Vol. 77 Tuesday, No. 157 August 14, 2012

Part III

Department of Commerce

Patent and Trademark Office 37 CFR Part 42 Changes to Implement Proceedings, Post-Grant Review Proceedings, and Transitional Program for Covered Business Method Patents; Final Rule

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DEPARTMENT OF COMMERCE (Pub. L. 112–29, 125 Stat. 284 (2011)). covered business method patent; (2) the The purpose of the AIA and this final standards for showing of sufficient Patent and Trademark Office rule is to establish a more efficient and grounds to institute a post-grant review streamlined patent system that will of a covered business method patent; (3) 37 CFR Part 42 improve patent quality and limit the standards for instituting a post-grant [Docket No. PTO–P–2011–0083] unnecessary and counterproductive review of a covered business method litigation costs. The preamble of this patent; (4) the procedures for RIN 0651–AC71 notice sets forth in detail the procedures conducting a post-grant review that by which the Board will conduct inter permits a patent owner response, a Changes to Implement Inter Partes partes review proceedings, post-grant submission of written comments, and an Review Proceedings, Post-Grant review proceedings, and transitional oral hearing; (5) the standards and Review Proceedings, and Transitional post-grant review proceedings for procedures for discovery and for the Program for Covered Business Method covered business method patents. The patent owner to move to amend the Patents USPTO is engaged in a transparent patent; and (6) the time periods for AGENCY: United States Patent and process to create a timely, cost-effective completing the review (subpart D of 37 Trademark Office, Commerce. alternative to litigation. Moreover, the CFR part 42). rules are designed to ensure the Costs and Benefits: This rulemaking is ACTION: Final rule. integrity of the trial procedures. See 35 not economically significant, but is SUMMARY: The United States Patent and U.S.C. 316(b), as amended, and 35 significant, under Executive Order Trademark Office (Office or USPTO) is U.S.C. 326(b). This final rule would 12866 (Sept. 30, 1993), as amended by revising the rules of practice to provide a set of rules relating to Board Executive Order 13258 (Feb. 26, 2002) implement the provisions of the Leahy- trial practice for inter partes review and Executive Order 13422 (Jan. 18, Smith America Invents Act (‘‘AIA’’) that proceedings, post-grant review 2007). create the new inter partes review proceedings, and transitional post-grant Background: To implement sections 6 proceeding, post-grant review review proceedings for covered business and 18 of the AIA, the Office published proceeding, and transitional post-grant method patents. the following notices of proposed review proceeding for covered business Summary of Major Provisions: rulemaking: (1) Rules of Practice for method patents, to be conducted before Consistent with section 6 of the AIA, Trials before the Patent Trial and the Patent Trial and Appeal Board this final rule sets forth for inter partes Appeal Board and Judicial Review of (Board). These provisions of the AIA review: (1) The requirements for a Patent Trial and Appeal Board will take effect on September 16, 2012, petition to institute an inter partes Decisions, 77 FR 6879 (Feb. 9, 2012), to one year after the date of enactment. review of a patent; (2) the standards for provide a consolidated set of rules showing of sufficient grounds to relating to Board trial practice for inter DATES: Effective Date: September 16, institute an inter partes review; (3) the partes review, post-grant review, 2012. derivation proceedings, the transitional Applicability Dates: The changes for standards for instituting an inter partes program for covered business method inter partes review proceedings apply to review; (4) the procedures for patents, and judicial review of Board any patent issued before, on, or after conducting an inter partes review that decisions by adding new parts 42 and September 16, 2012 (subpart B). permits a patent owner response, a 90 including a new subpart A to title 37 The changes for post-grant review submission of written comments, and an of the Code of Federal Regulations (RIN proceedings generally apply to patents oral hearing; (5) the standards and 0651–AC70); (2) Changes to Implement issuing from applications subject to procedures for discovery and for the Inter Partes Review Proceedings, 77 FR first-inventor-to-file provisions of the patent owner to move to amend the 7041 (Feb. 10, 2012), to provide rules AIA (subpart C). In addition, the Chief patent; and (6) the time periods for specific to inter partes review by adding Administrative Patent Judge may, in the completing the review (subpart B of 37 CFR part 42). a new subpart B to 37 CFR part 42 (RIN interests-of-justice, order an Consistent with section 6 of the AIA, 0651–AC71); (3) Changes to Implement interferences commenced before this final rule sets forth for post-grant Post-Grant Review Proceedings, 77 FR September 16, 2012, to be dismissed review: (1) The requirements for a 7060 (Feb. 10, 2012), to provide rules without prejudice to the filing of a petition to institute a post-grant review specific to post-grant review by adding petition for post-grant review. See of a patent; (2) the standards for a new subpart C to 37 CFR part 42 (RIN 42.200(d) and § 6(f)((3)(A) of the AIA. showing of sufficient grounds to 0651–AC72); (4) Changes to Implement The changes for transitional program institute a post-grant review; (3) the Transitional Program for Covered for covered business method patents standards for instituting a post-grant Business Method Patents, 77 FR 7080 apply to any covered business method review; (4) the procedures for (Feb. 10, 2012), to provide rules specific patent issued before, on, or after conducting a post-grant review that to the transitional program for covered September 16, 2012 (subpart D). permits a patent owner response, a business method patents by adding a FOR FURTHER INFORMATION CONTACT: submission of written comments, and an new subpart D to 37 CFR part 42 (RIN Michael P. Tierney, Lead oral hearing; (5) the standards and 0651–AC73); (5) Transitional Program Administrative Patent Judge, Sally G. procedures for discovery and for the for Covered Business Method Patents— Lane, Administrative Patent Judge, Sally patent owner to move to amend the Definition of Technological Invention, C. Medley, Administrative Patent Judge, patent; and (6) the time periods for 77 FR 7095 (Feb. 10, 2012), to add a new Robert A. Clarke, Administrative Patent completing the review (subpart C of 37 rule that sets forth the definition of Judge, and Joni Y. Chang, CFR part 42). technological invention for determining Administrative Patent Judge, Board of Consistent with sections 6 and 18 of whether a patent is for a technological Patent Appeals and Interferences, by the AIA, this final rule further sets forth invention solely for purposes of the telephone at (571) 272–9797. for transitional post-grant review of transitional program for covered SUPPLEMENTARY INFORMATION: Executive covered business method patents: (1) business method patents (RIN 0651– Summary: Purpose: On September 16, The requirements for a petition to AC75); and (6) Changes to Implement 2011, the AIA was enacted into law institute a post-grant review of a Derivation Proceedings, 77 FR 7028

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(Feb. 10, 2012), to provide rules specific submissions of written comments from patent owner response is extended from to derivation proceedings by adding a intellectual property organizations, two months to three months new subpart E to 37 CFR part 42 (RIN businesses, law firms, patent (§§ 42.120(b) and 42.220(b)). 0651–AC74). practitioners, and others, including a With respect to motions to amend This final rule adopts the proposed United States senator who was a challenged claims, the final rule rules, with modifications, set forth in principal author of section 18 of the clarifies that a patent owner may file the three notices of proposed AIA. The comments provided support one motion to amend but only after rulemaking: Inter partes review for, opposition to, and diverse conferring with the Board, and it must proceedings (77 FR 7041), post-grant recommendations on the proposed be filed no later than the filing of a review proceedings (77 FR 7060), and rules. The Office appreciates the patent owner response for inter partes, transitional post-grant review thoughtful comments, and has post-grant and covered business method proceedings for covered business considered and analyzed the comments patent reviews (§§ 42.121(a) and method patents (77 FR 7080), except for thoroughly. The Office’s responses to 42.221(a)). The final rule provides that definitions of the terms ‘‘covered the comments are provided in the 124 an additional motion to amend may be business method patent’’ and separate responses based on the topics authorized during inter partes, post- ‘‘technological invention’’ which are set raised in the 251 comments in the grant and covered business method forth in a separate final rule (RIN 0651– Response to Comments section infra. patent reviews when there is a good AC75). The definition of the term In light of the comments, the Office cause showing or a settlement ‘‘technological invention’’ was proposed has made modifications to the proposed (§§ 42.121(c) and 42.221(c)). In addition, in another notice of proposed rules to provide clarity and to balance the final rule clarifies that a reasonable rulemaking (77 FR 7095). the interests of the public, patent number of substitute claims is presumed In a separate final rule, the Office owners, patent challengers, and other to be one substitute claim per adopts the proposed rules, with interested parties, in light of the challenged claim, which may be modifications, set forth in Rules of statutory requirements and rebutted by a demonstration of need. Practice for Trials before the Patent considerations, such as the effect of the The final rule further clarifies that a Trial and Appeal Board and Judicial regulations on the economy, the motion to amend may be denied where: Review of Patent Trial and Appeal integrity of the patent system, the (1) The amendment does not respond to Board Decisions, 77 FR 6879 (Feb. 9, efficient administration of the Office, a ground of unpatentability, or (2) the 2012), to provide a consolidated set of and the ability of the Office to complete amendment seeks to enlarge the scope rules relating to Board trial practice for the proceedings timely. of the claims of the patent or introduce inter partes review, post-grant review, new subject matter (§§ 42.121(a) and derivation proceedings, and the Differences between the Final Rule and 42.221(a)). The final rule also clarifies transitional program for covered the Proposed Rule that an additional motion to amend may business method patents, and judicial The major differences between the be authorized when there is a good review of Board decisions by adding rules as adopted in this final rule and cause showing or a joint request of the new parts 42 and 90 including a new the proposed rules include: petitioner and the patent owner to subpart A to title 37 of the Code of The final rule clarifies that the one- materially advance a settlement Federal Regulations (RIN 0651–AC70). year period for completing an inter (§§ 42.121(c) and 42.221(c)). Moreover, In a third final rule, the Office adopts partes or post-grant review may be the final rule provides that in the proposed definitions of a ‘‘covered adjusted by the Board in the case of determining whether to authorize such business method patent’’ and joinder (§§ 42.100(c) and 42.200(c)). an additional motion to amend, the ‘‘technological invention’’ set forth in The final rule clarifies that a Board will consider whether a petitioner the following notices of proposed petitioner must certify that it is not has submitted supplemental rulemaking: Changes to Implement estopped from requesting an inter partes information after the time period set for Transitional Program for Covered or post-grant review for the challenged filing a motion to amend in Business Method Patents, 77 FR 7080 claims, as opposed to the patent § 42.121(a)(1) or 42.221(a)(1). (Feb. 10, 2012); and Transitional (§§ 42.104(a) and 42.204(a)). For joinder, the final rule clarifies that Program for Covered Business Method The final rule eliminates the a joinder may be requested by a patent Patents—Definition of Technological requirement that the petitioner must owner or petitioner during inter partes, Invention, 77 FR 7095 (Feb. 10, 2012). contact the Board to discuss alternate post-grant or covered business method Additionally, the Office published a modes of service when the petitioner patent reviews, but provides that such a Patent Trial Practice Guide for the cannot effect service of the petition for request must be filed, as a motion, no proposed rules in the Federal Register inter partes, post-grant and covered later than one month after institution of to provide the public an opportunity to business method patent reviews any review for which joinder is comment. Practice Guide for Proposed (§§ 42.105(b) and 42.205(b)). Instead, the requested (§§ 42.122(b) and 42.222(b)). Trial Rules, 77 FR 6868 (Feb. 9, 2012) final rule further clarifies that (1) upon With respect to inter partes reviews, the (Request for Comments) (hereafter agreement of the parties, service may be time period set forth in § 42.101(b) does ‘‘Practice Guide for Proposed Trial made electronically, (2) personal service not apply when the petition is Rules’’ or ‘‘Office Patent Trial Practice is not required, and (3) service may be accompanied by a request for joinder Guide’’). The Office envisions by EXPRESS MAIL® or by means at (§ 42.122). publishing a revised Patent Trial least as fast and reliable as EXPRESS As to filing a supplemental Practice Guide for the final rules. The MAIL® (§§ 42.105(b) and 42.205(b)). information during inter partes, post- Office also hosted a series of public The time period for filing a patent grant and covered business method educational roadshows, across the owner preliminary response for inter patent reviews, the final rule clarifies country, regarding the proposed rules partes, post-grant and covered business that a request for the authorization to for the implementation of the AIA. method patent reviews is extended from file a motion to submit supplement In response to the notices of proposed two months to three months information is made within one month rulemaking and the Practice Guide (§§ 42.107(b) and 42.207(b)). Likewise, of the date the trial is instituted, and the notice, the Office received 251 the default time period for filing a information must be relevant to a claim

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for which the trial has been instituted patent; or (2) if a post-grant review is response to the petition that sets forth (§§ 42.123(a) and 42.223(a)). A instituted under chapter 32 of title 35, reasons why no inter partes review petitioner who seeks to submit late United States Code, the date of the should be instituted based upon the information, or information that is not termination of that post-grant review. failure of the petition to meet any relevant to a claim under review, will be The grounds for seeking an inter requirement of chapter 31 of title 35, required to show why the information partes review will be limited compared United States Code. reasonably could not have been earlier with post-grant review. The grounds for Section 6(a) of the AIA amends 35 obtained, and that consideration of the seeking inter partes review are limited U.S.C. 314, entitled ‘‘Institution of inter information would be in the interests-of- to issues raised under 35 U.S.C. 102 or partes review.’’ 35 U.S.C. 314(a), as justice (§§ 42.123(b)–(c), 42.223(b)–(c)). 103 and only on the basis of prior art amended, provides that the Director For covered business method patent consisting of patents or printed may not authorize an inter partes review reviews, the final rule defines the term publications. In contrast, the grounds to be instituted, unless the Director ‘‘charged with infringement’’ to mean ‘‘a for seeking post-grant review include determines that the information real and substantial controversy any ground that could be raised under presented in the petition filed under 35 regarding infringement of a covered 35 U.S.C. 282(b)(2) or (3). Such grounds U.S.C. 311, as amended, and any business method patent such that the for post-grant review include grounds response filed under 35 U.S.C. 313, as petitioner would have standing to bring that could be raised under 35 U.S.C. 102 amended, shows that there is a a declaratory judgment action in Federal or 103 including those based on prior reasonable likelihood that the petitioner court’’ (§ 42.302(a)). In addition, the art consisting of patents or printed would prevail with respect to at least final rule clarifies that a petitioner may publications. Other grounds available one of the claims challenged in the challenge a claim based on the specific for post-grant review include 35 U.S.C. petition. 35 U.S.C. 314(b), as amended, statutory grounds permitted under 35 101 and 112, with the exception of provides that the Director will U.S.C. 282(b)(2) or (3), except as compliance with the best mode determine whether to institute an inter modified by section 18(a)(1)(C) of the requirement. partes review under chapter 31 of title AIA (§ 42.304(b)). Section 6(a) of the AIA amends 35 35, United States Code, pursuant to a U.S.C. 312, entitled ‘‘Petitions.’’ 35 petition filed under 35 U.S.C. 311, as Discussion of Relevant Provisions of the U.S.C. 312(a), as amended, provides that amended, within three months after: (1) AIA a petition filed under 35 U.S.C. 311, as Receiving a preliminary response to the Inter Partes Review amended, may be considered only if petition under 35 U.S.C. 313, as certain conditions are met. First, the amended; or (2) if no such preliminary Section 6 of the AIA is entitled petition must be accompanied by response is filed, the last date on which ‘‘POST-GRANT REVIEW payment of the fee established by the such response may be filed. 35 U.S.C. PROCEEDINGS’’ (Pub. L. 112–29, 125 Director under 35 U.S.C. 311, as 314(c), as amended, provides that the Stat. 284, 299–305 (2011)). Section 6(a) amended. Second, the petition must Director will notify the petitioner and of the AIA, entitled ‘‘INTER PARTES identify all real parties in interest. patent owner, in writing, of the REVIEW,’’ amends chapter 31 of title 35, Third, the petition must identify, in Director’s determination under 35 United States Code, also entitled writing and with particularity, each U.S.C. 314(a), as amended, and make ‘‘INTER PARTES REVIEW.’’ In claim challenged, the grounds on which the notice available to the public as particular, section 6(a) of the AIA the challenge to each claim is based, soon as is practicable. 35 U.S.C. 314(c), amends 35 U.S.C. 311–318 and adds 35 and the evidence that supports the as amended, also provides that the U.S.C. 319. grounds for the challenge to each claim, notice will include the date on which Section 6(a) of the AIA amends 35 including: (A) Copies of patents and the review will commence. 35 U.S.C. U.S.C. 311, entitled ‘‘Inter partes printed publications that the petitioner 314(d), as amended, provides that the review.’’ 35 U.S.C. 311(a), as amended, relies upon in support of the petition determination by the Director whether provides that, subject to the provisions and (B) affidavits or declarations of to institute an inter partes review under of chapter 31 of title 35, United States supporting evidence and opinions, if the 35 U.S.C. 314, as amended, will be final Code, a person who is not the owner of petitioner relies on expert opinions. and nonappealable. a patent may file a petition with the Fourth, the petition must provide such Section 6(a) of the AIA amends 35 Office to institute an inter partes review other information as the Director may U.S.C. 315, entitled ‘‘Relation to other of the patent. As amended, 35 U.S.C. require by regulation. Fifth, the proceedings or actions.’’ As amended, 311(a) also provides that the Director petitioner must provide copies of any of 35 U.S.C. 315(a)(1) provides that an will establish, by regulation, fees to be the documents required under inter partes review may not be instituted paid by the person requesting the paragraphs (2), (3), and (4) of 35 U.S.C. if, before the date on which the petition review, in such amounts as the Director 312(a), as amended, to the patent owner for review is filed, the petitioner or real determines to be reasonable, or, if applicable, the designated party-in-interest had filed a civil action considering the aggregate costs of the representative of the patent owner. 35 challenging the validity of a claim of the review. 35 U.S.C. 311(b), as amended, U.S.C. 312(b), as amended, provides patent. As amended, 35 U.S.C. 315(a)(2) provides that a petitioner in an inter that, as soon as practicable after the provides for an automatic stay of a civil partes review may request to cancel as receipt of a petition under 35 U.S.C. action brought by the petitioner or real unpatentable one or more claims of a 311, as amended, the Director will make party-in-interest challenging the validity patent only on a ground that could be the petition available to the public. of a claim of the patent and filed on or raised under 35 U.S.C. 102 or 103 and Section 6(a) of the AIA amends 35 after the date on which the petition for only on the basis of prior art consisting U.S.C. 313, entitled ‘‘Preliminary inter partes review was filed, until of patents or printed publications. As response to petition.’’ 35 U.S.C. 313, as certain specified conditions are met. 35 amended, 35 U.S.C. 311(c) provides that amended, provides that, if an inter U.S.C. 315(a)(3), as amended, provides a petition for inter partes review may be partes review petition is filed under 35 that a counterclaim challenging the filed after the later of either: (1) The date U.S.C. 311, as amended, within a time validity of a claim of a patent does not that is nine months after the grant of a period set by the Director, the patent constitute a civil action challenging the patent or issuance of a reissue of a owner has the right to file a preliminary validity of a claim of a patent for

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purposes of 35 U.S.C. 315(a), as the file of any proceeding under chapter 35 U.S.C. 315(c), as amended; (12) amended. 31 of title 35, United States Code, will setting a time period for requesting As amended, 35 U.S.C. 315(b) be made available to the public, except joinder under 35 U.S.C. 315(c), as provides that an inter partes review may that any petition or document filed with amended; and (13) providing the not be instituted if the petition the intent that it be sealed will, if petitioner with at least one opportunity requesting the proceeding is filed more accompanied by a motion to seal, be to file written comments within a time than one year after the date on which treated as sealed pending the outcome period established by the Director. the petitioner, real party-in-interest, or of the ruling on the motion; (2) setting As amended, 35 U.S.C. 316(b) privy of the petitioner is served with a forth the standards for the showing of provides that in prescribing regulations complaint alleging infringement of the sufficient grounds to institute a review under 35 U.S.C. 316, as amended, the patent. However, the time limitation set under 35 U.S.C. 314(a), as amended; (3) Director will consider the effect of any forth in 35 U.S.C. 315(b), as amended, establishing procedures for the such regulation on the economy, the does not apply to a request for joinder submission of supplemental information integrity of the patent system, the under 35 U.S.C. 315(c), as amended. after the petition is filed; (4) establishing efficient administration of the Office, As amended, 35 U.S.C. 315(c) and governing inter partes review under and the ability of the Office to complete provides that if the Director institutes an chapter 31 of title 35, United States the proceedings instituted under inter partes review, the Director may, in Code, and the relationship of such chapter 31 of title 35, United States the Director’s discretion, join as a party review to other proceedings under title Code timely. to that inter partes review any person As amended, 35 U.S.C. 316(c) 35, United States Code; (5) setting forth who properly files a petition under 35 provides that the Patent Trial and standards and procedures for discovery U.S.C. 311, as amended, that the Appeal Board will, in accordance with of relevant evidence, including that Director, after receiving a preliminary 35 U.S.C. 6, conduct each inter partes response under 35 U.S.C. 313, as such discovery will be limited to: (A) review instituted under chapter 31 of amended, or the expiration of the time The deposition of witnesses submitting title 35, United States Code. for filing such a response, determines affidavits or declarations, and (B) what As amended, 35 U.S.C. 316(d)(1) that the petition warrants the institution is otherwise necessary in the interest of provides that during an inter partes of an inter partes review under 35 justice; (6) prescribing sanctions for review instituted under chapter 31 of U.S.C. 314, as amended. abuse of discovery, abuse of process, or title 35, United States Code, the patent As amended, 35 U.S.C. 315(d) any other improper use of the owner may file one motion to amend the provides that, notwithstanding 35 proceeding, such as to harass or to cause patent in one or more of the following U.S.C. 135(a), as amended, 251, and unnecessary delay or an unnecessary ways: (A) Cancel any challenged patent 252, and chapter 30 of title 35, United increase in the cost of the proceeding; claim; and (B) for each challenged States Code, during the pendency of an (7) providing for protective orders claim, propose a reasonable number of inter partes review, if another governing the exchange and submission substitute claims. As amended, 35 proceeding or matter involving the of confidential information; (8) U.S.C. 316(d)(2) provides that additional patent is before the Office, the Director providing for the filing by the patent motions to amend may be permitted may determine the manner in which the owner of a response to the petition upon the joint request of the petitioner inter partes review or other proceeding under 35 U.S.C. 313, as amended, after and the patent owner to advance or matter may proceed, including an inter partes review has been materially the settlement of a providing for stay, transfer, instituted, and requiring that the patent proceeding under 35 U.S.C. 317, as consolidation, or termination of any owner file with such response, through amended, or as permitted by regulations such matter or proceeding. affidavits or declarations, any additional prescribed by the Director. 35 U.S.C. As amended, 35 U.S.C. 315(e)(1) factual evidence and expert opinions on 316(d)(3), as amended, provides that an provides that the petitioner in an inter which the patent owner relies in amendment under 35 U.S.C. 316(d), as partes review of a claim in a patent support of the response; (9) setting forth amended, may not enlarge the scope of under chapter 31 of title 35, United standards and procedures for allowing the claims of the patent or introduce States Code, that results in a final the patent owner to move to amend the new matter. written decision under 35 U.S.C. 318(a), patent under 35 U.S.C. 316(d), as As amended, 35 U.S.C. 316(e) as amended, or the real party-in-interest amended, to cancel a challenged claim provides that in an inter partes review or privy of the petitioner, may not or propose a reasonable number of instituted under chapter 31 of title 35, request or maintain a proceeding before substitute claims, and ensure that any United States Code, the petitioner has the Office with respect to that claim on information submitted by the patent the burden of proving a proposition of any ground that the petitioner raised or owner in support of any amendment unpatentability by a preponderance of reasonably could have raised during entered under 35 U.S.C. 316(d), as the evidence. that inter partes review. 35 U.S.C. amended, is made available to the Section 6(a) of the AIA amends 35 315(e)(2), as amended, provides for public as part of the prosecution history U.S.C. 317, entitled ‘‘Settlement.’’ 35 estoppel against an inter partes review of the patent; (10) providing either party U.S.C. 317(a), as amended, provides that petitioner, or the real party-in-interest or with the right to an oral hearing as part an inter partes review instituted under privy of the petitioner, in certain civil of the proceeding; (11) requiring that the chapter 31 of title 35, United States actions and certain other proceedings final determination in an inter partes Code, will be terminated with respect to before the United States International review will be issued not later than one any petitioner upon the joint request of Trade Commission if that inter partes year after the date on which the Director the petitioner and the patent owner, review results in a final written decision notices the institution of a review under unless the Office has decided the merits under 35 U.S.C. 318(a), as amended. chapter 31 of title 35, United States of the proceeding before the request for Section 6(a) of the AIA amends 35 Code, except that the Director may, for termination is filed. 35 U.S.C. 317(a), as U.S.C. 316, entitled ‘‘Conduct of inter good cause shown, extend the one-year amended, also provides that if the inter partes review.’’ As amended, 35 U.S.C. period by not more than six months, partes review is terminated with respect 316(a) provides that the Director will and may adjust the time periods in this to a petitioner under 35 U.S.C. 317, as prescribe regulations: (1) Providing that paragraph in the case of joinder under amended, no estoppel under 35 U.S.C.

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315(e), as amended, will attach to the within the United States, or imported partes , effective petitioner, or to the real party-in-interest into the United States, anything September 16, 2012. See Revision of or privy of the petitioner, on the basis patented by such proposed amended or Standard for Granting an Inter partes of that petitioner’s institution of that new claim, or who made substantial Reexamination Request, 76 FR 59055 inter partes review. As amended, 35 preparation therefor, before the issuance (Sept. 23, 2011) (final rule). U.S.C. 317(a) further provides that if no of a certificate under 35 U.S.C. 318(b), Post-Grant Review petitioner remains in the inter partes as amended. As amended, 35 U.S.C. review, the Office may terminate the 318(d) provides that the Office will Post-grant review may be sought in review or proceed to a final written make available to the public data more circumstances than inter partes decision under 35 U.S.C. 318(a), as describing the length of time between review. The grounds for seeking post- amended. the institution of, and the issuance of, grant review include any ground that As amended, 35 U.S.C. 317(b) a final written decision under 35 U.S.C. could be raised under 35 U.S.C. provides that any agreement or 318(a), as amended, for each inter partes 282(b)(2) or (3), except as modified by understanding between the patent review. section 18(a)(1)(C) of the AIA. Such owner and a petitioner, including any Section 6(a) of the AIA adds 35 U.S.C. grounds for post-grant review include collateral agreements referred to in the 319, entitled ‘‘Appeal.’’ 35 U.S.C. 319 grounds that could be raised under 35 agreement or understanding, made in provides that a party dissatisfied with U.S.C. 102 or 103 including those based connection with, or in contemplation of, the final written decision of the Patent on prior art consisting of patents or the termination of an inter partes review Trial and Appeal Board under 35 U.S.C. printed publications. Other grounds under 35 U.S.C. 317, as amended, will 318(a), as amended, may appeal the available for post-grant review include be in writing and a true copy of such decision pursuant to 35 U.S.C. 141–144. 35 U.S.C. 101 and 112, with the agreement or understanding will be 35 U.S.C. 319 also provides that any exception of compliance with the best filed in the Office before the termination party to the inter partes review will mode requirement. In contrast, the of the inter partes review as between the have the right to be a party to the grounds for seeking inter partes review parties. As amended, 35 U.S.C. 317(b) appeal. are limited to issues raised under 35 also provides that, at the request of a Section 6(c) of the AIA is entitled U.S.C. 102 or 103 and only on the basis party to the proceeding, the agreement ‘‘REGULATIONS AND EFFECTIVE of prior art consisting of patents or or understanding will be treated as DATE.’’ Section 6(c)(1) of the AIA printed publications. business confidential information, will provides that the Director will, not later Section 6 of the AIA is entitled be kept separate from the file of the than the date that is one year after the ‘‘POST–GRANT REVIEW involved patents, and will be made date of the enactment of the AIA, issue PROCEEDINGS.’’ Section 6(d) of the available only to Federal Government regulations to carry out chapter 31 of AIA, entitled ‘‘POST–GRANT agencies on written request, or to any title 35, United States Code, as amended REVIEW,’’ adds chapter 32 of title 35, person on a showing of good cause. by section 6(a) of the AIA. United States Code, also entitled Section 6(a) of the AIA amends 35 Section 6(c)(2)(A) of the AIA provides ‘‘POST–GRANT REVIEW.’’ In U.S.C. 318, entitled ‘‘Decision of the that the amendments made by section particular, § 6(d) adds 35 U.S.C. 321– Board.’’ As amended, 35 U.S.C. 318(a) 6(a) of the AIA will take effect upon the 329. Pub. L. 112–29, 125 Stat. 284, 305– provides that if an inter partes review is expiration of the one-year period 311 (2011). instituted and not dismissed under beginning on the date of the enactment Section 6(d) of the AIA adds 35 U.S.C. chapter 31 of title 35, United States of the AIA, and will apply to any patent 321, entitled ‘‘Post-grant review.’’ 35 Code, the Patent Trial and Appeal Board issued before, on, or after that effective U.S.C. 321(a) provides that, subject to will issue a final written decision with date. the provisions of chapter 32 of title 35, respect to the patentability of any patent Section 6(c)(2)(B) of the AIA provides United States Code, a person who is not claim challenged by the petitioner and that the Director may impose a limit on the owner of a patent may file a petition any new claim added under 35 U.S.C. the number of inter partes reviews that with the Office to institute a post-grant 316(d), as amended. As amended, 35 may be instituted under chapter 31 of review of the patent. 35 U.S.C. 321(a) U.S.C. 318(b) provides that if the Patent title 35, United States Code, during each also provides that the Director will Trial and Appeal Board issues a final of the first four one-year periods in establish by regulation fees to be paid by written decision under 35 U.S.C. 318(a), which the amendments made by section the person requesting the review, in as amended, and the time for appeal has 6(a) of the AIA are in effect, if such such amounts as the Director expired or any appeal has terminated, number in each year equals or exceeds determines to be reasonable, the Director will issue and publish a the number of inter partes considering the aggregate costs of the certificate canceling any claim of the reexaminations that are ordered under post-grant review. 35 U.S.C. 321(b) patent finally determined to be chapter 31 of title 35, United States provides that a petitioner in a post-grant unpatentable, confirming any claim of Code, in the last fiscal year ending review may request to cancel as the patent determined to be patentable, before the effective date of the unpatentable one or more claims of a and incorporating in the patent by amendments made by section 6(a) of the patent on any ground that could be operation of the certificate any new or AIA. raised under 35 U.S.C. 282(b)(2) or (3) amended claim determined to be Section 6(c)(3) of the AIA provides a (relating to invalidity of the patent or patentable. As amended, 35 U.S.C. transition provision for the granting, any claim). 35 U.S.C. 321(c) provides 318(c) provides that any proposed conduct, and termination of inter partes that a petition for post-grant review may amended or new claim determined to be reexaminations on or after the effective only be filed not later than the date that patentable and incorporated into a date of the AIA. The Office, in a is nine months after the date of the grant patent following an inter partes review separate rulemaking, revised the rules of the patent or of the issuance of a under chapter 31 of title 35, United governing inter partes reexamination to reissue patent. States Code, will have the same effect as implement the transition provision that Section 6(d) of the AIA adds 35 U.S.C. that specified in 35 U.S.C. 252 for changes the standard for granting a 322, entitled ‘‘Petitions.’’ 35 U.S.C. reissued patents on the right of any request for inter partes reexamination, 322(a) provides that a petition filed person who made, purchased, or used and to reflect the termination of inter under 35 U.S.C. 321 may be considered

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only if: (1) The petition is accompanied the last date on which such response or other proceeding or matter may by payment of the fee established by the may be filed. 35 U.S.C. 324(d) provide proceed, including providing for the Director under 35 U.S.C. 321; (2) the that the Director will notify the stay, transfer, consolidation, or petition identifies all real parties in petitioner and patent owner, in writing, termination of any such matter or interest; (3) the petition identifies, in of the Director’s determination under 35 proceeding. 35 U.S.C. 325(d) also writing and with particularity, each U.S.C. 324(a) or (b), and will make such provides that, in determining whether to claim challenged, the grounds on which notice available to the public as soon as institute or order a proceeding under the challenge to each claim is based, is practicable. 35 U.S.C. 324(d) also chapter 32 of title 35, United States and the evidence that supports the provides that such notice will include Code, chapter 30 of title 35, United grounds for the challenge to each claim, the date on which the review will States Code, or chapter 31 of title 35, including (A) copies of patents and commence. 35 U.S.C. 324(e) provides United States Code, the Director may printed publications that the petitioner that the determination by the Director take into account whether the same or relies upon in support of the petition whether to institute a post-grant review substantially the same prior art or and (B) affidavits or declarations of under 35 U.S.C. 324 will be final and arguments previously were presented to supporting evidence and opinions, if the nonappealable. the Office and reject the petition on that petitioner relies on other factual Section 6(d) of the AIA adds 35 U.S.C. basis. evidence or on expert opinions; (4) the 325, entitled ‘‘Relation to other 35 U.S.C. 325(e)(1) provides that the petition provides such other proceedings or actions.’’ 35 U.S.C. petitioner in a post-grant review of a information as the Director may require 325(a)(1) provides that a post-grant claim in a patent under chapter 32 of by regulation; and (5) the petitioner review may not be instituted under title 35, United States Code, that results provides copies of any of the documents chapter 32 of title 35, United States in a final written decision under 35 required under paragraphs (2), (3), and Code, if, before the date on which the U.S.C. 328(a), or the real party-in- (4) of 35 U.S.C. 322(a) to the patent petition for such a review is filed, the interest or privy of the petitioner, may owner or, if applicable, the designated petitioner or real party-in-interest filed not request or maintain a proceeding representative of the patent owner. 35 a civil action challenging the validity of before the Office with respect to that U.S.C. 322(b) provides that, as soon as a claim of the patent. 35 U.S.C. 325(a)(2) claim on any ground that the petitioner practicable after the receipt of a petition provides for an automatic stay of a civil raised or reasonably could have raised under 35 U.S.C. 321, the Director will action brought by the petitioner or real during that post-grant review. 35 U.S.C. make the petition available to the party-in-interest challenging the validity 325(e)(2) provides for estoppel against a public. of a claim of the patent and filed on or post-grant review petitioner, or the real Section 6(d) of the AIA adds 35 U.S.C. after the date on which the petition for party-in-interest or privy of the 323, entitled ‘‘Preliminary response to post-grant review was filed, until certain petitioner, in certain civil actions and petition.’’ 35 U.S.C. 323 provides that, if specified conditions are met. 35 U.S.C. certain other proceedings before the a post-grant review petition is filed 325(a)(3) provides that a counterclaim United States International Trade under 35 U.S.C. 321, the patent owner challenging the validity of a claim of a Commission if that post-grant review has the right to file a preliminary patent does not constitute a civil action results in a final written decision under response to the petition, within a time challenging the validity of a claim of a 35 U.S.C. 328(a). period set by the Director, that sets forth patent for purposes of 35 U.S.C. 325(a). 35 U.S.C. 325(f) provides that a post- reasons why no post-grant review 35 U.S.C. 325(b) provides that if a grant review may not be instituted should be instituted based upon the civil action alleging infringement of a under chapter 32 of title 35, United failure of the petition to meet any patent is filed within three months after States Code, if the petition requests requirement of chapter 32 of title 35, the date on which the patent is granted, cancellation of a claim in a reissue United States Code. the court may not stay its consideration patent that is identical to or narrower Section 6(d) of the AIA adds 35 U.S.C. of the patent owner’s motion for a than a claim in the original patent from 324, entitled ‘‘Institution of post-grant preliminary injunction against which the reissue patent was issued, review.’’ 35 U.S.C. 324(a) provides that infringement of the patent on the basis and the time limitations in 35 U.S.C. the Director may not authorize a post- that a petition for post-grant review has 321(c) would bar filing a petition for a grant review to be instituted, unless the been filed or instituted under chapter 32 post-grant review for such original Director determines that the information of title 35, United States Code. patent. presented in the petition filed under 35 35 U.S.C. 325(c) provides that if more Section 6(d) of the AIA adds 35 U.S.C. U.S.C. 321, if such information is not than one petition for a post-grant review 326, entitled ‘‘Conduct of post-grant rebutted, would demonstrate that it is under chapter 32 of title 35, United review.’’ 35 U.S.C. 326(a) provides that more likely than not that at least one of States Code, is properly filed against the the Director will prescribe regulations: the claims challenged in the petition is same patent and the Director determines (1) Providing that the file of any unpatentable. 35 U.S.C. 324(b) provides that more than one of these petitions proceeding under chapter 32 of title 35, that the determination required under warrants the institution of a post-grant United States Code, will be made 35 U.S.C. 324(a) may also be satisfied by review under 35 U.S.C. 324, the Director available to the public, except that any a showing that the petition raises a may consolidate such reviews into a petition or document filed with the novel or unsettled legal question that is single post-grant review. intent that it be sealed will, if important to other patents or patent 35 U.S.C. 325(d) provides that, accompanied by a motion to seal, be applications. 35 U.S.C. 324(c) provides notwithstanding 35 U.S.C. 135(a), 251, treated as sealed pending the outcome that the Director will determine whether and 252, and chapter 30 of title 35, of the ruling on the motion; (2) setting to institute a post-grant review under United States Code, during the forth the standards for the showing of chapter 32 of title 35, United States pendency of any post-grant review sufficient grounds to institute a review Code, pursuant to a petition filed under under chapter 32 of title 35, United under 35 U.S.C. 324(a) and (b); (3) 35 U.S.C. 321 within three months after: States Code, if another proceeding or establishing procedures for the (1) Receiving a preliminary response to matter involving the patent is before the submission of supplemental information the petition under 35 U.S.C. 323; or (2) Office, the Director may determine the after the petition is filed; (4) establishing if no such preliminary response is filed, manner in which the post-grant review and governing a post-grant review under

