[Federal Register Volume 81, Number 201 (Tuesday, October 18, 2016)]
[Proposed Rules]
[Pages 71653-71657]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25141]



United States Patent and Trademark Office

37 CFR Part 42

[Docket No. PTO-P-2016-0029]
RIN 0651-AD10

Rule Recognizing Privileged Communications Between Clients and 
Patent Practitioners at the Patent Trial and Appeal Board

AGENCY: Patent Trial and Appeal Board, United States Patent and 
Trademark Office, U.S. Department of Commerce.

ACTION: Proposed rule.


SUMMARY: This proposed rule would amend the rules of practice before 
the Patent Trial and Appeal Board to recognize that, in connection with 
discovery conducted in certain proceedings at the United States Patent 
and Trademark Office (USPTO or Office), communications between U.S.

[[Page 71654]]

patent agents or foreign patent practitioners and their clients are 
privileged to the same extent as communications between clients and 
U.S. attorneys. The rule would apply to inter partes review, post-grant 
review, the transitional program for covered business method patents, 
and derivation proceedings. This rule would clarify the protection 
afforded to such communications, which is currently not addressed in 
the rules governing Board proceedings at the USPTO. This new rule will 
not affect the duty of disclosure and candor before the Office under 37 
CFR 1.56.

DATES: Comment date: The Office solicits comments from the public on 
this proposed rulemaking. Written comments must be received on or 
before December 19, 2016 to ensure consideration.

ADDRESSES: Comments should be sent by electronic mail message over the 
Internet addressed to: [email protected]. Comments may also be 
submitted by postal mail addressed to: Mail Stop OPIA Director of the 
United States Patent and Trademark Office, P.O. Box 1450, Alexandria, 
VA 22313-1450, marked to the attention of ``Soma Saha, Patent Attorney, 
Patent Trial Proposed Rule on Privilege.''
    Comments may also be sent by electronic mail message over the 
Internet via the Federal eRulemaking Portal at http://www.regulations.gov. See the Federal eRulemaking Portal Web site for 
additional instructions on providing comments via the Federal e-
Rulemaking Portal.
    Although comments may be submitted by postal mail, the Office 
prefers to receive comments by electronic mail message to be able to 
more easily share all comments with the public. The Office prefers the 
comments to be submitted in plain text, but also accepts comments 
submitted in ADOBE[supreg] portable document format or MICROSOFT 
WORD[supreg] format. Comments not submitted electronically should be 
submitted on paper in a format that accommodates digital scanning into 
ADOBE[supreg] portable document format.
    The comments will be available for public inspection at the Office 
of Policy and International Affairs, currently located in Madison East, 
Second Floor, 600 Dulany Street, Alexandria, Virginia. Comments also 
will be available for viewing via the Office's Internet Web site at 
http://www.uspto.gov/patents/law/comments/index.jsp and at http://www.regulations.gov. Because comments will be made available for public 
inspection, information that the submitter does not desire to be made 
public, such as address or phone number, should not be included in the 

FOR FURTHER INFORMATION CONTACT: Soma Saha, Patent Attorney, by email 
at [email protected] or by telephone at (571) 272-8652; or Edward 
Elliott, Attorney Advisor, by email at [email protected] or by 
telephone at (571) 272-7024.

