Federal Register, Volume 89 Issue 77 (Friday, April 19, 2024)

[Federal Register Volume 89, Number 77 (Friday, April 19, 2024)]
[Proposed Rules]
[Pages 28693-28706]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-08362]

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DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Part 42

[Docket No. PTO-P-2023-0048]
RIN 0651-AD72

Patent Trial and Appeal Board Rules of Practice for Briefing
Discretionary Denial Issues, and Rules for 325(d) Considerations,
Instituting Parallel and Serial Petitions, and Termination Due to
Settlement Agreement

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: The United States Patent and Trademark Office (USPTO or
Office) proposes modifications to the rules of practice for inter
partes review (IPR) and post-grant review (PGR) proceedings before the
Patent Trial and Appeal Board (PTAB or Board) that the Director and, by
delegation, the PTAB will use

[[Page 28694]]

in exercising discretion to institute IPRs and PGRs. The Office
proposes these provisions in light of stakeholder feedback received in
response to an October 2020 Request for Comments (RFC) and an April
2023 Advance Notice of Proposed Rulemaking (ANPRM). The proposals
enhance and build on existing precedent and guidance regarding the
exercise of the Director's discretion pursuant to the America Invents
Act (AIA) to determine whether to institute an IPR or PGR proceeding
with regard to serial petitions, parallel petitions, and petitions
implicating the same or substantially the same art or arguments
previously presented to the Office. The proposed rules also provide a
separate briefing process for discretionary institution arguments and
align the procedures for termination of proceedings pre- and post-
institution.

DATES: Comments must be received by June 18, 2024 to ensure
consideration.

ADDRESSES: For reasons of Government efficiency, comments must be
submitted through the Federal eRulemaking Portal at https://www.regulations.gov. To submit comments via the portal, one should
enter docket number PTO-P-2023-0048 on the homepage and click
``search.'' The site will provide search results listing all documents
associated with this docket. Commenters can find a reference to this
notice and click on the ``Comment'' icon, complete the required fields,
and enter or attach their comments. Attachments to electronic comments
will be accepted in Adobe[supreg] portable document format (PDF) or
Microsoft Word[supreg] format. Because comments will be made available
for public inspection, information that the submitter does not desire
to make public, such as an address or phone number, should not be
included in the comments.
Visit the Federal eRulemaking Portal for additional instructions on
providing comments via the portal. If electronic submission of, or
access to, comments is not feasible due to a lack of access to a
computer and/or the internet, please contact the USPTO using the
contact information below for special instructions.

FOR FURTHER INFORMATION CONTACT: Michael P. Tierney, Vice Chief
Administrative Patent Judge; Amber L. Hagy, Lead Administrative Patent
Judge; or
Jamie T. Wisz, Lead Administrative Patent Judge, at 571-272-9797.

SUPPLEMENTARY INFORMATION:

Background

The USPTO is charged with promoting innovation through patent
protection. U.S. Const., art. I, section 8. The patent system is a
catalyst for jobs, economic prosperity, and world problem-solving. It
fosters innovation by encouraging the public disclosure of ideas and by
providing inventors time-limited exclusive rights to their patented
innovation, thereby incentivizing research and development and
investment in the same, as well as the investment necessary to bring
that research and development to market. The patent system works most
efficiently and effectively when the USPTO issues and maintains robust
and reliable patents upon which patent owners and the public can rely
to engage in technology transfer and licensing (including cross-
licensing), invest in innovations to bring them to market and
commercialize ideas, and/or to enforce patent rights.
Congress granted the Office ``significant power to revisit and
revise earlier patent grants'' as a mechanism to ``improve patent
quality and restore confidence in the presumption of validity that
comes with issued patents.'' Cuozzo Speed Techs., LLC v. Lee, 579 U.S.
261, 272 (2016) (quoting H.R. Rep. No. 112-98, pt. 1, at 45, 48).
Congress also sought to ensure that the proceedings provided ``a quick,
inexpensive, and reliable alternative to district court litigation to
resolve questions of patent validity.'' S. Rep. No. 110-259, at 20. At
the same time, Congress instructed that ``the changes made by [the AIA]
are not to be used as tools for harassment or a means to prevent market
entry through repeated litigation and administrative attacks on the
validity of a patent,'' as ``[d]oing so would frustrate the purpose of
the section as providing quick and cost-effective alternatives to
litigation.'' H.R. Rep. No. 112-98, at 48 (2011).
Under 35 U.S.C. 316(a) and 326(a), the Director shall prescribe
regulations for certain enumerated aspects of AIA proceedings and 35
U.S.C. 2(b)(2)(A) gives the Director authority to establish regulations
that ``shall govern the conduct of proceedings in the Office.'' The
proposed rules are in furtherance of this statutory authority.
The AIA gives the Director discretion to institute an IPR or PGR
proceeding that satisfies the relevant statutory institution standard.
Sections 314(a) and 324(a) of 35 U.S.C. provide the Director with
discretion to deny a petition, even when meritorious. See, e.g., 35
U.S.C. 314(a) (stating ``[t]he Director may not authorize an inter
partes review to be instituted unless . . .''); Cuozzo, 579 U.S. at 273
(``[T]he agency's decision to deny a petition is a matter committed to
the Patent Office's discretion.''). The Director's discretion to
institute an AIA trial is informed by 35 U.S.C. 316(b) and 326(b),
which require that ``the Director shall consider the effect of any such
regulation on the economy, the integrity of the patent system, the
efficient administration of the Office, and the ability of the Office
to timely complete proceedings instituted under'' 35 U.S.C. 316 and
326. In addition, 35 U.S.C. 325(d) provides that ``[i]n determining
whether to institute or order a proceeding . . . , the Director may
take into account whether, and reject the petition or request because,
the same or substantially the same prior art or arguments previously
were presented to the Office.''
The powers and discretion granted to the Director to determine
whether to institute an AIA proceeding have been delegated to the PTAB.
35 U.S.C. 6(a), 314, 324; 37 CFR 42.4(a). To promote the delegated
authority being exercised consistent with how the Director would
exercise their discretion and consistently across panels, and to
promote more transparency and consistency for those appearing before
the PTAB and the public, the Director and the PTAB have issued guidance
and precedential decisions. In particular, to take into account the 35
U.S.C. 316(b) and 326(b) considerations of the economy, the integrity
of the patent system, and the ability of the USPTO to provide timely
and cost-effective post-grant proceedings, as outlined in the AIA, this
guidance and precedential decisions have set forth factors to consider
when determining whether to institute an AIA review, including whether:
(1) more than one AIA petition challenging the same patent is filed by
the same petitioner at the same time as the first petition or up until
the filing of the preliminary response in the first filed proceeding
(``parallel petitions''); (2) additional AIA petitions are filed by the
same petitioner (or privy or real party in interest with a petitioner)
challenging overlapping claims of the same patent as the first petition
after the patent owner has filed a preliminary response to the first
petition (``serial'' or ``follow-on'' petitions); or (3) an AIA
petition relies on the same or substantially the same prior art or
arguments previously addressed by the USPTO in connection with the
challenged patent (implicating considerations under 35 U.S.C. 325(d)).
The changes under consideration would amend the rules of practice
for IPR and PGR proceedings to codify and

[[Page 28695]]

build on that guidance and those precedential decisions as well as
formalize PTAB's current practices, while creating more uniformity
across PTAB panels. In proposing these changes, the Director considered
``the effect of any such regulation on the economy, the integrity of
the patent system, the efficient administration of the Office, and the
ability of the Office to timely complete proceedings instituted under''
35 U.S.C. 316 and 326. The Director has also considered the comments
received from stakeholders, including those in response to the
``Request for Comments on Discretion To Institute Trials Before the
Patent Trial and Appeal Board'' (85 FR 66502 (Oct. 20, 2020)), and
received in response to the ANPRM titled ``Changes Under Consideration
to Discretionary Institution Practices, Petition Word-Count Limits, and
Settlement Practices for America Invents Act Trial Proceedings Before
the Patent Trial and Appeal Board'' (88 FR 24503 (Apr. 21, 2023)). In
light of the robust, extensive feedback from diverse stakeholders, and
the Board's experience in implementing the AIA for over a decade, the
Office proposes rule revisions intended to help ensure fairness,
transparency, and efficiency. This rulemaking is consistent with
comments received from stakeholders in response to the RFC and the
ANPRM, as well as those received in other contexts, expressing a
preference that key policy changes be made and formalized through
rulemaking.
The Office is now proposing rules addressing a subset of topics
from the ANPRM. The Office continues to consider issuing proposed
rules, with associated opportunities to comment, on other topics raised
in the ANPRM.
The Office proposes to incorporate into the rules the factors the
Board will consider in determining whether to institute an IPR or PGR
for parallel petitions and serial petitions as well as set forth the
framework the Board will use to conduct an analysis under 35 U.S.C.
325(d) when determining whether to institute an IPR or PGR. These
proposed changes enhance and build on existing precedent and guidance
regarding the exercise of the Director's discretion to determine
whether to institute an AIA proceeding.
Another proposed change would provide a procedure in which a patent
owner may, in a separate paper filed prior to a preliminary response,
request discretionary denial of institution, in which case each of the
parties will have the opportunity, in a separate responsive briefing,
to address relevant factors for discretionary denial. This separate
briefing avoids encroaching on the parties' word-count limits for
briefing on the merits.
An additional proposed change would amend the rules of practice for
the termination of proceedings in view of settlement to align the
requirements for terminating proceedings pre- and post-institution,
requiring that pre-institution settlement agreements be filed timely
with the Board to support termination of a proceeding pre-institution.
This proposed change would also align with the ``Executive Order on
Promoting Competition in the American Economy'' (E.O. 14036, 86 FR
36987 (July 9, 2021)) by facilitating a depository for all settlement
agreements in connection with contested cases, including AIA
proceedings, to assist the Federal Trade Commission (FTC) and the
Department of Justice (DOJ) in ensuring compliance with antitrust laws.