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chapter 32 of title 35, United States each post-grant review instituted under agreement or understanding will be Code, and the relationship of such chapter 32 of title 35, United States treated as business confidential review to other proceedings under title Code. information, will be kept separate from 35, United States Code; (5) setting forth 35 U.S.C. 326(d)(1) provides that the file of the involved patents, and will standards and procedures for discovery during a post-grant review instituted be made available only to Federal of relevant evidence, including that under chapter 32 of title 35, United Government agencies on written such discovery will be limited to States Code, the patent owner may file request, or to any person on a showing evidence directly related to factual a single motion to amend the patent in of good cause. assertions advanced by either party in one or more of the following ways: (A) Section 6(d) of the AIA adds 35 U.S.C. the proceeding; (6) prescribing sanctions Cancel any challenged ; 328, entitled ‘‘Decision of the Board.’’ for abuse of discovery, abuse of process, and/or (B) for each challenged claim, 35 U.S.C. 328(a) provides that if a post- or any other improper use of the propose a reasonable number of grant review is instituted and not proceeding, such as to harass or to cause substitute claims. 35 U.S.C. 326(d)(2) dismissed under chapter 32 of title 35, unnecessary delay or an unnecessary provides that additional motions to United States Code, the Patent Trial and increase in the cost of the proceeding; amend may be permitted upon the joint Appeal Board will issue a final written (7) providing for protective orders request of the petitioner and the patent decision with respect to the governing the exchange and submission owner to advance materially the patentability of any patent claim of confidential information; (8) settlement of a proceeding under 35 challenged by the petitioner and any providing for the filing by the patent U.S.C. 327, or upon the request of the new claim added under 35 U.S.C. owner of a response to the petition patent owner for good cause shown. 35 326(d). under 35 U.S.C. 323 after a post-grant U.S.C. 326(d)(3) provides that an 35 U.S.C. 328(b) provides that if the review has been instituted, and amendment under 35 U.S.C. 326(d) may Patent Trial and Appeal Board issues a requiring that the patent owner file with not enlarge the scope of the claims of final written decision under 35 U.S.C. such response, through affidavits or the patent or introduce new matter. 35 328(a) and the time for appeal has declarations, any additional factual U.S.C. 326(e) provides that in a post- expired or any appeal has terminated, evidence and expert opinions on which grant review instituted under chapter 32 the Director will issue and publish a the patent owner relies to support the of title 35, United States Code, the certificate canceling any claim of the response; (9) setting forth standards and petitioner will have the burden of patent finally determined to be procedures for allowing the patent proving a proposition of unpatentability unpatentable, confirming any claim of owner to move to amend the patent by a preponderance of the evidence. the patent determined to be patentable, under 35 U.S.C. 326(d) to cancel a Section 6(d) of the AIA adds 35 U.S.C. and incorporating in the patent by challenged claim or propose a 327, entitled ‘‘Settlement.’’ 35 U.S.C. operation of the certificate any new or reasonable number of substitute claims, 327(a) provides that a post-grant review amended claim determined to be and ensuring that any information instituted under chapter 32 of title 35, patentable. submitted by the patent owner in United States Code, will be terminated 35 U.S.C. 328(c) provides that any support of any amendment entered with respect to any petitioner upon the proposed amended or new claim under 35 U.S.C. 326(d) is made joint request of the petitioner and the determined to be patentable and available to the public as part of the patent owner, unless the Office has incorporated into a patent following a prosecution history of the patent; (10) decided the merits of the proceeding post-grant review under chapter 32 of providing either party with the right to before the request for termination is title 35, United States Code, will have an oral hearing as part of the filed. 35 U.S.C. 327(a) also provides that the same effect as that specified in 35 proceeding; (11) requiring that the final if the post-grant review is terminated U.S.C. 252 for reissued patents on the determination in any post-grant review with respect to a petitioner under 35 right of any person who made, be issued not later than one year after U.S.C. 327, no estoppel under 35 U.S.C. purchased, or used within the United the date on which the Director notices 325(e) will attach to the petitioner, or to States, or imported into the United the institution of a proceeding under the real party-in-interest or privy of the States, anything patented by such chapter 32 of title 35, United States petitioner, on the basis of that proposed amended or new claim, or Code, except that the Director may, for petitioner’s institution of that post-grant who made substantial preparation good cause shown, extend the one-year review. 35 U.S.C. 327(a) further therefor, before the issuance of a period by not more than six months, provides that if no petitioner remains in certificate under 35 U.S.C. 328(b). and may adjust the time periods in this the post-grant review, the Office may 35 U.S.C. 328(d) provides that the paragraph in the case of joinder under terminate the post-grant review or Office will make available to the public 35 U.S.C. 325(c); and (12) providing the proceed to a final written decision data describing the length of time petitioner with at least one opportunity under 35 U.S.C. 328(a). between the institution of, and the to file written comments within a time 35 U.S.C. 327(b) provides that any issuance of, a final written decision period established by the Director. agreement or understanding between under 35 U.S.C. 328(a) for each post- 35 U.S.C. 326(b) provides that in the patent owner and a petitioner, grant review. prescribing regulations under 35 U.S.C. including any collateral agreements Section 6(d) of the AIA adds 35 U.S.C. 326, the Director will consider the effect referred to in such agreement or 329, entitled ‘‘Appeal.’’ 35 U.S.C. 329 of any such regulation on the economy, understanding, made in connection provides that a party dissatisfied with the integrity of the patent system, the with, or in contemplation of, the the final written decision of the Patent efficient administration of the Office, termination of a post-grant review under Trial and Appeal Board under 35 U.S.C. and the ability of the Office to complete 35 U.S.C. 327 will be in writing, and a 328(a) may appeal the decision pursuant timely proceedings instituted under true copy of such agreement or to 35 U.S.C. 141–144. 35 U.S.C. 329 also chapter 32 of title 35, United States understanding will be filed in the Office provides that any party to the post-grant Code. before the termination of the post-grant review will have the right to be a party 35 U.S.C. 326(c) provides that the review as between the parties. 35 U.S.C. to the appeal. Patent Trial and Appeal Board will, in 327(b) also provides that at the request Section 6(f) of the AIA is entitled accordance with 35 U.S.C. 6, conduct of a party to the proceeding, the ‘‘REGULATIONS AND EFFECTIVE

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DATE.’’ Section 6(f)(1) of the AIA set forth in section 6(f)(2)(A) of the AIA, who challenges the validity of 1 or more provides that the Director will, not later the Director may deem the Patent Trial claims in a covered business method than the date that is one year after the and Appeal Board to be the Board of patent on a ground raised under section date of the enactment of the AIA, issue Patent Appeals and Interferences, and 102 or 103 of title 35, United States regulations to carry out chapter 32 of may allow the Patent Trial and Appeal Code, as in effect on the day before the title 35, United States Code, as added by Board to conduct any further effective date set forth in section 3(n)(1), section 6(d) of the AIA. proceedings in that interference. may support such ground only on the Section 6(f)(2)(A) of the AIA provides Section 6(f)(3)(C) of the AIA provides basis of prior art that is described by that the amendments made by section that the authorization to appeal or have section 102(a) of such title (as in effect 6(d) of the AIA will take effect upon the remedy from derivation proceedings in on the day before such effective date); expiration of the one-year period sections 141(d) and 146 of title 35, or prior art that discloses the invention beginning on the date of the enactment United States Code, as amended, and more than 1 year before the date of the of the AIA and, except as provided in the jurisdiction to entertain appeals application for patent in the United section 18 of the AIA and in section from derivation proceedings in 28 States; and would be described by 6(f)(3) of the AIA, will apply only to U.S.C. 1295(a)(4)(A), as amended, will section 102(a) of such title (as in effect patents described in section 3(n)(1) of be deemed to extend to any final on the day before the effective date set the AIA. Section 3(n) of the AIA is decision in an interference that is forth in section 3(n)(1)) if the disclosure entitled ‘‘EFFECTIVE DATE.’’ Section commenced before the effective date set had been made by another before the 3(n)(1) of the AIA provides: forth in section 6(f)(2)(A) of the AIA and invention thereof by the applicant for (n) EFFECTIVE DATE.— that is not dismissed pursuant to this patent. (1) IN GENERAL.—Except as otherwise paragraph. Section 18 of the AIA provides that provided in this section, the amendments Transitional Program for Covered the Director may institute a transitional made by this section shall take effect upon Business Method Patents proceeding only for a patent that is a the expiration of the 18-month period covered business method patent. beginning on the date of the enactment of Section 18 of the AIA provides that this Act, and shall apply to any application the Director will promulgate regulations Section 18(d)(1) of the AIA specifies for patent, and to any patent issuing thereon, establishing and implementing a that a covered business method patent that contains or contained at any time— transitional program for the review of is a patent that claims a method or (A) a claim to a claimed invention that has covered business method patents. corresponding apparatus for performing an effective filing date as defined in section data processing or other operations used 100(i) of title 35, United States Code, that is Section 18(a)(1) of the AIA provides that the transitional proceeding will be in the practice, administration, or on or after the effective date described in this management of a financial product or paragraph; or regarded as a post-grant review under (B) a specific reference under section 120, chapter 32 of title 35 United States Code service, except that the term does not 121, or 365(c) of title 35, United States Code, and will employ the standards and include patents for technological to any patent or application that contains or procedures as a post-grant review, inventions. Section 18(d)(2) provides contained at any time such a claim. subject to certain exceptions. For that the Director will issue regulations For example, the post-grant review instance, a petitioner in a covered for determining whether a patent is for provisions will apply to patents issued business method patent review may a technological invention. from applications that have an effective request to cancel as unpatentable one or The AIA provides that the transitional filing date on or after March 16, 2013, more claims of a patent on any ground program for the review of covered eighteen months after the date of that could be raised under 35 U.S.C. business method patents will take effect enactment. 282(b)(2) or (3) (relating to invalidity of on September 16, 2012, one year after Section 6(f)(2)(B) of the AIA provides the patent or any claim), except as the date of enactment, and applies to that the Director may impose a limit on modified by section 18(a)(1)(C) of the any covered business method patent the number of post-grant reviews that AIA (see 35 U.S.C. 321(b)). issued before, on, or after September 16, may be instituted under chapter 32 of Additionally, the determination by the 2012. Section 18 of the AIA and the title 35, United States Code, during each Director of whether to institute a regulations issued under section 18 are of the first four one-year periods in covered business method patent review repealed on September 16, 2020. which the amendments made by section will be final and nonappealable (see 35 Section 18 of the AIA and the 6(d) of the AIA are in effect. U.S.C. 324(e)). Section 18(a)(1)(A) of the regulations issued will continue to Section 6(f)(3) of the AIA is entitled AIA provides that 35 U.S.C. 321(c) and apply after September 16, 2020, to any ‘‘PENDING INTERFERENCES.’’ Section 35 U.S.C. 325(b), (e)(2), and (f) will not petition for a transitional proceeding 6(f)(3)(A) of the AIA provides that the apply to a transitional proceeding. that is filed before September 16, 2020. Director will determine, and include in Section 18(a)(1)(B) of the AIA The Office will not consider a petition the regulations issued under section specifies that a person may not file a for a transitional proceeding that is filed 6(f)(1) of the AIA, the procedures under petition for a transitional proceeding on or after September 16, 2020. which an interference commenced with respect to a covered business Discussion of Specific Rules before the effective date set forth in method patent unless the person or section 6(f)(2)(A) of the AIA is to person’s real party-in-interest or privy Title 37 of the Code of Federal proceed, including whether such has been sued for infringement of the Regulations (CFR), Chapter I, part 42, interference: (i) Is to be dismissed patent or has been charged with Subparts B, C, and D are added as without prejudice to the filing of a infringement under that patent. follows: petition for a post-grant review under Section 18(a)(1)(C) of the AIA further Subpart B—Inter Partes Review chapter 32 of title 35, United States provides that limited prior art shall Code; or (ii) is to proceed as if the AIA apply for those challenged covered Section 42.100: Section 42.100 sets had not been enacted. business method patents granted under forth policy considerations for inter Section 6(f)(3)(B) of the AIA provides first-to-invent provisions. Specifically, partes review proceedings. that, for purposes of an interference that section 18(a)(1)(C) provides that a Section 42.100(a) provides that an is commenced before the effective date petitioner in a transitional proceeding inter partes review is a trial and subject

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to the rules set forth in subpart A of title interest, or a privy of the petitioner is standing to file the inter partes review 42, Code of Federal Regulations. estopped from challenging the claims on and would help prevent spuriously- Section 42.100(b) provides that a the grounds identified in the petition. instituted inter partes reviews. Facially claim in an unexpired patent shall be The rule is consistent with 35 U.S.C. improper standing will be a basis for given its broadest reasonable 325(e)(1) and 315(e)(1), as amended, denying the petition without proceeding construction in light of the specification which provide for estoppel based upon to the merits of the petition. in which it appears. This rule is a final written decision in a post-grant Section 42.104(b) requires that the consistent with the provisions of 35 review, a covered business method petition identify the precise relief U.S.C. 316, as amended, which provides patent review, or inter partes review. requested for the claims challenged. for the promulgation of rules, including Section 42.102: Section 42.102 Specifically, the rule requires that the rules establishing and governing the provides a timeliness requirement for petition identify each claim being proceeding and the relationship of the filing an inter partes review petition. challenged, the specific grounds on proceeding to other proceedings, the Section 42.102(a) provides that a which each claim is challenged, how standards for instituting the proceeding, petition for inter partes review must be the claims are to be construed, why the and standards and procedures for filed consistent with the requirements claims as construed are unpatentable allowing a patent owner to amend the set forth in 35 U.S.C. 311(c), as under the identified grounds, and the patent, as well as 35 U.S.C. 318, as amended. Petitions requesting the exhibit numbers of the evidence relied amended, which provides that the institution of an inter partes review that upon with a citation to the portion of Board will enter a final written decision are filed nine months after the grant of the evidence that is relied upon to on patentability. This rule is also the patent or of the issuance of the support the challenge. This rule is consistent with longstanding reissue patent, but prior to the consistent with 35 U.S.C. 312(a)(3), as established principles of claim institution of a post-grant review would amended, which requires that the construction before the Office. In re Am. be considered timely filed. petition identify, in writing and with Acad. of Sci. Tech Ctr., 367 F.3d 1359, Additionally, petitions filed after particularity, each claim challenged, the 1364 (Fed. Cir. 2004); In re Yamamoto, termination of a post-grant review grounds on which the challenge to each 740 F.2d 1569, 1571 (Fed. Cir. 1984). As would be considered timely. claim is based, and the evidence explained in Yamamoto, a party’s Section 42.102(b) provides that the supporting the challenge. It is also ability to amend claims to avoid prior Director may set a limit on the number consistent with 35 U.S.C. 312(a)(4), as art—which exists in these proceedings of inter partes reviews that may be amended, which allows the Director to (§ 42.121)—distinguishes Office instituted during each of the first four require additional information as part of proceedings from district court one-year periods after inter partes the petition. The rule provides an proceedings and justifies the broadest review takes effect. This rule is efficient means for identifying the legal reasonable interpretation standard for consistent with section 6(c)(2)(B) of the and factual basis for satisfying the claim interpretation. Yamamoto, 740 AIA, which provides for graduated threshold for instituting inter partes F.2d at 1572. implementation of inter partes reviews. review and provides the patent owner Section 42.100(c) provides a one-year The Office, however, does not expect to with notice as to the basis for the time frame for administering the limit the number of petitions for inter challenge to the claims. proceeding after institution, with up to partes review at this time. Section 42.104(c) provides that a a six-month extension for good cause. Section 42.103: Section 42.103 sets petitioner seeking to correct clerical or The one-year period may be adjusted by forth the fee requirement for filing an typographical mistakes in a petition the Board in the case of joinder. This inter partes review petition. could file a motion to correct the rule is consistent with 35 U.S.C. Section 42.103(a) provides that a fee mistakes. The rule also provides that the 316(a)(11), as amended. under § 42.15(a) must accompany a grant of such a motion would not alter Section 42.101: Section 42.101 petition for inter partes review. the filing date of the petition. provides who may file a petition for Section 42.103(b) provides that that Section 42.105: Section 42.105 inter partes review. no filing date will be accorded until full provides petition and exhibit service Section 42.101(a) provides that a payment is received. This rule is requirements in addition to the service party or real party-in-interest must file consistent with 35 U.S.C. 312(a)(1), as requirements of § 42.6. a petition prior to the filing of a civil amended, which provides that a petition Section 42.105(a) requires that the action challenging the validity of a may only be considered if the petition petitioner serve the patent owner at the claim of the patent. The rule follows the is accompanied by the payment of the correspondence address of record for statutory language of 35 U.S.C. 315(a), fee established by the Director. the subject patent and permits service at as amended, which provides that inter Section 42.104: Section 42.104 any other address known to the partes reviews are barred by prior filing provides for the content of petitions to petitioner as likely to effect service as of such a civil action. institute an inter partes review. The rule well. Once a patent has issued, Section 42.101(b) provides that a is consistent with 35 U.S.C 312(a)(4), as communications between the Office and petition may not be filed more than one amended, which allows the Director to the patent owner often suffer. Ray v. year after the date on which the prescribe regulations concerning the Lehman, 55 F.3d 606 (Fed. Cir. 1995) petitioner, the petitioner’s real party-in- information provided with the petition. (patentee’s failure to maintain interest, or a privy of the petitioner was Section 42.104(a) provides that a correspondence address contributed to served with a complaint alleging petition must demonstrate that the failure to pay maintenance fee and infringement. The rule follows the petitioner has standing. To establish therefore expiration of the patent). statutory language of 35 U.S.C. 315(b), standing, a petitioner, at a minimum, While the rule requires service at the as amended, which provides a one-year must certify that the patent is available correspondence address of record in the time limit after date of service of for inter partes review and that the patent, the petitioner will already be in complaint. petitioner is not barred or estopped from communication with the patent owner, Section 42.101(c) provides that a requesting an inter partes review in many cases, at a better service petition may not be filed where the challenging the patent claims. This address than the correspondence petitioner, the petitioner’s real party-in- requirement is to ensure that a party has address of record for the subject patent.

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Section 42.105(b), as adopted in this such a response was due, to determine claims challenged in the petition. final rule, provides that upon agreement whether to institute the review. A patent Section 42.108 is consistent with this of the parties, service may be made owner seeking a shortened period for statutory requirement and identifies electronically, and service may be made such a determination may wish to file how the Board may authorize such a by EXPRESS MAIL® or by means at a patent owner preliminary response review to proceed. In considering least as fast and reliable as EXPRESS well before the date the patent owner whether to authorize the review, the MAIL®. Personal service is not required. preliminary response is due, or file a Board may take into account its ability Section 42.106: Section 42.106 paper stating that no patent owner to complete the proceeding timely. 35 provides for the filing date requirements preliminary response will be filed. No U.S.C. 316(b), as amended. of an inter partes review petition. adverse inferences will be drawn where Section 42.108(a) provides that the Section 42.106(a) specifies the a patent owner elects not to file a Board may authorize the review to requirements for a complete petition. 35 response or elects to waive the response. proceed on all or some of the challenged U.S.C. 312(a), as amended, states that a Section 42.107(c) provides that the claims and on all or some of the grounds petition may only be considered when patent owner preliminary response is of unpatentability asserted for each the petition identifies all the real parties not allowed to present new testimony claim. Specifically, in instituting the in interest, when a copy of the petition evidence, for example, expert witness review, the Board may authorize the is provided to the patent owner or the testimony on patentability. 35 U.S.C. review to proceed on the challenged owner’s representative and the petition 313, as amended, provides that a patent claims for which the threshold is accompanied by the fee established owner preliminary response set forth requirements for the proceeding have by the Director. Consistent with the reasons why no inter partes review been met. The Board will identify the statute, the rule requires that a petition should be instituted. In contrast, 35 grounds upon which the review will to institute an inter partes review will U.S.C. 316(a)(8), as amended, provides proceed on a claim-by-claim basis. Any not be accorded a filing date until the for a patent owner response after claim or issue not included in the petition: (1) Complies with § 42.104; (2) institution and requires the authorization for review is not part of is served upon the patent owner at the presentation, through affidavits or the review. The Office intends to correspondence address of record declarations, of any additional factual publish a notice of the institution of an provided in § 42.105(a); and (3) is evidence and expert opinions on which inter partes review in the Official accompanied by the fee set forth in the patent owner relies in support of the Gazette. § 42.15(a). response. The difference in statutory Section 42.108(b) provides that the Section 42.106(b) provides petitioners language demonstrates that 35 U.S.C. Board, prior to institution of a review, a one month time frame to correct 313, as amended, does not require the may deny some or all grounds for defective petitions to institute an inter presentation of evidence in the form of unpatentability on some or all of the partes review. The rule is consistent testimony in support of a patent owner challenged claims. The rule is with the requirement of 35 U.S.C. preliminary response and the rule consistent with the efficient 312(a), as amended, that the Board may reflects this distinction. In certain administration of the Office, which is a not consider a petition that fails to meet instances, however, a patent owner may consideration in prescribing inter partes the statutory requirements for a petition. be granted additional discovery before review regulations under 35 U.S.C. In determining whether to grant a filing filing its preliminary response and 316(b), as amended. date, the Board will review the petitions submit any testimonial evidence Section 42.108(c) provides that the for procedural compliance. Where a obtained through the discovery. For institution is based on a reasonable procedural defect is noted, e.g., failure example, additional discovery may be likelihood standard and is consistent to state the claims being challenged, the authorized where patent owner raises with the requirements of 35 U.S.C. Board will notify the petitioner that the sufficient concerns regarding the 314(a), as amended. A reasonable petition was incomplete and identify petitioner’s certification of standing. likelihood standard is a somewhat any non-compliance issues. Section 42.107(d) provides that the flexible standard that allows the judge Section 42.107: Section 42.107 sets patent owner preliminary response room for the exercise of judgment. forth the procedure in which the patent cannot include any amendment. See Section 42.120: Section 42.120 sets owner may file a preliminary response. § 42.121 for filing a motion to amend the forth the procedure in which the patent Section 42.107(a) provides that the patent after an inter partes review has owner may file a patent owner response. patent owner may file a preliminary been instituted. Section 42.120(a) provides for a response to the petition. The rule is Section 42.107(e) provides that the patent owner response and is consistent consistent with 35 U.S.C. 313, as patent owner may file a statutory with the requirements of 35 U.S.C. amended, which provides for such a disclaimer under 35 U.S.C. 253(a) in 316(a)(8), as amended. response. compliance with § 1.321(a), disclaiming Section 42.120(b) provides that if no Section 42.107(b) provides that the one or more claims in the patent, and no time for filing a patent owner response due date for the preliminary response to inter partes review will be instituted to to a petition is provided in a Board the petition is no later than three review disclaimed claims. order, the default time for filing the months from the date of the notice that Section 42.108: Section 42.108 response is three months from the date the request to institute an inter partes provides for the institution of an inter the inter partes review was instituted. review has been granted a filing date. partes review. The Board’s experience with patent This rule is consistent with 35 U.S.C. 35 U.S.C. 314(a), as amended, states owner responses is that three months 313, as amended, which provides that that the Director may not authorize an provides a sufficient amount of time to the Director shall set a time period for inter partes review to be instituted, respond in a typical case, especially as filing the patent owner preliminary unless the Director determines that the the patent owner would already have response. information in the petition, and any been provided three months to file a Under 35 U.S.C. 314(b), as amended, patent owner preliminary response, patent owner preliminary response prior the Board has three months from the shows that there is a reasonable to institution of the inter partes review. filing of the patent owner preliminary likelihood that the petitioner would Additionally, the time period for response, or three months from the date prevail with respect to at least one of the response is consistent with the

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requirement that the trial be conducted Under § 42.121(c), a patent owner issue regulations establishing such that a final written decision is may request filing more than one procedures for filing supplemental rendered within one year of the motion to amend its claims during the information after the petition is filed. 35 institution of the review. 35 U.S.C. course of the proceeding. Additional U.S.C. 314(a), as amended, provides that 316(a)(11), as amended. motions to amend may be permitted the institution of an inter partes review Section 42.121: Section 42.121 upon a demonstration of good cause by is based upon the information filed in provides standards and procedures for a the patent owner or a joint request of the the petition under 35 U.S.C. 311, as patent owner to file motions to amend petitioner and the patent owner to amended, and any response filed under the patent. The rule is consistent with materially advance a settlement. 35 U.S.C. 313, as amended. As the 35 U.S.C. 316(a)(9), as amended, which In considering whether good cause is institution of the inter partes review is requires the Office to promulgate rules shown, the Board will take into account not based upon supplemental setting forth the standards and how the filing of such motions would information, the rule provides that procedures for allowing the patent impact the timely completion of the motions identifying supplemental owner to amend the patent. proceeding and the additional burden information be filed after the institution Section 42.121(a) makes it clear that placed on the petitioner. Specifically, of the inter partes review. belated motions to amend may cause the the first motion to amend need not be Subpart C—Post-Grant Review authorized by the Board. The motion integrity and efficiency of the review to will be entered so long as it complies suffer as the petitioner may be required Section 42.200: Section 42.200 sets forth policy considerations for post- with the timing and procedural to devote significant time and resources grant review proceedings. requirements. Additional motions to on claims that are of constantly changing scope. Further, due to time Section 42.200(a) provides that a post- amend will require prior Board grant review is a trial and subject to the authorization. All motions to amend, constraints, motions to amend late in the process may not provide a petitioner rules set forth in subpart A of title 42, even if entered, will not result Code of Federal Regulations. automatically in entry of the proposed a full and fair opportunity to respond to the newly presented subject matter. In Section 42.200(b) provides that a amendment into the patent. The claim in an unexpired patent shall be requirement to consult the Board determining whether to authorize such an additional motion to amend, the given its broadest reasonable reflects the Board’s need to regulate the construction in light of the specification substitution of claims and the Board will consider whether a petitioner has submitted supplemental in which it appears. This rule is amendment of the patent to control information after the time period set for consistent with 35 U.S.C. 326, which unnecessary proliferation of issues and filing a motion to amend in provides for the promulgation of rules, abuses. The rule aids the efficient § 42.121(a)(1). Similarly, motions to including rules establishing and administration of the Office and the amend may be permitted upon a joint governing the proceeding and the timely completion of the review under request of the petitioner and the patent relationship of the proceeding to other 35 U.S.C. 316(b), as amended. owner to advance settlement where the proceedings, the standards for Section 42.121(a) also provides that a motion does not jeopardize the ability of instituting the proceeding, and motion to amend the claims may be the Office to complete the proceeding standards and procedures for allowing a denied where the amendment does not timely. patent owner to amend the patent, as respond to the ground of unpatentability Section 42.122: Section 42.122(a) is well as 35 U.S.C. 328, which provides involved in the trial or seeks to enlarge consistent with the requirements of 35 that the Board will enter a final written the scope of the claims or introduce new U.S.C. 315(d), as amended, regarding decision on patentability. This rule is matter. Section 42.121(a) further multiple proceedings involving the also consistent with longstanding provides that a reasonable number of subject patent. When there is a question established principles of claim substitute claims is presumed to be one of a stay concerning a matter for which construction before the Office. In re Am. substitute claim per challenged claim a statutory time period is running in one Acad. of Sci. Tech Ctr., 367 F.3d 1359, which may be rebutted by a of the proceedings, it is expected that 1364 (Fed. Cir. 2004); In re Yamamoto, demonstration of need. The rule aids the the Director would be consulted prior to 740 F.2d 1569, 1571 (Fed. Cir. 1984). As efficient administration of the Office issuance of a stay, given that the stay explained in Yamamoto, a party’s and the timely completion of the review would impact the ability of the Office to ability to amend claims to avoid prior under 35 U.S.C. 316(b), as amended, meet the statutory deadline. For art—which exists in these proceedings and also is consistent with 35 U.S.C. example, it is expected that the Board (§ 42.221)—distinguishes Office 316(d)(3), as amended, which prohibits would consult the Director prior to the proceedings from district court enlarging the scope of the claims or issuance of a stay in an ex parte proceedings and justifies the broadest introducing new matter. Further, the reexamination proceeding where the reasonable interpretation standard for rule is consistent with 35 U.S.C. three-month statutory time period under claim interpretation. Yamamoto, 740 316(a)(9), as amended, which requires 35 U.S.C. 303 is running. F.2d at 1572. the Office to promulgate rules setting Under § 42.122(b), a patent owner or Section 42.200(c) provides a one-year forth the standards and procedures for petitioner may request joinder, but such timeframe for administering the the patent owner to amend the patent. a request must be filed no later than one proceeding after institution, with up to Section 42.121(b) provides that a month after institution. Further, the a six-month extension for good cause. motion to amend the claims must time period set forth in § 42.101(b) shall The one-year period may be adjusted by include a claim listing, show the not apply when the petition is the Board in the case of joinder. This changes clearly, and set forth: (1) The accompanied by a request for joinder. rule is consistent with 35 U.S.C. support in the original disclosure of the This is consistent with the last sentence 326(a)(11). patent for each claim that is added or of 35 U.S.C. 315(b), as amended. Section 42.200(d) provides that amended, and (2) the support in an Section 42.123: Section 42.123 interferences commenced within one earlier filed disclosure for each claim for provides for the filing of supplemental year of enactment of the AIA shall which benefit of the filing date of the information. 35 U.S.C. 316(a)(3), as proceed under part 41 of 37 CFR except earlier filed disclosure is sought. amended, provides that the Director will as the Chief Administrative Patent Judge

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may otherwise order in the interests-of- Section 42.203: Section 42.203 the mistakes. The rule also provides that justice. The expectation is that dismissal provides that a fee must accompany a the grant of such a motion would not will be rarely, if ever, ordered. Hence, petition for post-grant review and that alter the filing date of the petition. any case where such an order arises no filing date will be accorded until full Section 42.205: Section 42.205 would be exceptional and should be payment is received. This rule is provides petition and exhibit service handled as its circumstances require. consistent with 35 U.S.C. 322(a)(1), requirements in addition to the service This rule is consistent with section which provides that a petition may only requirements of § 42.6. 6(f)(3) of the AIA, which provides that be considered if the petition is Section 42.205(a) requires the the Director shall include in regulations accompanied by the payment of the fee petitioner to serve the patent owner at the procedures under which an established by the Director. the correspondence address of record interference commenced before the Section 42.204: Section 42.204 for the patent, and permits service at effective date of the act is to proceed. provides for the content of petitions to any other address known to the Section 42.201: Section 42.201 institute a post-grant review. The rule is petitioner as likely to effect service as provides who may file a petition for consistent with 35 U.S.C 322(a)(4), well. Once a patent has issued, post-grant review. which allows the Director to prescribe communications between the Office and Section 42.201(a) provides that a regulations concerning the information the patent owner often suffer. Ray v. person who is not the patent owner may provided with the petition. Lehman, 55 F.3d 606 (Fed. Cir. 1995) file a petition to institute a post-grant Section 42.204(a) provides that a (patentee’s failure to maintain review, unless the petitioner or real petition must demonstrate that the correspondence address contributed to party-in-interest had already filed a civil petitioner has standing. To establish failure to pay maintenance fee and action challenging the validity of a standing, a petitioner, at a minimum, therefore expiration of the patent). claim of the patent. The rule follows the must certify that the patent is available While the rule requires service at the statutory language of 35 U.S.C. for post-grant review and that the correspondence address of record in the 325(a)(1), which provides that post- petitioner is not barred or estopped from patent, the petitioner will already be in requesting a post-grant review grant reviews are barred by prior civil communication with the patent owner, action. challenging the patent claims. This in many cases, at a better service Section 42.201(b) provides that a requirement is to ensure that a party has address than the official correspondence petition may not be filed where the standing to file the post-grant review address. petitioner, the petitioner’s real party-in- and would help prevent spuriously- Section 42.205(b), as adopted in this interest, or a privy of the petitioner is instituted post-grant reviews. Facially final rule, provides that upon agreement estopped from challenging the claims on improper standing will be a basis for the grounds identified in the petition. denying the petition without proceeding of the parties, service may be made electronically, and service may be made The rule is consistent with 35 U.S.C. to the merits of the petition. ® 325(e)(1) and 315(e)(1), as amended, Section 42.204(b) requires that the by EXPRESS MAIL or by means at least as fast and reliable as EXPRESS which provide for estoppel based upon petition identify the precise relief ® a final written decision in a post-grant requested for the claims challenged. MAIL . Personal service is not required. review, a covered business method Specifically, the rule requires that the Section 42.206: Section 42.206 patent review, or inter partes review. petition identify each claim being provides for the filing date requirements Section 42.202: Section 42.202 sets challenged, the specific grounds on of a post-grant review petition. forth the timeliness requirement for which each claim is challenged, how Section 42.206(a) sets forth the filing a post-grant review petition. the claims are to be construed, how the requirements for a complete petition. 35 Section 42.202(a) provides that a claims as construed are unpatentable, U.S.C. 322 states that a petition may petition for a post-grant review of a why the claims as construed are only be considered when the petition patent must be filed no later than the unpatentable under the identified identifies all the real parties in interest, date that is nine months after the date grounds, and the exhibit numbers of the when a copy of the petition is provided of the grant of a patent or of the issuance evidence relied upon with a citation to to the patent owner or the owner’s of a reissue patent. Section 42.202(a) the portion of the evidence that is relied representative, and when the petition is also provides that a petition may not upon to support the challenge. This rule accompanied by the fee established by request a post-grant review for a claim is consistent with 35 U.S.C. 322(a)(3), the Director. Consistent with the statute, in a reissue patent that is identical to or which requires that the petition the rule requires that a complete narrower than a claim in the original identify, in writing and with petition be filed along with the fee and patent from which the reissue patent particularity, each claim challenged, the that it be served upon the patent owner. was issued unless the petition is filed grounds on which the challenge to each Section 42.206(b) provides one month not later than the date that is nine claim is based, and the evidence to correct defective requests to institute months after the date of the grant of the supporting the challenge. It is also a post-grant review, unless the statutory original patent. The rule is consistent consistent with 35 U.S.C. 322(a)(4), deadline in which to file a petition for with the requirements of 35 U.S.C. which allows the Director to require post-grant review has expired. The rule 321(c). additional information as part of the is consistent with the requirement of 35 Section 42.202(b) provides that the petition. The rule provides an efficient U.S.C. 322 that the Board may not Director may limit the number of post- means for identifying the legal and consider a petition that fails to meet the grant reviews that may be instituted factual basis satisfying the threshold for statutory requirements for a petition. In during each of the first four one-year instituting a proceeding and provides determining whether to grant a filing periods after post-grant review takes the patent owner with a minimum level date, the Board will review a petition for effect. This rule is consistent with of notice as to the basis for the challenge procedural compliance. Where a section 6(f)(2)(B) of the AIA, which to the claims. procedural defect is noted, e.g., failure provides for graduated implementation Section 42.204(c) provides that a to state the claims being challenged, the of post-grant reviews. The Office, petitioner seeking to correct clerical or Board will notify the petitioner that the however, does not expect to limit the typographical mistakes in a petition petition was incomplete and identify number of petitions at this time. could file a procedural motion to correct any non-compliance issues.