    Purpose: This proposed rule would amend the rules of practice 
before the Patent Trial and Appeal Board (PTAB) to recognize that 
communications between non-attorney U.S. patent agents or foreign 
patent practitioners and their clients that pertain to authorized 
practice before the United States Patent and Trademark Office (Office 
or USPTO) are privileged to the same extent as communications of that 
sort conducted between clients and U.S. attorneys. Under the proposed 
rule, those communications would be protected from discovery in trial 
practice proceedings at the USPTO. The proposed rule would apply to 
inter partes review (IPR), post-grant review (PGR), the transitional 
program for covered business method patents (CBM), and derivation 
proceedings. Currently, the rules governing proceedings at the USPTO do 
not address the privilege of communications with patent practitioners, 
and questions regarding that matter are decided on a case-by-case basis 
under common law principles. This new rule will not affect the duty of 
disclosure and candor before the Office under 37 CFR 1.56.
    Background: Within this notice, the term ``patent practitioner'' 
includes both those authorized to practice patent matters before the 
USPTO and those authorized to practice patent matters in foreign 
jurisdictions. When referring to these groups separately, the terms 
``U.S. or domestic patent practitioners'' and ``foreign patent 
practitioners'' will be used, respectively.
    In February 2015, the USPTO held a roundtable and solicited 
comments on attorney-client privilege issues. See Notice of Roundtable 
and Request for Comments on Domestic and International Issues Related 
to Privileged Communications Between Patent Practitioners and Their 
Clients, 80 FR 3953 (Jan. 26, 2015). As part of that process, the USPTO 
requested comments on whether it should recognize that communications 
between patent applicants and owners and their U.S. patent agents or 
foreign patent practitioners are privileged to the same extent as 
communications between U.S. patent attorneys and patent applicants and 
owners. Respondents unanimously supported a rule recognizing such 
privilege. See USPTO, Summary of Roundtable and Written Comments, 
available at http://www.uspto.gov/sites/default/files/documents/Summary%20of%20Privileged%20Communication%20Roundtable.pdf (``Privilege 
    The USPTO administers various proceedings that entail discovery 
procedures, namely the IPR, PGR, and transitional program for CBM 
patents. In addition, the derivation proceedings provided for by the 
Leahy-Smith America Invents Act, Public Law 112-29, 125 Stat. 284 
(2011) (AIA) permit discovery. Questions regarding privilege issues may 
arise in the course of discovery, and as some roundtable commenters 
noted, rules regarding privilege for U.S. patent agents and foreign 
practitioners during discovery in PTAB proceedings are not well 
    Current Practice: PTAB proceedings are subject to the Federal Rules 
of Evidence (FRE), which include rules on attorney-client privilege. 
See 37 CFR 42.62(a). Accordingly, privilege may be asserted in PTAB 
proceedings by licensed attorneys. However, the FRE does not explicitly 
address privilege for communications with non-attorney U.S. patent 
agents or with foreign patent practitioners.
    The rules governing PTAB practice likewise do not address this 
matter, and when it arises, PTAB Administrative Law Judges make legal 
determinations as to which communications may be protected from 
disclosure on a case-by-case basis, based on common law. See GEA 
Process Engineering, Inc. v. Steuben Foods, Inc., IPR2014-00041, Paper 
117 (PTAB 2014). U.S. courts have devised several different approaches 
to determine under what circumstances communications with these 
practitioners are privileged. As the Privilege Report notes, the common 
law on privilege for domestic and foreign patent practitioners varies 
across jurisdictions. Different approaches are taken, and results 
sometimes conflict. This may lead to administrative inefficiencies and 
inconsistencies in outcomes, as PTAB must select which set of common 
law rules to follow. (It is also noted that Administrative Law Judges 
in other agencies recognize certain confidential communications with a 
patent agent as privileged. See, e.g., USITC Inv. No. 337-TA-339, slip 
op. at 2, 1992 WL 811804 (ITC 1992) (finding that confidential 
communications between a U.S. patent agent and his client in connection 

[[Page 71655]]

