[Federal Register Volume 80, Number 161 (Thursday, August 20, 2015)]
[Proposed Rules]
[Pages 50720-50747]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-20227]
[[Page 50719]]
Vol. 80
Thursday,
No. 161
August 20, 2015
Part II
Department of Commerce
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United States Patent and Trademark Office
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37 CFR Part 42
Amendments to the Rules of Practice for Trials Before the Patent Trial
and Appeal Board; Proposed Rules
Federal Register / Vol. 80 , No. 161 / Thursday, August 20, 2015 /
Proposed Rules
[[Page 50720]]
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DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
37 CFR Part 42
[Docket No. PT0-P-2015-0053]
RIN 0651-AD01
Amendments to the Rules of Practice for Trials Before the Patent
Trial and Appeal Board
AGENCY: Patent Trial and Appeal Board, United States Patent and
Trademark Office, U.S. Department of Commerce.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would amend the existing consolidated set
of rules relating to the United States Patent and Trademark Office
(Office or USPTO) trial practice for inter partes review (``IPR''),
post-grant review (``PGR''), the transitional program for covered
business method patents (``CBM''), and derivation proceedings that
implemented provisions of the Leahy-Smith America Invents Act (``AIA'')
providing for trials before the Office.
DATES: Comment date: The Office solicits comments from the public on
this proposed rulemaking. Written comments must be received on or
before October 19, 2015 to ensure consideration.
Roadshow Dates: The Office, in concert with the American
Intellectual Property Association (``AIPLA''), will have a Road Show
Series in August 2015 where the proposed rules will be discussed. This
AIPLA/USPTO Road Show Series, entitled ``Enhancing Patent Quality and
Conducting AIA Trials,'' will be held on August 24, 2015 in Santa
Clara, California, August 26, 2015 in Dallas, Texas, and August 28,
2015 in Alexandria, Virginia.
ADDRESSES: Comments should be sent by electronic mail message over the
Internet addressed to: [email protected]. Comments may also be
submitted by postal mail addressed to: Mail Stop Patent Board, Director
of the United States Patent and Trademark Office, P.O. Box 1450,
Alexandria, VA 22313-1450, marked to the attention of ``Lead Judge
Susan Mitchell, Patent Trial Proposed Rules.''
Comments may also be sent by electronic mail message over the
Internet via the Federal eRulemaking Portal. See the Federal
eRulemaking Portal Web site (http://www.regulations.gov) for additional
instructions on providing comments via the Federal e-Rulemaking Portal.
Although comments may be submitted by postal mail, the Office
prefers to receive comments by electronic mail message to be able to
more easily share all comments with the public. The Office prefers the
comments to be submitted in plain text, but also accepts comments
submitted in ADOBE[supreg] portable document format or MICROSOFT
WORD[supreg] FORMAT. Comments not submitted electronically should be
submitted on paper in a format that accommodates digital scanning into
ADOBE[supreg] portable document format.
The comments will be available for public inspection at the Patent
Trial and Appeal Board, currently located in Madison East, Ninth Floor,
600 Dulany Street, Alexandria, Virginia. Comments also will be
available for viewing via the Office's Internet Web site http://www.uspto.gov/patents/law/comments/index.jsp. Because comments will be
made available for public inspection, information that the submitter
does not desire to be made public, such as address or phone number,
should not be included in the comments.
FOR FURTHER INFORMATION CONTACT: Susan L. C. Mitchell, Lead
Administrative Patent Judge by telephone at (571) 272-9797.
SUPPLEMENTARY INFORMATION:
Executive Summary: Purpose: This proposed rule would amend the
existing consolidated set of rules relating to the United States Patent
and Trademark Office (Office or USPTO) trial practice for inter partes
review, post-grant review, the transitional program for covered
business method patents, and derivation proceedings that implemented
provisions of the Leahy-Smith America Invents Act (``AIA'') providing
for trials before the Office.
Summary of Major Provisions
In an effort to gauge the effectiveness of the rules governing AIA
trials, the Office conducted a nationwide listening tour in April and
May of 2014, and in June 2014, published a Federal Register Notice
asking for public feedback about the AIA trial proceedings. The Office
has carefully reviewed the comments and, in response to public input,
already has issued a first, final rule, which was published on May 19,
2015. That final rule addressed issues concerning the patent owner's
motion to amend and the petitioner's reply brief that involved
ministerial changes. For instance, the final rules provided ten
additional pages for a patent owner's motion to amend, allowed a claims
appendix for a motion to amend, and provided ten additional pages for a
petitioner's reply brief, in addition to other ministerial changes to
conform the rules to the Office's established practices in handling AIA
proceedings.
This second, proposed rule (the subject of this Federal Register
document) addresses more involved proposed changes to the rules and
proposed revisions to the Office Patent Trial Practice Guide. The
Office presents the following proposed rules to address issues and
public comments that were raised concerning the claim construction
standard for AIA trials, new testimonial evidence submitted with a
patent owner's preliminary response, Rule 11-type certification, and
word count for major briefing. The Office will also later amend its
Office Patent Trial Practice Guide to reflect developments in practice
before the Office concerning how the Office handles additional
discovery, live testimony, and confidential information. In response to
the USPTO's roundtable on attorney-client privilege issues held in
February 2015, the Office also requests input on recognizing privilege
for communications between a patent applicant or owner and its U.S.
patent agent or foreign patent practitioner in a possible future
rulemaking.
The Office anticipates that it will continue to refine the rules
governing AIA trials to continue to ensure fairness and efficiency
while meeting the congressional mandate. Therefore, the Office
continues to encourage comments concerning how the rules may be refined
to achieve this goal.
Costs and Benefits: This rulemaking is not economically
significant, and is not significant, under Executive Order 12866 (Sept.
30, 1993), as amended by Executive Order 13258 (Feb. 26, 2002) and
Executive Order 13422 (Jan. 18, 2007).
Background
Development of These Proposed Rules
On September 16, 2011, the AIA was enacted into law (Pub. L. 112-
29, 125 Stat. 284 (2011)), and shortly thereafter in 2012, the Office
implemented rules to govern Office trial practice for AIA trials,
including inter partes review, post-grant review, the transitional
program for covered business method patents, and derivation proceedings
pursuant to 35 U.S.C. 135, 316 and 326 and AIA 18(d)(2). See Rules of
Practice for Trials Before the Patent Trial and Appeal Board and
Judicial Review of Patent Trial and Appeal Board Decisions, 77 FR 48612
(Aug. 14, 2012); Changes to Implement Inter Partes Review Proceedings,
Post-Grant Review Proceedings, and Transitional Program
[[Page 50721]]
for Covered Business Method Patents, 77 FR 48680 (Aug. 14, 2012);
Transitional Program for Covered Business Method Patents--Definitions
of Covered Business Method Patent and Technological Invention, 77 FR
48734 (Aug. 14, 2012). Additionally, the Office published a Patent
Trial Practice Guide for the rules to advise the public on the general
framework of the regulations, including the structure and times for
taking action in each of the new proceedings. See Office Patent Trial
Practice Guide, 77 FR 48756 (Aug. 14, 2012).
In an effort to gauge the effectiveness of these rules governing
AIA trials, the Office conducted a nationwide listening tour in April
and May of 2014. During the listening tour, the Office solicited
feedback on how to make the trial proceedings more transparent and
effective by adjusting the rules and guidance where necessary. To
elicit even more input, in June of 2014, the Office published a Request
for Comments in the Federal Register and, at stakeholder request,
extended the period for receiving comments to October 16, 2014. See
Request for Comments on Trial Proceedings Under the America Invents Act
Before the Patent Trial and Appeal Board, 79 FR 36474 (June 27, 2014).
The Request for Comments asked seventeen questions on ten broad
topics, including a general catchall question, to gather stakeholder
feedback on any changes to the AIA trial proceedings that might be
beneficial. See Request for Comments, 79 FR at 36476-77. The Office
received thirty-seven comments from bar associations, corporations, law
firms, and individuals encompassing a wide range of issues. The Office
expresses its gratitude for the thoughtful and comprehensive comments
provided by the public, which are available on the USPTO Web site:
http://www.uspto.gov/page/comments-trial-proceedings-under-america-invents-act-patent-trial-and-appeal-board.
Several commenters expressed satisfaction with the current rules
governing AIA trial proceedings, and several commenters offered
suggestions on how to strengthen the AIA trial proceeding rules. For
example, some suggestions concerned the claim construction standard
used by the PTAB, motions to amend, discovery procedures, and handling
of multiple proceedings. The Office addressed all public comments that
involved changes to the page limitations for a patent owner's motion to
amend or a petitioner's reply brief in the first, final rulemaking. The
Office will address the remaining comments in this second, proposed
rulemaking.
Differences Between the Proposed Rules and the Current Rules
The Office will address the differences between the proposed rules
and the current rules in relation to the seventeen questions that the
Office asked in the June 27, 2014 Notice concerning the following ten
topics: (1) Claim construction standard; (2) a patent owner's motions
to amend; (3) a patent owner's preliminary response; (4) additional
discovery; (5) obviousness; (6) real party in interest; (7) multiple
proceedings; (8) extension of one year period to issue a final
determination; (9) oral hearing; and (10) general topics. See 79 FR at
36476. The comments provided support for, opposition to, and diverse
recommendations on the current rules. The Office appreciates the
thoughtful comments, and has considered and analyzed the comments
thoroughly. In this discussion, the Office will respond to the comments
submitted in response to the seventeen questions (besides those which
involved suggestions for page limitation changes for a patent owner's
motion to amend or petitioner's reply brief) and set forth proposed
changes to the rules and the Office Patent Trial Practice Guide. In
addition, in order to further attempt to prevent any misuse of the AIA
proceedings, the Office proposes to amend 37 CFR 42.11 (which
prescribes the duty of candor owed to the Office in these proceedings)
to include a Federal Rule of Civil Procedure Rule 11-type certification
for all papers filed with the Board in these proceedings, including a
provision for sanctions for misconduct in connection with such papers.
If appropriate, such misconduct in the course of AIA proceedings might
also be reported to the Office of Enrollment and Discipline.
Claim Construction Standard
The Office asked, ``Under what circumstances, if any, should the
Board decline to construe a claim in an unexpired patent in accordance
with its broadest reasonable construction in light of the specification
of the patent in which it appears?'' 79 FR at 36476. The Office
received comments advocating various positions, including that it
should continue to apply the broadest reasonable interpretation
standard in construing terms of an unexpired patent, that it should use
a Phillips-type construction standard for all patents at issue in AIA
proceedings, and that it use the claim construction standard set forth
in Phillips v. AWH Corp., 415 F.3d 130 (Fed. Cir. 2005 (en banc), under
certain circumstances. The Office will address each of these
suggestions in turn.
Comment 1: Multiple commenters recommended that the Office continue
to apply the broadest reasonable interpretation standard in construing
terms of an unexpired patent at issue in an inter partes review
proceeding, post-grant review proceeding, or covered business method
review proceeding. These commenters stressed that ``the broadest
reasonable construction standard used during traditional ex parte
prosecution, reissue, and reexamination practice is a reasonable
standard to use in PTAB proceedings.'' These same commenters noted that
the ``PTO has a long-standing practice of giving patent claims their
broadest reasonable interpretation during examination and during other
post-issuance proceedings such as reexamination, reissue and
interference for good reason,'' which ``serves the public interest by
reducing the possibility that claims, finally allowed, will be given
broader scope than is justified.''
Conversely, the Office received a comment suggesting the use of a
Phillips-type construction standard for all patents, stating that
``claims in AIA trials should be construed as they have been or would
be construed in a civil action to invalidate a patent under Patent Act
section 282, including construing each claim of the patent in
accordance with the ordinary and customary meaning of such claim as
understood by one of ordinary skill in the art, the prosecution history
pertaining to the patent, and prior judicial determinations and
stipulations relating to the patent.'' The commenter also stated that
``the PTAB should apply the Phillips construction during AIA trials
because they are adjudicative proceedings like litigation,'' and not
examination proceedings like inter partes reexamination.
Response: The comments favoring retention of the BRI approach are
adopted. The Office appreciates the suggestions and will continue to
apply the broadest reasonable interpretation standard to claims in an
unexpired patent at issue in an AIA proceeding. The United States Court
of Appeals for the Federal Circuit (``Federal Circuit'') has held
recently that the Office is authorized to employ the broadest
reasonable construction approach to construing terms of an unexpired
patent at issue in an inter partes review proceeding--the Federal
Circuit found that the BRI approach is consistent with legislative
intent and reasonable under the Office's rulemaking authority. In re
Cuozzo Speed Techs., LLC, No. 2014-
[[Page 50722]]
1301, 2015 WL 4097949, at *7-8 (Fed. Cir. July 8, 2015). In making this
determination, the Federal Circuit observed that ``[t]here is no
indication that the AIA was designed to change the claim construction
standard that the PTO has applied for more than 100 years. Congress is
presumed to legislate against the background of the kind of
longstanding, consistent existing law that is present here. Moreover,
Congress in enacting the AIA was well aware that the broadest
reasonable interpretation standard was the prevailing rule.'' Id. at
*6. The Federal Circuit recognized that because an inter partes review
proceeding provides the patent owner the opportunity to amend its
claims, use of the broadest reasonable interpretation approach is
appropriate, regardless of ``the fact that IPR may be said to be
adjudicatory rather than an examination.'' Id. at *16. The Federal
Circuit also stated, ``[a]lthough the opportunity to amend is cabined
in the IPR setting, it is thus nonetheless available,'' and
specifically addressed the prohibition on post-issuance broadening at
issue in the case, further stating that at least this restriction on
motions to amend ``does not distinguish pre-IPR processes or undermine
the inferred congressional authorization of the broadest reasonable
interpretation standard in IPRs.'' Cuozzo, 2015 WL 4097949, at 7.
Comment 3: The Office received multiple comments recommending
changing the claim construction standard in certain circumstances.
These commenters advocated for the use of the claim construction
standard set forth in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir.
2005) (en banc) for some or all of the following circumstances: (a)
Unexpired patents where the ability to amend claims is no longer
present in the trial, such as when a patent owner has elected to forego
the opportunity to amend; (b) unexpired patents where the patent will
expire prior to the final decision; (c) unexpired patents subject to a
terminal disclaimer prior to final decision; and/or (d) unexpired
patents when the parties to the trial have each filed claim
construction briefings in another tribunal on terms at issue in the
trial.
Response: These comments are adopted in part. The Office agrees
that the application of a Phillips-type claim construction for claims
of a patent that will expire prior to the issuance of a final decision
is appropriate. Such patents essentially lack any viable opportunity to
amend the claims in an AIA proceeding. Therefore, for patents that will
expire prior to issuance of any final written decision by the Office,
the Office proposes to apply a Phillips-type standard during the
proceeding.
A scenario where it is clear that a patent will expire before a
final decision is issued by the Office is a definitive circumstance
where a petitioner can determine which claim construction will be
applied with guidance from the Office. Specifically, the Office
proposes to amend 37 CFR 42.100(b), 42.200(b), and 42.300(b) to reflect
this change in the claim construction standard for claims in patents
that will expire before a final written decision is issued in an AIA
proceeding. The Office also intends to issue specific guidelines in the
Office Patent Trial Practice Guide. The Office invites comments on how
to structure guidelines to implement this change. For instance, the
Office welcomes comments on the following questions: Should the Office
set forth guidelines where a petitioner may determine, before filing a
petition, which claim construction approach will be applied by the
Office based on the relevant facts? Should the petitioner, who believes
that the subject patent will expire prior to issuance of a final
written decision, be required to submit claim interpretation analysis
under both a Phillips-type and broadest reasonable interpretation
approaches or state that either approach yields the same result? Should
the Office entertain briefing after a petition if filed, but before a
patent owner preliminary response is filed, concerning what standard
should be applied?
As to the remaining scenarios set forth by commenters, the Office
will continue to apply a broadest reasonable interpretation standard
because at the time that a petition is filed in each of those
scenarios, the patent owner's ability to amend remains available. To
allow the patent owner unilaterally to decide to forego any opportunity
to amend after a petition has been filed, and thereby opt-in to a
Phillips-type construction, appears to be unworkable, given the
timeline applicable to AIA proceedings. In particular, the timeline
would not allow a petitioner adequate time to amend the petition to
reflect a different claim construction standard. The Office invites
comments suggesting any workable and efficient solutions for scenarios
where the patent owner chooses to forego the right to amend claims in
an AIA proceeding, including any suggested revisions to the rules or
the Office Patent Trial Practice Guide.
Patent Owner's Motions To Amend
The Office asked, ``What modifications, if any, should be made to
the Board's practice regarding motions to amend?'' 79 FR at 36476. The
Office received a spectrum of comments that ranged from seeking no
change in amendment practice to proposals for liberal grant of
amendments in AIA proceedings. The Office addresses these comments
below.
Since receipt of these comments, the Office has clarified its
statement made in Idle Free System, Inc. v. Bergstrom, Inc., Case
IPR2012-00027 (PTAB June 11, 2013) (Paper 26) (informative), that
``[t]he burden is not on the petitioner to show unpatentability, but on
the patent owner to show patentable distinction over the prior art of
record and also prior art known to the patent owner.'' Id. at 7
(emphasis added). Specifically, the Office addressed what the
references to ``prior art of record'' and ``prior art known to the
patent owner'' mean, and how the burden of production shifts to the
petitioner once the patent owner has made its prima facie case for
patentability of the amendment. See MasterImage 3D, Inc. v. RealD Inc.,
Case IPR2015-00040, slip op. at 1-3 (PTAB July 15, 2015) (Paper 42).
This decision clarifies that a patent owner must argue for the
patentability of the proposed substitute claims over the prior art of
record, including any art provided in light of a patent owner's duty of
candor, and any other prior art or arguments supplied by the
petitioner, in conjunction with the requirement that the proposed
substitute claims be narrower than the claims that are being replaced.
Comment 1: A number of commenters expressed satisfaction with the
Board's current rules and practices for motions to amend. One commenter
identified Idle Free Systems, Inc. v. Bergstrom, Inc., Case IPR2014-
00027 (PTAB June 11, 2013) (Paper 26) (informative), as outlining
practices consistent with congressional intent and ``striking an
appropriate balance between the public's interest in challenging the
patentability of questionable patents and a patent owner's interest in
maintaining patent protection for a legitimate invention.'' Another
commenter stated that although the Board's current requirements for
motions to amend provide patent owners with a fair opportunity to
narrow claims in response to a petitioner's arguments and provide
petitioners with fair notice regarding the type of amendment they need
to rebut, the Office should consider providing consistent guidance
through a precedential opinion or other means.
Response: These comments are adopted. The Office is committed to
improving its rules and practices for motions to amend and AIA trial
practice in general. Accordingly, the Office will
[[Page 50723]]
continue to make improvements and clarifications via the rule-making
process, by updating the Office Patent Trial Practice Guide, and by
designating opinions as precedential or informative, as warranted. For
example, as discussed above, the Office has issued an opinion that
clarifies what is meant by ``prior art of record'' and ``prior art
known to the patent owner'' in the context of a patent owner's prima
facie case of patentability in a motion to amend. See MasterImage, slip
op. at 1-3.
Comment 2: One commenter advocated eliminating the opportunity to
amend claims in AIA trial proceedings based on the premise that AIA
trial proceedings are better designed to be expedited proceedings for
determining claim patentability, not an examination.
Response: As the commenter recognizes, a patent owner's right to
file a motion to amend is statutorily mandated (35 U.S.C. 316(d),
326(d)), as is the duty of the Director to provide standards and
procedures for allowing such amendment (35 U.S.C. 316(a)(9),
326(a)(9)). Absent a change in statutory authority, the Office cannot
withdraw the opportunity to amend claims in AIA trial proceedings.
Comment 3: Several commenters stated that the burden of proving the
patentability of any proposed substitute claim should remain with the
patent owner. Other commenters stated the contrary--that the burden
should be shifted to the patent challenger to prove a proposed
substitute claim unpatentable. Other commenters suggested intermediate
positions targeted to reducing the burden on the patent owner, who
submits a motion to amend, by requiring that the patent owner only bear
the burden of proving patentability over the cited art in the petition
or asserted grounds of unpatentability. Another commenter suggested
that, similar to practice before the European Patent Office, motions to
amend in AIA trials could include the participation of a USPTO Examiner
from the technology center, preferably the examiner who originally
granted the subject patent, and be limited to reviewing the broadest
claim of a substitute claim set to allow patent owners to present
multiple narrowing claim sets as fallback positions.
