or
all of the challenged claims. This rule is consistent with the
efficient administration of the Office, which is a consideration in
prescribing post-grant review regulations under 35 U.S.C. 326(b).
Section 42.208(c) provides that the institution may be based on a
more likely than not standard and that standard is consistent with the
requirements of 35 U.S.C. 324(a).
Section 42.208(d) provides that a determination under Sec.
42.208(c) may be satisfied by a showing that the petition raises a
novel or unsettled legal question that is important to other patents or
patent applications. This rule is consistent with 35 U.S.C. 324(b). The
expectation is that this ground for a post-grant review would be used
sparingly.
Section 42.220: Section 42.220 sets forth the procedure in which
the patent owner may file a patent owner response.
Section 42.220(a) provides for a patent owner response and is
consistent with the requirements of 35 U.S.C. 326(a)(8).
Section 42.220(b) provides that if no time for filing a patent
owner response to a petition is provided in a Board order, the default
time for filing the response is three months from the date the post-
grant review is instituted. The Board's experience with patent owner
responses is that three months provides a sufficient amount of time to
respond in a typical case, especially as the patent owner would already
have been provided three months to file a patent owner preliminary
response prior to institution. Additionally, the time period for
response is consistent with the requirement that the trial be conducted
such that the Board renders a final decision within one year of the
institution of the review. 35 U.S.C. 326(a)(11).
Section 42.221: Section 42.221 provides standards and procedures
for a patent owner to file motions to amend the patent. The rule is
consistent with 35 U.S.C. 326(a)(9), which requires the Office to
promulgate rules setting forth standards and procedures for allowing
the patent owner to amend the patent.
Section 42.221(a) makes it clear that the first motion to amend
need not be authorized by the Board. If the motion complies with the
timing and procedural requirements, the motion would be entered.
Additional motions to amend would require prior Board authorization.
All motions to amend, even if entered, will not result automatically in
entry of the proposed amendment into the patent. The requirement to
consult the Board reflects the Board's need to regulate the
substitution of claims and the amendment of the patent to control
unnecessary proliferation of issues and abuse of the system. The
proposed rule aids in the efficient administration of the Office and
the timely completion of the proceeding. 35 U.S.C. 326(b).
Section 42.221(a) also provides that a motion to amend the claims
may be denied where the amendment does not respond to the ground of
unpatentability
[[Page 48693]]
involved in the trial or seeks to enlarge the scope of the claims or
introduce new matter. Section 42.221(a) further provides that a
reasonable number of substitute claims is presumed to be one substitute
claim per challenged claim which may be rebutted by a demonstration of
need. The rule aids the efficient administration of the Office and the
timely completion of the review under 35 U.S.C. 326(b) and also is
consistent with 35 U.S.C. 326(d)(3) which prohibits enlarging the scope
of the claims or introducing new matter.
Section 42.221(b) provides that a motion to amend the claims must
include a claim listing, show the changes clearly, and set forth: (1)
The support in the original disclosure of the patent for each claim
that is added or amended, and (2) the support in an earlier filed
disclosure for each claim for which benefit of the filing date of the
earlier filed disclosure is sought.
Under Sec. 42.221(c), a patent owner may request the filing of
more than one motion to amend its claims during the course of the
proceeding. Additional motions to amend may be permitted upon a
demonstration of good cause by the patent owner or a joint request of
the petitioner and the patent owner to materially advance a settlement.
In considering whether good cause is shown, the Board will take
into account how the filing of such motions would impact the timely
completion of the proceeding and the additional burden placed on the
petitioner. Specifically, belated motions to amend may cause the
integrity and efficiency of the review to suffer as the petitioner may
be required to devote significant time and resources on claims that are
of constantly changing scope. Furthermore, due to time constraints,
motions to amend late in the process may not provide a petitioner a
full and fair opportunity to respond to the newly presented subject
matter. In determining whether to authorize such an additional motion
to amend, the Board will consider whether a petitioner has submitted
supplemental information after the time period set for filing a motion
to amend in Sec. 42.221(a)(1). Similarly, a motion to amend may be
permitted upon a joint request of the petitioner and the patent owner
to advance settlement where the motion does not jeopardize the ability
of the Office to complete the proceeding timely.
Section 42.222: Section 42.222 is consistent with the requirements
of 35 U.S.C. 325(d) regarding multiple proceedings involving the
subject patent. When there is a question of a stay concerning a matter
for which a statutory time period is running in one of the proceedings,
where the stay would impact the ability of the Office to meet the
statutory deadline, it is expected that the Director would be consulted
prior to issuance of a stay, given that the stay would impact the
ability of the Office to meet the statutory deadline for completing the
post-grant review. For example, it is expected that the Board would
consult the Director prior to the issuance of a stay in an ex parte
reexamination proceeding where the three-month statutory time period
under 35 U.S.C. 303 is running.
Under Sec. 42.222(b), a patent owner or petitioner may request a
joinder, but such a request must be filed no later than one month after
institution.
Section 42.223: Section 42.223 provides for the filing of
supplemental information. 35 U.S.C. 326(a)(3) provides that the
Director shall promulgate regulations establishing procedures for
filing supplemental information after the petition is filed. 35 U.S.C.
324(a) provides that the institution of a post-grant review is based
upon the information filed in the petition under 35 U.S.C. 321 and any
response filed under 35 U.S.C. 323. As the institution of the post-
grant review is not based upon supplemental information, the rule
provides that motions identifying supplemental information be filed
after the institution of the post-grant review.
Section 42.224: Section 42.224 provides that additional discovery
in a post-grant review is limited to evidence directly related to
factual assertions advanced by a party to the proceeding and that the
standard for additional discovery is good cause. The rule is consistent
with 35 U.S.C. 326(a)(5), which provides that the Director shall
prescribe regulations setting forth the standards and procedures for
discovery of relevant evidence that is directly related to factual
assertions by either party.
While an interests-of-justice standard will be employed in granting
additional discovery in inter partes reviews and derivation
proceedings, new subpart C will provide that a good cause standard is
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 on balance, the interests-of-justice standard is
a slightly higher standard than good cause. While a good cause standard
requires a party to show a specific factual reason to justify the
needed discovery, interests-of-justice would mean that the Board would
look at all relevant factors. The interests-of-justice standard covers
considerably more than the good cause standard, and in using such a
standard the Board will attempt to consider whether the additional
discovery is necessary in light of ``the totality of the relevant
circumstances.'' U.S. v. Roberts, 978 F.2d 17, 22 (1st Cir. 1992).
Subpart D--Transitional Program for Covered Business Method Patents
Section 42.300: Section 42.300 sets forth policy considerations for
covered business method patent review proceedings.
Section 42.300(a) provides that a covered business method patent
review is a trial and subject to the rules set forth in subpart A and
also subject to the post-grant review procedures set forth in subpart C
except for Sec. Sec. 42.200, 42.201, 42.202, and 42.204. This is
consistent with section 18(a)(1) of the AIA, which provides that the
transitional proceeding shall be regarded as, and shall employ the
standards and procedures of, a post-grant review with certain
exceptions.
Section 42.300(b) provides that a claim in an unexpired patent
shall be given its broadest reasonable construction in light of the
specification in which it appears. This rule is consistent with the
provisions of 35 U.S.C. 326, which provides for the promulgation of
rules, including rules establishing and governing the proceeding and
the relationship of the proceeding to other proceedings, the standards
for instituting the proceeding, and standards and procedures for
allowing a patent owner to amend the patent, as well as 35 U.S.C. 328,
which provides that the Board will enter a final written decision on
patentability. This rule would also be consistent with longstanding
established principles of claim construction before the Office. See,
e.g., In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed. Cir.
2004); In re Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984). As
explained in Yamamoto, a party's ability to amend claims to avoid prior
art--which exists in these proceedings (Sec. 42.221)--distinguishes
Office proceedings from district court proceedings and justifies the
broadest reasonable interpretation standard for claim interpretation.
Yamamoto, 740 F.2d at 1572.
Section 42.300(c) provides a one-year timeframe for administering
the proceeding after institution, with a six-month extension for good
cause. The one-year period may be adjusted by the Board in the case of
joinder. This rule is consistent with 35 U.S.C. 326(a)(11).
Section 42.300(d) provides that the rules in subpart D are in
effect until September 15, 2020, except that the rules shall continue
to apply to any
[[Page 48694]]
covered business method patent review filed before the date of repeal.
This is consistent with section 18(a)(3)(A) of the AIA, which provides
that the regulations issued are repealed effective upon the expiration
of the eight-year period beginning on the date that the regulations
take effect, and section 18(a)(3)(B) which provides that the rules in
effect until before the repeal will govern covered business method
patent reviews filed before the date of appeal.
Section 42.302: Section 42.302 specifies who may file a petition
for a covered business method patent review.
Section 42.302(a) provides that a petitioner may not file a
petition to institute a covered business method patent review of the
patent unless the petitioner, the petitioner's real party-in-interest,
or a privy of the petitioner has been sued for infringement of the
patent or has been charged with infringement under that patent. This
rule is consistent with section 18(a)(1)(B) of the AIA. Section
42.302(a) also defines the term ``charged with infringement'' to mean
``a real and substantial controversy regarding infringement of a
covered business method patent such that the petitioner would have
standing to bring a declaratory judgment action in Federal court.''
Section 42.302(b) provides that a petitioner may not file a
petition to institute a covered business method patent review of the
patent where the petitioner, the petitioner's real party-in-interest,
or a privy of the petitioner is estopped from challenging the claims on
the grounds identified in the petition. The rule is consistent with 35
U.S.C. 325(e)(1), which provides for estoppel based upon a final
written decision in a post-grant review.
Section 42.303: Section 42.303 provides that a petition for a
covered business method patent review may be filed at any time except
during the period in which a petition for a post-grant review of the
patent would satisfy the requirements of 35 U.S.C. 321(c). This rule is
consistent with section 18(a)(2) of the AIA.
Section 42.304: Section 42.304 provides for the content of
petitions to institute a covered business method patent review. The
rule is consistent with 35 U.S.C. 322(a)(4), which allows the Director
to prescribe regulations concerning the information provided with the
petition to institute a covered business patent review.
Section 42.304(a) provides that a petition under this section must
demonstrate that the petitioner has grounds for standing. To establish
standing, a petitioner, at a minimum, would be required to certify with
explanation that the patent is a covered business method patent and
that the petitioner meets the eligibility requirements of Sec. 42.302.
This requirement is to ensure that a party has standing to file the
covered business method patent review and would help prevent spuriously
instituted reviews. Facially improper standing will be a basis for
denying the petition without proceeding to the merits of the decision.
Section 42.304(b) requires that the petition identify the precise
relief requested for the claims challenged. Specifically, the rule
requires that the petition identify each claim being challenged, the
specific grounds on which each claim is challenged, how the claims are
to be construed, why the claims as construed are unpatentable, and the
exhibit numbers of the evidence relied upon with a citation to the
portion of the evidence that is relied upon to support the challenge.
This rule is consistent with 35 U.S.C. 322(a)(3), which requires that
the petition identify, in writing and with particularity, each claim
challenged, the grounds on which the challenge to each claim is based,
and the evidence supporting the challenge. It is also consistent with
35 U.S.C. 322(a)(4), which allows the Director to require additional
information as part of the petition. The rule provides an efficient
means for identifying the legal and factual bases supporting a prima
facie case of relief and would provide the patent owner with a minimum
level of notice as to the basis for the challenge to the claims.
Section 42.304(c) provides that a petitioner seeking to correct
clerical or typographical mistakes could file a motion to correct the
mistakes. The rule also provides that the grant of such a motion would
not alter the filing date of the petition.
Response to Comments
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 the consolidated set of rules relating to
Board trial practice and judicial review of Board decisions are
provided in a separate final rule (RIN 0651-AC70), and the Office's
responses to the comments that are directed to the definitions of the
terms ``covered business method patent'' and ``technological
invention'' are also provided in another separate final rule (RIN 0651-
AC75).
The Office's responses to comments that are directed to 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 as follows:
Eligibility
Comment 1: One comment requested clarification on whether an inter
partes review may be requested for a patent issued from an application
filed before November 29, 1999.
Response: Inter partes review is applicable to a patent issued from
an application filed before November 29, 1999. See section 6(c)(2)(A)
of the AIA.
Who May Petition (Sec. Sec. 42.101, 42.201)
Comment 2: Several comments suggested that patent owners should be
permitted to petition for inter partes review to provide a low cost
alternative to small companies seeking to defend their patents.
Response: This suggestion is not adopted because 35 U.S.C. 311, as
amended, requires that the petition in an inter partes review be filed
by a person who is not the owner of the patent.
Comment 3: Several comments suggested that the Office should
interpret the terms ``real parties in interest'' and ``privies'' in a
flexible manner consistent with common law principles and Federal case
law, and set forth common law definitions in the regulation. One
comment was in favor of the proposed rules related to the
identification of real party-in-interest and related matters under
Sec. 42.8. However, another comment expressed concerns related to the
predictability of the Office's case-by-case approach in view of the
estoppel effects.
Response: Because ``real party-in-interest'' and ``privy'' disputes
involve highly fact-dependent issues, the Office believes that the
case-by-case approach is the best way to resolve these disputes. The
Board will make the determination based on controlling case law and the
particular facts of each case as suggested by several of the comments.
The Office Patent Trial Practice Guide provides further discussion to
assist parties in identifying ``real parties in interest'' and
``privies.''
Comment 4: Several comments requested additional guidance regarding
the definitions for the terms ``real party-in-interest'' and ``privy.''
Some of the
[[Page 48695]]
comments requested examples, such as whether a third party who provides
financial, legal, and technical assistance will be considered a real
party-in-interest or privy.
Response: The Office Patent Trial Practice Guide provides further
discussion to assist parties in identifying ``real parties in
interest'' and ``privies.'' Since ``real party-in-interest'' and
``privy'' issues are highly fact dependent, the Office will also
provide more guidance through its opinions and will publish relevant
decisions promptly.
Comment 5: A few comments recommended that the Office should
maintain the control-focused approach to non-party estoppel and
requested more information regarding control-focused understandings of
the terms ``real party-in-interest'' and ``privy.''
Response: The Office may consider: (1) Whether the non-party
exercised, or could have exercised, control over a party's
participation in a proceeding, and (2) the degree of that control, in
determining whether a party may be recognized as a ``real party-in-
interest'' or ``privy.'' Furthermore, the Office may consider other
relevant factors. The Office Patent Trial Practice Guide provides
further discussion to assist in identifying the relevant parties. The
Office will also provide more guidance through its opinions, and will
publish relevant decisions promptly.
Comment 6: A few comments suggested that the Office should describe
how its practice in making ``real party-in-interest'' and ``privy''
determinations will differ from its current approach in inter partes
reexaminations.
Response: The Office Patent Trial Practice Guide provides a few
examples of relevant petition decisions issued in reexaminations. Since
``real party-in-interest'' and ``privy'' determinations are fact
dependent, the Office will consider the particular facts of each case
and controlling case law.
Comment 7: A few comments requested clarification on the relevance
of Joint Defense Agreements to a ``real party-in-interest'' or
``privy'' determination.
Response: Since ``real party-in-interest'' and ``privy''
determinations depend on the particular facts of each case, the Office
will decide these issues on a case-by-case basis. As to Joint Defense
Agreements, the Office Patent Trial Practice Guide discusses their role
in the determination. In short, a party's membership in a Joint Defense
Agreement with the petitioner does not, standing alone, make the party
a ``real party in interest'' or ``privy'' of the petitioner, but the
fact is relevant to those inquiries. Of particular relevance is the
party's level of participation in, and control over, the requested
trial.
Comment 8: A few comments suggested that the Office should require
that challenges to ``real party-in-interest'' identifications be
brought no later than the deadline for filing a patent owner
preliminary response in order to provide sufficient time for the Board
to decide the challenge before deciding whether to institute a review.
Another comment requested clarification that standing may be challenged
at any time.
Response: The Office agrees with the comments that such a challenge
should be brought before or with the filing of the patent owner
preliminary response. During that period, the patent owner may seek
authorization to take pertinent discovery. After the patent owner
preliminary response, the likelihood of granting an authorization for
additional discovery related to the challenge before institution will
decrease because the Board is required to determine whether to
institute a review within three months from the filing of the patent
owner preliminary response. After institution, standing issues may
still be raised during the trial. A patent owner may seek authority
from the Board to take pertinent discovery or to file a motion to
challenge the petitioner's standing.
Comment 9: A few comments requested clarification that the burdens
of proof and persuasion will be on the patent owner to come forward
with objective evidence to support a challenge to the ``real party-in-
interest'' identification. One comment suggested that the Office should
require petitioners to update the submissions related to estoppel
throughout the pendency of a review proceeding, and disclose any facts
relevant to the certification.
Response: The Office generally will accept the petitioner's ``real
party-in-interest'' identification at the time of filing the petition.
Section 42.8(a)(3) requires a party to file an update within 21 days of
a change of the ``real party-in-interest'' identification. The patent
owner may provide objective evidence to challenge the identification in
a preliminary response, which the Board will consider in determining
whether to grant the petition.
Comment 10: A few comments suggested that the discovery rules
should be expanded to permit the patent owner to investigate the
petitioner's compliance with the identification of the real party-in-
interest.
Response: Additional discovery may be authorized where a patent
owner raises sufficient concerns regarding the petitioner's
certification.
Comment 11: One comment recommended that the estoppel effects
should be enforced against the named petitioner and privies of the
named petitioner, as well as the actual real parties in interest and
its privies.
Response: Depending on the particular facts of each case, including
whether there is any intent of misrepresentation, the Board has the
discretion to impose an appropriate sanction against a party for
misconduct e.g., a petitioner willfully misleads the Office that it is
a proper petitioner for a review of certain claims in a patent when the
party knew on filing that they were a privy of a previously
unsuccessful petitioner who had sought review of the same claims in the
same patent. See Sec. 42.12.
Pendency (Sec. Sec. 42.100(c) and 42.200(c))
Comment 12: One comment opposed any policy that would allow
extension of the one-year period whenever a petition possesses certain
indicia of complexity, e.g., when the petition involves an obviousness
challenge, and urged the Office to remain firm in its commitment to
complete proceedings within the one-year period, with only rare use of
the six-month extension.
Response: The rules require final determinations to be issued in
both post-grant and inter partes review within the one-year period.
Sec. Sec. 42.100(c) and 42.200(c). Extensions of the one-year period
are anticipated to be rare.
Comment 13: Several comments supported a high threshold for
granting an extension of the one-year period and asked for guidance as
to what would constitute good cause to extend the one-year period.
Response: Extensions of the one-year period are anticipated to be
rare. Sec. Sec. 42.100(c) and 42.200(c). Whether good cause is shown
will depend on the particular facts of a given case and cannot be
articulated with certainty in the abstract. One example may be where,
through no fault of either party, new evidence is uncovered late in the
proceeding that necessitates a motion to amend the patent.