a patent prosecution are privileged).) The Federal Circuit recently 
recognized that attorney-client privilege applies to U.S. patent agents 
acting within the scope of their authorized practice. See In re Queen's 
University at Kingston, PARTEQ Research and Development Innovations, 
No. 2015-145 (Fed. Cir. 2016).
    The Office has strong policy reasons to establish a privilege rule 
governing trial proceedings before PTAB. Such a rule would help ensure 
consistent outcomes with respect to privilege matters that arise at the 
Office, would improve public understanding of how privilege questions 
are decided before PTAB, and would help further judicial economy by 
providing PTAB judges with a clear, concise statement of when privilege 
    Public Comments: In August 2015, the USPTO published in the Federal 
Register a proposed rule amending the rules for trial practice before 
the Office. See Amendments to the Rules of Practice for Trials Before 
the Patent Trial and Appeal Board, 80 FR 50719 (Aug. 20, 2015). 
Included in that proposed rule was a request for comments on the 
advisability of a privilege rule for PTAB proceedings. The comments 
submitted in response to that request are available on the USPTO Web 
site at http://www.uspto.gov/patents-application-process/patent-trial-and-appeal-board/comments-amendments-rules-practice-trials.
    Those responding to the request universally agreed that a privilege 
rule for PTAB proceedings should be promulgated. Respondents 
overwhelmingly favored promulgating such a rule, with some noting that 
it would lead to clarity and consistency and ``can reduce uncertainty 
and mitigate discovery costs.'' See Letter from Frederick W. Mau II on 
behalf of Toyota Motor Corp., David B. Kelley on behalf of Ford Motor 
Co., and Mark Duell on behalf of American Honda Motor Co., Inc., RE: 
Comments on Amendments to the Rules of Practice for Trials Before the 
Patent Trial and Appeal Board, p. 4-5 (Oct. 16, 2015). Others suggested 
that ``[i]f patent agents are not entitled to have their communications 
be considered privileged, however, then their utility--and associated 
cost savings for stakeholders--is lost.'' See Letter from Sharon A. 
Israel, President of the American Intellectual Property Law Assoc., RE: 
Response to Proposed ``Amendments to the Rules of Practice for Trials 
Before the Patent Trial and Appeal Board,'' 80 FR 50720 (August 20, 
2015), p. 15-16 (Oct. 21, 2015).
    Commenters said it ``would be particularly useful for patent 
agents['] communications to be explicitly protected in the discovery 
rules for post-grant proceedings (e.g., inter parties [sic] review) 
before the USPTO.'' See Letter from Dorothy R. Auth, President of the 
New York Intellectual Property Law Assoc., RE: NYIPLA Comments in 
Response to ``Amendments to the Rules of Practice for Trials Before the 
Patent Trial and Appeal Board,'' Federal Register Notice, August 20, 
2015, Vol. 80, No. 161 (80 FR 50720), p. 6-9 (Nov. 18, 2015). 
Commenters suggested that the rule should extend at least to 
communications made in connection with acts that patent agents are 
authorized to perform in their particular jurisdictions, such as 
prosecuting patent applications. The USPTO agrees that the scope of a 
privilege rule should be defined by the activities that the agent is 
authorized to carry out. Others suggested that it should be ``a simple 
rule . . . that explicitly recognize[s] privilege for communications 
between patent applicants or owners and their domestic patent agents or 
foreign professional patent practitioners under the same circumstances 
as such privilege is recognized for communications between applicants 
or owners and U.S. attorneys.'' See Letter from Andrew D. Meikle, 
President of the U.S. Section of the International Federation of 
Intellectual Property Attorneys (FICPI), RE: Comments on ``Recognizing 
Privilege for Communications With Domestic Patent Agents and Foreign 
Patent Practitioners'', p. 4 (Nov. 24, 2015).
    According to these comments, ``[t]his approach would provide the 
greatest uniformity and certainty, and avoid the need for the PTAB to 
engage in complex fact based analysis regarding application of the 
privilege under the common law.'' Id. These views were echoed by a law 
professor who has studied this issue since 2008:

    The privilege should be as broad as the ordinary attorney-client 
privilege. It should cover not only U.S. patent agents, but also 
foreign legal representatives. While the best solution would be a 
privilege that applied in all legal tribunals--not only the PTAB, 
but also federal and state courts--adoption of a privilege only for 
the PTAB would be a valuable first step toward this goal.

See Letter from John T. Cross, Professor of Law at University of 
Louisville, Possible Adoption of a Legal Representation Privilege in 
Matters Before the Patent Trial and Appeal Board, p. 2 (Sep. 9, 2015).
    The USPTO agrees with these views and believes the proposed rule 
reflects them. As a policy matter, open and frank discussions between 
practitioners and clients promotes effective legal representation 
before the Office.

Discussion of Specific Rules

    Taking into consideration comments from the public and insight 
gained from practice, the Office proposes to amend 37 CFR 42 to add new 
section 42.57 that clarifies which patent practitioners are eligible 
for assertions of attorney-client privilege.
    The term ``patent practitioner'' is used to conform with existing 
terminology and avoid confusion with other terms used around the world, 
such as ``IP Advisor'' or ``Patent Advisor.'' It fits with practice 
elsewhere in Title 37, which refers to domestic ``patent 
practitioners,'' i.e., U.S. patent agents and patent attorneys 
registered under 37 CFR 11.6. This narrower meaning is appropriate for 
most sections of Title 37, which deal with practitioners admitted to 
practice before the USPTO. For the new rule only, the term also 
includes comparable foreign counterparts practicing before foreign 
patent offices.
    The rule would provide that the privilege only applies where the 
practitioner performs legal work authorized by the jurisdiction in 
which the practitioner practices. For instance, communications between 
clients and U.S. patent agents relating to patent application matters 
would be protected as privileged under the rule, but communications 
between these parties regarding litigation strategies would not be 
protected. The proposed rule also does not recognize privilege as 
applying to advice given by lay persons in jurisdictions that do not 
impose professional qualifications as a requirement to practice. 
However, the proposed rule can apply to communications from an in-house 
counsel who performs the functions of a patent attorney under 
appropriate circumstances, even though some civil law jurisdictions may 
not grant in-house counsel the privilege-type protections given to 
    The Office invites the public to provide any comments on the 
proposed rule to inform further action.
    Costs and Benefits: This rulemaking is not economically 
significant, and is not significant, under Executive Order 12866 (Sept. 
30, 1993), as amended by Executive Order 13258 (Feb. 26, 2002) and 
Executive Order 13422 (Jan. 18, 2007).