Response: These comments are adopted in part. The Board currently
does not contemplate a change in rules or practice to shift the
ultimate burden of persuasion on patentability of proposed substitute
claims from the patent owner to the petitioner. Depending on the
amendment, a petitioner may not have an interest in challenging
patentability of any substitute claims. Therefore, the ultimate burden
of persuasion on patent owner's motion to amend remains best situated
with the patent owner, to ensure that there is a clear representation
on the record that the proposed substitute claims are patentable, given
that there is no opportunity for separate examination of these newly
proposed substitute claims in these adjudicatory-style AIA proceedings.
See Microsoft Corp. v. Proxyconn, Inc., Nos. 2014-1542, 2014-1543, 2015
WL 3747257, at *12 (Fed. Cir. June 16, 2015) (stating ultimate burden
of persuasion remains with the patent owner, the movant, to demonstrate
the patentability of the substitute claims).
The Board's decision in MasterImage clarifies the meaning of the
terms ``prior art of record'' and ``prior art known to the patent
owner'' as set forth in Idle Free, which stated that the burden is on
the patent owner ``to show patentable distinction over the prior art of
record and also prior art known to the patent owner.'' Idle Free, slip
op. at 7. The Office stated in MasterImage that, ``[t]he reference to
`prior art of record' in the above-quoted text, as well as everywhere
else in Idle Free, should be understood as referring to: a. any
material art in the prosecution history of the patent; b. any material
art of record in the current proceeding, including art asserted in
grounds on which the Board did not institute review; and c. any
material art of record in any other proceeding before the Office
involving the patent.'' MasterImage, slip op. at 2. The Office also
stated that the term ``prior art known to the patent owner,'' as used
in Idle Free, ``should be understood as no more than the material prior
art that Patent Owner makes of record in the current proceeding
pursuant to its duty of candor and good faith to the Office under 37
CFR 42.11, in light of a Motion to Amend.'' Id.
At this time, the Office does not contemplate seeking assistance
from the Examining Corps for review of motions to amend.
In addition, the Office has clarified how the burden of production
shifts between the parties with regard to a motion to amend. ``With
respect to a motion to amend, once Patent Owner has set forth a prima
facie case of patentability of narrower substitute claims over the
prior art of record, the burden of production shifts to the petitioner.
In its opposition, the petitioner may explain why the patent owner did
not make out a prima facie case of patentability, or attempt to rebut
that prima facie case, by addressing Patent Owner's evidence and
arguments and/or by identifying and applying additional prior art
against proposed substitute claims. Patent Owner has an opportunity to
respond in its reply. The ultimate burden of persuasion remains with
Patent Owner, the movant, to demonstrate the patentability of the
amended claims.'' MasterImage, slip op. at 2 (citing Microsoft, 2015 WL
3747257, at *12).
Comment 4: Several commenters suggested that patent owners should
not be required to cancel a challenged claim in order to submit a
substitute claim and/or should be permitted to propose more than one
substitute claim per challenged claim.
Response: Rule 42.221(a)(3) provides that a motion to amend may
``cancel a challenged claim or propose a reasonable number of
substitute claims,'' and for efficiency, sets forth the rebuttable
presumption ``that only one substitute claim would be needed to replace
each challenged claim.'' As 37 CFR 42.121(a)(3) and 42.221(a)(3)
provides, this presumption ``may be rebutted by a demonstration of
need.'' This strikes a reasonable balance between maintaining the
efficiency of the proceedings and allowing a patent owner to present
additional substitute claims when need is shown. Although patent owners
are encouraged to submit a single substitute claim for each canceled
claim, the Rules do not prohibit a motion to amend that proposes more
than one replacement claim for each cancelled claim. Patent owners are
encouraged to confer with the Board where an appropriate showing of
need can be made. The Board does not, however, contemplate a change in
rules or practice at this time.
Comment 5: Several commenters suggested that motions to amend
should be liberally allowed. One commenter suggested the Office should
evaluate a motion to amend in the same way that the entry of a
supplemental response in prosecution is evaluated, as under 37 CFR
1.111(a)(2).
Response: These suggestions are not adopted. Under 35 U.S.C.
316(a)(9) and 326(a)(9), the Office has the authority to set forth
standards and procedures for allowing a patent owner to move to amend
the patent under 35 U.S.C. 316(d) and 326(d). And 35 U.S.C. 316(d) and
326(d) sets forth certain statutory limitations for amendments for a
patent in an AIA proceeding, including limiting the number of proposed
claims to a ``reasonable number of substitute claims'' (35 U.S.C.
316(d)(1)(B)) and prohibiting amendments that ``enlarge the scope of
the claims of the patent or introduce new matter'' (35 U.S.C.
[[Page 50724]]
316(d)(3)). Thus, by statute, motions to amend cannot be entered in the
same way as amendments that are entered during prosecution, which are
not bound by such restrictions.
Moreover, AIA proceedings are neither ex parte patent prosecution
nor patent reexamination or reissue. The Board does not conduct a prior
art search to evaluate the patentability of the proposed substitute
claims, and any such requirement would be impractical given the
statutory structure of AIA proceedings. If a motion to amend is
granted, the substitute claims become part of an issued patent, without
any further examination by the Office. Because of this constraint, the
Office has set forth rules for motions to amend that account for the
absence of an independent examination by the Office where a prior art
search is performed as would be done during prosecution, reexamination,
or reissue.
As set forth above, however, the Office does recognize a
clarification of amendment practice that affirmatively states that a
patent owner must argue for the patentability of the proposed
substitute claims over the prior art of record, including art provided
in light of a patent owner's duty of candor and any other prior art or
arguments supplied by the petitioner, in conjunction with the statutory
requirement that the proposed substitute claims be narrower than the
claims that are being replaced. In light of these requirements, the
Office has explained how the burden of production shifts to the
petitioner once the patent owner has set forth a prima facie case of
patentability of narrower substitute claims. MasterImage, slip op. at
3.
Comment 6: Several commenters suggested that the Office provide
additional guidance in conferences regarding motion to amend practice,
including guidance on what prior art the patent owner needs to
distinguish in a motion to amend. One commenter stated that the Office
could confirm for a patent owner whether a new prior art search is
required and whether providing information similar to the accelerated
examination support documents (ESD) would be sufficient for a patent
owner to carry its burden. Another commenter suggested making clear in
the Rules and the Trial Practice Guide that a reissue application can
be utilized after a final written decision as an examination mechanism
for amending claims and that the burden of persuasion for permitting
the Board to consider a motion to amend is not the same as the burden
of proof as to the patentability of any claims that are the subject to
a motion to amend.
Response: These comments are adopted in part as set forth above.
The Office has explained how the burden of production shifts to the
petitioner once the patent owner has set forth a prima facie case of
patentability of narrower substitute claims. MasterImage, slip op. at
3. Also, 37 CFR 42.121(a) and 42.122(a) require the patent owner to
hold a conference call with the Office before the patent owner files a
motion to amend. During that call, the judges provide technical
guidance to the patent owner and the petitioner regarding the motion.
If the parties have questions regarding the proper scope of a motion to
amend, the parties may discuss those issues with the judges during the
conference call. In addition, the Board notes the following Board
decisions on motions to amend as further guidance: MasterImage, slip
op. at 1-3); Idle Free Systems, Inc. v. Bergstrom, Inc., Case IPR2012-
00027 (PTAB June 11, 2013) (Paper 26) (informative); Int'l Flavors &
Fragrances Inc. v. United States of America, Case IPR2013-00124 (PTAB
May 20, 2014) (Paper 12) (informative); Corning Optical Comms. RF, LLC
v. PPC Broadband, Inc., Case IPR2014-00441 (PTAB Oct. 30, 2014) (Paper
19); Riverbed Tech., Inc. v. Silver Peak Systems, Inc., Case IPR2013-
00403 (PTAB Dec. 30, 2014) (Paper 33); Reg Synthetic Fuels LLC v. Neste
Oil OYJ, Case IPR2014-00192 (PTAB June 5, 2015) (Paper 48).
As for whether to revise the Rules and the Trial Practice Guide to
state that a reissue application can be utilized as a mechanism for
amending the claims after final written decision, the Office declines
to propose a blanket rule applicable to all reissues, which have
additional requirements governing those proceedings.
As for distinguishing between the burden of persuasion for
permitting the Board to consider a motion to amend and the burden of
proof as to patentability, the patent owner has a statutory right to
file a motion to amend under 35 U.S.C. 316(d) and 326(d). Thus, there
is no burden of persuasion for permitting the Board to consider a
motion to amend, as the Board must consider a motion to amend that is
filed in a proceeding.
Comment 7: One commenter suggested that the Office should allow
patent owners to cure minor defects in motions to amend, such as the
failure to construe a claim term that the Board deems necessary or
failure to provide written description support for the substitute claim
language. The commenter further suggested that the petitioner should be
allowed to respond to these further comments by the patent owner.
Response: If the Board deems it appropriate, the Board may allow a
patent owner to cure minor defects in a motion to amend upon request.
Given the time constraints of these proceedings, however, the suggested
further exchange of briefing may be incompatible with the case
schedule. To the extent a patent owner is aware of any such defects,
the Office recommends that the patent owner seek authorization from the
Board to revise its motion to amend as soon as possible.
Comment 8: Several commenters suggested that the Office should
rescind the patent owner estoppel provision of 37 CFR 42.73(d)(3)
because the commenters believed the Rule ``precludes a patent owner
from obtaining from the Office in another proceeding a patent claim
that could have been filed in response to any properly raised ground of
unpatentability for a finally refused or cancelled claim.''
Response: This suggestion is not adopted. Under 37 CFR 42.73(d)(3),
a patent applicant or owner is precluded from taking action
inconsistent with the adverse judgment, including obtaining in any
patent (1) A claim that is not patentably distinct from a finally
refused or canceled claim; or (2) An amendment of a specification or of
a drawing that was denied during the trial proceeding, but this
provision does not apply to an application or patent that has a
different written description. Thus, 37 CFR 42.73(d)(3) does not
expressly preclude a patent owner from obtaining, in another
proceeding, all patent claims that could have been filed in response to
any properly raised ground of unpatentability for a finally refused or
cancelled claim, as the commenters suggest. By its terms, this rule
precludes a patent applicant or owner from obtaining, in another
proceeding, claims that are not patentably distinct from a finally
refused or canceled claim.
Comment 9: One commenter suggested that the rules are unfair
because the patent owner must file its motion to amend at the same time
that it files its patent owner response. The commenter states,
``[t]herefore, the patent owner must put forward all its arguments for
patentability without knowing whether the original or amended claims
will be reviewed by the PTAB.''
Response: When the patent owner files its patent owner response,
the Board will have issued its decision on institution, which
identifies the grounds and claims on which the inter partes or
[[Page 50725]]
post-grant review is instituted. Moreover, AIA proceedings before the
Office are required, by statute, to be completed no later than one year
from the date on which the Director notices the institution of a
review, except where good cause is shown to extend the one-year period,
which extension may be no more than six months. 35 U.S.C. 316(a)(11);
37 CFR 42.100(c). Due to the time constraints imposed on these
proceedings, the Office deemed it most efficient for patent owners to
file their motions to amend no later than the filing of the patent
owner response. See 37 CFR 42.121, 42.221. The patent owner, however,
may file a motion to amend at an earlier stage of the proceeding.
Comment 10: One commenter suggested that when a patent owner
concedes the unpatentability of an existing claim and files a non-
contingent motion to amend, claim cancellation should take place
immediately. The commenter stated that, under current practice, the
conceded claim remains in effect until the Board issues its final
written decision, which allows the patent owner to assert the conceded
claim in parallel proceedings. Accordingly, the commenter suggested
that a patent owner should not be permitted to concede a claim's
patentability before the Board while continuing to assert it in
litigation.
Response: This suggestion is not adopted. The defendant in such
litigation may seek relief before the district court. The Board
typically considers all papers at once for purposes of rendering the
final written decision. That practice is generally most efficient, in
light of the large number of cases pending before the Board. Also, a
patent owner who asserts a claim in a parallel proceeding that was
conceded to be unpatentable may face potential sanctions, and
registered practitioners who assert such a claim may face disciplinary
investigation by the Office of Enrollment and Discipline. In the event,
however, that a patent owner concedes unpatentability and requests
cancellation of any claims, the parties may request a conference call
with the panel to request cancellation of those claims before issuing
the final written decision.
Comment 11: One commenter suggested that if a motion to amend is
denied, the patent owner should be allowed to convert the denied motion
to amend into an ex parte reexamination of the substitute claims.
Accordingly, any prior art raised in either the motion or the
opposition should be applied as the substantial new question of
patentability in reexamination.
Response: This suggestion is not adopted. The rules for a request
for ex parte reexamination apply different parameters than the rules
for motions to amend in AIA proceedings. Compare 37 CFR 1.510(b) with
37 CFR 42.121, 42.221. Thus, the Office cannot convert a denied motion
to amend into an ex parte reexamination of the proposed substitute
claims that does not address the requirements of a request for ex parte
reexamination.
Patent Owner's Preliminary Response
The Office asked, ``Should new testimonial evidence be permitted in
a Patent Owner Preliminary Response? If new testimonial evidence is
permitted, how can the Board meet the statutory deadline to determine
whether to institute a proceeding while ensuring fair treatment of all
parties?'' 79 FR at 36476. The Office received comments that range from
advocating preserving the current prohibition on the patent owner's
ability to assert new testimonial evidence at the preliminary response
stage, an intermediate position of allowing new testimonial evidence on
issues for which the patent owner bears the burden of proof or in
response to petitioner's declarant, to allowance of new testimonial
evidence by patent owner at the preliminary response stage with no
restriction on scope. Commenters did express an overall concern with
the ability of parties to conduct adequate discovery relating to
testimonial evidence and adhering to the statutory timeline for
instituting proceedings.
The Office proposes amending the rules to allow the patent owner to
file new testimonial evidence with its preliminary response. In order
to be able to meet the three-month statutory deadline for issuing a
decision on institution, the rules will provide expressly that no right
of cross-examination of a declarant exists before institution. Because
the time frame for the preliminary phase of an AIA proceeding does not
allow for such cross-examination as of right, nor for the petitioner to
file a reply brief as of right, the Office proposes amending the rules
to provide that any factual dispute that is material to the institution
decision will be resolved in favor of the petitioner solely for
purposes of making a determination about whether to institute. This is
proposed, among other reasons, to preserve petitioner's right to
challenge statements made by the patent owner's declarant.
Comment 1: Several commenters suggested that the patent owner
should be allowed to rely on new testimonial evidence in its
preliminary response to the petition given that the petitioner may rely
upon such evidence in its petition, and that the current practice of
not allowing a patent owner to rely on such evidence is unfair. Within
these comments were examples of testimonial evidence that should be
allowed in a preliminary response, such as testimony related to claim
construction, issues regarding obviousness, and issues for which the
patent owner has the burden of proof. Certain comments suggested that
early development of the record would increase efficiency by leading to
fewer institutions or institution on fewer grounds. Other comments said
that the current rule should not be changed because the time period
prior to institution does not allow a petitioner to evaluate fully the
new evidence, the petitioner would not have an opportunity to cross-
examine the witness, and the patent owner has a full opportunity to
submit evidence post-institution.
Response: The Office proposes to amend the rules for the patent
owner preliminary response (37 CFR 42.107, 42.207) to allow new
testimonial evidence, thereby adopting the suggestions that the patent
owner be allowed to rely upon supporting testimonial evidence in
response to the petition. Sections 313 and 323 of Title 35 state that
the patent owner may file a preliminary response that sets forth
reasons why no institution should be granted. Therefore, the Office
believes that it would be fair and equitable to consider supporting
evidence submitted with a preliminary response.
If supporting evidence is submitted by a patent owner, cross-
examination of the witness providing the testimony is likely to be
permitted only after the institution of the proceeding, given the time
constraints surrounding the institution decision. Section 316(a)(5)(A)
of Title 35 states that the Director shall prescribe regulations
setting forth standards and procedures for discovery of relevant
evidence including the depositions of witnesses submitting affidavits
or declarations. Allowing for cross-examination as of right prior to
the institution of a proceeding would negatively impact the ability of
the Office to meet the statutory requirements set out in 35 U.S.C.
314(b) and 324(c), and would result in more cost to the parties before
a review is instituted.
In order for the Board to act consistently when confronted with
material factual disputes in the institution decision briefing and
evidence, the Office proposes that any
[[Page 50726]]
such factual disputes will be resolved in favor of the petitioner
solely for purposes of deciding whether to institute. The petitioner
also will be afforded an opportunity to seek permission to file a reply
brief to respond to a preliminary response that presents testimonial
evidence, though it will not be able to file such a reply as of right.
Comment 2: The Office received several comments suggesting that the
Board provide for the submission of a petitioner reply to the patent
owner preliminary response, particularly if the Board were to amend the
rule for the patent owner preliminary response to allow new testimonial
evidence. Many of these commenters stated that the petition itself is
limited because the petitioner cannot anticipate all arguments that the
patent owner may make (e.g., the patent owner preliminary response may
present additional claim constructions), and that a petitioner's
rehearing request does not provide a timely opportunity for the
petitioner to reply to the patent owner preliminary response. However,
one commenter opposed this suggestion, stating that ``in all fairness
the only way to reasonably address such a drastic change were it
implemented would be by the inventor/[patent owner] being allowed to
then file a sur-reply to Petitioner's reply . . . .'' Many of the
commenters noted the short statutory timeframe for the pre-institution
phase as a factor that limits the number of briefs that may be allowed.
Response: Because the Office proposes to amend the rules for the
patent owner preliminary response (37 CFR 42.107, 42.207) to allow new
testimonial evidence, the Office proposes to change the rules to
provide for a petitioner to seek leave to file a reply to the patent
owner preliminary response. In particular, each of 35 U.S.C. 316(a)(13)
and 326(a)(12) states that the Director shall prescribe regulations
providing the petitioner with ``at least 1 opportunity to file written
comments.'' The Office proposes to change the rules to provide
expressly that a petitioner may seek leave to file a reply to a
preliminary response including new testimonial evidence, so that the
Office may allow a reply when the circumstances so warrant.
Comment 3: Several commenters requested clarification of ``new
testimonial evidence'' as used in 37 CFR 42.107(c). These comments
indicated that the current rules, procedures, and cases do not provide
adequate guidance as to what testimonial evidence is permitted in a
preliminary response.
Response: Because the Office proposes to amend the rules for the
patent owner preliminary response (37 CFR 42.107, 42.207) to allow new
testimonial evidence, additional clarification is not necessary.
Additional Discovery
The Office asked, ``Are the factors enumerated in the Board's
decision in Garmin v. Cuozzo, IPR2012-00001, appropriate to consider in
deciding whether to grant a request for additional discovery? What
additional factors, if any, should be considered?'' 79 FR at 36476. The
Office provides guidance on its Web site, see, e.g., http://www.uspto.gov/blog/aia/entry/message_from_administrative_patent_judges,
in response to comments generated from these questions, and plans to
revise the Office Patent Trial Practice Guide to reflect this guidance.
Comment 1: A number of comments indicated that the Garmin factors
are appropriate. Some of the comments further noted that the Garmin
factors help the Office to strike the right balance for AIA trial
proceedings, permitting parties to obtain meaningful discovery while
preventing expensive, broad discovery. The comments also urged the
Office to continue applying those factors. Several comments also
expressed the view that the first, third, and fifth Garmin factors
provide an important safeguard to minimize costs and limit
distractions, ensuring fast and efficient resolution on the merits.
Response: These comments are adopted. The Office appreciates the
suggestions and will continue to apply the Garmin factors on a case-by-
case basis when considering whether additional discovery in an inter
partes review is necessary in the interest of justice, as follows:
1. More Than A Possibility And Mere Allegation. The mere
possibility of finding something useful, and mere allegation that
something useful will be found, are insufficient. Thus, the party
requesting discovery already should be in possession of a threshold
amount of evidence or reasoning tending to show beyond speculation that
something useful will be uncovered. ``Useful'' does not mean merely
``relevant'' or ``admissible,'' but rather means favorable in
substantive value to a contention of the party moving for discovery.
2. Litigation Positions And Underlying Basis. Asking for the other
party's litigation positions and the underlying basis for those
positions is not necessarily in the interest of justice.
3. Ability To Generate Equivalent Information By Other Means.
Discovery of information a party reasonably can figure out, generate,
obtain, or assemble without a discovery request would not be in the
interest of justice.
4. Easily Understandable Instructions. The requests themselves
should be easily understandable. For example, ten pages of complex
instructions are prima facie unclear.