Comment 14: Several comments asked for guidance as to the impact of
the Board missing the one-year period in post-grant or inter partes
review; for example whether the Board retains jurisdiction and what
recourse is available to the parties.
Response: As amended, 35 U.S.C. 316(a)(11) and 35 U.S.C. 326(a)(11)
require the Director to prescribe regulations requiring that the final
determination be issued within one year
[[Page 48696]]
(extendable up to six months with good cause). Consistent with these
statutory provisions, the Office adopted Sec. Sec. 42.100(c) and
42.200(c) in this final rule to set forth the one-year time period. The
Office does not envision at this time extending any review beyond the
time periods set forth in Sec. Sec. 42.100(c) and 42.200(c).
Comment 15: Several comments suggested that meeting the one-year
period will be difficult where a party is outside the United States and
that allowing less time for judicial deliberations should be considered
in such instances.
Response: The rules allow the Board to take into consideration any
factor that might affect the ability to meet the one-year period and to
adjust the schedule accordingly, including providing less time for
judicial deliberations.
Comment 16: One comment suggested that the Office should confirm in
the Office Patent Trial Practice Guide or the rules that ``good cause''
exists for a six-month extension of the one-year period where a motion
to amend is filed after the patent owner's response so that the patent
owners cannot ``sandbag'' the petitioners by holding back substitute
claims.
Response: This suggestion is not adopted because extensions of the
one-year period are anticipated to be rare. Whether good cause is shown
will depend on the particular facts of a given case. Sections 42.121
and 42.221 require a patent owner to seek authorization for filing a
motion to amend claims after a patent owner response, so that the Board
will be able to determine proper scheduling for completing the review
within the one-year period, and possibly to deny a patent owner's
request to file a motion to amend if it comes too late in the
proceeding.
Time for Filing Petition (Sec. Sec. 42.102, 42.202, and 42.303)
Comment 17: A comment indicated that nine months is a sufficient
amount of time for filing a petition for post-grant review.
Response: Nine months is the time required by statute. 35 U.S.C.
321(c).
Comment 18: A comment suggested that the statement in the
discussion of the notice of proposed rulemaking (77 FR at 7044)
indicating that petitions requesting inter partes review would be
considered timely if filed prior to the institution of a post-grant
review is in conflict with the requirement that a petition for inter
partes review not be filed until nine months after issuance.
Response: The statute states that a petition for inter partes
review must be filed after the later of nine months from issuance or
the termination of an instituted post-grant review. The statement in
the discussion refers to the situation where nine months have passed
since issuance, yet no decision on whether to institute a post-grant
review has been entered. In such a situation, a party need not wait
until a decision on whether the post-grant review will be instituted,
but may proceed and file a petition for inter partes review.
Comment 19: Several comments expressed concern about any decision
by the Director to limit the number of petitions for inter partes or
post-grant review.
Response: Although the AIA authorizes the Director to limit the
number of petitions under sections 6(c)(2)(B) and 6(f)(2)(B) of the
AIA, as stated previously in the discussion of Sec. Sec. 42.102(b) and
42.202(b), the Office does not plan to limit the number of petitions at
this time.
Comment 20: One comment suggested that the petition fees should
allow the Office to cover the demand that may exist for post-grant
proceedings.
Response: The fees have been set with consideration for the
aggregate cost of the proceeding. See 35 U.S.C. 321(a). At this time
the Office expects to be able to provide the resources necessary to
avoid limiting the number of petitions.
Comment 21: Several comments suggested that guidance should be
provided for consequences if the Director makes a decision to limit the
number of petitions. In particular, the comments requested
clarification on whether a petition, filed after the limit is reached,
would be afforded any benefit of priority or would be required to be
resubmitted.
Response: At this time, it is not anticipated that a limit on the
number of petitions will be imposed. Under Sec. Sec. 42.102(b) and
42.202(b), a petition that is filed after any established limit would
be considered untimely. If a limit were to be imposed, it is expected
that the Office would provide sufficient notice and guidance well prior
to the imposition of such limit.
Comment 22: One comment suggested that if a limit on the number of
petitions is imposed it should be done on a quarterly basis, noting
that having petitions filed after an established limit be deemed
untimely arbitrarily harms petitioners based on the timing of their
actions and is not statutorily required.
Response: This suggestion is not adopted. The statutes allow the
Director to impose a limit on the number of proceedings that may be
instituted on a yearly basis but do not provide for quarterly limits.
Sections 6(c)(2)(B) and 6(f)(2)(B) of the AIA. Any petition filed after
the Director has established a limit, and that limit has been exceeded,
will be untimely because the petition would have been filed beyond a
time when the Office is receiving petitions for the year.
Comment 23: Several comments suggested that the Office should
provide a monthly or quarterly count of the number of filed petitions
and instituted proceedings and notice prior to and when any limit is
reached.
Response: At this time it is not anticipated that a limit on the
number of proceedings instituted will be imposed and therefore, no
limit has been established. If a limit is set in the future it is
expected that the Office would provide sufficient notice, including
periodic reporting of the number of petitions received and proceedings
instituted, well prior to the time any limit would be met.
Comment 24: One comment suggested that the Office accept petitions
for covered business method patent review prior to the effective date
of the program pursuant to section 18(a)(2) of the AIA, so that the
Office can begin immediate consideration of those petitions as of
September 16, 2012.
Response: The suggestion is not adopted. The AIA provides that
regulations issued for the transitional covered business method patent
program shall take effect one year from the date of the enactment of
the Act, as set forth in section 18(a)(2). Consistent with the
provision, the regulations for the transitional covered business method
patent program will take effect September 16, 2012. At that time, the
Office will accept petitions for the program.
Content of Petition (Sec. Sec. 42.104, 42.204, and 42.304)
Comment 25: One comment suggested that the Office consider a ``more
rational and fair'' scheme for presenting challenges based on a
proposed-rejection-by-proposed-rejection approach allowing the patent
owner to challenge the grouping and grounds of a proposed rejection.
Response: The rules do not prohibit petitioners from grouping
claims where the basis for the alleged unpatentability of the grouped
claims is the same. When grouping claims, the petitioner must provide
sufficient notice as to the merits of the challenge for each claim so
challenged.
Comment 26: One comment suggested that the Office should require
proof in the petition sufficient to meet the statutory grounds for
unpatentability alleged, including requiring corroboration for ``on
sale'' and ``public
[[Page 48697]]
use'' challenges with an explanation of the grounds and specific
citation to supporting evidence.
Response: This suggestion is adopted in part. The rules require the
petition to set forth a full statement of the reasons for the relief
requested, including a detailed explanation of the significance of the
evidence. Sec. 41.22(a)(3). In addition, the petition must show how
each challenged claim is unpatentable under the statutory ground
identified, must specify where each element is found in the prior art,
and must provide specific citations to the evidence. Sec. Sec. 41.104
and 41.204. If corroborating evidence is necessary to show
unpatentability of a challenged claim, the evidence must be included
with the petition to meet the requirements of the rules.
Comment 27: One comment suggested that the second sentence of
Sec. Sec. 42.104(b) and 42.204(b) be amended to read ``in addition to
the precise relief requested, the statement must identify the
following.''
Response: This suggestion is not adopted. Sections 42.104 and
42.204 state that the requirements of paragraph (b) are in addition to
the requirements of Sec. Sec. 42.8, 42.22, and 42.24. ``A statement of
the precise relief requested'' is required by Sec. 42.22(a)(1).
Claim Construction (Sec. Sec. 42.100(b), 42.200(b), and 42.300(b))
Comment 28: Several comments suggested that proposed Sec. Sec.
42.100(b), 42.200(b), and 42.300(b) are substantive rules and appear to
exceed the authority of the Office, which does not have substantive
rulemaking authority under 35 U.S.C. 2(b)(2). Those comments further
stated that the AIA did not amend 35 U.S.C. 2(b)(2) to provide such an
authority. However, several other comments were in favor of the
proposed rules and recognized that the longstanding, established claim
construction standard set forth in the proposed rules is consistent
with the AIA and current case law.
Response: The rules are consistent with the AIA requirements to
prescribe regulations that set forth standards and procedures. In any
event, the Office believes that it has the statutory authority to
prescribe in the regulations a claim construction standard for inter
partes review, post-grant review, and covered business method patent
review proceedings. While the Leahy-Smith America Invents Act requires
the Office to establish the procedures for instituting and conducting
the reviews, the Leahy-Smith America Invents Act also provides that the
Office shall prescribe regulations setting forth certain standards. For
instance, the Leahy-Smith America Invents Act amended 35 U.S.C.
316(a)(2) and (a)(4) to provide that the Director shall prescribe
regulations setting forth the standards for the showing of sufficient
grounds to institute, establish and govern an inter partes review, as
well as the relationship of the review to other proceedings. 35 U.S.C.
326(a)(2) and (a)(4) provide the same mandate for post-grant review and
covered business method patent review. Therefore, the Office, at a
minimum, has the authority to prescribe the claim construction standard
by which inter partes review, post-grant review, and covered business
method patent review are instituted.
As to the propriety of the broadest reasonable interpretation
standard, its adoption here does not change any substantive rights
relative to the current practice. For nearly thirty years, the United
States Court of Appeals for the Federal Circuit has continued to
require the Office to give patent claims their broadest reasonable
construction consistent with the specification in patentability
determination proceedings. See In re Yamamoto, 740 F.2d 1569, 1571
(Fed. Cir. 1984). Even in the situation where the patent claims had
been previously construed by the district court using a different
standard in an action that involved invalidity and infringement issues,
the Office was required to apply the ``broadest reasonable
interpretation'' standard in its own proceedings. See, e.g., In re NTP,
Inc., 654 F.3d 1268, 1274 (Fed. Cir. 2011). Indeed, the Federal Circuit
has acknowledged the longstanding practice that the patent system has
two claim construction standards, the ``broadest reasonable
interpretation'' standard applied to Office's proceedings, and that
used by district courts in actions involving invalidity and
infringement issues. See, e.g., Phillips v. AWH Corp., 415 F.3d 1303,
1316 (Fed. Cir. 2005) (en banc). The ``broadest reasonable
interpretation'' standard has been well established for nearly thirty
years in the judicial precedent for construing patent claims in
patentability determination proceedings before the Office.
The provisions of the Leahy-Smith America Invents Act indicate that
the typical standard applicable to USPTO proceedings should apply as
well to these trial proceedings. The typical justifications for using
the ``broadest reasonable interpretation standard''--particularly the
ability to amend claims, application of the lower ``preponderance of
the evidence standard'' for determining patentability (35 U.S.C.
316(e), as amended, and 35 U.S.C. 326(e), and the absence of a
presumption of validity)--are explicitly provided for by the Act, or
consistent with it. In contrast, district courts must use the clear and
convincing standard, and the patent claims are presumed to be valid in
infringement litigation. Microsoft Corp. v. i4i Ltd. P'ship, 131 S. Ct.
2238, 2243 (2011) (``[Section] 282 creates a presumption that a patent
is valid and imposes the burden of proving invalidity on the attacker.
That burden is constant and never changes and is to convince the court
of invalidity by clear evidence.'' (quoting Am. Hoist & Derrick Co. v.
Sowa & Sons, Inc., 725 F.2d 1350, 1360 (Fed. Cir. 1984))). Furthermore,
courts construe patent claims, if possible, to avoid invalidity. See,
e.g., Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 655 F.3d
1364, 1373 (Fed. Cir. 2011); Exxon Research & Eng'g Co. v. U.S., 265
F.3d 1371, 1375 (Fed. Cir. 2001) (A claim is found to be indefinite
only where it is not ``amenable to construction'' or ``insolubly
ambiguous.'').
The adoption of the ``broadest reasonable interpretation'' standard
is further consistent with the legislative history of the Leahy-Smith
America Invents Act, which indicates that Congress was aware of the
``broadest reasonable interpretation'' standard and expected the Office
to apply the standard to the new Leahy-Smith America Invents Act review
proceedings. See, e.g., 157 Cong. Rec. S1375 (daily ed. Mar. 8, 2011)
(statement of Sen. Kyl). Nothing in the legislative history indicates
that Congress or the drafters of the legislation considered a different
standard for inter partes review, post-grant review, and covered
business method patent review proceedings. Congress could have set
forth a different standard in the Leahy-Smith America Invents Act, but
instead, Congress provided the statutory mandate for the Office to
prescribe regulations to set forth a standard.
Further, the Leahy-Smith America Invents Act amended 35 U.S.C.
315(d) to provide that, during the pendency of an inter partes review,
if another proceeding involving the patent is before the Office, the
Director may consolidate the inter partes review with the other
proceeding into a single inter partes review proceeding. A similar
provision is provided in 35 U.S.C. 325(d) for post-grant review and
covered business method patent review. The Office, thus, has the
discretion to consolidate a review proceeding with a pending reissue
application or reexamination that involves the same patent, for
example. Federal courts and
[[Page 48698]]
the Office have applied the ``broadest reasonable interpretation''
standard for nearly thirty years to patent claims in reissue
applications and reexamination proceedings. Yamamoto, 740 F.2d at 1571-
72; In re Reuter, 651 F.2d 751, 756 (CCPA 1981). It would be anomalous
for the Board to have to apply two different standards in the merged
proceeding.
Lastly, the Leahy-Smith America Invents Act also amended 35 U.S.C.
318(a) to provide that 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 under 35 U.S.C. 316(d), as amended.
The same directive is provided in 35 U.S.C. 328(a) for post-grant
review and covered business method patent review. As such, the Board is
to determine the patentability of the challenged patent claims and any
new claims, as opposed to the validity of the claims, which is the
analysis conducted by a district court. See also 35 U.S.C. 318(b), as
amended, and 328(b). That distinction confirms Congress' intent for the
USPTO to apply the typical framework it currently applies in existing
patentability determinations.
The Office has taken into account the considerations identified in
35 U.S.C. 316(b), as amended, and 35 U.S.C. 326(b) in promulgating the
rules. To prevent inconsistencies and inefficiencies, a single claim
construction standard must be used throughout a proceeding reviewing
the patentability of the claims of a patent. In other words, the
``broadest reasonable interpretation'' standard must be applied to all
of the involved claims in a single review proceeding including the
challenged patent claims; any new claims added under 35 U.S.C. 316(d),
as amended, or 35 U.S.C. 326(d); any claims from a merged derivation
proceeding; any original, new, or amended claims from a merged reissue
application; and any original, new, or amended claims from a merged
reexamination.
For the foregoing reasons, the Office has the authority to
prescribe regulations to set forth the claim construction standard for
inter partes review, post-grant review, and covered business method
patent review proceedings, and believes that the ``broadest reasonable
interpretation'' standard should be employed.
Comment 29: Several comments suggested that the claim construction
standard set forth in the proposed rules is inconsistent with 35 U.S.C.
301(d) because the statute recognizes that the claim construction in an
infringement action should be used in an inter partes review. A comment
suggested that the claim construction standard should be guided by 35
U.S.C. 301(d), and the Office should determine the ``proper meaning''
of the claim, rather than applying the ``broadest reasonable
interpretation'' standard.
Response: The legislative history of the AIA shows that 35 U.S.C.
301(d) was not intended to change the ``broadest reasonable
interpretation'' standard. Rather, it was to help the Office to
identify inconsistent statements made by a patent owner about claim
scope. In particular, Senator Kyl stated the following:
Section 5(a) of the 2009 version of the bill, which would amend
section 301, has been modified and moved to section 5(g) of the
bill. This provision allows written statements of the patent owner
regarding claim scope that have been filed in court or in the Office
to be made a part of the official file of the patent, and allows
those statements to be considered in reexaminations and inter partes
and post-grant reviews for purposes of claim construction. This
information should help the Office understand and construe the key
claims of a patent. It should also allow the Office to identify
inconsistent statements made about claim scope-for example, cases
where a patent owner successfully advocated a claim scope in
district court that is broader than the ``broadest reasonable
construction'' that he now urges in an inter partes review.
157 Cong. Rec. S1375 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl)
(emphasis added).
Further, 35 U.S.C. 301(d) provides that: ``[a] written statement
submitted pursuant to [section 301](a)(2), and additional information
submitted pursuant to [section 301](c), shall not be considered by the
Office for any purpose other than to determine the proper meaning of a
patent claim in a proceeding that is ordered or instituted pursuant to
section 304, 314, or 324.'' The statutory language of 35 U.S.C. 301(d)
does not set forth any claim construction standard, nor require the
Office to adopt the claim construction standard used by district
courts. Indeed, the statutory provision merely provides limitations on
when the Office may consider such a statement or information. The
Office has the discretion, but is not required, to consider such a
statement or information in an instituted review (inter partes review,
post-grant review, or covered business method patent review).
Therefore, the ``broadest reasonable interpretation'' standard is
consistent with 35 U.S.C. 301(d).
As to the comment regarding the ``proper meaning'' of the claim,
the comment is incorrect when it implies that claims are not properly
construed using the ``broadest reasonable interpretation.'' Consistent
with the judicial precedent of Federal Circuit, the Office recognizes
that it is proper to construe patent claims by applying the ``broadest
reasonable interpretation'' standard in patentability determination
proceedings. See, e.g., NTP, 654 F.3d at 1274 (the Board's construction
``is legally correct and is reasonable in view of the written
description and how the written description would be interpreted by one
of ordinary skill in the art'').
Comment 30: Several comments opposed proposed Sec. Sec. 42.100(b),
42.200(b), and 42.300(b) and believed that the Office's claim
construction should be the same as that used in the district courts for
invalidity or infringement suits. In particular, the comments suggested
that the proposed rules should be revised to state that ``[a] claim in
an unexpired patent shall be given its broadest reasonable construction
in light of the specification and the prosecution of the patent in
which it appears.'' To support their position, those comments suggested
that if the Office adopts the proposed rules, the patent owner will be
faced with a broad construction in the validity litigation and a narrow
construction in the infringement phase. Several comments stated that
the case law before the enactment of the AIA (e.g., Yamamoto) is
inapplicable to inter partes review, post-grant review, and covered
business method patent review proceedings, because the justification
for applying the ``broadest reasonable interpretation'' standard in
reexaminations and reissue applications, in which patent owners have
unlimited ability to amend claims, does not extend to the review
proceedings. On the other hand, several other comments were in favor of
the proposed rules. Those comments recognized that the claim
construction standard used in administrative trials before the Office
should be different from the one used by the district courts in
invalidity and infringement actions, and noted that two different
standards for claim construction existed before the AIA.
Response: The Office has considered carefully those comments that
suggested use of the district court's standard and the comments that
supported use of the ``broadest reasonable interpretation'' standard as
set forth in the proposed rules. The Office adopts the ``broadest
reasonable interpretation'' standard in this final rule in light of
statutory language in the AIA, legislative history, and judicial
precedent.
