[Federal Register Volume 87, Number 145 (Friday, July 29, 2022)]
[Notices]
[Pages 45764-45767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16299]
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DEPARTMENT OF COMMERCE
Patent and Trademark Office
[Docket No. PTO-P-2021-0058]
Duties of Disclosure and Reasonable Inquiry During Examination,
Reexamination, and Reissue, and for Proceedings Before the Patent Trial
and Appeal Board
AGENCY: United States Patent and Trademark Office, Department of
Commerce.
ACTION: Notice.
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SUMMARY: The duty of candor and good faith in dealing with the United
States Patent and Trademark Office (USPTO) includes the duty to
disclose to the USPTO information material to the patentability of a
claimed invention. Each party submitting a paper to the USPTO has an
additional duty to perform an inquiry that is reasonable under the
circumstances, including reviewing documents to identify information
that is material to the patentability of a claimed invention. The USPTO
relies on each individual who is subject to these duties to abide by
them. The duties are imposed to assist patent examiners and
administrative patent judges in evaluating patentability effectively
and efficiently. The duties promote robust and reliable patents, and
drive competition and economic growth. In the pharmaceutical space, the
duties promote robust and reliable patents that incentivize and protect
innovation that brings life-saving drugs to the American people while
not unnecessarily delaying more affordable generic drugs. This notice
is intended to clarify the duties, including as to materials or
statements material to patentability or statements made to the USPTO
that are inconsistent with statements submitted to the FDA and other
governmental agencies.
FOR FURTHER INFORMATION CONTACT: Ali Salimi, Senior Legal Advisor,
Office of Patent Legal Administration, Office of the Deputy
Commissioner for Patents, at 571-272-0909.
SUPPLEMENTARY INFORMATION:
I. Background: On July 9, 2021, President Biden issued an Executive
Order on Promoting Competition in the American Economy, 86 FR 36987
(2021). President Biden expressed concern that ``too often, patent and
other laws have been misused to inhibit or delay--for years and even
decades--competition from generic drugs and biosimilars, denying
Americans access to lower-cost drugs.'' The President called for action
``to help ensure that the patent system, while incentivizing
innovation, does not also unjustifiably delay generic drug and
biosimilar competition beyond that reasonably contemplated by
applicable law.''
On September 9, 2021, Senator Patrick Leahy and Senator Thom Tillis
sent a letter to Mr. Andrew Hirshfeld, Performing the Functions and
Duties of the Under Secretary of Commerce for Intellectual Property and
Director of the USPTO, requesting that the Office ``take steps to
reduce patent applicants'
[[Page 45765]]
making inappropriate conflicting statements in submissions to the
[USPTO] and other federal agencies.'' The letter provided a specific
example in which ``inconsistent statements submitted to the Food and
Drug Administration (FDA) to secure approval of a product--asserting
that the product is the same as a prior product that is already on the
market--can then be directly contradicted by statements made to the
[USPTO] to secure a patent on the product.'' The letter noted that such
inconsistent statements ``should be cause for rejecting the application
and, when made knowingly and with bad intent, potentially other
sanctions.''
This notice is part of the USPTO's efforts to put into effect the
Administration's goals and address the Senators' concerns. It is also
part of the USPTO's ongoing mission to issue robust and reliable
patents and to make sure our intellectual property ecosystem works to
bring more innovation to impact--in every technological space including
the critical pharmaceutical space. This notice clarifies the ``duty of
disclosure'' and ``duty of reasonable inquiry'' owed to the USPTO and
American public. This notice specifically addresses these duties as
they relate to information and statements material to patentability
including, but not limited to, those received from or submitted to the
FDA and other governmental agencies.
II. Who Has a Duty to Disclose Material Information: The duty to
disclose applies to matters pending before the USPTO and extends
broadly to ``[e]ach individual associated with the filing and
prosecution of a patent application'' and ``[e]ach individual
associated with the patent owner in a reexamination proceeding.'' 37
CFR 1.56(a) and 1.555(a). For patent applications, including reissue
applications, these individuals include each inventor named in the
application, each attorney or agent who prepares or prosecutes the
application, and ``[e]very other person who is substantively involved
in the preparation or prosecution of the application and who is
associated with the inventor, the applicant, an assignee, or anyone to
whom there is an obligation to assign the application.'' 37 CFR
1.56(c); see 37 CFR 1.171. For reexamination proceedings, these
individuals include ``the patent owner, each attorney or agent who
represents the patent owner, and every other individual who is
substantively involved on behalf of the patent owner in a reexamination
proceeding.'' 37 CFR 1.555(a).