Development of the Changes Under Consideration

On September 16, 2011, the AIA was enacted into law (Pub. L. 112-
29, 125 Stat. 284 (2011)), and in 2012, the USPTO implemented rules to
govern Office practice for AIA proceedings, including IPRs, PGRs,
covered business method (CBM) patent reviews, and derivation
proceedings pursuant to 35 U.S.C. 135, 316, and 326 and AIA 18(d)(2).
See 37 CFR part 42; 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); Transitional Program for Covered Business Method
Patents--Definitions of Covered Business Method Patent and
Technological Invention, 77 FR 48734 (Aug. 14, 2012). Additionally, the
USPTO 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 Office
Patent Trial Practice Guide, 77 FR 48756 (Aug. 14, 2012). Since then,
the USPTO has designated numerous decisions in such proceedings as
precedential or informative, issued several Director memoranda
providing agency guidance on the PTAB's implementation of various
statutory provisions, and issued several updates to the ``Trial
Practice Guide.''

Prior Request for Comments Regarding Discretionary Institution

On October 20, 2020, the USPTO published an RFC to obtain feedback
from stakeholders on case-specific approaches by the PTAB for
exercising discretion on whether to institute an AIA proceeding and
whether the USPTO should promulgate rules based on these approaches.
See Request for Comments on Discretion To Institute Trials Before the
Patent Trial and Appeal Board, 85 FR 66502 (Oct. 20, 2020). The USPTO
received 822 comments from a wide range of stakeholders, including
individuals, associations, law firms, companies, and three United
States Senators. In January 2021, the USPTO published an executive
summary encapsulating stakeholder feedback received from the RFC.\1\
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\1\ USPTO, Executive Summary: Public Views on Discretionary
Institution of AIA Proceedings (Jan. 2021), available at https://www.uspto.gov/sites/default/files/documents/USPTOExecutiveSummaryofPublicViewsonDiscretionaryInstitutiononAIAProceedingsJanuary2021.pdf.
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Prior Advance Notice of Proposed Rulemaking

On April 20, 2023, as a follow-up to the RFC, the USPTO published
an ANPRM to obtain feedback from stakeholders on a range of concepts
relating to how the Director, and, by delegation, the PTAB, exercises
discretion to institute IPRs and PGRs under 35 U.S.C. 314(a), 324(a),
and 325(d). See Changes Under Consideration to Discretionary
Institution Practices, Petition Word-Count Limits, and Settlement
Practices for America Invents Act Trial Proceedings Before the Patent
Trial and Appeal Board, 88 FR 24503 (Apr. 20, 2023). In the ANPRM, the
USPTO also solicited comments regarding whether it should provide a
separate briefing process for discretionary institution arguments, and/
or clarify that parties that settle prior to institution must file
copies of any settlement agreements that exist with the PTAB.
Engagement on the ANPRM was extensive. During the two-month comment
period, which ended on June 20, 2023, diverse stakeholders submitted
over 14,500 comments, reflecting the nation's deep interest in shaping
the future of the patent system. The comments provided support for,
opposition to, and diverse recommendations on the concepts discussed.
The Office appreciates the thoughtful comments and has considered and
analyzed them thoroughly.

[[Page 28696]]

The vast majority of comments were from individuals, whose views
generally fell on the opposite ends of the spectrum--stating either
that AIA review is an important protection against unwarranted
litigation and unpatentable claims and the Office should have fewer
bases for discretionarily denying review of patents or that AIA review
is being misused, for example, to the detriment of small inventors.
The USPTO also received many comments from trade and legal
associations representing numerous members, many of which provided
detailed, point-by-point comments on each concept discussed in the
ANPRM. Individual companies also weighed in, from large, established
corporations to small startups. These comments also spanned the
spectrum, with some supporting or opposing all or most of the concepts
discussed.

Discussion of Proposed Changes

In this section, the Office describes the proposed changes to
specific sections in part 42 of Title 37 of the Code of Federal
Regulations. Each subsection describes a related group of regulatory
changes and discusses stakeholder comments relevant to the proposed
changes. The Office solicits additional comments on the specific
proposed changes.

Definitions: Section 42.2

Section 42.2: Adds definitions of ``serial petition'' and
``parallel petitions'' as follows:
A ``serial petition'' is a petition that (1) challenges overlapping
claims of the same patent that have already been challenged by the
petitioner, the petitioner's real party in interest, or a privy of the
petitioner; and (2) is filed after (a) the filing of a patent owner
preliminary response to the first petition; or (b) the expiration of
the period for filing such a response under Sec. 42.107(a)(2) or Sec.
42.207(a)(2), or as otherwise ordered, if no preliminary response to
the first petition is filed.
Discussion: Comments were mixed as to whether the definition of a
serial petition should apply to petitions filed by parties other than
the original petitioner, and what degree of relationship between the
parties is sufficient to bring a subsequent petition under the
definition of a serial petition. Some comments expressed uncertainty as
to the definition of ``significant relationship'' as set forth in Valve
Corp. v. Electronic Scripting Products, Inc., IPR2019-00062, Paper 11
(PTAB Apr. 2, 2019), and asked for clarity as to the degree of
relationship that would be considered sufficient. The Office has
determined that applying the real party in interest and privity
concepts in exercising discretion in the serial petition context
carries out Congress's desire that the Director balance concerns about
harassment in exercising discretion. Further, adopting the established
common-law concepts of real party in interest and privity (see Taylor
v. Sturgell, 553 U.S. 880 (2008)) provides a body of case law from
which the PTAB and the public can draw when assessing whether the
relationship between the parties is sufficiently significant to warrant
discretionary denial. The Office notes that though Valve used the term
``significant relationship'' to examine the relationship between the
petitioners, the analysis was consistent with privity concepts.
``Parallel petitions'' are two or more petitions that (1) challenge
the same patent and (2) are filed by the same petitioner on or before:
(a) the filing of a patent owner preliminary response to any of the
petitions, or (b) the due date set forth in Sec. 42.107(a)(2) or Sec.
42.207(a)(2) for filing a patent owner preliminary response to the
first petition (if no patent owner preliminary response to the
petitions is filed).
Discussion: In response to the ANPRM, some commenters expressed
concern that the definition of parallel petitions in the ANPRM was
overly restrictive, as the definition focused on petitions challenging
the same ``patent'' as opposed to petitions challenging overlapping
``claims'' of the patent. The Office is moving forward with the ``same
patent'' definition as opposed to the ``overlapping claims'' definition
at this time to provide a mechanism for the Board to review filing
behaviors to assess whether there are any abuses or misuses of the
post-grant procedures, including ones that may place unwarranted and
unnecessary burdens on the patent owner (e.g., filing, without
explanation, multiple petitions challenging a single patent where each
petition challenges a single claim of the patent). That said, even if
two petitions are considered parallel under this definition, if the
petitions challenge different claims given a large claim set or
different art relevant to the different claim sets, the Board may still
exercise its discretion to institute both petitions under proposed
Sec. Sec. 42.108(d) and 42.208(e).
Some commenters requested more clarity regarding the difference in
timing between petitions the Office deems to be filed in parallel and
those it deems to be filed serially. To provide better clarity on this
issue, the Office proposes to define a parallel petition in the rule as
one filed during the time period for filing a patent owner preliminary
response in the first proceeding. This timing reflects current
practice, as noted in the Board's 2019 Consolidated Trial Practice
Guide.

Briefing on Motions for Discretionary Denial: Sections 42.24, 42.107,
42.207, 42.108(c)(1), 42.208(c)(1)

Section 42.24: Provides page limits for briefing on requests for
discretionary denial (which are provided for in Sec. Sec. 42.107 and
42.207, and which further provide that a patent owner may file the
request for discretionary denial without Board authorization under 37
CFR 42.20(b)). A patent owner request for discretionary denial is
limited to 10 pages, a petitioner opposition is also limited to 10
pages, and a patent owner sur-reply is limited to 5 pages.
Sections 42.107 and 42.207: Amend the rules on preliminary
responses to provide that the patent owner preliminary response shall
not address discretionary denial unless authorized by the Board, and
further provide that a patent owner may raise and address discretionary
denial issues in a separate request for discretionary denial of the
petition, which would be limited to addressing any applicable
discretionary institution issues and factors. Issues and factors
applicable to requests for discretionary institution include those
provided for in proposed Sec. Sec. 42.108 and 42.208, except
Sec. Sec. 42.108(d) and 42.208(e) governing parallel petitions, as
well as any issue that the patent owner believes warrants discretionary
denial of the petition in view of the Office's rules, precedents, or
guidance. The proposed amendment also provides the following due dates:
(1) a request for discretionary denial must be filed no later than two
months after the date of a notice indicating that the petition to
institute an IPR has been granted a filing date; (2) the opposition to
the request must be filed no later than one month after the filing of
the request for discretionary denial; and (3) a reply in support of the
request must be filed no later than two weeks after the filing of the
opposition. The proposed amendment also provides that the Board may sua
sponte raise discretionary denial, in which case the Board will provide
the parties with the opportunity for briefing on the relevant factors
set forth in this section. However, nothing in the rules prevents the
Board, when the circumstances warrant, from exercising discretion and
authorizing the patent owner to include discretionary denial issues in
the patent owner preliminary response. Further, to the extent the
merits are relevant to