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Section 42.207: Section 42.207(a) § 42.221 for filing a motion to amend the Section 42.208(d) provides that a provides that the patent owner may file patent after a post-grant review has been determination under § 42.208(c) may be a preliminary response to the petition. instituted. satisfied by a showing that the petition The rule is consistent with 35 U.S.C. Section 42.207(e) provides that the raises a novel or unsettled legal question 323, which provides for such a patent owner may file a statutory that is important to other patents or response. disclaimer under 35 U.S.C. 253(a) in patent applications. This rule is Section 42.207(b) provides that the compliance with § 1.321(a), disclaiming consistent with 35 U.S.C. 324(b). The due date for the preliminary response to one or more claims in the patent, and no expectation is that this ground for a petition is no later than three months post-grant review will be instituted to post-grant review would be used from the date of the notice that the review disclaimed claims. sparingly. request to institute a post-grant review Section 42.208: Section 42.208 Section 42.220: Section 42.220 sets has been granted a filing date. This rule provides for the institution of a post- forth the procedure in which the patent is consistent with 35 U.S.C. 323, which grant review. owner may file a patent owner response. provides that the Director shall set a 35 U.S.C. 324(a), as amended, states Section 42.220(a) provides for a time period for filing the patent owner that the Director may not authorize a patent owner response and is consistent preliminary response. post-grant review to be instituted, with the requirements of 35 U.S.C. Within three months from the filing of unless the Director determines that the 326(a)(8). the patent owner preliminary response, information in the petition, if such Section 42.220(b) provides that if no or three months from the date such a information is not rebutted, time for filing a patent owner response response was due, the Board will demonstrates that it is more likely than to a petition is provided in a Board determine whether to institute the not that at least one of the claims order, the default time for filing the review. A patent owner seeking a challenged in the petition is response is three months from the date shortened period for the determination unpatentable. Alternatively, the Director the post-grant review is instituted. The may wish to file a preliminary response may institute a post-grant review by Board’s experience with patent owner well before the date the response is due, showing that the petition raises a novel responses is that three months provides or file a paper stating that no or unsettled legal question that is a sufficient amount of time to respond preliminary response will be filed. No important to other patents or patent in a typical case, especially as the patent adverse inference will be drawn where applications. Section 42.208 is owner would already have been a patent owner elects not to file a consistent with this statutory provided three months to file a patent response or elects to waive the response. requirement and identifies how the owner preliminary response prior to Section 42.207(c) provides that the Board may authorize such a review to institution. Additionally, the time patent owner preliminary response may proceed. In considering whether to period for response is consistent with not present new testimony evidence, for authorize the review, the Board may the requirement that the trial be example, expert witness testimony on take into account its ability to complete conducted such that the Board renders patentability. 35 U.S.C. 323 provides the proceeding timely. 35 U.S.C. 326(b). a final decision within one year of the that a patent owner preliminary Section 42.208(a) provides that the institution of the review. 35 U.S.C. response set forth reasons why no post- Board may authorize the review to 326(a)(11). grant review should be instituted. In proceed on all or some of the challenged Section 42.221: Section 42.221 contrast, 35 U.S.C. 326(a)(8) provides for claims and on all or some of the grounds provides standards and procedures for a a patent owner response after institution of unpatentability asserted for each patent owner to file motions to amend and requires the presentation, through claim. Specifically, in instituting the the patent. The rule is consistent with affidavits or declarations, of any review, the Board may authorize the 35 U.S.C. 326(a)(9), which requires the additional factual evidence and expert review to proceed on the challenged Office to promulgate rules setting forth opinions on which the patent owner claims for which the threshold standards and procedures for allowing relies in support of the response. The requirements for the proceeding have the patent owner to amend the patent. difference in statutory language been met. The Board may identify Section 42.221(a) makes it clear that demonstrates that 35 U.S.C. 323 does which of the grounds the review will the first motion to amend need not be not permit the presentation of evidence proceed upon on a claim-by-claim basis. authorized by the Board. If the motion as a matter of right in the form of Any claim or issue not included in the complies with the timing and testimony in support of a patent owner authorization for review would not be procedural requirements, the motion preliminary response, and the proposed part of the post-grant review. The Office would be entered. Additional motions rule reflects this distinction. In certain intends to publish a notice of the to amend would require prior Board instances, however, a patent owner may institution of a post-grant review in the authorization. All motions to amend, be granted additional discovery before Official Gazette. even if entered, will not result filing its preliminary response and may Section 42.208(b) provides that the automatically in entry of the proposed submit any testimonial evidence Board, prior to institution of a review, amendment into the patent. The obtained through the discovery. For may deny some or all grounds for requirement to consult the Board example, additional discovery may be unpatentability on some or all of the reflects the Board’s need to regulate the authorized where the patent owner challenged claims. This rule is substitution of claims and the raises sufficient concerns regarding the consistent with the efficient amendment of the patent to control petitioner’s certification of standing. administration of the Office, which is a unnecessary proliferation of issues and Although 35 U.S.C. 324 does not consideration in prescribing post-grant abuse of the system. The proposed rule require that a patent owner preliminary review regulations under 35 U.S.C. aids in the efficient administration of response be considered, the Board 326(b). the Office and the timely completion of expects to consider such responses in Section 42.208(c) provides that the the proceeding. 35 U.S.C. 326(b). all but exceptional cases. institution may be based on a more Section 42.221(a) also provides that a Section 42.207(d) provides that the likely than not standard and that motion to amend the claims may be patent owner preliminary response standard is consistent with the denied where the amendment does not cannot include any amendment. See requirements of 35 U.S.C. 324(a). respond to the ground of unpatentability

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involved in the trial or seeks to enlarge of the proceedings, where the stay in using such a standard the Board will the scope of the claims or introduce new would impact the ability of the Office to attempt to consider whether the matter. Section 42.221(a) further meet the statutory deadline, it is additional discovery is necessary in provides that a reasonable number of expected that the Director would be light of ‘‘the totality of the relevant substitute claims is presumed to be one consulted prior to issuance of a stay, circumstances.’’ U.S. v. Roberts, 978 substitute claim per challenged claim given that the stay would impact the F.2d 17, 22 (1st Cir. 1992). which may be rebutted by a ability of the Office to meet the statutory Subpart D—Transitional Program for demonstration of need. The rule aids the deadline for completing the post-grant Covered Business Method Patents efficient administration of the Office review. For example, it is expected that and the timely completion of the review the Board would consult the Director Section 42.300: Section 42.300 sets under 35 U.S.C. 326(b) and also is prior to the issuance of a stay in an ex forth policy considerations for covered consistent with 35 U.S.C. 326(d)(3) parte reexamination proceeding where business method patent review which prohibits enlarging the scope of the three-month statutory time period proceedings. the claims or introducing new matter. under 35 U.S.C. 303 is running. Section 42.300(a) provides that a Section 42.221(b) provides that a Under § 42.222(b), a patent owner or covered business method patent review motion to amend the claims must petitioner may request a joinder, but is a trial and subject to the rules set forth include a claim listing, show the such a request must be filed no later in subpart A and also subject to the changes clearly, and set forth: (1) The than one month after institution. post-grant review procedures set forth in support in the original disclosure of the Section 42.223: Section 42.223 subpart C except for §§ 42.200, 42.201, patent for each claim that is added or provides for the filing of supplemental 42.202, and 42.204. This is consistent amended, and (2) the support in an information. 35 U.S.C. 326(a)(3) with section 18(a)(1) of the AIA, which earlier filed disclosure for each claim for provides that the Director shall provides that the transitional which benefit of the filing date of the promulgate regulations establishing proceeding shall be regarded as, and earlier filed disclosure is sought. procedures for filing supplemental shall employ the standards and Under § 42.221(c), a patent owner information after the petition is filed. 35 procedures of, a post-grant review with may request the filing of more than one U.S.C. 324(a) provides that the certain exceptions. motion to amend its claims during the institution of a post-grant review is Section 42.300(b) provides that a course of the proceeding. Additional based upon the information filed in the claim in an unexpired patent shall be motions to amend may be permitted petition under 35 U.S.C. 321 and any given its broadest reasonable upon a demonstration of good cause by response filed under 35 U.S.C. 323. As construction in light of the specification the patent owner or a joint request of the the institution of the post-grant review in which it appears. This rule is petitioner and the patent owner to is not based upon supplemental consistent with the provisions of 35 materially advance a settlement. information, the rule provides that U.S.C. 326, which provides for the In considering whether good cause is motions identifying supplemental promulgation of rules, including rules shown, the Board will take into account information be filed after the institution establishing and governing the how the filing of such motions would of the post-grant review. proceeding and the relationship of the impact the timely completion of the Section 42.224: Section 42.224 proceeding to other proceedings, the proceeding and the additional burden provides that additional discovery in a standards for instituting the proceeding, placed on the petitioner. Specifically, post-grant review is limited to evidence and standards and procedures for belated motions to amend may cause the directly related to factual assertions allowing a patent owner to amend the integrity and efficiency of the review to advanced by a party to the proceeding patent, as well as 35 U.S.C. 328, which suffer as the petitioner may be required and that the standard for additional provides that the Board will enter a final to devote significant time and resources discovery is good cause. The rule is written decision on patentability. This on claims that are of constantly consistent with 35 U.S.C. 326(a)(5), rule would also be consistent with changing scope. Furthermore, due to which provides that the Director shall longstanding established principles of time constraints, motions to amend late prescribe regulations setting forth the claim construction before the Office. in the process may not provide a standards and procedures for discovery See, e.g., In re Am. Acad. of Sci. Tech petitioner a full and fair opportunity to of relevant evidence that is directly Ctr., 367 F.3d 1359, 1364 (Fed. Cir. respond to the newly presented subject related to factual assertions by either 2004); In re Yamamoto, 740 F.2d 1569, matter. In determining whether to party. 1571 (Fed. Cir. 1984). As explained in authorize such an additional motion to While an interests-of-justice standard Yamamoto, a party’s ability to amend amend, the Board will consider whether will be employed in granting additional claims to avoid prior art—which exists a petitioner has submitted supplemental discovery in inter partes reviews and in these proceedings (§ 42.221)— information after the time period set for derivation proceedings, new subpart C distinguishes Office proceedings from filing a motion to amend in will provide that a good cause standard district court proceedings and justifies § 42.221(a)(1). Similarly, a motion to is employed in post-grant reviews, and the broadest reasonable interpretation amend may be permitted upon a joint by consequence, in covered business standard for claim interpretation. request of the petitioner and the patent method patent reviews. Good cause and Yamamoto, 740 F.2d at 1572. owner to advance settlement where the interests-of-justice are closely related Section 42.300(c) provides a one-year motion does not jeopardize the ability of standards, but on balance, the interests- timeframe for administering the the Office to complete the proceeding of-justice standard is a slightly higher proceeding after institution, with a six- timely. standard than good cause. While a good month extension for good cause. The Section 42.222: Section 42.222 is cause standard requires a party to show one-year period may be adjusted by the consistent with the requirements of 35 a specific factual reason to justify the Board in the case of joinder. This rule U.S.C. 325(d) regarding multiple needed discovery, interests-of-justice is consistent with 35 U.S.C. 326(a)(11). proceedings involving the subject would mean that the Board would look Section 42.300(d) provides that the patent. When there is a question of a at all relevant factors. The interests-of- rules in subpart D are in effect until stay concerning a matter for which a justice standard covers considerably September 15, 2020, except that the statutory time period is running in one more than the good cause standard, and rules shall continue to apply to any

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covered business method patent review explanation that the patent is a covered business method patent’’ and filed before the date of repeal. This is business method patent and that the ‘‘technological invention’’ are also consistent with section 18(a)(3)(A) of petitioner meets the eligibility provided in another separate final rule the AIA, which provides that the requirements of § 42.302. This (RIN 0651–AC75). regulations issued are repealed effective requirement is to ensure that a party has The Office’s responses to comments upon the expiration of the eight-year standing to file the covered business that are directed to inter partes review period beginning on the date that the method patent review and would help proceedings (77 FR 7041), post-grant regulations take effect, and section prevent spuriously instituted reviews. review proceedings (77 FR 7060), and 18(a)(3)(B) which provides that the rules Facially improper standing will be a transitional post-grant review in effect until before the repeal will basis for denying the petition without proceedings for covered business govern covered business method patent proceeding to the merits of the decision. method patents (77 FR 7080) are reviews filed before the date of appeal. Section 42.304(b) requires that the provided as follows: Section 42.302: Section 42.302 petition identify the precise relief specifies who may file a petition for a requested for the claims challenged. Eligibility covered business method patent review. Specifically, the rule requires that the Comment 1: One comment requested Section 42.302(a) provides that a petition identify each claim being clarification on whether an inter partes petitioner may not file a petition to challenged, the specific grounds on review may be requested for a patent institute a covered business method which each claim is challenged, how issued from an application filed before patent review of the patent unless the the claims are to be construed, why the November 29, 1999. petitioner, the petitioner’s real party-in- claims as construed are unpatentable, Response: Inter partes review is interest, or a privy of the petitioner has and the exhibit numbers of the evidence applicable to a patent issued from an been sued for infringement of the patent relied upon with a citation to the application filed before November 29, or has been charged with infringement portion of the evidence that is relied 1999. See section 6(c)(2)(A) of the AIA. under that patent. This rule is consistent upon to support the challenge. This rule Who May Petition (§§ 42.101, 42.201) with section 18(a)(1)(B) of the AIA. is consistent with 35 U.S.C. 322(a)(3), Section 42.302(a) also defines the term which requires that the petition Comment 2: Several comments ‘‘charged with infringement’’ to mean ‘‘a identify, in writing and with suggested that patent owners should be real and substantial controversy particularity, each claim challenged, the permitted to petition for inter partes regarding infringement of a covered grounds on which the challenge to each review to provide a low cost alternative business method patent such that the claim is based, and the evidence to small companies seeking to defend petitioner would have standing to bring supporting the challenge. It is also their patents. a declaratory judgment action in Federal consistent with 35 U.S.C. 322(a)(4), Response: This suggestion is not court.’’ which allows the Director to require adopted because 35 U.S.C. 311, as Section 42.302(b) provides that a additional information as part of the amended, requires that the petition in petitioner may not file a petition to petition. The rule provides an efficient an inter partes review be filed by a institute a covered business method means for identifying the legal and person who is not the owner of the patent review of the patent where the factual bases supporting a prima facie patent. petitioner, the petitioner’s real party-in- case of relief and would provide the Comment 3: Several comments interest, or a privy of the petitioner is patent owner with a minimum level of suggested that the Office should estopped from challenging the claims on notice as to the basis for the challenge interpret the terms ‘‘real parties in the grounds identified in the petition. to the claims. interest’’ and ‘‘privies’’ in a flexible The rule is consistent with 35 U.S.C. Section 42.304(c) provides that a manner consistent with common law 325(e)(1), which provides for estoppel petitioner seeking to correct clerical or principles and Federal case law, and set based upon a final written decision in typographical mistakes could file a forth common law definitions in the a post-grant review. motion to correct the mistakes. The rule regulation. One comment was in favor Section 42.303: Section 42.303 also provides that the grant of such a of the proposed rules related to the provides that a petition for a covered motion would not alter the filing date of identification of real party-in-interest business method patent review may be the petition. and related matters under § 42.8. filed at any time except during the However, another comment expressed Response to Comments period in which a petition for a post- concerns related to the predictability of grant review of the patent would satisfy The Office received 251 written the Office’s case-by-case approach in the requirements of 35 U.S.C. 321(c). submissions of comments from view of the estoppel effects. This rule is consistent with section intellectual property organizations, Response: Because ‘‘real party-in- 18(a)(2) of the AIA. businesses, law firms, patent interest’’ and ‘‘privy’’ disputes involve Section 42.304: Section 42.304 practitioners, and others. The comments highly fact-dependent issues, the Office provides for the content of petitions to provided support for, opposition to, and believes that the case-by-case approach institute a covered business method diverse recommendations on the is the best way to resolve these disputes. patent review. The rule is consistent proposed rules. The Office appreciates The Board will make the determination with 35 U.S.C. 322(a)(4), which allows the thoughtful comments, and has based on controlling case law and the the Director to prescribe regulations considered and analyzed the comments particular facts of each case as suggested concerning the information provided thoroughly. The Office’s responses to by several of the comments. The Office with the petition to institute a covered the comments that are directed to the Patent Trial Practice Guide provides business patent review. consolidated set of rules relating to further discussion to assist parties in Section 42.304(a) provides that a Board trial practice and judicial review identifying ‘‘real parties in interest’’ and petition under this section must of Board decisions are provided in a ‘‘privies.’’ demonstrate that the petitioner has separate final rule (RIN 0651–AC70), Comment 4: Several comments grounds for standing. To establish and the Office’s responses to the requested additional guidance regarding standing, a petitioner, at a minimum, comments that are directed to the the definitions for the terms ‘‘real party- would be required to certify with definitions of the terms ‘‘covered in-interest’’ and ‘‘privy.’’ Some of the

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comments requested examples, such as petitioner, but the fact is relevant to raises sufficient concerns regarding the whether a third party who provides those inquiries. Of particular relevance petitioner’s certification. financial, legal, and technical assistance is the party’s level of participation in, Comment 11: One comment will be considered a real party-in- and control over, the requested trial. recommended that the estoppel effects interest or privy. Comment 8: A few comments should be enforced against the named Response: The Office Patent Trial suggested that the Office should require petitioner and privies of the named Practice Guide provides further that challenges to ‘‘real party-in- petitioner, as well as the actual real discussion to assist parties in interest’’ identifications be brought no parties in interest and its privies. identifying ‘‘real parties in interest’’ and later than the deadline for filing a patent Response: Depending on the ‘‘privies.’’ Since ‘‘real party-in-interest’’ owner preliminary response in order to particular facts of each case, including and ‘‘privy’’ issues are highly fact provide sufficient time for the Board to whether there is any intent of dependent, the Office will also provide decide the challenge before deciding misrepresentation, the Board has the more guidance through its opinions and whether to institute a review. Another discretion to impose an appropriate will publish relevant decisions comment requested clarification that sanction against a party for misconduct promptly. standing may be challenged at any time. e.g., a petitioner willfully misleads the Comment 5: A few comments Response: The Office agrees with the Office that it is a proper petitioner for recommended that the Office should comments that such a challenge should a review of certain claims in a patent maintain the control-focused approach be brought before or with the filing of when the party knew on filing that they to non-party estoppel and requested the patent owner preliminary response. were a privy of a previously more information regarding control- During that period, the patent owner unsuccessful petitioner who had sought focused understandings of the terms may seek authorization to take pertinent review of the same claims in the same ‘‘real party-in-interest’’ and ‘‘privy.’’ discovery. After the patent owner patent. See § 42.12. Response: The Office may consider: preliminary response, the likelihood of (1) Whether the non-party exercised, or granting an authorization for additional Pendency (§§ 42.100(c) and 42.200(c)) could have exercised, control over a discovery related to the challenge before Comment 12: One comment opposed party’s participation in a proceeding, institution will decrease because the any policy that would allow extension and (2) the degree of that control, in Board is required to determine whether of the one-year period whenever a determining whether a party may be to institute a review within three petition possesses certain indicia of recognized as a ‘‘real party-in-interest’’ months from the filing of the patent complexity, e.g., when the petition or ‘‘privy.’’ Furthermore, the Office may owner preliminary response. After involves an obviousness challenge, and consider other relevant factors. The institution, standing issues may still be urged the Office to remain firm in its Office Patent Trial Practice Guide raised during the trial. A patent owner commitment to complete proceedings provides further discussion to assist in may seek authority from the Board to within the one-year period, with only identifying the relevant parties. The take pertinent discovery or to file a rare use of the six-month extension. Office will also provide more guidance motion to challenge the petitioner’s Response: The rules require final through its opinions, and will publish standing. determinations to be issued in both relevant decisions promptly. Comment 9: A few comments post-grant and inter partes review Comment 6: A few comments requested clarification that the burdens within the one-year period. §§ 42.100(c) suggested that the Office should of proof and persuasion will be on the and 42.200(c). Extensions of the one- describe how its practice in making patent owner to come forward with year period are anticipated to be rare. ‘‘real party-in-interest’’ and ‘‘privy’’ objective evidence to support a Comment 13: Several comments determinations will differ from its challenge to the ‘‘real party-in-interest’’ supported a high threshold for granting current approach in inter partes identification. One comment suggested an extension of the one-year period and reexaminations. that the Office should require asked for guidance as to what would Response: The Office Patent Trial petitioners to update the submissions constitute good cause to extend the one- Practice Guide provides a few examples related to estoppel throughout the year period. of relevant petition decisions issued in pendency of a review proceeding, and Response: Extensions of the one-year reexaminations. Since ‘‘real party-in- disclose any facts relevant to the period are anticipated to be rare. interest’’ and ‘‘privy’’ determinations certification. §§ 42.100(c) and 42.200(c). Whether are fact dependent, the Office will Response: The Office generally will good cause is shown will depend on the consider the particular facts of each case accept the petitioner’s ‘‘real party-in- particular facts of a given case and and controlling case law. interest’’ identification at the time of cannot be articulated with certainty in Comment 7: A few comments filing the petition. Section 42.8(a)(3) the abstract. One example may be requested clarification on the relevance requires a party to file an update within where, through no fault of either party, of Joint Defense Agreements to a ‘‘real 21 days of a change of the ‘‘real party- new evidence is uncovered late in the party-in-interest’’ or ‘‘privy’’ in-interest’’ identification. The patent proceeding that necessitates a motion to determination. owner may provide objective evidence amend the patent. Response: Since ‘‘real party-in- to challenge the identification in a Comment 14: Several comments asked interest’’ and ‘‘privy’’ determinations preliminary response, which the Board for guidance as to the impact of the depend on the particular facts of each will consider in determining whether to Board missing the one-year period in case, the Office will decide these issues grant the petition. post-grant or inter partes review; for on a case-by-case basis. As to Joint Comment 10: A few comments example whether the Board retains Defense Agreements, the Office Patent suggested that the discovery rules jurisdiction and what recourse is Trial Practice Guide discusses their role should be expanded to permit the patent available to the parties. in the determination. In short, a party’s owner to investigate the petitioner’s Response: As amended, 35 U.S.C. membership in a Joint Defense compliance with the identification of 316(a)(11) and 35 U.S.C. 326(a)(11) Agreement with the petitioner does not, the real party-in-interest. require the Director to prescribe standing alone, make the party a ‘‘real Response: Additional discovery may regulations requiring that the final party in interest’’ or ‘‘privy’’ of the be authorized where a patent owner determination be issued within one year

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(extendable up to six months with good issuance or the termination of an 6(f)(2)(B) of the AIA. Any petition filed cause). Consistent with these statutory instituted post-grant review. The after the Director has established a limit, provisions, the Office adopted statement in the discussion refers to the and that limit has been exceeded, will §§ 42.100(c) and 42.200(c) in this final situation where nine months have be untimely because the petition would rule to set forth the one-year time passed since issuance, yet no decision have been filed beyond a time when the period. The Office does not envision at on whether to institute a post-grant Office is receiving petitions for the year. this time extending any review beyond review has been entered. In such a Comment 23: Several comments the time periods set forth in §§ 42.100(c) situation, a party need not wait until a suggested that the Office should provide and 42.200(c). decision on whether the post-grant a monthly or quarterly count of the Comment 15: Several comments review will be instituted, but may number of filed petitions and instituted suggested that meeting the one-year proceed and file a petition for inter proceedings and notice prior to and period will be difficult where a party is partes review. when any limit is reached. outside the United States and that Comment 19: Several comments Response: At this time it is not allowing less time for judicial expressed concern about any decision anticipated that a limit on the number deliberations should be considered in by the Director to limit the number of of proceedings instituted will be such instances. petitions for inter partes or post-grant imposed and therefore, no limit has Response: The rules allow the Board review. been established. If a limit is set in the to take into consideration any factor that Response: Although the AIA future it is expected that the Office might affect the ability to meet the one- authorizes the Director to limit the would provide sufficient notice, year period and to adjust the schedule number of petitions under sections including periodic reporting of the accordingly, including providing less 6(c)(2)(B) and 6(f)(2)(B) of the AIA, as number of petitions received and time for judicial deliberations. stated previously in the discussion of proceedings instituted, well prior to the Comment 16: One comment suggested §§ 42.102(b) and 42.202(b), the Office time any limit would be met. that the Office should confirm in the does not plan to limit the number of Comment 24: One comment suggested Office Patent Trial Practice Guide or the petitions at this time. that the Office accept petitions for rules that ‘‘good cause’’ exists for a six- Comment 20: One comment suggested covered business method patent review month extension of the one-year period that the petition fees should allow the prior to the effective date of the program where a motion to amend is filed after Office to cover the demand that may pursuant to section 18(a)(2) of the AIA, the patent owner’s response so that the exist for post-grant proceedings. so that the Office can begin immediate patent owners cannot ‘‘sandbag’’ the Response: The fees have been set with consideration of those petitions as of petitioners by holding back substitute consideration for the aggregate cost of September 16, 2012. claims. the proceeding. See 35 U.S.C. 321(a). At Response: The suggestion is not Response: This suggestion is not this time the Office expects to be able adopted. The AIA provides that adopted because extensions of the one- to provide the resources necessary to regulations issued for the transitional year period are anticipated to be rare. avoid limiting the number of petitions. covered business method patent Whether good cause is shown will Comment 21: Several comments program shall take effect one year from depend on the particular facts of a given suggested that guidance should be the date of the enactment of the Act, as case. Sections 42.121 and 42.221 require provided for consequences if the set forth in section 18(a)(2). Consistent a patent owner to seek authorization for Director makes a decision to limit the with the provision, the regulations for filing a motion to amend claims after a number of petitions. In particular, the the transitional covered business patent owner response, so that the comments requested clarification on method patent program will take effect Board will be able to determine proper whether a petition, filed after the limit September 16, 2012. At that time, the scheduling for completing the review is reached, would be afforded any Office will accept petitions for the within the one-year period, and possibly benefit of priority or would be required program. to deny a patent owner’s request to file to be resubmitted. Response: At this time, it is not Content of Petition (§§ 42.104, 42.204, a motion to amend if it comes too late and 42.304) in the proceeding. anticipated that a limit on the number of petitions will be imposed. Under Comment 25: One comment suggested Time for Filing Petition (§§ 42.102, §§ 42.102(b) and 42.202(b), a petition that the Office consider a ‘‘more rational 42.202, and 42.303) that is filed after any established limit and fair’’ scheme for presenting Comment 17: A comment indicated would be considered untimely. If a limit challenges based on a proposed- that nine months is a sufficient amount were to be imposed, it is expected that rejection-by-proposed-rejection of time for filing a petition for post-grant the Office would provide sufficient approach allowing the patent owner to review. notice and guidance well prior to the challenge the grouping and grounds of Response: Nine months is the time imposition of such limit. a proposed rejection. required by statute. 35 U.S.C. 321(c). Comment 22: One comment suggested Response: The rules do not prohibit Comment 18: A comment suggested that if a limit on the number of petitions petitioners from grouping claims where that the statement in the discussion of is imposed it should be done on a the basis for the alleged unpatentability the notice of proposed rulemaking (77 quarterly basis, noting that having of the grouped claims is the same. When FR at 7044) indicating that petitions petitions filed after an established limit grouping claims, the petitioner must requesting inter partes review would be be deemed untimely arbitrarily harms provide sufficient notice as to the merits considered timely if filed prior to the petitioners based on the timing of their of the challenge for each claim so institution of a post-grant review is in actions and is not statutorily required. challenged. conflict with the requirement that a Response: This suggestion is not Comment 26: One comment suggested petition for inter partes review not be adopted. The statutes allow the Director that the Office should require proof in filed until nine months after issuance. to impose a limit on the number of the petition sufficient to meet the Response: The statute states that a proceedings that may be instituted on a statutory grounds for unpatentability petition for inter partes review must be yearly basis but do not provide for alleged, including requiring filed after the later of nine months from quarterly limits. Sections 6(c)(2)(B) and corroboration for ‘‘on sale’’ and ‘‘public

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use’’ challenges with an explanation of certain standards. For instance, the U.S.C. 326(e), and the absence of a the grounds and specific citation to Leahy-Smith America Invents Act presumption of validity)—are explicitly supporting evidence. amended 35 U.S.C. 316(a)(2) and (a)(4) provided for by the Act, or consistent Response: This suggestion is adopted to provide that the Director shall with it. In contrast, district courts must in part. The rules require the petition to prescribe regulations setting forth the use the clear and convincing standard, set forth a full statement of the reasons standards for the showing of sufficient and the patent claims are presumed to for the relief requested, including a grounds to institute, establish and be valid in infringement litigation. detailed explanation of the significance govern an inter partes review, as well as Microsoft Corp. v. i4i Ltd. P’ship, 131 S. of the evidence. § 41.22(a)(3). In the relationship of the review to other Ct. 2238, 2243 (2011) (‘‘[Section] 282 addition, the petition must show how proceedings. 35 U.S.C. 326(a)(2) and creates a presumption that a patent is each challenged claim is unpatentable (a)(4) provide the same mandate for valid and imposes the burden of proving under the statutory ground identified, post-grant review and covered business invalidity on the attacker. That burden must specify where each element is method patent review. Therefore, the is constant and never changes and is to found in the prior art, and must provide Office, at a minimum, has the authority convince the court of invalidity by clear specific citations to the evidence. to prescribe the claim construction evidence.’’ (quoting Am. Hoist & Derrick §§ 41.104 and 41.204. If corroborating standard by which inter partes review, Co. v. Sowa & Sons, Inc., 725 F.2d 1350, evidence is necessary to show post-grant review, and covered business 1360 (Fed. Cir. 1984))). Furthermore, unpatentability of a challenged claim, method patent review are instituted. courts construe patent claims, if the evidence must be included with the As to the propriety of the broadest possible, to avoid invalidity. See, e.g., petition to meet the requirements of the reasonable interpretation standard, its Star Scientific, Inc. v. R.J. Reynolds rules. adoption here does not change any Tobacco Co., 655 F.3d 1364, 1373 (Fed. Comment 27: One comment suggested substantive rights relative to the current Cir. 2011); Exxon Research & Eng’g Co. that the second sentence of §§ 42.104(b) practice. For nearly thirty years, the v. U.S., 265 F.3d 1371, 1375 (Fed. Cir. and 42.204(b) be amended to read ‘‘in United States Court of Appeals for the 2001) (A claim is found to be indefinite addition to the precise relief requested, Federal Circuit has continued to require only where it is not ‘‘amenable to the statement must identify the the Office to give patent claims their construction’’ or ‘‘insolubly following.’’ broadest reasonable construction ambiguous.’’). Response: This suggestion is not consistent with the specification in The adoption of the ‘‘broadest adopted. Sections 42.104 and 42.204 patentability determination reasonable interpretation’’ standard is state that the requirements of paragraph proceedings. See In re Yamamoto, 740 further consistent with the legislative (b) are in addition to the requirements F.2d 1569, 1571 (Fed. Cir. 1984). Even history of the Leahy-Smith America of §§ 42.8, 42.22, and 42.24. ‘‘A in the situation where the patent claims Invents Act, which indicates that statement of the precise relief had been previously construed by the Congress was aware of the ‘‘broadest requested’’ is required by § 42.22(a)(1). district court using a different standard reasonable interpretation’’ standard and Claim Construction (§§ 42.100(b), in an action that involved invalidity and expected the Office to apply the 42.200(b), and 42.300(b)) infringement issues, the Office was standard to the new Leahy-Smith required to apply the ‘‘broadest America Invents Act review Comment 28: Several comments reasonable interpretation’’ standard in proceedings. See, e.g., 157 Cong. Rec. suggested that proposed §§ 42.100(b), its own proceedings. See, e.g., In re S1375 (daily ed. Mar. 8, 2011) 42.200(b), and 42.300(b) are substantive NTP, Inc., 654 F.3d 1268, 1274 (Fed. (statement of Sen. Kyl). Nothing in the rules and appear to exceed the authority Cir. 2011). Indeed, the Federal Circuit legislative history indicates that of the Office, which does not have has acknowledged the longstanding Congress or the drafters of the substantive rulemaking authority under practice that the patent system has two legislation considered a different 35 U.S.C. 2(b)(2). Those comments claim construction standards, the standard for inter partes review, post- further stated that the AIA did not ‘‘broadest reasonable interpretation’’ grant review, and covered business amend 35 U.S.C. 2(b)(2) to provide such standard applied to Office’s method patent review proceedings. an authority. However, several other proceedings, and that used by district Congress could have set forth a different comments were in favor of the proposed courts in actions involving invalidity standard in the Leahy-Smith America rules and recognized that the and infringement issues. See, e.g., Invents Act, but instead, Congress longstanding, established claim Phillips v. AWH Corp., 415 F.3d 1303, provided the statutory mandate for the construction standard set forth in the 1316 (Fed. Cir. 2005) (en banc). The Office to prescribe regulations to set proposed rules is consistent with the ‘‘broadest reasonable interpretation’’ forth a standard. AIA and current case law. standard has been well established for Further, the Leahy-Smith America Response: The rules are consistent nearly thirty years in the judicial Invents Act amended 35 U.S.C. 315(d) with the AIA requirements to prescribe precedent for construing patent claims to provide that, during the pendency of regulations that set forth standards and in patentability determination an inter partes review, if another procedures. In any event, the Office proceedings before the Office. proceeding involving the patent is believes that it has the statutory The provisions of the Leahy-Smith before the Office, the Director may authority to prescribe in the regulations America Invents Act indicate that the consolidate the inter partes review with a claim construction standard for inter typical standard applicable to USPTO the other proceeding into a single inter partes review, post-grant review, and proceedings should apply as well to partes review proceeding. A similar covered business method patent review these trial proceedings. The typical provision is provided in 35 U.S.C. proceedings. While the Leahy-Smith justifications for using the ‘‘broadest 325(d) for post-grant review and covered America Invents Act requires the Office reasonable interpretation standard’’— business method patent review. The to establish the procedures for particularly the ability to amend claims, Office, thus, has the discretion to instituting and conducting the reviews, application of the lower consolidate a review proceeding with a the Leahy-Smith America Invents Act ‘‘preponderance of the evidence pending reissue application or also provides that the Office shall standard’’ for determining patentability reexamination that involves the same prescribe regulations setting forth (35 U.S.C. 316(e), as amended, and 35 patent, for example. Federal courts and

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the Office have applied the ‘‘broadest review. A comment suggested that the interpretation.’’ Consistent with the reasonable interpretation’’ standard for claim construction standard should be judicial precedent of Federal Circuit, the nearly thirty years to patent claims in guided by 35 U.S.C. 301(d), and the Office recognizes that it is proper to reissue applications and reexamination Office should determine the ‘‘proper construe patent claims by applying the proceedings. Yamamoto, 740 F.2d at meaning’’ of the claim, rather than ‘‘broadest reasonable interpretation’’ 1571–72; In re Reuter, 651 F.2d 751, 756 applying the ‘‘broadest reasonable standard in patentability determination (CCPA 1981). It would be anomalous for interpretation’’ standard. proceedings. See, e.g., NTP, 654 F.3d at the Board to have to apply two different Response: The legislative history of 1274 (the Board’s construction ‘‘is standards in the merged proceeding. the AIA shows that 35 U.S.C. 301(d) was legally correct and is reasonable in view Lastly, the Leahy-Smith America not intended to change the ‘‘broadest of the written description and how the Invents Act also amended 35 U.S.C. reasonable interpretation’’ standard. written description would be 318(a) to provide that the Board shall Rather, it was to help the Office to interpreted by one of ordinary skill in issue a final written decision with identify inconsistent statements made the art’’). respect to the patentability of any patent by a patent owner about claim scope. In Comment 30: Several comments claim challenged by the petitioner and particular, Senator Kyl stated the opposed proposed §§ 42.100(b), any new claim added under 35 U.S.C. following: 42.200(b), and 42.300(b) and believed 316(d), as amended. The same directive that the Office’s claim construction Section 5(a) of the 2009 version of the bill, is provided in 35 U.S.C. 328(a) for post- which would amend section 301, has been should be the same as that used in the grant review and covered business modified and moved to section 5(g) of the district courts for invalidity or method patent review. As such, the bill. This provision allows written statements infringement suits. In particular, the Board is to determine the patentability of the patent owner regarding claim scope comments suggested that the proposed of the challenged patent claims and any that have been filed in court or in the Office rules should be revised to state that ‘‘[a] new claims, as opposed to the validity to be made a part of the official file of the claim in an unexpired patent shall be of the claims, which is the analysis patent, and allows those statements to be given its broadest reasonable conducted by a district court. See also considered in reexaminations and inter construction in light of the specification partes and post-grant reviews for purposes of 35 U.S.C. 318(b), as amended, and claim construction. This information should and the prosecution of the patent in 328(b). That distinction confirms help the Office understand and construe the which it appears.’’ To support their Congress’ intent for the USPTO to apply key claims of a patent. It should also allow position, those comments suggested that the typical framework it currently the Office to identify inconsistent statements if the Office adopts the proposed rules, applies in existing patentability made about claim scope-for example, cases the patent owner will be faced with a determinations. where a patent owner successfully advocated broad construction in the validity The Office has taken into account the a claim scope in district court that is broader litigation and a narrow construction in considerations identified in 35 U.S.C. than the ‘‘broadest reasonable construction’’ the infringement phase. Several that he now urges in an inter partes review. 316(b), as amended, and 35 U.S.C. comments stated that the case law 326(b) in promulgating the rules. To 157 Cong. Rec. S1375 (daily ed. Mar. 8, before the enactment of the AIA (e.g., prevent inconsistencies and 2011) (statement of Sen. Kyl) (emphasis Yamamoto) is inapplicable to inter inefficiencies, a single claim added). partes review, post-grant review, and construction standard must be used Further, 35 U.S.C. 301(d) provides covered business method patent review throughout a proceeding reviewing the that: ‘‘[a] written statement submitted proceedings, because the justification patentability of the claims of a patent. pursuant to [section 301](a)(2), and for applying the ‘‘broadest reasonable In other words, the ‘‘broadest reasonable additional information submitted interpretation’’ standard in interpretation’’ standard must be pursuant to [section 301](c), shall not be reexaminations and reissue applied to all of the involved claims in considered by the Office for any applications, in which patent owners a single review proceeding including purpose other than to determine the have unlimited ability to amend claims, the challenged patent claims; any new proper meaning of a patent claim in a does not extend to the review claims added under 35 U.S.C. 316(d), as proceeding that is ordered or instituted proceedings. On the other hand, several amended, or 35 U.S.C. 326(d); any pursuant to section 304, 314, or 324.’’ other comments were in favor of the claims from a merged derivation The statutory language of 35 U.S.C. proposed rules. Those comments proceeding; any original, new, or 301(d) does not set forth any claim recognized that the claim construction amended claims from a merged reissue construction standard, nor require the standard used in administrative trials application; and any original, new, or Office to adopt the claim construction before the Office should be different amended claims from a merged standard used by district courts. Indeed, from the one used by the district courts reexamination. the statutory provision merely provides in invalidity and infringement actions, For the foregoing reasons, the Office limitations on when the Office may and noted that two different standards has the authority to prescribe consider such a statement or for claim construction existed before the regulations to set forth the claim information. The Office has the AIA. construction standard for inter partes discretion, but is not required, to Response: The Office has considered review, post-grant review, and covered consider such a statement or carefully those comments that suggested business method patent review information in an instituted review use of the district court’s standard and proceedings, and believes that the (inter partes review, post-grant review, the comments that supported use of the ‘‘broadest reasonable interpretation’’ or covered business method patent ‘‘broadest reasonable interpretation’’ standard should be employed. review). Therefore, the ‘‘broadest standard as set forth in the proposed Comment 29: Several comments reasonable interpretation’’ standard is rules. The Office adopts the ‘‘broadest suggested that the claim construction consistent with 35 U.S.C. 301(d). reasonable interpretation’’ standard in standard set forth in the proposed rules As to the comment regarding the this final rule in light of statutory is inconsistent with 35 U.S.C. 301(d) ‘‘proper meaning’’ of the claim, the language in the AIA, legislative history, because the statute recognizes that the comment is incorrect when it implies and judicial precedent. claim construction in an infringement that claims are not properly construed As stated previously, both the Federal action should be used in an inter partes using the ‘‘broadest reasonable Circuit and Congress recognize that the