The duty to disclose also extends to parties and individuals
involved in a proceeding before the Patent Trial and Appeal Board
(PTAB). According to 37 CFR 42.11(a), ``Parties and individuals
involved in the proceeding have a duty of candor and good faith to the
Office during the course of a proceeding.'' Not only does the duty
apply to each individual associated with a patent application
(including a reissue application) or reexamination proceeding that is
on appeal to the PTAB, but the duty to disclose also extends to patent
owners presenting substitute claims in an inter partes review or post
grant review proceeding. ``Under 37 CFR 42.11, all parties have a duty
of candor, which includes a patent owner's duty to disclose to the
Board information of which the patent owner is aware that is material
to the patentability of substitute claims, if such information is not
already of record in the case.'' Lectrosonics, Inc. v. Zaxcom, Inc.,
IPR2018-001129, 001130, Paper 15 at 9-10 (PTAB Feb. 25, 2019)
(precedential).
III. What Material Information Must Be Disclosed: ``[I]nformation
is material to patentability when it is not cumulative to information
already of record or being made of record in the application, and (1)
It establishes, by itself or in combination with other information, a
prima facie case of unpatentability of a claim; or (2) It refutes, or
is inconsistent with, a position the applicant takes in: (i) Opposing
an argument of unpatentability relied on by the Office, or (ii)
Asserting an argument of patentability.'' 37 CFR 1.56(b). The USPTO
holds those individuals subject to this duty to the highest standards.
In close cases where the materiality or consistency of the information
is in question, the applicant should consider submitting this
information to the USPTO. See Manual of Patent Examining Procedure (9th
ed. Rev. 10.2019) (MPEP) Sec. 2004, item 10.
Specifically, the duty of candor and good faith, and by extension
the duty to disclose, applies to positions taken by applicants or
parties involving the claimed subject matter. For instance, in PTAB
proceedings, parties should not take a position about the patentability
of challenged claims that is inconsistent with positions taken in
submissions to other Government agencies regarding the same subject
matter. See, e.g., Rules of Practice for Trials Before the Patent Trial
and Appeal Board and Judicial Review of Patent Trial and Appeal Board
Decisions, Final Rule, 77 FR 48612, 48630 (Aug. 14, 2012) (``The scope
of the duty [of candor and good faith] is comparable to the obligations
toward the tribunal imposed by Rule 11 of the Federal Rules of Civil
Procedure.'').
If a party to a USPTO proceeding discovers that an earlier position
taken in a submission to the USPTO or another Government agency was
incorrect or inconsistent with other statements made by the party, the
party must promptly correct the record. See, e.g., In re Tendler,
Proceeding No. D2013-17 (USPTO Jan. 1, 2014) (suspending a practitioner
for four years for failure to correct the written record after learning
of inaccuracies in a declaration the practitioner had filed). In the
context of prosecution, an applicant must disclose to the USPTO any
information that refutes, or is inconsistent with, a position the
applicant takes in: (i) opposing an argument of unpatentability relied
on by the Office, or (ii) asserting an argument of patentability. See
37 CFR 1.56(b)(2). In the context of PTAB proceedings, if the party is
or becomes aware of incorrect or inconsistent positions, the party must
make the PTAB panel aware of the incorrect or inconsistent positions
and must submit the inconsistent information. Patent owners may bring
information, including prior art and incorrect or inconsistent
positions, to the attention of the USPTO through supplemental
examination, ex parte reexamination, reissue applications, or
submissions under 37 CFR 1.501. During prosecution, third parties may
have an opportunity to disclose information to the USPTO through third
party submissions under 37 CFR 1.290 and protests under 37 CFR 1.291.
After issuance, third parties may disclose information directed to
issued patents to the USPTO via submissions under 37 CFR 1.501, in ex
parte reexamination, or in PTAB trial proceedings. A finding of
``fraud,'' ``inequitable conduct,'' or violation of duty of disclosure
through bad faith or intentional misconduct with respect to any claim
in an application or patent, renders all the claims thereof
unpatentable or invalid. MPEP Sec. 2016.