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discretionary denial, the parties may direct the Board's attention to
the petition and patent owner preliminary response for discussion of
the merits as contained in those documents.
Sections 42.108(c)(1) and 42.208(c)(1): Provide that the Board's
decision on institution will take into account a patent owner's request
for discretionary denial when such a request is filed, including any
opposition and reply.
Discussion: The Office has found the practice of allowing parties
to file separate papers ranking their petitions in the order in which
petitioner desires the Board to consider the merits is helpful in
evaluating parallel petitions while preserving the parties' word count
to focus on the merits of the challenge. The Office solicited feedback
in the ANRPM on a similar procedure to allow parties to address
discretionary denial in separate briefing. In response, most commenters
favored separate briefing to discuss discretionary denial issues,
noting that it would free up space in the petitions and patent owner
responses to address the merits and allow more fulsome discussion of
discretionary denial issues. That response is consistent with the
responses the USPTO received from the RFC.
In response to the ANPRM, some commenters expressed concern that
allowing separate briefing on discretionary denial would only favor
petitioners because it would give a petitioner an automatic right to
respond to a patent owner preliminary response. The proposed rules
address these concerns by limiting the petitioner's opposition to the
patent owner's request for discretionary denial to the issues raised in
that request, and then allowing a patent owner the opportunity to file
a reply brief limited to responding to the petitioner's opposition.
The USPTO also recognizes that there may be instances in which it
is appropriate for the Office to address discretionary denial even if
the patent owner does not file a request. The Office is further
proposing amendments to Sec. Sec. 42.107 and 42.207 to provide that
the Board may raise discretionary denial sua sponte, in which case the
Board will provide the parties with the opportunity for briefing.

Termination and Settlement Agreements: 37 CFR 42.72 and 42.74

Section 42.72: Revises the provisions for termination of a
proceeding in view of settlement, clarifying that the Board may
terminate a proceeding on its own initiative before or after
institution. Provides that the parties may jointly move for termination
of a proceeding, before or after institution.
Section 42.74: Provides that a joint motion for termination of a
proceeding, filed before or after institution, must be accompanied by
any written settlement agreement.
Discussion: Since FY2020, the settlement rate for AIA proceedings
has been approximately 30% per year, with pre-institution being over
50% of the settlements each year. See https://www.uspto.gov/sites/default/files/documents/ptab_aia_fy2023__roundup.pdf. For consistency
and predictability, the USPTO is proposing changes to the rules to
ensure that pre-institution settlement agreements are filed with the
Office, similar to post-institution settlement agreements. Although 35
U.S.C. 135(e), 317(b), and 327(b) require filing of settlement
agreements made in connection with, or in contemplation of, the
termination of an AIA proceeding that has been instituted, by their own
terms these statutory provisions do not expressly govern AIA pre-
institution settlement. 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, 48625 (Aug. 14, 2012) (final rule)
(stating that ``35 U.S.C. 135(e) and 317, as amended, and 35 U.S.C. 327
will govern settlement of Board trial proceedings but do not expressly
govern pre-institution settlement''). Pursuant to the Board's authority
to establish procedural rules for post-grant proceedings, 35 U.S.C.
316(a)(4) and 326(a)(4), we propose to extend the same practice
required by statute to encompass current practice and require filing of
pre-institution settlement agreements.
This proposed rule aligns with the policy set forth in Executive
Order 14036, which encourages government agencies to cooperate on
policing unfair, anticompetitive practices. In addition, having a
depository for all settlement agreements in connection with contested
cases, including AIA proceedings, in the USPTO would assist the FTC and
the DOJ in determining whether antitrust laws have been violated.
Since the inception of AIA proceedings, the Board has been
generally uniform in requiring the filing of a settlement agreement
prior to terminating an AIA proceeding based on a joint motion by the
parties, pre- or post-institution. Nevertheless, some petitioners have
filed motions to dismiss or withdraw the petition before institution,
arguing that they should not be required to file a copy of the parties'
settlement agreements, and panels in some of those cases have granted
the motions and terminated the proceedings without requiring the
parties to file their settlement agreements. See, e.g., Samsung Elecs.
Co. v. Telefonaktiebolaget LM Ericsson, IPR2021-00446, Paper 7 (PTAB
Aug. 3, 2021) (Order--Dismissal Prior to Institution of Trial) (over
the dissent of one Administrative Patent Judge (APJ), granting the
petitioner's motion to dismiss the petition and terminating the
proceeding without requiring the parties to file their settlement
agreements); Huawei Techs. Co. v. Verizon Patent & Licensing Inc.,
IPR2021-00616, Paper 9 and IPR2021-00617, Paper 9 (PTAB Sept. 9, 2021)
(Order--Dismissal Prior to Institution of Trial) (same dispute among a
panel of APJs); AEP Generation Res. Inc. v. Midwest Energy Emissions
Corp., IPR2020-01294, Paper 11 (PTAB Dec. 14, 2020).
Stakeholder comments in response to the ANPRM were divided on
whether the filing of pre-institution settlement agreements should be
required to terminate a proceeding pre-institution. A number of
comments supported the filing of pre-institution settlement agreements
to provide greater transparency and to curb the potential for abusive
filings. The Office agrees. The proposed changes provide consistency
and predictability by making clear that pre-institution settlement
agreements must be filed with the Office. This approach provides the
USPTO a greater ability to monitor and curb potential abusive filings
and, consistent with Executive Order 14036, allows the USPTO to
cooperate with other government agencies to police unfair,
anticompetitive practices.
A few ANPRM comments opposed the proposed requirement to file pre-
institution settlement agreements, taking the position that the statute
only requires the filing of agreements post-institution. Some believed
that parties should have the option to voluntarily file pre-institution
settlement agreements. A few comments expressed concern that the Office
lacks authority to require the filing of settlement agreements to
terminate a proceeding before institution. As noted above, the statute
requires the filing of settlement agreements made in connection with,
or in contemplation of, the termination of a proceeding that has been
instituted, and is silent on AIA pre-institution settlement. The
proposed rule is promulgated within the Director's authority to
prescribe regulations establishing and governing an IPR under the AIA
provisions. See 35 U.S.C. 316(a)(4).
Further, as discussed above, the Board has been generally uniform
in requiring

[[Page 28698]]

the filing of a settlement agreement prior to terminating an AIA
proceeding both pre- and post-institution, pursuant to 37 CFR 42.74(b).
The proposed rule ensures greater predictability and consistency.
Some ANPRM comments expressed concern that requiring the filing of
settlement agreements would discourage or complicate pre-institution
settlement negotiations. As noted above, the proposed rule is
consistent with the prior general uniform practice of the Board of
requiring the filing of settlement agreements if parties would like
termination based on settlement prior to a decision on institution. Any
concerns regarding possible disclosure to nonparties of settlement
terms from such filings have not been borne out in practice, given the
availability of filing such documents with the designation ``Board and
Parties Only.''