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patent system has two claim patent claims. For instance, the current determines the patentability of any construction standards: (1) The practice provides that the second Office challenged patent claim and new ‘‘broadest reasonable interpretation’’ action generally will be made final. claims. used by the Office in patentability §§ 1.116(b) and 41.33(b); MPEP Motion To Correct Petition (§§ 42.104(c), determination proceedings; and (2) the §§ 706.07(a) and 2271 (‘‘[A] 42.204(c), and 42.304(c)) other used by district courts in reexamination may result in the final invalidity and infringement actions. cancellation of claims from the patent Comment 34: Two comments See, e.g., Phillips, 415 F.3d at 1316; 157 and that the patent owner does not have suggested that the rules should specify Cong. Rec. S1375 (daily ed. Mar. 8, the right to renew or continue the that only non-substantive clerical or 2011) (statement of Sen. Kyl). The Office proceedings.’’). typographical errors can be corrected in and courts have been applying these Comment 31: One comment requested a petition without changing the filing standards for nearly thirty years when clarification on whether the Office will date of the petition since allowing construing patent claims. Congress consider a written statement and correction of substantive mistakes recognized the ‘‘broadest reasonable information submitted pursuant to 35 without changing the filing date can interpretation’’ standard in the U.S.C. 301 when deciding whether to substantially disadvantage the patent legislative history of the AIA, and did institute a review if such a statement or owner. not set forth a different standard or information is submitted in a petition Response: Sections 42.104(c), mandate the Office to apply the district for a review. 42.204(c) and 42.304(c) only allow for a court’s standard. As explained in Response: The Office may consider motion to correct due to clerical or previous Responses, these and multiple statements of the patent owner filed in typographical mistakes without a other statutory and legal considerations a proceeding before a Federal court or change in filing date. There is no suggest that the Board should not apply the Office regarding the claim scope of provision allowing for the correction of the district court’s claim construction a patent. However, if the petition merely a mistake that is not clerical or standard. presents a copy of a submission under typographical in nature without a Although the comments not in favor 35 U.S.C. 301, the Office’s consideration change in filing date. Furthermore, of the proposed rules implied that the of such a submission is limited by 35 when determining whether to grant a suggested standard (‘‘[a] claim in an U.S.C. 301(d). motion to correct a petition, the Board unexpired patent shall be given its Comment 32: Several comments will consider any substantial broadest reasonable construction in suggested that the Office should not substantive effect, including any effect light of the specification and the prescribe a claim construction standard on the patent owner’s ability to file a prosecution of the patent in which it in the regulation, but rather apply preliminary response. applicable judicial precedent or adopt appears’’) is used by the district courts, Requirement for Claim Construction the district court’s construction when the district courts do not use this (§§ 42.104(b)(3), 42.204(b)(3), and there is one. Several comments, suggested standard. In any event, the 42.304(b)(3)) Office may take into consideration however, were in favor of the Office inconsistent statements made by a setting the ‘‘broadest reasonable Comment 35: Several comments patent owner about claim scope, such as interpretation’’ standard in the recommended that the requirement for those submitted under 35 U.S.C. 301(a), regulations. One of the comments setting forth the claim construction of when applying the ‘‘broadest reasonable pointed out that the Office has done the the challenged claims in the petition interpretation’’ standard. public a service by announcing the should be eliminated because, according As to the comments that the ‘‘broadest standard in a rule. to the comments, the requirement is reasonable interpretation’’ standard Response: The AIA provides that the burdensome and will create delays. applies only where patent owners have Office shall prescribe regulations setting Further, one comment suggested that unlimited ability to amend in forth the standard for the showing of claim construction should only be reexaminations and reissue sufficient grounds to institute, establish required to the extent necessary to applications, the Office does not believe and govern a review and the establish the challenged claim is those comments are correct. There is no relationship of the review to other unpatentable. Other comments were in indication that an unlimited ability to proceedings. 35 U.S.C. 316(a)(2) and favor of the requirement. amend is required when employing the (a)(4), as amended; 35 U.S.C. 326(a)(2) Response: The Office believes that the current USPTO construction standard; and (a)(4). Therefore, setting forth a petitioner’s claim construction the rationale is simply that the broader claim construction standard for the requirement is not burdensome and will standard serves to identify ambiguities proceedings is consistent with the improve the efficiency of the in the claims that can then be clarified mandates in the AIA. As discussed proceeding. In particular, the through claim amendments. That previously, the ‘‘broadest reasonable petitioner’s claim construction will help rationale applies under the current interpretation’’ is also consistent with to provide sufficient notice to the patent proceedings. For inter partes review, the AIA and the judicial precedent for owner on the proposed grounds of post-grant review, and covered business construing patent claims in patentability unpatentability, and assist the Board in method patent review proceedings, determination proceedings before the analyzing to how a cited prior art §§ 42.121 and 42.221 provide patent Office. reference meets the claim limitation(s). owners the opportunity to file a motion Comment 33: One comment sought During a proceeding, a claim of an to amend after conferring with the clarification on whether the ‘‘broadest unexpired patent will be given its Board. Moreover, additional motions to reasonable interpretation’’ standard will broadest reasonable construction in amend may be authorized when there is be applied throughout the proceeding. light of the specification of the patent in a good cause showing or a joint request Response: The claim construction which it appears. See, e.g., § 42.100(c). of the petitioner and the patent owner standard set forth in §§ 42.100(b), This means that the words of the claim to advance materially a settlement. 42.200(b), and 42.300(b) will apply will be given their plain meaning unless Further, the current practice for throughout the proceeding when the the plain meaning is inconsistent with reexaminations and reissue applications Board determines whether to institute the specification. In re Zletz, 893 F.2d allows for limited opportunity to amend the review and when the Board 319, 321 (Fed. Cir. 1989). In the absence

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of a special definition in the specification. See, e.g., § 42.100(c). parties, that service may be made by specification, a claim term is presumed Petitioners must identify how the facsimile or electronically. to take on its ordinary and customary challenged claim is to be construed. See, Response: In view of the comments, meaning, a meaning that the term would e.g., § 42.104(b)(3). Petitioners are not §§ 42.105 and 42.205, as adopted in this have to a person of ordinary skill in the required to define every claim term, but final rule, expressly provide that, upon art. In re Am. Acad. of Sci. Tech Ctr., merely to provide a statement that the agreement of the parties, service may be 367 F.3d 1359, 1364 (Fed. Cir. 2004). claim terms are presumed to take on made electronically, and service may be Therefore, petitioners are not required their ordinary and customary meaning, made by EXPRESS MAIL® or by means to define every claim term, but rather and to point out any claim term that has at least as fast and reliable as EXPRESS merely provide a statement that the a special meaning and the definitions in MAIL®. Under the rules, personal claim terms are presumed to take on the specification. A patent owner may service is not required. The rules also do their ordinary and customary meaning, file a preliminary response to set forth not require serving a patent owner who and point out any claim term that has reasons why no review should be is not of record. a special meaning and the definition in instituted, including a response to any Comment 42: A few comments the specification. claim construction issues. See, e.g., suggested that the Office should Comment 36: A few comments § 42.107(a). After the review is eliminate the requirement set forth in suggested that the Office should adopt instituted, the patent owner may file a proposed §§ 42.105(b) and 42.205(b) for claim construction procedures similar to response to the petition addressing any contacting the Board when the those in the district courts, as opposed ground for unpatentability not already petitioner cannot effect service of the to requiring the petitioner to submit a denied, including a response to the petition on the patent owner at the statement to identify how the decision on petition and any claim correspondence address of record of the challenged claim is to be construed. constructions set forth therein. See, e.g., patent. Response: The Office believes that the § 42.120(a). The petitioner may file a Response: The suggestion has been petitioner’s claim construction reply to the patent owner’s response. adopted. Sections 42.105(b) and requirement will improve the efficiency See § 42.23. 42.205(b), as adopted in this final rule, of the proceeding. As discussed Comment 39: One comment suggested do not include the requirement for previously, the petitioner’s claim that a petitioner’s claim construction contacting the Board when the construction will help to provide should have no effect on other petitioner cannot effect service. sufficient notice to patent owner on the proceedings, and requested clarification Comment 43: One comment proposed grounds of unpatentability, that the petitioner’s claim construction recommended that the rules should and assist the Board in analyzing how is relevant only to the proceeding and provide that service on the last a cited prior art meets the claim will not vary or limit the scope of the designated representative of the patent limitation. claims in litigation. owner is also sufficient. Comment 37: One comment suggested Response: Sections 42.105 and Response: The determination of the that the requirement of a claim 42.205(a) provide that petitioner may meaning of the claim terms and the construction is not set forth in 35 U.S.C. additionally serve the petition and scope of the claims depends on the 312(a)(3), as amended. supporting evidence on the patent particular facts of each case. The Office Response: Although the claim owner at any other address known to cannot prejudge the effect, if any, of the construction requirement is not the petitioner as likely to effect service. petitioner’s claim construction on other provided expressly in the AIA, 35 Serving on the correspondence address proceedings, or know whether a district U.S.C. 312(a)(4), as amended, states that of record for the subject patent is court will consider such information or ‘‘the petition provides such other consistent with the Office’s current not. information as the Director may require practice (§ 41.106(e)). Therefore, service by regulation.’’ Furthermore, 35 U.S.C. Comment 40: One comment expressed on the last designated representative of 316(a), as amended, provides that the a concern as to restricting claim the patent owner of record is sufficient Director shall prescribe regulations construction later in the proceeding and if that is the same as the correspondence setting forth the standards for the suggested that the rules should permit address of record for the subject patent. showing of sufficient grounds to alternative claim construction in the Comment 44: One comment suggested institute an inter partes review. petition, and revised claim construction that each party should be required to Therefore, the claim construction later in the process. specify its preferred method for service requirement is consistent with the AIA. Response: The rules do not preclude as part of the mandatory notices. Comment 38: One comment requested providing alternative claim Response: Each party may express its more guidance as to the claim constructions in a petition or in later- preferred method for service. However, construction requirements. The authorized filings. the Office does not believe such a comment further expressed a concern Service (§§ 42.105 and 42.205) requirement in the rule is necessary. that it is unclear whether the patent owner is required to take a claim Comment 41: A few comments Filing Date (§§ 42.106(b) and 42.206(b)) construction position. A few comments suggested that proposed §§ 42.105(a) Comment 45: A few comments suggested that the patent owner should and 42.205(a) should be revised to suggested that the Office should accept address the petitioner’s claim provide that service by mailing is petitions that have minor deficiencies. construction, and the parties should sufficient, and clarified to provide that A few comments also requested have an opportunity to respond to the there is no requirement for personal clarification on whether, for minor Board’s decision. Another comment service or proof of service on a current omissions or mistakes, the Office would suggested that the rules should set forth patent owner who is not of record. In waive the rule requirements and grant a the procedure for claim construction. particular, one comment suggested that filing date as soon as the statutory Response: As discussed previously, a the rules should expressly provide that requirements are met. claim of an unexpired patent will be service must be made by EXPRESS Response: The Board generally will given its broadest reasonable MAIL® or by means at least as fast and accord a filing date and accept minor construction in light of the reliable, or upon agreement of the deficiencies that do not impact the

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Board’s ability to determine whether to response to three months to provide the Response: These suggestions are not institute the review or the patent patent owner sufficient time to prepare adopted. Patent owners are permitted to owner’s ability to file a preliminary a meaningful response. Sections rely upon new testimonial evidence in response. It is important to note that 42.107(b) and 42.207(b). A patent owner response to a petition but the AIA petitioners should make every effort to may expedite the proceeding by filing provides for submission of this complete their petitions accurately. the preliminary response earlier or an testimonial evidence after a proceeding While the Board may accept minor election to waive the preliminary has been instituted. As noted in the omissions or mistakes, certain response. comment, 35 U.S.C. 313, as amended, omissions or mistakes may nonetheless Comment 50: One comment suggested and 35 U.S.C. 323 state that the patent impact the Board’s determination. For that allowing testimonial evidence in owner may set forth ‘‘reasons’’ in the instance, citing to an incorrect portion response to the petition at the patent owner response, but do not of a reference may cause the Board to preliminary response stage would expressly provide for the submission of determine not to adopt the proposed simply cause more delays in starting the testimonial evidence by the patent ground of unpatentability, or an process and appears to be contrary to owner prior to institution of a omission of a challenged claim may the statutory language of 35 U.S.C. 313 proceeding. In contrast, 35 U.S.C. cause the Board not to institute the and 316(a)(8), as amended, and 35 316(a)(8), as amended, and 35 U.S.C. review for that claim. The Board plans U.S.C. 323 and 326(a)(8). The comment 326(a)(8) specifically provide for the to process the petitions and accord the further suggested that any provision for submission of testimonial evidence in filing date as soon as practical. new testimonial evidence on the part of the patent owner response filed after a Comment 46: One comment suggested the patent owner prior to institution proceeding has been instituted. If new that the word ‘‘request’’ in the title of undermines the simplicity of the testimonial evidence were to be § 42.206(b) be changed to ‘‘petition.’’ process, as once competing testimony is submitted by a patent holder, then Response: This suggestion has been offered, it is evident that cross- cross-examination of the witness adopted. examination of that competing providing the testimony is likely to be Comment 47: One comment stated testimony must be provided. permitted. 35 U.S.C. 316(5)(a), as that the Office should revise Response: The AIA only explicitly amended. Allowing for new testimony §§ 42.106(b) and 42.206(b) to include provides for submission of testimonial and the resulting cross-examination expressly the right to cure a failure to evidence from a patent owner after a prior to the institution of a proceeding include the specific relief requested. proceeding has been instituted. As would negatively impact the ability of Response: This suggestion is not noted in the comment, 35 U.S.C. 313, as the Office to meet the statutory adopted because the failure to include a amended, and 35 U.S.C. 323 provide requirements set out in 35 U.S.C. 314(b), statement for the precise relief requested that the patent owner may set forth as amended, and 35 U.S.C. 324(c) and for each claim challenged is not ‘‘reasons’’ in the patent owner would result in more upfront costs to considered a minor deficiency. preliminary response, but do not the parties. If a patent owner wishes to Comment 48: Two comments expressly provide for the submission of submit new testimonial evidence with requested a longer time period for testimonial evidence by the patent its preliminary response, the patent correcting an incomplete petition. owner prior to institution of a owner may seek relief through filing an Response: In most situations, one proceeding. In contrast, 35 U.S.C. authorized motion. month is sufficient for correcting 316(a)(8), as amended, and 35 U.S.C. Comment 52: One comment suggested deficiencies in a petition. If a longer 326(a)(8) specifically provide for the that the Office should recognize that the period is needed, however, the submission of testimonial evidence in difficulty in finding technical experts petitioner may re-file a complete the patent owner response after a should qualify as good cause or as being petition as no filing date is accorded for proceedings has been initiated. in the interests-of-justice for the purpose the initial petition. Moreover, cross-examination would be of the extension of time for a patent provided in most situations in which owner to respond. The comment Preliminary Response (§§ 42.107(b) and the patent owner relies on testimonial indicated that there seems to be little 42.207(b)) evidence, resulting in the delay to institutional barrier to granting the Comment 49: Several comments which the commenter refers. extension since the statutory deadline recommended that the time period for Comment 51: Several comments does not run until the date of filing the patent owner preliminary suggested that the patent owner be institution. response should be extended because, allowed to respond to the petition with Response: Under the rules, a party according to the comments, a two- testimonial evidence in order to be fair may seek authorization to file a motion month time period is too short for the since a challenger is permitted to rely seeking an extension of time. The patent owner to prepare and develop a upon such evidence in the petition. moving party would have the burden of meaningful response. In particular, Within these comments, there were proving that it is entitled to the relief several comments suggested that the further suggestions that testimony requested. § 42.20(a)–(c). Whether a time period should be extended to three should be allowed, especially for claim motion is authorized or granted depends months; two comments suggested four construction, and for rebuttal of expert on the particular facts presented. months; and one comment suggested testimony relied upon in the petition, Comment 53: One comment stated that extensions of time should be that allowing testimony in the response that as an alternative to allowing provided upon a showing of good cause. would allow for early development of testimonial evidence in the patent However, another comment suggested the record and promote settlement, that owner preliminary response, the Office shortening the two-month time period early development of the record would should clarify that attorney arguments to one month because the patent owner be useful given the short time to in the response will be given the same will have a right to amend and present complete post-grant review and that the weight with respect to technical issues evidence after the review is instituted. incongruity between what type of as any testimonial evidence presented Response: In view of these comments, evidence the petitioner and patent by the petitioner, and that the Office the Office extended the time period for owner are permitted to file may should confirm that it will consider filing a patent owner preliminary implicate due process issues. early motions to dismiss a proceeding

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where testimonial evidence presented of unpatentability that meet the a ground is not considered a final Board by the patent owner effectively threshold. decision under 35 U.S.C. 324(e) and disproves expert testimony presented in Response: Under the rules, the Board may be appealed. the petition. may authorize the review to proceed on Response: The Board may deny a Response: Arguments of counsel all or some of the challenged claims and ground at any time prior to institution cannot take the place of factually on all or some of the grounds of before or after receiving any patent supported objective evidence. See, e.g., unpatentability asserted for each claim. owner preliminary response. Denial of a In re Huang, 100 F.3d 135, 139–40 (Fed. §§ 42.108(a) and 42.208(a). ground is a final Board decision and Cir. 1996); In re De Blauwe, 736 F.2d Comment 57: One comment suggested thus is subject to request for 699, 705 (Fed. Cir. 1984). Although that because institution of a proceeding reconsideration at that time. attorney arguments are not evidence, the might impose an economic hardship on § 42.71(c)(2). The decision of the patent owner preliminary response may many patentees, the requested review Director on whether to institute review include evidence, other than new should be instituted after consideration on any ground is not reviewable. 35 testimonial evidence, to support such of the effect on the economy, the U.S.C. 314(d), as amended, and 35 contentions made. § 42.107(a). A party integrity of the patent system, the U.S.C. 324(e). wishing to file a motion to dismiss must efficient administration of the Office, Comment 59: Several comments seek authorization to do so. Whether the and the ability of the Office to complete suggested that the Office should provide motion will be authorized is based on a the proceeding timely. more guidance as to how the case-by-case determination. § 42.20(a) Response: Under the rules, review ‘‘reasonable likelihood’’ and ‘‘more will not be instituted unless the Board and (b). likely than not’’ standards will be decides that the petition supporting the Comment 54: One comment stated applied and what level of proof will be ground would demonstrate that there is required and how the standards differ. that it appears that the petitioner cannot a reasonable likelihood, for inter partes One comment stated that, given the add or revise grounds based on how the proceedings, or more likely than not, for experience of the Office in inter partes patent owner responds. Another post-grant proceedings, that at least one reexamination and the legislative comment suggested that the petitioner of the claims is unpatentable. §§ 42.108 record, it is reasonable for the Office to should have the right to reply within and 42.208. The rules utilize the provide more than a bald reference to one month of any patent owner statutory threshold. 35 U.S.C. 314, as the standards, that lack of clarity has an preliminary response allowing a amended, and 35 U.S.C. 324. The Office unnecessary ‘‘chilling effect’’ and that petitioner to sharpen its arguments and has considered the effect on the significant fees must accompany the further the Office’s streamlining goals economy, the integrity of the patent petition. and that without a reply, some system, the efficient administration of Response: The rules utilize the arguments may go unanswered and the Office, and the ability of the Office statutory threshold. 35 U.S.C. 314(a), as result in an unwarranted rejection of a to complete the proceeding timely in amended, and 35 U.S.C. 324(a). Whether petition that leaves an invalid patent prescribing the rules as required by 35 a petitioner has met the threshold must standing. U.S.C. 316(b), as amended, and 35 be considered on a case-by-case basis. A Response: This suggestion is not U.S.C. 326(b). That said, the Office, in ‘‘reasonable likelihood’’ requirement is adopted. The statutes provide for only a determining whether to institute a a lower threshold than a ‘‘more likely petition and a patent owner preliminary proceeding, may take into account than not’’ requirement. Although the response prior to institution. Allowing a whether the review could be timely Office disagrees that any ‘‘chilling reply as a matter of right would completed. For example, the Board may effect’’ will result, any such effect negatively impact the ability of the decline to institute a proceeding where would be the unavoidable result of the Office to meet the time requirements of the Board determines that it could not statutory language, not of the regulatory 35 U.S.C. 314(b), as amended, and 35 complete the proceeding timely. For language. U.S.C. 324(c). example, the Board could exercise its Comment 60: Several comments Institution (§§ 42.108 and 42.208) discretion to decline to institute a suggested that the Office should allow petition that seeks review of several all challenged claims to be included in Comment 55: A few comments hundred claims based upon a thousand the inter partes review when there is a expressed concerns regarding piecemeal references or when the patent owner reasonable likelihood of prevailing with challenges against specific claims in the demonstrates that a determination of respect to one challenged claim. A same patent, and encouraged the Board patentability would require dozens of comment indicated that instituting to use its authority under 35 U.S.C. depositions of non-party controlled review on a claim-by-claim basis is 325(d) to discourage efforts by witnesses in foreign countries for which unfairly prejudicial to challengers and petitioners to avoid estoppel through the testimony would need to be potentially at odds with the statute. The successive petitions against different compelled. comment stated that the rule is being claims within a patent. Comment 58: One comment suggested used to decide portions of the case Response: The Office recognizes these that the Office should clarify the effect without all the evidence before the concerns and will exercise its authority of proposed §§ 42.108(a) and 42.108(b) Office whereas claims or issues deemed under 35 U.S.C. 325(d), where to resolve the inconsistencies between not to have a reasonable likelihood of appropriate, to deny petitions that the Office’s ability to ‘‘authorize’’ the prevailing are cut off from further submit the same or substantially the review to proceed on some or all ground review in a final and non-appealable same prior art or arguments previously asserted and to ‘‘deny’’ some or all decision, at the same time alerting a presented to the Office. grounds asserted. Another comment patent owner of a potential infringement Comment 56: One comment expressed asked for guidance as to the impact of and raising legitimate concerns about agreement with the proposed rules denying review with respect to one or being estopped from further civil providing that the decision to institute more claims when another claim of the proceedings under 35 U.S.C. 315(e), as review be made only as to those claims same patent qualifies for review. amended. Another comment suggested for which the required threshold has Another comment asked that the rules that the rule be changed to provide that been met and only as to those grounds be amended to state that the denial of a review will be instituted for a ground

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so long as the threshold is met for one challenges and will not be burdened reasonable likelihood * * *.’’ Another claim. Another comment suggested that with responding to non-meritorious comment stated that under the rule a the rule use the language of 35 U.S.C. grounds that fail to meet the initial patent owner preliminary response 314(a), as amended. Another comment thresholds. This convergence of issues might seem to constitute rebuttal and stated that the rule appears to give the for review streamlines the proceeding encourages the Office to clarify the Board discretion to choose which issues and aids in the efficient operation of the provisions. will be subject to trial in contradiction Office and the ability of the Office to Response: Section 42.108(c), as to the Practice Guide for Proposed Trial complete the proceeding within the one- adopted in this final rule, does not Rules and that the trials should proceed year timeframe. It is inefficient and contain the phrase ‘‘if unrebutted.’’ The on all issues for which statutory unfair to patent owner to require a full rule requires the petitioner to set forth standards are met. response to challenges on claims that do in the petition sufficient grounds to Response: The suggestions have been not meet the initial threshold. justify the institution of a review. If considered, but are not adopted. The Comment 61: One comment stated sufficient grounds are not set forth in Office believes that the rules are that the Board should state the reason(s) the petition, the Office may deny the consistent with the statute. In particular, for denying any ground of a request for petition prior to receiving any patent 35 U.S.C. 312(a)(3), as amended, and 35 review which may help facilitate the owner preliminary response. U.S.C. 322(a)(3) provide that petitions to understanding of the proper scope for a Comment 64: One comment requested institute a review identify each claim patent claim and suggested that clarification on proposed § 42.208(d) challenged. As provided in 35 U.S.C. §§ 42.108(b) and 42.208(b) further state and asked if the ‘‘unsettled question’’ 314, as amended, and 35 U.S.C. 324, the that ‘‘[t]he Board shall provide a written has to be of importance to existing Director may not institute a review statement explicitly stating each reason patents or is it enough if future unless certain thresholds are met. More for denial of the ground.’’ applications might be impacted. importantly, 35 U.S.C. 315(e), as Response: Under § 42.4(a), each party Another comment asked if the question amended, and 35 U.S.C. 325(e) provide is notified of the institution of a trial. has to meet the ‘‘more likely than not’’ for estoppel on a claim-by-claim basis, Under 35 U.S.C. 314(c), as amended, threshold and whether the question is for claims in a patent that result in a and 35 U.S.C. 324(d), the Notice is limited to the ground identified at final written decision. As amended, 35 required to inform the parties in writing § 42.204(b)(2). One comment asked that U.S.C. 316(a)(2) and 35 U.S.C. 326(a)(2) of the Director’s determination of no artificial or unwarranted restriction require the Director to prescribe whether to institute a proceeding. The be placed on the ‘‘novel or unsettled regulations setting forth the standards Board will provide sufficient notice to legal question’’ basis for review. for showing sufficient grounds to the parties in its decision to institute a Response: The determination of institute a review, and 35 U.S.C. trial. whether a petition raises a novel or 316(a)(4), as amended, and 35 U.S.C. Comment 62: One comment asked for unsettled legal question that is 326(a)(4) require the promulgation of clarification that the Board will take important to other patents or patent rules establishing and governing the into account a patent owner preliminary applications will be made on a case-by- review. Further, 35 U.S.C. 316(a)(11), as response to a post-grant review petition case basis. The statute indicates that the amended, and 35 U.S.C. 326(a)(11) only to determine whether estoppel or Director’s determination required to require that rules be promulgated that a procedural flaw requires rejection of authorize a post-grant review may be require the final written determination the petition. met by a showing that the petition raises in a review to be issued one year after Response: For post-grant review, 35 a novel or unsettled legal question that the date of institution, except that the U.S.C. 323 provides that the patent is important to other patents or patent review may be extended by not more owner may set forth ‘‘reasons’’ why no applications. 35 U.S.C. 324(b). The than six months for good cause shown. review should be instituted based upon scope of any post-grant review is limited The AIA identifies considerations that the failure of the petition to meet any to the grounds set forth at 35 U.S.C. are to be taken into account in requirement of the corresponding 324(b). Under the rules, there is no promulgating rules including the chapter. Under 35 U.S.C. 324, the restriction of whether review can be integrity of the patent system, the Director may not institute unless the instituted on the basis of a ‘‘novel or efficient administration of the Office Director determines that the information unsettled legal question.’’ and the ability of the Office to complete contained in the petition, if not Comment 65: A few comments the proceedings timely. See 35 U.S.C. rebutted, would demonstrate that it is requested clarification on whether 316(b), as amended, and 35 U.S.C. more likely than not that at least one petitioners may request reconsideration 326(b). claim challenged is unpatentable. of: (1) A decision not to institute a The petition requesting institution of Additionally, under 35 U.S.C. 324, the review; and (2) a decision to institute a a review is required to identify the Director may institute a proceeding review, where the decision also denies claims being challenged, and only those where the petition raises a novel or a ground of unpatentability asserted in claims upon which review is instituted unsettled legal question that is the petition. are subject to estoppel. In prescribing important to other patents or patent Response: Pursuant to § 42.71, a rules, the Office considered the effect of applications. The Board will take into petitioner may file a request for allowing all challenged claims to be account a patent owner’s preliminary rehearing of a decision not to institute subject to review where the threshold response where such a response is filed. a review within thirty days of the entry for instituting was met for only a subset § 42.208(c). of the decision. Likewise, a petitioner of claims. In order to streamline and Comment 63: Two comments may request a rehearing of a decision to converge the issues for consideration, suggested that the phrase ‘‘if institute a review that denies a ground the decision to institute should limit the unrebutted’’ in § 42.108(c) makes the of unpatentability, within fourteen days, claims in the review to only those rule unclear. One comment indicated because a decision to institute is a claims that meet the threshold. By that the language makes the Office’s nonfinal decision. limiting the review in such a manner, intent ambiguous and should be Comment 66: One comment requested the patent owner is provided with a modified to read ‘‘the petition clarification on whether a decision not defined set of potentially meritorious supporting the ground demonstrates a to institute a review is a final written

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decision, and whether estoppel attaches month time period for filing a patent time of filing the patent owner’s to a decision not to institute a review. owner response should be extended to response and should be subject only to Response: The Board’s determination three or four months, or extensions of the restrictions set forth in the AIA. The not to institute an inter partes review, time should be provided upon a comments stated that the requirements post-grant review, or covered business showing of good cause. Another for ‘‘conferring with the Board’’ and method patent review is not a final comment suggested that the four-month ‘‘respond[ing] to a ground of written decision within the meaning of time period shown in the Practice Guide unpatentability’’ are inconsistent with 35 U.S.C. 318(a), as amended, and 35 for Proposed Trial Rules for the patent the statute. However, several other U.S.C. 328(a), and thereby does not owner to conduct discovery and file its comments were in favor of the trigger the estoppel provisions under 35 response should be shortened to three requirements. Another comment U.S.C. 315(e), as amended, and 35 months. recommended that the Office should U.S.C. 325(e). However, pursuant to 35 Response: In view of these comments, require a clear explanation as to how the U.S.C. 314(d) and 35 U.S.C. 324(e), a the Office, in this final rule, extended proposed amendment responds to a decision not to institute a trial is ‘‘final the default time period for filing a ground of unpatentability involved in and nonappealable,’’ foreclosing review patent owner response to 3 months. the trial and clarify that the amendment by the federal courts. Sections 42.120(b) and 42.220(b). Thus, is to be entered on a claim-by-claim Comment 67: One comment suggested if no time for filing a patent owner basis only when all proposed changes that the Practice Guide for Proposed response to a petition is provided in a within a claim are responsive to a Trial Rules or the rules should provide Board order, the default date for filing ground of unpatentability involved in that an entity is not estopped from a patent owner response is three months the trial. requesting inter partes review or post- from the date the review was instituted. Response: In view of the comments, grant review (or from certifying that no the Office, in this final rule, clarified Motion To Amend the Patent (§§ 42.121 estoppel exists) if it was involved in a that the patent owner’s first motion to and 42.221) prior proceeding but reached a amend does not require an authorization settlement before the entry of a final Comment 70: Several comments were from the Board, but merely requires that written decision. in favor of the proposed rules and the patent owner ‘‘confer[] with the Response: Section 42.73(d)(1) guidelines governing claim Board.’’ This means that a patent owner expressly provides that ‘‘estoppel shall amendments. Several comments also would simply identify its intent in a not apply to a petitioner, or to the real suggested that the deadline for filing the conference call to file a motion to party-in-interest or privy of the first motion to amend should be amend, and the number and general petitioner who has settled under 35 prescribed in the rules rather than in the scope of substitute claims that would be U.S.C. 317 or 327.’’ Therefore, if the Office Patent Trial Practice Guide. A filed in the motion to amend so that the joint request of a petitioner and the few comments stated that the deadline petitioner and Board are notified of the patent owner under 35 U.S.C. 317(a), as would provide petitioners with patent owner’s intent. The patent owner amended, or 35 U.S.C. 327(a) is filed sufficient time to respond meaningfully, is not required to identify a fully before the Office enters the final written avoid undue complexity, and ensure developed claim set. As a result of the decision, the review is terminated with fast resolution as mandated by the call, the patent owner would receive respect to the petitioner and no estoppel statute. The comments further feedback from the Board on whether the under 35 U.S.C. 315(e), as amended, or recommended that the rules should proposed number of substitute claims is 325(e) will attach to the petitioner, or to include the good cause showing reasonable. This procedure, thus, will the real party-in-interest or privy of the requirement for any motion to amend save the patent owner time and petitioner, on the basis of that filed after the patent owner’s response, resources to prepare a motion to amend petitioner’s institution of that review. unless for a settlement. that would otherwise be denied because Comment 68: One comment requested Response: In view of these comments, of an unreasonable number of substitute that the Office clarify whether it will the Office adopted the deadline for claims. It also will save the petitioner consider evidence properly submitted filing the first motion to amend and the time and resources to prepare an by a party in connection with the requirement of a good cause showing for opposition to a motion that contains an petition process, including relevant any additional motion to amend, unless unreasonable number of substitute statements on claim construction it is for a settlement. Specifically, claims. previously filed by the patent owner in §§ 42.121(a)(1) and 42.221(a)(1), as The AIA amended 35 U.S.C. 316(a)(9) a proceeding with either the Office or a adopted in this final rule, provide that to provide that the Director shall Federal court or, if such evidence is not ‘‘[u]nless a due date is provided in a prescribe regulations setting forth considered, will consider an early Board order, a motion to amend must be standards and procedures for allowing motion by the patent owner to dismiss filed no later than the filing of a patent the patent owner to move to amend the the proceedings. owner response.’’ Additionally, patent under 35 U.S.C. 316(d), as Response: Under the rules, a patent §§ 42.121(c) and 42.221(c), as adopted amended, to cancel a challenged claim owner may include evidence except for in this final rule, provide that an or propose a reasonable number of new testimony evidence beyond that additional ‘‘motion to amend may be substitute claims. A similar mandate is which is already of record, §§ 42.107(a) authorized when there is a good cause provided in 35 U.S.C. 326(a)(9) for post- and (c), 42.207(a) and (c), which the showing or a joint request of the grant review and covered business Office will take into account, and the petitioner and the patent owner to method patent review. Pursuant to these Office will consider whether to materially advance a settlement.’’ statutory provisions, the Office is setting authorize a motion to dismiss based on Comment 71: Several comments the standards and procedures for filing the facts of the given case. § 42.20(b). stated that the rules should clearly set motions to amend in §§ 42.121 and forth the patent owner’s right to amend 42.221. The Office also has taken into Patent Owner Response (§§ 42.120(b) the claims. According to a few account the considerations provided in and 42.220(b)) comments, the patent owner has the 35 U.S.C. 316(b), as amended, and 35 Comment 69: A number of comments right to present a reasonable number of U.S.C. 326(b), and believes the recommended that the default two- substitute claims at any time up to the standards and procedures set forth in

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this final rule will enhance efficiency of Response: The presumption that only one substitute claim is reasonable by a the review proceedings. Furthermore, one substitute claim per challenged demonstration of need, and how to any amendment that does not respond claim is reasonable is consistent with obtain a ruling as to the number of to a ground of unpatentability most the AIA. The provisions of 35 U.S.C. substituted claims that will be likely would cause delay, increase the 316(d), as amended, and 35 U.S.C. permitted. Another comment requested complexity of the review, and place 326(d) should be interpreted together examples of acceptable kinds of additional burdens on the petitioner and with other statutory provisions in the substitute claims, and encouraged the the Board. Therefore, the rules are AIA. Under 35 U.S.C. 316(a)(9), as Office to standardize the manner in consistent with the statute. amended, and 35 U.S.C. 326(a)(9), the which claim amendments are indicated, As to the comment that the Office Office has the authority to prescribe similar to reissue and reexamination should require a clear explanation as to regulations to set forth the standards practice. how the proposed amendment responds and procedures for motions to amend, Response: The Board will enter a to a ground of unpatentability, §§ 42.121 including setting the standard for Scheduling Order concurrently with the and 42.221, as adopted in this final rule, determining a reasonable number of decision to institute the review. The expressly provide that a motion to substitute claims. The Office has further Scheduling Order will set due dates for amend may be denied where the taken into account the considerations the proceeding. An initial conference amendment does not respond to a provided in 35 U.S.C. 316(b), as call will be held about one month from ground of unpatentability involved in amended, and 35 U.S.C. 326(b), and the date of institution to discuss the the trial. believes the standards and procedures motions that the parties intend to file Comment 72: A few comments were set forth in this final rule will enhance and to determine if any adjustment in favor of the ‘‘reasonable number of efficiency of the review proceedings. needs to be made to the Scheduling substitute claims’’ presumption that Moreover, 35 U.S.C. 316(d), as Order. During the conference call, the permits only one substitute claim in amended, and 35 U.S.C. 326(d) permit patent owner would identify the exchange for cancellation of an original the Office to accept more than one number of substitute claims that the claim. A few comments suggested that substitute claim for each challenged patent owner intends to file in the the rule should expressly permit claim in situations where the patent motion to amend, and any reasons why multiple amended claims for each owner meets the standards and more than one substitute claim is challenged claim. procedures set forth in the regulations needed for each challenged claim. The Board may provide an indication as to Response: In view of the comments, promulgated pursuant to 35 U.S.C. whether the number of substitute claims the Office added the presumption that 316(a)(9), as amended, and 35 U.S.C. 326(a)(9). Therefore, the presumption is seems reasonable based on the reasons only one substitute claim per challenged consistent with these provisions of the given. The patent owner will not be claim is reasonable expressly in AIA. required to identify a fully developed §§ 42.121(a) and 42.221(a). Before Comment 74: A few comments claim set. An example of an acceptable submitting any amendment, a patent recommended that the Office prohibit substitute claim is a substitute claim owner would already have the patent owners from amending patent that adds a patentably distinct feature to opportunity to: (1) Review all of the claims that currently are being asserted respond to a ground of unpatentability, grounds of unpatentability proposed by against a defendant-petitioner because without adding new matter or enlarging the petitioner and supporting evidence, the patent owner may file a reissue the scope of the claim. (2) submit a preliminary response to set application to amend the claims. Amendments must clearly state forth reasons why the claims are Response: This suggestion is not ‘‘original,’’ ‘‘cancelled,’’ ‘‘replaced by patentable over any cited prior art and adopted. Such a requirement is proposed substitute,’’ or ‘‘proposed the grounds of unpatentability, and (3) unnecessary in view of 35 U.S.C. 318(c), substitute for original claim X’’ and the review the Board decision to institute as amended, and 35 U.S.C. 328(c) motion must clearly describe the the review. To overcome a ground of because any amendment of a patent changes. Part II, Item G of the Office unpatentability, a patent owner would claim gives rise to intervening rights in Patent Trial Practice Guide. Appropriate need to add merely a patentably distinct the same manner as amendments in conforming amendments may be feature to the claim. Therefore, in most reexamination proceedings that mature presented (e.g., changing dependent situations, only one substitute claim per into certificates or in a reissue claims to depend from another claim challenged claim is needed to address a applications that result in reissued when the original parent claim is ground of unpatentability. Where the patents. canceled). Amendments should clearly patent owner needs more than one Comment 75: Several comments state where the specification and any substitute claim, the patent owner may suggested that the Office should permit drawings disclose all the limitations in rebut the presumption by a the patent owner to submit alternative the proposed substitute claims. demonstration of need. Adding more claim sets or contingent amendments. Amendments should also clearly state claims beyond those that are needed to Response: Alternative claim sets or the patentably distinct features for the respond to a ground of unpatentability contingent amendments may be proposed substitute claims. This will most likely would cause delay, increase permitted if the total number of aid the Board in determining whether the complexity of the review, and place substitute claims is reasonable. See the amendment narrows the claims and additional burdens on the petitioner and §§ 42.121(a)(3) and 42.221(a)(3). if the amendment is responsive to the the Board. Comment 76: A few comments grounds of unpatentability involved in Comment 73: One comment stated requested clarification on the procedure the trial. that the ‘‘reasonable number of by which a reasonable number of If the amendment adds more than one substitute claims’’ presumption is substitute claims can be presented, and substitute claim per claim, the patent inconsistent with 35 U.S.C. 316(d), as additional information on the owner may be required to pay excess amended, and 35 U.S.C. 326(d) because, conditions and manner of making claims fees. 35 U.S.C. 41(a)(2). In view according to the comment, the statute amendments. Another comment of the comments, the Office provided refers to a plurality of ‘‘substitute requested guidance as to how the patent the amounts for the excess claim fees claims.’’ owner rebuts the presumption that only expressly in § 42.15(e) and (f) for clarity.