As stated previously, both the Federal Circuit and Congress
recognize that the
[[Page 48699]]
patent system has two claim construction standards: (1) The ``broadest
reasonable interpretation'' used by the Office in patentability
determination proceedings; and (2) the other used by district courts in
invalidity and infringement actions. See, e.g., Phillips, 415 F.3d at
1316; 157 Cong. Rec. S1375 (daily ed. Mar. 8, 2011) (statement of Sen.
Kyl). The Office and courts have been applying these standards for
nearly thirty years when construing patent claims. Congress recognized
the ``broadest reasonable interpretation'' standard in the legislative
history of the AIA, and did not set forth a different standard or
mandate the Office to apply the district court's standard. As explained
in previous Responses, these and multiple other statutory and legal
considerations suggest that the Board should not apply the district
court's claim construction standard.
Although the comments not in favor of the proposed rules implied
that the suggested standard (``[a] claim in an unexpired patent shall
be given its broadest reasonable construction in light of the
specification and the prosecution of the patent in which it appears'')
is used by the district courts, the district courts do not use this
suggested standard. In any event, the Office may take into
consideration inconsistent statements made by a patent owner about
claim scope, such as those submitted under 35 U.S.C. 301(a), when
applying the ``broadest reasonable interpretation'' standard.
As to the comments that the ``broadest reasonable interpretation''
standard applies only where patent owners have unlimited ability to
amend in reexaminations and reissue applications, the Office does not
believe those comments are correct. There is no indication that an
unlimited ability to amend is required when employing the current USPTO
construction standard; the rationale is simply that the broader
standard serves to identify ambiguities in the claims that can then be
clarified through claim amendments. That rationale applies under the
current proceedings. For inter partes review, post-grant review, and
covered business method patent review proceedings, Sec. Sec. 42.121
and 42.221 provide patent owners the opportunity to file a motion to
amend after conferring with the Board. Moreover, additional motions to
amend may be authorized when there is a good cause showing or a joint
request of the petitioner and the patent owner to advance materially a
settlement. Further, the current practice for reexaminations and
reissue applications allows for limited opportunity to amend patent
claims. For instance, the current practice provides that the second
Office action generally will be made final. Sec. Sec. 1.116(b) and
41.33(b); MPEP Sec. Sec. 706.07(a) and 2271 (``[A] reexamination may
result in the final cancellation of claims from the patent and that the
patent owner does not have the right to renew or continue the
proceedings.'').
Comment 31: One comment requested clarification on whether the
Office will consider a written statement and information submitted
pursuant to 35 U.S.C. 301 when deciding whether to institute a review
if such a statement or information is submitted in a petition for a
review.
Response: The Office may consider statements of the patent owner
filed in a proceeding before a Federal court or the Office regarding
the claim scope of a patent. However, if the petition merely presents a
copy of a submission under 35 U.S.C. 301, the Office's consideration of
such a submission is limited by 35 U.S.C. 301(d).
Comment 32: Several comments suggested that the Office should not
prescribe a claim construction standard in the regulation, but rather
apply applicable judicial precedent or adopt the district court's
construction when there is one. Several comments, however, were in
favor of the Office setting the ``broadest reasonable interpretation''
standard in the regulations. One of the comments pointed out that the
Office has done the public a service by announcing the standard in a
rule.
Response: The AIA provides that the Office shall prescribe
regulations setting forth the standard for the showing of sufficient
grounds to institute, establish and govern a review and the
relationship of the review to other proceedings. 35 U.S.C. 316(a)(2)
and (a)(4), as amended; 35 U.S.C. 326(a)(2) and (a)(4). Therefore,
setting forth a claim construction standard for the proceedings is
consistent with the mandates in the AIA. As discussed previously, the
``broadest reasonable interpretation'' is also consistent with the AIA
and the judicial precedent for construing patent claims in
patentability determination proceedings before the Office.
Comment 33: One comment sought clarification on whether the
``broadest reasonable interpretation'' standard will be applied
throughout the proceeding.
Response: The claim construction standard set forth in Sec. Sec.
42.100(b), 42.200(b), and 42.300(b) will apply throughout the
proceeding when the Board determines whether to institute the review
and when the Board determines the patentability of any challenged
patent claim and new claims.
Motion To Correct Petition (Sec. Sec. 42.104(c), 42.204(c), and
42.304(c))
Comment 34: Two comments suggested that the rules should specify
that only non-substantive clerical or typographical errors can be
corrected in a petition without changing the filing date of the
petition since allowing correction of substantive mistakes without
changing the filing date can substantially disadvantage the patent
owner.
Response: Sections 42.104(c), 42.204(c) and 42.304(c) only allow
for a motion to correct due to clerical or typographical mistakes
without a change in filing date. There is no provision allowing for the
correction of a mistake that is not clerical or typographical in nature
without a change in filing date. Furthermore, when determining whether
to grant a motion to correct a petition, the Board will consider any
substantial substantive effect, including any effect on the patent
owner's ability to file a preliminary response.
Requirement for Claim Construction (Sec. Sec. 42.104(b)(3),
42.204(b)(3), and 42.304(b)(3))
Comment 35: Several comments recommended that the requirement for
setting forth the claim construction of the challenged claims in the
petition should be eliminated because, according to the comments, the
requirement is burdensome and will create delays. Further, one comment
suggested that claim construction should only be required to the extent
necessary to establish the challenged claim is unpatentable. Other
comments were in favor of the requirement.
Response: The Office believes that the petitioner's claim
construction requirement is not burdensome and will improve the
efficiency of the proceeding. In particular, the petitioner's claim
construction will help to provide sufficient notice to the patent owner
on the proposed grounds of unpatentability, and assist the Board in
analyzing to how a cited prior art reference meets the claim
limitation(s). During a proceeding, a claim of an unexpired patent will
be given its broadest reasonable construction in light of the
specification of the patent in which it appears. See, e.g., Sec.
42.100(c). This means that the words of the claim will be given their
plain meaning unless the plain meaning is inconsistent with the
specification. In re Zletz, 893 F.2d 319, 321 (Fed. Cir. 1989). In the
absence
[[Page 48700]]
of a special definition in the specification, a claim term is presumed
to take on its ordinary and customary meaning, a meaning that the term
would have to a person of ordinary skill in the art. In re Am. Acad. of
Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004). Therefore,
petitioners are not required to define every claim term, but rather
merely provide a statement that the claim terms are presumed to take on
their ordinary and customary meaning, and point out any claim term that
has a special meaning and the definition in the specification.
Comment 36: A few comments suggested that the Office should adopt
claim construction procedures similar to those in the district courts,
as opposed to requiring the petitioner to submit a statement to
identify how the challenged claim is to be construed.
Response: The Office believes that the petitioner's claim
construction requirement will improve the efficiency of the proceeding.
As discussed previously, the petitioner's claim construction will help
to provide sufficient notice to patent owner on the proposed grounds of
unpatentability, and assist the Board in analyzing how a cited prior
art meets the claim limitation.
Comment 37: One comment suggested that the requirement of a claim
construction is not set forth in 35 U.S.C. 312(a)(3), as amended.
Response: Although the claim construction requirement is not
provided expressly in the AIA, 35 U.S.C. 312(a)(4), as amended, states
that ``the petition provides such other information as the Director may
require by regulation.'' Furthermore, 35 U.S.C. 316(a), as amended,
provides that the Director shall prescribe regulations setting forth
the standards for the showing of sufficient grounds to institute an
inter partes review. Therefore, the claim construction requirement is
consistent with the AIA.
Comment 38: One comment requested more guidance as to the claim
construction requirements. The comment further expressed a concern that
it is unclear whether the patent owner is required to take a claim
construction position. A few comments suggested that the patent owner
should address the petitioner's claim construction, and the parties
should have an opportunity to respond to the Board's decision. Another
comment suggested that the rules should set forth the procedure for
claim construction.
Response: As discussed previously, a claim of an unexpired patent
will be given its broadest reasonable construction in light of the
specification. See, e.g., Sec. 42.100(c). Petitioners must identify
how the challenged claim is to be construed. See, e.g., Sec.
42.104(b)(3). Petitioners are not required to define every claim term,
but merely to provide a statement that the claim terms are presumed to
take on their ordinary and customary meaning, and to point out any
claim term that has a special meaning and the definitions in the
specification. A patent owner may file a preliminary response to set
forth reasons why no review should be instituted, including a response
to any claim construction issues. See, e.g., Sec. 42.107(a). After the
review is instituted, the patent owner may file a response to the
petition addressing any ground for unpatentability not already denied,
including a response to the decision on petition and any claim
constructions set forth therein. See, e.g., Sec. 42.120(a). The
petitioner may file a reply to the patent owner's response. See Sec.
42.23.
Comment 39: One comment suggested that a petitioner's claim
construction should have no effect on other proceedings, and requested
clarification that the petitioner's claim construction is relevant only
to the proceeding and will not vary or limit the scope of the claims in
litigation.
Response: The determination of the meaning of the claim terms and
the scope of the claims depends on the particular facts of each case.
The Office cannot prejudge the effect, if any, of the petitioner's
claim construction on other proceedings, or know whether a district
court will consider such information or not.
Comment 40: One comment expressed a concern as to restricting claim
construction later in the proceeding and suggested that the rules
should permit alternative claim construction in the petition, and
revised claim construction later in the process.
Response: The rules do not preclude providing alternative claim
constructions in a petition or in later-authorized filings.
Service (Sec. Sec. 42.105 and 42.205)
Comment 41: A few comments suggested that proposed Sec. Sec.
42.105(a) and 42.205(a) should be revised to provide that service by
mailing is sufficient, and clarified to provide that there is no
requirement for personal service or proof of service on a current
patent owner who is not of record. In particular, one comment suggested
that the rules should expressly provide that service must be made by
EXPRESS MAIL[supreg] or by means at least as fast and reliable, or upon
agreement of the parties, that service may be made by facsimile or
electronically.
Response: In view of the comments, Sec. Sec. 42.105 and 42.205, as
adopted in this final rule, expressly provide that, upon agreement of
the parties, service may be made electronically, and service may be
made by EXPRESS MAIL[supreg] or by means at least as fast and reliable
as EXPRESS MAIL[supreg]. Under the rules, personal service is not
required. The rules also do not require serving a patent owner who is
not of record.
Comment 42: A few comments suggested that the Office should
eliminate the requirement set forth in proposed Sec. Sec. 42.105(b)
and 42.205(b) for contacting the Board when the petitioner cannot
effect service of the petition on the patent owner at the
correspondence address of record of the patent.
Response: The suggestion has been adopted. Sections 42.105(b) and
42.205(b), as adopted in this final rule, do not include the
requirement for contacting the Board when the petitioner cannot effect
service.
Comment 43: One comment recommended that the rules should provide
that service on the last designated representative of the patent owner
is also sufficient.
Response: Sections 42.105 and 42.205(a) provide that petitioner may
additionally serve the petition and supporting evidence on the patent
owner at any other address known to the petitioner as likely to effect
service. Serving on the correspondence address of record for the
subject patent is consistent with the Office's current practice (Sec.
41.106(e)). Therefore, service on the last designated representative of
the patent owner of record is sufficient if that is the same as the
correspondence address of record for the subject patent.
Comment 44: One comment suggested that each party should be
required to specify its preferred method for service as part of the
mandatory notices.
Response: Each party may express its preferred method for service.
However, the Office does not believe such a requirement in the rule is
necessary.
Filing Date (Sec. Sec. 42.106(b) and 42.206(b))
Comment 45: A few comments suggested that the Office should accept
petitions that have minor deficiencies. A few comments also requested
clarification on whether, for minor omissions or mistakes, the Office
would waive the rule requirements and grant a filing date as soon as
the statutory requirements are met.
Response: The Board generally will accord a filing date and accept
minor deficiencies that do not impact the
[[Page 48701]]
Board's ability to determine whether to institute the review or the
patent owner's ability to file a preliminary response. It is important
to note that petitioners should make every effort to complete their
petitions accurately. While the Board may accept minor omissions or
mistakes, certain omissions or mistakes may nonetheless impact the
Board's determination. For instance, citing to an incorrect portion of
a reference may cause the Board to determine not to adopt the proposed
ground of unpatentability, or an omission of a challenged claim may
cause the Board not to institute the review for that claim. The Board
plans to process the petitions and accord the filing date as soon as
practical.
Comment 46: One comment suggested that the word ``request'' in the
title of Sec. 42.206(b) be changed to ``petition.''
Response: This suggestion has been adopted.
Comment 47: One comment stated that the Office should revise
Sec. Sec. 42.106(b) and 42.206(b) to include expressly the right to
cure a failure to include the specific relief requested.
Response: This suggestion is not adopted because the failure to
include a statement for the precise relief requested for each claim
challenged is not considered a minor deficiency.
Comment 48: Two comments requested a longer time period for
correcting an incomplete petition.
Response: In most situations, one month is sufficient for
correcting deficiencies in a petition. If a longer period is needed,
however, the petitioner may re-file a complete petition as no filing
date is accorded for the initial petition.
Preliminary Response (Sec. Sec. 42.107(b) and 42.207(b))
Comment 49: Several comments recommended that the time period for
filing the patent owner preliminary response should be extended
because, according to the comments, a two-month time period is too
short for the patent owner to prepare and develop a meaningful
response. In particular, several comments suggested that the time
period should be extended to three months; two comments suggested four
months; and one comment suggested that extensions of time should be
provided upon a showing of good cause. However, another comment
suggested shortening the two-month time period to one month because the
patent owner will have a right to amend and present evidence after the
review is instituted.
Response: In view of these comments, the Office extended the time
period for filing a patent owner preliminary response to three months
to provide the patent owner sufficient time to prepare a meaningful
response. Sections 42.107(b) and 42.207(b). A patent owner may expedite
the proceeding by filing the preliminary response earlier or an
election to waive the preliminary response.
Comment 50: One comment suggested that allowing testimonial
evidence in response to the petition at the preliminary response stage
would simply cause more delays in starting the process and appears to
be contrary to the statutory language of 35 U.S.C. 313 and 316(a)(8),
as amended, and 35 U.S.C. 323 and 326(a)(8). The comment further
suggested that any provision for new testimonial evidence on the part
of the patent owner prior to institution undermines the simplicity of
the process, as once competing testimony is offered, it is evident that
cross-examination of that competing testimony must be provided.
Response: The AIA only explicitly provides for submission of
testimonial evidence from a patent owner after a proceeding has been
instituted. As noted in the comment, 35 U.S.C. 313, as amended, and 35
U.S.C. 323 provide that the patent owner may set forth ``reasons'' in
the patent owner preliminary response, but do not expressly provide for
the submission of testimonial evidence by the patent owner prior to
institution of a proceeding. In contrast, 35 U.S.C. 316(a)(8), as
amended, and 35 U.S.C. 326(a)(8) specifically provide for the
submission of testimonial evidence in the patent owner response after a
proceedings has been initiated. Moreover, cross-examination would be
provided in most situations in which the patent owner relies on
testimonial evidence, resulting in the delay to which the commenter
refers.
Comment 51: Several comments suggested that the patent owner be
allowed to respond to the petition with testimonial evidence in order
to be fair since a challenger is permitted to rely upon such evidence
in the petition. Within these comments, there were further suggestions
that testimony should be allowed, especially for claim construction,
and for rebuttal of expert testimony relied upon in the petition, that
allowing testimony in the response would allow for early development of
the record and promote settlement, that early development of the record
would be useful given the short time to complete post-grant review and
that the incongruity between what type of evidence the petitioner and
patent owner are permitted to file may implicate due process issues.
Response: These suggestions are not adopted. Patent owners are
permitted to rely upon new testimonial evidence in response to a
petition but the AIA provides for submission of this testimonial
evidence after a proceeding has been instituted. As noted in the
comment, 35 U.S.C. 313, as amended, and 35 U.S.C. 323 state that the
patent owner may set forth ``reasons'' in the patent owner response,
but do not expressly provide for the submission of testimonial evidence
by the patent owner prior to institution of a proceeding. In contrast,
35 U.S.C. 316(a)(8), as amended, and 35 U.S.C. 326(a)(8) specifically
provide for the submission of testimonial evidence in the patent owner
response filed after a proceeding has been instituted. If new
testimonial evidence were to be submitted by a patent holder, then
cross-examination of the witness providing the testimony is likely to
be permitted. 35 U.S.C. 316(5)(a), as amended. Allowing for new
testimony and the resulting cross-examination prior to the institution
of a proceeding would negatively impact the ability of the Office to
meet the statutory requirements set out in 35 U.S.C. 314(b), as
amended, and 35 U.S.C. 324(c) and would result in more upfront costs to
the parties. If a patent owner wishes to submit new testimonial
evidence with its preliminary response, the patent owner may seek
relief through filing an authorized motion.
Comment 52: One comment suggested that the Office should recognize
that the difficulty in finding technical experts should qualify as good
cause or as being in the interests-of-justice for the purpose of the
extension of time for a patent owner to respond. The comment indicated
that there seems to be little institutional barrier to granting the
extension since the statutory deadline does not run until the date of
institution.
Response: Under the rules, a party may seek authorization to file a
motion seeking an extension of time. The moving party would have the
burden of proving that it is entitled to the relief requested. Sec.
42.20(a)-(c). Whether a motion is authorized or granted depends on the
particular facts presented.
Comment 53: One comment stated that as an alternative to allowing
testimonial evidence in the patent owner preliminary response, the
Office should clarify that attorney arguments in the response will be
given the same weight with respect to technical issues as any
testimonial evidence presented by the petitioner, and that the Office
should confirm that it will consider early motions to dismiss a
proceeding
[[Page 48702]]
where testimonial evidence presented by the patent owner effectively
disproves expert testimony presented in the petition.
Response: Arguments of counsel cannot take the place of factually
supported objective evidence. See, e.g., In re Huang, 100 F.3d 135,
139-40 (Fed. Cir. 1996); In re De Blauwe, 736 F.2d 699, 705 (Fed. Cir.
1984). Although attorney arguments are not evidence, the patent owner
preliminary response may include evidence, other than new testimonial
evidence, to support such contentions made. Sec. 42.107(a). A party
wishing to file a motion to dismiss must seek authorization to do so.
Whether the motion will be authorized is based on a case-by-case
determination. Sec. 42.20(a) and (b).
Comment 54: One comment stated that it appears that the petitioner
cannot add or revise grounds based on how the patent owner responds.
Another comment suggested that the petitioner should have the right to
reply within one month of any patent owner preliminary response
allowing a petitioner to sharpen its arguments and further the Office's
streamlining goals and that without a reply, some arguments may go
unanswered and result in an unwarranted rejection of a petition that
leaves an invalid patent standing.
Response: This suggestion is not adopted. The statutes provide for
only a petition and a patent owner preliminary response prior to
institution. Allowing a reply as a matter of right would negatively
impact the ability of the Office to meet the time requirements of 35
U.S.C. 314(b), as amended, and 35 U.S.C. 324(c).