Factors for Discretionary Denial: 37 CFR 42.108 and 42.208

Sections 42.108 and 42.208: Revise the rules for institution of
IPRs to include factors to be addressed in consideration of
discretionary denial on the basis of parallel petitions (Sec. Sec.
42.108(d), 42.208(e)) and serial petitions (Sec. Sec. 42.108(e),
42.208(f)), and in accordance with 35 U.S.C. 325(d) (Sec. Sec.
42.108(f), 42.208(g)).
Sections 42.108(c)(1) and 42.208(c)(1) provide that the factors set
forth for discretionary denial shall not be construed to limit the
Board's discretion to deny institution or dismiss a proceeding as a
sanction or in response to evidence of improper conduct or
gamesmanship.
Sections 42.108(c)(2) and 42.208(c)(2) provide that, in reaching a
decision on institution of a petition accompanied by a timely motion
for joinder to a petition that was instituted, the Board will not
consider arguments against initiating that petition on the basis of
discretionary considerations under Sec. Sec. 42.108(d) and 42.208(e)
(parallel petitions) or Sec. Sec. 42.108(f) and 42.208(g) (petitions
implicating 35 U.S.C. 325(d)) where those considerations were available
in the already-instituted petition. However, the Board may deny motions
for joinder and the later-filed petition where a patent owner
successfully identifies other bases for discretionary denial.
Sections 42.108(d) and 42.208(e) provide that the Board will not
institute parallel petitions absent a threshold showing of good cause
as to why more than one petition is necessary. The petitioner must
provide information relevant to a good cause determination either in
the petition or a separate filing, and the patent owner may respond in
a separate filing. Various factors relevant to the good cause
determination may be considered by the Board, including: (1) a
petitioner's ranking of their parallel petitions in the order in which
petitioner wishes the Board to consider the merits, (2) an explanation
of the differences between parallel petitions, (3) the number of claims
challenged by the petitioner and asserted by the patent owner, (4)
whether the parties dispute the priority date of the challenged patent,
(5) whether there are alternative claim constructions requiring
different prior art, (6) whether the petitioner lacked information at
the time of filing the petition; and (7) the complexity of the
technology in the case, as well as any other information believed to be
pertinent to the good cause determination.
Sections 42.108(e) and 42.208(f) provide that the Board may deny
institution of any serial petition when it challenges claims of the
same patent that overlap with claims challenged in a previously filed
petition for IPR, PGR, or CBM patent review. The Board will consider
various factors in determining whether to deny institution of a serial
petition, including: (1) whether, at the time of filing of the first
petition, the petitioner knew of the prior art asserted in the second
petition or should have known of it; (2) whether, at the time of filing
of the second petition, the petitioner had already received the patent
owner preliminary response to the first petition or had received the
Board's institution decision for the earlier petition; (3) the length
of time that elapsed between the time the petitioner learned of the
prior art asserted in the second petition and the filing of the second
petition; and (4) whether the petitioner provided an adequate
explanation for the time elapsed between the filings of multiple
petitions directed to the same claims of the same patent. (As discussed
below, these are factors (2) through (5) from the 2017 General Plastic
precedential decision. Factor (1) from General Plastic is incorporated
into the proposed rule's definition of a ``serial petition,'' and
factors (6) and (7) are not included in the proposed rule.)
Sections 42.108(f) and 42.208(g) provide that the Board may deny a
petition for IPR under 35 U.S.C. 325(d) if the same or substantially
the same prior art or arguments previously presented were meaningfully
addressed by the Office with respect to the challenged patent or a
related patent or application, unless the petitioner establishes
material error in the Office's previous evaluation. The rule provides
an opportunity for a patent owner to file a request for discretionary
denial under 35 U.S.C. 325(d), for the petitioner to file an
opposition, and for the patent owner to file a reply. The Board may
deny the petition if section 325(d) is sufficiently implicated such
that instituting on all grounds of unpatentability would not promote
the efficient administration of the Office or support the integrity of
the patent system.
Discussion
Statutory Authority
Some comments assert generally that discretionary denials frustrate
Congress's intent by depriving parties of the ability to seek AIA
review. Some comments express the view that the Director does not have
the authority to preclude serial or parallel petitions.
Congress specifically granted the Director of the USPTO the
authority to institute a review. 35 U.S.C. 314 and 324. The AIA statute
does not require the Director to institute a review in any case, and
gives the Director discretion not to institute even where the statutory
requirements for institution are met. The Director's discretion is
informed by 35 U.S.C. 316 and 326, which require that ``the Director
shall consider the effect of any such regulation on the economy, the
integrity of the patent system, the efficient administration of the
Office, and the ability of the Office to timely complete proceedings
instituted under this chapter.'' 35 U.S.C. 316 and 326. Congress also
empowered the Director to prescribe regulations related to the
implementation of the AIA. See 35 U.S.C. 316(a) and 326(a) (stating
that the Director shall prescribe regulations for certain enumerated
aspects of AIA proceedings). Under 35 U.S.C. 2(b)(2)(A), the Director
may establish regulations that ``shall govern the conduct of
proceedings in the Office.'' The language and intent of the above
statutes therefore support evaluating whether parallel or serial
petitions advance the mission and vision of the Office to promote
innovation or the intent behind the AIA to provide a less-expensive
alternative to district court litigation when exercising the Director's
discretion to institute. 35 U.S.C. 316(b) and 326(b). Also, under 35
U.S.C. 325(d), ``the Director may take into account whether, and reject
the petition or request because, the same or substantially the same
prior art or arguments previously were presented to the Office.''

[[Page 28699]]

Parallel Petitions
Comments pertaining to parallel petitions challenging the same
patent, as defined in Sec. 42.2, were mixed.
Many comments supported denying parallel petitions absent a showing
of good cause. Some comments that supported the concept of requiring a
showing of good cause for filing parallel petitions asserted that this
practice is in line with the congressional intent to allow
discretionary denials based on the volume of AIA petitions. In line
with these comments, the proposed rule implements the current practice
of requiring that petitioners demonstrate why parallel petitions should
be allowed to proceed. This framework supports the Office's goal of
reducing duplicative challenges to a patent and balances the interests
of parties by preventing undue harassment of patent owners through the
filing of multiple challenges to a patent, while allowing petitioners
reasonable opportunities to seek review.
Many comments asserted that denials of meritorious challenges are
an unnecessary restraint on review. Yet, some comments urged that the
restrictions on parallel petitions do not go far enough. Some urged
greater restrictions on parallel petitions, asserting that most, if not
all, parallel petitions should be denied to prevent companies from
harassing patent owners. The proposed rule strikes a balance between
denying all parallel petitions and instituting all parallel petitions
that meet the statutory threshold for institution in 35 U.S.C. 314(a)
and 35 U.S.C. 324(a) by requiring a showing by the petitioner of good
cause as to why more than one petition is necessary.
Some comments asserted that there are no justifications for
limiting multiple petitions because there is little, if any, evidence
of petitioners abusing the system by filing multiple petitions. A USPTO
study of parallel petitions found that from fiscal year 2015 through
fiscal year 2018, parallel petitions represented roughly 15-18% of all
challenges. https://www.uspto.gov/sites/default/files/documents/executive_summary_ptab_multiple_petitions_study_fy2021-2022_update.pdf.
In fiscal year 2019, parallel petitions represented roughly 20% of all
challenges, but then in fiscal years 2020 through 2022, the percent of
challenges involving parallel petitions steadily dropped, down to
roughly 7% in fiscal year 2022 (the final year of the study). See id.
The decrease in the number of parallel petition filings was influenced
by USPTO guidance (see Consolidated Trial Practice Guide (2019)), which
the USPTO is now codifying and clarifying through the rulemaking
process.
Serial Petitions
Comments on proposed discretionary denials of serial petitions, as
defined in Sec. 42.2, were sharply divided, with most comments
favoring either fewer or greater restrictions.
Some comments supported the adoption of the General Plastic factors
as a compromise between denying all serial petitions and instituting
all serial petitions that meet the statutory threshold for institution
in 35 U.S.C. 314(a) and 35 U.S.C. 324(a). In General Plastic Co. v.
Canon Kabushiki Kaisha, IPR2016-01357, 2017 WL 3917706, at *7 (PTAB
Sept. 6, 2017) (precedential), the PTAB referred to the AIA's goals
``to improve patent quality and make the patent system more efficient
by the use of post-grant review procedures'' but also ``recognize[d]
the potential for abuse of the review process by repeated attacks on
patents.'' 2017 WL 3917706, at *7 (citing H.R. Rep. No. 112-98, part 1,
at 48 (2011)). To aid the Board's assessment of ``the potential impacts
on both the efficiency of the inter partes review process and the
fundamental fairness of the process for all parties,'' General Plastic
identified a number of non-exclusive factors that the Board will
consider in exercising discretion in instituting an IPR, especially as
to ``follow-on'' petitions challenging a patent that was challenged
previously in an IPR, PGR, or CBM proceeding. Id. at *8. The General
Plastic non-exclusive factors include: (1) whether the same petitioner
previously filed a petition directed to the same claims of the same
patent; (2) whether, at the time of the filing of the first petition,
the petitioner knew of the prior art asserted in the second petition or
should have known of it; (3) whether, at the time of the filing of the
second petition, the petitioner had already received a patent owner
preliminary response (if filed) to the first petition or received the
Board's decision on whether to institute review in the first petition;
(4) the length of time that elapsed between the time the petitioner
learned of the prior art asserted in the second petition and the filing
of the second petition; and (5) whether the petitioner provided an
adequate explanation for the time elapsed between the filings of
multiple petitions directed to the same claims of the same patent. Id.
at *7. Additional factors include: (6) the finite resources of the
Board, and (7) the requirement to issue a final determination not later
than one year after the date on which the Director notices institution
of review. Id.
The proposed serial petition definition and rules generally adopt
the General Plastic factors approach, striking a balance between
denying all serial petitions versus removing all restrictions on serial
petitions. Specifically, General Plastic factor (1) is included in the
definition of ``serial petition'' in Sec. 42.2, and factors (2)
through (5) are included in the proposed rules at Sec. 42.108(e) and
Sec. 42.208(f). The other two General Plastic factors--(6) and (7)--
are not proposed for regulatory adoption in light of stakeholder
feedback that parties lack sufficient information to opine on the
finite resources of the Board and the Board's ability to issue a final
determination within one year. While the parties need not address
existing factors (6) and (7), the Board may still weigh the
considerations reflected by those factors in rendering its decision on
serial petition issues.
Comments that urged greater restrictions on serial petitions
asserted that most, if not all, serial petitions should be
presumptively denied to prevent companies from harassing patent owners
or contesting the same patent repeatedly. Some of these comments
offered limited exceptions to presumptive denials, including requiring
the petitioner to demonstrate it could not reasonably have discovered
earlier the prior art presented in the subsequent petition and
requiring a heightened burden for subsequent petitions of demonstrating
unpatentability by clear and convincing evidence.
As discussed, the proposed rule implements the current practice of
applying substantially the same factors as those stated in General
Plastic. This framework supports the Office's goal of reducing
duplicative challenges to a patent and balances the interests of
parties by preventing undue harassment of patent owners through serial
challenges while allowing petitioners reasonable opportunities to seek
review.
A USPTO study of serial petitions filed by the same petitioner
found a notable decrease in the filing of serial petitions, as well as
institution of AIA trials based on serial petitions, after the Office
issued General Plastic in late 2017. See https://www.uspto.gov/sites/default/files/documents/executive_summary_ptab_multiple_petitions_study_fy2021-2022_update.pdf.
This data showed that in fiscal year 2015, serial petitions represented
roughly 9.0% of all challenges, and in fiscal years 2016 and 2017
serial petitions represented roughly 8% of all