5. Requests Not Overly Burdensome To Answer. The Board considers
financial burden, burden on human resources, and burden on meeting the
time schedule of the review. Requests should be sensible and
responsibly tailored according to a genuine need.
Garmin Int'l, Inc. v. Cuozzo Speed Techs. LLC, Case IPR2012-00001,
slip op. at 6-7 (PTAB Mar. 5, 2013) (Paper 26) (informative). The
Office also applies similar factors in post-grant reviews and covered
business method patent reviews when deciding whether the requested
additional discovery is supported by a good cause showing and ``limited
to evidence directly related to factual assertions advanced'' by a
party. See 37 CFR 42.224; Bloomberg Inc. v. Markets-Alert Pty Ltd, Case
CBM2013-00005, slip op. at 3-5 (PTAB May 29, 2013) (Paper 32).
Comment 2: A comment suggested that the Office should provide rule-
based guidance on the ``interest of justice'' standard.
Response: As discovery disputes are highly fact dependent, the
Office has found that the flexible approach as set forth in Garmin
provides helpful guidance to the parties and assists the Office in
achieving the appropriate balance, permitting meaningful discovery,
while securing the just, speedy, and inexpensive resolution of every
proceeding.
Comment 3: One comment suggested that the Office should continue to
place emphasis on maintaining the one-year trial schedule by
encouraging parties to raise discovery issues early in the proceeding,
even during the pre-institution stage.
Response: This comment is adopted. As explained in Garmin regarding
Factor 5--discovery requests must not be overly burdensome to answer--
the Office will consider the burden on meeting the schedule of the
proceeding. Garmin, Case IPR2012-00001, slip op. at 7. For example, as
discussed below, the Office has granted reasonable, narrowly tailored
discovery requests prior to institution when the patent owner raises
sufficient concerns regarding the petitioner's identification of real
parties-in-interest. Moreover, the Scheduling Order of each trial
utilizes sequenced discovery, whereby parties can conduct meaningful
discovery
[[Page 50727]]
before they are required to submit their respective motions and
oppositions, taking into account the complexity of the proceeding,
while ensuring that the trial is completed within one year of
institution. Parties are encouraged to raise discovery issues, and
confer with each other regarding such issues, as soon as they arise in
a proceeding.
Comment 4: One comment suggested that Factor 2 should not be
applied as a per se rule.
Response: Garmin sets forth a flexible approach in which the Garmin
factors are not per se rules. As explained in Garmin regarding Factor
2, the Board has established rules and practices for the presentation
of arguments and evidence, and there is a proper time and place for
each party to make its presentation. Garmin, Case IPR2012-00001, slip
op. at 13. For instance, under 37 CFR 42.51(b)(1) for routine
discovery, a party has the opportunity to cross-examine the opposing
party's declarant with regard to the basis of his or her testimony.
Moreover, as discovery disputes are highly fact dependent, the Office
decides each issue on a case-by-case basis, taking account of the
specific facts of the proceeding. See, e.g., Bloomberg Inc. v. Markets-
Alert Pty Ltd., Case CBM2013-00005, slip op. at 6-7 (PTAB May 29, 2013)
(Paper 32) (granting a specific and narrowly tailored request seeking
information considered by an expert witness in connection with the
preparation of his declaration filed in the proceeding).
Comment 5: One comment recommended that the Office expressly
consider the specificity of the request, require parties to identify
requested documents with the greatest possible specificity, and reject
broad, amorphous requests that do not reasonably identify responsive
documents. Other comments urged the Office to add the following
additional factors, ensuring that the Garmin factors would be applied
correctly and permitting additional discovery when it is actually
warranted: (1) Whether the information is solely within the possession
of the other party; (2) whether the information already has been
produced in a related matter; and (3) whether the discovery sought
relates to jurisdictional issues under 35 U.S.C. 315 and 325.
Response: Garmin sets forth a flexible and representative framework
for providing helpful guidance to the parties, and assisting the Office
to decide whether additional discovery requested in an inter partes
review is necessary in the interest of justice, consistent with 35
U.S.C. 316(a)(5), or whether additional discovery in a post-grant
review is supported by a good cause showing, consistent with 35 U.S.C.
326(a)(5). The list of factors set forth in Garmin is not exhaustive.
The Office applies the factors on a case-by-case basis, considering the
particular facts of each discovery request, including the particular
arguments raised by a party seeking additional discovery. Under this
flexible approach, parties are permitted to present their arguments
using different factors including those suggested in the comments. In
fact, the suggested additional factors are subsumed effectively already
under the Garmin factors, and have been considered by the Office in
deciding whether to grant additional discovery requests. See, e.g.,
Int'l Sec. Exch., LLC v. Chi. Bd. Options Exch., Inc., Case IPR2014-
00097 (PTAB July 14, 2014) (Paper 20) (granting a specific, narrowly
tailored, and reasonable request for additional discovery of
information that Patent Owner could not have obtained reasonably
without a discovery request). As noted below, the Office frequently has
granted reasonable discovery requests that are specific, narrowly
tailored, and not overly burdensome in cases where a patent owner
timely raises a real party-in-interest or privity challenge. See, e.g.,
Nestle USA, Inc. v. Steuben Foods, Case IPR2015-00195 (PTAB Feb. 27,
2015) (Paper 21) (granting Patent Owner's request for a sales agreement
between Petitioner and another entity that allegedly contains
indemnity, control, and cooperation provisions).
Comment 6: One comment suggested combining Factor 4 and Factor 5.
Response: Factor 4 and Factor 5 address different concerns. In
particular, Factor 4 promotes the use of easily understandable
instructions and, thereby, guards against the use of long and complex
instructions that could unduly burden the producing party. Factor 5, by
contrast, focuses on burdens and time constraints associated with
complying with a request for additional discovery and, thereby, assists
the Office in limiting discovery to requests that can be satisfied
without disrupting the schedule, and which do not impose undue
financial or human resource burdens on the producing party. As
discussed above, parties have the flexibility under the Garmin
framework to adopt a different combination of factors to present their
arguments, including combining their analyses regarding Factor 4 and
Factor 5.
Comment 7: Several comments indicated that, although the Garmin
factors are appropriate, they sometimes are being applied incorrectly
to require the moving party to have the actual evidence being sought.
Response: As explained in Garmin, the moving party, who is seeking
additional discovery, should present a threshold amount of evidence or
reasoning tending to show beyond speculation that something useful will
be uncovered. Garmin, Case IPR2012-00001, slip op. at 7-8. This factor
ensures that the opposing party is not overly burdened, and the
proceeding not unnecessarily delayed, by speculative requests where
discovery is not warranted. The Office, however, does not require the
moving party to have any actual evidence of the type being sought, for
example, where reasoning is presented that tends to show beyond
speculation that something useful will be uncovered. Furthermore, a
party who is dissatisfied with a decision and believes the Office
misapprehended or overlooked a matter in denying additional discovery
may file a request for rehearing, without prior authorization. See 37
CFR 42.71(d).
Obviousness
The Office asked, ``Under what circumstances should the Board
permit the discovery of evidence of non-obviousness held by the
Petitioner, for example, evidence of commercial success for a product
of the Petitioner? What limits should be placed on such discovery to
ensure that the trial is completed by the statutory deadline?'' 79 FR
at 36476. The Office provides guidance on its Web site, see, e.g.,
http://www.uspto.gov/blog/aia/entry/message_from_administrative_patent_judges, in response to comments
generated from these questions, and will revise the Office Patent Trial
Practice Guide to reflect this guidance.
Comment 1: Several comments suggested that the Office should permit
discovery of evidence of non-obviousness held by the petitioner in all
cases. Another comment indicated that, if a request is narrowly
tailored, this may be one situation where additional discovery may be
permissible. In contrast, several other comments recommended that the
Office should very rarely, if ever, permit discovery of the
petitioner's product, as it would require a mini-trial on whether the
petitioner's product infringes the patent, overwhelming the AIA trial
process, undermining the efficient, focused procedure, making it
impossible to conclude the AIA trial proceedings within the statutory
deadline, and imposing a significant burden on the petitioner. Several
comments further suggested that the Office should
[[Page 50728]]
continue to apply the Garmin factors (see Garmin Int'l Inc. v. Cuozzo
Speed Techs. LLC, IPR2012-00001 (PTAB Mar. 5, 2013) (Paper 26)
(informative)), allowing discovery only when the patent owner
establishes that the additional discovery is in the interest of
justice.
Response: The Office appreciates the varying points of view. The
Office has considered these comments and believes that the Garmin
factors currently provide appropriate and sufficient guidance for how
to handle requests for additional discovery, which the Office will
continue to decide on a case-by-case basis. The Office will continue to
seek feedback as the case law develops as to whether a more specific
rule for this type of discovery is warranted or needed. The Office
encourages parties to confer and reach an agreement on the information
to exchange early in the proceeding, resolving discovery issues
promptly and efficiently. See 37 CFR 42.51(a). As explained in the
Office Patent Trial Practice Guide, the parties may agree to certain
initial disclosures, including information regarding secondary indicia
of non-obviousness from the petitioner. Office Patent Trial Practice
Guide, 77 FR at 48762. In situations in which there is a disagreement
among the parties, the Office will decide on a case-by-case basis
whether additional discovery in an inter partes review is necessary in
the interest of justice, or whether additional discovery in a post-
grant review is supported by a good cause showing, based on the
particular facts of each request, consistent with 35 U.S.C. 316(a)(5)
and 326(a)(5). As discussed above, the Garmin factors provide helpful
guidance to the parties and assist the Office to achieve the
appropriate balance, permitting meaningful discovery, while securing
the just, speedy, and inexpensive resolution of every proceeding. The
Office plans to add further discussion as to how the Garmin factors
have been applied in the Office Patent Trial Practice Guide.
Comment 2: Several comments indicated that a patent owner seeking
additional discovery regarding the petitioner's product in support of a
commercial success non-obviousness argument should have to show that
the challenged patent claims read on the petitioner's product, that the
product was commercially successful, and that the alleged success
resulted from the patented feature. Several other comments, however,
suggested that requiring a patent owner to prove such a nexus between
the evidence being sought and the claims places too high a burden on
the patent owner. One comment urged the Office to allow a patent owner
to obtain secondary consideration evidence from the petitioner when the
patent owner presents a good-faith argument that there is a nexus
between such evidence and the claims, such as by infringement
contentions offered in the related district court litigation. Several
comments recommended that a patent owner should be permitted to obtain
additional discovery from a petitioner when the patent owner
demonstrates that the petitioner is reasonably likely to possess
evidence of secondary considerations, relaxing the first Garmin Factor.
A few other comments suggested that the Office should permit limited
discovery of the petitioner's evidence of secondary considerations when
the patent owner has presented a sufficient showing of a nexus.
Response: The Office recognizes that it is important to provide a
patent owner a full and fair opportunity to develop arguments regarding
secondary considerations. The Office, therefore, agrees that a
conclusive showing of nexus between the claimed invention and the
information being sought through discovery is not required at the time
the patent owner requests additional discovery. Nonetheless, some
showing of nexus is required to ensure that additional discovery is
necessary in the interest of justice, in an inter partes review, or is
supported by a good cause showing, in a post-grant review. See 35
U.S.C. 316(a)(5) and 326(a)(5); 37 CFR 42.51(b)(2) and 42.224. Notably,
as explained in Garmin concerning Factor 1, the mere possibility of
finding something useful, and mere allegation that something useful
will be found, are insufficient to demonstrate that the requested
discovery is necessary in the interest of justice. Garmin, slip op. at
6. A patent owner seeking secondary consideration evidence from a
petitioner should present a threshold amount of evidence or reasoning
tending to show beyond speculation that something useful will be
uncovered. A mere infringement contention or allegation that the claims
reasonably could be read to cover the petitioner's product is generally
insufficient, because such a contention or allegation, for example,
does not show necessarily that the alleged commercial success derives
from the claimed feature. Nor does it account for other desirable
features of the petitioner's product or market position that could have
contributed to the alleged commercial success. See e.g., John's Lone
Star Distrib., Inc. v. Thermolife Int'l, LLC, IPR2014-01201 (PTAB May
13, 2015) (Paper 30). The Office plans to add further discussion on
this issue to the Office Patent Trial Practice Guide.
Comment 3: One comment recommended that the Office permit the
patent owner to serve a limited number of focused interrogatories and
requests for production related to secondary considerations, and
provide a schedule for the discovery.
Response: The Office declines to adopt a mandatory rule regarding
additional discovery of secondary considerations, but will continue to
entertain the need for such discovery on a case-by-case basis.
Moreover, as provided in 37 CFR 42.51(a)(1) and (b)(2), parties may
agree to additional discovery, including answering focused
interrogatories and production of documents, even prior to institution.
The Office also encourages and facilitates such cooperation between
parties. See, e.g., Square, Inc. v. REM Holdings 3, LLC, Case IPR2014-
00312, slip op. at 2-4 (PTAB Sep. 15, 2014) (Paper 23) (In response to
the Board's request, the parties conferred and reached an agreement as
to the Patent Owner's focused and narrowly tailored interrogatories and
document request.). Balancing fairness concerns with the need to meet
statutory deadlines, the Office, at this time, declines to make
additional discovery on secondary considerations available as a matter
of right, given that all other types of additional discovery may be
obtained only upon a showing based on the Garmin factors.
Real Party in Interest
The Office asked, ``Should a Patent Owner be able to raise a
challenge regarding a real party in interest at any time during a
trial?'' 79 FR at 36476. The Office provides guidance below in response
to comments generated from these questions, and will revise the Office
Patent Trial Practice Guide to reflect this guidance.
Comment 1: A number of comments indicated that a patent owner
should be able to raise a challenge regarding a real party-in-interest
or privity at any time during a trial proceeding. A few comments also
suggested that the Office should encourage or require the patent owner
to raise this challenge in its preliminary response, so that the Office
could consider this issue when determining whether or not to institute
a review and resolve it promptly. Several comments further recommended
that a patent owner may raise this challenge after institution if it
provides a reasonable explanation as to why it could not have raised
such a challenge
[[Page 50729]]
earlier in the proceeding. One comment, however, opposed any change
that would allow a patent owner to challenge the identity of a real
party-in-interest at any time during a trial. Another comment also
opposed allowing patent owners to make a belated challenge under 35
U.S.C. 312(a) for a petitioner's failure to name all real parties-in-
interest.
Response: The Office recognizes that it is important to resolve
real party-in-interest and privity issues as early as possible,
preferably in the preliminary stage of the proceeding prior to
institution, to avoid unnecessary delays and to minimize cost and
burden on the parties and the resources of the Office. In most cases,
the patent owner also recognizes the benefit of raising a real party-
in-interest or privity challenge early in the proceeding, before or
with the filing of its preliminary response, to avoid the cost and
burden of a trial if the challenge is successful.
To balance efficiency with fairness, the Office, in general, will
permit a patent owner to raise a challenge regarding a real party-in-
interest or privity at any time during a trial proceeding. Such a
position is consistent with the final rule notice. See Changes to
Implement Inter Partes Review Proceedings, Post-Grant Review
Proceedings, and Transitional Program for Covered Business Method
Patents; Final Rule, 77 FR 48680, 48695 (Aug. 14, 2012) (``After
institution, standing issues may still be raised during trial. A patent
owner may seek authority from the Board to take pertinent discovery or
to file a motion to challenge the petitioner's standing.''). With
respect to a late challenge that reasonably could have been raised
earlier in the proceeding, the Office will consider the impact of such
a delay on a case-by-case basis, including whether the delay is
unwarranted or prejudicial. The Office also will consider that impact
when deciding whether to grant a motion for additional discovery based
on a real party-in-interest or privity issue. The Office plans to add
further discussion on this issue to the Office Patent Trial Practice
Guide.
Comment 2: A few comments suggested that the rules should be
revised to require both parties to provide certain documents associated
with the real party-in-interest or privity of the parties. In
particular, the comments recommended requiring the parties to provide
the following information: (1) Joint defense group agreements, (2)
indemnity agreements, (3) identification of counsel representing a
defendant in related litigations, (4) identification of parties
participating in the preparation of the petition or in the review, and
(5) identification of all parties funding the expenses associated with
the review. In contrast, another comment urged the Office not to impose
such burdensome mandatory disclosure requirements and indicated that
the Office's current practice is appropriate for resolving real party-
in-interest and privity issues in a low-cost and efficient manner.
Response: As many cases do not involve real party-in-interest or
privity disputes, the Office, at this time, does not believe that any
benefit resulting from requiring the parties to provide these highly
sensitive, and possibly privileged, documents in every case would
outweigh the additional cost and burden on the parties and the Office.
When a patent owner timely raises real party-in-interest or privity
challenges, which are highly fact dependent, the Office will continue
to consider the need for additional discovery on a case-by-case basis,
taking into account the specific facts in the proceeding to determine
whether additional discovery is necessary in the interest of justice,
in an inter partes review, or supported by a good cause showing, in a
post-grant review. See, e.g., 37 CFR 42.51(b)(2); Garmin, Case IPR2012-
00001, slip op. at 7; Office Patent Trial Practice Guide, 77 FR at
48760; Unified Patents, Inc. v. Dragon Intellectual Prop., LLC, Case
IPR2014-01252 (PTAB Feb. 12, 2015) (Paper 37) (A non-party does not
become a real party-in-interest or privy solely because it is a member
of a trade association or joint defense group.). The Office also
encourages the parties to confer on the issue of additional discovery
early in the proceeding, and attempt to reach an agreement on a
reasonable amount of information to exchange, so that the issue may be
resolved promptly and efficiently. See 37 CFR 42.51(b)(2) (``The
parties may agree to additional discovery between themselves.'').
Comment 3: A few comments suggested that patent owners should be
able to discover information concerning a real party-in-interest freely
at any time. In contrast, several other comments urged the Office to
limit discovery to that which is truly necessary, by applying the
statutory standards for additional discovery.
Response: As discussed above, the Office generally will permit a
patent owner to raise a challenge regarding a real party-in-interest or
privity at any time during a proceeding. The scope of discovery in AIA
proceedings, however, differs significantly from the scope of discovery
available under the Federal Rules of Civil Procedure in district court
proceedings. Because Congress intended AIA proceedings to be a quick
and cost-effective alternative to litigation, the statute provides only
limited discovery in trial proceedings before the Office. See 35 U.S.C.
316(a)(5) and 326(a)(5); 37 CFR 42.51(b)(2) and 42.224. Under the
current practice--applying these statutory standards--the Office
frequently has granted discovery requests directed to real-party-in-
interest or privity information, where the requests were specific,
narrowly tailored, and not unduly burdensome. See, e.g., Arris Group,
Inc. v. C-Cation Techs., LLC, Case IPR2015-00635 (PTAB May 1, 2015)
(Paper 10) (informative); Zerto, Inc. v. EMC Corp., Case IPR2014-01254
(PTAB Nov. 25, 2014) (Paper 15); Gen. Elec. Co. v. Transdata, Inc.,
Case IPR2014-01380 (PTAB Nov. 12, 2014); Medtronic, Inc. v. Robert
Bosch Healthcare Sys., Inc., Case IPR2014-00488 (PTAB Nov. 5, 2014);
Samsung Elects. Co. v. Black Hills Media, LLC, Case IPR2014-00717 (PTAB
Oct. 2, 2014); Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc.,
Case IPR2013-00453 (PTAB Apr. 23, 2014) (Paper 40); RPX Corp. v.
VirnetX Inc., Case IPR2014-00171 (PTAB Feb. 20, 2014) (Paper 33).
Comment 4: One comment urged the Office to provide additional
guidance regarding issues concerning real party-in-interest or privity,
including specific questions and factors that petitioners should
consider in determining what entities to identify, which would allow
petitioners and patent owners to evaluate these issues early and in a
more efficient manner.
Response: The Office appreciates the interest in additional
guidance on these complex issues. As the Supreme Court has instructed,
however, whether an entity is a real party-in-interest is a highly fact
dependent question that is not amenable to any bright-line test. Taylor
v. Sturgell, 553 U.S. 880, 893-895 (2008). Whether a non-party is a
real party-in-interest or privy for a trial proceeding before the
Office is a highly fact dependent question that takes into account how
courts generally have used the term to ``describe relationships and
considerations sufficient to justify applying conventional principles
of estoppel and preclusion.'' Office Patent Trial Practice Guide, 77 FR
at 48759. The Office Patent Trial Practice Guide sets forth a detailed
discussion on the relevant common law principles and Federal case law.