Institution (Sec. Sec. 42.108 and 42.208)
Comment 55: A few comments expressed concerns regarding piecemeal
challenges against specific claims in the same patent, and encouraged
the Board to use its authority under 35 U.S.C. 325(d) to discourage
efforts by petitioners to avoid estoppel through successive petitions
against different claims within a patent.
Response: The Office recognizes these concerns and will exercise
its authority under 35 U.S.C. 325(d), where appropriate, to deny
petitions that submit the same or substantially the same prior art or
arguments previously presented to the Office.
Comment 56: One comment expressed agreement with the proposed rules
providing that the decision to institute review be made only as to
those claims for which the required threshold has been met and only as
to those grounds of unpatentability that meet the threshold.
Response: Under the rules, the Board may authorize the review to
proceed on all or some of the challenged claims and on all or some of
the grounds of unpatentability asserted for each claim. Sec. Sec.
42.108(a) and 42.208(a).
Comment 57: One comment suggested that because institution of a
proceeding might impose an economic hardship on many patentees, the
requested review should be instituted after consideration of the effect
on the economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to complete
the proceeding timely.
Response: Under the rules, review will not be instituted unless the
Board decides that the petition supporting the ground would demonstrate
that there is a reasonable likelihood, for inter partes proceedings, or
more likely than not, for post-grant proceedings, that at least one of
the claims is unpatentable. Sec. Sec. 42.108 and 42.208. The rules
utilize the statutory threshold. 35 U.S.C. 314, as amended, and 35
U.S.C. 324. The Office has considered the effect on the economy, the
integrity of the patent system, the efficient administration of the
Office, and the ability of the Office to complete the proceeding timely
in prescribing the rules as required by 35 U.S.C. 316(b), as amended,
and 35 U.S.C. 326(b). That said, the Office, in determining whether to
institute a proceeding, may take into account whether the review could
be timely completed. For example, the Board may decline to institute a
proceeding where the Board determines that it could not complete the
proceeding timely. For example, the Board could exercise its discretion
to decline to institute a petition that seeks review of several hundred
claims based upon a thousand references or when the patent owner
demonstrates that a determination of patentability would require dozens
of depositions of non-party controlled witnesses in foreign countries
for which the testimony would need to be compelled.
Comment 58: One comment suggested that the Office should clarify
the effect of proposed Sec. Sec. 42.108(a) and 42.108(b) to resolve
the inconsistencies between the Office's ability to ``authorize'' the
review to proceed on some or all ground asserted and to ``deny'' some
or all grounds asserted. Another comment asked for guidance as to the
impact of denying review with respect to one or more claims when
another claim of the same patent qualifies for review. Another comment
asked that the rules be amended to state that the denial of a ground is
not considered a final Board decision under 35 U.S.C. 324(e) and may be
appealed.
Response: The Board may deny a ground at any time prior to
institution before or after receiving any patent owner preliminary
response. Denial of a ground is a final Board decision and thus is
subject to request for reconsideration at that time. Sec. 42.71(c)(2).
The decision of the Director on whether to institute review on any
ground is not reviewable. 35 U.S.C. 314(d), as amended, and 35 U.S.C.
324(e).
Comment 59: Several comments suggested that the Office should
provide more guidance as to how the ``reasonable likelihood'' and
``more likely than not'' standards will be applied and what level of
proof will be required and how the standards differ. One comment stated
that, given the experience of the Office in inter partes reexamination
and the legislative record, it is reasonable for the Office to provide
more than a bald reference to the standards, that lack of clarity has
an unnecessary ``chilling effect'' and that significant fees must
accompany the petition.
Response: The rules utilize the statutory threshold. 35 U.S.C.
314(a), as amended, and 35 U.S.C. 324(a). Whether a petitioner has met
the threshold must be considered on a case-by-case basis. A
``reasonable likelihood'' requirement is a lower threshold than a
``more likely than not'' requirement. Although the Office disagrees
that any ``chilling effect'' will result, any such effect would be the
unavoidable result of the statutory language, not of the regulatory
language.
Comment 60: Several comments suggested that the Office should allow
all challenged claims to be included in the inter partes review when
there is a reasonable likelihood of prevailing with respect to one
challenged claim. A comment indicated that instituting review on a
claim-by-claim basis is unfairly prejudicial to challengers and
potentially at odds with the statute. The comment stated that the rule
is being used to decide portions of the case without all the evidence
before the Office whereas claims or issues deemed not to have a
reasonable likelihood of prevailing are cut off from further review in
a final and non-appealable decision, at the same time alerting a patent
owner of a potential infringement and raising legitimate concerns about
being estopped from further civil proceedings under 35 U.S.C. 315(e),
as amended. Another comment suggested that the rule be changed to
provide that a review will be instituted for a ground
[[Page 48703]]
so long as the threshold is met for one claim. Another comment
suggested that the rule use the language of 35 U.S.C. 314(a), as
amended. Another comment stated that the rule appears to give the Board
discretion to choose which issues will be subject to trial in
contradiction to the Practice Guide for Proposed Trial Rules and that
the trials should proceed on all issues for which statutory standards
are met.
Response: The suggestions have been considered, but are not
adopted. The Office believes that the rules are consistent with the
statute. In particular, 35 U.S.C. 312(a)(3), as amended, and 35 U.S.C.
322(a)(3) provide that petitions to institute a review identify each
claim challenged. As provided in 35 U.S.C. 314, as amended, and 35
U.S.C. 324, the Director may not institute a review unless certain
thresholds are met. More importantly, 35 U.S.C. 315(e), as amended, and
35 U.S.C. 325(e) provide for estoppel on a claim-by-claim basis, for
claims in a patent that result in a final written decision. As amended,
35 U.S.C. 316(a)(2) and 35 U.S.C. 326(a)(2) require the Director to
prescribe regulations setting forth the standards for showing
sufficient grounds to institute a review, and 35 U.S.C. 316(a)(4), as
amended, and 35 U.S.C. 326(a)(4) require the promulgation of rules
establishing and governing the review. Further, 35 U.S.C. 316(a)(11),
as amended, and 35 U.S.C. 326(a)(11) require that rules be promulgated
that require the final written determination in a review to be issued
one year after the date of institution, except that the review may be
extended by not more than six months for good cause shown. The AIA
identifies considerations that are to be taken into account in
promulgating rules including the integrity of the patent system, the
efficient administration of the Office and the ability of the Office to
complete the proceedings timely. See 35 U.S.C. 316(b), as amended, and
35 U.S.C. 326(b).
The petition requesting institution of a review is required to
identify the claims being challenged, and only those claims upon which
review is instituted are subject to estoppel. In prescribing rules, the
Office considered the effect of allowing all challenged claims to be
subject to review where the threshold for instituting was met for only
a subset of claims. In order to streamline and converge the issues for
consideration, the decision to institute should limit the claims in the
review to only those claims that meet the threshold. By limiting the
review in such a manner, the patent owner is provided with a defined
set of potentially meritorious challenges and will not be burdened with
responding to non-meritorious grounds that fail to meet the initial
thresholds. This convergence of issues for review streamlines the
proceeding and aids in the efficient operation of the Office and the
ability of the Office to complete the proceeding within the one-year
timeframe. It is inefficient and unfair to patent owner to require a
full response to challenges on claims that do not meet the initial
threshold.
Comment 61: One comment stated that the Board should state the
reason(s) for denying any ground of a request for review which may help
facilitate the understanding of the proper scope for a patent claim and
suggested that Sec. Sec. 42.108(b) and 42.208(b) further state that
``[t]he Board shall provide a written statement explicitly stating each
reason for denial of the ground.''
Response: Under Sec. 42.4(a), each party is notified of the
institution of a trial. Under 35 U.S.C. 314(c), as amended, and 35
U.S.C. 324(d), the Notice is required to inform the parties in writing
of the Director's determination of whether to institute a proceeding.
The Board will provide sufficient notice to the parties in its decision
to institute a trial.
Comment 62: One comment asked for clarification that the Board will
take into account a patent owner preliminary response to a post-grant
review petition only to determine whether estoppel or a procedural flaw
requires rejection of the petition.
Response: For post-grant review, 35 U.S.C. 323 provides that the
patent owner may set forth ``reasons'' why no review should be
instituted based upon the failure of the petition to meet any
requirement of the corresponding chapter. Under 35 U.S.C. 324, the
Director may not institute unless the Director determines that the
information contained in the petition, if not rebutted, would
demonstrate that it is more likely than not that at least one claim
challenged is unpatentable. Additionally, under 35 U.S.C. 324, the
Director may institute a proceeding where the petition raises a novel
or unsettled legal question that is important to other patents or
patent applications. The Board will take into account a patent owner's
preliminary response where such a response is filed. Sec. 42.208(c).
Comment 63: Two comments suggested that the phrase ``if
unrebutted'' in Sec. 42.108(c) makes the rule unclear. One comment
indicated that the language makes the Office's intent ambiguous and
should be modified to read ``the petition supporting the ground
demonstrates a reasonable likelihood * * *.'' Another comment stated
that under the rule a patent owner preliminary response might seem to
constitute rebuttal and encourages the Office to clarify the
provisions.
Response: Section 42.108(c), as adopted in this final rule, does
not contain the phrase ``if unrebutted.'' The rule requires the
petitioner to set forth in the petition sufficient grounds to justify
the institution of a review. If sufficient grounds are not set forth in
the petition, the Office may deny the petition prior to receiving any
patent owner preliminary response.
Comment 64: One comment requested clarification on proposed Sec.
42.208(d) and asked if the ``unsettled question'' has to be of
importance to existing patents or is it enough if future applications
might be impacted. Another comment asked if the question has to meet
the ``more likely than not'' threshold and whether the question is
limited to the ground identified at Sec. 42.204(b)(2). One comment
asked that no artificial or unwarranted restriction be placed on the
``novel or unsettled legal question'' basis for review.
Response: The determination of whether a petition raises a novel or
unsettled legal question that is important to other patents or patent
applications will be made on a case-by-case basis. The statute
indicates that the Director's determination required to authorize a
post-grant review may be met by a showing that the petition raises a
novel or unsettled legal question that is important to other patents or
patent applications. 35 U.S.C. 324(b). The scope of any post-grant
review is limited to the grounds set forth at 35 U.S.C. 324(b). Under
the rules, there is no restriction of whether review can be instituted
on the basis of a ``novel or unsettled legal question.''
Comment 65: A few comments requested clarification on whether
petitioners may request reconsideration of: (1) A decision not to
institute a review; and (2) a decision to institute a review, where the
decision also denies a ground of unpatentability asserted in the
petition.
Response: Pursuant to Sec. 42.71, a petitioner may file a request
for rehearing of a decision not to institute a review within thirty
days of the entry of the decision. Likewise, a petitioner may request a
rehearing of a decision to institute a review that denies a ground of
unpatentability, within fourteen days, because a decision to institute
is a nonfinal decision.
Comment 66: One comment requested clarification on whether a
decision not to institute a review is a final written
[[Page 48704]]
decision, and whether estoppel attaches to a decision not to institute
a review.
Response: The Board's determination not to institute an inter
partes review, post-grant review, or covered business method patent
review is not a final written decision within the meaning of 35 U.S.C.
318(a), as amended, and 35 U.S.C. 328(a), and thereby does not trigger
the estoppel provisions under 35 U.S.C. 315(e), as amended, and 35
U.S.C. 325(e). However, pursuant to 35 U.S.C. 314(d) and 35 U.S.C.
324(e), a decision not to institute a trial is ``final and
nonappealable,'' foreclosing review by the federal courts.
Comment 67: One comment suggested that the Practice Guide for
Proposed Trial Rules or the rules should provide that an entity is not
estopped from requesting inter partes review or post-grant review (or
from certifying that no estoppel exists) if it was involved in a prior
proceeding but reached a settlement before the entry of a final written
decision.
Response: Section 42.73(d)(1) expressly provides 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.''
Therefore, if the joint request of a petitioner and the patent owner
under 35 U.S.C. 317(a), as amended, or 35 U.S.C. 327(a) is filed before
the Office enters the final written decision, the review is terminated
with respect to the petitioner and no estoppel under 35 U.S.C. 315(e),
as amended, or 325(e) will attach to the petitioner, or to the real
party-in-interest or privy of the petitioner, on the basis of that
petitioner's institution of that review.
Comment 68: One comment requested that the Office clarify whether
it will consider evidence properly submitted by a party in connection
with the petition process, including relevant statements on claim
construction previously filed by the patent owner in a proceeding with
either the Office or a Federal court or, if such evidence is not
considered, will consider an early motion by the patent owner to
dismiss the proceedings.
Response: Under the rules, a patent owner may include evidence
except for new testimony evidence beyond that which is already of
record, Sec. Sec. 42.107(a) and (c), 42.207(a) and (c), which the
Office will take into account, and the Office will consider whether to
authorize a motion to dismiss based on the facts of the given case.
Sec. 42.20(b).
Patent Owner Response (Sec. Sec. 42.120(b) and 42.220(b))
Comment 69: A number of comments recommended that the default two-
month time period for filing a patent owner response should be extended
to three or four months, or extensions of time should be provided upon
a showing of good cause. Another comment suggested that the four-month
time period shown in the Practice Guide for Proposed Trial Rules for
the patent owner to conduct discovery and file its response should be
shortened to three months.
Response: In view of these comments, the Office, in this final
rule, extended the default time period for filing a patent owner
response to 3 months. Sections 42.120(b) and 42.220(b). Thus, if no
time for filing a patent owner response to a petition is provided in a
Board order, the default date for filing a patent owner response is
three months from the date the review was instituted.
Motion To Amend the Patent (Sec. Sec. 42.121 and 42.221)
Comment 70: Several comments were in favor of the proposed rules
and guidelines governing claim amendments. Several comments also
suggested that the deadline for filing the first motion to amend should
be prescribed in the rules rather than in the Office Patent Trial
Practice Guide. A few comments stated that the deadline would provide
petitioners with sufficient time to respond meaningfully, avoid undue
complexity, and ensure fast resolution as mandated by the statute. The
comments further recommended that the rules should include the good
cause showing requirement for any motion to amend filed after the
patent owner's response, unless for a settlement.
Response: In view of these comments, the Office adopted the
deadline for filing the first motion to amend and the requirement of a
good cause showing for any additional motion to amend, unless it is for
a settlement. Specifically, Sec. Sec. 42.121(a)(1) and 42.221(a)(1),
as adopted in this final rule, provide that ``[u]nless a due date is
provided in a Board order, a motion to amend must be filed no later
than the filing of a patent owner response.'' Additionally, Sec. Sec.
42.121(c) and 42.221(c), as adopted in this final rule, provide that an
additional ``motion to amend may be authorized when there is a good
cause showing or a joint request of the petitioner and the patent owner
to materially advance a settlement.''
Comment 71: Several comments stated that the rules should clearly
set forth the patent owner's right to amend the claims. According to a
few comments, the patent owner has the right to present a reasonable
number of substitute claims at any time up to the time of filing the
patent owner's response and should be subject only to the restrictions
set forth in the AIA. The comments stated that the requirements for
``conferring with the Board'' and ``respond[ing] to a ground of
unpatentability'' are inconsistent with the statute. However, several
other comments were in favor of the requirements. Another comment
recommended that the Office should require a clear explanation as to
how the proposed amendment responds to a ground of unpatentability
involved in the trial and clarify that the amendment is to be entered
on a claim-by-claim basis only when all proposed changes within a claim
are responsive to a ground of unpatentability involved in the trial.
Response: In view of the comments, the Office, in this final rule,
clarified that the patent owner's first motion to amend does not
require an authorization from the Board, but merely requires that the
patent owner ``confer[] with the Board.'' This means that a patent
owner would simply identify its intent in a conference call to file a
motion to amend, and the number and general scope of substitute claims
that would be filed in the motion to amend so that the petitioner and
Board are notified of the patent owner's intent. The patent owner is
not required to identify a fully developed claim set. As a result of
the call, the patent owner would receive feedback from the Board on
whether the proposed number of substitute claims is reasonable. This
procedure, thus, will save the patent owner time and resources to
prepare a motion to amend that would otherwise be denied because of an
unreasonable number of substitute claims. It also will save the
petitioner time and resources to prepare an opposition to a motion that
contains an unreasonable number of substitute claims.
The AIA amended 35 U.S.C. 316(a)(9) to provide that the Director
shall prescribe regulations setting forth standards and procedures for
allowing the patent owner to move to amend the patent under 35 U.S.C.
316(d), as amended, to cancel a challenged claim or propose a
reasonable number of substitute claims. A similar mandate is provided
in 35 U.S.C. 326(a)(9) for post-grant review and covered business
method patent review. Pursuant to these statutory provisions, the
Office is setting the standards and procedures for filing motions to
amend in Sec. Sec. 42.121 and 42.221. The Office also has taken into
account the considerations provided in 35 U.S.C. 316(b), as amended,
and 35 U.S.C. 326(b), and believes the standards and procedures set
forth in
[[Page 48705]]
this final rule will enhance efficiency of the review proceedings.
Furthermore, any amendment that does not respond to a ground of
unpatentability most likely would cause delay, increase the complexity
of the review, and place additional burdens on the petitioner and the
Board. Therefore, the rules are consistent with the statute.
As to the comment that the Office should require a clear
explanation as to how the proposed amendment responds to a ground of
unpatentability, Sec. Sec. 42.121 and 42.221, as adopted in this final
rule, expressly provide that a motion to amend may be denied where the
amendment does not respond to a ground of unpatentability involved in
the trial.
Comment 72: A few comments were in favor of the ``reasonable number
of substitute claims'' presumption that permits only one substitute
claim in exchange for cancellation of an original claim. A few comments
suggested that the rule should expressly permit multiple amended claims
for each challenged claim.
Response: In view of the comments, the Office added the presumption
that only one substitute claim per challenged claim is reasonable
expressly in Sec. Sec. 42.121(a) and 42.221(a). Before submitting any
amendment, a patent owner would already have the opportunity to: (1)
Review all of the grounds of unpatentability proposed by the petitioner
and supporting evidence, (2) submit a preliminary response to set forth
reasons why the claims are patentable over any cited prior art and the
grounds of unpatentability, and (3) review the Board decision to
institute the review. To overcome a ground of unpatentability, a patent
owner would need to add merely a patentably distinct feature to the
claim. Therefore, in most situations, only one substitute claim per
challenged claim is needed to address a ground of unpatentability.
Where the patent owner needs more than one substitute claim, the patent
owner may rebut the presumption by a demonstration of need. Adding more
claims beyond those that are needed to respond to a ground of
unpatentability most likely would cause delay, increase the complexity
of the review, and place additional burdens on the petitioner and the
Board.
Comment 73: One comment stated that the ``reasonable number of
substitute claims'' presumption is inconsistent with 35 U.S.C. 316(d),
as amended, and 35 U.S.C. 326(d) because, according to the comment, the
statute refers to a plurality of ``substitute claims.''