[[Page 28700]]

challenges. After the issuance of General Plastic in late 2017, serial
petition filings began immediately dropping, representing 5.6% of
filings in fiscal year 2018, approximately 2% of filings fiscal years
2019 and 2020, 1.4% of filings in fiscal year 2021, and 1.7% of filings
in fiscal year 2022. Additionally, of the 17 petitions involving a
serial petition attempt by the same petitioner in fiscal year 2022,
only 3 petitions resulted in institution (roughly 18%), as compared to
42 out of 99 serial petition filings that resulted in institution
(roughly 42%) in fiscal year 2015. Although the data suggests that only
small number of serial petition challenges continue to occur each year,
in the wake of General Plastic, the USPTO believes that there is a
public benefit to codifying and clarifying the existing practice
related to serial petition challenges through the rulemaking process.
Some stakeholders commented that multiple filings are often the
result of a patent owner's litigation tactics. The Office believes the
articulated factors provide adequate means to strike the appropriate
balance between denying and allowing all serial petitions because they
allow the Board to weigh relevant and appropriate evidence and, for
example, to identify instances of improper roadmapping, in which a
petitioner engages in a litigation tactic to gain an advantage by
tailoring a ``follow on'' petition based on information gleaned from a
patent owner's preliminary response to an earlier petition. As the
Board noted in General Plastic: ``Multiple, staggered petitions
challenging the same patent and same claims raise the potential for
abuse. The absence of any restrictions on follow-on petitions would
allow petitioners the opportunity to strategically stage their prior
art and arguments in multiple petitions, using our decisions as a
roadmap, until a ground is found that results in the grant of review.''
2017 WL 3917706, at *7.
Previously Presented Art or Arguments
On March 24, 2020, the Office designated as precedential Advanced
Bionics, LLC v. Med-El Elektromedizinische Ger[auml]te GmbH, IPR2019-
01469, Paper 6 (PTAB Feb. 13, 2020). This precedent lays out a two-part
framework for evaluating whether to exercise discretion under 325(d).
The first part of the test relates to whether the same or substantially
the same art or arguments were previously presented to the Office. The
second part of the test looks to whether the petitioner has
demonstrated that the Office erred in a manner material to the
patentability of the challenged claims.
The Office does not have any studies evaluating the impact of the
Advanced Bionics precedent on the application of 325(d). Comments
received in response to the ANPRM, however, generally expressed the
view that Advanced Bionics provides the public with a simplified
framework for evaluating 325(d) issues, even if application of the
Advanced Bionics framework would not alter the outcome of the majority
of cases where 325(d) issues arose.
Specific comments on the application of 35 U.S.C. 325(d) to deny
petitions on the basis of previously presented prior art or arguments
were split, primarily on the question of whether the Office should
consider prior art that was made of record, but not applied or
substantively discussed by the examiner, as having been ``previously
presented.''
Some comments supported a proposed rule that would limit the
application of discretionary denial under section 325(d) to situations
in which the prior art was previously applied or substantively
discussed during examination. One comment stated that applying
discretionary denial in situations in which prior art was listed on an
Information Disclosure Statement (IDS), without more involvement in
examination, would encourage ``dumping'' of references on the Office
during prosecution. Another comment agreed that a requirement that a
prior art reference be previously addressed would increase efficiency
by providing a clear test that reduces unnecessary briefing.
Section 325(d) provides discretion for the Director, when
determining whether to institute a proceeding, to take into account
whether the same (or substantially the same) art or arguments were
previously presented to the Office. The USPTO agrees that the
application of section 325(d) should be limited to situations in which
the prior art or arguments were meaningfully addressed by the Office.
The proposed rule provides that art or arguments are deemed to have
been meaningfully addressed where the Office has evaluated the art or
arguments and articulated its consideration of the art or arguments in
the record of the application from which the patent issued or the
record of a related application or patent with claims that are
substantially the same. For purposes of this section, an application or
patent is ``related'' to the challenged patent if it claims priority to
a common application or is a parent application or parent patent of the
challenged patent. This definition of ``related application or patent''
only applies to part 42 and does not apply to other sections that
discuss the term (e.g., 37 CFR 1.77(b)(2), 1.78(d)(5)).
Some comments favored the broader application of discretionary
denial in circumstances in which prior art references were made of
record during prosecution (such as on an IDS) but not applied or
substantively discussed by the examiner. Comments expressed concern
that requiring a patent owner to identify prior art or arguments that
were meaningfully addressed by the Office is inconsistent with the text
of 325(d). One comment noted patent applicants do not have control over
what references an examiner chooses to cite in the record and believed
that excluding art that was merely cited on an IDS may deter compliance
with the duty of disclosure. Another comment expressed concern with a
blanket rule that section 325(d) only applies to art and arguments
previously evaluated by the Office. One comment suggested that if prior
art and arguments are limited to art and arguments addressed by the
Office, petitioners should face a higher ``material error'' burden. In
response to the concern that patent applicants do not have control over
what references an examiner chooses to address, the rule does not
prevent patent applicants from drawing attention to specific
references.
As noted above, 35 U.S.C. 325(d) gives the Director the authority
to take into account whether the same or substantially the same prior
art was previously presented to the Office, but does not require the
Director to do so. After careful consideration of the comments, and to
best support the integrity of the patent system, the USPTO proposes to
limit the application of 325(d) to circumstances in which the same or
substantially the same prior art or arguments previously presented to
the Office were meaningfully addressed by the Office. Under these
circumstances, the proposed rule installs the current Board practice of
requiring petitioners to establish a ``material error'' by the Office.
Advanced Bionics, LLC v. Med-El Elektromedizinische Ger[auml]te GmbH,
IPR2019-01469, Paper 6 (PTAB Feb. 13, 2020) (precedential). A material
error may include misapprehending or overlooking clear, specific
evidence in the prior record, including teachings of the relevant prior
art that impact the patentability of the challenged claims; evidence
demonstrating an inherent feature of the prior art; or evidence
rebutting a showing of unexpected results. A material error may also
include a legal error, including an

[[Page 28701]]

erroneous claim construction that impacts the patentability of the
challenged claims.
The proposed rule also seeks to carry out the purpose of 325(d),
and give appropriate deference to prior findings made by the Office
when meaningfully addressing prior art references, by focusing on
instances in which a petitioner seeks to apply a reference in a manner
that is directly contrary to prior Office findings. The proposed rule
thus defines ``the same prior art'' as a reference that forms the basis
of a challenge in a petition, where that reference was previously
meaningfully addressed by the Office and the petition relies on the
reference for a factual proposition that directly contradicts a finding
made by the Office when the reference was previously meaningfully
addressed. Therefore, if the ``same prior art'' was meaningfully
addressed, the petition may be denied under 35 U.S.C. 325(d) unless the
petitioner establishes material error by the Office.
The proposed rule ensures greater predictability and consistency in
the application of 325(d) and focuses the application of 325(d) on
circumstances in which the prior record is clear. The proposed rule
further supports the Office's goal of reducing duplicative challenges
to a patent by considering whether the same or substantially the same
challenge was meaningfully addressed by the Office previously. The
proposed rule does not reduce or eliminate a patent applicant's duty of
disclosure under 37 CFR 1.56.
One comment suggested that where a patent owner asserts that the
same or substantially the same prior art was previously presented in a
related application, the requirement for the patent owner to identify
how the claims are substantially the same as those in the challenged
patent should only apply to related applications that are not direct
ancestors.
Under the proposed rule, a patent owner must identify, in a request
for discretionary denial under 35 U.S.C. 325(d), where the same or
substantially the same prior art or arguments were meaningfully
addressed by the Office. If the art or arguments were previously
evaluated by the Office in the record of a related application, the
patent owner must establish that the art or arguments were previously
evaluated with respect to claims that are substantially the same as the
claims in the challenged patent. Claims in a direct ancestor patent may
not be substantially the same as those in the challenged patent, and
therefore the requirement of establishing that the claims are
substantially the same as those in the challenged patent to related
applications that are not direct ancestors is still necessary.
Additionally, where the claims are substantially the same as those in a
related application, a petitioner could identify inconsistent positions
taken by an examiner in the related application as part of its burden
of establishing material error.
Discretionary Denial Considerations for Joinder Petitions
Proposed rule Sec. 42.208(c)(2) installs current Board practice
regarding the analysis of 35 U.S.C. 325(d) and parallel petition issues
in the joinder context. Joinder petitions may present the same
discretionary denial considerations as the petition upon which the IPR
sought to be joined was instituted. See Facebook, Inc. v. Windy City
Innovations, LLC, 973 F.3d 1321, 1335-38 (Fed. Cir. 2020) (holding that
35 U.S.C. 315(c) prohibits a joined party from bringing new issues
through its petition into the proceeding being joined). Additionally,
section 325(d) or parallel petition issues implicated by the joinder
petition were already implicated by the previously instituted petition.
Issues raised by discretionary considerations under 35 U.S.C. 325(d)
are directed to the prosecution history of the challenged patent and to
whether the same or substantially the same prior art or arguments were
previously presented to the Office. Arguments under section 325(d) were
available to the patent owner in the context of the already instituted
petition. Similarly, parallel petition issues require the showing of
good cause for multiple petitions filed by the same petitioner based on
particular considerations (e.g., the number of claims the petitioner is
challenging, whether there is a priority date dispute, whether there
are alternative claim constructions, the number of claims the patent
owner is asserting in litigation, etc.). In the scenario in which a
joinder petitioner seeks to join multiple instituted IPRs, the need to
justify multiple IPR trials is implicated by the already instituted
petitions.
Accordingly, under current practice, Board panels presented with 35
U.S.C. 325(d) or parallel petition issues for joinder petitions have
declined to consider those issues in light of the decision to institute
the previously instituted petition(s) to be joined. In order to
maintain consistency with current practice, in reaching a decision on
institution of a petition accompanied by a timely motion for joinder,
Board panels will not consider arguments on discretionary
considerations under Sec. 42.108(d) (parallel petitions) or Sec.
42.108(f) (35 U.S.C. 325(d)) where the petition(s) sought to be joined
was instituted and those discretionary considerations were available in
the already instituted petition. The Board may, however, deny motions
for joinder where the later-filed petition implicates other bases for
discretionary denial.