Further helpful guidance is provided in recent Board decisions. See,
e.g., Askeladden LLC v. Sean I. McGhie and Brian Buchheit, Case
IPR2015-00122, slip op. at 3-16 (PTAB Mar. 6, 2015) (Paper 30); Zerto,
[[Page 50730]]
Inc. v. EMC Corp., Case IPR2014-01254, slip op. at 6-15 (PTAB Mar. 3,
2015) (Paper 35); Aruze Gaming Macau, Ltd. v. MGT Gaming, Inc., Case
IPR2014-01288, slip op. at 6-20 (PTAB Feb. 20, 2015); Unified Patents,
Inc. v. Dragon Intellectual Prop., LLC, Case IPR2014-01252, slip op. at
8-13 (PTAB Feb. 12, 2015) (Paper 37); GEA Process Eng'g, Inc. v.
Steuben Foods, Inc., Case IPR2014-00041, slip op. at 3-26 (PTAB Dec.
23, 2014) (Paper 140); Samsung Elecs. Co. v. Black Hills Media, LLC,
Case IPR2014-00737, slip op. at 3-4 (PTAB Nov. 4, 2014) (Paper 7);
First Data Corp. v. Cardsoft LLC, Case IPR2014-00715 (PTAB Oct. 17,
2014); RPX Corp. v. VirnetX Inc., Case IPR2014-00171, slip op. at 6-10
(PTAB July 14, 2014) (Paper 49); Alcon Research, Ltd. v. Dr. Joseph
Neev, Case IPR2014-00217, slip op. at 6-7 (PTAB May 9, 2014) (Paper
21); Zoll Lifecor Corp. v. Philips Elecs. N. Am. Corp., Case IPR2013-
00606, slip op. at 3-12 (PTAB Mar. 20, 2014) (Paper 13). The Office
plans to add further discussion on this issue to the Office Patent
Trial Practice Guide.
Comment 5: A few comments recommended that the Office establish a
rule or precedential opinion stating that the existence of a real
party-in-interest and privity are determined based on the facts in
existence at the time of petition filing.
Response: Limiting the inquiry to the time of petition filing would
undercut the core functions underlying the requirement to name all real
parties-in-interest and privies. Those core functions include
resolution of conflicts of interest and ensuring the proper application
of statutory estoppel provisions--concerns that persist throughout the
course of an AIA trial proceeding. See 35 U.S.C. 315(e)(1) (real party-
in-interest or privy of the petition may not ``request or maintain'' a
proceeding); 35 U.S.C. 325(e)(1) (same). As real party-in-interest and
privity issues are highly fact dependent, in certain situations the
issue may involve supporting evidence that comes into existence after
the filing of a petition. See, e.g., GEA Process Eng'g, Inc. v. Steuben
Foods, Inc., Case IPR2014-00041 (PTAB Dec. 23, 2014) (Paper 140, Public
Version) (finding that a non-party who paid the Petitioner's legal fees
for the inter partes review is a real party-in-interest, and rejecting
the argument that post-filing funds cannot retroactively change the
facts as of the filing date, because ``[t]ypically, legal bills are
billed and paid for after the services have been rendered'').
Therefore, such bright-line rules as suggested by the comments would
not be in the interest of justice and are not adopted.
Comment 6: A comment urged the Office to permit petitioners to
correct the identification of real parties-in-interest without
affecting the filing date if a ``good faith attempt'' was made to
satisfy 35 U.S.C. 312(a).
Response: The statute requires a petition to identify all real
parties-in-interest without qualification. See 35 U.S.C. 312(a); see 37
CFR 42.8 and 42.104. In the situation where the failure to identify a
real party-in-interest was a mere clerical error, the petitioner may
correct the petition without affecting the filing date. See, e.g., 37
CFR 42.104(c); Coleman Cable, LLC v. Simon Nicholas Richmond, Case
IPR2014-00935 (PTAB Aug. 28, 2014) (Paper 12). The Office is unable,
however, to allow for the correction of any other such errors without
changing the filing date because of the statutory requirement.
Comment 7: A comment urged the Office to confirm that the
petitioner bears the burden of producing evidence that it has standing,
as well as the burden of persuasion on the issue.
Response: As discussed previously, additional discovery may be
authorized where patent owner raises sufficient concerns regarding the
petitioner's identification of real parties-in-interest. Several recent
decisions have acknowledged that the ultimate burden of proof on the
issue lies with the petitioner. See, e.g., Askeladden, slip op. at 8
(Paper 30); Zerto, slip op. at 6-7 (Paper 35); Atlanta Gas Light Co. v.
Bennett Regulator Guards, Inc., Case IPR2013-00453, slip op. at 6-8
(PTAB Jan. 6, 2015) (Paper 88); Atlanta Gas Light Co. v. Bennett
Regulator Guards, Inc., Case IPR2013-00453, slip op. at 2-7 (PTAB Feb.
23, 2015) (Paper 91). This allocation of the burden acknowledges that a
petitioner is more likely than a patent owner to be in possession of,
or have access to, evidence relevant to the issue. Zerto, slip op. at
6-7. The Office plans to add further discussion on this issue to the
Office Patent Trial Practice Guide.
Multiple Proceedings
The Office asked a series of questions relating to how multiple
proceedings, such as an AIA trial, reexamination, or reissue
proceeding, before the Office involving the same patent should be
coordinated, including whether one proceeding should be stayed,
transferred, consolidated, or terminated in favor of another. The
questions are replicated below, followed by the comments responsive to
those questions and the Office's responses to the comments.
Question 7: How should multiple proceedings before the USPTO
involving the same patent be coordinated? Multiple proceedings before
the USPTO include, for example: (i) Two or more separate AIA trials;
(ii) an AIA trial and a reexamination proceeding; or (iii) an AIA trial
and a reissue proceeding? 79 FR at 36476.
Comments: Multiple commenters recommended that the Board continue
to exercise its discretion, on a case-by-case basis, to stay, transfer,
consolidate, or terminate multiple proceedings involving the same
patent claims. Several commenters urged the Board to consolidate
multiple proceedings involving the same or related patents.
Commenters urged the Board to manage multiple AIA proceedings by
manipulating the dates for the patent owner's preliminary response.
Several commenters suggested that the Board should delay the time
period for filing the patent owner's preliminary response to a second
petition, ``so as to effectively stay the filing of'' that response,
until after the first-filed petition is resolved by termination or a
final written decision. One commenter remarked that this effective stay
of the time for filing the patent owner's preliminary response in a
second proceeding is especially appropriate where the proceeding,
instituted on the first-filed petition, is near completion.
Another commenter proposed that, where a second petition is filed
before the date on which the patent owner's preliminary response is
filed in the first proceeding, the patent owner's preliminary response
in the first proceeding should be reset to three months from the notice
of filing date accorded the second petition. The commenter also urged
that, under those circumstances, scheduling and briefing should be
consolidated in the two proceedings. The same commenter proposed that
the Board should stay all activity on a second petition that is filed
after trial is instituted on a first petition.
Several commenters proposed requiring petitioners, who file a
petition challenging the same patent claims at issue in an earlier-
filed petition, to identify what issues were previously raised.
Commenters also advocated requiring such petitioners to state whether
they are amenable to joinder with the earlier proceeding. On that
point, one commenter urged that duplicative petitions, filed after the
deadline for joinder, ``should be terminated at an early stage to
conserve Patent Owner costs and [Board] resources.'' Another commenter
stated
[[Page 50731]]
that, ``[f]or consolidated AIA trials involving the same patent with at
least one challenged claim in common, the current rules that the Board
uses for joinder seem to be working well.'' Some commenters urged that
duplicative petitions, filed outside the permissible period for
joinder, should not be granted.
Response: The current rules afford the Board broad discretion to
manage multiple proceedings by tailoring the solution to the unique
circumstances of each case and, thereby, optimizing efficiencies and
promoting fair results in each case. See Prism Pharma Co. v. Choongwae
Pharma Corp., IPR2014-00315 (PTAB July 8, 2014) (Paper 14)
(informative) (denying institution of inter partes review based on
second-filed petition that was based on the same prior art and same
arguments previously considered by the Office during prosecution of the
patent being challenged); Medtronic, Inc. v. Nuvasive, Inc., Case
IPR2014-00487 (PTAB Sept. 11 2014) (Paper 8); Unified Patents, Inc. v.
PersonalWeb Techs., LLC, Case IPR2014-00702 (PTAB July 24, 2014) (Paper
13); Unilever, Inc. v. Procter & Gamble Co., Case IPR2014-00506 (PTAB
July 7, 2014) (Paper 17); Medtronic, Inc. v. Robert Bosch Healthcare
Systems, Inc., Case IPR2014-00436 (PTAB June 19, 2014) (Paper 17);
Intelligent Bio-Systems, Inc. v. Illumina Cambridge Ltd., Case IPR2013-
00324 (PTAB Nov. 21, 2013); ZTE Corp. v. ContentGuard Holdings, Inc.,
Case IPR2013-00454 (PTAB Sept. 25, 2013) (Paper 12). The Board will
continue to take into account the interests of justice and fairness to
both petitioners and patent owners where multiple proceedings involving
the same patent claims are before the Office.
The Board also must consider its ability to meet the statutory
deadlines imposed by Congress on AIA trials. The Board agrees with the
commenters that the timing of the patent owner's preliminary response
may be altered, when helpful and fair in an appropriate case. No rule
change is needed to accomplish that goal.
The Board has considered the comment that second petitioners should
self-identify repetitive challenges, and state their amenability to
joinder. As a practical matter, the Board is well-positioned to
determine whether a second petition raises the same or substantially
the same challenges presented in a first petition that is identified as
a related matter. The Board is also adept at determining whether a
grant of the second petition, with joinder, serves the interests of
fairness, efficiency, and economy of process. In addition, pursuant to
37 CFR 42.8(b)(2), petitioners are required to identify other
proceedings involving the same challenged patent, and petitioners are
encouraged to identify any substantive similarities with other
proceedings in the petition. No rule change requiring petitioners to
self-identify repetitive challenges is warranted at this time.
The Board agrees with the commenters that a factor which may be
relevant in appropriate cases is whether the petitioner in a later-
filed proceeding is amenable to joinder with an earlier-filed
proceeding involving the same patent claims. See, e.g., Motorola
Mobility LLC v. Softview LLC, IPR2013-00257 (PTAB June 20, 2013) (Paper
10) (order granting joinder where a second petitioner neither
introduced new grounds of unpatentability nor raised procedural issues
that would delay the schedule set for the first proceeding). The Board
will continue to take account of all factors, bearing on the propriety
and feasibility of joinder, based on the particular facts of the
involved proceedings.
Based on the comments, the Office determines that the current rules
provide a workable framework for the Board to manage multiple
proceedings that involve the same patent claims. No revision of the
rules for managing such proceedings is necessary at this time.
Question 8: What factors should be considered in deciding whether
to stay, transfer, consolidate, or terminate an additional proceeding
involving the same patent after a petition for AIA trial has been
filed? 79 FR at 36,476.
Comments: Some commenters suggested that the Office promulgate new
rules that define the factors that the Office will take into account
when considering multiple petitions directed to the same patent claims.
Commenters advocated for the application of a variety of factors, which
fall into three main categories: (1) The impact on scheduling and the
Office's ability to meet the deadlines imposed by Congress in AIA
proceedings; (2) prejudice to the patent owner; and (3) prejudice to
the petitioner.
Response: The issues raised by Question 8 are closely related to
the issues raised by Question 7. The interests of fairness, speed,
efficiency, and economy are served by retaining the Office's ability to
balance the competing interests of the petitioner and patent owner,
where multiple petitions are filed that challenge the same patent
claims. Managing multiple petitions demands highly fact-specific
inquiries, and the Office requires broad discretion to craft results
that are tailored to the particular circumstances presented in each
case. The Office agrees with the comments that recognize the issues
raised by multiple petitions are best resolved on a case-by-case basis.
The Office recognizes that approaching each case on its own facts
raises consistency concerns that could be ameliorated by identifying a
set of factors that apply in all cases. The Office agrees with the
comments, however, suggesting that the interests, which bear on the
propriety of a stay, transfer, consolidation, or termination where
multiple proceedings are directed to the same patent claims, are best
served by allowing the constellation of relevant factors to evolve
gradually, tethered to the facts of individual cases. A restrained
evolution, on a case-by-case basis, promotes fair and rational results
in each case, and equips the Office with necessary flexibility to
customize resolutions suitable for each particular case. The Office
will develop relevant factors, tethered to specific facts raised in
particular cases, through its body of case law. Given the still-
evolving nature of AIA proceedings, the Office believes that this
gradual approach is prudent and preferred over a premature attempt to
establish a rule or factors divorced from particular facts raised in a
particular case, which may not address the relevant concerns in every
case. The Office plans to add further discussion on this issue to the
Office Patent Trial Practice Guide.
Question 9: Under what circumstances, if any, should a copending
reexamination proceeding or reissue proceeding be stayed in favor of an
AIA trial? If a stay is entered, under what circumstances should the
stay be lifted? 79 FR at 36476.
Comments: The Office received comments in favor of staying a
copending reissue or reexamination. Commenters proposed that a stay for
copending proceedings be determined on a case-by-case basis, with other
commenters proposing that the stay be imposed upon institution of trial
on the same patent. Another commenter proposed that a copending reissue
or reexamination be stayed automatically, unless there was a showing of
``good cause,'' which includes factors such as avoiding: (a)
Inconsistent decisions by the Office; (b) duplicative work for the
Board; and (c) disruption to the trial schedule. Other factors to
consider in granting a stay, according to another commenter, include
the statutory deadlines of the proceeding, the issues raised in the
multiple proceedings, the parties involved, the likelihood of a reissue
application being granted, and whether the decision adversely affects a
party's ability to reach a timely
[[Page 50732]]
conclusion on a patentability issue. Another commenter provided
additional factors to consider in granting a stay, such as the stage
where amendments are possible, whether claim construction is
inconsistent with the claim construction applied during trial, and
agreement of the parties regarding a stay.
For those commenters favoring a stay, the circumstances regarding
when a stay should be lifted ranged from the rendering of a final
written decision to when appeal to the Federal Circuit has been
exhausted. Other commenters have requested that the Office clarify that
it will not terminate the reexamination or reissue once the final
written decision issues, so that a patent owner may pursue claim
amendments in those proceedings.
In the circumstances when a copending reexamination or reissue is
not stayed and when there is no overlap of claims involved in the
copending proceedings and the instituted trial, a commenter stated that
the Office should preclude the presentation of new amended claims in
the copending proceedings involving the same patent because a
``sequential,'' rather than a ``simultaneous,'' evaluation of the
claims is consistent with the legislative history of the AIA.
Other commenters proposed that the Office consider allowing the
reexamination and reissue to continue in parallel with or before the
instituted trial. One commenter stressed that the purpose of a reissue
is to correct errors, and therefore the remedial nature of the
proceeding counsels against waiting for a trial to conclude. The same
commenter offered that staying a reexamination is unjust to the patent
owner because reexaminations are given ``special dispatch'' under 35
U.S.C. 305, a statutory requirement that remained unchanged with the
passage of the AIA. Because in an instituted trial only one amendment
is allowed by motion, the same commenter stated that a stay would
preclude examination of claims amended in a reexamination or reissue to
address the newly cited prior art or correct an error that was not
present or addressed during the original examination of the patent. In
particular, one commenter stressed that a reexamination should be
allowed to run its course, and in any event, because an AIA proceeding
would replace reexamination, copending AIA and reexamination would not
be a problem much longer.
In the event a reexamination is not stayed, one commenter suggested
that the Board's claim construction should be applied in the
reexamination, or briefing on claim construction for the reexamination
should be allowed in light of the claim construction involved in the
trial.
Response: The Office has been determining whether to stay a
reexamination or reissue on a case-by-case basis, and agrees with the
commenters advocating that various factors should be considered,
including the overlap of issues presented in the copending proceeding
and the stage of the copending proceeding to avoid duplicative work for
the Office. See, e.g., Kaiser Aluminum v. Constellium Rolled Prods.
Ravenswood, LLC, IPR2014-01002 (PTAB Feb. 19, 2015) (Paper 25) (denying
request to stay a reexamination on the same patent and some of the same
references because the proceeding involved evidence different from the
evidence presented in the inter partes review (IPR) and the
reexamination was not sufficiently underway such that it would conclude
before a final decision would issue in the IPR); Chicago Mercantile
Exch., Inc. v. 5th Market, Inc., CBM2014-00114 (PTAB Jan. 9, 2015)
(Paper 20) (denying request to stay copending reexamination because
claims amended in reexamination were not at issue in the instituted
covered business method review, where Patent Owner did not file a
motion to amend, and finding that parallel proceedings would not result
in duplication of efforts at the Office because the instant proceedings
did not involve a complete overlap of claims); Geortek, Inc. v. Knowles
Elecs., LLC, IPR2013-00614 (PTAB Nov. 13, 2013) (Paper 11) (granting
Patent Owner's motion to stay copending reexamination that had been
ongoing for three years where Patent Owner argued that stay would
prevent inconsistent results with regard to potential amendments of the
same claims challenged in the inter partes review); Google, Inc. v.
Grandeye, Ltd., IPR2013-00548 (PTAB Sept. 30, 2013) (Paper 7) (granting
unopposed motion to stay copending reexamination by Patent Owner
because concurrent proceedings would duplicate efforts within the
Office and could potentially result in inconsistencies among the
proceedings, especially in light of amendments of the challenged claims
in the reexamination).
The Office is not proposing changes at this time to the Rules or to
the Office Patent Trial Practice Guide to give guidance regarding the
timing on lifting a stay or how to proceed in a copending reexamination
or reissue that is not stayed. These determinations have been
proceeding appropriately on a case-by-case basis, noting, among many
factors, the impact of the concurrent reexamination on the trial and
whether the trial has concluded. See, e.g., GEA Process Eng'g, Inc. v.
Steuben Foods, Inc., IPR2014-00043 (PTAB Feb. 19, 2015) (Paper 121)
(ordering lift of stay of a copending reexamination after the trial was
terminated and timing for filing a request for rehearing had expired,
and ordering that Patent Owner provide a copy of the Decision on
Institution to the Central Reexamination Unit for consideration in
light of alleged inconsistencies); Gnosis S.p.A. v. Merck & CIE,
IPR2014-00117 (PTAB Feb. 5, 2015) (Paper 74) (ordering lift of stay of
a copending reexamination after issue of a final written decision, and
in consideration of the following: (1) The reexamination involved
overlapping claims; (2) Patent Owner did not amend claims involved in
inter partes review; (3) added claims were alleged to be narrower in
scope; and (3) Examiner in the reexamination had issued a final
rejection); Avaya Inc. v. Network-1 Sec. Solutions, Inc., IPR2013-
00071, slip op. at 31-32 (PTAB May 22, 2014) (Paper 103) (lifting stay,
sua sponte and after final written decision issued, of a reexamination
involving a non-asserted claim and different prior art presented in the
inter partes review).
The Office will continue to determine, on the facts of each case in
which there is a copending reexamination or reissue, whether a stay is
warranted or a stay should be lifted under the circumstances of each
case.
Question 10: Under what circumstances, if any, should an AIA trial
be stayed in favor of a copending reexamination proceeding or reissue
proceeding? If a stay is entered, under what circumstances should the
stay be lifted? 79 FR at 36476.
Comments: The Office received comments in favor of not staying AIA
trials in favor of a copending reexamination or reissue. One reason
provided for not staying the trial is that statutory deadlines apply to
the trials. One commenter observed an exception that may warrant a stay
of AIA proceedings, i.e., to account for when the copending
reexamination or reissue was not stayed and a new claim is about to
issue. In that circumstance, the commenter suggested that a limited
stay should be granted to allow a petitioner to raise the new claim in
the pending trial. Another commenter also stated that limited
circumstances may warrant a stay, such as when the copending
reexamination is in the late stages of appeal and there is significant
overlap in claims between the trial and the copending proceeding. This
same commenter stressed that if the parties agree that patentability
should be
[[Page 50733]]
determined first in the reexamination, a stay of the trial may be
warranted.
Other comments favored the request for and grant of a stay of the
trial in favor of the copending reexamination or reissue. One commenter
noted that such a stay should be granted when the copending
reexamination or reissue is near completion, and another commenter
stressed that the stay may be implemented before the trial is
instituted such that the statutory deadlines are not impacted.
Another commenter provided that denial of institution should result
for grounds with claims that are at issue in a copending reexamination
or reissue, where amended claims were filed in the copending proceeding
before the deadline for the Board to determine institution. To clarify
whether the Board would have jurisdiction over such a trial, the same
commenter advocated revising the Office Patent Trial Practice Guide to
include clarification regarding the timing on when a notice of intent
to issue a reexamination certificate or notice of allowance of a
reissue would be effective.
