Federal Register, Volume 85 Issue 237 (Wednesday, December 9, 2020)

[Federal Register Volume 85, Number 237 (Wednesday, December 9, 2020)]
[Rules and Regulations]
[Pages 79120-79129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-27048]

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DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Part 42

[Docket No. PTO-P-2019-0024]
RIN 0651-AD40

PTAB Rules of Practice for Instituting on All Challenged Patent
Claims and All Grounds and Eliminating the Presumption at Institution
Favoring Petitioner as to Testimonial Evidence

AGENCY: United States Patent and Trademark Office, Department of
Commerce.

ACTION: Final rule.

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SUMMARY: The United States Patent and Trademark Office (USPTO or
Office) revises the rules of practice for instituting review on all
challenged claims or none in inter partes review (IPR), post-grant
review (PGR), and the transitional program for covered business method
patents (CBM) proceedings before the Patent Trial and Appeal Board
(PTAB or Board) in accordance with the U.S. Supreme Court decision in
SAS Institute Inc. v. Iancu (SAS). Consistent with SAS, the Office also
revises the rules of practice for instituting a review, if at all, on
all grounds of unpatentability for the challenged claims that are
asserted in a petition. Additionally, the Office revises the rules to
conform to the current standard practice of providing sur-replies to
principal briefs and providing that a reply and a patent owner response
may respond to a decision on institution. The Office further revises
the rules to eliminate the presumption that a genuine issue of material
fact created by the patent owner's testimonial evidence filed with a
preliminary response will be viewed in the light most favorable to the
petitioner for purposes of deciding whether to institute a review.

DATES: Effective date: The changes in this final rule are effective
January 8, 2021.
Applicability date: This final rule applies to all IPR and PGR
petitions filed on or after January 8, 2021.

FOR FURTHER INFORMATION CONTACT: Michael Tierney, Vice Chief
Administrative Patent Judge, by telephone at 571-272-9797.

SUPPLEMENTARY INFORMATION:

Executive Summary

Purpose: The final rule revises the rules of practice for IPR, PGR,
and CBM proceedings that implemented provisions of the Leahy-Smith
America Invents Act (AIA) providing for trials before the Office.
The U.S. Supreme Court held in SAS that a decision to institute an
IPR under 35 U.S.C. 314 may not institute on fewer than all claims
challenged in a petition. See SAS Institute Inc. v. Iancu, 138 S. Ct.
1348 (2018). The Court held that the Office has the discretion to
institute on either all of the claims challenged in the petition or to
deny the petition. Previously, the Board exercised discretion to
institute an IPR, PGR, or CBM on all or some of the challenged claims
and on all or some of the grounds of unpatentability asserted in a
petition. For example, the Board exercised discretion to authorize a
review to proceed on only those claims and grounds for which the
required threshold had been met, thus narrowing the issues for
efficiency in conducting a proceeding.
In light of SAS, the Office provided guidance that, if the Board
institutes a trial under 35 U.S.C. 314 or 324, the Board will institute
on all claims and all grounds included in a petition of an IPR, PGR, or
CBM. To implement this practice in the regulation, this final rule
revises the rules of practice for instituting an IPR, PGR, or CBM to
require institution on either all challenged claims (and all of the
grounds) presented in a petition or none. Under the amended rule,
therefore, in all pending IPR, PGR, and CBM proceedings before the
Office, the Board will either institute review on all of the challenged
claims and grounds of unpatentability presented in the petition or deny
the petition.
The second change is conforming the rules to certain standard
practices before the PTAB in IPR, PGR, and CBM proceedings.
Specifically, this final rule amends the rules to set forth the
briefing requirements of sur-replies to principal briefs and to provide
that a reply and a patent owner response may respond to a decision on
institution.
Finally, this final rule amends the rules to eliminate, when
deciding whether to institute an IPR, PGR, or CBM review, the
presumption in favor of the petitioner for a genuine issue of material
fact created by testimonial evidence submitted with a patent owner's
preliminary response. As with all other evidentiary questions at the
institution phase, the Board will consider all evidence to determine
whether the petitioner has met the applicable standard for institution
of the proceeding.
Costs and Benefits: This rulemaking is not economically significant
under Executive Order 12866 (Sept. 30, 1993).

Background

On September 16, 2011, the AIA was enacted into law (Pub. L. 112-
29, 125 Stat. 284 (2011)), and within one year, the Office implemented
rules to govern Office practice for AIA trials, including IPR, PGR,
CBM,\1\ and derivation proceedings pursuant to 35 U.S.C. 135, 316, and
326 and AIA 18(d)(2). 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 48612 (Aug. 14, 2012); Changes to
Implement Inter Partes Review Proceedings, Post-Grant Review
Proceedings, and Transitional Program for Covered Business Method
Patents, 77 FR 48680 (Aug. 14, 2012); and Transitional Program for
Covered Business Method Patents--Definitions of Covered Business Method
Patent and Technological Invention, 77 FR 48734 (Aug. 14, 2012).
Additionally, the Office published a Patent Trial Practice Guide to
advise the public on the general framework of the regulations,
including the structure and times for taking action in each of the new
proceedings. See

[[Page 79121]]