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For example, if the patent originally has additional motion to amend may be the first motion to amend and any three independent claims and the patent authorized when there is a good cause additional motions to amend) may be owner presents two new independent showing. denied where the amendment does not claims and cancels one independent Comment 81: One comment respond to a ground of unpatentability, claim in the proceeding, the patent recommended that amendments be or seeks to enlarge the scope of the owner must submit a payment of the permitted in the patent owner’s claims or introduce new matter. Failure excess claim fee under § 42.15(e) (e.g., preliminary response. to comply with this, or any other, $110 for a small entity) with the motion Response: This suggestion is not requirement in the regulation may result to amend. adopted. A motion to amend the patent in denial of the proposed amendment(s). The Office is also in a separate is not provided for until after the The requirements are consistent with rulemaking proposing to set or adjust institution of a review. See 35 U.S.C. the AIA. As discussed previously, 35 patent fees subsequently under section 316(d)(1), as amended, and 35 U.S.C. U.S.C. 316(a)(9), as amended, and 35 10 of the AIA. Consequently, the fees set 326(d)(1). U.S.C. 326(a)(9) provide the Office with in this final rule will be superseded by Comment 82: One comment the authority to set forth standards and the fees ultimately set in the section 10 recommended that examples of claim procedures for filing motions to amend rulemaking. language in papers other than a motion the patent under 35 U.S.C. 316(d), as Comment 77: One comment requested to amend the patent should be amended, and 35 U.S.C. 326(e). These clarification on whether the patent permitted and should not be considered statutory provisions of the AIA are not owner may continue to argue the to be an amendment. provided in the statutory provisions for original claim is patentable while Response: For the conference call reissue and reexamination proceedings, presenting a proposed substituted claim. with the Board, a patent owner may e.g., 35 U.S.C. 251 and 305. In Response: The patent owner may file present the scope of the substitute particular, since the reissue and a patent owner response that contains claims that would be filed in the motion reexamination statutory provisions do arguments to respond to the grounds of to amend. Otherwise, the not provide that a patentee seeking the unpatentability and a motion to amend recommendations of claim language relief of amending a claim does so by to present substituted claims. should be filed in a motion to amend. motion, the reissue and reexamination Comment 78: A few comments Comment 83: One comment was in statutory provisions for amendment requested clarification on whether the favor of proposed §§ 42.121(b)(2) and were implemented in a different patent owner may present substitute 42.221(b)(2), and suggested that if the manner. The Office has also taken into claims without cancellation of existing earlier filed disclosure is not in the account the considerations provided in claims. English language, then a certified 35 U.S.C. 316(b), as amended, and 35 Response: The patent owner may file translation of the disclosure must be U.S.C. 326(b) and believes the standards a patent owner response that contains submitted with the amendment. and procedures set forth in this final arguments to respond to the grounds of Response: Section 42.63(b) requires rule will enhance efficiency of the unpatentability and a motion to amend an English language translation of any review proceedings. to present substituted claims. The non-English language document relied Moreover, these rules will increase presumption is that only one substitute upon by a party, and an affidavit efficiency and prevent delays. For claim would be needed to replace each attesting to the accuracy of the instance, when a patent owner facially challenged claim. In other words, each translation. cannot meet one of the requirements challenged claim that is being replaced Comment 84: A few comments (e.g., no support for the new claims), it should be canceled unless the patent suggested that proposed §§ 42.121(c)(2) is more efficient to deny the owner rebuts the presumption by a and 42.221(c)(2) would procedurally authorization to file the additional demonstration of need. deny amendments on substantive motion to amend, because it would not Comment 79: One comment sought grounds. In particular, the comments be necessary for the petitioner to file an clarification on whether the recommended that the Office should opposition and for the Board to wait for reexamination amendment rule, § 1.530, enter the amendment and substantively the opposition and provide a written applies to inter partes review, post-grant reject the claims. Another comment decision on such a motion. review, and covered business method stated that this is a departure from the Comment 85: One comment suggested patent review proceedings. way the Office has implemented nearly that the Office should establish a one- Response: Patent owners are not identical statutory language in reissue month deadline for the petitioner to required to submit amendments in and reexamination proceedings under propose any new grounds of rejection accordance with § 1.530 in inter partes 35 U.S.C. 251, 305, and 314 and that necessitated by the patent owner’s review, post-grant review, or covered there is no statutory language that amendment. Another comment business method patent review permits the Office to limit the first suggested that the Office should proceedings. Rather, amendments motion to amend. The second comment prescribe a six-month deadline for filing should be filed in compliance with also stated that the proposed rules are the opposition to the first motion to § 42.121 or § 42.221, as noted in the inefficient because the Board’s refusal of amend in the rules. Office Patent Trial Practice Guide. entry will constitute a determination of Response: Concurrent with the Comment 80: A few comments unpatentability of the substitute claims decision to institute the review, the suggested that patent owners should be and substantial re-work will be Board will enter a Scheduling Order. As permitted to file additional amendments required. discussed previously, the Scheduling throughout the proceeding, and that the Response: In view of the comments, Order will set due dates for the review rules should prescribe the standard for the Office reorganized the rules and taking into account the complexity of determining whether additional motions added titles to clarify that the the proceeding, but ensuring that the to amend are authorized, such as a good requirement for authorization applies trial is completed within one year of cause showing. only to additional motions to amend. In institution. The default Scheduling Response: In view of these comments, addition, the Office modified Order generally will provide the §§ 42.121(c) and 42.221(c), as adopted §§ 42.121(a) and 42.221(a) to make clear petitioner with three months for in this final rule, provide that an that any motions to amend (including discovery and for filing a petitioner’s

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reply to the patent owner’s response and Response: Joinder may be requested Supplemental Information (§§ 42.123 any opposition to the motion to amend. by filing a motion within one month of and 42.223) Parties may request adjustments to the the date that the trial is instituted. When Scheduling Order at the initial the Office determines whether to grant Comment 91: Several comments conference call. a motion for joinder, the Office will opposed proposed §§ 42.123 and 42.223, Comment 86: One comment suggested consider the particular facts of each case providing for motions to file that the rules should expressly provide including how the consolidation of the supplemental information. According to for the petitioner’s right to present new reviews impacts the Office’s ability to the comments, the petition should evidence in an opposition to an complete reviews timely. In view of this disclose the entirety of the petitioner’s amendment, and the patent owner’s comment, the Office modified §§ 42.122 case, and the comments also expressed right to file a reply to petitioner’s and 42.222 to provide expressly for the concerns that the petitioner may opposition to an amendment. time period for filing a request for intentionally hold back some evidence Response: Section 42.23 provides for joinder. which would be unfair to the patent oppositions and replies. As noted in the The AIA, however, does not provide owner. Conversely, other comments Office Patent Trial Practice Guide for the ‘‘replacement’’ of a party. A were in favor of the proposed rules, and (Section H), a petitioner will be afforded petitioner may settle with the patent noted that the procedure for submitting an opportunity to respond fully to an owner and upon entering the joint supplemental information is expressed amendment. The time for filing an request, the review will terminate with provided in the AIA. opposition generally will be set in a respect to the petitioner. 35 U.S.C. 317, Response: Since the request must be Scheduling Order. No authorization is as amended, and 35 U.S.C. 327. made within one month of the date the needed to file an opposition to an Comment 89: Several comments trial is instituted, the patent owner will amendment. Petitioners may requested clarification regarding the have sufficient time to address any new supplement evidence submitted with effect of a stay or joinder on the ability information submitted by the petitioner, their petition to respond to new issues of the Office to complete review within except in the situation where the party arising from proposed substitute claims. the one-year period. satisfies the requirements of § 42.123(b) This includes the submission of new Response: In the case of joinder, the or 42.223(b). The Office understands the expert declarations that are directed to Director may adjust the time periods concerns related to late submissions of the proposed substitute claims. allowing the Office to manage the more supplemental information. Therefore, Additionally, § 42.23 provides that complex case. 35 U.S.C. 316 (a)(11), as the Office has modified the proposed oppositions and replies must comply amended, and 35 U.S.C. 326(a)(11). provisions set forth in §§ 42.123 and with the content requirements for When multiple proceedings involving a 42.223 to provide that any request not motions, and a reply may only respond single patent are instituted, joinder made within one month must show why to arguments raised in the would allow the Office to consolidate the information reasonably could not corresponding opposition. Section I of issues and to account for timing issues have been obtained earlier, and that the Office Patent Trial Practice Guide that may arise. If another proceeding or consideration for the supplemental also provides that a reply that raises a matter involving the patent is before the information would be in the interests-of- new issue or belatedly presents Office, the Director may determine the justice. See §§ 42.123(b) and 42.223(b). manner in which the inter partes or evidence will not be considered. Further, supplemental information post-grant review will proceed must be relevant to a claim for which Multiple Proceedings and Joinder including providing for a stay of one of the trial has been instituted. The final (§§ 42.122 and 42.222) the matters or proceedings. 35 U.S.C. rule clarifies that if the submission is Comment 87: One comment asked for 315(d), as amended, and 35 U.S.C. not relevant to a claim for which the clarification as to what effect 325(d). A stay of a matter that suspends trial has been instituted, the party must consolidating proceedings, for example, the time for taking actions is expected show that the information reasonably two post-grant review proceedings, to be a rare occurrence. In considering could not have been obtained earlier would have on the total number of post- whether to order a stay, the goal of and that consideration of the grant reviews allowed in a given year. completing the proceeding in a timely supplemental information would be in Response: Where multiple instituted manner will be taken into account. proceedings are consolidated, each Comment 90: One comment asked the interests-of-justice. See §§ 42.123(c) proceeding would be counted towards what effect a reissue application filed and 42.223(c). any limit that might be established as after institution of post-grant or inter As other comments pointed out, 35 each is a separately instituted partes review would have on the order U.S.C. 316(a)(3), as amended, and 35 proceeding that is thereafter in which the proceedings would be U.S.C. 326(a)(3) provide that the consolidated into a single proceeding. resolved. Another comment urged the Director shall prescribe regulations Comment 88: One comment requested Office not to merge an inter partes establishing procedures for the clarification on the timing for requesting review with an ex parte proceeding due submission of supplemental information joinder of parties or replacement of a to different standards for conducting the after the petition is filed. Consistent consenting petitioner, and suggested proceedings. with these statutory provisions, that the Office permit joinder and Response: Under the rules, a stay, §§ 42.123 and 42.223, as adopted in this replacement until the time of a final transfer, consolidation or termination final rule, establish the procedures in written decision under appropriate would be an option in this situation. which parties may file supplemental circumstances. The comment further §§ 42.122 and 42.222. Both whether a information. suggested a list of factors that the Office stay, transfer, consolidation or Comment 92: Several comments might consider in determining whether termination would be ordered and the suggested that the rules should permit a to permit voluntary joinder or order of resolution would depend on party to file a motion to file replacement (e.g., the impact on the particular facts and circumstances. The supplemental information, and Scheduling Order). Another comment Board will take into consideration the suggested that the motion should be requested guidance as to when joinder impact on each proceeding on a case-by- granted only for good cause or be might occur. case basis. limited to rebuttal evidence and/or

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evidence bearing on the credibility of Comment 94: One comment should be made for modification of the witnesses. recommended the time period for scheduling order based on good cause. Response: Petitioners are encouraged requesting the authorization to file Response: The scheduling order in the to set forth their best grounds of supplemental information should be Office Patent Trial Practice Guide is a unpatentability and supporting shortened to two weeks. general guideline based on the rules. evidence in their petitions, lest the Response: The Office believes that the The parties are encouraged to petitioner risk a determination by the one-month time period is appropriate so recommend particular dates within the Board not to institute the review or deny that a party has sufficient opportunity to general framework of the scheduling the asserted grounds of unpatentability request the authorization to file the order that work for both, prior to the (§ 42.108(b)). Moreover, the Board may motion at the initial conference call. initial conference call. The parties also impose a sanction against a party for Comment 95: One comment noted may stipulate to modify most of the misconduct, including any action that that the rules do not provide for raising deadlines set within the scheduling harasses or causes unnecessary delay or new grounds of unpatentability and order. Any further modification must be cost (§ 42.12(a)(7)). Where a party needs suggested that the rules should clarify by authorized motion. § 42.20(b). to submit late supplemental that no estoppel applies for new Whether such a motion would be information, the party must explain why grounds of unpatentability. authorized or granted depends on the the information reasonably could not Response: 35 U.S.C. 316(a)(3), as particular circumstances of the case have been obtained earlier, and that the amended, and 35 U.S.C. 326(a)(3) including the Office’s ability to consideration of the information would provide that the Director is to complete the review in a timely manner. be in the interests-of-justice. If the Board promulgate regulations that establish Covered Business Method Patent Review grants such a motion, the Board may procedures for the submission of authorize the patent owner to take supplemental information after the Who May Petition for a Covered additional discovery or to file a motion petition is filed. The rules provide a Business Method Patent Review to amend. Sections 42.121(c) and timeframe for the submission of the (§ 42.302(a)) 42.221(c), as adopted in this final rule, supplemental information during the clarify that in determining whether to Comment 98: Several comments review. Whether a party is authorized to authorize such an additional motion to requested that the Office provide raise new grounds of unpatentability amend, the Board will consider whether guidance as to the standard for based upon the supplemental a petitioner has submitted supplemental satisfying the ‘‘charged with information will be determined on a information after the time period set for infringement’’ requirement. One case-by-case basis taking into account filing a motion to amend in § 42.121(a) comment suggested that the Office or 42.221(a). The Board may also extend the particular facts surrounding should clarify that the ‘‘charged with the time period for completing the supplemental information submitted. infringement’’ criterion is something review. Additionally, the Board may Since estoppel applies for any ground more than the showing required to take into account whether a late that the petition raised or reasonably establish declaratory judgment submission represents an improper use could have raised during the review (35 jurisdiction. Several other comments of the proceeding. 35 U.S.C. 316(a)(6), as U.S.C. 315(e), as amended, and 35 suggested that the standard should be amended, and 35 U.S.C. 326(a)(6). U.S.C. 325(e)), estoppel would apply based on the test for declaratory Comment 93: One comment stated where a new ground is authorized. judgment jurisdiction. Lastly, one that providing petitioners with a right to Intervening Rights comment suggested that the rule should submit supplemental information will clarify that a patentee can discuss help ensure that all pertinent issues are Comment 96: One comment licensing with a party without making a resolved in the same proceeding, and recommended that the rules or Practice charge of infringement. suggested that the rule should allow Guide should note that the intervening Response: The suggestions are petitioners to present new evidence rights applicable to an inter partes adopted in part. The Office will provide obtained during discovery even for a review or post-grant review shall be more guidance by providing a rule that new ground of unpatentability. based on 35 U.S.C. 318(c), as amended, sets forth the standard for ‘‘charged with Response: As discussed previously, and 35 U.S.C. 328(c) and 252 as infringement’’ in a revision to the Office petitioners are strongly encouraged to interpreted by case law. Patent Trial Practice Guide. The final submit all of the evidence that supports Response: Since the issue of rule includes the standard based on the the grounds of unpatentability asserted intervening rights is not one decided by test for declaratory judgment in the petition. Sections 42.123 and the Office in an inter partes review, jurisdiction in Federal court. The final 42.223, as adopted in this final rule, post-grant review, or covered business rule provides that ‘‘charged with provide that a party may seek method patent review, it is not infringement’’ means a real and authorization to file a motion to submit necessary to include information substantial controversy regarding supplemental evidence relevant to a regarding intervening rights in the rules infringement of a covered business claim for which the trial has been of practice before the Office. method patent such that the petitioner instituted within one month of the date would have standing to bring a Practice Guide the trial is instituted. The rules also declaratory judgment action in Federal provide standards by which later Comment 97: One comment suggested court. motions may be granted where the that the timeline of the Practice Guide evidence reasonably could not have for Proposed Trial Rules favors the Time for Filing Petition for a Covered been obtained earlier. While the patentee and should be modified to Business Method Patent Review evidence may be relevant to a new allow the petitioner an additional (§ 42.303) ground of unpatentability, the party, month while shortening the patentee’s Comment 99: One comment suggested however, must additionally show that time by a month. One comment that the proposed rule apparently consideration of the supplemental suggested that in the scheduling order precludes the filing of a business evidence would be in the interests-of- timeline of the Practice Guide for method patent review of any patent (i.e., justice. Proposed Trial Rules, a provision first-to-invent and first-to-file patents)

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within the first nine months after that requires that the petitioner demonstrate 18(d)(2). The AIA provides for a patent is issued, in violation of the AIA. that the patent for which review is challenge to one or more claims within The comment proposed that the Office sought is a covered business method such a covered business method patent. change the language of the rule to make patent. A covered business method The AIA does not limit the claims that it clearer. patent is defined in part as not being for may be challenged to those that are Response: The transitional review a technological invention. As part of directed specifically to the covered program is available for non-first-to-file demonstrating that the patent for which business method. patents, even within the first nine review is sought is a covered business Comment 104: One comment months of the grant of such patents. The method patent, the petitioner must suggested that proposed § 42.301 fails to rule is consistent with the limitation set demonstrate that the patent in question address the required nexus between a forth in section 18(a)(2) of the AIA, and meets the definition of a covered challenged business method patent and therefore no change was made. See business method patent, including a financial product or service. § 42.302(a). demonstrating that the patent is not for Response: Under the rules, the petitioner must demonstrate that the Content of Petition for a Covered a technological invention. As provided in the preamble, to establish standing, a patent for which review is sought is a Business Method Patent Review covered business method patent. (§ 42.304(a)) petitioner would be required to certify that the petitioner meets the eligibility § 42.304(a). Thus, a petitioner must Comment 100: Several comments requirements of § 42.302 and show the challenged patent to be a suggested that the patentee should bear demonstrate that the patent is a covered patent that claims a method or the burden of proof or persuasion to business method. corresponding apparatus for performing show that the patent in question is a Comment 102: One comment data processing or other operation used technological invention. One comment suggested that the proposed rules in the practice, administration, or suggested that the petitioner bears the appear to contemplate that a petitioner management of a financial product or burden to demonstrate that at least one could establish standing simply by service, and which is not a claim is not directed to a technological certifying that it has standing, without technological invention. invention. any supporting facts or reasoning. The Comment 105: One comment Response: The Office adopts proposed comment further expressed that proof of suggested that shortly after institution of § 42.304(a) without any modifications. standing (showing that the petitioner a proceeding, the patent owner should The petitioner bears the burden to has been sued for or charged with be authorized to file a threshold motion demonstrate that at least one claim is infringement) should be required, as challenging the standing of the not directed to a technological invention well as a showing that the patent is a petitioner. to show that the petitioner has standing covered business method patent and Response: Under the rules, a patent to proceed. Section 42.304(a) requires that the technological invention owner should challenge standing no that the petitioner demonstrate that the exception does not apply. later than the filing of the patent owner patent for which review is sought is a Response: The Office adopts proposed preliminary response. § 42.207(a). Once covered business method patent. A § 42.304(a) in this final rule without any a proceeding is initiated, a party covered business method patent is modifications. Section 42.304(a) wishing to challenge standing may defined in part as not being for a requires that the petition under this challenge standing in its patent owner technological invention. As part of section demonstrate that the petitioner response. demonstrating that the patent for which has grounds for standing. To establish Comment 106: Several comments review is sought is a covered business standing, a petitioner, at a minimum, suggested that the rules should require method patent, the petitioner must would be required to certify with proof of standing for a transitional demonstrate that the patent in question explanation that the patent is a covered covered business method patent review, meets the definition of a covered business method patent and that the i.e., require a showing that the business method patent, including petitioner meets the eligibility petitioner has been sued or charged for demonstrating that the patent is not for requirements of § 42.302. This infringement and that the patent at issue a technological invention. The showing requirement is to ensure that a party has is a covered business method patent. for both covered business method patent standing to file the covered business Response: Under the rules, the and technological invention is based on method patent review and would help petitioner must demonstrate standing what is claimed. prevent spuriously instituted reviews. and that the patent for which review is Comment 101: One comment Facially improper standing is a basis for sought is a covered business method suggested that the Office clarify that the denying the petition without proceeding patent. § 42.304(a). The petition is petitioner need only make a prima facie to the merits of the decision. required to show specifically that it showing (rather than demonstrate) that Comment 103: One comment meets the requirements of § 42.302, i.e., the patent for which review is sought is suggested that the Office conduct its that the petitioner, the petitioner’s real a covered business method patent and eligibility requirements for a covered party-in-interest, or a privy of the that the ultimate burden of persuasion business method patent on a claim-by- petitioner has been sued for be on the patentee to show that the claim basis and indicate in § 42.304(a) infringement of the patent or has been patent is a technological invention. that the petitioner must demonstrate the charged with infringement under that Another comment suggested that the grounds for standing for each claim for patent. A showing can only be made petitioner bears the burden of going which review is sought. through sufficient proof. forward and has the burden of Response: The petitioner must Comment 107: One comment persuasion that the subject matter is demonstrate standing and that the suggested that the rules should eligible for the Transitional Program for patent for which review is sought is a implement the requirements of section Covered Business Method Patents covered business method patent. 18(a)(1)(C) of the AIA. review. § 42.304(a). The AIA defines a covered Response: The comment is adopted. Response: The Office adopts proposed business method patent as a patent that Section 42.304(b)(2), as adopted in this § 42.304(a) in this final rule without any claims a method or corresponding final rule, implements the requirements modifications. Section 42.304(a) apparatus, as set forth at Section of section 18(a)(1)(C) of the AIA.

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Rulemaking Considerations however, published these proposed F.3d 1330, 1336–37 (Fed. Cir. 2008), for The rulemaking considerations for the changes for comment as it sought the the proposition that 5 U.S.C. 553, and series of final rules for implementing benefit of the public’s views on the thus 35 U.S.C. 2(b)(2)(B), does not the administrative patent trials as Office’s proposed implementation of require notice and comment rulemaking required by the AIA have been these provisions of the AIA. See for ‘‘interpretive rules, general statement considered together and are based upon Changes to Implement Inter Partes of policy, or rules of agency the same assumptions, except where Review Proceedings, 77 FR 7041 (Feb. organization, procedure or practice.’’ differences between the regulations and 10, 2012); Changes To Implement Post- The Office’s reliance on Cooper proceedings that they implement Grant Review Proceedings, 77 FR 7060 Technologies is appropriate and remains require additional or different (Feb. 10, 2012); and Changes To an accurate statement of administrative Implement Transitional Program for law. In any event, the Office sought the information. Notably, this final rule is Covered Business Method Patents, 77 benefit of public comment on the directed to specific procedures for inter FR 7080 (Feb. 10, 2012). proposed rules and has fully considered partes review, post-grant review, and The Office received one written and responded to the comments covered business method patent review, submission of comments from the received. and therefore, does not depend on or public regarding the Administrative B. Final Regulatory Flexibility Act discuss the responses or information Procedure Act. Each component of that Analysis: related to other than derivations. comment directed to the APA is The Office estimates that 420 A. Administrative Procedure Act addressed below. petitions for inter partes review and 50 (APA): Comment 108: One comment petitions for post-grant review and This final rule revises the rules of suggested that almost all of the covered business method patent review practice concerning the procedure for proposed regulations were legislative combined will be filed in fiscal year requesting an inter partes review, post- and not interpretive rules. That leads 2013. In fiscal year 2014, it is estimated grant review, and covered business the USPTO to omit required steps in the that 450 inter partes review and 60 method patent review, and the trial rulemaking process. petitions for post-grant review and process after initiation of such a review. Response: At the outset, it should be covered business method patent review The changes being adopted in this noted that the Office did not omit any combined will be filed. In fiscal year notice do not change the substantive steps in the rulemaking process. Even 2015, it is estimated that 500 inter criteria of patentability. These changes though not legally required, the Office partes review and 110 petitions for post- involve rules of agency practice, published notices of proposed grant review and covered business standards and procedure and/or rulemaking in the Federal Register, method patent review combined will be interpretive rules. See Bachow solicited public comment, and fully filed. Commc’ns Inc. v. F.C.C., 237 F.3d 683, considered and responded to comments The estimate for inter partes review 690 (DC Cir. 2001) (rules governing an received. Although the Office sought the petitions is based partially on the application process are procedural benefit of public comment, these rules number of inter partes reexamination under the Administrative Procedure are procedural and/or interpretive. requests under § 1.915 that have been Act); Inova Alexandria Hosp. v. Shalala, Stevens v. Tamai, 366 F.3d. 1325, 1333– filed in fiscal years 2010, 2011 and the 244 F.3d 342, 350 (4th Cir. 2001) (rules 34 (Fed. Cir. 2004) (upholding the first half of fiscal year 2012. The rate of for handling appeals were procedural Office’s rules governing the procedure growth of inter partes reexamination where they did not change the in patent interferences). The final filing has slowed considerably in FY substantive standard for reviewing written decisions on patentability which 2012 to roughly 2.6% (374 filings in FY claims); Nat’l Org. of Veterans’ conclude the reviews will not be 2011, 192 filings in the first half of FY Advocates, Inc. v. Sec’y of Veterans impacted by the regulations, adopted in 2012). Assuming some increase in Affairs, 260 F.3d 1365, 1375 (Fed. Cir. this final rule, as the decisions will be growth rate had the AIA not been 2001) (rule that clarifies interpretation based on statutory patentability enacted, it is reasonable to estimate that of a statute is interpretive); JEM Broad. requirements, e.g., 35 U.S.C. 101 and no more than 420 inter partes Co. v. F.C.C., 22 F.3d 320, 328 (DC Cir. 102. reexamination requests would have 1994 (The rules are not legislative Comment 109: One comment been filed in FY 2012 and that a similar because they do not ‘‘foreclose effective suggested that, even if the rules are number of inter partes reviews will be opportunity to make one’s case on the merely procedural, reliance on Cooper filed in FY 2013. merits’’). Moreover, sections 6 and 18 of Technologies. Co. v. Dudas was not The Office received 281 requests for the AIA require the Director to prescribe appropriate and therefore notice and inter partes reexamination in fiscal year regulations for implementing the new comment was required. 2010. See Table 13B of the United States trials. Response: These rules are consistent Patent and Trademark Office Accordingly, prior notice and with the AIA requirements to prescribe Performance and Accountability Report opportunity for public comment are not regulations to set forth standards and Fiscal Year 2010, available at http:// required pursuant to 5 U.S.C. 553(b) or procedures. The rules are procedural www.uspto.gov/about/stratplan/ar/ (c) (or any other law), and thirty-day and/or interpretative. Stevens v. Tamai, 2010/USPTOFY2010PAR.pdf. advance publication is not required 366 F.3d 1325, 1333–34 (Fed. Cir. 2004) The Office received 374 requests for pursuant to 5 U.S.C. 553(d) (or any other (upholding the Office’s rules governing inter partes reexamination in fiscal year law). See Cooper Techs. Co. v. Dudas, the procedure in patent interferences). 2011. See Table 14B of the United States 536 F.3d 1330, 1336–37 (Fed. Cir. 2008) The Office nevertheless published Patent and Trademark Office (stating that 5 U.S.C. 553, and thus 35 notices of proposed rulemaking in the Performance and Accountability Report U.S.C. 2(b)(2)(B), does not require notice Federal Register, solicited public for Fiscal Year 2011, available at and comment rulemaking for comment, and fully considered and http://www.uspto.gov/about/stratplan/ ‘‘interpretative rules, general statements responded to comments received. In ar/2011/USPTOFY2011PAR.pdf. of policy, or rules of agency both the notice of proposed rulemaking The Office received 192 requests for organization, procedure, or practice’’) and this final rule, the Office cites inter partes reexamination in the first (quoting 5 U.S.C. 553(b)(A)). The Office, Cooper Technologies. Co v. Dudas, 536 half of fiscal year 2012. See http://

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www.uspto.gov/patents/stats/ complete search of 705/300–348 should grounds, the greater coordination with reexam_operational_ include a search of 705/1.1. Once the project litigation, and the provision that patents statistics_FY12Q2.pdf. documents in 705/1.1 have been reclassified will be eligible for the proceeding Additionally, the Office takes into they will be moved to the appropriate subclasses and this note will be removed. regardless of filing date of the consideration the recent moderate SCOPE OF THE CLASS application which resulted in the growth rate in the number of requests patent. The Office estimates zero growth for inter partes reexamination, the 1. The arrangements in this class are generally used for problems relating to in the number of petitions for covered projected growth due to an expansion in administration of an organization, business method review in fiscal year the number of eligible patents under the commodities or financial transactions. 2014 and 2015. inter partes review provisions of section 2. Mere designation of an arrangement as It is not anticipated that any post- 6(c) of the AIA, and the more restrictive a ‘‘business ’’ or a document as a filing time period in 35 U.S.C. 315(b) as ‘‘business form’’ or ‘‘business chart’’ without grant review petitions will be received amended by the AIA. any particular business function will not in fiscal year 2013 as only patents In fiscal year 2013, it is expected that cause classification in this class or its issuing based on certain applications no post-grant review petitions will be subclasses. filed on or after March 16, 2013, or received, other than those filed under 3. For classification herein, there must be certain applications involved in an significant claim recitation of the data the transitional program for covered interference proceeding commenced processing system or calculating computer before September 16, 2012, are eligible business method patents. Thus, the and only nominal claim recitation of any estimated number of post-grant review external art environment. Significantly for post-grant review. See Public Law petitions including covered business claimed apparatus external to this class, 112–29, section 6(f), 125 Stat. 284, 311 method patent review petitions is based claimed in combination with apparatus (2011). It is estimated that 10 petitions on the number of inter partes under the class definition, which perform for post-grant review will be filed in reexamination requests filed in fiscal data processing or calculation operations are fiscal year 2014 and 60 petitions will be year 2011 for patents having an original classified in the class appropriate to the filed in fiscal year 2015. external device unless specifically excluded classification in class 705 of the United therefrom. The Office has updated its review of States Patent Classification System. 4. Nominally claimed apparatus external to the entity status of patents for which Class 705 is the classification for patents this class in combination with apparatus inter partes reexamination was directed to data processing in the under the class definition is classified in this requested from October 1, 2000, to May following areas: Financial, business class unless provided for in the appropriate 18, 2012. This data only includes filings practice, management, or cost/price external class. 5. In view of the nature of the subject granted a filing date rather than filings determination. See http:// in which a request was received. The www.uspto.gov/web/patents/ matter included herein, consideration of the classification schedule for the diverse art or first inter partes reexamination was classification/uspc705/sched705.pdf. environment is necessary for proper search. filed on July 27, 2001. A summary of The following is the class definition that review is provided in Table 1 and description for Class 705: See Classification Definitions (Feb. 2011) available at http:// below. As shown by Table 1, patents This is the generic class for apparatus and known to be owned by a small entity corresponding methods for performing data www.uspto.gov/web/patents/ classification/uspc705/defs705.htm. represented 32.09% of patents for which processing operations, in which there is a inter partes reexamination was significant change in the data or for Accordingly, patents subject to performing calculation operations wherein covered business method patent review requested. Based on an assumption that the apparatus or method is uniquely are anticipated to be typically the same percentage of patents owned designed for or utilized in the practice, classifiable in Class 705. It is anticipated by small entities will be subject to inter administration, or management of an that the number of patents in Class 705 partes review, it is estimated that 146 enterprise, or in the processing of financial that do not qualify as covered business petitions for inter partes review would data. method patents would approximate the be filed to seek review of patents owned This class also provides for apparatus and by a small entity annually in fiscal years corresponding methods for performing data number of patents classified in other processing or calculating operations in which classes that do qualify. 2013–2015. Based on an assumption a charge for goods or services is determined. The Office received 20 requests for that the same percentage of patents This class additionally provides for subject inter partes reexamination of patents owned by small entities will be subject matter described in the two paragraphs above classified in Class 705 in fiscal year to post-grant or covered business in combination with cryptographic apparatus 2011. The Office estimates the number method patent review, it is estimated or method. of petitions for covered business method that 24 petitions for covered business Subclasses 705/300–348 were established prior to complete reclassification of all patent review to be higher than 20 method patent review would be filed to project documents. Documents that have not requests due to an expansion of grounds seek review of patents owned by a small yet been reclassified have been placed in for which review may be requested entity annually in fiscal years 2013– 705/1.1. Until reclassification is finished a including subject matter eligibility 2015.