Response: The Office will continue to proceed with the
determination whether to institute trial on a case-by-case basis with
no delay of the proceedings unless warranted by the facts or
circumstances of the case. See, e.g., Intromedic Co., Ltd. v. Given
Imaging Ltd., Case IPR2015-00579 (PTAB Aug. 5, 2015) (Paper 9) (denying
institution of review because the only claim being challenged by
Petitioner has been amended in the copending reexamination, and the
advanced stage of the reexamination involving the same parties);
Juniper Networks, Inc. v. Linex Techs., Inc., IPR2014-00595 (PTAB Sept.
26, 2014) (Paper 19) (denying institution of inter partes review
because a Reexamination Certificate in a copending reexamination had
issued and reexamination had concluded with all original claims amended
and new claims issued). The Office agrees with the commenters that
stress that a statutory deadline does not favor staying trials in favor
of a copending reexamination or reissue, which have no statutory
deadlines. See, e.g., Mercedes-Benz USA, LLC v. Velocity Patent, LLC,
IPR2015-00290 (PTAB Jan. 21, 2015) (Paper 9) (denying authorization for
motion to stay inter partes review in favor of a copending
reexamination because the argument that new claims would issue there
first and inter partes review would be amended to include those claims
were not sufficient reasons to lengthen the pendency of the inter
partes review, which is designed to secure the just, speedy, and
inexpensive resolution of the dispute); see also American Simmental
Assn. v. Leachman Cattle of Co., LLC, PGR2015-00003 (PTAB Dec. 14,
2014) (Paper 4) (denying request to stay institution of post-grant
review (PGR) in favor of pending reissue because of the status of the
PGR, Patent Owner had not sought amendment or cancellation of the
claims challenged in the PGR, and the Office had not taken any
substantive action on the reissue application).
At this time, the Office does not propose changes to the Rules or
the Trial Practice Guide to list specific circumstances under which a
party may show that a stay of either a decision on institution or a
trial may be appropriate. The Office will continue to decide motions to
stay proceedings according to the facts and circumstances of each case.
Question 11: Under what circumstances, if any, should a copending
reexamination proceeding or reissue proceeding be consolidated with an
AIA trial? 79 FR at 36477.
Comments: The Board received several comments concerning the
circumstances under which a copending reexamination or reissue should
be consolidated with an AIA trial. Those circumstances fall roughly
into two categories. The first category of comments indicated that
consolidation of an AIA trial with copending reexaminations or reissues
was impractical and that rules requiring such consolidation could, in
some cases, prejudice patent owners. The second category of comments
provided several factors that should be considered and weighed by the
Board in determining whether to consolidate such proceedings. Those
factors included: (1) Type of additional proceeding; (2) time between
filing date of initial proceeding and additional proceeding; (3) stage
of initial proceeding; (4) duration of additional proceeding; (5) scope
of each proceeding; (6) third party filers (same, different); (7)
relation between third party filer of additional proceeding and filer
of initial proceeding; (8) number of total proceedings filed against
the patent; (9) whether the additional proceeding is a reexamination:
ex parte reexamination should not be transferred to PTAB because patent
owner would lose certain procedural mechanisms such as ability to
interview case; (10) whether pending district court litigation has been
stayed pending resolution of the reexamination; (11) whether validity
of claims at issue in AIA trial is currently on appeal to the Federal
Circuit; (12) express interests of the parties in the proceedings; (13)
issues raised in the different proceedings; (14) ability of Board to
reach a timely conclusion of a patentability issue in any proceeding;
and (15) saving of costs and resources gained by the parties and the
Board by consolidation, for example, by coordination of procedures
common to the proceedings.
Response: The Office appreciates the comments and has been
considering the above factors, among others, in deciding requests to
consolidate a copending reexamination or reissue with AIA trials. See,
e.g., Mercedes-Benz USA, LLC et al. v. Velocity Patent LLC, Case
IPR2014-01247 (PTAB Dec. 15, 2014) (Paper 12) (denying Petitioner's
request to file a motion to consolidate AIA trial proceeding with a
related reexamination, where the only claims at issue in the AIA trial
proceeding were added in the reexamination, and Patent Owner cancelled
those claims in the reexamination); GEA Process Engineering, Inc. v.
Steuben Food, Inc., Case IPR2014-00041, slip. op. at 3-5 (PTAB Dec. 6,
2013) (Paper 13) (denying Petitioner's motion to consolidate AIA trial
proceeding with a related reexamination, where Patent Owner stipulated
to not amend claims in the related reexamination); GEA Process
Engineering, Inc. v. Steuben Food, Inc., Case IPR2014-00051, slip. op.
at 2-3 (PTAB Dec. 6, 2013) (Paper 12) (denying as moot Petitioner's
motion to consolidate AIA trial proceeding with a related
reexamination, where the reexamination had terminated and the
reexamination certificate had issued). The Office agrees with the
commenters who noted that there are many difficulties in consolidating
copending reexaminations or reissues with AIA trials, and that all
relevant factors, including but not limited to those set forth above,
should be taken into consideration. The Office has performed similar
analyses weighing a myriad of factors in analogous contexts, for
example, in determining whether to stay a copending reexamination or
reissue in favor of an AIA trial, or vice versa. See, e.g., Responses
to Questions 9 and 10 set forth above.
The Office does not propose to change the Rules or the portion of
the Office Patent Trial Practice Guide pertaining to consolidation of a
copending reexamination or reissue with AIA trials at this time. The
Office will continue to determine on the facts of each case, in which
consolidation is requested, whether a particular request sets forth
facts sufficient to warrant consolidation of a copending reexamination
or reissue with AIA trials.
Question 12: How should consolidated proceedings be handled
[[Page 50734]]
before the USPTO? Consolidated proceedings include, for example: (i)
Consolidated AIA trials; (ii) an AIA trial consolidated with a
reexamination proceeding; or (iii) an AIA trial consolidated with a
reissue proceeding? 79 FR at 36477.
Comments: The Office received comments suggesting ways in which
consolidated proceedings should be conducted. Suggestions included: (1)
Multiple AIA trials concerning the same (or related) patents (or
parties) should be consolidated or handled by the same panel; (2)
consolidated proceedings should follow the district court model with
the same schedule applying to the proceedings; (3) a petitioner should
be required to select a single lead and backup counsel, but taking into
consideration the interests of the parties, in some circumstances the
Board may determine coordination should not be required; and (4) panels
should consider adjusting page limits in cases where different parties
may be asserting different positions.
Response: The Office agrees with the commenters that conducting
consolidated proceedings in the manner set forth in the comments above
may be appropriate. The Board has consolidated inter partes reviews
involving the same parties and the same patent into a single proceeding
where appropriate. See Ford Motor Co. v. TMC Fuels Injection System,
LLC, Case IPR2014-00272 (PTAB Jun 26, 2014) (Paper 12) (consolidating
IPR2014-00272, which was instituted on challenges under 35 U.S.C. 103,
with IPR2014-00273, which was instituted on different challenges to the
same claims under 35 U.S.C. 102 and 103 in which some of the applied
references were common to both proceedings). In some cases where
different parties have been joined to a proceeding, the panel has
provided opportunities for limited additional briefing on issues where
the petitioners may take different positions. See, e.g., Motorola
Mobility LLC v. Softview LLC, Case IPR2013-00257 (PTAB June 20, 2013)
(Paper 10) (joining proceeding to IPR2013-00004 and providing for
consolidated filings and limited separate filings by Petitioners on
points of disagreement only).
The Office received a further comment that claim amendments should
be allowed if an AIA trial is consolidated with a copending
reexamination or reissue. The Office notes that claim amendments are
available currently in all of these proceedings. Insofar as the
commenter may be suggesting that all claim amendments be entered as a
matter of right in a consolidated proceeding, the Office disagrees, and
instead leaves entry of claim amendments to be determined by the panel
conducting the consolidated proceeding in accordance with the statutory
and regulatory framework applicable to each of the proceedings.
Some commenters suggested that the Board has coordinated and should
continue coordinating schedules of multiple related proceedings without
formally consolidating the proceedings, for example, so as to allow
different petitioners flexibility to pursue different arguments and to
allow patent owner all of its allotted pages to respond to those
different arguments. The Office has been coordinating schedules of
multiple related proceedings without formally consolidating the
proceedings, on a case-by-case basis, and agrees with the commenters
that such practices should be continued, as appropriate. See, e.g.,
Taiwan Semiconductor Mfg. Co., Ltd. v. Zond, LLC, Case IPR2014-001089,
slip. op. at 2-3 (PTAB Feb. 2, 2015) (Paper 17) (setting forth
procedure for consolidated trial schedule, filings, and discovery in
multiple related proceedings). The Board has also coordinated hearings
in related cases and has scheduled hearings in related cases to occur
on consecutive days in related cases. See Samsung Electronics Co., Ltd.
v. Black Hills Media, LLC, Case IPR2014-00709 (PTAB Dec. 10, 2014)
(summary of initial conference during which it was decided that
IPR2014-00709, -00711, and -00718 would be heard together, IPR2014-
00737 and -00740 would be heard together, IPR2014-00718 and -00721
would be heard together, and IPR2014-00717 and -00735 would be heard
together, on consecutive days). See, e.g., Responses to Question 7 set
forth above.
The Office does not propose to change the Rules or the portion of
the Office Patent Trial Practice Guide pertaining to handling of
consolidated proceedings. The Office will continue to determine based
on a case-by-case basis the proper manner in which such consolidated
proceedings should be handled.
Question 13: Under what circumstances, if any, should a petition
for an AIA trial be rejected because the same or substantially the same
prior art or arguments previously were presented to the USPTO in a
different petition for an AIA trial, in a reexamination proceeding or
in a reissue proceeding? 79 FR at 36477.
Comments: The Board received many comments in favor of denying AIA
petitions that raise the same or substantially the same prior art or
arguments that were raised in an earlier-filed petition, whether raised
by the same or a different petitioner. One commenter stated that the
Board ``should aggressively exercise'' its discretion to deny
cumulative or overlapping grounds in multiple proceedings, ``even when
different parties file petitions.'' Some commenters advocated denial of
serial petitions filed by the same real party-in-interest. Other
commenters stated that the Board should consolidate multiple petitions
where feasible.
Several commenters suggested a general policy of ``one and done''
to duplicative petitions, to prevent harassment of patent owners,
minimize costs, and ensure quiet title of patent rights. Those same
commenters also recommended that the citation of new art in a
subsequent petition should create a rebuttable presumption that
substantially the same prior art or arguments are not raised in that
petition. Commenters also urged the Board to apply principles of
redundancy, across different petitions, to deny duplicative grounds
raised in later-filed petitions.
Other commenters stated that ``[t]he Board should treat each
petition independently,'' and that a different petitioner, not in
privity with the first petitioner, should be permitted to raise the
same prior art in a subsequent petition. Some commenters proposed that
duplicative petitions should not be denied where arguments in a later-
filed petition differ in scope from those presented in an earlier-filed
petition. Another commenter, by contrast, proposed a rule of
``horizontal stare decisis'' that would require treating a first
decision on patentability as ``binding law of the case'' in subsequent
proceedings, challenging the same patent claims, based on the same or
substantially the same prior art or arguments.
Response: The Office has and will continue to balance the interests
of petitioners, who seek to present new prior art and arguments in a
later-filed petition, against patent owners' interest in preventing
harassment that takes the form of repetitive, serial petitions that
challenge the same patent claims. The Office is best able to balance
those competing interests by approaching multiple petitions, which may
raise the same or substantially the same prior art or arguments against
the same patent claims, on a case-by-case basis, taking into account
the unique facts and relative equities raised in each particular
proceeding.
The comments do not suggest a need for a rule change at this time.
The current rules provide the Board with broad discretion adequate to
take all
[[Page 50735]]
relevant factors into account, when deciding whether to proceed on a
petition that challenges the same patent claims at issue in an earlier-
filed petition. Nor is a rule change necessary to enumerate the factors
that the Board may take into account when making case-specific
determinations, regarding the degree of overlap between the prior art
and arguments raised in multiple petitions. The Office believes that
the Board's current practice should continue to allow those factors to
develop in its growing body of case law, tethered to the facts of
particular proceedings, with such decisions of the Board providing
guidance to practitioners.
Issued decisions already provide useful guidance in that regard.
The Board has considered many factors, including, for example: (1) The
degree of overlap between the prior art and arguments raised in the
multiple petitions; (2) the identity of the petitioner in the later-
filed proceeding; (3) whether the petitioner in the later-filed
proceeding uses a prior decision on institution as a roadmap to refine
and recycle arguments presented in an earlier-filed petition; (4)
whether the circumstances surrounding the later-filed petition raises
the specter of patent owner harassment; and (5) whether granting the
later-filed petition is in the interests of justice. See, e.g., ZTE
Corp. v. ContentGuard Holdings Inc., IPR2013-00454 (PTAB Sept. 25,
2013) (Paper 12) (informative) (denying institution of inter partes
review of a patent based on substantially the same prior art and same
arguments presented previously in an earlier-filed petition filed by
the same Petitioner for which institution was in-part denied, and
citing 35 U.S.C. 325(d), to determine that ``[a] decision to institute
review on some claims should not act as an entry ticket, and a how-to
guide, for the same Petitioner who filed an unsuccessful joinder
motion, and is outside of the one-year statutory period, for filing a
second petition to challenge those claims which it unsuccessfully
challenged in the first petition''); Medtronic, Inc. v Robert Bosch
Healthcare Systems, Inc., IPR2014-00436 (PTAB June 19, 2014) (Paper 17)
(informative) (denying institution of inter partes review where
petition was based on redundant prior art and substantially the same
arguments that were presented previously in an earlier-filed petition
challenging the same patent and filed by a different Petitioner, but
where the Petitioner in the later-filed case acknowledged that it was a
real party-in-interest in the earlier-filed proceeding, due to its
acquisition of the Petitioner in the earlier-filed proceeding);
Unilever v. Procter & Gamble Co., IPR2014-00506 (PTAB July 7, 2014)
(Paper 17) (informative) (denying institution of inter partes review
based on a later-filed petition, filed by same Petitioner and on same
patent as an earlier-filed petition, where the later-filed petition
attempted to correct deficiencies in the earlier-filed petition for
claims for which earlier trial was not instituted); Dell Inc. v.
Electronics and Telecomms. Res. Inst., Case IPR2015-00549 (PTAB March
26, 2015) (Paper 10); Zimmer Holdings, Inc. v. Bonutti Skeletal
Innovations LLC, Case IPR2014-01080 (PTAB Oct. 31, 2014) (Paper 17);
Prism Pharma Co., Ltd. v. Choongwae Pharma Corp., Case IPR2014-00315
(PTAB July 8, 2014) (Paper 14).
The Office recognizes that a ``one and done'' approach to multiple
petitions may favor patent owners by diminishing the opportunity for
harassment and ensuring some certainty for patent rights. In that
regard, the Board already has applied its broad discretion to curtail
multiple challenges against a patent as described above.
The competing interests of fairness to petitioners and the public
interest, however, favor retaining the Office's discretion to grant or
deny multiple petitions, rather than imposing a rigid rule that would
require denial and, in effect, bind all potential challengers to the
outcome of a first-filed petition, regardless of the facts and equities
that surround the filing of the subsequent petitions.
The Office also acknowledges that petitioners may benefit from a
``rebuttable presumption'' that would render inapplicable the
provisions of section 325(d), where a subsequent petition raises even
one prior art reference that was not raised in the first-filed
petition. Such an approach, however, unfairly would provide petitioners
a fail-safe mechanism for avoiding the provisions of the statute, by
filing serial petitions that add a single new reference to support the
same grounds raised in an earlier petition. Such an approach fails to
take into account the unfairness, including the potential for
harassment, to patent owners when ``substantially the same'' prior art
is raised sequentially against the same patent claims. The Office's
discretion to grant or deny subsequent petitions, by viewing all
relevant circumstances as a whole, on a case-by-case basis, is
preferable to setting down a rigid rule.
Within the existing framework of the statute and rules, the Office
has discretion to consider the relative scope of the challenges raised
in multiple petitions. If a petition raises challenges that are based
on the same or substantially the same prior art as a prior petition,
but advances arguments of different scope, the Office has discretion to
deny or grant the second petition based on the totality of facts
presented in the case. A rule of ``horizontal stare decisis'' would,
therefore, abolish the Board's discretion, especially where two cases
do not present the same facts or identical considerations.
The Office will to continue to apply the existing framework, based
on discretion to customize a result based on the facts and equities of
each case. No rule changes are indicated at this time.
Extension of One Year Period To Issue a Final Determination
The Office asked, ``What circumstances should constitute a finding
of good cause to extend the 1-year period for the Board to issue a
final determination in an AIA trial?'' 79 FR at 36477.
Comments: The Office received comments in favor of the current
strict adherence to the one-year statutory period and advocating that
the granting of extensions should be rare. Many of these commenters
stated that the Office should ``continue to strive for completion of
each trial in one year,'' the ``good cause'' bar should be very high,
and extensions of the deadline should be ``rare'' and used only ``in
the most extreme circumstances'' such as ``where unforeseen
circumstances make it impossible to complete proceedings in a fair
manner.'' These same commenters stressed that ``one of the most
important benefits of [these proceedings]'' and ``a major driver in the
widespread adoption of the AIA procedures'' is that the Office renders
a decision within one year. The commenters warned about eviscerating
these benefits by a ``systematic extension of the one-year period.''
The Office also received comments advocating that the Office make
more generous use of the option to extend the one-year statutory period
under certain circumstances. For example, commenters proposed that an
extension of the one-year deadline would be appropriate under the
following circumstances: (1) ``where a comparative test(s) are deemed
necessary;'' (2) where there is ``delay by the party not seeking the
extension;'' (3) ``if there is a later-filed AIA proceeding on the same
patent that will not reach a final decision until after the first
proceeding is concluded;'' (4) ``where
[[Page 50736]]
additional discovery is sought . . . in regard to secondary
considerations or real party in interest;'' (5) ``in situations in
which more time is needed to consider amended claims;'' and (6) ``where
an irreplaceable, key participant becomes unexpectedly unavailable.''
Many commenters also suggested that an extension would be
appropriate in complex cases ``in the interests of justness, fairness
to the parties'' and ``to conduct a full and fair review of the
record.'' The commenters described examples of complex cases as
including: (1) ``where there is a complex situation with multiple
proceedings;'' (2) when ``the [Patent] Owner is involved in multiple
proceedings simultaneously;'' (3) ``when an invention is particularly
complex;'' (3) ``where multiple AIA trials are consolidated or
joined;'' (4) ``where there are a large number of parties involved;''
and (5) ``where the trial involves complicated discovery issues.''
Response: The Office will continue to strive to meet the one-year
statutory time period for trial. By striving to meet the one-year
statutory time period in most cases, the Office safeguards a core
function of the administrative process as a speedy alternative to
district court litigation. The Office does not propose to change the
rules pertaining to the one-year pendency from institution-to-decision
to provide for specific circumstances under which ``good cause'' may be
shown. The Board will continue to determine on the facts of each case,
in which an extension is requested, whether a particular request sets
forth facts sufficient to meet the ``good cause'' standard to extend
the one-year statutory deadline to complete a trial. The Office
proposes, however, to revise the Office Patent Trial Practice Guide to
provide examples of instances in which an extension of the one-year
statutory period may be warranted. These examples will not be an
exclusive list.
Oral Hearing
The Office asked, ``Under what circumstances, if any, should live
testimony be permitted at the oral hearing? What changes, if any,
should be made to the format of the oral hearing?'' 79 FR at 36477.
Comment 1: Several commenters asked the Board to be more willing to
permit live testimony of declarants. Some suggested that live testimony
be considered when requested or when the issues turn on conflicting
expert testimony. Others commented that live testimony is rarely needed
in AIA trials and the format of oral hearings should not change. One
party suggested establishing a reasonable time limit when live
testimony is permitted.
Response: The Office will continue its present practice of
considering requests for oral hearings on a case-by-case basis. Thus
far, the Office has authorized and granted one such motion requesting
oral testimony. See K-40 Electronics, LLC v. Escort, Inc., Case
IPR2013-00203 (PTAB May 21, 2014) (Paper 34). The Office does not
expect that oral testimony will be required in every case where there
is conflicting testimony. When requested by the parties, however, and
where the panel believes oral testimony will be helpful in making a
determination, the Office will permit oral testimony. The format for
presenting live testimony is left to the discretion of the panel.