Office Patent Trial Practice Guide, 77 FR 48756 (Aug. 14, 2012)
(TPG2012). This guide has been periodically updated. See Office Patent
Trial Practice Guide, August 2018 Update, 83 FR 39989 (Aug. 13, 2018)
(TPG2018); and Office Patent Trial Practice Guide, July 2019 Update, 84
FR 33925 (July 16, 2019) (TPG2019). A consolidated Trial Practice
Guide, incorporating updates to the original August 2012 Practice
Guide, was published in November 2019. See Consolidated Trial Practice
Guide, 84 FR 64280 (Nov. 21, 2019) (CTPG).
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\1\ The transitional covered business method patent review
program expired on September 16, 2020, in accordance with AIA
18(a)(3). Although the program has sunset, existing CBM proceedings,
based on petitions filed before September 16, 2020, are still
pending.
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Previously, under 37 CFR 42.108(a) and 42.208(a), the Board
exercised the discretion to institute an IPR, PGR, or CBM on all or
some of the challenged claims and on all or some of the grounds of
unpatentability asserted for each claim presented in a petition. For
example, the Board exercised the discretion to authorize a review to
proceed on only those claims and grounds for which the required
threshold under 35 U.S.C. 314(a) or 324(a) had been met, narrowing the
issues for efficiency.
The U.S. Supreme Court held in SAS, however, that a decision to
institute an IPR trial under 35 U.S.C. 314 may not institute review on
fewer than all claims challenged in a petition. The Court held that the
Office has the discretion to institute trial on either all of the
claims challenged in the petition or to deny the petition. On April 26,
2018, the Office posted guidance on the impact of SAS on AIA trial
proceedings at https://www.uspto.gov/patents-application-process/patent-trial-and-appeal-board/trials/guidance-impact-sas-aia-trial. In
light of SAS, the guidance states that if the Board institutes a trial
for an IPR, PGR, or CBM under 35 U.S.C. 314 or 324, the Board will
institute on all claims and all grounds included in a petition. The
guidance provides that ``the PTAB will institute as to all claims or
none,'' and ``[a]t this time, if the PTAB institutes a trial, the PTAB
will institute on all challenges raised in the petition.'' Id.
Subsequently, the U.S. Court of Appeals for the Federal Circuit
(the Federal Circuit) has held that ``[e]qual treatment of claims and
grounds for institution purposes has pervasive support in SAS.'' PGS
Geophysical AS v. Iancu, 891 F.3d 1354, 1360 (Fed. Cir. 2018) (noting
that the Supreme Court in SAS wrote that ``the petitioner is master of
its complaint and normally entitled to judgment on all of the claims it
raises,'' SAS, 138 S. Ct. at 1355, and that section 314 ``indicates a
binary choice--either institute review or don't,'' id., adding that
``Congress didn't choose to pursue'' a statute that ``allows the
Director to institute proceedings on a claim-by-claim and ground-by-
ground basis'' as in ex parte reexamination, id. at 1356). The Federal
Circuit has also held that ``if the Board institutes an IPR, it must
similarly address all grounds of unpatentability raised by the
petitioner.'' AC Techs. S.A. v. Amazon.com, Inc., 912 F.3d 1358, 1364
(Fed. Cir. 2019).
Consistent with SAS, the Office's guidance, and Federal Circuit's
case law, this final rule revises Sec. Sec. 42.108(a) and 42.208(a) to
provide for instituting an IPR, PGR, or CBM trial on all challenged
claims or none. This final rule also revises these rules for
instituting a review, if at all, on all of the grounds of
unpatentability for the challenged claims that are presented in a
petition. In all pending IPR, PGR, and CBM proceedings before the
Office, the Board will either institute on all of the challenged claims
and on all grounds of unpatentability asserted for each claim or deny
the petition.
In addition, consistent with the TPG2018, this final rule amends
Sec. Sec. 42.23, 42.24, 42.120, and 42.220 to permit (1) replies and
patent owner responses to address issues discussed in the institution
decisions, and (2) sur-replies to principal briefs (i.e., to a reply to
a patent owner response or to a reply to an opposition to a motion to
amend). TPG2018 at 14-15.
As noted in the TPG2018, in response to issues arising from SAS,
the petitioner is permitted to address in its reply brief issues
discussed in the institution decision. Similarly, the patent owner is
permitted to address the institution decision in its response and a
sur-reply, if necessary to respond to the petitioner's reply. However,
the sur-reply may not be accompanied by new evidence other than
deposition transcripts of the cross-examination of any reply witness.
Sur-replies may only respond to arguments made in reply briefs, comment
on reply declaration testimony, or point to cross-examination
testimony. A sur-reply may also address the institution decision if
necessary to respond to the petitioner's reply. This sur-reply practice
essentially replaces the previous practice of filing observations on
cross-examination testimony.
In 2012, the Office also promulgated Sec. Sec. 42.107(c) and
42.207(c), which initially included a prohibition against a patent
owner filing new testimony evidence with its preliminary response. In
particular, these rules stated: ``No new testimonial evidence. The
preliminary response shall not present new testimony evidence beyond
that already of record, except as authorized by the Board.'' 37 CFR
42.107(c) and 42.207(c) (2012).
In April 2016, after receiving comments from the public and
carefully reviewing them, the Office promulgated a rule to allow new
testimonial evidence to be submitted with a patent owner's preliminary
response. Amendments to Rules of Practice for Trials Before the Patent
Trial and Appeal Board, 81 FR 18750 (April 1, 2016). The Office also
amended the rules to provide a presumption in favor of the petitioner
for a genuine issue of material fact created by such testimonial
evidence solely for purposes of deciding whether to institute an IPR,
PGR, or CBM review. Id. at 18755-57.
Stakeholder feedback received in party and amicus briefing as part
of the Precedential Opinion Panel (POP) review process in Hulu, LLC v.
Sound View Innovations, LLC, Case IPR2018-01039, Paper 15 (PTAB Apr. 3,
2019) (granting POP review), indicated that the rule has caused some
confusion at the institution stage for AIA proceedings. For example,
certain stakeholders indicated that the presumption in favor of the
petitioner for genuine issues of material fact created by patent owner
testimonial evidence also creates a presumption in favor of the
petitioner for questions relating to whether a document is a printed
publication. Hulu, Paper 29 at 16. The Office has clarified in Hulu
that this is not the case--the only presumption in favor of the
petitioner is set forth in 37 CFR 42.108(c) applying to genuine issues
of material fact created by testimonial evidence. Id. As to that
presumption, the Office's experience is consistent with the concerns
raised by commenters here that the presumption may discourage patent
owners from filing testimonial evidence with their preliminary
responses to avoid creating a presumption against the patent owner
where none would otherwise exist.
Section 314(a) of 35 U.S.C. provides that ``[t]he Director may not
authorize an inter partes review to be instituted unless the Director
determines that the information presented in the petition . . . and any
response . . . shows that there is a reasonable likelihood that the
petitioner would prevail with respect to at least 1 of the claims
challenged in the petition.'' 35 U.S.C. 314(a). That is, the statute
provides that a petitioner is required to present evidence and
arguments sufficient to show that it is reasonably likely that it will
prevail in showing unpatentability. Hulu, Paper 29, at 12-13 (citing 35
U.S.C. 312(a)(3), 314(a)). For a PGR proceeding, the standard for
institution is whether it is ``more likely than not'' that the

[[Page 79122]]

petitioner would prevail at trial. See 35 U.S.C. 324(a). In determining
whether the information presented in the petition meets the standard
for institution, the PTAB considers the totality of the evidence
currently in the record. See Hulu, Paper 29, at 3, 19. Thus, a
petitioner carries the burden in both IPRs and PGRs at the institution
stage. The Office's experience with the 2016 rule change, however, is
that having a presumption in favor of the petitioner at the institution
stage for one class of evidence may lead to results that are
inconsistent with this statutory scheme.
Accordingly, the Office has an interest in ensuring that
testimonial evidence is treated similarly to other evidence for
purposes of institution and consistently with the statutory scheme.
This final rule amends the rules of practice to eliminate the
presumption in favor of the petitioner for a genuine issue of material
fact created by testimonial evidence submitted with a patent owner's
preliminary response when deciding whether to institute an IPR, PGR, or
CBM review. Thus, consistent with the statutory framework, any
testimonial evidence submitted with a patent owner's preliminary
response will be taken into account as part of the totality of the
evidence. Doing so will remove a disincentive to patent owners
submitting pre-institution testimony, eliminate a source of confusion,
and align the Board's practice with its treatment of other evidence at
the time of institution, without adversely impacting petitioners'
ability to ensure that otherwise meritorious petitions proceed to
trial. Further, while parties normally do not have an opportunity to
depose the testifying parties prior to institution, the Board's
experience is that cross-examination is not necessary to weigh the
strengths and weaknesses of the testimony for purposes of institution.