Response: The presumption that only one substitute claim per
challenged claim is reasonable is consistent with the AIA. The
provisions of 35 U.S.C. 316(d), as amended, and 35 U.S.C. 326(d) should
be interpreted together with other statutory provisions in the AIA.
Under 35 U.S.C. 316(a)(9), as amended, and 35 U.S.C. 326(a)(9), the
Office has the authority to prescribe regulations to set forth the
standards and procedures for motions to amend, including setting the
standard for determining a reasonable number of substitute claims. The
Office has further taken into account the considerations provided in 35
U.S.C. 316(b), as amended, and 35 U.S.C. 326(b), and believes the
standards and procedures set forth in this final rule will enhance
efficiency of the review proceedings. Moreover, 35 U.S.C. 316(d), as
amended, and 35 U.S.C. 326(d) permit the Office to accept more than one
substitute claim for each challenged claim in situations where the
patent owner meets the standards and procedures set forth in the
regulations promulgated pursuant to 35 U.S.C. 316(a)(9), as amended,
and 35 U.S.C. 326(a)(9). Therefore, the presumption is consistent with
these provisions of the AIA.
Comment 74: A few comments recommended that the Office prohibit
patent owners from amending patent claims that currently are being
asserted against a defendant-petitioner because the patent owner may
file a reissue application to amend the claims.
Response: This suggestion is not adopted. Such a requirement is
unnecessary in view of 35 U.S.C. 318(c), as amended, and 35 U.S.C.
328(c) because any amendment of a patent claim gives rise to
intervening rights in the same manner as amendments in reexamination
proceedings that mature into certificates or in a reissue applications
that result in reissued patents.
Comment 75: Several comments suggested that the Office should
permit the patent owner to submit alternative claim sets or contingent
amendments.
Response: Alternative claim sets or contingent amendments may be
permitted if the total number of substitute claims is reasonable. See
Sec. Sec. 42.121(a)(3) and 42.221(a)(3).
Comment 76: A few comments requested clarification on the procedure
by which a reasonable number of substitute claims can be presented, and
additional information on the conditions and manner of making
amendments. Another comment requested guidance as to how the patent
owner rebuts the presumption that only one substitute claim is
reasonable by a demonstration of need, and how to obtain a ruling as to
the number of substituted claims that will be permitted. Another
comment requested examples of acceptable kinds of substitute claims,
and encouraged the Office to standardize the manner in which claim
amendments are indicated, similar to reissue and reexamination
practice.
Response: The Board will enter a Scheduling Order concurrently with
the decision to institute the review. The Scheduling Order will set due
dates for the proceeding. An initial conference call will be held about
one month from the date of institution to discuss the motions that the
parties intend to file and to determine if any adjustment needs to be
made to the Scheduling Order. During the conference call, the patent
owner would identify the number of substitute claims that the patent
owner intends to file in the motion to amend, and any reasons why more
than one substitute claim is needed for each challenged claim. The
Board may provide an indication as to whether the number of substitute
claims seems reasonable based on the reasons given. The patent owner
will not be required to identify a fully developed claim set. An
example of an acceptable substitute claim is a substitute claim that
adds a patentably distinct feature to respond to a ground of
unpatentability, without adding new matter or enlarging the scope of
the claim.
Amendments must clearly state ``original,'' ``cancelled,''
``replaced by proposed substitute,'' or ``proposed substitute for
original claim X'' and the motion must clearly describe the changes.
Part II, Item G of the Office Patent Trial Practice Guide. Appropriate
conforming amendments may be presented (e.g., changing dependent claims
to depend from another claim when the original parent claim is
canceled). Amendments should clearly state where the specification and
any drawings disclose all the limitations in the proposed substitute
claims. Amendments should also clearly state the patentably distinct
features for the proposed substitute claims. This will aid the Board in
determining whether the amendment narrows the claims and if the
amendment is responsive to the grounds of unpatentability involved in
the trial.
If the amendment adds more than one substitute claim per claim, the
patent owner may be required to pay excess claims fees. 35 U.S.C.
41(a)(2). In view of the comments, the Office provided the amounts for
the excess claim fees expressly in Sec. 42.15(e) and (f) for clarity.
[[Page 48706]]
For example, if the patent originally has three independent claims and
the patent owner presents two new independent claims and cancels one
independent claim in the proceeding, the patent owner must submit a
payment of the excess claim fee under Sec. 42.15(e) (e.g., $110 for a
small entity) with the motion to amend.
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.
Comment 77: One comment requested clarification on whether the
patent owner may continue to argue the original claim is patentable
while presenting a proposed substituted claim.
Response: The patent owner may file a patent owner response that
contains arguments to respond to the grounds of unpatentability and a
motion to amend to present substituted claims.
Comment 78: A few comments requested clarification on whether the
patent owner may present substitute claims without cancellation of
existing claims.
Response: The patent owner may file a patent owner response that
contains arguments to respond to the grounds of unpatentability and a
motion to amend to present substituted claims. The presumption is that
only one substitute claim would be needed to replace each challenged
claim. In other words, each challenged claim that is being replaced
should be canceled unless the patent owner rebuts the presumption by a
demonstration of need.
Comment 79: One comment sought clarification on whether the
reexamination amendment rule, Sec. 1.530, applies to inter partes
review, post-grant review, and covered business method patent review
proceedings.
Response: Patent owners are not required to submit amendments in
accordance with Sec. 1.530 in inter partes review, post-grant review,
or covered business method patent review proceedings. Rather,
amendments should be filed in compliance with Sec. 42.121 or Sec.
42.221, as noted in the Office Patent Trial Practice Guide.
Comment 80: A few comments suggested that patent owners should be
permitted to file additional amendments throughout the proceeding, and
that the rules should prescribe the standard for determining whether
additional motions to amend are authorized, such as a good cause
showing.
Response: In view of these comments, Sec. Sec. 42.121(c) and
42.221(c), as adopted in this final rule, provide that an additional
motion to amend may be authorized when there is a good cause showing.
Comment 81: One comment recommended that amendments be permitted in
the patent owner's preliminary response.
Response: This suggestion is not adopted. A motion to amend the
patent is not provided for until after the institution of a review. See
35 U.S.C. 316(d)(1), as amended, and 35 U.S.C. 326(d)(1).
Comment 82: One comment recommended that examples of claim language
in papers other than a motion to amend the patent should be permitted
and should not be considered to be an amendment.
Response: For the conference call with the Board, a patent owner
may present the scope of the substitute claims that would be filed in
the motion to amend. Otherwise, the recommendations of claim language
should be filed in a motion to amend.
Comment 83: One comment was in favor of proposed Sec. Sec.
42.121(b)(2) and 42.221(b)(2), and suggested that if the earlier filed
disclosure is not in the English language, then a certified translation
of the disclosure must be submitted with the amendment.
Response: Section 42.63(b) requires an English language translation
of any non-English language document relied upon by a party, and an
affidavit attesting to the accuracy of the translation.
Comment 84: A few comments suggested that proposed Sec. Sec.
42.121(c)(2) and 42.221(c)(2) would procedurally deny amendments on
substantive grounds. In particular, the comments recommended that the
Office should enter the amendment and substantively reject the claims.
Another comment stated that this is a departure from the way the Office
has implemented nearly identical statutory language in reissue and
reexamination proceedings under 35 U.S.C. 251, 305, and 314 and that
there is no statutory language that permits the Office to limit the
first motion to amend. The second comment also stated that the proposed
rules are inefficient because the Board's refusal of entry will
constitute a determination of unpatentability of the substitute claims
and substantial re-work will be required.
Response: In view of the comments, the Office reorganized the rules
and added titles to clarify that the requirement for authorization
applies only to additional motions to amend. In addition, the Office
modified Sec. Sec. 42.121(a) and 42.221(a) to make clear that any
motions to amend (including the first motion to amend and any
additional motions to amend) may be denied where the amendment does not
respond to a ground of unpatentability, or seeks to enlarge the scope
of the claims or introduce new matter. Failure to comply with this, or
any other, requirement in the regulation may result in denial of the
proposed amendment(s).
The requirements are consistent with the AIA. As discussed
previously, 35 U.S.C. 316(a)(9), as amended, and 35 U.S.C. 326(a)(9)
provide the Office with the authority to set forth standards and
procedures for filing motions to amend the patent under 35 U.S.C.
316(d), as amended, and 35 U.S.C. 326(e). These statutory provisions of
the AIA are not provided in the statutory provisions for reissue and
reexamination proceedings, e.g., 35 U.S.C. 251 and 305. In particular,
since the reissue and reexamination statutory provisions do not provide
that a patentee seeking the relief of amending a claim does so by
motion, the reissue and reexamination statutory provisions for
amendment were implemented in a different manner. The Office has also
taken into account the considerations provided in 35 U.S.C. 316(b), as
amended, and 35 U.S.C. 326(b) and believes the standards and procedures
set forth in this final rule will enhance efficiency of the review
proceedings.
Moreover, these rules will increase efficiency and prevent delays.
For instance, when a patent owner facially cannot meet one of the
requirements (e.g., no support for the new claims), it is more
efficient to deny the authorization to file the additional motion to
amend, because it would not be necessary for the petitioner to file an
opposition and for the Board to wait for the opposition and provide a
written decision on such a motion.
Comment 85: One comment suggested that the Office should establish
a one-month deadline for the petitioner to propose any new grounds of
rejection necessitated by the patent owner's amendment. Another comment
suggested that the Office should prescribe a six-month deadline for
filing the opposition to the first motion to amend in the rules.
Response: Concurrent with the decision to institute the review, the
Board will enter a Scheduling Order. As discussed previously, the
Scheduling Order will set due dates for the review taking into account
the complexity of the proceeding, but ensuring that the trial is
completed within one year of institution. The default Scheduling Order
generally will provide the petitioner with three months for discovery
and for filing a petitioner's
[[Page 48707]]
reply to the patent owner's response and any opposition to the motion
to amend. Parties may request adjustments to the Scheduling Order at
the initial conference call.
Comment 86: One comment suggested that the rules should expressly
provide for the petitioner's right to present new evidence in an
opposition to an amendment, and the patent owner's right to file a
reply to petitioner's opposition to an amendment.
Response: Section 42.23 provides for oppositions and replies. As
noted in the Office Patent Trial Practice Guide (Section H), a
petitioner will be afforded an opportunity to respond fully to an
amendment. The time for filing an opposition generally will be set in a
Scheduling Order. No authorization is needed to file an opposition to
an amendment. Petitioners may supplement evidence submitted with their
petition to respond to new issues arising from proposed substitute
claims. This includes the submission of new expert declarations that
are directed to the proposed substitute claims. Additionally, Sec.
42.23 provides that oppositions and replies must comply with the
content requirements for motions, and a reply may only respond to
arguments raised in the corresponding opposition. Section I of the
Office Patent Trial Practice Guide also provides that a reply that
raises a new issue or belatedly presents evidence will not be
considered.
Multiple Proceedings and Joinder (Sec. Sec. 42.122 and 42.222)
Comment 87: One comment asked for clarification as to what effect
consolidating proceedings, for example, two post-grant review
proceedings, would have on the total number of post-grant reviews
allowed in a given year.
Response: Where multiple instituted proceedings are consolidated,
each proceeding would be counted towards any limit that might be
established as each is a separately instituted proceeding that is
thereafter consolidated into a single proceeding.
Comment 88: One comment requested clarification on the timing for
requesting joinder of parties or replacement of a consenting
petitioner, and suggested that the Office permit joinder and
replacement until the time of a final written decision under
appropriate circumstances. The comment further suggested a list of
factors that the Office might consider in determining whether to permit
voluntary joinder or replacement (e.g., the impact on the Scheduling
Order). Another comment requested guidance as to when joinder might
occur.
Response: Joinder may be requested by filing a motion within one
month of the date that the trial is instituted. When the Office
determines whether to grant a motion for joinder, the Office will
consider the particular facts of each case including how the
consolidation of the reviews impacts the Office's ability to complete
reviews timely. In view of this comment, the Office modified Sec. Sec.
42.122 and 42.222 to provide expressly for the time period for filing a
request for joinder.
The AIA, however, does not provide for the ``replacement'' of a
party. A petitioner may settle with the patent owner and upon entering
the joint request, the review will terminate with respect to the
petitioner. 35 U.S.C. 317, as amended, and 35 U.S.C. 327.
Comment 89: Several comments requested clarification regarding the
effect of a stay or joinder on the ability of the Office to complete
review within the one-year period.
Response: In the case of joinder, the Director may adjust the time
periods allowing the Office to manage the more complex case. 35 U.S.C.
316 (a)(11), as amended, and 35 U.S.C. 326(a)(11). When multiple
proceedings involving a single patent are instituted, joinder would
allow the Office to consolidate issues and to account for timing issues
that may arise. If another proceeding or matter involving the patent is
before the Office, the Director may determine the manner in which the
inter partes or post-grant review will proceed including providing for
a stay of one of the matters or proceedings. 35 U.S.C. 315(d), as
amended, and 35 U.S.C. 325(d). A stay of a matter that suspends the
time for taking actions is expected to be a rare occurrence. In
considering whether to order a stay, the goal of completing the
proceeding in a timely manner will be taken into account.
Comment 90: One comment asked what effect a reissue application
filed after institution of post-grant or inter partes review would have
on the order in which the proceedings would be resolved. Another
comment urged the Office not to merge an inter partes review with an ex
parte proceeding due to different standards for conducting the
proceedings.
Response: Under the rules, a stay, transfer, consolidation or
termination would be an option in this situation. Sec. Sec. 42.122 and
42.222. Both whether a stay, transfer, consolidation or termination
would be ordered and the order of resolution would depend on particular
facts and circumstances. The Board will take into consideration the
impact on each proceeding on a case-by-case basis.
Supplemental Information (Sec. Sec. 42.123 and 42.223)
Comment 91: Several comments opposed proposed Sec. Sec. 42.123 and
42.223, providing for motions to file supplemental information.
According to the comments, the petition should disclose the entirety of
the petitioner's case, and the comments also expressed concerns that
the petitioner may intentionally hold back some evidence which would be
unfair to the patent owner. Conversely, other comments were in favor of
the proposed rules, and noted that the procedure for submitting
supplemental information is expressed provided in the AIA.
Response: Since the request must be made within one month of the
date the trial is instituted, the patent owner will have sufficient
time to address any new information submitted by the petitioner, except
in the situation where the party satisfies the requirements of Sec.
42.123(b) or 42.223(b). The Office understands the concerns related to
late submissions of supplemental information. Therefore, the Office has
modified the proposed provisions set forth in Sec. Sec. 42.123 and
42.223 to provide that any request not made within one month must show
why the information reasonably could not have been obtained earlier,
and that consideration for the supplemental information would be in the
interests-of-justice. See Sec. Sec. 42.123(b) and 42.223(b).
Further, supplemental information must be relevant to a claim for
which the trial has been instituted. The final rule clarifies that if
the submission is not relevant to a claim for which the trial has been
instituted, the party must show that the information reasonably could
not have been obtained earlier and that consideration of the
supplemental information would be in the interests-of-justice. See
Sec. Sec. 42.123(c) and 42.223(c).
As other comments pointed out, 35 U.S.C. 316(a)(3), as amended, and
35 U.S.C. 326(a)(3) provide that the Director shall prescribe
regulations establishing procedures for the submission of supplemental
information after the petition is filed. Consistent with these
statutory provisions, Sec. Sec. 42.123 and 42.223, as adopted in this
final rule, establish the procedures in which parties may file
supplemental information.
Comment 92: Several comments suggested that the rules should permit
a party to file a motion to file supplemental information, and
suggested that the motion should be granted only for good cause or be
limited to rebuttal evidence and/or
[[Page 48708]]
evidence bearing on the credibility of witnesses.
Response: Petitioners are encouraged to set forth their best
grounds of unpatentability and supporting evidence in their petitions,
lest the petitioner risk a determination by the Board not to institute
the review or deny the asserted grounds of unpatentability (Sec.
42.108(b)). Moreover, the Board may impose a sanction against a party
for misconduct, including any action that harasses or causes
unnecessary delay or cost (Sec. 42.12(a)(7)). Where a party needs to
submit late supplemental information, the party must explain why the
information reasonably could not have been obtained earlier, and that
the consideration of the information would be in the interests-of-
justice. If the Board grants such a motion, the Board may authorize the
patent owner to take additional discovery or to file a motion to amend.
Sections 42.121(c) and 42.221(c), as adopted in this final rule,
clarify that in determining whether to authorize such an additional
motion to amend, the Board will consider whether a petitioner has
submitted supplemental information after the time period set for filing
a motion to amend in Sec. 42.121(a) or 42.221(a). The Board may also
extend the time period for completing the review. Additionally, the
Board may take into account whether a late submission represents an
improper use of the proceeding. 35 U.S.C. 316(a)(6), as amended, and 35
U.S.C. 326(a)(6).
Comment 93: One comment stated that providing petitioners with a
right to submit supplemental information will help ensure that all
pertinent issues are resolved in the same proceeding, and suggested
that the rule should allow petitioners to present new evidence obtained
during discovery even for a new ground of unpatentability.
Response: As discussed previously, petitioners are strongly
encouraged to submit all of the evidence that supports the grounds of
unpatentability asserted in the petition. Sections 42.123 and 42.223,
as adopted in this final rule, provide that a party may seek
authorization to file a motion to submit supplemental evidence relevant
to a claim for which the trial has been instituted within one month of
the date the trial is instituted. The rules also provide standards by
which later motions may be granted where the evidence reasonably could
not have been obtained earlier. While the evidence may be relevant to a
new ground of unpatentability, the party, however, must additionally
show that consideration of the supplemental evidence would be in the
interests-of-justice.
Comment 94: One comment recommended the time period for requesting
the authorization to file supplemental information should be shortened
to two weeks.
Response: The Office believes that the one-month time period is
appropriate so that a party has sufficient opportunity to request the
authorization to file the motion at the initial conference call.
Comment 95: One comment noted that the rules do not provide for
raising new grounds of unpatentability and suggested that the rules
should clarify that no estoppel applies for new grounds of
unpatentability.
Response: 35 U.S.C. 316(a)(3), as amended, and 35 U.S.C. 326(a)(3)
provide that the Director is to promulgate regulations that establish
procedures for the submission of supplemental information after the
petition is filed. The rules provide a timeframe for the submission of
the supplemental information during the review. Whether a party is
authorized to raise new grounds of unpatentability based upon the
supplemental information will be determined on a case-by-case basis
taking into account the particular facts surrounding supplemental
information submitted.
Since estoppel applies for any ground that the petition raised or
reasonably could have raised during the review (35 U.S.C. 315(e), as
amended, and 35 U.S.C. 325(e)), estoppel would apply where a new ground
is authorized.