Rulemaking Considerations

A. Administrative Procedure Act: The changes proposed by this
rulemaking involve rules of agency practice and procedure, and/or
interpretive rules, and do not require notice-and-comment rulemaking.
See Perez v. Mortg. Bankers Ass'n, 575 U.S. 92, 97, 101 (2015)
(explaining that interpretive rules ``advise the public of the agency's
construction of the statutes and rules which it administers'' and do
not require notice and comment when issued or amended); 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''); and
JEM Broadcasting Co. v. F.C.C., 22 F.3d 320, 328 (D.C. Cir. 1994)
(explaining that rules are not legislative because they do not
``foreclose effective opportunity to make one's case on the merits'').
Nevertheless, the USPTO is publishing this proposed rule for
comment to seek the benefit of the public's views on the Office's
proposed regulatory changes.
B. Regulatory Flexibility Act: For the reasons set forth in this
notice, the Senior Counsel for Regulatory and Legislative Affairs,
Office of General Law, USPTO, has certified to the Chief Counsel for
Advocacy of the Small Business Administration that changes set forth in
this notice of proposed rulemaking (NPRM) would not have a significant
economic impact on a substantial number of small entities. See 5 U.S.C.
605(b).
The changes in this NPRM set forth express modifications to the
rules of practice for IPR and PGR proceedings before the PTAB that the
Director and, by delegation, the PTAB, will use in exercising
discretion to institute IPRs and PGRs under 35 U.S.C. 314(a), 324(a),
and 325(d). The changes pertaining to discretionary institution are
largely formalizing existing Board practice, as set forth in
precedential decisions and the Trial Practice Guide. Additionally, the
changes allowing parties to separately brief discretionary institution
issues and the filing of pre-existing settlement agreements prior to

[[Page 28702]]

institution would not cause any party to incur significant additional
cost.
As a result, the Office estimates that any requirements resulting
from these proposed changes would create little, if any, additional
burden to those practicing before the Board. The Office proposes to
formalize rules that, for the most part, implement current PTAB
practices with regard to discretionary denial of serial and parallel
petitions for review, petitions implicating considerations under 35
U.S.C. 325(d), procedures for separate briefing on discretionary
denial, and practices regarding termination due to settlement.
Accordingly, any economic impact would be minimal.
Regarding parallel petitions, the proposed rule providing that the
Board will not institute parallel petitions absent a showing of good
cause as to why more than one petition is necessary reflects current
practice. The Board's Consolidated Trial Practice Guide (November 2019)
already makes clear that one petition should be sufficient in most
situations and requires petitioners to rank any parallel petitions. In
response to stakeholder comments, the proposed rule articulates
specific circumstances that may establish good cause and promotes
greater efficiency and transparency in the Board's determination
whether to go forward with parallel petitions. Accordingly, the
proposed change is expected to have minimal economic impact.
With regard to serial petitions, the proposed rule adopts the
factors set forth in the Board's precedential decision in General
Plastic. Accordingly, the proposed rule generally reflects current
practice, including practice based on binding precedent, to reduce
duplicative proceedings, and is expected to have minimal economic
impact.
With regard to petitions implicating considerations under 35 U.S.C.
325(d), the proposed rule clarifies that mere prior citation of prior
art in an IDS will not automatically satisfy the first prong of the
analytical framework in the Board's decision in Advanced Bionics, LLC
v. Med-El Elektromedizinische Ger[auml]te GmbH, IPR2019-01469, Paper 6
at 8 (PTAB Feb. 13, 2020) (precedential). The proposed rule resolves an
issue that has caused confusion and resulted in unnecessary briefing
and the consumption of significant time and effort in the past in the
absence of credible evidence that the art or arguments were
meaningfully addressed by the Office. Accordingly, the proposed change
is expected to mitigate the need for parties and the Board to expend
resources in trying to assess examiner error where the examiner did not
meaningfully address the art and arguments. As such, the proposed rule
is expected to increase efficiency for the parties and the Board and
therefore is not expected to have a significant economic impact.
The proposed rule regarding separate briefing on discretionary
denial issues is likewise expected to increase efficiency for the
parties and the Board. The parties already brief the same issues and
provide the same information that would be presented in the separate
briefing in any existing patent owner preliminary response and any
petitioner sur-reply, but will merely do so in a different format going
forward. The proposed rule will help highlight and focus attention on
the key issues concerning discretionary denial. As such, the proposed
rule will not substantially change existing practice and is unlikely to
have any significant economic impact.
Finally, with respect to practices regarding termination, the
proposed change aligns the requirements for terminating proceedings
pre- and post-institution by clarifying that pre-institution settlement
agreements must be filed with the Board for termination of a
proceeding, which includes pre-institution terminations as well as
post-institution terminations. This proposal aligns with already
widespread practice, where most parties requesting termination pre-
institution have provided such agreements. 35 U.S.C. 135(e), 317(b),
and 327(b), concerning settlement, do not expressly address settlements
pre-institution, but the Board has been generally uniform in requiring
agreements to be filed prior to termination. As such, the proposed rule
reflects existing practice and eliminates potential confusion. Under
the proposed rule, parties will simply be filing existing documents,
not creating any additional documents, and accordingly, any cost for
compliance will be minimal.
For these reasons, the proposed changes in this NPRM would not have
a significant economic impact on a substantial number of small
entities.
C. Executive Order 12866 (Regulatory Planning and Review): This
rulemaking is significant under Executive Order 12866 (Sept. 30, 1993),
as amended by Executive Order 14094 (Apr. 6, 2023).
D. Executive Order 13563 (Improving Regulation and Regulatory
Review): The Office has complied with Executive Order 13563 (Jan. 18,
2011). Specifically, and as discussed above, the Office has, to the
extent feasible and applicable: (1) made a reasoned determination that
the benefits justify the costs of the rule; (2) tailored the rule to
impose the least burden on society consistent with obtaining the
regulatory objectives; (3) selected a regulatory approach that
maximizes net benefits; (4) specified performance objectives; (5)
identified and assessed available alternatives; (6) involved the public
in an open exchange of information and perspectives among experts in
relevant disciplines, affected stakeholders in the private sector, and
the public as a whole, and provided online access to the rulemaking
docket; (7) attempted to promote coordination, simplification, and
harmonization across Government agencies and identified goals designed
to promote innovation; (8) considered approaches that reduce burdens
and maintain flexibility and freedom of choice for the public; and (9)
ensured the objectivity of scientific and technological information and
processes.
E. Executive Order 13132 (Federalism): This rulemaking pertains
strictly to federal agency procedures and does not contain policies
with federalism implications sufficient to warrant preparation of a
Federalism Assessment under Executive Order 13132 (Aug. 4, 1999).
F. Executive Order 13175 (Tribal Consultation): This rulemaking
will not: (1) have substantial direct effects on one or more Indian
tribes, (2) impose substantial direct compliance costs on Indian tribal
governments, or (3) preempt tribal law. Therefore, a tribal summary
impact statement is not required under Executive Order 13175 (Nov. 6,
2000).
G. Executive Order 13211 (Energy Effects): This rulemaking is not a
significant energy action under Executive Order 13211 because this
rulemaking is not likely to have a significant adverse effect on the
supply, distribution, or use of energy. Therefore, a Statement of
Energy Effects is not required under Executive Order 13211 (May 18,
2001).
H. Executive Order 12988 (Civil Justice Reform): This rulemaking
meets applicable standards to minimize litigation, eliminate ambiguity,
and reduce burden as set forth in sections 3(a) and 3(b)(2) of
Executive Order 12988 (Feb. 5, 1996).
I. Executive Order 13045 (Protection of Children): This rulemaking
does not concern an environmental risk to health or safety that may
disproportionately affect children under Executive Order 13045 (Apr.
21, 1997).
J. Executive Order 12630 (Taking of Private Property): This
rulemaking will not affect a taking of private property or otherwise
have taking implications

[[Page 28703]]

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 NPRM 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 NPRM 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 of 1969: 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 of 1995: 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 of 1995: The Paperwork Reduction Act of
1995 (44 U.S.C. 3501 et seq.) requires that the Office consider the
impact of paperwork and other information collection burdens imposed on
the public. This NPRM involves information collection requirements that
are subject to review by the Office of Management and Budget (OMB)
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). The
collection of information involved in this rulemaking have been
reviewed and previously approved by OMB under OMB control numbers 0651-
0069. This rulemaking does not add any additional information
requirements or fees for parties before the Board.
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.
P. E-Government Act Compliance: The USPTO is committed to
compliance with the E-Government Act to promote the use of the internet
and other information technologies, to provide increased opportunities
for citizen access to Government information and services, and for
other purposes.

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 proposes to
amend 37 CFR part 42 as follows:

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

0
1. The authority citation for 37 CFR part 42 is revised to read as
follows:

Authority: 35 U.S.C. 2(b)(2), 6, 21, 23, 41, 135, 311-319, 321-
329; Pub. L. 112-129, 125 Stat. 284; and Pub. L. 112-274, 126 Stat.
2456.