Comment 2: Two commenters suggested that the Office should revise
the definition of ``hearing'' or ``trial'' to clarify that live
testimony at the final hearing is part of an AIA trial.
Response: The current definition of what constitutes a trial is
intended to establish an endpoint for the receipt of evidence. Thus,
unless otherwise authorized, no new evidence can be presented at the
final oral hearing, as that would create surprise and be unfair to the
party against whom the evidence is being offered. However, in the case
of oral testimony at the final hearing, it is understood, and the Board
will make clear at the hearing, that the testimony is evidence that
becomes part of the record.
Comment 3: Several commenters suggested that the Office should
alter its format for final oral hearings to allow each party to reserve
time for a main and rebuttal argument.
Response: The comment is not adopted. The current format of oral
hearings and the availability of rebuttal arguments are dictated by
burdens of proof. Consequently, the petitioner, who has the burden of
proving the challenged claims unpatentable, is permitted to rebut the
patent owner's opposing argument on that issue. Likewise, a patent
owner who presents argument on a motion to amend at final hearing is
permitted to rebut petitioner's opposing argument on that issue.
Providing a rebuttal to patent owner, as a matter of right, on
unpatentablilty would disadvantage the party with the burden of proof.
The Board, however, has broad discretion to conduct final oral hearings
in a manner that is in the interests of justice.
Comment 4: A commenter requested that the Office clarify whether
the parties are limited to presenting argument on issues specified in
the oral hearing request.
Response: The comment is adopted. The Office will provide guidance
on this issue in the FAQs on the PTAB Trials Web site and in the Office
Patent Trial Practice Guide.
Comment 5: A commenter requested that the Office provide the
parties with additional days to permit exchange and conference on
demonstratives.
Response: The comment is adopted. The Office's rules for oral
hearings are proposed to be modified to require the exchange of
demonstratives seven business days before the final hearing date.
Comment 6: A commenter requested that the Office revise its
guidelines on the nature of demonstrative exhibits at oral argument to
make them more ``relaxed.''
Response: The comment is not adopted. The guidelines on
demonstrative exhibits are intended to prevent a party from
supplementing the record with additional evidence and arguments after
the period for presenting evidence has ended.
Comment 7: One commenter suggested upgrading technology resources
so that hearings can be held in regional offices.
Response: Currently, the Office is planning to upgrade its ability
to hold hearings in regional offices.
Comment 8: One commenter suggested that hearing rooms be open at
least 30 minutes before the scheduled hearing time to allow the parties
to organize themselves and connect any equipment to be used during the
hearing.
Response: The current Office practice is to open PTAB hearing rooms
to the parties and public 30 minutes before the hearing is scheduled to
start. The Office will continue this practice.
Comment 9: A commenter advocated allowing a recess during oral
argument to confer with an expert when there is a question of specific
claim construction.
Response: The panel hearing a final argument will evaluate a
party's request for a recess on a case-by-case basis.
Comment 10: A commenter suggested that all judges of a proceeding
be available for multiple session final arguments.
Response: This comment is adopted in part. Sometimes several
related cases having different assigned panels are heard at the same
time in a multi-session hearing. The Office ensures that, absent
extenuating circumstances, the panel members assigned to a particular
case are present at the session when that case is heard. The Office
also encourages the panel members assigned to the related cases to be
present for all
[[Page 50737]]
the sessions. Occasionally a scheduling conflict prevents a panel
member from attending a session in a related case.
General Topics
The Office asked, ``What other changes can and should be made in
AIA trial proceedings? For example, should changes be made to the
Board's approach to instituting petitions, page limits, or request for
rehearing practice?'' 79 FR at 36477.
Comment 1: Several comments suggested reduced filing fees for
smaller businesses such as micro-entities and technology start-ups,
especially those involved in litigation.
Response: The Office does not adopt this proposal. The Office was
not given authority to provide for small entity and micro-entity filing
fee reduction for reviews under AIA. The current filing fee schedule,
available at http://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-schedule, takes into account the costs and expenses
for maintaining the operation of the Office, and in particular, the
operation of the Board in conducting AIA proceedings.
Comment 2: The Office received comments regarding the use of party
confidential information produced under a protective order in parallel
district court proceedings. Commenters expressed concern that such
party confidential information may be submitted in an AIA proceeding by
the opposing party where there is ``little incentive to . . . either
limit the evidence to that which has a nexus to the challenged claims
or to provide sufficient argument to maintain'' confidentiality.
Commenters further suggested procedural safeguards whereby, prior to
filing an opponent's confidential information, a party is required to:
(1) Initiate a conference call with the Board; (2) identify the
materials to be used; and (3) explain why there is a nexus between the
evidence and the challenged claims. The same commenters recommended
that, once the Board authorizes the filing of this evidence, the
opponent be afforded an opportunity to explain why the evidence be
maintained under seal.
Additionally, some commenters suggested that Section 4(A)(i) and
(ii) of the default protective order should be modified to place the
burden on the party designating the information confidential to show
good cause for maintaining the information under seal. Other commenters
recommended that the default protective order be entered automatically,
and that the parties request authorization to file a motion to modify
the default protective order.
Response: In promulgating the rules for the treatment of
confidential information in an AIA proceeding, the Office attempted to
strike the proper balance between protecting the discloser's
confidential information and the rights of others to use that
information. There is a strong public policy in favor of making
information filed in an AIA proceeding open to the public, especially
because the proceeding determines the patentability of claims in an
issued patent and, therefore, affects the rights of the public.
Nonetheless, if a party wishes the Board to consider truly sensitive
information in making a patentability determination, the current rules
provide a mechanism for the party to seek protection of that
information from public disclosure by providing for motions to seal and
the filing of a proposed protective order. 37 CFR 42.54.
With respect to the specific situation identified by the commenters
regarding the filing of an opponent's confidential information, the
current rules provide mechanisms to maintain confidentiality of such
information. For example, under Rule 42.14, information subject to a
motion to seal is ``provisionally sealed on receipt of the motion and
remain[s] so pending the outcome of the decision on the motion.''
Following the filing of the motion to seal, an opponent may contact the
Board and raise concerns regarding the other party's motion and the
confidentiality of the opponent's information while the information is
provisionally sealed. Further, under Rule 42.54, if applicable, the
Board may issue an order to protect a party or person from disclosing
confidential information, including ``[f]orbidding the disclosure or
discovery.'' Moreover, to the extent that confidential information may
have been improperly filed, Rule 42.56 provides for the expungement of
this information from the record.
Additionally, a party need not wait for the filing of a motion to
seal or proposed protective order to bring issues of confidentiality to
the Board's attention. Parties are encouraged to discuss discovery
matters, including the discovery of confidential information, early in
proceedings to resolve potential disputes before these occur. These
discovery matters include whether a protective order is necessary for
the proceeding. The automatic entry of a protective order in every
proceeding is not necessary, especially as the majority of evidence in
these contested proceedings is non-confidential. Nevertheless, should
the parties desire more or less protection than that provided by the
default order in the Office Trial Practice Guide (Appendix B), the
parties are always free to propose a stipulated protective order for
consideration by the Board. The purpose of the default order is to
encourage the parties to reach such agreements promptly, as lengthy
disputes over complex protective order provisions are inconsistent with
the legislative goal of providing a more efficient, less costly
alternative to litigation. As always, if the parties are unable to come
to agreement on any issue, the Board is available to provide guidance.
In light of the above, the Office does not propose any rule change
in response to these comments. However, the Office appreciates the
comments directed to affording the ``opponent'' an opportunity to
explain why the evidence is confidential and placing the burden on the
designating party to show good cause in sealing the information. The
Office agrees it is reasonable that the party designating information
as confidential is in the better position of explaining that
designation and bearing the burden of maintaining confidentiality.
Accordingly, the Office will revise the protective order in the Office
Trial Practice Guide to include language addressing this concern.
Comment 3: Several commenters recommended the use of word count
instead of page limits.
Response: This comment is adopted for the petition, preliminary
response, patent owner response, and petitioner's reply brief. For all
other briefing, a page limitation will be maintained. This change will
allow the Office to gain administrative efficiencies. For example, with
the use of word counts for the main briefing for AIA proceedings,
petitions will no longer be reviewed to determine if any claim charts
contain argument. This will streamline administrative review of
petitions and reduce the number of non-compliant petitions that require
correction.
Comment 4: One comment suggested that a petition page limit should
be determined by the number of claims challenged to avoid the filing of
multiple petitions on a single patent. Another comment has favored an
alternative approach that provides automatic page extension tied to
excess claim fees.
Response: This comment is not adopted. Based on the Board's
experience, considering solely the number of claims at issue to
determine a page limit for a petition does not provide sufficient
flexibility in a petition to present ``the precise relief requested''
and ``the reasons for the relief requested, including a detailed
[[Page 50738]]
explanation of the significance of the evidence including material
facts, and the governing law, rules, and precedent'' as required under
Rule 42.22(a). Although, the number of claims at issue may affect the
length of a petition, more often, the page length is governed by the
discussion of the substantive unpatentability issues presented. In the
Board's experience, the substantive issues for multiple claims in the
same patent involve similar discussions of technology, claim
construction, and prior art references. The Office expects that the
word limits for inter partes review petitions, covered business method
patent review petitions, and post-grant review petitions will be
sufficient in all but exceptional cases. Furthermore, petitioners may
seek waiver of the word limits in appropriate circumstances. 37 CFR
42.24(a)(2).
Comment 5: The Office received several comments regarding the use
of claim charts. One commenter suggested claim charts should be
attached separately from a petition and should not count toward the
page limit. Other commenters requested clarification on the permitted
contents in claim charts. For example, one commenter suggests that
claim charts only include quotations from and citations to the prior
art. Another commenter suggested allowing citations to declarations in
the claim chart to support arguments as long as the declaration does
not ``bootstrap arguments not also presented in the briefing.''
Response: In considering the use of claim charts, the Office has
always been mindful of the concerns that claim charts may be used
improperly by parties to circumvent page limits. Indeed, claim charts
have been improperly used by parties to present attorney arguments and
the incorporation by reference of evidence and arguments (e.g., copious
citations to declarations) that would otherwise exceed the page limits
if provided elsewhere in briefing. As explained in the Board's
frequently asked questions, D12, ``[p]lacing one's argument and claim
construction in a claim chart to circumvent the double spacing
requirement is not permitted, and any such argument or claim
construction may not be considered by the Board.'' Further, D12
explains the ``Board previously accepted a few petitions with claim
charts that included claim constructions, arguments, and explanations
as to how the claim is unpatentable because the procedure for filing
AIA petitions was new. However, correction is now required when a
petition includes improper usage of claim charts.'' With the advent of
the change from page limits to word count for the petition, patent
owner preliminary response, patent owner response, and reply brief,
however, a party could present its case by including argument in claim
charts.
Comment 6: Several comments proposed allowing petitioners to file a
reply brief responsive to the patent owner's preliminary response.
Commenters suggest that the ability to file a reply brief will provide
a more complete record, reduce the burden on the Office, and reduce the
number of requests for rehearing filed by petitioners. Another comment,
however, contends this proposed practice at the preliminary stage of
the review would afford petitioners an unfair advantage in including
arguments in the reply not addressed in the petition.
Response: The Office does not adopt the proposal of a petitioner's
reply as of right in the pre-institution phase of an AIA review. Adding
a reply as of right to the record at the preliminary stage would
increase the burden on Office review by introducing additional
arguments into the record not presented in the petition, which is the
focus of the institution decision. Further, under Rule 42.5 the Office
exercises discretion in administering the proceedings to balance the
ideal of precise rules against the need for flexibility to achieve
reasonably fast, inexpensive, and fair proceedings. Accordingly, the
Board will continue to consider a petitioners' requests for filing
reply briefs on a case-by-case basis, such as in response to
testimonial evidence submitted by a patent owner in its preliminary
response.
Comment 7: Several comments proposed increased page limits for the
petitioner's reply to patent owner's response. Other comments suggested
allowing patent owners to file a surreply to the petitioner's reply to
patent owner's response addressing new issues that appear in replies.
Another comment proposed replacing the motion for observations with a
surreply.
Response: The Office has recently issued rules that adopt the
proposed change for increasing the page limit of the petitioner's reply
to twenty-five (25) pages. The Office does not adopt the other proposed
changes regarding surreplies. The Office Patent Trial Practice Guide
provides that ``a reply that raises a new issue or belatedly presents
evidence will not be considered and may be returned.'' Thus, a surreply
is not required to address new issues raised in a petitioner's reply
because such new issues are not considered by the Board.
Comment 8: Several comments advised against implementing mandatory
settlement discussions that impact the statutory timeline for AIA
proceedings. Other comments agreed with the Board's approach of
encouraging but not requiring settlement discussions. Further comments
advised that additional Board resources should not be expended on
promoting settlement. Additionally, other commenters disagreed on
whether a proceeding should be terminated following settlement.
Response: The Office agrees with comments recommending the
encouragement of settlement and often includes a meet-and-confer
requirement in a Scheduling Order. Additionally, the Office notes that
the extent of the Board's involvement in settlement discussions, if
any, will be determined on a case-by-case basis, especially where the
parties request such involvement.
With respect to the issue of termination following settlement,
current Rule 42.74 provides the Board with discretion to determine
issues of unpatentability after a settlement in a proceeding. In the
Board's experience, this rule allows the Board greater flexibility to
balance the public interest in resolving issues of unpatentability with
the need to efficiently allocate Board resources. Thus, the Office does
not adopt any rule change.
Comment 9: The Office received a number of comments suggesting that
the Board designate more decisions as precedential or informative to
improve consistency of Board decisions, although one commenter
suggested that the Office should not announce policy changes
inferentially, for example, by selectively publishing decisions as
informative. One commenter suggested the assignment of an assistant
chief judge to identify precedential and informative decisions, and the
promulgation of a rule-based designation process. Another commenter
advocated revising SOP 2 to streamline the designation process.
Response: The Office does not adopt these changes. Standard
Operating Procedure 2 (rev. 9) (``SOP 2'') provides that any member of
the Board may recommend to the Chief Judge that an opinion be
designated as precedential or informative. This procedure ensures that
all members of the Board, and not just an assigned member, have the
opportunity to nominate a case of which others may not be aware.
Further, SOP 2 provides that parties to a proceeding or a third party
member of the public may, within 60 days of issuance of an opinion,
request that the opinion be
[[Page 50739]]
made precedential. This procedure further engages stakeholders in the
process of maintaining consistency at the Board by bringing cases of
interest to stakeholders to the Board's attention. Additionally, the
Office does not adopt a rule-based approach given that SOP 2 provides
clear and sufficient guidance on the procedures taken at the Board for
the designation of cases as informative or precedential.
Also, in addition to the informative and precedential decisions,
the Board further provides a list of representative orders and
decisions at http://www.uspto.gov/patents-application-process/appealing-patent-decisions/decisions-and-opinions/representative-orders. Although not informative or precedential, representative orders
and decisions provide guidance on the Board's treatment of recurring
issues in AIA proceedings. See Standard Operating Procedure 2 (Rev. 9)
(explaining distinction between routine, representative, informative,
and precedential), http://www.uspto.gov/sites/default/files/documents/sop2-revision-9-dated-9-22-2014.pdf.
Comment 10: One commenter suggested that the Office Patent Trial
Practice Guide should be updated periodically.
Response: The Office is currently working on a revised Office
Patent Trial Practice Guide that will be published with the final
rulemaking for these proposed rules. The Office further expects
revisions to the Office Patent Trial Practice Guide will be issued as
needed in the future.
Comment 11: Several commenters advocated improvements to the
Board's Web site and docketing case system. Suggestions included the
integration of the PTAB docketing system with Patent Application
Information Retrieval (``PAIR''), improvements to Patent Review
Processing System (``PRPS'') searching capabilities and user interface,
and increased availability of statistics concerning AIA proceedings.
One commenter suggested that all final written decisions should be
uploaded into PAIR.
Response: The Office has considered the commenters' suggestions and
is working with vendors to improve PRPS and provide additional
functionality such as searching in the case docketing system. With
respect to integration with PAIR, after the issuance of a final written
decision in an AIA proceeding, the final written decision also is
uploaded into PAIR. In the Office's experience, this provides
sufficient continuity of information between PRPS and PAIR.
Additionally, the Office posts all final Board decisions to the
Office's eFOIA site at http://e-foia.uspto.gov/Foia/PTABReadingRoom.jsp, and has endeavored to maintain up-to-date and
archived statistics on AIA proceedings, available at http://www.uspto.gov/patents-application-process/patent-trial-and-appeal-board/statistics. Thus, at this time no changes to the availability of
statistics or the underlying data are adopted.
Comment 12: Several commenters expressed concern about the Office's
practice of allowing institution based on some, but not all, of the
grounds presented in a Petition. Commenters are concerned that because
the decision on institution is not appealable, and any ground on a
challenged claim that is not instituted is not reflected in the final,
appealable decision, a petitioner has no redress for grounds on which
the Office chooses to not institute. Also, one commenter suggested,
allowing claim amendments for any ``challenged'' patent claim as
contemplated by the AIA would be at odds with a practice where all
challenged claims may not be in a trial. A commenter suggested shifting
the redundancy determination to the final written decision, so that
such a decision is appealable. One commenter stated that redundancy
should not be applied where grounds are in different statutory classes,
or when a reference can be sworn behind. Another commenter suggested
requiring patent owner to submit a claim construction at the
preliminary stage so that the Office could render a definitive
construction in its decision on institution, subject to broadening in
view of claim construction opinions in concurrent litigation, and avoid
redundancy determinations between grounds under sections 102 and 103,
that may prove during trial to be unduly constraining.
Response: The Office appreciates the concerns expressed by the
comments, but must balance these concerns with the workload in AIA
proceedings and the statutory time constraints under which AIA review
proceeding must be decided. In order to ensure a fair and efficient
process to resolve reviews in a timely fashion, the Office uses partial
institution as one tool to manage effectively AIA reviews. The Office
is cognizant of the ramifications of partial institution where the
grounds are in different statutory classes, or when a reference may be
overcome by swearing behind it, and strives to strike an appropriate
balance between what can be accomplished during the finite time frame
for a trial and fairness to the parties in fully vetting patentability
issues on challenged claims. The Office will continue to assess whether
such balance is appropriately struck.
Comment 13: One commenter suggested that the scope of estoppel
under 37 CFR 42.73(d)(3) is too broad because it encompasses a finally
refused or cancelled claim of a patent owner in an AIA review as prior
art to be used against the patent owner, and may not allow a patent
owner to pursue narrower, patentably distinct claims in a separate
reissue, reexamination, or continuing application. Another commenter
requested that the Office should maintain its rules regarding patentee
estoppel to prevent a patentee from seeking new, but patentably
indistinct claims in another proceeding before the Office. Commenters
also requested clarification of the estoppel rule to make clear that an
estoppel does not arise where an amendment is proposed, but not
granted.
Response: The Office appreciates the comments, but does not propose
any rule change in response. The rule that the comment addresses, 37
CFR 42.73(d)(3), appropriately precludes an applicant or owner from
obtaining a claim that is not patentably distinct from a finally
refused or canceled claim.
Comment 14: Several commenters were concerned with a panel's
perceived reluctance to revisit a decision, whether on rehearing or on
final written decision after institution. One commenter suggested that
the Office should consider designating one Administrative Patent Judge
(``APJ'') for the decision on institution and a panel of three APJs for
the corresponding AIA trial because of a real or perceived challenge
for panel members to remain impartial in conducting an AIA trial on the
merits when they participated in the decision to institute the trial.
The commenter further stated that having the same three APJs consider
an incomplete, preliminary record to decide institution, and
subsequently issuing a final written decision based on the complete
trial record, creates an actual or perceived bias against the patent
owner. Another commenter suggested that the panel that institutes
should be different from the panel that makes a final decision on the
merits because it would increase due process protections, reduce any
bias or perception of bias, and more fully meet AIA requirements by
avoiding any blurring of the distinction between the threshold standard
for institution and the higher standard for a determination on the
merits of patentability. Several commenters suggested that requests for
rehearing should be freely allowed and an expanded panel of APJs should
be used to have ``another set of eyes'' to
[[Page 50740]]
ensure that rehearing requests will be duly considered, with another
commenter suggesting that a completely different panel of APJs should
consider requests for rehearing. Another commenter suggested that the
Office should clarify what types of decisions are appropriate for an
expanded panel review. One commenter asked for a requirement that a
party requesting rehearing should file a statement specifically
identifying conflicting Board or court decisions. Another commenter
suggested that a reply brief for a petitioner should be allowed before
a decision on institution is made, rather than relying on the
availability of a request for rehearing that has a deferential
standard, because the panel that decided the original decision may be
reluctant to revisit it.