TABLE 1—INTER PARTES REEXAMINATION REQUESTS FILED WITH PARENT ENTITY TYPE *

Number filed Inter partes where parent Percentage of Fiscal year reexamination patent is small small entity-type requests filed entity type of total

2012 ...... 226 85 37 .61 2011 ...... 369 135 36.59 2010 ...... 255 89 34 .9 2009 ...... 237 61 25 .74 2008 ...... 155 51 32 .9 2007 ...... 127 32 25 .2

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TABLE 1—INTER PARTES REEXAMINATION REQUESTS FILED WITH PARENT ENTITY TYPE *—Continued

Number filed Inter partes where parent Percentage of Fiscal year reexamination patent is small small entity-type requests filed entity type of total

2006 ...... 61 16 26 .23 2005 ...... 59 20 33 .9 2004 ...... 26 5 19 .23 2003 ...... 21 12 57 .14 2002 ...... 4 1 25 .00 2001 ...... 1 0 0.00 1315 422 32 .09 * Small entity status determined by reviewing preexamination small entity indicator for the parent patent.

Based on the number of patents small entity-owned patents impacted by ability of the Office to complete, in a issued during fiscal years 1995 through inter partes review annually in fiscal timely fashion, the instituted 1999 that paid the small entity third- year 2013–2015 (146 patents) would be proceedings. See 35 U.S.C. 316(b), as stage maintenance fee, the number of less than 0.05% (146/375,000) of all amended, and 35 U.S.C. 326(b). patents issued during fiscal years 2000 patents in force that are owned by small Consistent with the time periods through 2003 that paid the small entity entities. Moreover, post-grant review provided in 35 U.S.C. 316(a)(11), as second stage maintenance fee, the and covered business method patent amended, and 35 U.S.C. 326(a)(11), the number of patents issued during fiscal review would have an even smaller rules are designed to result in a final years 2004 through 2007 that paid the impact. determination by the Patent Trial and small entity first-stage maintenance fee, 1. Description of the Reasons That Appeal Board within one year of the and the number of patents issued during Action by the Office Is Being notice of initiation of the review, except fiscal years 2008 through 2011 that paid Considered: The Office is revising the where good cause is shown to exist. a small entity issue fee, there are rules of practice to implement inter This one-year review will enhance the approximately 375,000 patents owned partes review, post-grant review, and economy, improve the integrity of the by small entities in force as of October the transitional program for covered patent system, and promote the efficient 1, 2011. business method patent review administration of the Office. Furthermore, the Office recognizes provisions of the AIA, which take effect 3. Statement of Significant Issues that there would be an offset to this September 16, 2012. Public Law 112–29, Raised by the Public Comments in number for patents that expire earlier §§ 6 (c) and (f), and § 18, 125 Stat. 284, Response to the IRFA and the Office’s than 20 years from their filing date due 304, 311 and 330 (2011). The AIA Response to Such Issues: The Office to a benefit claim to an earlier requires the Office to issue regulations published an IRFA analysis to consider application or due to a filing of a to implement the new administrative the economic impact of the proposed terminal disclaimer. The Office likewise trials. rules on small entities. See Changes to recognizes that there would be an offset 2. Statement of the Objectives of, and Implement Inter Partes Review in the opposite manner due to the Legal Basis for, the Final Rules: This Proceedings, 77 FR 7041, 7048–55 (Feb. accrual of patent term extension and final rule is part of a series of rules that 10, 2012). The Office received one adjustment. The Office, however, does implement the new administrative trials written submission of comments from not maintain data on the date of authorized by the AIA. Specifically, this the public concerning the Regulatory expiration by operation of a terminal final rules implement specific aspects of Flexibility Act. Each component of that disclaimer. Therefore, the Office has not the inter partes review, post-grant comment directed to the Regulatory adjusted the estimate of 375,000 patents review, and the transitional program for Flexibility Act is addressed below. owned by small entities in force as of covered business method patent review Comment 110: One comment argued October 1, 2011. While the Office proceedings as authorized by the AIA. that non-office costs and burden should maintains information regarding patent The AIA requires that the Director include the burden on small entity term extension and adjustment accrued prescribe rules for the inter partes patent owners, petitioners, and by each patent, the Office does not reviews, post-grant reviews, and licensees, as well as settlement burdens, collect data on the expiration date of covered business method patent reviews disruption of businesses, or effects on patents that are subject to a terminal that result in a final determination not investment, business formation or disclaimer. As such, the Office has not later than one year after the date on employment. The comment further adjusted the estimate of 375,000 patents which the Director notices the argued that prophylactic application owned by small entities in force as of institution of a proceeding. The one- steps (e.g., filing of reissue applications) October 1, 2011, for accrual of patent year period may be extended for not were not considered and that the offsets term extension and adjustment, because more than six months if good cause is for inter partes reexamination’s in view of the incomplete terminal shown. See 35 U.S.C. 316(a)(11), as elimination were not appropriate. disclaimer data issue, any adjustment amended, and 35 U.S.C. 326(a)(11). The Response: As explained in the notice would be incomplete and would be AIA also requires that the Director, in of proposed rulemaking, the Office administratively burdensome to prescribing rules for inter partes notes that inter partes reexamination is estimate. Thus, it is estimated that the reviews, post-grant reviews, and the appropriate baseline for estimating number of small entity patents in force covered business method patent economic impacts because the use or in fiscal year 2013–2015 will be reviews, consider the effect of the rules outcome of the prior reexamination approximately 375,000. on the economy, the integrity of the process and the new trial are largely the Based on the estimated number of patent system, the efficient same. See OMB Circular A4, at (e)(3). patents in force, the average number of administration of the Office, and the The Office estimated that the same

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number of patents would be subject to on average, an inter partes review Application Location and Monitoring inter partes review as would have been proceeding will require 35 hours of (PALM) database system, which tracks subject to inter partes reexamination. judge time to make a decision on information on each patent application The comment did not argue that this institution, 20 hours of judge time to submitted to the Office. estimate was unreasonable or provide prepare for and conduct hearings, 60 Unlike the SBA small business size an alternative estimate. Considering the hours of judge time to prepare and issue standards set forth in 13 CFR 121.201, similarities in the grounds of review and a final decision, and 15 hours of judge the size standard for the USPTO is not the number of patents subject to the time to prepare and issue miscellaneous industry-specific. Specifically, the proceedings, it is anticipated that the interlocutory decisions. It is also Office’s definition of small business existing inter partes reexamination estimated that 2.5% of proceedings will concern for Regulatory Flexibility Act process, if not eliminated for new settle before a decision of whether to purposes is a business or other concern filings, would have had similar impact institute is made and another 2.5% of that: (1) Meets the SBA’s definition of a on the economy as the new review proceedings will terminate by patent ‘‘business concern or concern’’ set forth proceedings and therefore the impacts owners filing a default judgment motion in 13 CFR 121.105; and (2) meets the noted in the comment would simply after institution. The Office estimates size standards set forth in 13 CFR replace existing analogous impacts and that 10% of proceedings will not be 121.802 for the purpose of paying effects in inter partes reexamination. instituted and another 20% of reduced patent fees, namely, an entity: The comment argues that no offset for proceedings will settle after institution. (a) Whose number of employees, the replaced process should be In settled cases it is estimated that 50% including affiliates, does not exceed 500 considered although OMB guidance of the anticipated motions would not be persons; and (b) which has not assigned, provides otherwise. See OMB Circular filed. It should be appreciated that cases granted, conveyed, or licensed (and is A4. Additionally, although the comment that terminate prior to the need to under no obligation to do so) any rights argues that the new proceedings may render a decision on institution, that do in the invention to any person who result in patent owners taking request an oral hearing or do not require made it and could not be classified as additional prophylactic measures that a final decision because of an earlier an independent inventor, or to any would have their own burdens for small termination result in an average judge concern which would not qualify as a businesses, any patent owner motivated time per proceeding which is less than non-profit organization or a small by the regulations adopted in this final the time needed to perform all possible business concern under this definition. rule to take prophylactic application steps in a proceeding. See Business Size Standard for Purposes steps would similarly have been 4. Description and Estimate of the of United States Patent and Trademark motivated to take those steps under the Number of Affected Small Entities: Office Regulatory Flexibility Analysis for former inter partes reexamination A. Size Standard and Description of Patent-Related Regulations, 71 FR at regime. Thus, the burdens on small Entities Affected. The Small Business 67112 (Nov 20, 2006), 1313 Off. Gaz. entity patent owners, petitioners, and Administration’s (SBA) small business Pat. Office at 63 (Dec. 12, 2006). licensees, as well as settlement burdens, size standards applicable to most B. Overview of Estimates of Number disruption of businesses, or effects on analyses conducted in compliance with of Entities Affected. The rules will apply investment, business formation or the Regulatory Flexibility Act are set to any small entity that either files a employment that are caused by the final forth in 13 CFR 121.201. These petition for inter partes review, post- rules would have been similarly caused regulations generally define small grant review, or covered business by the former inter partes reexamination businesses as those with fewer than a method patent review or owns a patent proceedings as the same effects and specified maximum number of subject to such review. As discussed impacts are caused by the two types of employees or less than a specified level above (which is incorporated here), it is proceedings. of annual receipts for the entity’s anticipated that 420 petitions for inter Additionally, the Office’s estimates of industrial sector or North American partes review and 50 petitions for post- the burden on small entities are likely Industry Classification System (NAICS) grant review and covered business overstated. As noted in the notice of code. As provided by the Regulatory method patent review combined will be proposed rulemaking, it is anticipated Flexibility Act, and after consultation filed in fiscal year 2013. In fiscal year that the current significant overlap with the Small Business 2014, it is estimated that 450 inter between district court litigation and Administration, the Office formally partes review and 60 petitions for post- inter partes reexamination may be adopted an alternate size standard as the grant review and covered business reduced by improvement in the size standard for the purpose of method patent review combined will be coordination between the two processes. conducting an analysis or making a filed. In fiscal year 2015, it is estimated See Rules of Practice for Trials before certification under the Regulatory that 500 inter partes review and 110 the Patent Trial and Appeal Board and Flexibility Act for patent-related petitions for post-grant review and Judicial Review of Patent Trial and regulations. See Business Size Standard covered business method patent review Appeal Board Decisions, 77 FR at 6903. for Purposes of United States Patent and combined will be filed. The Office has Similarly, it is anticipated that the Trademark Office Regulatory Flexibility reviewed the percentage of patents public burden will be reduced because Analysis for Patent-Related Regulations, owned by small entities for which inter the longer duration of the inter partes 71 FR 67109 (Nov. 20, 2006), 1313 Off. partes reexamination was requested reexamination process will be reduced Gaz. Pat. Office 60 (Dec. 12, 2006). This from October 1, 2000, to May 18, 2012. owing to the anticipated shorter alternate small business size standard is A summary of that review is provided duration of the new procedure. Id. the SBA’s previously established size in Table 1 above. As demonstrated by Comment 111: A comment indicated standard that identifies the criteria Table 1, patents known to be owned by that the underlying data for the 98.7 entities must meet to be entitled to pay a small entity represent 32.09% of hours of judge time for an inter partes reduced patent fees. See 13 CFR patents for which an inter partes review proceeding was not provided. 121.802. If patent applicants identify reexamination was requested. Based on Response: Based on the Office’s themselves on a patent application as an assumption that the same percentage experience involving similar qualifying for reduced patent fees, the of patents owned by small entities will proceedings, the Office estimates that, Office captures this data in the Patent be subject to the new review

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proceedings, it is estimated that 146 response to an inter partes review institute multiplied by 33.333%) will be patents owned by small entities would petition, and 21 small entities will filed. Based on the percentage of small be affected annually by inter partes annually file a preliminary response to entity-owned patents that were the review, and that 24 patents owned by a post-grant review or covered business subject of inter partes reexamination small entities would be affected method patent review petition in fiscal (32.09%) it is estimated that six small annually by a post-grant review or years 2013–2015. entities will file a request for a covered business method patent review. Under the final rules, the Office will reconsideration of a decision dismissing The USPTO estimates that 2.5% of determine whether to institute a trial the petition for review in fiscal year patent owners will file a request for within three months after the earlier of: 2013. Further, the Office estimates that adverse judgment prior to a decision to (1) The submission of a patent owner it will issue 321 final written decisions institute and that another 2.5% will file preliminary response, (2) the waiver of for inter partes reviews and 51 final a request for adverse judgment or fail to filing a patent owner preliminary written decisions for post-grant reviews, participate after initiation. Thus, an response, or (3) the expiration of the including cover business method patent estimated 22 patent owners will time period for filing a patent owner reviews annually. Applying the same annually file a request for adverse preliminary response. If the Office 33.333% rate, the Office estimates 124 judgment or fail to participate after decides not to institute a trial, the requests for reconsiderations ((321+51) institution in inter partes review, and an petitioner may file a request for multiplied by 33.333%) will be filed estimated four patent owners will reconsideration of the Office’s decision. based on the final written decisions annually do so in post-grant review and In estimating the number of requests for annually. Therefore, the Office estimates covered business method patent review reconsideration, the Office considered a total of 141 (17+124) requests for proceedings combined. Based on the the percentage of inter partes reconsiderations annually. percentage of small entity-owned reexaminations that were denied The Office reviewed motions, patents that were the subject of inter relative to those that were ordered (24 oppositions, and replies in a number of partes reexamination (32.09%) from divided by 342, or 7%) in fiscal year contested trial proceedings before the October 1, 2000, to May 18, 2012, it is 2011. See Reexaminations—FY 2011, trial section of the Board. The review estimated that seven small entities will available at http://www.uspto.gov/ included determining whether the annually file such requests or fail to patents/Reexamination_ motion, opposition, and reply were participate in inter partes review operational_statistic_ directed to patentability grounds and proceedings, and an estimated one small through_FY2011Q4.pdf. The Office also non-priority non-patentability grounds. entity will annually do so in post-grant considered the impact of: (1) Patent This series of final rules adopts changes review or covered business method owner preliminary responses newly to permit parties to agree to certain patent review combined. authorized in 35 U.S.C. 313, as changes from the default process Under the final rules, prior to amended, and 35 U.S.C. 323; (2) the between themselves without filing a determining whether to institute a enhanced thresholds for instituting motion with the Board. Based on the review, the patent owner may file an reviews set forth in 35 U.S.C. 314(a), as changes in the final rules, the estimate optional patent owner preliminary amended, and 35 U.S.C. 324(a), which of the number of motions has been response to the petition. Given the new would tend to increase the likelihood of revised downwardly so that it is now time period requirements to file a dismissing a petition for review; and (3) anticipated that: (1) Inter partes reviews petition for review before the Board, the more restrictive time period for will have an average of 6 motions, relative to patent enforcement filing a petition for review in 35 U.S.C. oppositions, and replies per trial after proceedings, and the desire to avoid the 315(b), as amended, and 35 U.S.C. institution, and (2) post-grant reviews cost of a trial and delays to related 325(b), which would tend to reduce the and covered business method patent infringement actions, it is anticipated likelihood of dismissing a petition. reviews will have an average of 8 that 90% of petitions, other than those Based on these considerations, it is motions, oppositions, and replies per for which a request for adverse estimated that approximately 10% of trial after institution. Settlement is judgment is filed, will annually result in the petitions for review (51 divided by estimated to occur in 20% of instituted the filing of a patent owner preliminary 516) would be dismissed annually based trials at various points of the trial. In response. Where an inter partes review on reviews filed during FY 2013–2015. trials that are settled, it is estimated that petition is filed close to the expiration During fiscal year 2011, the Office only 50% of the noted motions, of the one-year period set forth in 35 issued 21 decisions following a request oppositions, and replies would be filed. U.S.C. 315(b), as amended, a patent for reconsideration of a decision on The Office envisions that most motions owner likely would be advantaged by appeal in inter partes reexamination. will be decided in a conference call or filing a successful preliminary response. The average time from original decision shortly thereafter. In view of these considerations, it is to decision on reconsideration was 4.4 After a trial has been instituted but anticipated that 90% of patent owners months. Thus, the decisions on prior to a final written decision, parties will annually file a preliminary reconsideration were based on original to a review may request an oral hearing. response. Specifically, the Office decisions issued from July 2010 until It is anticipated that 479 requests for estimates that 401 patent owners will June 2011. During this time period, the oral hearings will be filed annually annually file a preliminary response to Office mailed 63 decisions on appeals in during FY 2013–2015 based on the an inter partes review petition, and an inter partes reexamination. See BPAI number of requests for oral hearings in estimated 64 patent owners will Statistics—Receipts and Dispositions by inter partes reexamination, the stated annually file a preliminary response to Technology Center, available at http:// desirability for oral hearings during the a post-grant review or covered business www.uspto.gov/ip/boards/bpai/stats/ legislative process, and the public input method patent review petition. Based on receipts/index.jsp (monthly data). Based received prior to the notice of proposed the percentage of small entity-owned on the assumption that the same rate of rulemaking. patents that were the subject of inter reconsideration (21 divided by 63 or Based on the percentage of small partes reexamination (32.09%), it is 33.333%) will occur, the Office entity-owned patents that were the estimated that on average 129 small estimates that 17 requests for subject of inter partes reexamination entities will annually file a preliminary reconsideration (51 decisions not to (32.09%), it is estimated that 154 small

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entity patent owners or petitioners will covered business method patent reviews The cost of preparing a petition for on average annually file a request for would be limited to covered business post-grant review or covered business oral hearing in the reviews instituted in method patents that are not patents for method patent review is estimated to be fiscal years 2013–2015. technological inventions. Under the 33.333% higher than the cost of Parties to a review may file requests final rules, a person who is not the preparing a petition for inter partes to treat a settlement as business owner of a patent may file a petition to review because the petition for post- confidential and requests for adverse institute a review of that patent, with a grant review or covered business judgment. A written request to make a few exceptions. Given this, it is method patent review may seek to settlement agreement available may also anticipated that a petition for review is institute a proceeding on additional be filed. Given the short time period set likely to be filed by an entity practicing grounds such as subject matter for conducting trials, it is anticipated in the same or similar field as the eligibility. Therefore, the Office that the alternative dispute resolution patent. Therefore, it is anticipated that estimates that the cost of preparing a options will be infrequently used. The 50% of the petitions for review will be petition for post-grant review or covered Office estimates that 20 requests to treat filed in the electronic fields, 30% in the business method patent review would a settlement as business confidential mechanical field, and 20% in the be $61,333. and 116 requests for adverse judgment, chemical or design fields. The filing of a petition for review default adverse judgment, or settlement The procedures for petitions to would also require payment by the notices will be filed annually. The institute an inter partes review include petitioner of the appropriate petition fee Office also estimates that 20 requests to those set forth in §§ 42.5, 42.6, 42.8, to recover the aggregate cost for make a settlement available will be filed 42.11, 42.13, 42.20, 42.21, 42.22, providing the review. The appropriate annually. Based on the percentage of 42.24(a)(1), 42.63, 42.65, and 42.101 petition fee would be determined by the small entity-owned patents that were through 42.105. The procedures for number of claims for which review is the subject of inter partes reexamination petitions to institute a post-grant review sought and the type of review. The fees (32.09%), it is estimated that six small include those set forth in §§ 42.5, 42.6, for filing a petition for inter partes entities will annually file a request to 42.8, 42.11, 42.13, 42.20, 42.21, 42.22, review are: $27,200 for requesting treat a settlement as business 42.24(a)(2), 42.63, 42.65, and 42.201 review of 20 or fewer claims, and $600 confidential and 37 small entities will through 42.205. The procedures for for each claim in excess of 20 for which annually file a request for adverse petitions to institute a covered business review is sought. The fees for filing a judgment, default adverse judgment method patent review include those set petition for post-grant review or covered notices, or settlement notices in fiscal forth in §§ 42.5, 42.6, 42.8, 42.11, 42.13, business method patent review would years 2013–2015. 42.20, 42.21, 42.22, 42.24(a)(3), 42.63, be: $35,800 to request review of 20 or Parties to a review may seek judicial 42.65, 42.203, 42.205, and 42.302 fewer claims and $800 for each claim in review of the final decision of the through 42.304. excess of 20 for which review is sought. Board. Historically, 33% of examiners’ The skills necessary to prepare a decisions in inter partes reexamination petition for review and to participate in In setting fees, the estimated proceedings have been appealed to the a trial before the Patent Trial and information technology (IT) cost to Board. Given the increased coordination Appeal Board would be similar to those establish the process and maintain the with district court litigation, that Office needed to prepare a request for inter filing and storage system through 2017 has adjusted its estimate of the appeal partes reexamination and to represent a is to be recovered by charging each rate to be 120% of the historic rate (40% party in an inter partes reexamination petition an IT fee that has a base of decisions). Based on this rate, 145 before the Board. The level of skill component of $1,705 for requests to additional notices of appeal will be filed typically is possessed by a registered review 20 or fewer claims. The IT annually from the decisions issued in patent practitioner having devoted component fee would increase $75 per the new reviews during fiscal years professional time to the particular claim in excess of 20. The remainder of 2013–2015. Based on the percentage of practice area, typically under the the fee is to recover the cost for judges small entity-owned patents that were supervision of a practitioner skilled in to determine whether to institute a the subject of inter partes reexamination the particular practice area. Where review and conduct the review, together (32.09%) it is estimated that 47 small authorized by the Board, a non- with a proportionate share of indirect entities would annually seek judicial registered practitioner may be admitted costs, e.g., rent, utilities, additional review of final decisions of the Board in pro hac vice, on a case-by-case basis support, and administrative costs. Based the new reviews in fiscal years 2013– based on the facts and circumstances of on the direct and indirect costs, the 2015. the trial and party, as well as the skill fully burdened cost per hour for judges 5. Description of the Reporting, of the practitioner. to decide a petition and conduct a Recordkeeping, and Other Compliance The cost of preparing a petition for review is estimated to be $258.32. Requirements of the Final Rule, inter partes review is anticipated to be For a petition for inter partes review Including an Estimate of the Classes of the same as the cost for preparing a with 20 or fewer challenged claims, it is Small Entities Which Will Be Subject to request for inter partes reexamination. anticipated that about 100 hours of time the Requirement and the Type of The American Intellectual Property Law for review by the judges would be Professional Skills Necessary for Association’s AIPLA Report of the required. An additional two hours for Preparation of the Report or Record: Economic Survey 2011 reported that the each claim in excess of 20 would be Based on the filing trends of inter partes average cost of preparing a request for required. reexamination requests, it is anticipated inter partes reexamination was $46,000. For a petition for post-grant review or that petitions for review will be filed Based on the work required to prepare covered business method patent review across all technologies with and file such a request, the Office with 20 or fewer challenged claims, it is approximately 50% being filed in considers the reported cost as a anticipated that about 130 hours of time electrical technologies, approximately reasonable estimate. Accordingly, the for review by the judges will be 30% in mechanical technologies, and Office estimates that the cost of required. An additional slightly less the remaining 20% in chemical preparing a petition for inter partes than 3 hours of judge time for each technologies and design. However, review would be $46,000. claim in excess of 20 would be required.

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The rules permit the patent owner to 42.63, 42.64, 42.65, 42.121, 42.221, covered business method patent reviews file a preliminary response to the 42.123, and 42.223. The procedures for and 70% of the reviews will have petition setting forth the reasons why no filing an opposition include those set concurrent litigation based on standing review should be initiated. The forth in §§ 42.6, 42.8, 42.11, 42.13, requirement in covered business procedures for a patent owner to file a 42.21, 42.23, 42.24(b), 42.51, 42.52, method patent reviews and the preliminary response as an opposition 42.53, 42.54, 42.63, 42.64, 42.65, 42.107, historical rate during inter partes are set forth in §§ 42.6, 42.8, 42.11, 42.120, 42.207, and 42.220. The reexamination. It is anticipated that 42.13, 42.21, 42.23, 42.24(b), 42.51, procedures for filing a reply include requests to make a settlement agreement 42.52, 42.53, 42.54, 42.63, 42.64, 42.65, those set forth in §§ 42.6, 42.8, 42.11, available will require one hour of 42.107, 42.120, 42.207, and 42.220. The 42.13, 42.21, 42.23, 42.24(c), 42.51, professional time for a cost of $371. The patent owner is not required to file a 42.52, 42.53, 42.54, 42.63, and 42.65. As requests to make a settlement agreement preliminary response. The Office discussed previously, the Office available will also require payment of a estimates that the preparation and filing estimates that the average inter partes fee of $400 specified in § 42.15(d). The of a patent owner preliminary response review will have 6 motions, fee is the same as that currently set forth would require 91.6 hours of professional oppositions, and replies after in § 41.20(a) for petitions to the Chief time and cost $34,000. The AIPLA institution. The average post-grant Administrative Patent Judge. Report of the Economic Survey 2011 review or covered business method Parties to a review proceeding may reported that the average cost for inter patent review will have 8 motions, seek judicial review of the judgment of partes reexamination including the oppositions, and replies after the Board. The procedures to file notices request ($46,000), the first patent owner institution. The Office envisions that of judicial review of a Board decision, response, and third party comments was most motions will be decided in a including notices of appeal are set forth $75,000 (see page I–175) and the mean conference call or shortly thereafter. in Part 90. The submission of a copy of billing rate for professional time was After a trial has been instituted, but a notice of appeal is anticipated to $371 per hour for attorneys in private prior to a final written decision, parties require six minutes of professional time firms (see page 8). Thus, the cost of the to a review may request an oral hearing. at a cost of $37.10. first patent owner reply and the third- The procedure for filing requests for oral 6. Description of Any Significant party statement is $29,000, the balance argument is set forth in § 42.70. The Alternatives to the Final Rules Which of $75,000 minus $46,000. The Office AIPLA Report of the Economic Survey Accomplish the Stated Objectives of finds these costs to be reasonable 2011 reported that the third quartile cost Applicable Statutes and Which estimates. The patent owner reply and of an ex parte appeal with an oral Minimize Any Significant Economic third party statement, however, occur argument is $12,000, while the third Impact of the Rules on Small Entities: after the examiner has made an initial quartile cost of an ex parte appeal Size of petitions and motions: The threshold determination and made only without an oral argument is $6,000. In Office considered whether to apply a the appropriate rejections. Accordingly, view of the reported costs, which the page limit in the administrative trials it is anticipated that filing a patent Office finds reasonable, and the and what an appropriate page limit owner preliminary response to a increased complexity of an oral hearing would be. The Office does not currently petition for review would cost more with multiple parties, it is estimated have a page limit on inter partes than the initial reply in a reexamination, that the cost per party for oral hearings reexamination requests. The inter partes an estimated $34,000. would be $6,800, or 18.3 hours of reexamination requests from October 1, The Office will determine whether to professional time ($6,800 divided by 2010, to June 30, 2011, averaged 246 institute a trial within three months $371), or $800 more than the reported pages. Based on the experience of after the earlier of: (1) The submission third quartile cost for an ex parte oral processing inter partes reexamination of a patent owner preliminary response, hearing. requests, the Office finds that the very (2) the waiver of filing a patent owner Parties to a review may file requests large size of the requests has created a preliminary response, or (3) the to treat a settlement as business burden on the Office that hinders the expiration of the time period for filing confidential, and requests for adverse efficiency and timeliness of processing a patent owner preliminary response. If judgment. A written request to make a the requests, and creates a burden on the Office decides not to institute a trial, settlement agreement available may also patent owners. The quarterly reported the petitioner may file a request for be filed. The procedures to file requests average processing time from the filing reconsideration of the Office’s decision. that a settlement be treated as business of a request to the publication of a It is anticipated that a request for confidential are set forth in § 42.74(c). reexamination certificate ranged from reconsideration will require 80 hours of The procedures to file requests for 28.9 months to 41.7 months in fiscal professional time to prepare and file, for adverse judgment are set forth in year 2009, from 29.5 months to 37.6 a cost of $29,680. This estimate is based § 42.73(b). The procedures to file months in fiscal year 2010, and from on the complexity of the issues and requests to make a settlement agreement 31.9 to 38.0 months in fiscal year 2011. desire to avoid time bars imposed by 35 available are set forth in § 42.74(c)(2). It See Reexaminations—FY 2011 available U.S.C. 315(b), as amended, and 35 is anticipated that requests to treat a at http://www.uspto.gov/patents/ U.S.C. 325(b). settlement as business confidential will Reexamination_operational_statistic_ Following institution of a trial, the require two hours of professional time through_FY2011Q4.pdf. parties may be authorized to file various for a cost of $742. It is anticipated that By contrast, the Office has a page motions, e.g., motions to amend and requests for adverse judgment will limit on the motions filed in contested motions for additional discovery. Where require one hour of professional time for cases, except where parties are a motion is authorized, an opposition a cost of $371. It is anticipated that a specifically authorized to exceed the may be authorized, and where an settlement agreement will require 100 limitation. The typical contested case opposition is authorized, a reply may be hours of professional time for a cost of proceeding is subject to a standing order authorized. The procedures for filing a $37,100 if the parties are not also in that sets a 50-page limit for motions and motion include those set forth in litigation over the patent and one hour oppositions on priority, a 15-page limit §§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.22, for a cost of $371 if the parties are in for miscellaneous motions 42.24(a)(5), 42.51, 42.52, 42.53, 42.54, litigation. It is estimated that 100% of (§ 41.121(a)(3)) and oppositions

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(§ 41.122), and a 25-page limit for other to require Federal judges to shovel of compliance with 35 U.S.C. 101, motions (§ 41.121(a)(2)) and oppositions through steaming mounds of pleonastic although a 35 U.S.C. 101 motion may be to other motions. In typical proceedings, arguments in Herculean effort to required to be combined with the 35 replies are subject to a 15-page limit if uncover a hidden gem of logic that will U.S.C. 112 motion. Each of these directed to priority, five-page limit for ineluctably compel a favorable ruling. motions is currently limited to 25 pages miscellaneous issues, and ten-page limit Nothing could be further from the in length, unless good cause is shown for other motions. The average contested truth.’’); Broadwater v. Heidtman Steel that the page limits are unduly case was terminated in 10.1 months in Prods., Inc., 182 F. Supp. 2d 705, 710 restrictive for a particular motion. fiscal year 2009, in 12 months in fiscal (S.D. Ill. 2002) (‘‘Counsel are strongly A petition requesting the institution year 2010, and nine months in fiscal advised, in the future, to not ask this of a trial proceeding would be similar to year 2011. The percentage of contested Court for leave to file any memoranda motions currently filed with the Board. cases terminated within two years was (supporting or opposing dispositive Specifically, petitions to institute a trial 93.7% in fiscal year 2009, 88.0% in motions) longer than 15 pages. The seek a final written decision that the fiscal year 2010, and 94.0% in fiscal Court has handled complicated patent challenged claims are unpatentable, year 2011. See BPAI Statistics— cases and employment discrimination where derivation is a form of Performance Measures, available at cases in which the parties were able to unpatentability. Accordingly, a petition http://www.uspto.gov/ip/boards/bpai/ limit their briefs supporting and to institute a trial based on prior art stats/perform/index.jsp. opposing summary judgment to 10 or 15 would, under current practice, be Comparing the average time period for pages.’’ (Emphasis omitted)). limited to 25 pages, and by terminating a contested case, 10.0 to The Board’s contested cases consequence, a petition raising 12.0 months, with the average time experience with page limits in motions unpatentability based on prior art and period, during fiscal years 2009 through practice is consistent with that of the unpatentability under 35 U.S.C. 101 2011, for completing an inter partes Federal courts. The Board’s use of page and/or 112 would be limited to 50 reexamination, 28.9 to 41.7 months, limits has shown it to be beneficial pages. indicates that the average contested case without being unduly restrictive for the Under the final rules, an inter partes takes from 24% (10.0/41.7) to 42% parties. Page limits have encouraged the review petition would be based upon (12.0/28.9) of the time of the average parties to focus on dispositive issues, any grounds identified in 35 U.S.C. inter partes reexamination. While and reducing costs for the parties and 311(b), as amended, i.e., only a ground several factors contribute to the the Board. The Board’s contested cases that could be raised under 35 U.S.C. 102 reduction in time, limiting the size of experience with page limits is informed or 103 and only on the basis of patents the requests and motions is considered by its use of different approaches over or printed publications. Generally, a significant factor. Section 42.24 thus the years. In the early 1990s, page limits under current practice, a party is limited provides page limits for petitions, were not routinely used for motions, to filing a single prior art motion, motions, oppositions, and replies. 35 and the practice suffered from lengthy limited to 25 pages in length. The rule U.S.C. 316(b), as amended, and 35 and unacceptable delays. To reduce the provides up to 60 pages in length for a U.S.C. 326(b) provide considerations burden on the parties and on the Board motion requesting inter partes review. that are to be taken into account when and thereby reduce the time to decision, Thus, as the page limit more than prescribing regulations including the the Board instituted page limits in the doubles the default page limit currently integrity of the patent system, the late 1990s for every motion. Page limit set for a motion before the Board, a 60- efficient administration of the Office, practice was found to be effective in page limit is considered sufficient in all and the ability to complete the trials reducing the burdens on the parties and but exceptional cases and is consistent timely. The page limits set forth in this improving decision times at the Board. with the considerations provided in 35 final rule is consistent with these In 2006, the Board revised the page limit U.S.C. 316(b), as amended. considerations. practice and allowed unlimited findings Under the final rules, a post-grant Federal courts routinely use page of fact and generally limited the number review petition would be based upon limits in managing motions practice as of pages containing argument. Due to any grounds identified in 35 U.S.C. ‘‘[e]ffective writing is concise writing.’’ abuses of the system, the Board recently 321(b), e.g., failure to comply with 35 Spaziano v. Singletary, 36 F.3d 1028, reverted back to page limits for the U.S.C. 101, 102, 103, and 112 (except 1031 n.2 (11th Cir. 1994). Many district entire motion (both argument and best mode). Under current practice, a courts restrict the number of pages that findings of fact). party would be limited to filing two or may be filed in a motion including, for The Board’s current page limits are three motions, each limited to 25 pages, example, the District of Delaware, the consistent with the 25-page limits in the for a maximum of 75 pages. Where there District of New Jersey, the Eastern Northern, Central, and Southern is more than one motion for District of Texas, the Northern, Central, Districts of California, and the Middle unpatentability based upon different and Southern Districts of California, and District of Florida, and exceed the limits statutory grounds, the Board’s the Eastern District of Virginia. in the District of Delaware (20), the experience is that the motions contain Federal courts have found that page Northern District of Illinois (15), the similar discussions of technology and limits ease the burden on both the District of Massachusetts (20), the claim constructions. Such overlap is parties and the courts, and patent cases Eastern District of Michigan (20), the unnecessary where a single petition for are no exception. Eolas Techs., Inc. v. Southern District of Florida (20), and unpatentability is filed. Thus, the 80- Adobe Sys., Inc., No. 6:09–CV–446, at 1 the Southern District of Illinois (20). page limit is considered sufficient in all (E.D. Tex. Sept. 2, 2010) (‘‘The Local In a typical proceeding before the but exceptional cases. Rules’ page limits ease the burden of Board, a party may be authorized to file Covered business method patent motion practice on both the Court and a single motion for unpatentability review is similar in scope to that of the parties.’’); Blackboard, Inc. v. based on prior art, a single motion for post-grant review, as there is substantial Desire2Learn, Inc., 521 F. Supp. 2d 575, unpatentability based upon failure to overlap in the statutory grounds 576 (E.D. Tex. 2007) (The parties ‘‘seem comply with 35 U.S.C. 112, lack of permitted for review. Thus, the page to share the misconception, popular in written description, and/or enablement, limit for covered business method some circles, that motion practice exists and potentially another motion for lack patent review petitions is 80 pages,