Patent examiners also have the ability to require submission of
information that may be reasonably necessary to properly examine or
treat a matter in a pending or abandoned application. 37 CFR
1.105(a)(1). The information that must be submitted to comply with a
requirement for information under 37 CFR 1.105 may not be material to
patentability in itself under 37 CFR 1.56, but it is necessary to
obtain a complete record from which a determination of patentability
may be made. MPEP Sec. 704.12(a). Therefore, when an examiner has a
reasonable
[[Page 45766]]
basis to conclude that an individual identified under 37 CFR 1.56(c) or
any assignee has information that would aid in the examination of the
application or treatment of some matter, the examiner may require
submission of information that is not necessarily material to
patentability. This requirement could include statements made or
information submitted to other Government agencies such as the FDA. For
example, when examining a claim directed to a process of manufacturing
a particular drug product that was effectively filed more than one year
after FDA approval of the drug product, an examiner may appropriately
require an applicant to submit to the USPTO information submitted to
the FDA (e.g., in a New Drug Application or Biologics License
Application) on how the drug product was manufactured.
IV. What Is the Duty of Reasonable Inquiry: ``The presentation to
the Office (whether by signing, filing, submitting, or later
advocating) of any paper by a party, whether a practitioner or non-
practitioner, constitutes a certification under Sec. 11.18(b).'' 37
CFR 1.4(d)(4)(i). Section 11.18(b) includes 11.18(b)(2), which calls
for a duty of reasonable inquiry to ensure that the paper is not being
presented for any improper purpose, the legal contentions are warranted
by law, the allegations and other factual contentions have evidentiary
support, and the denials of factual contentions are warranted on the
evidence.\1\
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\1\ ``To the best of the party's knowledge, information and
belief, formed after an inquiry reasonable under the circumstances,
(i) The paper is not being presented for any improper purpose, such
as to harass someone or to cause unnecessary delay or needless
increase in the cost of any proceeding before the Office; (ii) The
other legal contentions therein are warranted by existing law or by
a nonfrivolous argument for the extension, modification, or reversal
of existing law or the establishment of new law; (iii) The
allegations and other factual contentions have evidentiary support
or, if specifically so identified, are likely to have evidentiary
support after a reasonable opportunity for further investigation or
discovery; and (iv) The denials of factual contentions are warranted
on the evidence, or if specifically so identified, are reasonably
based on a lack of information or belief.'' 37 CFR 11.18(b)(2).
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Accordingly, each party presenting a paper to the USPTO, whether a
practitioner or non-practitioner, has a duty to perform an inquiry that
is reasonable under the circumstances. This reasonable inquiry may
comprise reviewing documents that are submitted to or received from
other Government agencies, including the FDA. If any reviewed document
is material to the patentability of a pending matter before the Office,
such as a patent application (including a reissue application), a
reexamination proceeding, or an issue pending before the PTAB, the
party has a duty to submit the information to the USPTO. 37 CFR 1.56,
1.555, 42.11(a); see 37 CFR 42.11(c), 11.18(b)(2). A duty of reasonable
inquiry may exist based on circumstances known to the party presenting
the paper to the USPTO. Failing to inquire when the circumstances
warrant it could result in sanctions or other action under 37 CFR
11.18(c), which may include: (1) striking the offending paper; (2)
referring a practitioner's conduct to the Director of Enrollment and
Discipline for appropriate action; (3) precluding a party or
practitioner from submitting a paper, or presenting or contesting an
issue; (4) affecting the weight given to the offending paper; or (5)
terminating the proceedings in the Office. See, e.g., In re Hao,
Proceeding No. D2021-14 (USPTO Apr. 27, 2022) (involving disciplinary
sanctions predicated on non-compliance with 37 CFR 11.18).
V. When the Duties of Disclosure and Reasonable Inquiry Arise in
Dealings With Other Government Agencies: Each individual with a duty to
disclose, or party with a duty of reasonable inquiry, should ensure
that the statements made to the USPTO and other Government agencies, or
any statements made on their behalf to other Government agencies
regarding the claimed subject matter, are consistent. See Belcher
Pharms., LLC v. Hospira, Inc., 11 F.4th 1345 (Fed. Cir. 2021)
(affirming a district court's determination of inequitable conduct
because the patent owner's Chief Science Officer failed to provide to
the USPTO submissions he made to the FDA about the prior art that were
inconsistent with positions taken before the USPTO during the
prosecution of a pending patent application). Furthermore, providing
material information to other Government agencies, including the FDA,
while simultaneously withholding the same information from the USPTO
undermines both the intent and spirit of the duty of disclosure and
violates those duties. For example, in Bruno Independent Living Aids,
Inc. v. Acorn Mobility Services, Ltd., 394 F.3d 1348, 1354 (Fed. Cir.