Discussion of Specific Rules

37 CFR, part 42, is amended as follows:

Section 42.23

Section 42.23 is amended to permit patent owners and petitioners to
file sur-replies to principal briefs (i.e., to a reply to a patent
owner response or to a reply to an opposition to a motion to amend). In
particular, the title and Sec. 42.23(a) are amended to add ``sur-
replies'' so that the rule is amended as follows: ``42.23 Oppositions,
replies, and sur-replies. (a) Oppositions, replies, and sur-replies . .
. and, if the paper to which the opposition, reply, or sur-reply . . .
''
Paragraph (b) of Sec. 42.23 is amended to permit petitioners to
address issues discussed in the institution decision in the reply
briefs. Specifically, Sec. 42.23(b) is amended to replace the second
sentence with: ``A reply may only respond to arguments raised in the
corresponding opposition, patent owner preliminary response, patent
owner response, or decision on institution.'' Paragraph (b) of Sec.
42.23 is amended to address the content of a sur-reply by adding the
following: ``A sur-reply may only respond to arguments raised in the
corresponding reply, and may not be accompanied by new evidence other
than deposition transcripts of the cross-examination of any reply
witness.''

Section 42.24

The title and Sec. 42.24(c) are amended to provide for word count
limit for sur-replies so that they are amended as follows: ``Sec.
42.24 Type-volume or page limits for petitions, motions, oppositions,
replies, and sur-replies'' and ``(c) Replies and Sur-replies. The
following word counts or page limits for replies and sur-replies apply
. . . ''
Paragraph (c) of Sec. 42.24 is amended to add a new paragraph (4)
that would limit sur-replies to replies to patent owner responses to
petitions to 5,600 words.

Section 42.71

The third sentence of Sec. 42.71(d) is amended to add ``a sur-
reply'' so that a rehearing request may identify matters in a sur-reply
consistent with Sec. Sec. 42.23 and 42.24 that allow the parties to
file sur-replies to principal briefs.

Sections 42.108 and 42.208

Each of Sec. Sec. 42.108(a) and 42.208(a) is amended to state that
when instituting IPR or PGR, the Board will authorize the review to
proceed on all of the challenged claims and on all grounds of
unpatentability asserted for each claim.
Each of Sec. Sec. 42.108(b) and 42.208(b) is amended to state that
at any time prior to institution of IPR or PGR, the Board may deny all
grounds for unpatentability for all of the challenged claims. Denial of
all grounds is a Board decision not to institute IPR or PGR.
The second sentence in each of Sec. Sec. 42.108(c) and 42.208(c)
is amended to delete the phrase ``but a genuine issue of material fact
created by such testimonial evidence will be viewed in the light most
favorable to the petitioner solely for purposes of deciding whether to
institute [a] review.'' Therefore, the second sentence in each of
Sec. Sec. 42.108(c) and 42.208(c) states the following: ``The Board's
decision will take into account a patent owner preliminary response
where such a response is filed, including any testimonial evidence.''

Sections 42.120 and 42.220

The first sentence of each of Sec. Sec. 42.108(a) and 42.208(a) is
replaced with the following: ``(a) Scope. A patent owner may file a
single response to the petition and/or decision on institution.''

Response to Comments

In the notice of proposed rulemaking, the Office sought comments on
these proposed changes. PTAB Rules of Practice for Instituting on All
Challenged Patent Claims and All Grounds and Eliminating the
Presumption at Institution Favoring Petitioner as to Testimonial
Evidence, 85 FR 31728 (May 27, 2020). The Office received a total of 40
comments, including 5 comments from individuals, 30 comments from
associations, 1 comment from a law firm, and 4 comments from
corporations. The Office appreciates the thoughtful comments
representing a diverse set of views from the various public stakeholder
communities. All of the comments are posted on the PTAB website at
https://www.uspto.gov/patents-application-process/patent-trial-and-appeal-board/comments-proposed-rules-aia-trial.
Upon careful consideration of the public comments, and taking into
account the effect of the rule changes on the economy, the integrity of
the patent system, the efficient administration of the Office, and the
ability of the Office to timely complete instituted proceedings, the
Office adopts the proposed rule changes (with minor deviations in the
rule language, as discussed below). Any deviations from the proposed
rule are based upon a logical outgrowth of the comments received.
The Office's responses address the comments that are directed to
the proposed changes set forth in the notice of proposed rulemaking. 85
FR 31728. Any comments directed to topics that are beyond the scope of
the notice of proposed rulemaking will not be addressed at this time.

Instituting on All Claims and All Grounds

Comment 1: Most comments strongly supported the proposed rules that
codify the Board's existing practice for instituting on all challenged
claims and all grounds presented in a petition when the Board
institutes a review. Several comments indicated that instituting on all
challenged claims and grounds is the most efficient course of action to
fully address the parties' dispute before the Board and to allow
district courts to