Response: The Office believes that the panel deciding whether to
institute an AIA proceeding is not predisposed to rule in favor of any
party, whether the petitioner or patent owner, and that each panel
applies the appropriate legal standard to make a fair and unbiased
decision based upon the evidence and arguments of record. In response
to these comments and to explore gaining further efficiencies in AIA
proceedings, however, the Office may seek, in a separate Request for
Comments, comments on a proposed pilot program under which the
determination of whether to institute an IPR will be made by a single
APJ, with two additional APJs being assigned to the IPR if a trial is
instituted. In that separate Request for Comments, the Office also may
seek comments on any other issues relevant to fair and efficient
decision making.
The Office recently has revised SOP1 to describe situations in
which an expanded panel may be utilized, where the decision to expand a
panel is made on a case-by-case basis. In SOP1, the Office has included
reasons that may warrant expansion of a panel. This guidance may be
found on the Office's Web site at: http://www.uspto.gov/sites/default/files/documents/SOP1%20-%20Rev.%2014%202015-05-08.pdf. Also, a
petitioner always has the ability to request that a panel authorize the
filing of a reply brief at the preliminary stage. Although a petitioner
is not afforded a reply brief as of right before institution, the
Office has provided in these proposed rules an explicit provision
affording an opportunity to seek permission to file a reply brief to
respond to a preliminary response that presents testimonial evidence.
A request for rehearing is an opportunity to address whether a
panel misapprehended or overlooked a matter in rendering its opinion,
which may include identification of conflicting Board or court
decisions, but does not necessitate such a statement. See 37 CFR
42.71(d). Requiring a moving party to identify all matters the party
believes the Board misapprehended or overlooked, and the place where
each matter was previously addressed in a motion, an opposition, or a
reply is appropriate for a rehearing request. See id.
Comment 15: Two commenters sought a more generous schedule for
parties to conduct the trial and advocated a more proactive management
of the trial by earlier rulings on interlocutory motions, such as
motions to amend, claim construction disputes, and motions to exclude,
to narrow the issues for trial.
Response: Although there is discretion in how to schedule due dates
for an AIA trial, the Office is cognizant of the constraints on parties
to engage in and complete discovery in a timely manner. To that end,
the standard Scheduling Order generally entered in each case allows the
parties to stipulate to adjustment of deadlines for the filing of
patent owner's response, petitioner's reply, briefing for any motion to
amend, and briefing on any motions for observations and any motion to
exclude except for the reply briefs for the motion to exclude (due
dates 1 through 5). If a problem arises in meeting the schedule set
forth by the Office on dates for which the parties may not stipulate to
a change or on which the parties do not agree to a new date, the
parties are encouraged to contact the Office to resolve the issue. The
Office continues to review the AIA proceedings to assess where
efficiencies may be gained for both the Office and the parties, but
does not contemplate at this time requiring resolution of interlocutory
motions at certain points in the trial timeline. As always, should any
party believe that a particular motion in a case warrants early
attention to resolve an issue that will truncate the proceeding, such
party is invited to bring that issue to the attention of the Office in
that case.
Comment 16: One commenter suggested changing 37 CFR 42.20(c) to
refer to both the burden of proof and persuasion, and to refer to the
burden being placed on the ``petitioning or moving'' party, as opposed
to ``moving party'' only.
Response: The Office appreciates the comment, but declines to amend
the rule.
Comment 17: One commenter suggests that further training of APJs in
the payments industry may be necessary for those working on covered
business method patent reviews. Another commenter suggests that 37 CFR
42.301(b) should be amended to reflect that both factors for
determining a technological invention must not exist for a claim to be
found to fail to define a ``technological invention.''
Response: The Office appreciates these comments and continues to
assess the training needs for employees. The Office declines to amend
37 CFR 42.301(b) as it reflects properly the standard for determining
whether a patent is for a technological invention.
Comment 18: One commenter advocates application of an issue
preclusion analysis in deciding whether to adopt a prior claim
construction in another proceeding.
Response: Although the Office considers prior claim constructions
rendered in another proceeding, the Office is mindful that the Board
follows a different claim construction approach than that of district
courts, and the evidentiary record in the later AIA proceeding may be
different than the one in the prior proceeding. Therefore, a strict
issue preclusion analysis would not be appropriate for every case. The
Office will determine the claim construction on a case-by-case basis
depending on the facts presented in the particular proceeding.
Comment 19: Several commenters had suggestions for deposition
practice before the Office in AIA trials. One commenter suggested that
37 CFR 42.53(d)(4) is too restrictive by requiring a notice of
deposition to be filed at least 10 days before a deposition takes
place, because in practice, parties often do not agree on the place and
time of a deposition within this time frame. Another commenter asked
for clarification concerning when counsel may object to a line of
questioning in a deposition as beyond the scope of the witness's direct
testimony. Two commenters requested clarification of 37 CFR 42.53(g)
governing which party should bear the costs associated with the
testimony of a witness. Another commenter seeks a blanket prohibition
on a party's ability to confer with a witness during the deposition,
especially between cross-examination and re-direct, which the commenter
asserts encourages rehearsal of testimony for re-direct.
Response: The Office appreciates these comments. The Office invites
further comment on how to amend section 42.53(d)(4). For instance,
should the rule be amended to reduce the amount of lead time for filing
a notice of deposition before the deposition, allow the parties to
stipulate to the timing for filing, or allow both options? Determining
when a party's line of questioning in a deposition is beyond
[[Page 50741]]
the scope of the deposition is best handled on a case-by-case basis,
and the Office is amenable to handling timely these issues as they
arise in a deposition. The Office has provided guidance on which party
should bear the costs associated with the testimony of a witness in the
Office Patent Trial Practice Guide in discussing witness expenses
associated with discovery. See 77 FR at 48761. The Office invites
further comment on any additional clarification that is needed. The
Office appreciates the comment concerning when a party may confer with
its witness during a deposition, but believes that the guidance in the
Office Patent Trial Practice Guide strikes the correct balance
concerning when a party may confer with its witness.
Comment 20: One commenter suggested that a patent owner be required
to serve any evidence regarding authentication or public availability
of a prior art reference on which trial has been instituted, concurrent
with any objections the patent owner is making to the petitioner's
evidence.
Response: The Office appreciates the comment. The rules currently
provide that unless previously served, a party must serve relevant
information that is inconsistent with a position advanced by the party
during the proceeding concurrent with the filing of the documents or
things that contains the inconsistency. See 37 CFR 42.51(b)(1)(iii).
Therefore, a patent owner advancing the position that evidence is not
authentic or was not available publicly has an obligation to serve this
information on the petitioner.
Comment 21: To facilitate electronic filing, one commenter
suggested that backup counsel's login credentials should be able to be
used for filing documents and that service may be made to electronic
mail addresses specified in the mandatory notices without requiring
agreement of the parties.
Response: The Office appreciates the suggestions and is working to
improve its electronic filing and case management system. Parties are
now permitted to identify one backup counsel who will have the same
permissions as lead counsel and be permitted to file documents in the
system. Parties may identify additional backup counsel, but only the
lead counsel and first backup counsel may file documents. With respect
to service under Sec. 42.6(e), the Office believes that the ability to
serve electronically should remain optional upon agreement of the
parties, rather than mandatory, to accommodate users who do not use
electronic mail regularly or who prefer service by mail.
Comment 22: Two commenters questioned how experts are utilized in
AIA proceedings. One commenter favors significant sanctions for counsel
to author a report that an expert signs without authorship. A second
commenter seeks amendment of 37 CFR 42.65(a) to require that an
unsupported expert report be entitled to ``no weight.''
Response: The authority of the Office to sanction a party for
misconduct, see 37 CFR 42.12, including abuse of process or any other
improper use of the proceeding, is robust, and the Office proposes
adding a Rule 11-type certification for all papers filed with the Board
with a provision for sanctions for noncompliance that would apply to
practitioners as well as parties. Therefore, the Office has the ability
to sanction inappropriate conduct that is brought to its attention. The
Office declines to amend 37 CFR 42.65(a) to require that an unsupported
expert report must be entitled to ``no weight.''
Comment 23: One commenter stated that an Office decision nullifying
the claims of a patent or an affirmance of such a decision should
operate to trigger the failure-to-market forfeiture provisions under 21
U.S.C. 355(j)(5)(D)(i)(I).
Response: The Office appreciates the comment, but as the commenter
recognizes, such a request is beyond the Office's jurisdiction to
accomplish.
Comment 24: Several commenters expressed concern about the
perception of overall fairness of AIA proceedings to both the
petitioner and patent owner. For instance, several commenters expressed
concern that the Office is more concerned with the speed and efficiency
with which it handles AIA proceedings than with the perception of
fairness of the proceedings to all involved parties. Several commenters
expressed a perception that AIA proceedings are skewed in favor of
petitioner.
Response: The Office appreciates these comments and continues to
actively engage with the public and practitioners who utilize AIA
proceedings, as the Office has done with this notice of proposed
rulemaking, to continually monitor the fairness of the proceedings for
all involved parties, as well as examining ways to ensure that the
process is as efficient and fair as possible under the congressional
mandate. For instance, in the Office's ``Quick-Fix'' rulemaking, the
Office provided for additional pages for briefing for motions to amend
and the petitioner's reply brief and provided for a claims appendix.
The Office has also issued further guidance on motions to amend through
decisions, such as MasterImage 3D, Inc. v. RealD Inc., Case IPR2015-
00040 (PTAB July 15, 2015) (Paper 42), and currently proposes allowing
Patent Owners to present new testimonial evidence at the preliminary
stage of the proceeding. The Office also is proposing a word count for
major briefing to allow the parties to present arguments and evidence
to the Office in a way that the party deems is most effective, and is
proposing a Rule-11 type certification be applied to police the actions
of counsel, as well as parties, in AIA proceedings. Based upon input
from the public and experience with the proceedings, the Office will
continue its efforts to make the proceedings as fair and effective as
possible under congressional mandate.
Comment 25: One commenter expressed concern over use of AIA
proceedings by a second petitioner that uses prior art or arguments
from a previously filed petition and expressed concerns about
consistency in the joinder process. This commenter suggested assigning
the second petitioner the role of junior party, who should not be
allowed to continue the proceeding if the original petitioner and
patent owner successfully settle the AIA proceeding.
Response: The Office appreciates these comments, and notes that the
Office has the discretion concerning whether to institute an AIA review
and the authority to decline to institute where the same or
substantially the same prior art or arguments were previously presented
to the Office. See 35 U.S.C. 314(a), 315(d), 324(a), 325(d). Although
the Office strives for consistency in the treatment of parties before
the Office, the Office declines to adopt the suggestion to assign a
second petitioner, asserting similar argument or prior art as a first
petitioner, the role of ``junior party'' and to discontinue a
proceeding if the original petitioner and the patent owner settle their
dispute. The Office will not terminate a proceeding that has not been
settled as to all parties because each party is entitled to assert its
interest in the proceeding.
Comment 26: Commenters suggested eliminating the proposed statement
of material facts option in 37 CFR 42.22 and 42.23 because it is not
used often and panels have differed as to whether such statements are
counted in the page limits.
Response: The Office appreciates this comment, but declines to
adopt it in order to maintain the option of a party to choose to file a
proposed statement of material facts. See 37 CFR 42.24
[[Page 50742]]
(including any statement of material facts to be admitted or denied in
support of a petition or motion in the page limits).
Comment 27: Several commenters expressed concern over the use of
demonstrative exhibits. For instance, one commenter wanted the timing
for exchanging demonstratives that allows parties to address objections
and achieve resolution before the oral hearing. Another commenter seeks
to be able to use argument in demonstratives with proper citation, and
another commenter states that striking of demonstratives should be very
rare and that problems with demonstratives should go to the weight to
be accorded.
Response: The Office appreciates the comments and understands the
difficulty in resolving disputes concerning demonstrative exhibits. The
Office believes, however, that the most efficient way to handle such
disputes is on a case-by-case basis with the panel for the case.
Comment 28: One commenter encourages the Office to continue
outreach by roundtables and webinars.
Response: This comment is adopted. The Office continues to host
Board-side chats, road shows, and lunch-and-learn programs that will
begin in the fall of 2015. The Office considers these interactive
programs to provide valuable input into how to improve the fairness and
effectiveness of the AIA proceedings.
Comment 29: Two commenters ask that the patent owner's preliminary
response be made mandatory for certain disclosures such as claim
construction and antedating of references, which will merely shift the
timeframe in which a patent owner must present such information and
argument.
Response: The Office appreciates this comment. In this proposed
rulemaking, the Office proposes allowing a patent owner to present new
testimonial evidence with the patent owner preliminary response, which
may encourage patent owners to participate in the preliminary phase by
filing such a response and addressing issues raised in the petition
with argument and supporting evidence. The Office declines, however, to
make a patent owner preliminary response mandatory in light of the
statutory framework of AIA, which provides a patent owner a right to
file a preliminary response. See 35 U.S.C. 313.
Comment 30: One commenter requested that guidance in the Office
Patent Trial Practice Guide that is not reflected in any rule, be
incorporated into a rule, and that criteria for pro hac vice motions
that are reflected in current case law be incorporated into a revised
rule.
Response: The Office appreciates these comments. The Federal
Circuit recognizes that ``the choice between rulemaking and
adjudication lies in the first instance within the agency's
discretion.'' Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1291 (Fed.
Cir. 2015) (citing NLRB v. Bell Aerospace Co. Div. of Textron, 416 U.S.
267, 294 (1974)) (internal quotation marks omitted). At this time, an
effective and efficient way to provide guidance to practitioners is
through the Office Patent Trial Practice Guide and through
adjudication--the development of case law that resolves specific issues
in light of specific facts before the Office. The Office will continue
to develop guidance through these avenues, as well as through
rulemaking, where appropriate.
Comment 31: Several comments addressed formatting for briefing in
AIA proceedings. For instance, one commenter asks that the requirement
that each page of an exhibit be uniquely numbered in sequence be
amended to apply only if such page numbering does not exist already on
the document to avoid confusion as to which numbering scheme is
referenced in a brief. Another commenter asked that block quotes be
single spaced, and that incorporation by reference be allowed at a
panel's discretion when the same argument from another proceeding is
applicable.
Response: The Office appreciates the comments, but declines to
adopt them. Rule 42.63(d)(2)(i) requires that each page of an exhibit
must be uniquely numbered in sequence, but does not require a new set
of unique numbers be applied to an exhibit for which unique numbers
exist. The Office proposes using a word count for major briefing, which
would negate any advantage for using single spacing for a block quote,
and the Office requires 1.5 spaced block quotations for readability.
See 37 CFR 42.6(a)(2)(iii). The Office declines to allow incorporation
by reference at the panel's discretion because such incorporation may
subvert the page or word limit and each proceeding should be self-
contained within the docket for that proceeding for efficiency and
completeness.
Comment 32: Another commenter suggested that the Office allow the
parties to file papers, such as claim construction orders or other
statements from co-pending litigation, as supplemental information.
Response: The Office appreciates that claim construction orders and
other papers from co-pending litigation could be helpful to resolve the
parties' disputes in the proceeding before the Office in certain
situations. From the Office's experience, petitioners had submitted
such papers with their petitions to support their proposed claim
constructions. Similarly, patent owners proffered district court's
claim construction determinations with their preliminary responses or
patent owner responses in support of their position on patentability.
In fact, parties may file co-pending litigation papers to support their
motions, oppositions, or replies. Parties also may seek leave to file a
motion to submit supplemental information pursuant to Sec. 42.123, but
such papers must be relevant to a claim for which the trial has been
instituted.
Comment 33: One commenter suggested a clarification in 37 CFR
42.121(b)(1) to change the ``support in the original disclosure of the
patent'' to the ``support in the original disclosure of the application
from which the patent issued.''
Response: The Office appreciates this comment, but does not adopt
it as the rule, as applied, is clear.
Comment 34: Several comments were directed to the treatment of sole
inventors and small entities. One commenter asked for more guidance for
independent inventors or small business who may want to utilize the AIA
proceedings pro se. For instance, the commenter stated that AIA
proceedings should be no more onerous than prosecution before the
Office, should be affordable, fair, and accessible for smaller
companies, and should be preferential to small entities and sole
inventors, who spend a greater percentage of time and capital securing
patents than larger entities.
Response: The Office does not adopt these proposals. The Office was
not given authority to provide for small entity and micro-entity filing
fee reduction for reviews under AIA. The current filing fee schedule,
available at http://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-schedule, takes into account the costs and expenses
for maintaining the operation of the Office, and in particular, the
operation of the Board in conducting AIA proceedings. The Office also
provides guidance for AIA proceedings through its Office Patent Trial
Practice Guide and on its Web site.
Comment 35: One commenter suggested that the Office should
encourage Congress to expand the scope of AIA proceedings by advocating
that Congress include section 101 challenges in inter partes reviews,
make covered business method patent reviews permanent, and expand
covered
[[Page 50743]]
business method patent reviews to include a broader variety of patents.
Response: The Office remains open to all ways of strengthening our
patent system and appreciates the comment, and notes that these issues
were considered by Congress during the legislative process for AIA.
Comment 36: One commenter proposed that the Office amend Rule
42.52(d)(2) to state that cross-examination should ordinarily take
place after any supplemental evidence relating to the direct testimony
has been served, as opposed to filed, because supplemental evidence is
served under Rule 42.64(b)(2), and not filed until after a motion to
exclude has been filed, which occurs well after most depositions have
taken place. Another commenter suggests requiring filing of
supplemental evidence as exhibits versus just serving.
Response: The Office will adopt these comments and resolve the
issue presented, but seeks further comment on the best way to resolve
the issue. For instance, should the Office amend Rule 42.52(d)(2) as
suggested or amend Rule 42.64(b)(2) to require that supplemental
evidence be filed as opposed to served?
Comment 37: Several commenters expressed views concerning the types
of arguments to be made in AIA proceedings. For instance, one commenter
suggested that the Office should distinguish between appropriate
analysis and inappropriate ``argument'' in claim charts. A second
commenter sought a limitation on the number of invalidity arguments.
Another commenter wanted clarification of the rules that a patent owner
is also under a burden to support affirmative factual statements with
evidence.
Response: The Office appreciates the comments. In the current
proposed rule, the Office proposes to use a word count for major
briefing, such as the petition, patent owner preliminary response,
patent owner response, and petitioner's reply. A change from page
limits to word count for major briefing allows the parties to structure
arguments in briefing in any way that the party deems best for
presenting its case to the Office, including presenting analysis and
arguments in claim charts. Because the Office has the discretion under
35 U.S.C. 314(a) and 324(a) whether to institute an AIA trial and takes
the opportunity at institution to focus the trial on grounds which meet
the threshold standards in 35 U.S.C. 314(a) and 324(a) and which
reasonably may be decided within the statutory imposed time-frame for
the trial, the Office declines to place a limitation on the number of
grounds that a petitioner may present. Also, if patent owner does not
support affirmative factual statements with evidence, such statements
will be given little or no weight.
Rule 11-Type Certification
To further attempt to prevent any misuse of the AIA proceedings,
the Office proposes to amend Sec. 42.11, which prescribes the duty of
candor owed to the Office, to include a Rule 11-type certification for
all papers filed with the Board with a provision for sanctions for
noncompliance. The Board also may refer possible misconduct in the
course of AIA proceedings to the Office of Enrollment and Discipline
for investigation and, if warranted, further proceedings under 37 CFR
11.19-11.61.
Recognizing Privilege for Communications With Domestic Patent Agents
and Foreign Patent Practitioners
In 2015, the Office launched an outreach initiative to explore
various issues associated with confidential communications with patent
agents or foreign patent practitioners. The Office published a notice
convening a roundtable in February 2015 and requesting public comments.
See Domestic and International Issues Related to Privileged
Communications Between Patent Practitioners and Their Clients, 80 FR
3953 (Jan. 26, 2015). Nineteen parties submitted written comments in
response to the Federal Register notice, which are available on the
USPTO Web site at: http://www.uspto.gov/learning-and-resources/ip-policy/roundtable-domestic-and-international-issues-related-privileged.
Some of these comments raised the issue of unclear or inconsistent
privilege rules for agents and foreign practitioners during discovery
in PTAB proceedings.