2005), the U.S. Court of Appeals for the Federal Circuit inferred
intent to deceive and found inequitable conduct occurred when an
official involved in both the FDA and the USPTO submissions chose to
disclose material prior art to the FDA but not to the USPTO.
Activities or documents associated with market testing, marketing,
or commercialization by the patent applicant can also be material to
patentability, and therefore, when material, should be disclosed to the
USPTO. See GS Cleantech Corp. v. Adkins Energy LLC, 951 F.3d 1310,
1330-1332 (Fed. Cir. 2020) (finding that a district court did not abuse
its discretion in reaching its inequitable conduct determination where
the district court concluded that the inventors and their lawyers made
a deliberate decision to withhold material information from the USPTO
regarding an offer for sale and reduction to practice of the claimed
invention that would have implicated an on-sale bar to the granting of
a patent; the lawyers filed with the USPTO a declaration containing a
false statement about the timing of an offer for sale despite having in
their possession materials that would call into question the veracity
of the statement; and the inventors and lawyers subsequently failed to
correct the false declaration). By following the guidance in this
notice, it is expected that patent applicants can obtain more reliable
patent protection and avoid the findings of inequitable conduct and
sanctions noted above.
Similarly, each individual with a duty to disclose, or party with a
duty of reasonable inquiry, should review documents it receives from
other Government agencies to determine whether the information should
be submitted to the USPTO. For example, when a company seeks FDA
approval to market a generic drug before the expiration of patents
related to the drug, the generic drug application (e.g., an Abbreviated
New Drug Application (ANDA)) must contain a ``paragraph IV
certification'' that the patents submitted to the FDA by the brand-name
drug's sponsor, listed in the FDA's Approved Drug Products with
Therapeutic Equivalence Evaluations (the Orange Book), and related to
the drug are invalid, are unenforceable, or will not be infringed by
the generic product. Except in limited circumstances, notice of a
paragraph IV certification must also be communicated to the owner of
the patent subject to the certification and to the New Drug Application
holder. Such a notice includes a detailed statement providing factual
and legal bases for the paragraph IV certification. 21 CFR
314.95(c)(7). Consequently, to assist USPTO staff in evaluating
patentability effectively and efficiently, the party receiving a
paragraph IV certification should review such documents to determine
whether they are material to the patentability of any pending matters
before the USPTO, such as pending patent applications, reexamination
proceedings, or issues in proceedings pending before the PTAB. If the
content
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of the detailed statement, or other information that is part of the
ANDA process, is deemed material to patentability in a pending USPTO
matter, then such information must be submitted to the USPTO during the
pendency of the matter, to meet the duties of candor and good faith and
disclosure under 37 CFR 1.56, 1.555, 42.11(a) or (c), or 11.18(b)(2).
Deliberate schemes or established practices to prevent 37 CFR
1.56(c) individuals from obtaining knowledge of material information is
not acting in accordance with candor and good faith under 37 CFR
1.56(a). For example, walling off the patent prosecution practitioners
from the attorneys seeking FDA approval, as a way to prevent material
information from being exchanged between the practitioners and
attorneys, is inappropriate. The U.S. Supreme Court has refused to
enforce patents where deliberate steps were taken to suppress material
information. See, e.g., Keystone Driller Co. v. Gen. Excavator Co., 290
U.S. 240 (1933) (patent owner's suit dismissed where the patent owner
paid a third party to keep a prior use secret); Precision Instruments
Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (1945) (suit dismissed
where patent owner actively suppressed evidence of perjury to the
USPTO).
Though the FDA compiles paragraph IV certifications and publishes a
list on its website, submitting this list to the USPTO does not satisfy
the duty of disclosure for any material information submitted with the
paragraph IV certification. These lists do not include patent numbers,
relevant claims, or an explanation of the basis for the certification.
Therefore, information and documents submitted with the paragraph IV
certification that are material to patentability or to issues in
proceedings pending before the USPTO, including the PTAB, must be
submitted directly to the USPTO and as described above, the examiner
may appropriately require submission of information concerning the
certifications in certain situations.
Katherine K. Vidal,
Under Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office.
[FR Doc. 2022-16299 Filed 7-28-22; 8:45 am]
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