0
2. Amend Sec. 42.2 by adding, in alphabetical order, the definitions
for ``parallel petitions'' and ``serial petition'' to read as follows:

Sec. 42.2 Definitions.

* * * * *
Parallel petitions means two or more petitions that:
(1) Challenge the same patent by the petitioner; and
(2) Are filed on or before:
(i) The filing of the first patent owner preliminary response to
any of the petitions; or
(ii) The due date set forth in Sec. 42.107(a)(2) or Sec.
42.207(a)(2) for filing a patent owner preliminary response to the
first petition, if no patent owner preliminary response to the
petitions is filed.
* * * * *
Serial petition means a petition that:
(1) Challenges same or overlapping claims of the same patent that
have already been challenged by the petitioner, the petitioner's real
party in interest, or a privy of the petitioner; and
(2) Is filed after:
(a) The filing of a patent owner preliminary response to the first
petition; or
(b) The expiration of the period for filing such a response under
Sec. 42.107(a)(2) or Sec. 42.207(a)(2), or as otherwise ordered, if
no preliminary response to the first petition is filed.
* * * * *
0
3. Amend Sec. 42.24 by adding paragraph (e) to read as follows:

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

* * * * *
(e) Requests for discretionary denial. The following page limits
apply to briefing in connection with a patent owner request for
discretionary denial but 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 an appendix of
exhibits:
(1) Patent owner request: 10 pages.
(2) Petitioner opposition: 10 pages.
(3) Patent owner reply: 5 pages.
0
4. Revise Sec. 42.72 to read as follows:

Sec. 42.72 Termination of proceeding.

(a) The Board may terminate a proceeding. The Board may terminate a
proceeding, where appropriate, before institution or after institution,
including where the proceeding is consolidated with another proceeding
or pursuant to a joint request under 35 U.S.C. 317(a) or 327(a).
(b) Motion for termination of a proceeding. With prior
authorization from the Board, parties may file a joint request for
termination of a proceeding before institution, or after institution
pursuant to 35 U.S.C. 317(a) or 327(a), by filing a joint motion
accompanied by any written agreement or understanding, including any
collateral agreements, between the parties as required by Sec. 42.74.
0
5. Amend Sec. 42.74 by revising paragraph (b) to read as follows:

Sec. 42.74 Settlement.

* * * * *
(b) Agreements in writing. Any agreement or understanding between
the parties made in connection with, or in contemplation of, the
termination of a proceeding shall be in writing, and a true copy shall
be filed with the Board before the termination of a proceeding.
* * * * *

[[Page 28704]]

0
6. Amend Sec. 42.107 by revising the section heading and paragraphs
(a) and (b) to read as follows:

Sec. 42.107 Preliminary response to petition and request for
discretionary denial.

(a) Patent owner preliminary response. (1) The patent owner may
file a preliminary response to the petition. The response is limited to
setting forth the reasons why no inter partes review should be
instituted under 35 U.S.C. 314 based on issues other than discretionary
denial, and can include supporting evidence. The preliminary response
is subject to the word count under Sec. 42.24. A patent owner
preliminary response shall not address discretionary denial, which may
only be raised pursuant to Sec. 42.107(b), unless otherwise authorized
by the Board.
(2) The preliminary response must be filed no later than three
months after the date of a notice indicating that the petition to
institute an inter partes review has been granted a filing date. A
patent owner may expedite the proceeding by filing an election to waive
the patent owner preliminary response.
(b) Request for discretionary denial. (1) In addition to a
preliminary response to the petition, the patent owner may file a
single request for discretionary denial of the petition. 37 CFR
42.20(b) notwithstanding, no prior Board authorization is required to
file the single request for discretionary denial. The request is
limited to addressing any applicable discretionary institution issues
and factors, other than those involving parallel petitions under Sec.
42.108(d). Applicable discretionary institution issues include those
enumerated in Sec. 42.108(e) and (f), as well as any issue that the
patent owner believes, based on Office rules, precedent, or guidance,
warrants discretionary denial of the petition. If the patent owner
files a request for discretionary denial, the petitioner may file an
opposition limited to the issues raised in the request, and the patent
owner may file a reply limited to the issues raised in the opposition.
The request, opposition, and reply are subject to the page limits under
Sec. 42.24(e). The Board may also sua sponte raise any applicable
discretionary denial issue, in which case the Board will provide an
opportunity for briefing by the parties.
(2) A request for discretionary denial must be filed no later than
two months after the date of a notice indicating that the petition to
institute an inter partes review has been granted a filing date. An
opposition to the request for discretionary denial must be filed no
later than one month after the filing of the request for discretionary
denial. A reply in support of the request must be filed no later than
two weeks after the filing of the opposition.
* * * * *
0
7. Amend Sec. 42.108 by revising paragraph (c) and adding paragraphs
(d) through (f) to read as follows:

Sec. 42.108 Institution of inter partes review.

* * * * *
(c) Institution considerations. 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 when 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.
(1) Consideration of discretionary denial. The Board's decision
will also take into account, when filed, a patent owner's request for
discretionary denial, including any opposition and reply, and a
petitioner's filing pursuant to Sec. 42.108(d). To the extent the
patent owner contends that there are substantive weaknesses in the
petitioner's grounds of unpatentability that are relevant to the
exercise of discretion under 35 U.S.C. 314(a), the patent owner may
indicate in their request that they will address those substantive
weaknesses in the preliminary response permitted by Sec. 42.107(a).
Nothing in Sec. 42.108 shall be construed to limit the Board's
discretion to deny institution or dismiss a proceeding as a sanction or
for any other reason deemed warranted by the Board.
(2) Discretionary considerations for joined petitions. In reaching
a decision on institution of a petition accompanied by a timely motion
for joinder, the Board will not consider arguments on discretionary
considerations under Sec. 42.108(d) (parallel petitions) or Sec.
42.108(f) (35 U.S.C. 325(d)) where the petition sought to be joined was
instituted. However, the Board may deny the accompanying motion for
joinder where the later-filed petition implicates other bases for
discretionary denial.
(d) Parallel petitions challenging the same patent. The Board will
not institute parallel petitions, as defined in Sec. 42.2, absent a
showing of good cause as to why more than one petition is necessary. A
petitioner filing a parallel petition may, either in the petition or in
a separate paper filed concurrently with the petition and limited to no
more than five pages, provide information relevant to the good cause
determination. 37 CFR 42.20(b) notwithstanding, the patent owner is
authorized, without prior Board authorization, to file a separate paper
of no more than five pages, on or before the deadline for the
preliminary response, limited to providing an explanation of why the
Board should not institute more than one petition. Information relevant
to the good cause determination may include:
(1) A petitioner's ranking of their petitions in the order in which
petitioner desires the Board to consider the merits of their petitions
relative to the other parallel petitions;
(2) An explanation of the differences between the petitions and why
the issues addressed by the differences are material;
(3) The number of patent claims of the challenged patent that have
been asserted by the patent owner in district court litigation;
(4) The number of claims the petitioner is challenging;
(5) Whether there is a dispute about the priority date of the
challenged patent;
(6) Whether there are alternative claim constructions that require
different prior art references on mutually exclusive grounds;
(7) Whether the petitioner lacked information, such as the identity
of asserted claims, at the time they filed the petitions;
(8) The complexity of the technology in the case; and
(9) Any other information believed to be pertinent to the good
cause determination.
(e) Institution factors for serial petitions. The Board, in its
discretion, may deny institution of any serial petition, as defined in
Sec. 42.2, for inter partes review challenging claims of the same
patent that overlap with claims challenged in a previously filed
petition for inter partes review, post-grant review, or covered
business method patent review. The Board will consider the following
factors in determining whether to deny institution:
(1) Whether, at the time of filing of the first petition, the
petitioner knew of the prior art asserted in the second petition or
should have known of it;
(2) Whether, at the time of filing of the second petition, the
petitioner had already received the patent owner preliminary response
to the first petition or had received the Board's decision on

[[Page 28705]]

whether to institute review in the first petition;
(3) The length of time that elapsed between the time the petitioner
learned of the prior art asserted in the second petition and the filing
of the second petition; and
(4) Whether the petitioner provided an adequate explanation for the
time elapsed between the filings of multiple petitions directed to the
same claims of the same patent.
(f) Discretion based on previously presented art or arguments. A
petition for inter partes review may be denied under 35 U.S.C. 325(d)
if the same or substantially the same prior art was previously
meaningfully addressed by the Office or the same or substantially the
same arguments were previously meaningfully addressed by the Office
with regard to the challenged patent or a related patent or
application, unless the petitioner establishes material error by the
Office. If some, but not all, of the grounds of unpatentability
presented in a petition implicate considerations under 35 U.S.C.
325(d), the Board may deny the petition if section 325(d) is
sufficiently implicated such that instituting on all grounds of
unpatentability would not promote the efficient administration of the
Office or support the integrity of the patent system.
(1) Request to deny institution pursuant to discretion under 35
U.S.C. 325(d). A patent owner may file a request for discretionary
denial under 35 U.S.C. 325(d) under the provisions of Sec. 42.107(b).
Such request must identify whether the same or substantially the same
prior art was previously meaningfully addressed by the Office and/or
whether the same or substantially the same arguments were previously
meaningfully addressed by the Office. A petitioner may file an
opposition under the provisions of Sec. 42.107(b) to argue that the
same or substantially the same prior art or arguments were not
previously meaningfully addressed by the Office and/or to argue that
there was material error by the Office. The patent owner may file a
reply to the opposition under the provisions of Sec. 42.107(b).
(2) The same prior art. Prior art is deemed to be ``the same prior
art'' if a reference that forms the basis of the challenges in the
petition was previously meaningfully addressed by the Office and the
petition relies on the reference for a factual proposition that
directly contradicts a finding made by the Office when the reference
was previously meaningfully addressed.
(3) Substantially the same prior art. Prior art is ``substantially
the same prior art'' if the disclosure in the prior art previously
meaningfully addressed by the Office contains the same teaching as that
relied upon in the petition.
(4) Meaningfully addressed art or arguments. Art or arguments are
deemed to have been meaningfully addressed when the Office has
evaluated the art or arguments and articulated its consideration of the
art or arguments in the record of the patent or the application from
which the patent issued or the record of a related application or
patent with claims that are substantially the same. An initialed
Information Disclosure Statement, without more, does not satisfy this
standard. Art or arguments from a related application or patent will
only be considered to be meaningfully addressed if they are addressed
by the Office before the issuance of the challenged patent.
(5) Related application or patent. For purposes of this section, an
application or patent is ``related'' to the challenged patent if it
claims priority to a common application or is a parent application or
parent patent of the challenged patent.
0
8. Amend Sec. 42.207 by revising the section heading and paragraphs
(a) and (b) to read as follows:

Sec. 42.207 Preliminary response to petition and request for
discretionary denial.