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which is the same as that for post-grant on the economy, the integrity of the of asserted claims is appropriate to review. patent system, the efficient manage a patent case efficiently). The final rule provides that petitions administration of the Office, and the Moreover, the number of claims for to institute a trial must comply with the ability of the Office to complete timely which review is requested easily can be stated page limits but may be the instituted proceedings. See 35 determined and administered, which accompanied by a motion that seeks to U.S.C. 316(b), as amended, and 35 avoids delays in the Office and the waive the page limits. The petitioner U.S.C. 326(b). In view of the actual impact on the economy or patent system must show in the motion how a waiver results of the duration of proceedings in that would occur if an otherwise of the page limits is in the interests-of- inter partes reexamination (without meritorious petition is refused due to justice. A copy of the desired non-page page limits) and contested cases (with improper fee payment. Any subsequent limited petition must accompany the page limits), adopting procedures with petition could be time barred in view of motion. Generally, the Board would reasonable page limits would be 35 U.S.C. 315(b), as amended, or 35 decide the motion prior to deciding consistent with the objectives set forth U.S.C. 325. whether to institute the trial. in the AIA. Based on our experience on II. Alternative Option I. Number of Current Board practice provides a the time needed to complete a non-page grounds for which review is requested. limit of 25 pages for other motions and limited proceeding, the option of non- The Office has experience with large 15 pages for miscellaneous motions. The page limited proceedings was not numbers of cumulative grounds being Board’s experience is that such page adopted. presented in inter partes reexaminations limits are sufficient for the parties filing Fee Setting: 35 U.S.C. 311(a), as which often add little value to the them and do not unduly burden the amended, and 35 U.S.C. 321(a) require proceedings. Allowing for a large opposing party or the Board. Petitions to the Director to establish fees to be paid number of grounds to be presented on institute a trial generally would replace by the person requesting the review in payment of an additional fee(s) is not the current practice of filing motions for such amounts as the Director favored. Determination of the number of unpatentability, as most motions for determines to be reasonable, grounds in a request may be contentious relief are expected to be similar to the considering the aggregate costs of the and difficult and may result in a large current contested cases miscellaneous review. In contrast to 35 U.S.C. 311(b) amount of high-level petition work. As motion practice. Accordingly, the 15- and 312(c), effective September 15, such, this option would have a negative page limit is considered sufficient for 2012, the AIA requires the Director to impact on small entities. Moreover, most motions but may be adjusted establish more than one fee for reviews contested cases instituted in the 1980s where the limit is determined to be based on the total cost of performing the and early 1990s suffered from this unduly restrictive for the relief reviews, and does not provide explicitly problem as there was no page limit for requested. for refund of any part of the fee when motions and the parties had little Section 42.24(b) provides page limits the Director determines that the review incentive to focus the issues for for oppositions filed in response to should not be initiated. decision. The resulting records were motions. Current practice for other Further, 35 U.S.C. 312(a)(1), as often a collection of disparate issues and contested cases provides an equal amended, and 35 U.S.C. 322(a)(1) evidence. This led to lengthy and number of pages for an opposition as its require that the fee established by the unwarranted delays in deciding corresponding motion. This is generally Director under 35 U.S.C. 311(a), as contested cases as well as increased consistent with motions practice in amended, or 35 U.S.C. 321 accompany costs for parties and the Office. Federal courts. The rule is consistent the petition on filing. Accordingly, Accordingly, this alternative is with the practice for other contested under the fee setting authority in 35 inconsistent with objectives of the AIA cases. U.S.C. 311(a), as amended, and 35 that the Director, in prescribing rules for Section 42.24(c) provides page limits U.S.C. 321(a), it is reasonable that the the inter partes reviews, post-grant for replies. Current practice for other Director set a number of fees for filing reviews, and covered business method contested cases provide a 15-page limit a petition based on the anticipated patent reviews, consider the effect of the for priority motion replies, a five page aggregate cost of conducting the review rules on the economy, the integrity of limit for miscellaneous (procedural) depending on the complexity of the the patent system, the efficient motion replies, and a ten page limit for review, and require payment of the fee administration of the Office, and the all other motions. The rule is consistent upon filing of the petition. ability of the Office to complete the with current contested case practice for Based on experience with contested instituted proceedings timely. procedural motions. The rule provides a cases and inter partes reexamination III. Alternative Option II. Pages of 15-page limit for reply to petitions proceedings, the following argument. The Office has experience requesting a trial, which the Office characteristics of requests were with large requests in inter partes believes is sufficient based on current considered as potential factors for fee reexamination in which the merits of practice. Current contested case practice setting as each likely would impact the the proceedings could have been has shown that such page limits do not cost of providing the new services. The resolved in a shorter request. Allowing unduly restrict the parties and, in fact, Office also considered the relative for unnecessarily large requests on have provided sufficient flexibility to difficulty in administrating each option payment of an additional fee(s) is not parties not only to reply to the motion in selecting the characteristics for which favored. Moreover, determination of but also help to focus on the issues. different fees should be paid for what should be counted as ‘‘argument’’ Thus, it is anticipated that default page requesting review. as compared with ‘‘evidence’’ has often limits would minimize the economic I. Adopted Option. Number of claims proven to be contentious and difficult as impact on small entities by focusing on for which review is requested. The administered in the current inter partes the issues in the trials. number of claims often impacts the reexamination appeal process. The AIA requires that the Director, in complexity of the request and increases In addition, the trial section of the prescribing rules for the inter partes the demands placed on the deciding Board recently experimented with reviews, post-grant reviews, and officials. Cf. In re Katz Interactive Call motions having a fixed-page limit for covered business method patent Processing Patent Litig., 639 F.3d 1303, the argument section and an unlimited reviews, consider the effect of the rules 1309 (Fed. Cir. 2011) (limiting number number of pages for the statement of

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facts. Unlimited pages for the statement paid by mistake or in excess of that of-justice standard, the Board would of facts led to a dramatic increase in the owed. See 35 U.S.C. 42(d). look at all relevant factors. Specifically, number of alleged facts and pages Discovery: The Office considered a to show good cause, a party would be associated with those facts. For procedure for discovery similar to the required to make a particular and example, one party used approximately one available during district court specific demonstration of fact. Under ten pages for a single ‘‘fact’’ that merely litigation. Discovery of that scope has the interests-of-justice standard, the cut and pasted a portion of a declarant’s been criticized sharply, particularly moving party would also be required to cross-examination. Based upon the trial when attorneys use discovery tools as show that it was fully diligent in section’s experience with unlimited tactical weapons, which hinder the seeking discovery and that there is no pages of facts, the Board recently ‘‘just, speedy, and inexpensive undue prejudice to the non-moving reverted back to a fixed-page limit for determination of every action and party. The interests-of-justice standard the entire motion (argument and facts). proceedings.’’ See introduction to An E- covers considerable ground, and in Accordingly, this alternative is Discovery Model Order, available at using such a standard, the Board inconsistent with objectives of the AIA http://www.cafc.uscourts.gov/images/ expects to consider whether the that the Director, in prescribing rules for stories/announcements/ additional discovery is necessary in _ _ the inter partes reviews, post-grant Ediscovery Model Order.pdf. light of the totality of the relevant reviews, and covered business method Accordingly, this would have been circumstances. patent reviews, consider the effect of the inconsistent with objectives of the AIA The Board will set forth a default rules on the economy, the integrity of that the Director, in prescribing rules for scheduling order to provide limited the patent system, the efficient inter partes review, post-grant review, discovery as a matter of right and administration of the Office, and the and covered business method patent provide parties with the ability to seek ability of the Office to complete timely review, consider the effect of the rules additional discovery on a case-by-case the instituted proceedings. on the economy, the integrity of the basis. In weighing the need for IV. Alternative Option III. The Office patent system, the efficient additional discovery, should a request considered an alternative fee setting administration of the Office, and the be made, the Board would consider the regime in which fees would be charged ability of the Office to complete the economic impact on the opposing party. at various steps in the review process instituted proceedings timely. This would tend to limit additional Additional discovery increases trial (rather than collected as a single discovery where a party is a small costs and increases the expenditures of entity. payment on filing of the petition) as the time by the parties and the Board. The Pro Hac Vice: The Office considered proceeding progresses, e.g., a first fee on Board’s experience in contested cases, whether to allow counsel to appear pro filing of the petition, a second fee if however, is that such showings are often hac vice. In certain instances, highly instituted, a third fee on filing a motion lacking and authorization for additional skilled, non-registered, attorneys have in opposition to amended claims, etc. discovery is expected to be limited. appeared satisfactorily before the Board The alternative fee setting regime would While an interests-of-justice standard in contested cases. The Board may hamper the ability of the Office to would be employed in granting recognize counsel pro hac vice during a complete timely reviews, would result additional discovery in inter partes proceeding upon a showing of good in dismissal of pending proceedings reviews, the post-grant and covered cause. The Board may impose with patentability in doubt due to non- business method patent reviews would conditions in recognizing counsel pro payment of required fees by third employ a good cause standard in hac vice, including a requirement that parties, and would be inconsistent with granting additional discovery. Parties counsel acknowledge that counsel is 35 U.S.C. 312, as amended, and 35 may, however, agree to additional bound by the Office’s Code of U.S.C. 322 that require the fee discovery amongst themselves. Professional Responsibility. Proceedings established by the Director to be paid at To promote effective discovery, the before the Office can be technically the time of filing the petition. rule requires a showing that additional complex. The grant of a motion to Accordingly, this alternative is requested discovery would be appear pro hac vice is a discretionary inconsistent with objectives of the AIA productive in inter partes reviews. The action taking into account the specifics that the Director, in prescribing rules for rules adopt an interests-of-justice of the proceedings. Similarly, the inter partes review, post-grant review, standard for additional discovery for revocation of pro hac vice is a and covered business method patent inter partes reviews. This standard is discretionary action taking into account review, consider the effect of the rules consistent with the considerations various factors, including on the economy, the integrity of the identified in 35 U.S.C. 316(b), as incompetence, unwillingness to abide patent system, the efficient amended, including the efficient by the Office’s Code of Professional administration of the Office, and the administration of the Board and the Responsibility, prior findings of ability of the Office to complete, in a Board’s ability to complete timely trials. misconduct before the Office in other timely fashion, the instituted Further, the interests-of-justice standard proceedings, and incivility. proceedings. is consistent with 35 U.S.C. 316(a)(5), as The Board’s past practice has required V. Alternative Option IV. The Office amended, which states that discovery the filing of a motion by a registered considered setting reduced fees for other than depositions of witnesses patent practitioner seeking pro hac vice small and micro entities and to provide submitting affidavits and declarations representation based upon a showing of: refunds if a review is not instituted. be what is otherwise necessary in the (1) How qualified the unregistered However, 35 U.S.C. 41(d)(2)(a) provides interests-of-justice. practitioner is to represent the party in that the Office shall set the fee to Good cause and interests-of-justice are the proceeding when measured against recover the cost of providing the closely related standards, but the a registered practitioner, and (2) services. Fees set under this authority interests-of-justice standard is slightly whether the party has a genuine need to are not reduced for small entities. See higher than good cause. While a good have the particular unregistered 35 U.S.C. 42(h)(1), as amended. cause standard requires a party to show practitioner represent it during the Moreover, the Office does not have a specific factual reason to justify the proceeding. This practice has proven authority to refund fees that were not needed discovery, under the interests- effective in the limited number of

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contested cases where such requests This alternative could not be adopted in publications. Consistent with 35 U.S.C. have been granted. The rule allows for view of the statutory requirements in 35 302–307, ex parte reexamination rules this practice in the new proceedings U.S.C. 314, as amended, and 35 U.S.C. provide a different threshold for authorized by the AIA. 324. initiation, require the proceeding to be The rules provide a limited delegation Default Electronic Filing: The Office conducted by an examiner with a right to the Board under 35 U.S.C. 2(b)(2) and considered a paper filing system and a of appeal to the Patent Trial and Appeal 32 to regulate the conduct of counsel in mandatory electronic filing system Board, and allow for limited Board proceedings. The rule delegates to (without any exceptions) as alternatives participation by third parties. the Board the authority to conduct to the requirement that all papers are to 37 CFR 1.902–1.997 provide for inter counsel disqualification proceedings be electronically filed, unless otherwise partes reexamination of patents. Similar while the Board has jurisdiction over a authorized. to ex parte reexamination, inter partes proceeding. The rules also delegate to Based on the Office’s experience, a reexamination provides a procedure in the Chief Administrative Patent Judge paper-based filing system increases which a third party may request the authority to make final a decision to delay in processing papers, delay in reexamination of any claim in a patent disqualify counsel in a proceeding public availability, and the chance that on the basis of the cited prior art patents before the Board for the purposes of a paper may be misplaced or made and printed publication. The inter judicial review. This delegation does available to an improper party if partes reexamination practice will be not derogate from the Director the confidential. Accordingly, the eliminated, except for requests filed prerogative to make such decisions, nor alternative of a paper-based filing before the effective date, September 16, does it prevent the Chief Administrative system would have been inconsistent 2012. See § 6(c)(3)(C) of the AIA. Patent Judge from further delegating with objectives of the AIA that the Other countries have their own patent authority to an administrative patent Director, in prescribing rules for inter laws, and an entity desiring a patent in judge. partes review, post-grant review, and a particular country must make an The Office considered broadly covered business method patent review, application for patent in that country, in permitting practitioners not registered to consider the effect of the rules on the accordance with the applicable law. practice by the Office to represent economy, the integrity of the patent Although the potential for overlap exists parties in trial as well as categorically system, the efficient administration of internationally, this cannot be avoided prohibiting such practice. A prohibition the Office, and the ability of the Office except by treaty (such as the Paris on the practice would be inconsistent to complete the instituted proceedings Convention for the Protection of with the Board’s experience, and more timely. Industrial Property, or the Patent importantly, might result in increased An electronic filing system (without Cooperation Treaty (PCT)). costs particularly where a small entity any exceptions) that is rigidly applied Nevertheless, the Office believes that has selected its district court litigation would result in unnecessary cost and there are no other duplicative or team and subsequently a patent review burdens, particularly where a party overlapping foreign rules. is filed after litigation efforts have lacks the ability to file electronically. By C. Executive Order 12866 (Regulatory commenced. Alternatively, broadly contrast, under the adopted option, it is Planning and Review): This rulemaking making the practice available would expected that the entity size and has been determined to be significant create burdens on the Office in sophistication would be considered in for purposes of Executive Order 12866 administering the trials and in determining whether alternative filing (Sept. 30, 1993), as amended by completing the trial within the methods would be authorized. Executive Order 13258 (Feb. 26, 2002) established time frame, particularly if 7. Identification, to the Extent and Executive Order 13422 (Jan. 18, the selected practitioner does not have Practicable, of All Relevant Federal 2007). the requisite skill. In weighing the Rules Which May Duplicate, Overlap, or The Office estimates that the aggregate desirability of admitting a practitioner Conflict With the Final Rules: The burden of the rules for implementing pro hac vice, the economic impact on following rules also provide processes the new review procedures is the party in interest would be involving patent applications and approximately $82.6 million annually considered, which would tend to patents: for fiscal years 2013–2015. The USPTO increase the likelihood that a small 37 CFR 1.99 provides for the considered several factors in making entity could be represented by a non- submission of information after this estimate. registered practitioner. Accordingly, the publication of a patent application Based on the petition and other filing alternatives to eliminate pro hac vice during examination by third parties. requirements for initiating a review practice or to permit it more broadly 37 CFR 1.171–1.179 provide for proceeding, the USPTO initially would have been inconsistent with applications to reissue a patent to estimated the annual aggregate burden objectives of the AIA that the Director, correct errors, including where a claim of the rules on the public to be in prescribing rules for inter partes in a patent is overly broad. $202,034,212.10 in fiscal years 2013– reviews, post-grant reviews, and 37 CFR 1.291 provides for the protest 2015, which represents the sum of the covered business method patent against the issuance of a patent during estimated total annual (hour) reviews, consider the effect of the rules examination. respondent cost burden on the economy, the integrity of the 37 CFR 1.321 provides for the ($184,627,816.10) plus the estimated patent system, the efficient disclaimer of a claim by a patentee. total annual non-hour respondent cost administration of the Office, and the 37 CFR 1.501 and 1.502 provide for ex burden ($17,406,396.00) provided in ability of the Office to complete, in a parte reexamination of patents. Under Item (O)(II) of the Rulemaking timely fashion, the instituted these rules, a person may submit to the Considerations section of this notice, proceedings. Office prior art consisting of patents or infra. However, since the AIA also Threshold for Instituting a Review: printed publications that are pertinent eliminates inter partes reexamination The Office considered whether the to the patentability of any claim of a practice (except for requests filed before threshold for instituting a review could patent, and request reexamination of the effective date of September 16, be set as low as or lower than the any claim in the patent on the basis of 2012), the burden of the rules should be threshold for ex parte reexamination. the cited prior art patents or printed offset by the eliminations of those

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proceedings and their associated See Reexaminations—FY 2011, Comment 112: One comment burdens. available at http://www.uspto.gov/ suggested that the proposed rules would It is estimated that 420 new requests patents/Reexamination_operational_ have been classified more appropriately for inter partes reexamination would statistic_through_FY2011Q4.pdf. as significant under section 3(f)(4) of have been filed in FY 2012, 450 new Likewise, it is anticipated that the Executive Order 12866 because the requests in FY 2014 and 500 new rules will minimize duplication of proposed rules raise novel legal or requests in FY 2015 if the AIA had not efforts. In particular, the AIA provides policy issues arising out of legal been enacted for an annual average of more coordination between district mandates. 456. This estimate is based on the court infringement litigation and inter Response: As stated in the notice of number of proceedings filed in FY 2011 partes review to reduce duplication of proposed rulemaking and in this final (374), FY 2010 (280), FY 2009 (258), and efforts and costs. For instance, 35 U.S.C. rule, the Office of Management and the first half of FY 2012 (192). 315(b), as amended, will require that a Budget designated the proposed rules as Elimination of 456 proceedings reduces petition for inter partes review be filed significant under Executive Order the public’s burden to pay filing fees by within one year of the date of service of 12866, but not economically significant. $4,012,800 (456 filings with an $8,800 a complaint alleging infringement of a The comment does not present what filing fee due) and the public’s burden patent. By requiring the filing of an inter aspect(s) of the rule is believed to to prepare requests by $20,976,000 (456 partes review petition earlier than a present novel legal or policy issues. filings with $46,000 average cost to request for inter partes reexamination, Comment 113: One comment prepare). Based on the assumption that and by providing shorter timelines for suggested that the costs, including any 93% of the requests would be ordered inter partes review compared with prophylactic application steps resulting (consistent with the FY 2011 grant rate), reexamination, it is anticipated that the from the new proceedings, were not the burden to conduct the proceeding current high level of duplication calculated appropriately when the until close of prosecution will reduce between litigation and reexamination Office offset the new burdens with those the public’s burden by $89,040,000 (424 will be reduced. removed by elimination of the ability to file new inter partes reexamination proceedings that would be estimated to The AIPLA Report of the Economic be granted reexamination multiplied by under Executive Order 12866 and that Survey 2011 reports that where the $210,000 which is the average cost cited when appropriately calculated, the cost damages at risk are less than $1,000,000 in the AIPLA Report of the Economic would exceed the $100 million the total cost of patent litigation was, on Survey 2011 per party cost until close of threshold for declaring the proposed average, $916,000, where the damages at prosecution reduced by the $46,000 rules significant under section 3(f)(1). risk are between $1,000,000 and request preparation cost). Additionally, Response: As stated in the notice of $25,000,000 average $2,769,000, and the burden on the public to appeal to proposed rulemaking and in this final where the damages at risk exceed the Board would be reduced by rule, the Office of Management and $25,000,000 average $6,018,000. The $5,358,000 (based on an estimate that Budget designated the proposed rules as Office believes, based on its experience, 141 proceedings would be appealed to significant under Executive Order the Board, which is estimated based on that these estimates are reasonable. 12866, but not economically significant. the number of granted proceedings (424) There may be a significant reduction in The baseline costs that the Office used and the historical rate of appeal to the overall burden if, as intended, the AIA to determine the increased burden of the and the rules reduce the overlap Board (1⁄3) and an average public cost of proposed rules properly included the $38,000). Thus, a reduction of between review at the USPTO of issued burden on the public to comply with $119,386,800 in public burden results patents and validity determination inter partes reexamination because from the elimination of new filings of during patent infringement actions. Data those burdens existed before the inter partes reexamination (the sum of from the United States district courts statutory change, and that process was $3,696,000 (the filing fees), $19,320,000 reveals that 2,830 patent cases were eliminated and replaced by the process (the cost of preparing requests), filed in 2006, 2,896 in 2007, 2,909 in adopted by the AIA as implemented this $82,110,000 (the prosecution costs), 2008, 2,792 in 2009, and 3,301 in 2010. final rule. See OMB Circular A4, section plus $4,940,000 (the burden to appeal to See U.S. Courts, Judicial Business of the (e)(3). See also response to Comment the Board)). Therefore, the estimated United States Courts, available at www. 109. aggregate burden of the rules for uscourts.gov/uscourts/Statistics/ Comment 114: One comment argued implementing the new review JudicialBusiness/2010/appendices/ the $80,000,000 burden estimate is so proceedings would be $82,647,412.10 C02ASep10.pdf (last visited Nov. 11, close to $100,000,000 threshold, that, ($202,034,212.10 minus $119,386,800) 2011) (hosting annual reports for 1997 particularly in view of the difficulties in annually in fiscal years 2013–2015. through 2010). Thus, the Office estimating burden, the Office should The USPTO expects several benefits estimates that no more than 3,300 patent assume that it is likely that the proposed to flow from the AIA and these rules. It cases (the highest number of yearly rules would have a $100,000,000 is anticipated that the rules will reduce filings between 2006 and 2010 rounded impact. One comment suggested that the the time for reviewing patents at the to the nearest 100) are likely to be filed Office should have conducted a USPTO. Specifically, 35 U.S.C. 316(a), annually. The aggregate burden estimate Regulatory Impact Analysis. as amended, and 35 U.S.C. 326(a) above ($82,647,412.10) was not offset by Response: As stated in the notice of provide that the Director prescribe a reduction in burden based on proposed rulemaking and in this final regulations requiring a final improved coordination between district rule, the Office of Management and determination by the Board within one court patent litigation and the new inter Budget designated the proposed rules as year of initiation, which may be partes review proceedings. significant under Executive Order extended for up to six months for good The Office received one written 12866, but not economically significant. cause. In contrast, currently for inter submission of comments from the The comment did not indicate what partes reexamination, the average time public regarding Executive Order 12866. aspect of the estimate was likely to be from the filing to the publication of a Each component of that comment wrong. Furthermore, $80,000,000 is certificate ranged from 28.9 to 41.7 directed to Executive Order 12866 is twenty percent below the $100,000,000 months during fiscal years 2009–2011. addressed below. threshold. Moreover, the Office’s

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estimate did not take into account the 12988 (Feb. 5, 1996). This rulemaking Act of 1995 (15 U.S.C. 272 note) are not reduction in burden due to decreased carries out a statute designed to lessen applicable because this rulemaking does litigation. Thus, the Office’s estimate is litigation. See H.R. Rep. No. 112–98, at not contain provisions which involve likely an overstatement of the estimated 45–48. the use of technical standards. basis. I. Executive Order 13045 (Protection O. Paperwork Reduction Act: The D. Executive Order 13563 (Improving of Children): This rulemaking does not Paperwork Reduction Act of 1995 (44 Regulation and Regulatory Review): The concern an environmental risk to health U.S.C. 3501–3549) requires that the Office has complied with Executive or safety that may disproportionately USPTO consider the impact of Order 13563. Specifically, the Office affect children under Executive Order paperwork and other information has, to the extent feasible and 13045 (Apr. 21, 1997). collection burdens imposed on the applicable: (1) Made a reasoned J. Executive Order 12630 (Taking of public. This rulemaking involves determination that the benefits justify Private Property): This rulemaking will information collection requirements the costs of the rule; (2) tailored the rule not effect a taking of private property or which are subject to review by the to impose the least burden on society otherwise have taking implications Office of Management and Budget consistent with obtaining the regulatory under Executive Order 12630 (Mar. 15, (OMB) under the Paperwork Reduction objectives; (3) selected a regulatory 1988). Act of 1995 (44 U.S.C. 3501–3549). The approach that maximizes net benefits; K. Congressional Review Act: Under collection of information involved in (4) specified performance objectives; (5) the Congressional Review Act this notice has been submitted to OMB identified and assessed available provisions of the Small Business under OMB control number 0651–0069 alternatives; (6) involved the public in Regulatory Enforcement Fairness Act of when the notice of proposed rulemaking an open exchange of information and 1996 (5 U.S.C. 801–808), prior to issuing was published. The Office published the perspectives among experts in relevant any final rule, the United States Patent title, description, and respondent disciplines, affected stakeholders in the and Trademark Office will submit a description of the information private sector, and the public as a report containing the final rule and collection, with an estimate of the whole, and provided online access to other required information to the U.S. annual reporting burdens, in the Notices the rulemaking docket; (7) attempted to Senate, the U.S. House of ‘‘Rules of Practice for Trials before the promote coordination, simplification, Representatives, and the Comptroller Patent Trial and Appeal Board and and harmonization across government General of the Government Judicial Review of Patent Trial and agencies and identified goals designed Accountability Office. The changes in Appeal Board Decisions,’’ 77 FR 6879 to promote innovation; (8) considered this notice are not expected to result in (Feb. 9, 2012) (notice of proposed approaches that reduce burdens and an annual effect on the economy of 100 rulemaking) (RIN 0651–AC70), maintain flexibility and freedom of million dollars or more, a major increase ‘‘Changes to Implement Inter Partes choice for the public; and (9) ensured in costs or prices, or significant adverse Review Proceedings,’’ 77 FR 7041 (Feb. the objectivity of scientific and effects on competition, employment, 10, 2012) (notice of proposed technological information and investment, productivity, innovation, or rulemaking) (RIN 0651–AC71), processes. the ability of United States-based ‘‘Changes to Implement Post-Grant E. Executive Order 13132 enterprises to compete with foreign Review Proceedings,’’ 77 FR 7060 (Feb. (Federalism): This rulemaking does not based enterprises in domestic and 10, 2012) (notice of proposed contain policies with federalism export markets. Therefore, this notice is rulemaking) (RIN 0651–AC72), and implications sufficient to warrant not expected to result in a ‘‘major rule’’ ‘‘Changes to Implement Transitional preparation of a Federalism Assessment as defined in 5 U.S.C. 804(2). Program for Covered Business Method under Executive Order 13132 (Aug. 4, L. Unfunded Mandates Reform Act of Patents,’’ 77 FR 7080 (Feb. 10, 2012) 1999). 1995: The changes set forth in this final (notice of proposed rulemaking) (RIN F. Executive Order 13175 (Tribal rule do not involve a Federal 0651–AC73). Consultation): This rulemaking will not: intergovernmental mandate that will The Office received one comment and (1) Have substantial direct effects on one result in the expenditure by State, local, made minor revisions to the or more Indian tribes; (2) impose and tribal governments, in the aggregate, requirements in the rule, as well as the substantial direct compliance costs on of 100 million dollars (as adjusted) or burden estimates, as outlined below. Indian tribal governments; or (3) more in any one year, or a Federal Accordingly, the Office has resubmitted preempt tribal law. Therefore, a tribal private sector mandate that will result the proposed revision to the information summary impact statement is not in the expenditure by the private sector collection requirements under 0651– required under Executive Order 13175 of 100 million dollars (as adjusted) or 0069. The proposed revision to the (Nov. 6, 2000). more in any one year, and will not information collection requirements G. Executive Order 13211 (Energy significantly or uniquely affect small under 0651–0069 is available at OMB’s Effects): This rulemaking is not a governments. Therefore, no actions are Information Collection Web site (www. significant energy action under necessary under the provisions of the reginfo.gov/public/do/PRAMain). Executive Order 13211 because this Unfunded Mandates Reform Act of This rulemaking will add the rulemaking is not likely to have a 1995. See 2 U.S.C. 1501 et seq. following to a collection of information: significant adverse effect on the supply, M. National Environmental Policy (1) Petitions to institute an inter distribution, or use of energy. Therefore, Act: This rulemaking will not have any partes review (§§ 42.5, 42.6, 42.8, 42.11, a Statement of Energy Effects is not effect on the quality of the environment 42.13, 42.20, 42.21, 42.22, 42.24(a)(1), required under Executive Order 13211 and is thus categorically excluded from 42.63, 42.65, and 42.101 through (May 18, 2001). review under the National 42.105); H. Executive Order 12988 (Civil Environmental Policy Act of 1969. See (2) Petitions to institute a post-grant Justice Reform): This rulemaking meets 42 U.S.C. 4321–4370h. review (§§ 42.5, 42.6, 42.8, 42.11, 42.13, applicable standards to minimize N. National Technology Transfer and 42.20, 42.21, 42.22, 42.24(a)(2), 42.63, litigation, eliminate ambiguity, and Advancement Act: The requirements of 42.65, and 42.201 through 42.205); reduce burden as set forth in sections section 12(d) of the National (3) Petitions to institute a covered 3(a) and 3(b)(2) of Executive Order Technology Transfer and Advancement business method patent review (§§ 42.5,

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42.6, 42.8, 42.11, 42.13, 42.20, 42.21, employ the standards and procedures of declines because of overlap in subject 42.22, 42.24(a)(3), 42.63, 42.65, 42.203, the post-grant review proceeding with a matter, expert overlap, and familiarity 42.205, and 42.302 through 42.304); few exceptions. The new rules for with the technical subject matter. Given (4) Motions (§§ 42.6, 42.8, 42.11, initiating and conducting these the overlap of subject matter, a 42.13, 42.21, 42.22, 42.24(a)(5), 42.51, proceedings are adopted in this notice proceeding with fewer motions such as through 42.54, 42.63, 42.64, 42.65, as new part 42 of title 37 of the Code inter partes review will have a 42.121, 42.221, 42.123, and 42.223); of Federal Regulations. somewhat less than proportional (5) Oppositions (§§ 42.6, 42.8, 42.11, In estimating the number of hours decrease in costs since the overlapping 42.13, 42.21, 42.23, 42.24(b), 42.51, necessary for preparing a petition to costs will be spread over fewer motions 42.52, 42.53, 42.54, 42.63, 42.64, 42.65, institute an inter partes review, the as compared with a derivation 42.107, 42.120, 42.207, and 42.220); USPTO considered the estimated cost of proceeding. (6) Replies provided for in 35 U.S.C. preparing a request for inter partes It is estimated that the cost of an inter 135 and 311–318, as amended, and new reexamination ($46,000), the mean partes review would be 60% of the cost 35 U.S.C. 319 and 321–329 (§§ 42.6, billing rate ($371 per hour), and the of current contested cases before the 42.8, 42.11, 42.13, 42.21, 42.23, 42.24(c), observation that the cost of inter partes trial section of the Board to the end of 42.51, 42.52, 42.53, 42.54, 42.63, and reexamination has risen the fastest of all the preliminary motion period. An inter 42.65); and litigation costs since 2009 in the AIPLA partes review should have many fewer (7) Notices of judicial review of a Report of the Economic Survey 2011. It motions since only one party will have Board decision, including notices of was estimated that a petition for an inter a patent that is the subject of the appeal and notices of election provided partes review and an inter partes proceeding (compared with each party for 35 U.S.C. 141, 142, 145 and 146 reexamination request would cost the having at least a patent or an application (§§ 90.1 through 90.3). same to the preparing party ($46,000). in current contested cases before the The rules also permit filing requests Since additional grounds for instituting trial section of the Board). Moreover, for oral argument (§ 42.70) provided for review are provided in post-grant fewer issues can be raised since inter in 35 U.S.C. 316(a)(10), as amended, and review or covered business method partes review will not have priority- 35 U.S.C. 326(a)(10), requests for patent review compared with inter related issues that must be addressed in rehearing (§ 42.71(c)), requests for partes reexamination, the Office current contested cases before the trial adverse judgment (§ 42.73(b)), requests estimates the cost of preparing a petition section of the Board. Consequently, a that a settlement be treated as business to institute a review will be 33.333% 60% weighting factor should capture confidential (§ 42.74(b) and 42.409) more than the estimated cost of the typical costs of an inter partes provided for in 35 U.S.C. 317, as preparing a request for inter partes review. amended, and 35 U.S.C. 327, to a reexamination, or $61,333. It is estimated that the cost of a post- collection of information. The USPTO also reviewed recent grant review or covered business I. Abstract: The USPTO is required by contested cases before the trial section method patent review would be 75% of 35 U.S.C. 131 and 151 to examine of the Board to make estimates on the the cost of current contested cases applications and, when appropriate, average number of motions for any before the trial section of the Board to issue applications as patents. matter including priority, the subset of the end of the preliminary motion Chapter 31 of title 35, United States those motions directed to non-priority period. The basis for this estimate is Code, in effect on September 16, 2012, issues, the subset of those motions similar to the basis for the inter partes provides for inter partes review directed to non-priority patentability review estimate. Since more proceedings allowing third parties to issues, and the subset of those motions patentability issues may be raised in the petition the USPTO to review the directed to patentability issues based on petition, the cost for these trials is patentability of an issued patent under a patent or printed publication on the expected to be somewhat higher. Again, 35 U.S.C. 102 and 103 based on patents basis of 35 U.S.C. 102 or 103. Thus, for a 75% weighting factor should capture and printed publications. If a trial is inter partes review, considering the the typical costs of a post-grant review initiated by the USPTO based on the percentage of motions on patentability or a covered business method patent petition, as authorized by the USPTO, issues based on a patent or printed review. additional motions may be filed by the publication on the basis of 35 U.S.C. 102 The motions that present claims in petitioner. A patent owner may file a or 103 would be appropriate as grounds excess of the number of claims in the response to the petition and if a trial is raised in those proceedings would be patent and in excess of three dependent instituted, as authorized by the USPTO, directed to the same issues. Similarly, or more than 20 total claims also require may file additional motions. for post-grant review and transitional payment of statutory fee for presenting Chapter 32 of title 35 U.S.C. in effect proceedings for covered business such claims. See 35 U.S.C. 41(a)(2)(i) on September 16, 2012, provides for methods, considering the percentage of and (ii). It is estimated that 20 percent post-grant review proceeding allowing motions on patentability issues would of instituted proceedings will have one third parties to petition the USPTO to be appropriate as grounds raised in additional independent claim and ten review the patentability of an issued those proceedings would be directed to additional dependent claims presented patent under any ground authorized the same issues. The review of current in proceedings filed in FY 2013. Based under 35 U.S.C. 282(b)(2). If a trial is contested cases before the trial section on the historical data for inter partes initiated by the USPTO based on the of the Board indicated that reexamination, it is estimated that petition, as authorized by the USPTO, approximately 15% of motions were 32.09% of the patent owners presenting additional motions may be filed by the directed to prior art grounds, 18% of additional claims will pay the small petitioner. A patent owner may file a motions were directed to other entity fee for the additional claims. response to the petition and if a trial is patentability grounds, 27% were Thus, it is estimated that 23 small instituted, as authorized by the USPTO, directed to miscellaneous issues, and entities will pay an additional $110.00 may file additional motions. 40% were directed to priority issues. It for an additional independent claim and Section 18 of the AIA provides for a was estimated that the cost per motion $260.00 for ten additional claims in transitional program for covered to a party in current contested cases inter partes review proceedings in FY business method patents, which will before the trial section of the Board 2013. It is estimated that 48 non-small

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entities will pay an additional $220.00 determine whether to initiate a review per year. There are no capital start-up or for an additional independent claim and under 35 U.S.C. 314, as amended, or 35 maintenance costs associated with this $520.00 for ten additional claims in U.S.C. 324 or derivation proceeding information collection. However, this inter partes review proceedings in FY under 35 U.S.C. 135, as amended, and collection does have annual (non-hour) 2013. It is estimated that three small to prepare a final decision under 35 costs in the form of filing fees and entities will pay an additional $110.00 U.S.C. 135 or 318, as amended, or 35 postage costs where filing via mail is for an additional independent claim and U.S.C. 328. authorized. It is estimated that filing via $260.00 for ten additional claims in OMB Number: 0651–0069. mail will be authorized in one inter post-grant review proceedings in FY Title: Patent Review and Derivation partes review petition filing and three 2013. It is estimated that six non-small Proceedings. subsequent papers. There are filing fees Form Numbers: None. entities will pay an additional $220.00 associated with petitions for inter partes for an additional independent claim and Type of Review: New Collection. Likely Respondents/Affected Public: review, post-grant review, and covered $520.00 for ten additional claims in Individuals or households, businesses business method patent review and for post-grant review proceedings in FY or other for-profit, not-for-profit requests to treat a settlement as business 2013. The total excess claim fee due institutions, farms, Federal Government, confidential. The total filing fees for this from patent owners is estimated to be and state, local, or tribal governments. collection are calculated in the $49,580 in FY 2013. Estimated Number of Respondents/ accompanying table. The USPTO The title, description, and respondent Frequency of Collection: 940 estimates that filings authorized to be description of the information collection respondents and 4,541 responses per filed via mail will be mailed to the are shown below with an estimate of the year. USPTO by EXPRESS MAIL® using the annual reporting burdens. Included in Estimated Time per Response: The U.S. Postal Service’s flat rate envelope, this estimate is the time for reviewing USPTO estimates that it will take the which can accommodate varying instructions, gathering and maintaining public from 0.1 to 165.3 hours to gather submission weights, estimated in this the data needed, and completing and the necessary information, prepare the case to be 16 ounces for the petitions reviewing the collection of information. documents, and submit the information and two ounces for the other papers. The principal impact of the changes in to the USPTO. The cost of the flat rate envelope is this notice is to implement the changes Estimated Total Annual Respondent $18.95. The USPTO estimates that the to Office practice necessitated by Burden Hours: 497,649.1 hours per year. total postage cost associated with this sections 6 and 18 of the AIA. Estimated Total Annual (Hour) collection will be approximately $76 per The public uses this information Respondent Cost Burden: year. The USPTO estimates that the total collection to request review and $184,627,816.10 per year. The USPTO fees associated with this collection will derivation proceedings as well as to expects that the information in this be approximately $17,406,320.00 per ensure that the associated fees and collection will be prepared by attorneys. year. documentation are submitted to the Using the professional rate of $371 per USPTO. hour for attorneys in private firms, the Therefore, the total annual cost USPTO estimates that the respondent burden in fiscal years 2013–2015 is II. Data cost burden for this collection will be estimated to be $202,034,212.10 (the Needs and Uses: The information approximately $184,627,816.10 per year sum of the estimated total annual (hour) supplied to the USPTO by a petition to (497,649.1 hours per year multiplied by respondent cost burden institute a review or derivation as well $371 per hour). ($184,627,816.10) plus the estimated as the motions authorized following the Estimated Total Annual Non-Hour total annual non-hour respondent cost institution is used by the USPTO to Respondent Cost Burden: $17,406,396 burden ($17,406,396)).