Intervening Rights
Comment 96: One comment recommended that the rules or Practice
Guide should note that the intervening rights applicable to an inter
partes review or post-grant review shall be based on 35 U.S.C. 318(c),
as amended, and 35 U.S.C. 328(c) and 252 as interpreted by case law.
Response: Since the issue of intervening rights is not one decided
by the Office in an inter partes review, post-grant review, or covered
business method patent review, it is not necessary to include
information regarding intervening rights in the rules of practice
before the Office.
Practice Guide
Comment 97: One comment suggested that the timeline of the Practice
Guide for Proposed Trial Rules favors the patentee and should be
modified to allow the petitioner an additional month while shortening
the patentee's time by a month. One comment suggested that in the
scheduling order timeline of the Practice Guide for Proposed Trial
Rules, a provision should be made for modification of the scheduling
order based on good cause.
Response: The scheduling order in the Office Patent Trial Practice
Guide is a general guideline based on the rules. The parties are
encouraged to recommend particular dates within the general framework
of the scheduling order that work for both, prior to the initial
conference call. The parties also may stipulate to modify most of the
deadlines set within the scheduling order. Any further modification
must be by authorized motion. Sec. 42.20(b). Whether such a motion
would be authorized or granted depends on the particular circumstances
of the case including the Office's ability to complete the review in a
timely manner.
Covered Business Method Patent Review
Who May Petition for a Covered Business Method Patent Review (Sec.
42.302(a))
Comment 98: Several comments requested that the Office provide
guidance as to the standard for satisfying the ``charged with
infringement'' requirement. One comment suggested that the Office
should clarify that the ``charged with infringement'' criterion is
something more than the showing required to establish declaratory
judgment jurisdiction. Several other comments suggested that the
standard should be based on the test for declaratory judgment
jurisdiction. Lastly, one comment suggested that the rule should
clarify that a patentee can discuss licensing with a party without
making a charge of infringement.
Response: The suggestions are adopted in part. The Office will
provide more guidance by providing a rule that sets forth the standard
for ``charged with infringement'' in a revision to the Office Patent
Trial Practice Guide. The final rule includes the standard based on the
test for declaratory judgment jurisdiction in Federal court. The final
rule provides that ``charged with infringement'' means a real and
substantial controversy regarding infringement of a covered business
method patent such that the petitioner would have standing to bring a
declaratory judgment action in Federal court.
Time for Filing Petition for a Covered Business Method Patent Review
(Sec. 42.303)
Comment 99: One comment suggested that the proposed rule apparently
precludes the filing of a business method patent review of any patent
(i.e., first-to-invent and first-to-file patents)
[[Page 48709]]
within the first nine months after that patent is issued, in violation
of the AIA. The comment proposed that the Office change the language of
the rule to make it clearer.
Response: The transitional review program is available for non-
first-to-file patents, even within the first nine months of the grant
of such patents. The rule is consistent with the limitation set forth
in section 18(a)(2) of the AIA, and therefore no change was made. See
Sec. 42.302(a).
Content of Petition for a Covered Business Method Patent Review (Sec.
42.304(a))
Comment 100: Several comments suggested that the patentee should
bear the burden of proof or persuasion to show that the patent in
question is a technological invention. One comment suggested that the
petitioner bears the burden to demonstrate that at least one claim is
not directed to a technological invention.
Response: The Office adopts proposed Sec. 42.304(a) without any
modifications. The petitioner bears the burden to demonstrate that at
least one claim is not directed to a technological invention to show
that the petitioner has standing to proceed. Section 42.304(a) requires
that the petitioner demonstrate that the patent for which review is
sought is a covered business method patent. A covered business method
patent is defined in part as not being for a technological invention.
As part of demonstrating that the patent for which review is sought is
a covered business method patent, the petitioner must demonstrate that
the patent in question meets the definition of a covered business
method patent, including demonstrating that the patent is not for a
technological invention. The showing for both covered business method
patent and technological invention is based on what is claimed.
Comment 101: One comment suggested that the Office clarify that the
petitioner need only make a prima facie showing (rather than
demonstrate) that the patent for which review is sought is a covered
business method patent and that the ultimate burden of persuasion be on
the patentee to show that the patent is a technological invention.
Another comment suggested that the petitioner bears the burden of going
forward and has the burden of persuasion that the subject matter is
eligible for the Transitional Program for Covered Business Method
Patents review.
Response: The Office adopts proposed Sec. 42.304(a) in this final
rule without any modifications. Section 42.304(a) requires that the
petitioner demonstrate that the patent for which review is sought is a
covered business method patent. A covered business method patent is
defined in part as not being for a technological invention. As part of
demonstrating that the patent for which review is sought is a covered
business method patent, the petitioner must demonstrate that the patent
in question meets the definition of a covered business method patent,
including demonstrating that the patent is not for a technological
invention. As provided in the preamble, to establish standing, a
petitioner would be required to certify that the petitioner meets the
eligibility requirements of Sec. 42.302 and demonstrate that the
patent is a covered business method.
Comment 102: One comment suggested that the proposed rules appear
to contemplate that a petitioner could establish standing simply by
certifying that it has standing, without any supporting facts or
reasoning. The comment further expressed that proof of standing
(showing that the petitioner has been sued for or charged with
infringement) should be required, as well as a showing that the patent
is a covered business method patent and that the technological
invention exception does not apply.
Response: The Office adopts proposed Sec. 42.304(a) in this final
rule without any modifications. Section 42.304(a) requires that the
petition under this section demonstrate that the petitioner has grounds
for standing. To establish standing, a petitioner, at a minimum, would
be required to certify with explanation that the patent is a covered
business method patent and that the petitioner meets the eligibility
requirements of Sec. 42.302. This requirement is to ensure that a
party has standing to file the covered business method patent review
and would help prevent spuriously instituted reviews. Facially improper
standing is a basis for denying the petition without proceeding to the
merits of the decision.
Comment 103: One comment suggested that the Office conduct its
eligibility requirements for a covered business method patent on a
claim-by-claim basis and indicate in Sec. 42.304(a) that the
petitioner must demonstrate the grounds for standing for each claim for
which review is sought.
Response: The petitioner must demonstrate standing and that the
patent for which review is sought is a covered business method patent.
Sec. 42.304(a). The AIA defines a covered business method patent as a
patent that claims a method or corresponding apparatus, as set forth at
Section 18(d)(2). The AIA provides for a challenge to one or more
claims within such a covered business method patent. The AIA does not
limit the claims that may be challenged to those that are directed
specifically to the covered business method.
Comment 104: One comment suggested that proposed Sec. 42.301 fails
to address the required nexus between a challenged business method
patent and a financial product or service.
Response: Under the rules, the petitioner must demonstrate that the
patent for which review is sought is a covered business method patent.
Sec. 42.304(a). Thus, a petitioner must show the challenged patent to
be a patent that claims a method or corresponding apparatus for
performing data processing or other operation used in the practice,
administration, or management of a financial product or service, and
which is not a technological invention.
Comment 105: One comment suggested that shortly after institution
of a proceeding, the patent owner should be authorized to file a
threshold motion challenging the standing of the petitioner.
Response: Under the rules, a patent owner should challenge standing
no later than the filing of the patent owner preliminary response.
Sec. 42.207(a). Once a proceeding is initiated, a party wishing to
challenge standing may challenge standing in its patent owner response.
Comment 106: Several comments suggested that the rules should
require proof of standing for a transitional covered business method
patent review, i.e., require a showing that the petitioner has been
sued or charged for infringement and that the patent at issue is a
covered business method patent.
Response: Under the rules, the petitioner must demonstrate standing
and that the patent for which review is sought is a covered business
method patent. Sec. 42.304(a). The petition is required to show
specifically that it meets the requirements of Sec. 42.302, i.e., that
the petitioner, the petitioner's real party-in-interest, or a privy of
the petitioner has been sued for infringement of the patent or has been
charged with infringement under that patent. A showing can only be made
through sufficient proof.
Comment 107: One comment suggested that the rules should implement
the requirements of section 18(a)(1)(C) of the AIA.
Response: The comment is adopted. Section 42.304(b)(2), as adopted
in this final rule, implements the requirements of section 18(a)(1)(C)
of the AIA.
[[Page 48710]]
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 specific procedures for inter partes
review, post-grant review, and covered business method patent review,
and therefore, does not depend on or discuss the responses or
information related to other than 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, and
covered business method patent review, and the trial process after
initiation of such a review. 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. F.C.C., 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, Inc.
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 rulemaking 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 proposed changes for
comment as it sought the benefit of the public's views on the Office's
proposed implementation of these provisions of the AIA. See Changes to
Implement Inter Partes Review Proceedings, 77 FR 7041 (Feb. 10, 2012);
Changes To Implement Post-Grant Review Proceedings, 77 FR 7060 (Feb.
10, 2012); and Changes To Implement Transitional Program for Covered
Business Method Patents, 77 FR 7080 (Feb. 10, 2012).
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 108: One comment suggested that almost all of the proposed
regulations were legislative and not interpretive rules. That 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 F.3d. 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 109: One comment suggested that, even if the rules are
merely procedural, reliance on Cooper Technologies. Co. 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 F.3d 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 Technologies. 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 and
50 petitions for post-grant review and covered business method patent
review combined will be filed in fiscal year 2013. In fiscal year 2014,
it is estimated that 450 inter partes review and 60 petitions for post-
grant review and covered business method patent review combined will be
filed. In fiscal year 2015, it is estimated that 500 inter partes
review and 110 petitions for post-grant review and covered business
method patent review combined will be filed.
The estimate for inter partes review petitions is based partially
on the number of inter partes reexamination requests under Sec. 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 FY 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 estimate that no more than 420 inter partes reexamination requests
would have been filed in FY 2012 and that a similar number of inter
partes reviews 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 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://
[[Page 48711]]
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 classified in the
class appropriate to the external device unless specifically
excluded therefrom.
4. Nominally claimed apparatus external to this class in
combination with apparatus under the class definition is classified
in this class unless provided for in the appropriate external class.
5. In view of the nature of the subject matter included herein,
consideration of the classification schedule for the diverse art or
environment is necessary for proper search.
See Classification Definitions (Feb. 2011) available at http://www.uspto.gov/web/patents/classification/uspc705/defs705.htm.
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
estimates 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,
section 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 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 for
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.
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
[[Page 48712]]
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
1315 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 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 estimate 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, any adjustment would be
incomplete and would be administratively burdensome to estimate. Thus,
it is estimated that the number of small entity patents in force in
fiscal year 2013-2015 will be approximately 375,000.
Based on the estimated number of patents in force, the average
number of small entity-owned patents impacted by inter partes review
annually in fiscal year 2013-2015 (146 patents) would be less than
0.05% (146/375,000) of all patents in force that are owned by small
entities. Moreover, post-grant review and covered business method
patent review 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 review, post-grant review, and the transitional program
for covered business method patent review provisions of the AIA, which
take effect September 16, 2012. Public Law 112-29, Sec. Sec. 6 (c) and
(f), and Sec. 18, 125 Stat. 284, 304, 311 and 330 (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: This final rule is part of a series of rules that implement the
new administrative trials authorized by the AIA. Specifically, this
final rules implement specific aspects of the inter partes review,
post-grant review, and the transitional program for covered business
method patent review proceedings as authorized by the AIA. The AIA
requires that the Director prescribe rules for the inter partes
reviews, post-grant reviews, 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 reviews, post-grant reviews, 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, in a timely fashion, the instituted proceedings. See 35
U.S.C. 316(b), as amended, and 35 U.S.C. 326(b). Consistent with the
time periods provided in 35 U.S.C. 316(a)(11), as amended, and 35
U.S.C. 326(a)(11), the 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, improve
the integrity of the patent system, and promote 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 Changes to Implement Inter
Partes Review Proceedings, 77 FR 7041, 7048-55 (Feb. 10, 2012). The
Office received one written submission of comments from the public
concerning the Regulatory Flexibility Act. Each component of that
comment directed to the Regulatory Flexibility Act is addressed below.
Comment 110: 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, at (e)(3). The Office estimated that the same
[[Page 48713]]
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 111: A comment 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 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 in compliance with the Regulatory
Flexibility Act are set forth in 13 CFR 121.201. These regulations
generally define small businesses as those with fewer than a specified
maximum number of employees or less than a specified level of annual
receipts for the entity's industrial sector or North American Industry
Classification System (NAICS) code. As provided by the Regulatory
Flexibility Act, and after consultation with the Small Business
Administration, the Office formally adopted an alternate size standard
as the size standard for the purpose of conducting an analysis or
making a certification under the Regulatory Flexibility Act for patent-
related regulations. See Business Size Standard for Purposes of United
States Patent and Trademark Office Regulatory Flexibility Analysis for
Patent-Related Regulations, 71 FR 67109 (Nov. 20, 2006), 1313 Off. Gaz.
Pat. Office 60 (Dec. 12, 2006). This alternate small business size
standard is the 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 the 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, or covered business method patent
review or owns a patent subject to such review. As discussed above
(which is incorporated here), it is anticipated that 420 petitions for
inter partes review and 50 petitions for post-grant review and covered
business method patent review combined will be filed in fiscal year
2013. In fiscal year 2014, it is estimated that 450 inter partes review
and 60 petitions for post-grant review and covered business method
patent review combined will be filed. In fiscal year 2015, it is
estimated that 500 inter partes review and 110 petitions for post-grant
review and covered business method patent review combined 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 an 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
[[Page 48714]]
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
review or covered business method patent review.
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. Thus, 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 annually result in the filing of a patent owner
preliminary response. Where an inter partes review petition is filed
close to the expiration of the one-year period set forth in 35 U.S.C.
315(b), as amended, a patent owner likely would be advantaged by filing
a successful preliminary response. In view of these considerations, it
is anticipated that 90% of patent owners will annually file a
preliminary response. Specifically, the Office estimates that 401
patent owners will annually file a preliminary response to an inter
partes review petition, and an estimated 64 patent owners will annually
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 years 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 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.
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 17 requests for
reconsideration (51 decisions not to institute multiplied by 33.333%)
will be filed. Based on the percentage of small entity-owned patents
that were the subject of inter partes reexamination (32.09%) it is
estimated that six small entities will file a request for a
reconsideration of a decision dismissing the petition for review in
fiscal year 2013. Further, the Office estimates that it will issue 321
final written decisions for inter partes reviews and 51 final written
decisions for post-grant reviews, including cover business method
patent reviews annually. Applying the same 33.333% rate, the Office
estimates 124 requests for reconsiderations ((321+51) multiplied by
33.333%) will be filed based on the final written decisions annually.
Therefore, the Office estimates a total of 141 (17+124) requests for
reconsiderations annually.
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, and (2) post-grant reviews and
covered business method patent reviews will have an average of 8
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 may request an oral hearing. It is
anticipated that 479 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
154 small
[[Page 48715]]
entity patent owners or petitioners will on average annually file a
request for oral hearing in the reviews instituted in fiscal years
2013-2015.
Parties to a review 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.
Given the short time period set for conducting trials, it is
anticipated that the alternative dispute resolution options will be
infrequently used. The Office estimates that 20 requests to treat a
settlement as business confidential and 116 requests for adverse
judgment, default adverse judgment, or settlement notices will be filed
annually. The Office also estimates that 20 requests to make a
settlement available will be filed annually. Based on the percentage of
small entity-owned patents that were the subject of inter partes
reexamination (32.09%), it is estimated that six small entities will
annually file a request to treat a settlement as business confidential
and 37 small entities will annually file a request for adverse
judgment, default adverse judgment notices, or settlement notices in
fiscal years 2013-2015.
Parties to a review 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, that Office has
adjusted its estimate of the appeal rate to be 120% of the historic
rate (40% of decisions). Based on this rate, 145 additional notices of
appeal will be filed annually from the decisions issued in the new
reviews during fiscal years 2013-2015. Based on the percentage of small
entity-owned patents that were the subject of inter partes
reexamination (32.09%) it is estimated that 47 small entities would
annually seek judicial review of final decisions of the Board in the
new reviews in fiscal years 2013-2015.
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 electronic fields, 30% in
the mechanical field, and 20% in the chemical or design fields.
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 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 Board. The level of skill typically is possessed by a
registered patent practitioner having devoted professional time to the
particular practice area, typically under the supervision of a
practitioner skilled in the particular practice area. Where authorized
by the Board, a non-registered practitioner may be admitted pro hac
vice, on a case-by-case basis based on the facts and circumstances of
the trial and party, as well as the skill of the practitioner.
The cost of preparing a petition for inter partes review is
anticipated to be the same as the cost for preparing a request for
inter partes reexamination. The American Intellectual Property Law
Association's AIPLA Report of the Economic Survey 2011 reported that
the average cost of preparing a request for inter partes reexamination
was $46,000.
Based on the work required to prepare and file such a request, the
Office considers the reported cost as a reasonable estimate.
Accordingly, the Office estimates that the cost of preparing a petition
for inter partes review would be $46,000.
The cost of preparing a petition for post-grant review 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 review 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 review or covered business
method patent review would 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 review 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 (IT) 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 time for review by
the judges would be required. An additional two hours for each claim in
excess of 20 would be required.
For a petition for post-grant review or covered business method
patent review with 20 or fewer challenged claims, it is anticipated
that about 130 hours of time for review by the judges will be required.
An additional slightly less than 3 hours of judge time for each claim
in excess of 20 would be required.
[[Page 48716]]
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 was $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 review or covered business method patent review will
have 8 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 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 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. The
procedures to file requests that a settlement be treated as business
confidential are set forth in Sec. 42.74(c). The procedures to file
requests for adverse judgment are set forth in Sec. 42.73(b). 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 for a cost of $742. It is anticipated that requests
for adverse judgment will require one hour of professional time for a
cost of $371. It is anticipated that a settlement agreement will
require 100 hours of professional time for a cost of $37,100 if the
parties are not also in litigation over the patent and one hour for a
cost of $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 for a cost of $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, including notices of appeal are set forth
in Part 90. The submission of a copy of a notice of appeal 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
[[Page 48717]]
(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 thus provides 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
this final rule is 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
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,
[[Page 48718]]
which is the same as that for post-grant review.
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 generally would 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 not only to 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 reviews, post-grant reviews, and covered business method
patent reviews, consider the effect of the rules on the economy, the
integrity of the patent system, the efficient administration of the
Office, and the ability of the Office to complete timely the instituted
proceedings. See 35 U.S.C. 316(b), as amended, and 35 U.S.C. 326(b). In
view of the actual results of the duration of proceedings in inter
partes reexamination (without page limits) and contested cases (with
page limits), adopting procedures with reasonable page limits would be
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), effective 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, under 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 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 likely
would 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 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 of 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, this 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
reviews, post-grant reviews, 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
[[Page 48719]]
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 reviews, post-grant
reviews, and covered business method patent reviews, consider the
effect of the rules on the economy, the integrity of the patent system,
the efficient administration of the Office, and the ability of the
Office to complete timely the instituted proceedings.