(a) Patent owner preliminary response. (1) The patent owner may
file a preliminary response to the petition. The response is limited to
setting forth the reasons why no post-grant review should be instituted
under 35 U.S.C. 324 based on issues other than discretionary denial,
and can include supporting evidence. The preliminary response is
subject to the word count under Sec. 42.24. A patent owner preliminary
response shall not address discretionary denial, which may only be
raised pursuant to paragraph (b) of this section, unless otherwise
authorized by the Board.
(2) The preliminary response must be filed no later than three
months after the date of a notice indicating that the petition to
institute a post-grant review has been accorded a filing date. A patent
owner may expedite the proceeding by filing an election to waive the
patent owner preliminary response.
(b) Request for discretionary denial. (1) In addition to a
preliminary response to the petition, the patent owner may file a
single request for discretionary denial of the petition. Section
42.20(b) notwithstanding, no prior Board authorization is required to
file the single request for discretionary denial. The request is
limited to addressing any applicable discretionary institution issues
and factors other than those involving parallel petitions under Sec.
42.208(e). Applicable discretionary institution issues include those
enumerated in Sec. 42.208(f) and (g), as well as any issue that the
patent owner believes, based on Office rules, precedent, or guidance,
warrants discretionary denial of the petition. If the patent owner
files a request for discretionary denial, the petitioner may file an
opposition limited to the issues raised in the request, and the patent
owner may file a reply limited to the issues raised in the opposition.
The request, opposition, and reply are subject to the page limits under
Sec. 42.24(e). The Board may also sua sponte raise discretionary
denial, in which case the Board will provide an opportunity for
briefing by the parties.
(2) A request for discretionary denial must be filed no later than
two months after the date of a notice indicating that the petition to
institute a post-grant review has been accorded a filing date. An
opposition to the request for discretionary denial must be filed no
later than one month after the filing of the request for discretionary
denial. A reply in support of the request must be filed no later than
two weeks after the filing of the opposition.
* * * * *
0
9. Amend Sec. 42.208 by revising paragraph (c) and adding paragraphs
(e) through (g) to read as follows:

Sec. 42.208 Institution of post-grant review.

* * * * *
(c) Institution considerations. Post-grant 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 when 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.
(1) Consideration of discretionary denial. The Board's decision
will also take into account, where filed, a patent owner's request for
discretionary denial, including any opposition and reply, and a
petitioner's filing pursuant to Sec. 42.208(e). To the extent the
patent owner contends that there are substantive weaknesses in the
petitioner's grounds of unpatentability that are relevant to the
exercise of discretion under 35 U.S.C. 324(a), the

[[Page 28706]]

patent owner may indicate in their request that they will address those
substantive weaknesses in the preliminary response permitted by Sec.
42.207(a). Nothing in this section shall be construed to limit the
Board's discretion to deny institution or dismiss a proceeding as a
sanction or for any other reason deemed warranted by the Board.
(2) Discretionary considerations for joined petitions. In reaching
a decision on institution of a petition accompanied by a timely motion
for joinder, the Board will not consider arguments on discretionary
considerations under paragraph (e) of this section (parallel petitions)
or paragraph (g) of this section (35 U.S.C. 325(d)) where the petition
sought to be joined was instituted. However, the Board may deny the
accompanying motion for joinder where the later-filed petition
implicates other bases for discretionary denial.
* * * * *
(e) Parallel petitions challenging the same patent. The Board will
not institute parallel petitions, as defined in Sec. 42.2, absent a
showing of good cause as to why more than one petition is necessary. A
petitioner filing a parallel petition may, either in the petition or in
a separate paper filed concurrently with the petition and limited to no
more than five pages, provide information relevant to the good cause
determination. Section 42.20(b) notwithstanding, the patent owner is
authorized, without prior Board authorization, to file a separate paper
of no more than five pages, on or before the deadline for the
preliminary response, limited to providing an explanation of why the
Board should not institute more than one petition. Information relevant
to the good cause determination may include:
(1) A petitioner's ranking of their petitions in the order in which
petitioner desires the Board to consider the merits of their petitions
relative to their other parallel petitions;
(2) An explanation of the differences between the petitions and why
the issues addressed by the differences are material;
(3) The number of patent claims of the challenged patent that have
been asserted by the patent owner in district court litigation;
(4) The number of claims the petitioner is challenging;
(5) Whether there is a dispute about the priority date of the
challenged patent;
(6) Whether there are alternative claim constructions that require
different prior art references on mutually exclusive grounds;
(7) Whether the petitioner lacked information, such as the identity
of asserted claims, at the time they filed the petitions;
(8) The complexity of the technology in the case; and
(9) Any other information believed to be pertinent to the good
cause determination.
(f) Institution factors for serial petitions. The Board, in its
discretion, may deny institution of any serial petition, as defined in
Sec. 42.2, for post-grant review challenging claims of the same patent
that overlap with claims challenged in a previously filed petition for
inter partes review, post-grant review, or covered business method
patent review. The Board will consider the following factors in
determining whether to deny institution:
(1) Whether, at the time of filing of the first petition, the
petitioner knew of the prior art asserted in the second petition or
should have known of it;
(2) Whether, at the time of filing of the second petition, the
petitioner had already received the patent owner preliminary response
to the first petition or had received the Board's decision on whether
to institute review in the first petition;
(3) The length of time that elapsed between the time the petitioner
learned of the prior art asserted in the second petition and the filing
of the second petition; and
(4) Whether the petitioner provided an adequate explanation for the
time elapsed between the filings of multiple petitions directed to the
same claims of the same patent.
(g) Discretion based on previously presented art or arguments. A
petition for post-grant review may be denied under 35 U.S.C. 325(d) if
the same or substantially the same prior art was previously
meaningfully addressed by the Office or the same or substantially the
same arguments were previously meaningfully addressed by the Office
with regard to the challenged patent or a related patent or
application, unless the petitioner establishes material error by the
Office. If some, but not all, of the grounds of unpatentability
presented in a petition implicate considerations under 35 U.S.C.
325(d), the Board may deny the petition if section 325(d) is
sufficiently implicated such that instituting on all grounds of
unpatentability would not promote the efficient administration of the
Office or support the integrity of the patent system.
(1) Request to deny institution pursuant to discretion under 35
U.S.C. 325(d). A patent owner may file a request for discretionary
denial under 35 U.S.C. 325(d) under the provisions of Sec. 42.207(b).
Such request must identify whether the same or substantially the same
prior art was previously meaningfully addressed by the Office and/or
whether the same or substantially the same arguments were previously
meaningfully addressed by the Office. A petitioner may file an
opposition under the provisions of Sec. 42.207(b) to argue that the
same or substantially the same prior art or arguments were not
previously meaningfully addressed by the Office and/or to argue that
there was material error by the Office. The patent owner may file a
reply to the opposition under the provisions of Sec. 42.207(b).
(2) The same prior art. Prior art is deemed to be ``the same prior
art'' if a reference that forms the basis of the challenges in the
petition was previously meaningfully addressed by the Office and the
petition relies on the reference for a factual proposition that
directly contradicts a finding made by the Office when the reference
was previously meaningfully addressed.
(3) Substantially the same prior art. Prior art is ``substantially
the same prior art'' if the disclosure in the prior art previously
meaningfully addressed by the Office contains the same teaching as that
relied upon in the petition.
(4) Meaningfully addressed art or arguments. Art or arguments are
deemed to have been meaningfully addressed when the Office has
evaluated the art or arguments and articulated its consideration of the
art or arguments in the record of the patent or the application from
which the patent issued or the record of a related application or
patent with claims that are substantially the same. An initialed
Information Disclosure Statement, without more, does not satisfy this
standard. Art or arguments from a related application or patent will
only be considered to be meaningfully addressed if they are addressed
by the Office before the issuance of the challenged patent.
(5) Related application or patent. For purposes of this section, an
application or patent is ``related'' to the challenged patent if it
claims priority to a common application or is a parent application or
parent patent of the challenged patent.

Dated: April 15, 2024.
Katherine K. Vidal,
Under Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office.
[FR Doc. 2024-08362 Filed 4-18-24; 8:45 am]
BILLING CODE 3510-16-P