[[Page 79123]]

apply AIA estoppel in the most efficient manner during any subsequent,
parallel litigation, including making the estoppel provisions of
section 315(e)(2) more predictable and robust. A number of comments
also stated that this type of review structure is consistent with the
Supreme Court's decision in SAS and promotes efficiency by resolving
all challenges presented in a single proceeding, which will increase
certainty for patent owners. A few comments further noted that
instituting on all claims and grounds may strike a balance that helps
achieve the Congressional objective of providing a fair, comprehensive,
and efficient alternative to district court litigation, and adopting
the proposed rules may help promote clarity.
Response: The Office appreciates the thoughtful comments and agrees
with them. In this final rule, the Office adopts the proposed rules
that codify the Board's existing practice that has been in place for
over two years. Under the amended rules, when instituting a review, the
Board will authorize the review to proceed on all of the challenged
claims and on all grounds of unpatentability asserted for each claim.
Comment 2: A comment stated that the Supreme Court in SAS did not
squarely address partial-grounds institution and that if the rules were
implemented rigidly, they would harm patent owners, petitioners, and
the public affected by the challenged patent. In particular, the
comment suggested that denying petitions that have some meritorious
grounds or instituting reviews that have some non-meritorious grounds
would constitute waste, making this rulemaking economically significant
under Executive Orders 12866 and 13771.
Response: The Federal Circuit has held that ``[e]qual treatment of
claims and grounds for institution purposes has pervasive support in
SAS.'' PGS Geophysical AS, 891 F.3d at 1360. The Federal Circuit noted
that the Supreme Court in SAS wrote that ``the petitioner is master of
its complaint and normally entitled to judgment on all of the claims it
raises'' and that section 314 ``indicates a binary choice--either
institute review or don't,'' adding that ```Congress didn't choose to
pursue' a statute that `allows the Director to institute proceedings on
a claim-by-claim and ground-by-ground basis' as in ex parte
reexamination.'' Id. (quoting SAS, 138 S. Ct at 1355-1356). The Federal
Circuit has also held that ``if the Board institutes an IPR, it must
similarly address all grounds of unpatentability raised by the
petitioner.'' AC Techs. S.A., 912 F.3d at 1364.
As discussed above, this final rule codifies the Board's existing
practice that has been in place for over two years for instituting on
all challenged claims and grounds when the Board institutes a review.
The Office of Management and Budget (OMB) has determined this rule to
be not economically significant under Executive Order 12866. Further,
there is no significant economic impact as the rule merely implements
the law, as mandated by SAS and further supported by subsequent Federal
Circuit precedent like PGS Geophysical AS, 891 F.3d at 1360. As some of
the comments have recognized, on balance, the amended rules promote
clarity and efficiency by addressing in one proceeding all challenges
asserted in a petition.
In short, instituting on all challenged claims and grounds is
consistent with the Supreme Court's decision in SAS, is mandated by the
Federal Circuit, and is consistent with the Board's existing practice.
In adopting the proposed rules, the Office has considered 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 timely complete proceedings instituted.
Comment 3: Some comments encouraged the Office to clarify that the
preexistence of a claim where no reasonable likelihood of success has
been demonstrated does not create a presumption against institution
where there is another claim that does have a reasonable likelihood of
succeeding. A few comments urged the Office not to apply the rules for
instituting on all claims and grounds to deny meritorious petitions as
to some claims or grounds.
Response: The Office appreciates the thoughtful comments. Even when
a petitioner demonstrates a reasonable likelihood of prevailing with
respect to one or more claims, institution of review remains
discretionary. SAS, 138 S. Ct. at 1356 (``[Section] 314(a) invests the
Director with discretion on the question whether to institute review .
. . '' (emphasis omitted)); Harmonic Inc. v. Avid Tech., Inc., 815 F.3d
1356, 1367 (Fed. Cir. 2016) (``[T]he PTO is permitted, but never
compelled, to institute an IPR proceeding.''). In exercising that
discretion, the Board is guided by the statutory requirement, in
promulgating regulations for IPR, PGR, and CBM, to consider the effect
of any regulations on ``the efficient administration of the Office
[and] the ability of the Office to timely complete proceedings,'' 35
U.S.C. 316(b) and 326(b), as well as the requirement to construe our
rules to ``secure the just, speedy, and inexpensive resolution of every
proceeding,'' 37 CFR 42.1(b). The Office's guidance, issued on June 5,
2018, also explains that the Board may consider the number of claims
and grounds that meet the reasonable likelihood standard when deciding
whether to institute a review. SAS Q&As, Part D, Effect of SAS on
Future Challenges that Could Be Denied for Statutory Reasons (June 5,
2018), available at https://www.uspto.gov/sites/default/files/documents/sas_qas_20180605.pdf (``[T]he panel will evaluate the
challenges and determine whether, in the interests of efficient
administration of the Office and integrity of the patent system (see 35
U.S.C. 316(b)), the entire petition should be denied under 35 U.S.C.
314(a).'').
Comment 4: One comment suggested several changes in the language of
Sec. 42.108. For example, the comment suggested (1) changing the title
of Sec. 42.108 from ``Institution of inter partes review'' to
``Decision whether to institute review''; (2) changing ``When'' to
``If'' in the phrase ``When instituting inter partes review'' in Sec.
42.108(a); (3) deleting the phrase ``the Board will authorize'' in
Sec. 42.108(a); and (4) replacing ``all of the challenged claims''
with ``all involved claims.''
Response: The Office appreciates the comment. The suggested changes
are not necessary to codify the existing practice for instituting on
all challenged claims and grounds when the Board institutes a review.
Notably, the title of Sec. 42.108 is consistent with the title of 35
U.S.C. 314, which is ``Institution of inter partes review.'' Moreover,
the term ``challenged claims'' is consistent with 35 U.S.C. 318 and
328, each of which states ``a final written decision with respect to
the patentability of any patent claim challenged by the petitioner and
any new claim added.''

Addressing the Institution Decision

Comment 5: Most comments strongly supported the proposed rules
codifying the Board's existing practice that allows the parties to
address issues raised in the institution decision. Several comments
recognized that the institution decision is a vehicle by which the
Board can solicit responsive evidence and arguments on certain issues
and that allowing the parties to address those issues may lead to
developing a more complete written record, clarifying the issues, and
ensuring fairness. A few comments sought clarification about whether a
patent owner may file a response to either or both the petition and
decision on institution, and whether a petitioner may file a reply when
the patent owner elects not to file a response.

[[Page 79124]]

Response: The Office appreciates the thoughtful comments. In this
final rule, the Office adopts the proposed rules codifying the Board's
existing practice that allows the parties to address issues raised in
the institution decision. Under the amended rules, a patent owner may
file a single response to address issues raised in either or both the
petition and institution decision, and a petitioner may file a single
reply to address issues raised in either or both the patent owner
response and institution decision. For those rare circumstances in
which the patent owner elects not to file a response, the patent owner
must arrange a conference call with the parties and the Board, as
required by the scheduling order, and the petitioner is expected to
notify the Board during the conference call whether it intends to file
a reply to the decision on institution. The absence of a patent owner
response will not prevent a petitioner from filing a reply where
appropriate to address the institution decision.
Comment 6: One comment does not support the rule changes that allow
the parties to address the issues raised in the institution decision
because the Board should not take sides in the dispute. Another comment
suggested that the rules should not provide a basis for parties to re-
litigate the institution decision.
Response: As noted above, a few comments have recognized that the
institution decision is a vehicle by which the Board can solicit
responsive evidence and arguments on certain issues. Notably, a
decision instituting a review does not make a final determination with
respect to the patentability of the challenged claims or with respect
to the claim construction. Allowing the parties to address the issues
raised in the institution decision may promote developing a more
complete written record, clarify the issues, and ensure fairness in
issuing the final written decision on patentability.