IV. Alternative Option III. The Office considered an alternative
fee setting regime in which fees would be charged at various steps in
the review process (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
timely reviews, would result in dismissal of pending proceedings with
patentability in doubt due to non-payment of required fees by third
parties, and would be inconsistent with 35 U.S.C. 312, as amended, and
35 U.S.C. 322 that require the fee established by the Director 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, in a timely fashion, the instituted proceedings.
V. Alternative Option IV. The Office considered setting reduced
fees for small and micro entities and to provide refunds if a review is
not instituted. However, 35 U.S.C. 41(d)(2)(a) provides that the Office
shall set the fee to recover the cost of providing the services. 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 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.
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, 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 requires a showing that
additional requested discovery would be productive in inter partes
reviews. The rules adopt an interests-of-justice standard for
additional discovery for inter partes reviews. This standard is
consistent with the considerations identified in 35 U.S.C. 316(b), as
amended, including the efficient administration of the Board and the
Board's ability to complete timely trials. Further, the interests-of-
justice standard is consistent with 35 U.S.C. 316(a)(5), as amended,
which states that discovery other than depositions of witnesses
submitting affidavits and declarations be what is otherwise necessary
in the interests-of-justice.
Good cause and interests-of-justice are closely related standards,
but the interests-of-justice standard is slightly higher than good
cause. While a good cause standard requires a party to show a specific
factual reason to justify the needed discovery, under the interests-of-
justice standard, the Board would look at all relevant factors.
Specifically, to show good cause, a party would be required to make a
particular and specific demonstration of fact. Under the interests-of-
justice standard, the moving party would also be required to show that
it was fully diligent in seeking discovery and that there is no undue
prejudice to the non-moving party. The interests-of-justice standard
covers considerable ground, and in using such a standard, the Board
expects to consider whether the additional discovery is necessary in
light of the totality of the relevant circumstances.
The Board will set 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, 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
[[Page 48720]]
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 rules 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 does not derogate from the Director the prerogative to make
such decisions, nor does 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 reviews, post-grant reviews, 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, in a timely fashion, the instituted proceedings.
Threshold for Instituting a Review: The Office considered whether
the threshold for instituting a review could be set as low as or lower
than the threshold for ex parte reexamination. This alternative could
not be adopted in view of the statutory requirements in 35 U.S.C. 314,
as amended, and 35 U.S.C. 324.
Default Electronic Filing: The Office considered a paper filing
system and a mandatory electronic filing system (without any
exceptions) as alternatives to the 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, under the adopted option, 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 Board, and allow for limited
participation by third parties.
37 CFR 1.902-1.997 provide for inter partes reexamination of
patents. Similar to ex parte reexamination, inter partes reexamination
provides a procedure in which a third party may request reexamination
of any claim in a patent on the basis of the cited prior art patents
and printed publication. The inter partes reexamination practice will
be eliminated, except for requests filed before the effective date,
September 16, 2012. See Sec. 6(c)(3)(C) of the 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.
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 $82.6 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 annual aggregate
burden of the rules on the public to be $202,034,212.10 in fiscal years
2013-2015, which represents the sum of the estimated total annual
(hour) respondent cost burden ($184,627,816.10) plus the estimated
total annual non-hour respondent cost burden ($17,406,396.00) 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), the burden of the rules should be offset
by the eliminations of those
[[Page 48721]]
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 FY 2011 (374), FY 2010 (280), FY 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 FY 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 per party cost until close
of prosecution reduced by the $46,000 request preparation cost).
Additionally, the burden on the public to appeal to the Board would be
reduced by $5,358,000 (based on an estimate that 141 proceedings would
be appealed to the Board, which is estimated based on the number of
granted proceedings (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)). Therefore, the estimated aggregate burden of the rules for
implementing the new review proceedings would be $82,647,412.10
($202,034,212.10 minus $119,386,800) annually in fiscal years 2013-
2015.
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 where the
damages at risk are less than $1,000,000 the total cost of patent
litigation was, on 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. The Office
believes, based on its experience, that these estimates are reasonable.
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 ($82,647,412.10) 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 one written submission of comments from the
public regarding Executive Order 12866. Each component of that comment
directed to Executive Order 12866 is addressed below.
Comment 112: One comment 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 113: 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 baseline costs that the Office used to
determine the increased burden of the proposed rules properly included
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 109.
Comment 114: One comment argued 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
[[Page 48722]]
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
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 final rule 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 et seq.
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 Notices
``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),
``Changes to Implement Inter Partes Review Proceedings,'' 77 FR 7041
(Feb. 10, 2012) (notice of proposed rulemaking) (RIN 0651-AC71),
``Changes to Implement Post-Grant Review Proceedings,'' 77 FR 7060
(Feb. 10, 2012) (notice of proposed rulemaking) (RIN 0651-AC72), and
``Changes to Implement Transitional Program for Covered Business Method
Patents,'' 77 FR 7080 (Feb. 10, 2012) (notice of proposed rulemaking)
(RIN 0651-AC73).
The Office received one comment 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,
[[Page 48723]]
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) 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);
(5) 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);
(6) 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
(7) Notices of judicial review of a Board decision, including
notices of appeal and notices of election provided for 35 U.S.C. 141,
142, 145 and 146 (Sec. Sec. 90.1 through 90.3).
The 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, to a collection of
information.
I. Abstract: The USPTO is required by 35 U.S.C. 131 and 151 to
examine applications and, when appropriate, issue applications as
patents.
Chapter 31 of title 35, United States Code, in effect on September
16, 2012, provides for inter partes review proceedings allowing third
parties to petition the USPTO to review the patentability of an issued
patent under 35 U.S.C. 102 and 103 based on patents and printed
publications. If a trial is initiated by the USPTO based on the
petition, as authorized by the USPTO, additional motions may be filed
by the petitioner. A patent owner may file a response to the petition
and if a trial is instituted, as authorized by the USPTO, may file
additional motions.
Chapter 32 of title 35 U.S.C. in effect on September 16, 2012,
provides for post-grant review proceeding allowing third parties to
petition the USPTO to review the patentability of an issued patent
under any ground authorized under 35 U.S.C. 282(b)(2). If a trial is
initiated by the USPTO based on the petition, as authorized by the
USPTO, additional motions may be filed by the petitioner. A patent
owner may file a response to the petition and if a trial is instituted,
as authorized by the USPTO, may file additional motions.
Section 18 of the 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.
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 per 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 the 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
[[Page 48724]]
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.
The title, description, and respondent description of the
information collection are shown below with an estimate of the annual
reporting burdens. Included in this estimate is the time for reviewing
instructions, gathering and maintaining the data needed, and completing
and reviewing the collection of information. The principal impact of
the changes in this notice is to implement the changes to Office
practice necessitated by sections 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: 940
respondents and 4,541 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: 497,649.1 hours per
year.
Estimated Total Annual (Hour) Respondent Cost Burden:
$184,627,816.10 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 $184,627,816.10 per year (497,649.1 hours per year
multiplied by $371 per hour).
Estimated Total Annual Non-Hour Respondent Cost Burden: $17,406,396
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[supreg] 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 $17,406,320.00
per year.
Therefore, the total annual cost burden in fiscal years 2013-2015
is estimated to be $202,034,212.10 (the sum of the estimated total
annual (hour) respondent cost burden ($184,627,816.10) plus the
estimated total annual non-hour respondent cost burden ($17,406,396)).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed Proposed Final estimated Final Final
estimated time estimated estimated time for estimated estimated
Item for response annual annual burden response annual annual burden
(hours) responses hours (hours) responses hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
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.................................
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 80 141 11,280
Motions, replies and oppositions after institution in 140 2,453 343,420 140 2,166 303,240
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...............................................
Request for oral hearing.............................. 20 456 9,120 18.3 479 8,765.70
Request to treat a settlement as business confidential 2 18 36 2 20 40
Request for adverse judgment, default adverse judgment 1 101 101 1 84 84
or settlement (parties in litigation over patent)....
[[Page 48725]]
Settlement parties not in litigation.................. n/a n/a n/a 100 32 3,200
Request to make a settlement agreement available...... 1 18 18.00 1 20 20
Notice of judicial review of a Board decision (e.g., 0.1 51 5.1 0.1 145 14.5
notice of appeal under 35 U.S.C. 142)................
Totals............................................ ............... 4,541 524,798.10 ............... 4,541 497,649.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
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
(average)....................
Petition for post-grant review or covered 50 47,100 2,355,000 73 41,400 3,022,200
business method patent review. (average)....................
Reply to inter partes review petition.... 406 0 0 401 0............................ 0
Reply to post-grant review or covered 45 0 0 64 0............................ 0
business method patent review petition.
Request for Reconsideration.............. 141 0 0 141 0............................ 0
Motions, replies and oppositions after 2,453 0 0 2,086 0............................ 0
initiation in inter partes review with
no excess claims.
Motions in inter partes review with n/a n/a n/a 26 370.......................... 9,620
excess claims by small entity patent
owners.
Motions in inter partes review with n/a n/a n/a 54 740.......................... 39,960
excess claims by other than small entity
patent owners.
Motions, replies and oppositions after 342 0 0 447 0............................ 0
initiation in post-grant review or
covered business method patent review
with no excess claims.
Motions in post-grant review or covered n/a n/a n/a 4 370.......................... 1,480
business method patent review with
excess claims by other than small entity
patent owners.
Motions in post-grant review or covered n/a n/a n/a 9 740.......................... 6,660
business method patent review with
excess claims by small entity patent
owners.
Request for oral hearing................. 456 0 0 479 0............................ 0
Request to treat a settlement as business 18 0 0 20 0............................ 0
confidential.
Request for adverse judgment, default 101 0 0 116 0............................ 0
adverse judgment or settlement.
Request to make a settlement agreement 18 400 7,200 20 400.......................... 8,000
available.
Notice of judicial review of a Board 51 0 0 145 0............................ 0
decision (e.g., notice of appeal under
35 U.S.C. 142).
Totals............................... 4,541 .............. 18,830,200 4,541 ............................. 17,406,320
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 one written submission of comments regarding
the Paperwork Reduction Act. Each component of that comment directed
the Paperwork Reduction Act is addressed below.
Comment 115: 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. The comment argues that the completed
proceeding are only the least complex of proceedings which the comment
alleges result in a sampling bias.
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
[[Page 48726]]
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 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 for the new proceedings.
Comment 116: 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 is 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: The suggestion is 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.
Comment 117: A comment 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 proceedings. 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 118: 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 is 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 provided 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 119: A comment noted that the distribution of claims for
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 proceedings requested review of between 21 and 30 claims;
three of the 60 proceedings requested review of between 31 and 40
claims; six of the 60 proceedings requested review of between 41 and 50
claims; one of the 60 proceedings requested review of between 51 and 60
claims; one of the 60 proceedings requested review of between 61 and 70
claims; and one of the 60 proceedings 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 proceedings requested review of 20 or fewer claims; three of 20
proceedings requested review of between 21 and 30 claims; three of 20
proceedings requested review of between 31 and 40 claims; and one of 20
proceedings requested review of 53 claims.
Comment 120: 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. 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 121: One comment suggested that the hourly rate for
practitioners should be raised from $340 (the medium hourly rate from
the AIPLA Report of the Economic Survey 2011) to $500. The comment
asserts that using the median hourly rate from the AIPLA Report of the
Economic Survey 2011 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
[[Page 48727]]
Report of the Economic Survey 2011, 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 122: One comment suggested that reliance on the AIPLA
Report of the Economic Survey 2011 is 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 Report of the Economic Survey 2011, 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
Report of the Economic Survey 2011 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 Report of the Economic Survey 2011.
Likewise, the AIPLA Report of the Economic Survey 2011 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 Report of the Economic
Survey 2011 in formulating some burden estimations. No correction is
required under the Information Quality Act.
Comment 123: 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 124: 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 109.
Notwithstanding any other provision of law, no person is required
to respond to nor shall a person be subject to a penalty for failure to
comply with a collection of information subject to the requirements of
the Paperwork Reduction Act unless that collection of information
displays a currently valid OMB control number.
List of Subjects in 37 CFR Part 42
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 37 CFR part 42, as added elsewhere
in this issue of the Federal Register, as follows:
PART 42--TRIAL PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD
0
1. The authority citation for 37 CFR part 42 continues to read as
follows:
Authority: 35 U.S.C. 2(b)(2), 6, 21, 23, 41, 135, 311, 312, 316,
321-326 and the Leahy-Smith America Invents Act, Pub. L. 112-29,
sections 6(c), 6(f), and 18, 125 Stat. 284, 304, 311, and 329
(2011).
0
2. Add subpart B to read as follows:
Subpart B--Inter Partes Review
General
Sec.
42.100 Procedure; pendency.
42.101 Who may petition for inter partes review.
42.102 Time for filing.
42.103 Inter partes review fee.
42.104 Content of petition.
42.105 Service of petition.
42.106 Filing date.
42.107 Preliminary response to petition.
Instituting Inter Partes Review
42.108 Institution of inter partes review.
After Institution of Inter Partes Review
42.120 Patent owner response.
42.121 Amendment of the patent.
42.122 Multiple proceedings.
42.123 Filing of supplemental information.
Subpart B--Inter Partes Review
General
Sec. 42.100 Procedure; pendency.
(a) An inter partes review is a trial subject to the procedures set
forth in subpart A of this part.
(b) A claim in an unexpired patent shall be given its broadest
reasonable construction in light of the specification of the patent in
which it appears.
(c) An inter partes review proceeding 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, or adjusted by the
Board in the case of joinder.
Sec. 42.101 Who may petition for inter partes review.
A person who is not the owner of a patent may file with the Office
a petition to institute an inter partes review of the patent unless:
(a) Before the date on which the petition for review is filed, the
petitioner or real party-in-interest filed a civil action challenging
the validity of a claim of the patent;
(b) The petition requesting the proceeding is filed more than one
year after the date on which the petitioner, the petitioner's real
party-in-interest, or a privy of the petitioner is served with a
complaint alleging infringement of the patent; or
(c) The petitioner, the petitioner's real party-in-interest, or a
privy of the petitioner is estopped from challenging the claims on the
grounds identified in the petition.
Sec. 42.102 Time for filing.
(a) A petition for inter partes review of a patent must be filed
after the later of:
(1) The date that is nine months after the date of the grant of the
patent or of the issuance of the reissue patent; or
(2) If a post-grant review is instituted as set forth in subpart C
of this part, the date of the termination of such post-grant review.
(b) The Director may impose a limit on the number of inter partes
reviews that may be instituted during each of the first four one-year
periods in which the amendment made to chapter 31 of title 35, United
States Code, is in effect by providing notice in the Office's Official
Gazette or Federal Register. Petitions filed after an established limit
has been reached will be deemed untimely.
[[Page 48728]]
Sec. 42.103 Inter partes review fee.
(a) An inter partes review fee set forth in Sec. 42.15(a) must
accompany the petition. (b) No filing date will be accorded to the
petition until full payment is received.
Sec. 42.104 Content of petition.
In addition to the requirements of Sec. Sec. 42.6, 42.8, 42.22,
and 42.24, the petition must set forth:
(a) Grounds for standing. The petitioner must certify that the
patent for which review is sought is available for inter partes review
and that the petitioner is not barred or estopped from requesting an
inter partes review challenging the patent claims on the grounds
identified in the petition.
(b) Identification of challenge. Provide a statement of the precise
relief requested for each claim challenged. The statement must identify
the following:
(1) The claim;
(2) The specific statutory grounds under 35 U.S.C. 102 or 103 on
which the challenge to the claim is based and the patents or printed
publications relied upon for each ground;
(3) How the challenged claim is to be construed. Where the claim to
be construed contains a means-plus-function or step-plus-function
limitation as permitted under 35 U.S.C. 112(f), the construction of the
claim must identify the specific portions of the specification that
describe the structure, material, or acts corresponding to each claimed
function;
(4) How the construed claim is unpatentable under the statutory
grounds identified in paragraph (b)(2) of this section. The petition
must specify where each element of the claim is found in the prior art
patents or printed publications relied upon; and
(5) The exhibit number of the supporting evidence relied upon to
support the challenge and the relevance of the evidence to the
challenge raised, including identifying specific portions of the
evidence that support the challenge. The Board may exclude or give no
weight to the evidence where a party has failed to state its relevance
or to identify specific portions of the evidence that support the
challenge.
(c) A motion may be filed that seeks to correct a clerical or
typographical mistake in the petition. The grant of such a motion does
not change the filing date of the petition.
Sec. 42.105 Service of petition.
In addition to the requirements of Sec. 42.6, the petitioner must
serve the petition and exhibits relied upon in the petition as follows:
(a) The petition and supporting evidence must be served on the
patent owner at the correspondence address of record for the subject
patent. The petitioner may additionally serve the petition and
supporting evidence on the patent owner at any other address known to
the petitioner as likely to effect service.
(b) Upon agreement of the parties, service may be made
electronically. Service may be by EXPRESS MAIL[supreg] or by means at
least as fast and reliable as EXPRESS MAIL[supreg]. Personal service is
not required.
Sec. 42.106 Filing date.
(a) Complete petition. A petition to institute inter partes review
will not be accorded a filing date until the petition satisfies all of
the following requirements:
(1) Complies with Sec. 42.104;
(2) Effects service of the petition on the correspondence address
of record as provided in Sec. 42.105(a); and
(3) Is accompanied by the fee to institute required in Sec.
42.15(a).
(b) Incomplete petition. Where a party files an incomplete
petition, no filing date will be accorded, and the Office will dismiss
the petition if the deficiency in the petition is not corrected within
one month from the notice of an incomplete petition.
Sec. 42.107 Preliminary response to petition.
(a) The patent owner may file a preliminary response to the
petition. The response is limited to setting forth the reasons why no
inter partes review should be instituted under 35 U.S.C. 314. The
response can include evidence except as provided in paragraph (c) of
this section. The preliminary response is subject to the page limits
under Sec. 42.24.
(b) Due date. The preliminary response must be filed no later than
three months after the date of a notice indicating that the request to
institute an inter partes review has been granted a filing date. A
patent owner may expedite the proceeding by filing an election to waive
the patent owner preliminary response.
(c) No new testimonial evidence. The preliminary response shall not
present new testimony evidence beyond that already of record, except as
authorized by the Board.
(d) No amendment. The preliminary response shall not include any
amendment.
(e) Disclaim Patent Claims. The patent owner may file a statutory
disclaimer under 35 U.S.C. 253(a) in compliance with Sec. 1.321(a) of
this chapter, disclaiming one or more claims in the patent. No inter
partes review will be instituted based on disclaimed claims.
Instituting Inter Partes Review
Sec. 42.108 Institution of inter partes review.
(a) When instituting inter partes review, the Board may authorize
the review to proceed on all or some of the challenged claims and on
all or some of the grounds of unpatentability asserted for each claim.