Rulemaking Considerations

A. Administrative Procedure Act (APA)

    This proposed rule revises the rules of practice before PTAB to 
recognize that

[[Page 71656]]

communications between non-attorney or foreign patent practitioners and 
their clients that pertain to authorized practice before the USPTO are 
privileged. The changes in this rulemaking involve rules of agency 
practice and procedure and/or interpretive rules. See Nat'l Org. of 
Veterans' Advocates v. Secretary of Veterans Affairs, 260 F.3d 1365, 
1375 (Fed. Cir. 2001) (rule that clarifies interpretation of a statute 
is interpretive); Bachow Commc'ns Inc. v. F.C.C., 237 F.3d 683, 690 
(D.C. Cir. 2001) (rules governing an application process are procedural 
under the Administrative Procedure Act); Inova Alexandria Hosp. v. 
Shalala, 244 F.3d 342, 350 (4th Cir. 2001) (rules for handling appeals 
were procedural where they did not change the substantive requirements 
for reviewing claims).
    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. 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), do 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))). However, the 
Office chose to seek public comment before implementing the rule to 
benefit from the public's input.

B. Regulatory Flexibility Act

    For the reasons set forth herein, the Deputy General Counsel for 
General Law of the USPTO has certified to the Chief Counsel for 
Advocacy of the Small Business Administration that this proposed rule 
will not have a significant economic impact on a substantial number of 
small entities. See 5 U.S.C. 605(b).
    The changes proposed in this rule are to revise the rules of 
practice before PTAB to explicitly recognize that communications 
between non-attorney or foreign patent practitioners and their clients 
that pertain to authorized practice before the USPTO or foreign patent 
offices are privileged and to define those persons who may avail 
themselves of this privilege. These proposed changes are expected to 
create no additional burden to those practicing before the Board as 
this rule merely clarifies rights and protections for the practitioner 
and client and does not impose a change in practice or requirements. In 
fact, this rule may produce a small benefit from a reduction in 
uncertainty and mitigation of discovery costs. For the foregoing 
reasons, the changes proposed in this rule will not have a significant 
economic impact on a substantial number of small entities.

C. Executive Order 12866 (Regulatory Planning and Review)

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

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 on-line 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).

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 affect 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 et seq.), 
prior to issuing any final rule, the USPTO will submit a report 
containing the rule and other required information to the United States 
Senate, the United States House of Representatives, and the Comptroller 
General of the Government Accountability Office. The changes in this 
final rule 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 final rule is not 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 rulemaking 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

[[Page 71657]]

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 et seq.

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 Office consider the impact of paperwork and other information 
collection burdens imposed on the public. This proposed rule not does 
not involve any new information collection requirements that are 
subject to review by the Office of Management and Budget (OMB) under 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3549). Any 
information collections associated with this rule have been previously 
approved under OMB control number 0651-0069.
    Notwithstanding any other provision of law, no person is required 
to respond to, nor shall any person be subject to, a penalty for 
failure to comply with a collection of information subject to the 
requirements of the 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.

    For the reasons set forth in the preamble, 37 CFR part 42 is 
proposed to be amended as follows:


1. The authority citation for 37 CFR Part 42 continues to read as 

    Authority:  35 U.S.C. 2(b)(2), 6, 21, 23, 41, 135, 311, 312, 
316, 321-326; Pub. L. 112-29, 125 Stat. 284; and Pub. L. 112-274, 
126 Stat. 2456.

2. Add Sec.  42.57 to read as follows:

Sec.  42.57   Privilege for patent practitioners.

    (a) Privileged communications. A communication between a client and 
a domestic or foreign patent practitioner that is reasonably necessary 
or incident to the scope of the patent practitioner's authority shall 
receive the same protections of privilege as if that communication were 
between a client and an attorney authorized to practice in the United 
States, including all limitations and exceptions.
    (b) Definitions. The term ``domestic patent practitioner'' means a 
person who is registered by the United States Patent and Trademark 
Office to practice before the agency under section 11.6. ``Foreign 
patent practitioner'' means a person who is authorized to provide legal 
advice on patent matters in a foreign jurisdiction, provided that the 
jurisdiction establishes professional qualifications and the 
practitioner satisfies them, and regardless of whether that 
jurisdiction provides privilege or an equivalent under its laws.

    Dated: October 12, 2016.
Michelle K. Lee,
Under Secretary of Commerce for Intellectual Property and Director of 
the United States Patent and Trademark Office.
[FR Doc. 2016-25141 Filed 10-17-16; 8:45 am]