Sur-Replies

Comment 7: Most comments strongly supported the proposed rules that
codify the Board's existing practice of allowing sur-replies to
principal briefs. Several comments indicated that allowing sur-replies
provides certainty to Board processes. Some comments also noted that
allowing sur-replies gives a patent owner an opportunity to respond to
new exhibits or other new information in a petitioner's reply,
providing balance during AIA proceedings and affording patent owners a
fair opportunity to be heard. Some comments stated that sur-replies are
preferable to the previous procedure of authorizing a patent owner to
file observations on cross-examination testimony in response to
testimonial evidence submitted with a reply because they provide a more
complete record.
Response: The Office appreciates these thoughtful comments. The
amended rules are intended to conform to existing practice. Consistent
with the practice as outlined in the TPG2018, and the CTPG published in
November 2019, the new rules will permit sur-replies to principal
briefs (i.e., to a reply to a patent owner response or to a reply to an
opposition to a motion to amend). However, a sur-reply may not be
accompanied by new evidence other than transcripts of the cross-
examination testimony of any reply witness. Sur-replies are permitted
only to respond to arguments made in reply briefs, comment on reply
declaration testimony, or point to cross-examination testimony. A sur-
reply also may address the institution decision if necessary to respond
to the petitioner's reply. This sur-reply practice essentially replaces
the previous practice of filing observations on cross-examination
testimony.
Comment 8: Some comments expressed concern that the amended rules
do not expressly provide for a sur-reply as a matter of right, stating
that this may lead to uncertainty among parties involved in an AIA
trial proceeding.
Response: See response to comment 7. Consistent with existing
practice as provided in the TPG2018 and the CTPG, no prior
authorization is required to file a sur-reply to a reply to a patent
owner response or to a reply to an opposition to a motion to amend.
Comment 9: Some comments expressed concern that the Proposed Rules
do not place limits on the introduction of new evidence in a sur-reply,
which could lead to uncertainty and gamesmanship.
Response: The Office appreciates these thoughtful comments. The
Office has revised the text of rule 42.23(b) to clarify that the sur-
reply ``may not be accompanied by new evidence other than transcripts
of the cross-examination testimony of any reply witness.'' This
conforms to existing practice as stated in the TPG2018 and the CTPG.

Word Limits for Sur-Replies

Comment 10: Most comments strongly supported the proposed rule
change to 37 CFR 42.24(c), which imposes a limit of 5,600 words for
sur-replies to patent owner responses to petitions. Some comments noted
that this rule provides certainty as well as fairness.
Response: The Office appreciates these comments. The amended rule
is intended to conform to existing practice. Consistent with the
practice as outlined in the TPG2018 and the CTPG, sur-replies are
subject to the same word or page limit as a reply.
Comment 11: The Office has also received comments on the existing
practice of requiring, in response to a paper that contains a statement
of material fact, a listing of facts that are admitted, denied, or
cannot be admitted or denied.
Response: The Office appreciates the comments received; however,
they are beyond the scope of the current rulemaking. No changes to that
practice are implemented in the amended rules. The Office will take
these comments into account as the Office continually seeks to improve
the AIA review process to maintain fair procedures.
Comment 12: The Office has also received some comments suggesting
changes to the word count limit. For example, one comment requested
that the word count be a function of the number of claims in a
challenged patent or the length of those claims. Another comment
expressed concern about perceived unfairness in word counts, wherein
patent owners may file both a preliminary response and an opposition,
each containing 14,000 words, in addition to a sur-reply of 5,600
words, whereas a petitioner is limited to a petition of 14,000 words
followed by a reply of 5,600 words. This comment suggested that some of
this disparity could be mitigated if petitioners are allowed to file a
reply whenever a patent owner files a preliminary response.
Response: The Office appreciates the comments received; however,
they are beyond the scope of the current rulemaking. The Office will
take these comments into account as the Office continually seeks to
improve the AIA review process to maintain fair procedures.

Eliminating the Presumption at Institution

Comment 13: Most comments favored adoption of the proposed rule
eliminating the presumption at institution that a genuine issue of
material fact created by testimonial evidence will be viewed in a light
most favorable to petitioner for purposes of deciding whether to
institute. However, a number of comments opposed adopting the proposed
rule.
Response: The Office appreciates the input from the public on this
issue,

[[Page 79125]]

