[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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