Proposed Proposed Proposed Final estimated Final estimated time estimated estimated time for estimated Final estimated Item for response annual annual burden response annual annual burden (hours) responses hours (hours) responses hours

Petition for inter partes review ...... 135 .3 460 62,238 124 456 56,544 Petition for post-grant review or cov- ered business method patent re- view ...... 180.4 50 9,020 165 .3 73 12,066 .90 Reply to initial inter partes review pe- tition ...... 100 406 40,600 91 .6 401 36,731 .60 Reply to initial post-grant review or covered business method patent review ...... 100 45 4,500 91 .6 64 5,862.40 Request for Reconsideration ...... 80 141 11,280 80 141 11,280 Motions, replies and oppositions after institution in inter partes review ..... 140 2,453 343,420 140 2,166 303,240 Motions, replies and oppositions after institution in post-grant review or covered business method patent review ...... 130 342 44,460 130 460 59,800 Request for oral hearing ...... 20 456 9,120 18 .3 479 8,765 .70 Request to treat a settlement as business confidential...... 2 18 36 2 20 40 Request for adverse judgment, de- fault adverse judgment or settle- ment (parties in litigation over pat- ent) ...... 1 101 101 1 84 84

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Proposed Proposed Proposed Final estimated Final estimated time estimated estimated time for estimated Final estimated Item for response annual annual burden response annual annual burden (hours) responses hours (hours) responses hours

Settlement parties not in litigation ..... n/a n/a n/a 100 32 3,200 Request to make a settlement agree- ment available...... 1 18 18.00 1 20 20 Notice of judicial review of a Board decision (e.g., notice of appeal under 35 U.S.C. 142) ...... 0 .1 51 5.1 0.1 145 14 .5 Totals ...... 4,541 524,798.10 ...... 4,541 497,649 .10

Proposed esti- Proposed esti- Final esti- Final esti- Item mated annual Proposed fee mated annual mated annual Fee amount mated annual response amount filing costs responses filing costs

Petition for inter partes review ...... 460 $35,800 $16,468,000 456 $31,400 $14,318,400 (average) ..... Petition for post-grant review or covered 50 47,100 2,355,000 73 41,400 3,022,200 business method patent review. (average) ..... Reply to inter partes review petition ...... 406 0 0 401 0 ...... 0 Reply to post-grant review or covered 45 0 0 64 0...... 0 business method patent review petition. Request for Reconsideration ...... 141 0 0 141 0 ...... 0 Motions, replies and oppositions after initi- 2,453 0 0 2,086 0...... 0 ation in inter partes review with no ex- cess claims. Motions in inter partes review with excess n/a n/a n/a 26 370...... 9,620 claims by small entity patent owners. Motions in inter partes review with excess n/a n/a n/a 54 740...... 39,960 claims by other than small entity patent owners. Motions, replies and oppositions after initi- 342 0 0 447 0...... 0 ation in post-grant review or covered business method patent review with no excess claims. Motions in post-grant review or covered n/a n/a n/a 4 370...... 1,480 business method patent review with ex- cess claims by other than small entity patent owners. Motions in post-grant review or covered n/a n/a n/a 9 740...... 6,660 business method patent review with ex- cess claims by small entity patent own- ers. Request for oral hearing ...... 456 0 0 479 0 ...... 0 Request to treat a settlement as business 18 0 0 20 0...... 0 confidential. Request for adverse judgment, default ad- 101 0 0 116 0...... 0 verse judgment or settlement. Request to make a settlement agreement 18 400 7,200 20 400...... 8,000 available. Notice of judicial review of a Board deci- 51 0 0 145 0...... 0 sion (e.g., notice of appeal under 35 U.S.C. 142). Totals ...... 4,541 ...... 18,830,200 4,541 ...... 17,406,320

Notwithstanding any other provision Comment 115: One comment of proceedings have been completed. of law, no person is required to respond suggested that inter partes The number of filings of inter partes to nor shall a person be subject to a reexamination is a very poor proxy for reexamination has increased penalty for failure to comply with a these proceedings because there have considerably in the last three full years. collection of information subject to the been very few completed proceedings See Rules of Practice for Trials before requirements of the Paperwork relative to all filing of inter partes the Patent Trial and Appeal Board and Reduction Act unless that collection of reexaminations from 2001 to 2011. The Judicial Review of Patent Trial and information displays a currently valid comment argues that the completed Appeal Board Decisions, 77 FR at 6893. OMB control number. proceeding are only the least complex of For example, in the last three years 824 The Office received one written proceedings which the comment alleges or 64% of the 1,278 requests filed from submission of comments regarding the result in a sampling bias. 2001 to 2011 were filed. Considering Paperwork Reduction Act. Each Response: While only 305 inter partes that the average time from filing to component of that comment directed reexamination proceedings have certificate for the 305 certificates was the Paperwork Reduction Act is resulted in a certificate, the comment is 36.2 months and the median pendency addressed below. not correct that only the least complex was 32.9 months, it would have been

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more appropriate for the comment to on the historical data on the number of between 41 and 50 claims; one of the 60 consider the 305 certificates that have filings in the most analogous proceedings requested review of issued compared with the filings from proceedings. See Transitional Program between 51 and 60 claims; one of the 60 2001 to 2008. During that time period for Covered Business Method Patents— proceedings requested review of there were 467 requests filed, 14 Definition of Technological Invention, between 61 and 70 claims; and one of requests were subsequently denied a 77 FR at 7097. the 60 proceedings requested review of filing date, 53 requests were denied on Comment 118: One comment between 91 and 100 claims. A second the merits, 246 concluded with a suggested that a projection for at least group of 20 proceedings filed after certificate by September 30, 2011, and three years of growth in future filings is September 15, 2011, were reviewed to 154 were still pending on September 30, necessary because the PRA clearance is determine if the change to the statutory 2011. Of the 154 that were still pending, for three years. The comment also seeks threshold resulted in a clear change in only one was before the examiner after disclosure of USPTO’s estimation the number of claims for which review a non-final rejection, only three had an models. was requested. A summary of that data action closing prosecution as the last Response: The suggestion is adopted. is provided as follows: 13 of 20 action, and only three had a right of The Office estimates moderate aggregate proceedings requested review of 20 or appeal notice as the last action. Most of growth for petitions seeking inter partes fewer claims; three of 20 proceedings the 154 proceedings were subject to review and post-grant review, as set requested review of between 21 and 30 appeal proceedings or were in the forth in item B above. Further, the claims; three of 20 proceedings publication process. Accordingly, inter Office estimates no growth for petitions requested review of between 31 and 40 partes reexamination is an appropriate seeking review under the transitional claims; and one of 20 proceedings proxy for the new proceedings. program for covered business method requested review of 53 claims. Comment 116: One comment patents during the three year period. Comment 120: One comment suggested that for matters not Calculations for these numbers are suggested that the estimate of the concurrently in litigation, the Office’s provided in the supporting statement for number of post-grant review two hour estimate for public burden of this collection. In 2013, the number of proceedings should be doubled based settlement under the Paperwork eligible patents will include patents for on the analysis of the University of Reduction Act is unreasonably low by a which currently in litigation. In Houston of patent cases from 2005– factor of 30–100 and must include the subsequent years, the number of eligible 2009. According to the comment, this costs to arrive at the settlement in patents is expected to be reduced, analysis shows that for every 15 addition to the cost of submitting the because some proceedings will have decisions involving printed prior art agreement to the Office. The comment been settled, while others will have grounds, there were 13 decisions asserts that this burden is fully been stayed pending a review. At the involving public use, ‘‘on sale,’’ or 35 cognizable under the Paperwork same time, as experience in the U.S.C. 112. Reduction Act. procedure becomes more wide spread, Response: The suggestion is not Response: The suggestion is adopted the public would more likely seek a adopted. While the Office agrees that in part. For inter partes and post-grant review. Because these two factors offset many decisions involved public use, review proceedings where the parties each other, the Office is anticipated zero ‘‘on sale,’’ or 35 U.S.C. 112, the are not also in district court litigations growth for petitions for the covered comment and the analysis by the regarding the patent, the burden has business method patent review. University of Houston did not consider been increased to 100 hours per Comment 119: A comment noted that which decisions did not include a prior settlement as suggested as the highest the distribution of claims for review was art grounds, but did include a public estimate in the comment. Based not disclosed during the comment use, ‘‘on sale,’’ or 35 U.S.C. 112 ground. partially on historical data for inter period. The comment asserts that failure Only the subset of decisions including partes reexamination, it is estimated to disclose underlying data in the Notice the newly available grounds could be that 30% of reviewed patents will not be of Proposed Rulemaking violates the used appropriately in estimating an subject to concurrent litigation. Paperwork Reduction Act (and other increased rate of post-grant review By statute, any petitioner seeking requirements). filings relative to inter partes review. review of a covered business method Response: The distribution of claims The comment also did not address how must also be in litigation regarding the for which review will be requested was the limited filing window relative to the patent or have been charged with estimated based on the number of filing of district court litigation for post- infringement. The comment only argued claims for which inter partes grant review would be addressed that for parties not in litigation, the cost reexamination was requested in the first appropriately if the University of of settlement was too low. Therefore, 60 requests filed during the second Houston study served as a basis for the this comment is not pertinent to this quarter of FY 2011 as that data was the estimates. rulemaking and is not adopted. most timely when the proposed rule Comment 121: One comment Comment 117: A comment requested notices were drafted. That data was suggested that the hourly rate for that the Office set forth the basis for the publically available when the notice of practitioners should be raised from $340 number of petitions for review. proposed rulemaking was published (the medium hourly rate from the Response: As discussed above in item and remains available today. See AIPLA Report of the Economic Survey B, the Office considered the actual http://portal.uspto.gov/external/portal/ 2011) to $500. The comment asserts that number of inter partes reexamination pair. A summary of that publicly using the median hourly rate from the requests filed during FY 2001–2011 and available data is provided as follows: 40 AIPLA Report of the Economic Survey the anticipated number of requests in of the 60 proceedings requested review 2011 of $340 is analytically wrong and FY 2012, the number of such requests of of 20 or fewer claims; eight of the 60 that, at a minimum, the higher mean patents classified in Class 705, the proceedings requested review of rate of $371 from that survey should be number of interferences, and the between 21 and 30 claims; three of the used. differences between reexamination and 60 proceedings requested review of Response: The suggestion is adopted the new review proceedings. The Office between 31 and 40 claims; six of the 60 in part. The Office has adopted a mean estimated the number of reviews based proceedings requested review of hourly rate of $371 from the AIPLA

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Report of the Economic Survey 2011, Comment 123: One comment 42.121 Amendment of the patent. rather than the median hourly rate of suggested that the regulations imposed 42.122 Multiple proceedings. $340 from that survey. The suggestion of a substantial paperwork burden without 42.123 Filing of supplemental information. a $500 hourly rate cannot be adopted a valid OMB Control Number. Subpart B—Inter Partes Review because the comment did not provide Response: The suggestion is not any data to support the validity of adopted. OMB Control number 0651– General hourly rate suggested and the Office 0069 has been requested appropriately believes, based on its experience, that and is pending. § 42.100 Procedure; pendency. $371 is a better estimate of the average Comment 124: One comment (a) An inter partes review is a trial hourly rate. suggested that the USPTO’s estimates subject to the procedures set forth in Comment 122: One comment systematically ignore burdens and costs subpart A of this part. suggested that reliance on the AIPLA associated with the attorney’s client (b) A claim in an unexpired patent Report of the Economic Survey 2011 is company. shall be given its broadest reasonable inappropriate as the survey is flawed. Response: See response to Comment construction in light of the specification of the patent in which it appears. The comment asserts that the survey is 109. (c) An inter partes review proceeding unreliable for estimating paperwork Notwithstanding any other provision shall be administered such that of law, no person is required to respond burden under the Information Quality pendency before the Board after to nor shall a person be subject to a Act. institution is normally no more than one penalty for failure to comply with a Response: In providing estimates of year. The time can be extended by up collection of information subject to the burden hours, the USPTO sometimes to six months for good cause by the requirements of the Paperwork referenced the AIPLA Report of the Chief Administrative Patent Judge, or Economic Survey 2011, as a benchmark Reduction Act unless that collection of adjusted by the Board in the case of for the estimates. While the costs information displays a currently valid joinder. reported in the survey were considered, OMB control number. § 42.101 Who may petition for inter partes the Office, in estimating the cost of the List of Subjects in 37 CFR Part 42 collection, also considered the work review. required to prepare and file the Administrative practice and A person who is not the owner of a submissions. procedure, Inventions and patents, patent may file with the Office a Under the USPTO’s Information Lawyers. petition to institute an inter partes Quality Guidelines (ICG), the AIPLA Amendments to the Regulatory Text review of the patent unless: Report of the Economic Survey 2011 (a) Before the date on which the report is not a ‘‘dissemination’’ of For the reasons stated in the petition for review is filed, the information. The Guidelines state that preamble, the Under Secretary of petitioner or real party-in-interest filed ‘‘dissemination’’ means an ‘‘agency Commerce for Intellectual Property and a civil action challenging the validity of initiated or sponsored distribution of Director of the United States Patent and a claim of the patent; information to the public.’’ USPTO’s Trademark Office amends 37 CFR part (b) The petition requesting the ICG, Section IV, A, 1. Subsection (a) 42, as added elsewhere in this issue of proceeding is filed more than one year further defines ‘‘agency initiated the Federal Register, as follows: after the date on which the petitioner, the petitioner’s real party-in-interest, or distribution of information to the PART 42—TRIAL PRACTICE BEFORE public’’ to mean ‘‘information that the a privy of the petitioner is served with THE PATENT TRIAL AND APPEAL a complaint alleging infringement of the agency distributes or releases which BOARD reflects, represents, or forms any part of patent; or (c) The petitioner, the petitioner’s real the support of the policies of the ■ 1. The authority citation for 37 CFR party-in-interest, or a privy of the agency.’’ Id. at Section IV, A, 1, a. The part 42 continues to read as follows: USPTO did not distribute or release the petitioner is estopped from challenging AIPLA Report of the Economic Survey Authority: 35 U.S.C. 2(b)(2), 6, 21, 23, 41, the claims on the grounds identified in 135, 311, 312, 316, 321–326 and the Leahy- the petition. 2011. Smith America Invents Act, Pub. L. 112–29, Likewise, the AIPLA Report of the sections 6(c), 6(f), and 18, 125 Stat. 284, 304, § 42.102 Time for filing. Economic Survey 2011 does not qualify 311, and 329 (2011). (a) A petition for inter partes review as an ‘‘agency sponsored distribution of of a patent must be filed after the later ■ 2. Add subpart B to read as follows: information’’ under Subsection (b) of of: the Guidelines, which ‘‘refers to Subpart B—Inter Partes Review (1) The date that is nine months after situations where the agency has directed General the date of the grant of the patent or of a third party to distribute or release the issuance of the reissue patent; or information, or where the agency has Sec. (2) If a post-grant review is instituted the authority to review and approve the 42.100 Procedure; pendency. 42.101 Who may petition for inter partes as set forth in subpart C of this part, the information before release.’’ Id. at review. date of the termination of such post- Section IV, A, 1, b. The USPTO did not 42.102 Time for filing. grant review. commission the report, had no input 42.103 Inter partes review fee. (b) The Director may impose a limit into the structure of the report and does 42.104 Content of petition. on the number of inter partes reviews not rely exclusively upon the results of 42.105 Service of petition. that may be instituted during each of the the report to arrive at estimates. No 42.106 Filing date. first four one-year periods in which the correction of the documents is required 42.107 Preliminary response to petition. amendment made to chapter 31 of title because the Office utilized the AIPLA Instituting Inter Partes Review 35, United States Code, is in effect by Report of the Economic Survey 2011 in 42.108 Institution of inter partes review. providing notice in the Office’s Official formulating some burden estimations. Gazette or Federal Register. Petitions No correction is required under the After Institution of Inter Partes Review filed after an established limit has been Information Quality Act. 42.120 Patent owner response. reached will be deemed untimely.

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§ 42.103 Inter partes review fee. (a) The petition and supporting patent. No inter partes review will be (a) An inter partes review fee set forth evidence must be served on the patent instituted based on disclaimed claims. owner at the correspondence address of in § 42.15(a) must accompany the Instituting Inter Partes Review petition. (b) No filing date will be record for the subject patent. The accorded to the petition until full petitioner may additionally serve the § 42.108 Institution of inter partes review. payment is received. petition and supporting evidence on the (a) When instituting inter partes patent owner at any other address § 42.104 Content of petition. review, the Board may authorize the known to the petitioner as likely to review to proceed on all or some of the In addition to the requirements of effect service. challenged claims and on all or some of §§ 42.6, 42.8, 42.22, and 42.24, the (b) Upon agreement of the parties, the grounds of unpatentability asserted petition must set forth: service may be made electronically. for each claim. (a) Grounds for standing. The ® Service may be by EXPRESS MAIL or (b) At any time prior to institution of petitioner must certify that the patent by means at least as fast and reliable as inter partes review, the Board may deny for which review is sought is available ® EXPRESS MAIL . Personal service is some or all grounds for unpatentability for inter partes review and that the not required. for some or all of the challenged claims. petitioner is not barred or estopped from Denial of a ground is a Board decision requesting an inter partes review § 42.106 Filing date. not to institute inter partes review on challenging the patent claims on the (a) Complete petition. A petition to that ground. grounds identified in the petition. institute inter partes review will not be (c) Sufficient grounds. Inter partes (b) Identification of challenge. Provide accorded a filing date until the petition review shall not be instituted for a a statement of the precise relief satisfies all of the following ground of unpatentability unless the requested for each claim challenged. requirements: Board decides that the petition The statement must identify the (1) Complies with § 42.104; supporting the ground would following: (2) Effects service of the petition on (1) The claim; the correspondence address of record as demonstrate that there is a reasonable (2) The specific statutory grounds provided in § 42.105(a); and likelihood that at least one of the claims under 35 U.S.C. 102 or 103 on which (3) Is accompanied by the fee to challenged in the petition is the challenge to the claim is based and institute required in § 42.15(a). unpatentable. The Board’s decision will the patents or printed publications (b) Incomplete petition. Where a party take into account a patent owner relied upon for each ground; files an incomplete petition, no filing preliminary response where such a (3) How the challenged claim is to be date will be accorded, and the Office response is filed. construed. Where the claim to be will dismiss the petition if the After Institution of Inter Partes construed contains a means-plus- deficiency in the petition is not Review function or step-plus-function limitation corrected within one month from the as permitted under 35 U.S.C. 112(f), the notice of an incomplete petition. § 42.120 Patent owner response. construction of the claim must identify (a) Scope. A patent owner may file a the specific portions of the specification § 42.107 Preliminary response to petition. response to the petition addressing any that describe the structure, material, or (a) The patent owner may file a ground for unpatentability not already acts corresponding to each claimed preliminary response to the petition. denied. A patent owner response is filed function; The response is limited to setting forth as an opposition and is subject to the (4) How the construed claim is the reasons why no inter partes review page limits provided in § 42.24. unpatentable under the statutory should be instituted under 35 U.S.C. (b) Due date for response. If no time grounds identified in paragraph (b)(2) of 314. The response can include evidence for filing a patent owner response to a this section. The petition must specify except as provided in paragraph (c) of petition is provided in a Board order, where each element of the claim is this section. The preliminary response the default date for filing a patent owner found in the prior art patents or printed is subject to the page limits under response is three months from the date publications relied upon; and § 42.24. the inter partes review was instituted. (5) The exhibit number of the (b) Due date. The preliminary supporting evidence relied upon to response must be filed no later than § 42.121 Amendment of the patent. support the challenge and the relevance three months after the date of a notice (a) Motion to amend. A patent owner of the evidence to the challenge raised, indicating that the request to institute may file one motion to amend a patent, including identifying specific portions an inter partes review has been granted but only after conferring with the Board. of the evidence that support the a filing date. A patent owner may (1) Due date. Unless a due date is challenge. The Board may exclude or expedite the proceeding by filing an provided in a Board order, a motion to give no weight to the evidence where a election to waive the patent owner amend must be filed no later than the party has failed to state its relevance or preliminary response. filing of a patent owner response. to identify specific portions of the (c) No new testimonial evidence. The (2) Scope. A motion to amend may be evidence that support the challenge. preliminary response shall not present denied where: (c) A motion may be filed that seeks new testimony evidence beyond that (i) The amendment does not respond to correct a clerical or typographical already of record, except as authorized to a ground of unpatentability involved mistake in the petition. The grant of by the Board. in the trial; or such a motion does not change the filing (d) No amendment. The preliminary (ii) The amendment seeks to enlarge date of the petition. response shall not include any the scope of the claims of the patent or amendment. introduce new subject matter. § 42.105 Service of petition. (e) Disclaim Patent Claims. The patent (3) A reasonable number of substitute In addition to the requirements of owner may file a statutory disclaimer claims. A motion to amend may cancel § 42.6, the petitioner must serve the under 35 U.S.C. 253(a) in compliance a challenged claim or propose a petition and exhibits relied upon in the with § 1.321(a) of this chapter, reasonable number of substitute claims. petition as follows: disclaiming one or more claims in the The presumption is that only one

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substitute claim would be needed to one month after the date the trial is otherwise order in the interests-of- replace each challenged claim, and it instituted, must request authorization to justice. may be rebutted by a demonstration of file a motion to submit the information. need. The motion to submit supplemental § 42.201 Who may petition for a post-grant review. (b) Content. A motion to amend information must show why the claims must include a claim listing, supplemental information reasonably A person who is not the owner of a show the changes clearly, and set forth: could not have been obtained earlier, patent may file with the Office a (1) The support in the original and that consideration of the petition to institute a post-grant review disclosure of the patent for each claim supplemental information would be in of the patent unless: that is added or amended; and the interests-of-justice. (a) Before the date on which the (2) The support in an earlier-filed (c) Other supplemental information. petition for review is filed, the disclosure for each claim for which A party seeking to submit supplemental petitioner or real party-in-interest filed benefit of the filing date of the earlier information not relevant to a claim for a civil action challenging the validity of filed disclosure is sought. which the trial has been instituted must a claim of the patent; or (c) Additional motion to amend. In request authorization to file a motion to addition to the requirements set forth in (b) The petitioner, the petitioner’s real submit the information. The motion paragraphs (a) and (b) of this section, party-in-interest, or a privy of the must show why the supplemental any additional motion to amend may petitioner is estopped from challenging information reasonably could not have not be filed without Board the claims on the grounds identified in been obtained earlier, and that authorization. An additional motion to the petition. consideration of the supplemental amend may be authorized when there is information would be in the interests-of- § 42.202 Time for filing. a good cause showing or a joint request justice. (a) A petition for a post-grant review of the petitioner and the patent owner ■ of a patent must be filed no later than to materially advance a settlement. In 3. Add subpart C to read as follows: the date that is nine months after the determining whether to authorize such Subpart C—Post-Grant Review date of the grant of a patent or of the an additional motion to amend, the General issuance of a reissue patent. A petition, Board will consider whether a petitioner Sec. however, may not request a post-grant has submitted supplemental 42.200 Procedure; pendency. review for a claim in a reissue patent information after the time period set for 42.201 Who may petition for a post-grant that is identical to or narrower than a filing a motion to amend in paragraph review. claim in the original patent from which (a)(1) of this section. 42.202 Time for filing. 42.203 Post-grant review fee. the reissue patent was issued unless the § 42.122 Multiple proceedings and Joinder. 42.204 Content of petition. petition is filed not later than the date (a) Multiple proceedings. Where 42.205 Service of petition. that is nine months after the date of the another matter involving the patent is 42.206 Filing date. grant of the original patent. before the Office, the Board may during 42.207 Preliminary response to petition. (b) The Director may impose a limit the pendency of the inter partes review Instituting Post-Grant Review on the number of post-grant reviews that enter any appropriate order regarding 42.208 Institution of post-grant review. may be instituted during each of the the additional matter including first four one-year periods in which 35 providing for the stay, transfer, After Institution of Post-Grant Review U.S.C. 321 is in effect by providing consolidation, or termination of any 42.220 Patent owner response. notice in the Office’s Official Gazette or such matter. 42.221 Amendment of the patent. Federal Register. Petitions filed after an (b) Request for joinder. Joinder may be 42.222 Multiple proceedings. established limit has been reached will requested by a patent owner or 42.223 Filing of supplemental information. be deemed untimely. 42.224 Discovery. petitioner. Any request for joinder must § 42.203 Post-grant review fee. be filed, as a motion under § 42.22, no Subpart C—Post-Grant Review later than one month after the (a) A post-grant review fee set forth in institution date of any inter partes General § 42.15(b) must accompany the petition. review for which joinder is requested. (b) No filing date will be accorded to § 42.200 Procedure; pendency. The time period set forth in § 42.101(b) the petition until full payment is (a) A post-grant review is a trial shall not apply when the petition is received. subject to the procedures set forth in accompanied by a request for joinder. subpart A of this part. § 42.204 Content of petition. (b) A claim in an unexpired patent § 42.123 Filing of supplemental In addition to the requirements of shall be given its broadest reasonable information. §§ 42.6, 42.8, 42.22, and 42.24, the construction in light of the specification (a) Motion to submit supplemental petition must set forth: information. Once a trial has been of the patent in which it appears. (c) A post-grant review proceeding (a) Grounds for standing. The instituted, a party may file a motion to petitioner must certify that the patent submit supplemental information in shall be administered such that pendency before the Board after for which review is sought is available accordance with the following for post-grant review and that the requirements: institution is normally no more than one (1) A request for the authorization to year. The time can be extended by up petitioner is not barred or estopped from file a motion to submit supplemental to six months for good cause by the requesting a post-grant review information is made within one month Chief Administrative Patent Judge, or challenging the patent claims on the of the date the trial is instituted. adjusted by the Board in the case of grounds identified in the petition. (2) The supplemental information joinder. (b) Identification of challenge. Provide must be relevant to a claim for which (d) Interferences commenced before a statement of the precise relief the trial has been instituted. September 16, 2012, shall proceed requested for each claim challenged. (b) Late submission of supplemental under part 41 of this chapter except as The statement must identify the information. A party seeking to submit the Chief Administrative Patent Judge, following: supplemental information more than acting on behalf of the Director, may (1) The claim;

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(2) The specific statutory grounds accorded a filing date until the petition Denial of a ground is a Board decision permitted under 35 U.S.C. 282(b)(2) or satisfies all of the following not to institute post-grant review on that (3) on which the challenge to the claim requirements: ground. is based; (1) Complies with § 42.204 or (c) Sufficient grounds. Post-grant (3) How the challenged claim is to be § 42.304, as the case may be, review shall not be instituted for a construed. Where the claim to be (2) Effects service of the petition on ground of unpatentability, unless the construed contains a means-plus- the correspondence address of record as Board decides that the petition function or step-plus-function limitation provided in § 42.205(a); and supporting the ground would, if as permitted under 35 U.S.C. 112(f), the (3) Is accompanied by the filing fee in unrebutted, demonstrate that it is more construction of the claim must identify § 42.15(b). likely than not that at least one of the the specific portions of the specification (b) Incomplete petition. Where a party claims challenged in the petition is that describe the structure, material, or files an incomplete petition, no filing unpatentable. The Board’s decision will acts corresponding to each claimed date will be accorded and the Office take into account a patent owner function; will dismiss the request if the deficiency preliminary response where such a (4) How the construed claim is in the petition is not corrected within response is filed. unpatentable under the statutory the earlier of either one month from the (d) Additional grounds. Sufficient grounds identified in paragraph (b)(2) of notice of an incomplete petition, or the grounds under § 42.208(c) may be a this section. Where the grounds for expiration of the statutory deadline in showing that the petition raises a novel unpatentability are based on prior art, which to file a petition for post-grant or unsettled legal question that is the petition must specify where each review. important to other patents or patent element of the claim is found in the § 42.207 Preliminary response to petition. applications. prior art. For all other grounds of (a) The patent owner may file a unpatentability, the petition must After Institution of Post-Grant Review preliminary response to the petition. identify the specific part of the claim The response is limited to setting forth § 42.220 Patent owner response. that fails to comply with the statutory the reasons why no post-grant review (a) Scope. A patent owner may file a grounds raised and state how the should be instituted under 35 U.S.C. response to the petition addressing any identified subject matter fails to comply 324. The response can include evidence ground for unpatentability not already with the statute; and except as provided in paragraph (c) of denied. A patent owner response is filed (5) The exhibit number of the this section. The preliminary response as an opposition and is subject to the supporting evidence relied upon to is subject to the page limits under page limits provided in § 42.24. support the challenge and the relevance § 42.24. (b) Due date for response. If no date of the evidence to the challenge raised, (b) Due date. The preliminary for filing a patent owner response to a including identifying specific portions response must be filed no later than petition is provided in a Board order, of the evidence that support the three months after the date of a notice the default date for filing a patent owner challenge. The Board may exclude or indicating that the request to institute a response is three months from the date give no weight to the evidence where a post-grant review has been granted a the post-grant review is instituted. party has failed to state its relevance or filing date. A patent owner may to identify specific portions of the expedite the proceeding by filing an § 42.221 Amendment of the patent. evidence that support the challenge. election to waive the patent owner (a) Motion to amend. A patent owner (c) A motion may be filed that seeks preliminary response. may file one motion to amend a patent, to correct a clerical or typographical (c) No new testimonial evidence. The but only after conferring with the Board. mistake in the petition. The grant of preliminary response shall not present (1) Due date. Unless a due date is such a motion does not change the filing new testimony evidence beyond that provided in a Board order, a motion to date of the petition. already of record, except as authorized amend must be filed no later than the § 42.205 Service of petition. by the Board. filing of a patent owner response. In addition to the requirements of (d) No amendment. The preliminary (2) Scope. A motion to amend may be § 42.6, the petitioner must serve the response shall not include any denied where: petition and exhibits relied upon in the amendment. (i) The amendment does not respond (e) Disclaim Patent Claims. The patent petition as follows: to a ground of unpatentability involved (a) The petition and supporting owner may file a statutory disclaimer in the trial; or evidence must be served on the patent under 35 U.S.C. 253(a) in compliance (ii) The amendment seeks to enlarge owner at the correspondence address of with § 1.321(a), disclaiming one or more the scope of the claims of the patent or record for the subject patent. The claims in the patent. No post-grant introduce new subject matter. petitioner may additionally serve the review will be instituted based on (3) A reasonable number of substitute petition and supporting evidence on the disclaimed claims. claims. A motion to amend may cancel patent owner at any other address Instituting Post-Grant Review a challenged claim or propose a known to the petitioner as likely to reasonable number of substitute claims. effect service. § 42.208 Institution of post-grant review. The presumption is that only one (b) Upon agreement of the parties, (a) When instituting post-grant substitute claim would be needed to service may be made electronically. review, the Board may authorize the replace each challenged claim, and it Service may be by EXPRESS MAIL® or review to proceed on all or some of the may be rebutted by a demonstration of by means at least as fast and reliable as challenged claims and on all or some of need. EXPRESS MAIL®. Personal service is the grounds of unpatentability asserted (b) Content. A motion to amend not required. for each claim. claims must include a claim listing, (b) At any time prior to institution of show the changes clearly, and set forth: § 42.206 Filing date. post-grant review, the Board may deny (1) The support in the original (a) Complete petition. A petition to some or all grounds for unpatentability disclosure of the patent for each claim institute a post-grant review will not be for some or all of the challenged claims. that is added or amended; and

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(2) The support in an earlier-filed (c) Other supplemental information. petitioner’s real party-in-interest, or a disclosure for each claim for which A party seeking to submit supplemental privy of the petitioner has been sued for benefit of the filing date of the earlier information not relevant to a claim for infringement of the patent or has been filed disclosure is sought. which the trial has been instituted must charged with infringement under that (c) Additional motion to amend. In request authorization to file a motion to patent. Charged with infringement addition to the requirements set forth in submit the information. The motion means a real and substantial controversy paragraphs (a) and (b) of this section, must show why the supplemental regarding infringement of a covered any additional motion to amend may information reasonably could not have business method patent exists such that not be filed without Board been obtained earlier, and that the petitioner would have standing to authorization. An additional motion to consideration of the supplemental bring a declaratory judgment action in amend may be authorized when there is information would be in the interests-of- Federal court. a good cause showing or a joint request justice. (b) A petitioner may not file a petition of the petitioner and the patent owner to institute a covered business method § 42.224 Discovery. to materially advance a settlement. In patent review of the patent where the determining whether to authorize such Notwithstanding the discovery petitioner, the petitioner’s real party-in- an additional motion to amend, the provisions of subpart A: interest, or a privy of the petitioner is Board will consider whether a petitioner (a) Requests for additional discovery estopped from challenging the claims on has submitted supplemental may be granted upon a showing of good the grounds identified in the petition. cause as to why the discovery is needed; information after the time period set for § 42.303 Time for filing. filing a motion to amend in paragraph and (a)(1) of this section. (b) Discovery is limited to evidence A petition requesting a covered directly related to factual assertions business method patent review may be § 42.222 Multiple proceedings and Joinder. advanced by either party in the filed any time except during the period (a) Multiple proceedings. Where proceeding. in which a petition for a post-grant another matter involving the patent is ■ 4. Add subpart D to read as follows: review of the patent would satisfy the requirements of 35 U.S.C. 321(c). before the Office, the Board may during Subpart D—Transitional Program for the pendency of the post-grant review Covered Business Method Patents § 42.304 Content of petition. enter any appropriate order regarding Sec. In addition to any other notices the additional matter including 42.300 Procedure; pendency. required by subparts A and C of this providing for the stay, transfer, 42.302 Who may petition for a covered part, a petition must request judgment consolidation, or termination of any business method patent review. against one or more claims of a patent such matter. 42.303 Time for filing. identified by patent number. In addition 42.304 Content of petition. (b) Request for joinder. Joinder may be to the requirements of §§ 42.6, 42.8, requested by a patent owner or 42.22, and 42.24 the petition must set petitioner. Any request for joinder must Subpart D—Transitional Program for Covered Business Method Patents forth: be filed, as a motion under § 42.22, no (a) Grounds for standing. The later than one month after the § 42.300 Procedure; pendency. petitioner must demonstrate that the institution date of any post-grant review (a) A covered business method patent patent for which review is sought is a for which joinder is requested. review is a trial subject to the covered business method patent, and § 42.223 Filing of supplemental procedures set forth in subpart A of this that the petitioner meets the eligibility information. part and is also subject to the post-grant requirements of § 42.302. (b) Identification of challenge. Provide (a) Motion to submit supplemental review procedures set forth in subpart C a statement of the precise relief information. Once a trial has been except for §§ 42.200, 42.201, 42.202, and requested for each claim challenged. instituted, a party may file a motion to 42.204. The statement must identify the submit supplemental information in (b) A claim in an unexpired patent shall be given its broadest reasonable following: accordance with the following (1) The claim; requirements: construction in light of the specification of the patent in which it appears. (2) The specific statutory grounds (1) A request for the authorization to (c) A covered business method patent permitted under paragraph (2) or (3) of file a motion to submit supplemental review proceeding shall be administered 35 U.S.C. 282(b), except as modified by information is made within one month such that pendency before the Board section 18(a)(1)(C) of the Leahy-Smith of the date the trial is instituted. after institution is normally no more America Invents Act (Pub. L. 112–29, (2) The supplemental information than one year. The time can be extended 125 Stat. 284 (2011)), on which the must be relevant to a claim for which by up to six months for good cause by challenge to the claim is based; the trial has been instituted. the Chief Administrative Patent Judge. (3) How the challenged claim is to be (b) Late submission of supplemental (d) The rules in this subpart are construed. Where the claim to be information. A party seeking to submit applicable until September 15, 2020, construed contains a means-plus- supplemental information more than except that the rules shall continue to function or step-plus-function limitation one month after the date the trial is apply to any petition for a covered as permitted under 35 U.S.C. 112(f), the instituted, must request authorization to business method patent review filed construction of the claim must identify file a motion to submit the information. before the date of repeal. the specific portions of the specification The motion to submit supplemental that describe the structure, material, or information must show why the § 42.302 Who may petition for a covered acts corresponding to each claimed supplemental information reasonably business method patent review. function; could not have been obtained earlier, (a) A petitioner may not file with the (4) How the construed claim is and that consideration of the Office a petition to institute a covered unpatentable under the statutory supplemental information would be in business method patent review of the grounds identified in paragraph (b)(2) of the interests-of-justice. patent unless the petitioner, the this section. Where the grounds for

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unpatentability are based on prior art, challenge and the relevance of the such a motion does not change the filing the petition must specify where each evidence to the challenge raised, date of the petition. element of the claim is found in the including identifying specific portions Dated: July 16, 2012. prior art. For all other grounds of of the evidence that support the unpatentability, the petition must challenge. The Board may exclude or David J. Kappos, identify the specific part of the claim give no weight to the evidence where a Under Secretary of Commerce for Intellectual that fails to comply with the statutory party has failed to state its relevance or Property and Director of the United States grounds raised and state how the to identify specific portions of the Patent and Trademark Office. identified subject matter fails to comply evidence that support the challenge. [FR Doc. 2012–17906 Filed 8–13–12; 8:45 am] with the statute; and (c) A motion may be filed that seeks BILLING CODE 3510–16–P (5) The exhibit number of supporting to correct a clerical or typographical evidence relied upon to support the mistake in the petition. The grant of

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