whether supporting or opposing the proposed rule. The suggestion that
the present rule be retained is not adopted. The presumption in favor
of the petitioner where there is a genuine dispute of material fact
created by testimonial evidence in a patent owner preliminary response
has created confusion as to how other evidence should be weighed. This
confusion was resolved in large part in Hulu, but Hulu highlights an
inconsistency in the treatment of evidence that the proposed rule is
intended to resolve. In particular, in Hulu, the Board held that
disputed questions of material fact raised by evidence other than
testimonial evidence are resolved by the Board at the institution phase
without a presumption, even where additional evidence or discovery
might have illuminated them. See Hulu, Paper 29, at 16-20 (addressing
the standard for proving printed publication pre-institution). The
proposed rule confirms that no presumption applies in favor of
institution regardless of the existence or nature of a factual dispute
in the pre-institution record and regardless of the type of evidence,
testimonial or otherwise.
Many of the comments opposing the proposed rule are arguments in
favor of an institution presumption generally. This would conflict with
the statute, which makes clear that the burden is on the petitioner to
meet the applicable standard that it would prevail with respect to at
least one of the claims challenged in the petition. See 35 U.S.C.
314(a), 324(a). Moreover, the presumption provided by the existing rule
has proved unnecessary to resolve the institution question in other
contexts. Disputed questions of material fact raised by other than
testimonial evidence are resolved by the Board at the institution phase
without a presumption. See Hulu, Paper 29, at 16-20 (addressing the
standard for proving printed publication pre-institution).
Comment 14: A number of comments supporting the rule change
asserted that the current presumption in favor of the petitioner is
biased towards institution and discourages patent owners from
submitting conflicting testimonial evidence with a preliminary
response. One comment suggested that, in view of the presumption of
validity, testimonial evidence should instead be viewed in the light
most favorable to patentability and that a presumption in favor of the
patent owner would be appropriate. Another comment suggested that a
neutral presumption is best in the interest of fairness and reduces the
risk that innovators will be deprived of their innovations.
Response: The Office appreciates the comments and agrees that any
presumption in favor of institution is inappropriate. The Office also
agrees that under the current rule, a patent owner might not be
inclined to submit pre-institution testimony that might, under the
presumption, create an issue of material fact. As in the proposed rule,
the final rule modifies the existing rule to address these concerns and
no longer specifies that a genuine issue of material fact created by
testimonial evidence results in a presumption in favor of a petitioner.
The rule change removes any bias or appearance of bias in favor of
petitioner, and provides a balanced approach to ensure that all
testimonial evidence submitted by the parties is fairly considered.
Comment 15: Several comments in support of the rule change noted
that the practice to view testimonial evidence in the light most
favorable to the petitioner for purposes of instituting a review
conflicts with the decision of Congress to place the burden of proof on
the petitioner. One comment noted that, by eliminating the presumption,
the proposed rule change enables the PTAB to consider the totality of
the evidence in deciding whether the petition meets the standard for
institution. Another comment opposing the rule change stated the change
thwarts Congress's purposes in establishing the AIA by hampering the
ability to challenge low-quality patents.
Response: The Office appreciates these thoughtful comments. As set
forth in the statutes established by Congress, the burden is on the
petitioner to meet the applicable standard that it would prevail with
respect to at least one of the claims challenged in the petition. See
35 U.S.C. 314(a), 324(a). In response to recent feedback received from
the public, the Office agrees it is inconsistent with the statutory
framework to view testimonial evidence in the light most favorable to
petitioners. The presumption has caused confusion at the institution
stage for AIA proceedings and has proved unnecessary to resolve the
institution question in other contexts. With the elimination of the
presumption, the PTAB will consider the totality of the evidence to
determine whether the petitioner has met the standard for institution
of the procedure.
The Office disagrees that elimination of the presumption frustrates
the intention of Congress. To the contrary, Congress provided that
institution of IPR is discretionary and conditioned on the petitioner
meeting the applicable standard for review. Id. Elimination of the
presumption furthers Congressional intent. In addition, elimination of
the presumption does not impact the ability of petitioners to file with
the Office a petition to institute a review of a patent.
Comment 16: A number of comments opposing the proposed rule
questioned the fairness of the proposed rule to petitioners. One
comment expressed concern that under the proposed rule, the patent
owner would have a ``one-sided ability to enter unchallenged evidence
prior to institution.'' Other comments expressed concern that crediting
a patent owner's testimonial evidence without providing cross-
examination or an opportunity to respond may lead to denials of
institution that cannot be appealed, even where the patent owner's
factual contentions are mistaken. Several comments expressed the view
that the lack of cross-examination is especially concerning when the
patent owner introduces testimony asserting ``secondary
considerations'' such as unexpected results, commercial success,
copying by others, and long-felt but unmet need. One comment expressed
concern that the proposed rule would lead to more discretionary denials
of institution. One comment expressed concern that the proposed rule
would reduce patent quality, drive up costs, and invite
``gamesmanship.''
Response: The Office appreciates these comments but does not adopt
them. The Office believes the Board is adequately able to weigh the
parties' testimonial evidence and fairly resolve factual disputes at
the institution stage without a presumption crediting the petitioner's
testimony. For example, testimony must still disclose the underlying
facts and data upon which it relies, or it will be entitled to little
weight. See 37 CFR 42.65(a); CTPG, at 35. Moreover, consistent with
existing practice, limited pre-institution discovery may be granted at
the discretion of the Board. Nonetheless, although cross-examination of
pre-institution testimony might be helpful in a few cases, as a general
matter, the Office believes that its benefits will be outweighed by the
greater expense to the Office and the parties, where the Board is able
to reach a decision on institution based on the briefs and documents as
submitted by the parties.
Comment 17: Several comments expressed concern that adopting the
proposed rule would unduly complicate the pre-institution phase for AIA
trials. This is sometimes described in the comments as creating a
``trial within a trial.'' One comment expressed concern that the
proposed rule could give rise to ``almost universal requests'' for pre-
institution discovery and additional

[[Page 79126]]