(b) At any time prior to institution of inter partes review, the
Board may deny some or all grounds for unpatentability for some or all
of the challenged claims. Denial of a ground is a Board decision not to
institute inter partes review on that ground.
(c) Sufficient grounds. Inter partes review shall not be instituted
for a ground of unpatentability unless the Board decides that the
petition supporting the ground would demonstrate that there is a
reasonable likelihood that at least one of the claims challenged in the
petition is unpatentable. The Board's decision will take into account a
patent owner preliminary response where such a response is filed.
After Institution of Inter Partes Review
Sec. 42.120 Patent owner response.
(a) Scope. A patent owner may file a response to the petition
addressing any ground for unpatentability not already denied. A patent
owner response is filed as an opposition and is subject to the page
limits provided in Sec. 42.24.
(b) Due date for response. If no time for filing a patent owner
response to a petition is provided in a Board order, the default date
for filing a patent owner response is three months from the date the
inter partes review was instituted.
Sec. 42.121 Amendment of the patent.
(a) Motion to amend. A patent owner may file one motion to amend a
patent, but only after conferring with the Board.
(1) Due date. Unless a due date is provided in a Board order, a
motion to amend must be filed no later than the filing of a patent
owner response.
(2) Scope. A motion to amend may be denied where:
(i) The amendment does not respond to a ground of unpatentability
involved in the trial; or
(ii) The amendment seeks to enlarge the scope of the claims of the
patent or introduce new subject matter.
(3) A reasonable number of substitute claims. A motion to amend may
cancel a challenged claim or propose a reasonable number of substitute
claims. The presumption is that only one
[[Page 48729]]
substitute claim would be needed to replace each challenged claim, and
it may be rebutted by a demonstration of need.
(b) Content. A motion to amend claims must include a claim listing,
show the changes clearly, and set forth:
(1) The support in the original disclosure of the patent for each
claim that is added or amended; and
(2) The support in an earlier-filed disclosure for each claim for
which benefit of the filing date of the earlier filed disclosure is
sought.
(c) Additional motion to amend. In addition to the requirements set
forth in paragraphs (a) and (b) of this section, any additional motion
to amend may not be filed without Board authorization. An additional
motion to amend may be authorized when there is a good cause showing or
a joint request of the petitioner and the patent owner to materially
advance a settlement. In determining whether to authorize such an
additional motion to amend, the Board will consider whether a
petitioner has submitted supplemental information after the time period
set for filing a motion to amend in paragraph (a)(1) of this section.
Sec. 42.122 Multiple proceedings and Joinder.
(a) Multiple proceedings. Where another matter involving the patent
is before the Office, the Board may during the pendency of the inter
partes review enter any appropriate order regarding the additional
matter including providing for the stay, transfer, consolidation, or
termination of any such matter.
(b) Request for joinder. Joinder may be requested by a patent owner
or petitioner. Any request for joinder must be filed, as a motion under
Sec. 42.22, no later than one month after the institution date of any
inter partes review for which joinder is requested. The time period set
forth in Sec. 42.101(b) shall not apply when the petition is
accompanied by a request for joinder.
Sec. 42.123 Filing of supplemental information.
(a) Motion to submit supplemental information. Once a trial has
been instituted, a party may file a motion to submit supplemental
information in accordance with the following requirements:
(1) A request for the authorization to file a motion to submit
supplemental information is made within one month of the date the trial
is instituted.
(2) The supplemental information must be relevant to a claim for
which the trial has been instituted.
(b) Late submission of supplemental information. A party seeking to
submit supplemental information more than one month after the date the
trial is instituted, must request authorization to file a motion to
submit the information. The motion to submit supplemental information
must show why the supplemental information reasonably could not have
been obtained earlier, and that consideration of the supplemental
information would be in the interests-of-justice.
(c) Other supplemental information. A party seeking to submit
supplemental information not relevant to a claim for which the trial
has been instituted must request authorization to file a motion to
submit the information. The motion must show why the supplemental
information reasonably could not have been obtained earlier, and that
consideration of the supplemental information would be in the
interests-of-justice.
0
3. Add subpart C to read as follows:
Subpart C--Post-Grant Review
General
Sec.
42.200 Procedure; pendency.
42.201 Who may petition for a post-grant review.
42.202 Time for filing.
42.203 Post-grant review fee.
42.204 Content of petition.
42.205 Service of petition.
42.206 Filing date.
42.207 Preliminary response to petition.
Instituting Post-Grant Review
42.208 Institution of post-grant review.
After Institution of Post-Grant Review
42.220 Patent owner response.
42.221 Amendment of the patent.
42.222 Multiple proceedings.
42.223 Filing of supplemental information.
42.224 Discovery.
Subpart C--Post-Grant Review
General
Sec. 42.200 Procedure; pendency.
(a) A post-grant review is a trial subject to the procedures set
forth in subpart A of this part.
(b) A claim in an unexpired patent shall be given its broadest
reasonable construction in light of the specification of the patent in
which it appears.
(c) A post-grant review proceeding 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, or adjusted by the Board in
the case of joinder.
(d) Interferences commenced before September 16, 2012, shall
proceed under part 41 of this chapter except as the Chief
Administrative Patent Judge, acting on behalf of the Director, may
otherwise order in the interests-of-justice.
Sec. 42.201 Who may petition for a post-grant review.
A person who is not the owner of a patent may file with the Office
a petition to institute a post-grant review of the patent unless:
(a) Before the date on which the petition for review is filed, the
petitioner or real party-in-interest filed a civil action challenging
the validity of a claim of the patent; or
(b) The petitioner, the petitioner's real party-in-interest, or a
privy of the petitioner is estopped from challenging the claims on the
grounds identified in the petition.
Sec. 42.202 Time for filing.
(a) A petition for a post-grant review of a patent must be filed no
later than the date that is nine months after the date of the grant of
a patent or of the issuance of a reissue patent. A petition, however,
may not request a post-grant review for a claim in a reissue patent
that is identical to or narrower than a claim in the original patent
from which the reissue patent was issued unless the petition is filed
not later than the date that is nine months after the date of the grant
of the original patent.
(b) The Director may impose a limit on the number of post-grant
reviews that may be instituted during each of the first four one-year
periods in which 35 U.S.C. 321 is in effect by providing notice in the
Office's Official Gazette or Federal Register. Petitions filed after an
established limit has been reached will be deemed untimely.
Sec. 42.203 Post-grant review fee.
(a) A post-grant review fee set forth in Sec. 42.15(b) must
accompany the petition.
(b) No filing date will be accorded to the petition until full
payment is received.
Sec. 42.204 Content of petition.
In addition to the requirements of Sec. Sec. 42.6, 42.8, 42.22,
and 42.24, the petition must set forth:
(a) Grounds for standing. The petitioner must certify that the
patent for which review is sought is available for post-grant review
and that the petitioner is not barred or estopped from requesting a
post-grant review challenging the patent claims on the grounds
identified in the petition.
(b) Identification of challenge. Provide a statement of the precise
relief requested for each claim challenged. The statement must identify
the following:
(1) The claim;
[[Page 48730]]
(2) The specific statutory grounds permitted under 35 U.S.C.
282(b)(2) or (3) on which the challenge to the claim is based;
(3) How the challenged claim is to be construed. Where the claim to
be construed contains a means-plus-function or step-plus-function
limitation as permitted under 35 U.S.C. 112(f), the construction of the
claim must identify the specific portions of the specification that
describe the structure, material, or acts corresponding to each claimed
function;
(4) How the construed claim is unpatentable under the statutory
grounds identified in paragraph (b)(2) of this section. Where the
grounds for unpatentability are based on prior art, the petition must
specify where each element of the claim is found in the prior art. For
all other grounds of unpatentability, the petition must identify the
specific part of the claim that fails to comply with the statutory
grounds raised and state how the identified subject matter fails to
comply with the statute; and
(5) The exhibit number of the supporting evidence relied upon to
support the challenge and the relevance of the evidence to the
challenge raised, including identifying specific portions of the
evidence that support the challenge. The Board may exclude or give no
weight to the evidence where a party has failed to state its relevance
or to identify specific portions of the evidence that support the
challenge.
(c) A motion may be filed that seeks to correct a clerical or
typographical mistake in the petition. The grant of such a motion does
not change the filing date of the petition.
Sec. 42.205 Service of petition.
In addition to the requirements of Sec. 42.6, the petitioner must
serve the petition and exhibits relied upon in the petition as follows:
(a) The petition and supporting evidence must be served on the
patent owner at the correspondence address of record for the subject
patent. The petitioner may additionally serve the petition and
supporting evidence on the patent owner at any other address known to
the petitioner as likely to effect service.
(b) Upon agreement of the parties, service may be made
electronically. Service may be by EXPRESS MAIL[supreg] or by means at
least as fast and reliable as EXPRESS MAIL[supreg]. Personal service is
not required.
Sec. 42.206 Filing date.
(a) Complete petition. A petition to institute a post-grant review
will not be accorded a filing date until the petition satisfies all of
the following requirements:
(1) Complies with Sec. 42.204 or Sec. 42.304, as the case may be,
(2) Effects service of the petition on the correspondence address
of record as provided in Sec. 42.205(a); and
(3) Is accompanied by the filing fee in Sec. 42.15(b).
(b) Incomplete petition. Where a party files an incomplete
petition, no filing date will be accorded and the Office will dismiss
the request if the deficiency in the petition is not corrected within
the earlier of either one month from the notice of an incomplete
petition, or the expiration of the statutory deadline in which to file
a petition for post-grant review.
Sec. 42.207 Preliminary response to petition.
(a) The patent owner may file a preliminary response to the
petition. The response is limited to setting forth the reasons why no
post-grant review should be instituted under 35 U.S.C. 324. The
response can include evidence except as provided in paragraph (c) of
this section. The preliminary response is subject to the page limits
under Sec. 42.24.
(b) Due date. The preliminary response must be filed no later than
three months after the date of a notice indicating that the request to
institute a post-grant review has been granted a filing date. A patent
owner may expedite the proceeding by filing an election to waive the
patent owner preliminary response.
(c) No new testimonial evidence. The preliminary response shall not
present new testimony evidence beyond that already of record, except as
authorized by the Board.
(d) No amendment. The preliminary response shall not include any
amendment.
(e) Disclaim Patent Claims. The patent owner may file a statutory
disclaimer under 35 U.S.C. 253(a) in compliance with Sec. 1.321(a),
disclaiming one or more claims in the patent. No post-grant review will
be instituted based on disclaimed claims.
Instituting Post-Grant Review
Sec. 42.208 Institution of post-grant review.
(a) When instituting post-grant review, the Board may authorize the
review to proceed on all or some of the challenged claims and on all or
some of the grounds of unpatentability asserted for each claim.
(b) At any time prior to institution of post-grant review, the
Board may deny some or all grounds for unpatentability for some or all
of the challenged claims. Denial of a ground is a Board decision not to
institute post-grant review on that ground.
(c) Sufficient grounds. Post-grant review shall not be instituted
for a ground of unpatentability, unless the Board decides that the
petition supporting the ground would, if unrebutted, demonstrate that
it is more likely than not that at least one of the claims challenged
in the petition is unpatentable. The Board's decision will take into
account a patent owner preliminary response where such a response is
filed.
(d) Additional grounds. Sufficient grounds under Sec. 42.208(c)
may be a showing that the petition raises a novel or unsettled legal
question that is important to other patents or patent applications.
After Institution of Post-Grant Review
Sec. 42.220 Patent owner response.
(a) Scope. A patent owner may file a response to the petition
addressing any ground for unpatentability not already denied. A patent
owner response is filed as an opposition and is subject to the page
limits provided in Sec. 42.24.
(b) Due date for response. If no date for filing a patent owner
response to a petition is provided in a Board order, the default date
for filing a patent owner response is three months from the date the
post-grant review is instituted.
Sec. 42.221 Amendment of the patent.
(a) Motion to amend. A patent owner may file one motion to amend a
patent, but only after conferring with the Board.
(1) Due date. Unless a due date is provided in a Board order, a
motion to amend must be filed no later than the filing of a patent
owner response.
(2) Scope. A motion to amend may be denied where:
(i) The amendment does not respond to a ground of unpatentability
involved in the trial; or
(ii) The amendment seeks to enlarge the scope of the claims of the
patent or introduce new subject matter.
(3) A reasonable number of substitute claims. A motion to amend may
cancel a challenged claim or propose a reasonable number of substitute
claims. The presumption is that only one substitute claim would be
needed to replace each challenged claim, and it may be rebutted by a
demonstration of need.
(b) Content. A motion to amend claims must include a claim listing,
show the changes clearly, and set forth:
(1) The support in the original disclosure of the patent for each
claim that is added or amended; and
[[Page 48731]]
(2) The support in an earlier-filed disclosure for each claim for
which benefit of the filing date of the earlier filed disclosure is
sought.
(c) Additional motion to amend. In addition to the requirements set
forth in paragraphs (a) and (b) of this section, any additional motion
to amend may not be filed without Board authorization. An additional
motion to amend may be authorized when there is a good cause showing or
a joint request of the petitioner and the patent owner to materially
advance a settlement. In determining whether to authorize such an
additional motion to amend, the Board will consider whether a
petitioner has submitted supplemental information after the time period
set for filing a motion to amend in paragraph (a)(1) of this section.
Sec. 42.222 Multiple proceedings and Joinder.
(a) Multiple proceedings. Where another matter involving the patent
is before the Office, the Board may during the pendency of the post-
grant review enter any appropriate order regarding the additional
matter including providing for the stay, transfer, consolidation, or
termination of any such matter.
(b) Request for joinder. Joinder may be requested by a patent owner
or petitioner. Any request for joinder must be filed, as a motion under
Sec. 42.22, no later than one month after the institution date of any
post-grant review for which joinder is requested.
Sec. 42.223 Filing of supplemental information.
(a) Motion to submit supplemental information. Once a trial has
been instituted, a party may file a motion to submit supplemental
information in accordance with the following requirements:
(1) A request for the authorization to file a motion to submit
supplemental information is made within one month of the date the trial
is instituted.
(2) The supplemental information must be relevant to a claim for
which the trial has been instituted.
(b) Late submission of supplemental information. A party seeking to
submit supplemental information more than one month after the date the
trial is instituted, must request authorization to file a motion to
submit the information. The motion to submit supplemental information
must show why the supplemental information reasonably could not have
been obtained earlier, and that consideration of the supplemental
information would be in the interests-of-justice.
(c) Other supplemental information. A party seeking to submit
supplemental information not relevant to a claim for which the trial
has been instituted must request authorization to file a motion to
submit the information. The motion must show why the supplemental
information reasonably could not have been obtained earlier, and that
consideration of the supplemental information would be in the
interests-of-justice.
Sec. 42.224 Discovery.
Notwithstanding the discovery provisions of subpart A:
(a) Requests for additional discovery may be granted upon a showing
of good cause as to why the discovery is needed; and
(b) Discovery is limited to evidence directly related to factual
assertions advanced by either party in the proceeding.
0
4. Add subpart D to read as follows:
Subpart D--Transitional Program for Covered Business Method Patents
Sec.
42.300 Procedure; pendency.
42.302 Who may petition for a covered business method patent review.
42.303 Time for filing.
42.304 Content of petition.
Subpart D--Transitional Program for Covered Business Method Patents
Sec. 42.300 Procedure; pendency.
(a) A covered business method patent review is a trial subject to
the procedures set forth in subpart A of this part and is also subject
to the post-grant review procedures set forth in subpart C except for
Sec. Sec. 42.200, 42.201, 42.202, and 42.204.
(b) A claim in an unexpired patent shall be given its broadest
reasonable construction in light of the specification of the patent in
which it appears.
(c) A covered business method patent review proceeding 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.
(d) The rules in this subpart are applicable until September 15,
2020, except that the rules shall continue to apply to any petition for
a covered business method patent review filed before the date of
repeal.
Sec. 42.302 Who may petition for a covered business method patent
review.
(a) A petitioner may not file with the Office a petition to
institute a covered business method patent review of the patent unless
the petitioner, the petitioner's real party-in-interest, or a privy of
the petitioner has been sued for infringement of the patent or has been
charged with infringement under that patent. Charged with infringement
means a real and substantial controversy regarding infringement of a
covered business method patent exists such that the petitioner would
have standing to bring a declaratory judgment action in Federal court.
(b) A petitioner may not file a petition to institute a covered
business method patent review of the patent where the petitioner, the
petitioner's real party-in-interest, or a privy of the petitioner is
estopped from challenging the claims on the grounds identified in the
petition.
Sec. 42.303 Time for filing.
A petition requesting a covered business method patent review may
be filed any time except during the period in which a petition for a
post-grant review of the patent would satisfy the requirements of 35
U.S.C. 321(c).
Sec. 42.304 Content of petition.
In addition to any other notices required by subparts A and C of
this part, a petition must request judgment against one or more claims
of a patent identified by patent number. In addition to the
requirements of Sec. Sec. 42.6, 42.8, 42.22, and 42.24 the petition
must set forth:
(a) Grounds for standing. The petitioner must demonstrate that the
patent for which review is sought is a covered business method patent,
and that the petitioner meets the eligibility requirements of Sec.
42.302.
(b) Identification of challenge. Provide a statement of the precise
relief requested for each claim challenged. The statement must identify
the following:
(1) The claim;
(2) The specific statutory grounds permitted under paragraph (2) or
(3) of 35 U.S.C. 282(b), except as modified by section 18(a)(1)(C) of
the Leahy-Smith America Invents Act (Pub. L. 112-29, 125 Stat. 284
(2011)), on which the challenge to the claim is based;
(3) How the challenged claim is to be construed. Where the claim to
be construed contains a means-plus-function or step-plus-function
limitation as permitted under 35 U.S.C. 112(f), the construction of the
claim must identify the specific portions of the specification that
describe the structure, material, or acts corresponding to each claimed
function;
(4) How the construed claim is unpatentable under the statutory
grounds identified in paragraph (b)(2) of this section. Where the
grounds for
[[Page 48732]]
unpatentability are based on prior art, the petition must specify where
each element of the claim is found in the prior art. For all other
grounds of unpatentability, the petition must identify the specific
part of the claim that fails to comply with the statutory grounds
raised and state how the identified subject matter fails to comply with
the statute; and
(5) The exhibit number of supporting evidence relied upon to
support the challenge and the relevance of the evidence to the
challenge raised, including identifying specific portions of the
evidence that support the challenge. The Board may exclude or give no
weight to the evidence where a party has failed to state its relevance
or to identify specific portions of the evidence that support the
challenge.
(c) A motion may be filed that seeks to correct a clerical or
typographical mistake in the petition. The grant of such a motion does
not change the filing date of the petition.
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. 2012-17906 Filed 8-13-12; 8:45 am]
BILLING CODE 3510-16-P