briefing, leading to greater costs and burdens to the parties. Another
comment expressed concern that there are no procedural guidelines in
place to prevent this. This comment expressed concern that ``over
complication'' of the pre-institution stage advantages more experienced
parties, and that the costs and burdens to the Office may increase due
to pre-institution depositions and additional briefing. Several other
comments suggested that the rule should give petitioners the
opportunity to reply if a patent owner submits testimony with the
preliminary response that raises a genuine issue of material fact. One
comment expressed the view that the chances of error by the Board are
greater if institution is decided without the safeguards of discovery,
cross-examination, additional briefing, and a hearing. Another comment
opposed the proposed rule because it endorses resolution of disputes of
fact at the institution phase on an incomplete record and without
judicial review.
Response: The Office appreciates these thoughtful comments and
concerns on this issue. At present, although timely and well-supported
requests are permitted, as consistent with existing practice, no
additional briefing or discovery (e.g., depositions of declarants)
during the institution phase is contemplated as a result of the
submission of testimony with the preliminary response. In this way, no
trial within a trial is anticipated, and the parties will not be
burdened with greater costs. The Board has the benefit of the
documentary evidence of record, as well as elucidating argument from
the parties, in evaluating the testimonial evidence. In most cases, in
the Board's experience, this evidence is sufficient to resolve the
facts in dispute. For instance, declaration evidence alleging secondary
considerations would, consistent with normal practice, be given little
weight absent supporting documentary evidence. Thus, a declaration
alleging commercial success would not be given much weight on
institution absent sufficient supporting evidence demonstrating sales
figures, etc.
Comment 18: Several comments opposing the proposed rule expressed
concern about unfairness to the petitioner if the patent owner
withdraws its reliance on testimony submitted with the preliminary
response. One comment suggested that the patent owner might be
``incentivized'' to introduce less supportable testimony prior to
institution that can be withdrawn if a trial is instituted. Another
comment expressed concern that, because eliminating the presumption may
allow a patent owner to introduce disputes of material fact via expert
testimony on the patentability of the challenged claims that lead to a
denial of institution, the petitioner should be entitled to take the
deposition of an expert whose declaration is submitted with the
preliminary response. The comment stated that if a new expert
declaration is submitted with the patent owner response, the petitioner
should also be permitted to take the deposition of that expert as well.
Response: The Office appreciates but does not adopt the comments.
Under the current rule, once a trial is instituted, a patent owner may
choose not to rely on testimony submitted with the preliminary
response. CTPG, at 51. That would not change under the final rule. Once
a trial commences, petitioners can also withdraw evidence. See Hulu,
Paper 29, at 6 (additional evidence regarding the date of publication
at issue raised more questions than it answered and was withdrawn). If
both parties can withdraw their reliance on evidence that turns out to
be weak, there is no unfairness.
The Office does not believe patent owners will be motivated to
provide ``less supportable'' testimony from their declarants as a
result of the rule change. The Office believes parties generally
recognize that their goals are best served by providing the most
credible testimony from their declarants. See 37 CFR 42.65(a); CTPG, at
51. If, after trial is initiated, the patent owner withdraws reliance
on a declarant and a declaration submitted with the preliminary
response, that declarant will usually not be subject to a deposition on
the withdrawn declaration. CTPG, at 51.
Comment 19: One comment expressed a concern that the new rule
should not alter the standard for instituting a trial.
Response: The Office agrees. The final rule does not change the
standard for instituting trial and does not shift the burden of proving
unpatentability away from the petitioner.
Comment 20: One comment opposing the rule change suggested that a
presumption in favor of the petitioner should continue and should apply
to all disputed evidentiary issues, including questions of whether a
document is a printed publication.
Response: The Office appreciates but does not adopt this comment.
The final rule eliminates the presumption as to genuine issues of
material fact. The Hulu decision expressly provides guidance on
establishing a document as a printed publication. Hulu, Paper 29, at
11-19.
Comment 21: Several comments addressed the standard of review under
the rule. One comment expressed concern that the rule does not make it
clear how pre-institution testimony will be evaluated. Another stated
that the rule should specify the burden and asserted that removing the
summary judgment standard in the proposed rule would make Board
decisions on disputed facts arbitrary and capricious.
Response: The Office appreciates but does not adopt the comments.
The final rule provides no presumption as to disputed issues of
material fact. However, the decision in Hulu provides guidance on the
institution standard and evidentiary dynamics, albeit in the context of
a printed publication issue. Hulu, Paper 29, at 11-19. The Office has
ample experience in evaluating declaration testimony without cross-
examination in a variety of contexts and does not see the need to
provide further guidance in the rule itself. Additional guidance on the
application of the rule change may be provided in future precedential
and informative Board decisions.
Comment 22: Several comments opposing the rule change expressed
concerns that removal of the presumption would violate due process
requirements because it would allow for a decision not to institute
based on unchallenged testimonial evidence. One comment asserted the
change would be unconstitutional because it does not allow a petitioner
to confront an adverse witness.
Response: The Office appreciates the comments but disagrees the
final rule violates due process requirements or is unconstitutional.
Institution of AIA review proceedings is discretionary, and there is no
right provided in the statutory framework to challenge testimony at the
institution stage. See 35 U.S.C. 314(a), 324(a). Under the final rule,
both the petitioner and patent owner are able to submit testimonial
evidence. The Office has ample experience in evaluating declaration
testimony without cross-examination in a variety of contexts. Such
testimony must be supported as appropriate, or it will be accorded
little weight. See 37 CFR 42.65(a); CTPG, at 51. The Board will
consider the totality of the evidence presented to determine if the
petitioner meets the threshold standard to institute review.
Comment 23: A number of comments expressed concern that the Office
did not provide adequate justification for the rule change and asserted
the rationale for the change is inconsistent with the Office findings
in the 2016 rulemaking that established the

[[Page 79127]]

presumption. A few comments suggested that any stakeholder confusion
caused by the rule does not justify abandoning the rule but should
instead be addressed by precedential decisions or the next revision of
the Trial Practice Guide.
Response: As part of ongoing efforts to improve AIA proceedings,
the Office continuously evaluates its procedures based on feedback from
the public. Upon evaluation of recent feedback, the Office has
determined that the presumption causes confusion at the institution
stage and potentially discourages patent owners from submitting
testimonial evidence. In addition, the Office's experience is that
having a presumption in favor of the petitioner at the institution
stage may lead to results that are inconsistent with the statutory
scheme, which places the burden on the petitioner.
Although there were valid reasons for promulgating the original
rule, the Office has determined that the problems and confusion
engendered by the rule, discussed above, outweigh those reasons. The
Office has ample experience in evaluating declaration testimony without
cross-examination in a variety of contexts. The Office believes,
therefore, that the Board will remain able to fairly and efficiently
resolve factual disputes at the institution phase in deciding whether
to institute the requested trial without the current presumption. The
Office received numerous comments that support and agree with the
Office's rationale for the change as eliminating a source of confusion,
removing a disincentive to patent owners to provide pre-institution
testimonial evidence, and better according with the statutory standards
for institution. See 35 U.S.C. 314(a), 324(a). Accordingly, the Office
has elected to revise its rule.
Comment 24: A few comments expressed concern with the retroactive
application of the rule change and requested that the rule not go into
immediate effect. Several other comments stated that the Office should
provide an opportunity for further discussion and consideration on this
proposed rule change.
Response: The Office acknowledges the concerns with the retroactive
application of the rule. The change to eliminate the presumption will
apply only to petitions filed on or after the effective date of the
rule. The Office appreciates all comments submitted in response to the
proposed rule and does not believe further discussion is needed.
Comment 25: A few comments stated the rulemaking fails to comply
with the procedural requirements imposed by the Administrative
Procedure Act and Executive Order 12866. The comments assert that the
rule making is significant--economically significant--and the 30-day
comment period failed to provide the public a meaningful opportunity to
respond to the comments.
Response: The OMB has determined this rule to be not significant
for purposes of Executive Order 12866. Further, the Office disagrees
that the final rule will impose additional costs because no additional
briefing or discovery is contemplated as a result of the rule change.

Rulemaking Considerations

A. Administrative Procedure Act (APA): This final rule revises the
rules relating to Office trial practice for IPR, PGR, and CBM
proceedings. The changes set forth in this final rule do not change the
substantive criteria of patentability. These changes involve rules of
agency procedure and interpretation. See Perez v. Mortg. Bankers Ass'n,
135 S. Ct. 1199, 1204 (2015) (Interpretive rules ``advise the public of
the agency's construction of the statutes and rules which it
administers.'') (citation and internal quotation marks omitted); 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.); Nat'l Org. of Veterans' Advocates, Inc. v. Sec'y of
Veterans Affairs, 260 F.3d 1365, 1375 (Fed. Cir. 2001) (Rule that
clarifies the interpretation of a statute is interpretive.); JEM
Broadcasting Co. v. F.C.C., 22 F.3d 320, 328 (D.C. Cir. 1994) (Rules
are not legislative because they do not ``foreclose effective
opportunity to make one's case on the merits.'').
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
Perez, 135 S. Ct. 1199, 1206 (Notice-and-comment procedures are
required neither when an agency ``issue[s] an initial interpretive
rule'' nor ``when it amends or repeals that interpretive rule.'');
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)(3)(A)).
The Office, nevertheless, published the notice of proposed
rulemaking for comment, as it sought the benefit of the public's views
on the Office's proposed changes. See 85 FR 31728.
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 changes adopted in this final rule will not have a significant
economic impact on a substantial number of small entities. See 5 U.S.C.
605(b).
This final rule revises certain trial practice procedures before
the Board in light of the Supreme Court's ruling in SAS Institute Inc.
v. Iancu, 138 S. Ct. 1348 (2018), that a decision to institute an IPR
under 35 U.S.C. 314 may not institute on fewer than all claims
challenged in a petition. In accordance with that ruling, this final
rule revises the rules of practice for instituting review on all
challenged claims or none in IPR, PGR, and CBM proceedings before the
PTAB. This final rule also revises the rules of practice for
instituting a review on all grounds of unpatentability for the
challenged claims that are asserted in a petition. Additionally, this
final rule revises the rules to conform to the current standard
practice of providing sur-replies to principal briefs and providing
that a patent owner response and reply may respond to a decision on
institution. This final rule further revises the rules to eliminate the
presumption that a genuine issue of material fact created by the patent
owner's testimonial evidence filed with a preliminary response will be
viewed in the light most favorable to the petitioner for purposes of
deciding whether to institute a review. The changes in this final rule
are procedural in nature, and any requirements resulting from these
changes are of minimal or no additional burden to those practicing
before the Board.
For the foregoing reasons, the changes in this final 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 (Jan. 18,
2011). Specifically, the Office has, to the extent feasible and
applicable: (1) Made a reasoned determination that the benefits

[[Page 79128]]

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 13771 (Reducing Regulation and Controlling
Regulatory Costs): This final rule is not expected to be an Executive
Order 13771 (Jan. 30, 2017) regulatory action because this final rule
is not significant under Executive Order 12866 (Sept. 30, 1993).
F. 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).
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 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
rulemaking 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 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 (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 (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 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 that 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 final rule does not involve an information collection
requirement that is subject to review by the OMB under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501-3549). This rulemaking does not
add any additional information requirements or fees for parties before
the Board. Therefore, the Office is not resubmitting information
collection packages to OMB for its review and approval because the
revisions in this rulemaking do not materially change the information
collections 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,
Lawyers.

For the reasons set forth in the preamble, the Office amends part
42 of title 37 as follows:

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

0
1. The authority citation for 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; Pub. L. 112-129, 125 Stat. 284; and Pub. L. 112-274,
126 Stat. 2456.

0
2. Revise Sec. 42.23 to read as follows:

Sec. 42.23 Oppositions, replies, and sur-replies.

(a) Oppositions, replies, and sur-replies must comply with the
content requirements for motions and, if the paper to which the
opposition, reply, or sur-reply is responding contains a statement of
material fact, must include a listing of facts that are admitted,
denied, or cannot be admitted or denied. Any material fact not
specifically denied may be considered admitted.
(b) All arguments for the relief requested in a motion must be made
in the motion. A reply may only respond to arguments raised in the
corresponding opposition, patent owner preliminary response, patent
owner response, or decision on institution. A sur-reply may only
respond to arguments raised in the corresponding reply and may not be
accompanied by new evidence other than deposition transcripts of the
cross-examination of any reply witness.

0
3. Amend Sec. 42.24 by revising the section heading and paragraph (c)
introductory text and adding paragraph (c)(4) to read as follows:

[[Page 79129]]

Sec. 42.24 Type-volume or page limits for petitions, motions,
oppositions, replies, and sur-replies.

* * * * *
(c) Replies and sur-replies. The following word counts or page
limits for replies and sur-replies apply and include any statement of
facts in support of the reply. The word counts or page limits do not
include a table of contents; a table of authorities; a listing of facts
that are admitted, denied, or cannot be admitted or denied; a
certificate of service or word count; or an appendix of exhibits.
* * * * *
(4) Sur-replies to replies to patent owner responses to petitions:
5,600 words.
* * * * *

0
4. Amend Sec. 42.71 by revising the third sentence of paragraph (d)
introductory text to read as follows:

Sec. 42.71 Decision on petitions or motions.

* * * * *
(d) * * * The request must specifically identify all matters the
party believes the Board misapprehended or overlooked, and the place
where each matter was previously addressed in a motion, an opposition,
a reply, or a sur-reply. * * *
* * * * *

0
5. Revise Sec. 42.108 to read as follows:

Sec. 42.108 Institution of inter partes review.

(a) When instituting inter partes review, the Board will authorize
the review to proceed on all of the challenged claims and on all
grounds of unpatentability asserted for each claim.
(b) At any time prior to a decision on institution of inter partes
review, the Board may deny all grounds for unpatentability for all of
the challenged claims. Denial of all grounds is a Board decision not to
institute inter partes review.
(c) Inter partes review shall not be instituted unless the Board
decides that the information presented in the petition demonstrates
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, including any testimonial evidence. A petitioner may
seek leave to file a reply to the preliminary response in accordance
with Sec. Sec. 42.23 and 42.24(c). Any such request must make a
showing of good cause.

0
6. Amend Sec. 42.120 by revising paragraph (a) to read as follows:

Sec. 42.120 Patent owner response.

(a) Scope. A patent owner may file a single response to the
petition and/or decision on institution. A patent owner response is
filed as an opposition and is subject to the page limits provided in
Sec. 42.24.
* * * * *

0
7. Amend Sec. 42.208 by revising paragraphs (a), (b), and (c) to read
as follows:

Sec. 42.208 Institution of post-grant review.

(a) When instituting post-grant review, the Board will authorize
the review to proceed on all of the challenged claims and on all
grounds of unpatentability asserted for each claim.
(b) At any time prior to institution of post-grant review, the
Board may deny all grounds for unpatentability for all of the
challenged claims. Denial of all grounds is a Board decision not to
institute post-grant review.
(c) Post-grant review shall not be instituted unless the Board
decides that the information presented in the petition demonstrates
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, including any testimonial evidence. A petitioner may
seek leave to file a reply to the preliminary response in accordance
with Sec. Sec. 42.23 and 42.24(c). Any such request must make a
showing of good cause.
* * * * *

0
8. Amend Sec. 42.220 by revising paragraph (a) to read as follows:

Sec. 42.220 Patent owner response.

Andrei Iancu,
Under Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office.
[FR Doc. 2020-27048 Filed 12-8-20; 8:45 am]
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