Consistent with that earlier outreach initiative, the Office here
seeks comments on the subject of attorney-client privilege or other
limitations on discovery in PTAB proceedings, including on whether
rules regarding privilege should be issued in connection with PTAB
proceedings. Such rules could, for example, explicitly recognize
privilege for communications between patent applicants or owners and
their domestic patent agents or foreign patent practitioners, under the
same circumstances as such privilege is recognized for communications
between applicants or owners and U.S. attorneys. The Office invites the
public to provide any comments on language, scope, or other
considerations for creating such a privilege, including possible
amendments to any of 37 CFR 42.51, 42.52, 42.55, 42.62, or 42.64 to
accomplish this purpose.
Discussion of Specific Rules
Subpart A--Trial Practice and Procedure
Claim Construction Standard
The Office proposes to amend 37 CFR 42.100(b), 42.200(b), and
42.300(b) as follows:
Amend 37 CFR 42.100(b) to add the phrase ``that will not
expire before a final written decision is issued'' after ``an unexpired
patent.''
Amend 37 CFR 42.200(b) to add the phrase ``that will not
expire before a final written decision is issued'' after ``an unexpired
patent.''
Amend 37 CFR 42.300(b) to add the phrase ``that will not
expire before a final written decision is issued'' after ``an unexpired
patent.''
The Office will add further clarifying instructions in the Office
Patent Trial Practice Guide concerning how a petitioner may determine
which standard to apply in the petition.
Patent Owner Preliminary Response
The Office proposes to amend 37 CFR 42.107(a) to provide that the
patent owner is not prohibited from including new testimonial evidence
with a preliminary response and that the patent owner's preliminary
response to the petition is subject to the word count under 37 CFR
42.24. See the proposed text in the amendatory instructions below.
The Office proposes to amend 37 CFR 42.107 to delete paragraph (c)
so that the patent owner is not prohibited from including new
testimonial evidence with a patent owner preliminary response.
The Office proposes to revise 37 CFR 42.108(c) provide that the
Board's decision whether to institute an inter partes review will take
into account a patent owner preliminary response where such a response
is filed, but supporting evidence concerning disputed material facts
will be viewed in the light most favorable to the petitioner for
purposes of deciding whether to institute an inter partes review, and
that the petitioner may seek leave to file a reply to the preliminary
response. See the proposed text in the amendatory instructions below.
The Office proposes to revise 37 CFR 42.207(a) to provide that the
patent owner is not prohibited from including new testimonial evidence
with a preliminary response and that the patent owner's preliminary
response to the petition is subject to the word count under 37 CFR
42.24. See the proposed text in the amendatory instructions below.
[[Page 50744]]
The Office proposes to amend 37 CFR 42.207 to delete paragraph (c)
so that the patent owner is not prohibited from including new
testimonial evidence with a patent owner preliminary response.
The Office proposes to revise 37 CFR 42.208(c) provide that the
Board's decision whether to institute a post-grant review will take
into account a patent owner preliminary response where such a response
is filed, but supporting evidence concerning disputed material facts
will be viewed in the light most favorable to the petitioner for
purposes of deciding whether to institute a post-grant review, and that
the petitioner may seek leave to file a reply to the preliminary
response. See the proposed text in the amendatory instructions below.
Oral Hearing
The Office proposes to amend 37 CFR 42.70(b) to require at least
seven, not just five, days before oral argument for exchange of
exhibits to provide additional time for the parties to resolve disputes
concerning demonstrative exhibits.
Word Count
The Office proposes to amend 37 CFR 42.24 to implement a word count
limitation for petitions, patent owner preliminary responses, patent
owner responses, and petitioner's replies, by:
Adding ``Type-volume or'' to the title;
adding ``word counts or'' before the words ``page limits''
or ``page limit'' and adding ``or word count'' after ``a certificate of
service'' in paragraph (a)(1);
substituting ``14,000 words'' for ``60 pages'' in
paragraphs (a)(1)(i) and (a)(1)(iv);
substituting ``18,700 words'' for ``80 pages'' in
paragraphs (a)(1)(ii) and (a)(1)(iii);
substituting ``word counts'' for ``page limits'' and
``word count'' for ``page limit'' in paragraph (a)(2) except for the
last sentence in which ``word counts or'' is added before ``page
limits;''
adding ``word counts or'' before the ``page limits'' in
paragraph (b);
substituting ``word counts'' for the two instances of
``page limits'' in paragraph (b)(1);
substituting ``word counts'' for the two instances of
``page limits'' in paragraph (b)(2);
adding ``word counts or'' before the two instances of
``page limits'' and adding ``or word count'' after ``a certificate of
service'' in paragraph (c);
substituting ``5,600 words'' for ``25 pages'' in paragraph
(c)(1);
adding paragraph (d) concerning word count certification.
See the proposed text in the amendatory instructions below.
Rule 11-Type Certification
The Office proposes to amend 37 CFR 42.11 to add ``signing papers;
representations to the Board; sanctions'' to the title of the section,
to designate existing text as paragraph (a), and to add paragraphs (b)
through (d) to include a Rule 11-type certification for all papers
filed with the Board with a provision for sanctions for noncompliance.
See the proposed text in the amendatory instructions below.
Rulemaking Considerations
A. Administrative Procedure Act (APA)
This proposed rule would revise the consolidated set of rules
relating to Office trial practice for inter partes review, post-grant
review, the transitional program for covered business method patents,
and derivation proceedings. The changes proposed in this notice do not
change the substantive criteria of patentability. These changes involve
rules of agency practice. See, e.g., 35 U.S.C. 316(a)(5), as amended.
These rules are procedural and/or interpretive rules. See Bachow
Commc'ns Inc. v. F.C.C., 237 F.3d 683, 690 (D.C. Cir. 2001) (rules
governing an application process are procedural under the
Administrative Procedure Act); Inova Alexandria Hosp. v. Shalala, 244
F.3d 342, 350 (4th Cir. 2001) (rules for handling appeals were
procedural where they did not change the substantive requirements for
reviewing claims); Nat'l Org. of Veterans' Advocates v. Sec'y of
Veterans Affairs, 260 F.3d 1365, 1375 (Fed. Cir. 2001) (rule that
clarifies interpretation of a statute is interpretive); JEM Broad. Co.
v. F.C.C., 22 F.3d 320, 328 (D.C. Cir. 1994) (rules are not legislative
because they do not ``foreclose effective opportunity to make one's
case on the merits'').
Accordingly, prior notice and opportunity for public comment are
not required pursuant to 5 U.S.C. 553(b) or (c) (or any other law), and
thirty-day advance publication is not required pursuant to 5 U.S.C.
553(d) (or any other law). See Cooper Techs. Co. v. Dudas, 536 F.3d
1330, 1336-37 (Fed. Cir. 2008) (stating that 5 U.S.C. 553, and thus 35
U.S.C. 2(b)(2)(B), do not require notice and comment rulemaking for
``interpretative rules, general statements of policy, or rules of
agency organization, procedure, or practice'') (quoting 5 U.S.C.
553(b)(A)); U.S. v. Gould, 568 F.3d 459, 476 (4th Cir. 2009) (``The APA
also requires publication of any substantive rule at least 30 days
before its effective date, 5 U.S.C. 553(d), except where the rule is
interpretive * * * .''). The Office, however, is providing a sixty day
comment period in order to seek the benefit of the public's views.
B. Regulatory Flexibility Act
For the reasons set forth herein, the Deputy General Counsel for
General Law of the United States Patent and Trademark Office has
certified to the Chief Counsel for Advocacy of the Small Business
Administration that changes proposed in this notice will not have a
significant economic impact on a substantial number of small entities.
See 5 U.S.C. 605(b). The changes proposed in this document are to
revise certain trial practice procedures before the Board. Any
requirements resulting from these proposed changes are of minimal or no
additional burden to those practicing before the Board. Specifically,
proposed changes pertaining to representation would not present any
additional burden as the duty of candor and good faith are already
requirements under existing Board trial practice (37 CFR 42.11), USPTO
rules of professional conduct, and, for those who are attorneys,
applicable State bars. Second, changes imposed by converting certain
page limits to word counts for petitions and motions are not expected
to result in any material change to filings, other than the addition of
a certification that the filing is compliant. Finally, the proposed
changes pertaining to the inclusion of supporting evidence in a patent
owner preliminary response to petition are not required to be filed,
but merely available to parties should they choose. Moreover, the
Office anticipates that the vast majority of those that will provide
such supporting evidence during the petition review stage would have
provided such information later anyway, if and when, a trial were
instituted. For the foregoing reasons, the changes proposed in this
notice will not have a significant economic impact on a substantial
number of small entities.
C. Executive Order 12866 (Regulatory Planning and Review)
This rulemaking has been determined to be not significant for
purposes of Executive Order 12866 (Sept. 30, 1993).
D. Executive Order 13563 (Improving Regulation and Regulatory Review)
The Office has complied with Executive Order 13563. Specifically,
the Office has, to the extent feasible and applicable: (1) Made a
reasoned
[[Page 50745]]
determination that the benefits justify the costs of the rule; (2)
tailored the rule to impose the least burden on society consistent with
obtaining the regulatory objectives; (3) selected a regulatory approach
that maximizes net benefits; (4) specified performance objectives; (5)
identified and assessed available alternatives; (6) involved the public
in an open exchange of information and perspectives among experts in
relevant disciplines, affected stakeholders in the private sector and
the public as a whole, and provided on-line access to the rulemaking
docket; (7) attempted to promote coordination, simplification, and
harmonization across government agencies and identified goals designed
to promote innovation; (8) considered approaches that reduce burdens
and maintain flexibility and freedom of choice for the public; and (9)
ensured the objectivity of scientific and technological information and
processes.
E. Executive Order 13132 (Federalism)
This rulemaking does not contain policies with federalism
implications sufficient to warrant preparation of a Federalism
Assessment under Executive Order 13132 (Aug. 4, 1999).
F. Executive Order 13175 (Tribal Consultation)
This rulemaking will not: (1) Have substantial direct effects on
one or more Indian tribes; (2) impose substantial direct compliance
costs on Indian tribal governments; or (3) preempt tribal law.
Therefore, a tribal summary impact statement is not required under
Executive Order 13175 (Nov. 6, 2000).
G. Executive Order 13211 (Energy Effects)
This rulemaking is not a significant energy action under Executive
Order 13211 because this rulemaking is not likely to have a significant
adverse effect on the supply, distribution, or use of energy.
Therefore, a Statement of Energy Effects is not required under
Executive Order 13211 (May 18, 2001).
H. Executive Order 12988 (Civil Justice Reform)
This rulemaking meets applicable standards to minimize litigation,
eliminate ambiguity, and reduce burden as set forth in sections 3(a)
and 3(b)(2) of Executive Order 12988 (Feb. 5, 1996).
I. Executive Order 13045 (Protection of Children)
This rulemaking does not concern an environmental risk to health or
safety that may disproportionately affect children under Executive
Order 13045 (Apr. 21, 1997).
J. Executive Order 12630 (Taking of Private Property)
This rulemaking will not affect a taking of private property or
otherwise have taking implications under Executive Order 12630 (Mar.
15, 1988).
K. Congressional Review Act
Under the Congressional Review Act provisions of the Small Business
Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq.),
prior to issuing any final rule, the United States Patent and Trademark
Office will submit a report containing the rule and other required
information to the United States Senate, the United States House of
Representatives, and the Comptroller General of the Government
Accountability Office. The changes in this final rule are not expected
to result in an annual effect on the economy of 100 million dollars or
more, a major increase in costs or prices, or significant adverse
effects on competition, employment, investment, productivity,
innovation, or the ability of United States-based enterprises to
compete with foreign-based enterprises in domestic and export markets.
Therefore, this final rule is not a ``major rule'' as defined in 5
U.S.C. 804(2).
L. Unfunded Mandates Reform Act of 1995
The changes set forth in this rulemaking do not involve a Federal
intergovernmental mandate that will result in the expenditure by State,
local, and tribal governments, in the aggregate, of 100 million dollars
(as adjusted) or more in any one year, or a Federal private sector
mandate that will result in the expenditure by the private sector of
100 million dollars (as adjusted) or more in any one year, and will not
significantly or uniquely affect small governments. Therefore, no
actions are necessary under the provisions of the Unfunded Mandates
Reform Act of 1995. See 2 U.S.C. 1501 et seq.
M. National Environmental Policy Act
This rulemaking will not have any effect on the quality of the
environment and is thus categorically excluded from review under the
National Environmental Policy Act of 1969. See 42 U.S.C. 4321 et seq.
N. National Technology Transfer and Advancement Act
The requirements of section 12(d) of the National Technology
Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) are not
applicable because this rulemaking does not contain provisions which
involve the use of technical standards.
O. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3549) requires
that the Office consider the impact of paperwork and other information
collection burdens imposed on the public. This final rule involves
information collection requirements which are subject to review by the
Office of Management and Budget (OMB) under the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501-3549). This rulemaking does not add any
additional information requirements or fees for parties before the
Board. Therefore, the Office is not resubmitting information collection
packages to OMB for its review and approval because the revisions in
this rulemaking do not materially change the information collections
approved under OMB control number 0651-0069.
Notwithstanding any other provision of law, no person is required
to respond to, nor shall any person be subject to, a penalty for
failure to comply with a collection of information subject to the
requirements of the Paperwork Reduction Act unless that collection of
information displays a currently valid OMB control number.
List of Subjects in 37 CFR Part 42
Administrative practice and procedure, Inventions and patents.
For the reasons set forth in the preamble, the Office proposes to
amend 37 CFR part 42 as follows:
PART 42--TRIAL PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD
0
1. The authority citation for 37 CFR part 42 continues to read as
follows:
Authority: 35 U.S.C. 2(b)(2), 6, 21, 23, 41, 135, 311, 312,
316, 321-326 and Public Law 112-29.
Subpart A--Trial Practice and Procedure
0
2. Section 42.11 is revised to read as follows:
Sec. 42.11 Duty of candor; signing papers; representations to the
Board; sanctions.
(a) Duty of candor. Parties and individuals involved in the
proceeding have a duty of candor and good faith to the Office during
the course of a proceeding.
(b) Signature. Every petition, response, written motion, and other
paper filed in a proceeding must be signed by at least lead counsel or
designated backup counsel under
[[Page 50746]]
Sec. 42.10 in the attorney's or registered practitioner's name--or by
a party personally if the party is unrepresented. The Board may expunge
any unsigned submission unless the omission is promptly corrected after
being called to the counsel's or party's attention.
(c) Representations to the Board. By presenting to the Board a
petition, response, written motion, or other paper--whether by signing,
filing, submitting, or later advocating it--an attorney, registered
practitioner, or unrepresented party certifies that to the best of the
person's knowledge, information, and belief, formed after an inquiry
reasonable under the circumstances:
(1) It is not being presented for any improper purpose, such as to
harass, cause unnecessary delay, or needlessly increase the cost of the
proceeding;
(2) The claims, defenses, and other legal contentions are warranted
by existing law or by a non-frivolous argument for extending,
modifying, or reversing existing law or for establishing new law;
(3) The factual contentions have evidentiary support; and
(4) The denials of factual contentions are warranted on the
evidence.
(d) Sanctions--(1) In general. If, after notice and a reasonable
opportunity to respond, the Board determines that paragraph (c) of this
section has been violated, the Board may impose an appropriate sanction
on any attorney, registered practitioner, law firm, patent agent, or
party that violated the rule or is responsible for the violation.
Absent exceptional circumstances, a law firm must be held jointly
responsible for a violation committed by its partner, associate, or
employee.
(2) Motion for sanctions. A motion for sanctions must be made
separately from any other motion and must describe the specific conduct
that allegedly violates paragraph (c) of this section. The motion must
be authorized by the Board under Sec. 42.20. Prior to seeking
authorization to file a motion for sanctions, the moving party must
provide written notice to the other party of the basis for the proposed
motion. A motion for sanctions must not be filed or be presented to the
Board if the challenged paper, claim, defense, contention, or denial is
withdrawn or appropriately corrected within 21 days after service of
such notice or within another time the Board sets. If warranted, the
Board may award to the prevailing party the reasonable expenses,
including attorney's fees, incurred for the motion.
(3) On the Board's initiative. On its own, the Board may order an
attorney, registered practitioner, law firm, or party to show cause why
conduct specifically described in the order has not violated paragraph
(c) of this section.
(4) Nature of a sanction. A sanction imposed under this rule must
be limited to what suffices to deter repetition of the conduct or
comparable conduct by others similarly situated and should be
consistent with Sec. 42.12.
(5) Requirements for an order. An order imposing a sanction must
describe the sanctioned conduct and explain the basis for the sanction.
(e) Inapplicability to discovery. This rule does not apply to
disclosures and discovery requests, responses, and objections.
0
3. Section 42.24 is revised to read as follows:
Sec. 42.24 Type-Volume and page-limits for petitions, motions,
oppositions, and replies.
(a) Petitions and motions. (1) The following word counts or page
limits for petitions and motions apply and include any statement of
material facts to be admitted or denied in support of the petition or
motion. The word count or page limit does not include a table of
contents, a table of authorities, a certificate of service or word
count, exhibits, appendix, or claim listing.
(i) Petition requesting inter partes review: 14,000 words.
(ii) Petition requesting post-grant review: 18,700 words.
(iii) Petition requesting covered business method patent review:
18,700 words.
(iv) Petition requesting derivation proceeding: 14,000 words.
(v) Motions (excluding motions to amend): 15 pages.
(vi) Motions to Amend: 25 pages.
(2) Petitions to institute a trial must comply with the stated word
counts but may be accompanied by a motion to waive the word counts. The
petitioner must show in the motion how a waiver of the word counts is
in the interests of justice and must append a copy of proposed petition
exceeding the word count to the motion. If the motion is not granted,
the proposed petition exceeding the word count may be expunged or
returned. Any other motion to waive word counts or page limits must be
granted in advance of filing a motion, opposition, or reply for which
the waiver is necessary.
(b) Patent owner responses and oppositions. The word counts or page
limits set forth in this paragraph do not include a listing of facts
which are admitted, denied, or cannot be admitted or denied.
(1) The word counts for a patent owner preliminary response to
petition are the same as the word counts for the petition.
(2) The word counts for a patent owner response to petition are the
same as the word counts for the petition.
(3) The page limits for oppositions are the same as those for
corresponding motions.
(c) Replies. The following word counts or page limits for replies
apply and include any statement of facts in support of the reply. The
word counts or page limits do not include a table of contents, a table
of authorities, a listing of facts which are admitted, denied, or
cannot be admitted or denied, a certificate of service or word count,
or appendix of exhibits.
(1) Replies to patent owner responses to petitions: 5,600 words.
(2) Replies to oppositions (excluding replies to oppositions to
motions to amend): 5 pages.
(3) Replies to oppositions to motions to amend: 12 pages.
(d) Certification. Any petition, preliminary response, patent owner
response, or reply whose length is specified by type-volume limits must
include a certification stating the number of words in the petition,
motion, opposition, or reply. A party may rely on the word count of the
word-processing system used to prepare the petition, preliminary
response, patent owner response, or reply.
0
4. Section 42.70 is amended by revising paragraph (b) to read as
follows:
Sec. 42.70 Oral argument.
* * * * *
(b) Demonstrative exhibits must be served at least seven business
days before oral argument and filed no later than the time of the oral
argument.
Subpart B--Inter Partes Review
0
5. Section 42.100 is amended by revising paragraph (b) to read as
follows:
Sec. 42.100 Procedure; pendency.
* * * * *
(b) A claim in an unexpired patent that will not expire before a
final written decision is issued shall be given its broadest reasonable
construction in light of the specification of the patent in which it
appears.
* * * * *
0
6. Section 42.107 is amended by revising paragraph (a) and removing and
reserving paragraph (c) to read as follows:
Sec. 42.107 Preliminary response to petition.
(a) The patent owner may file a preliminary response to the
petition. The response may set forth the reasons why no inter partes
review should be
[[Page 50747]]
instituted under 35 U.S.C. 314 and can include supporting evidence. The
preliminary response is subject to the word count under Sec. 42.24.
* * * * *
(c) [Reserved]
* * * * *
0
7. Section 42.108 is amended by revising paragraph (c) to read as
follows:
Sec. 42.108 Institution of inter partes review.
* * * * *
(c) Sufficient grounds. Inter partes review shall not be instituted
for a ground of unpatentability unless the Board decides that the
petition supporting the ground would demonstrate that there is a
reasonable likelihood that at least one of the claims challenged in the
petition is unpatentable. The Board's decision will take into account a
patent owner preliminary response where such a response is filed, but
supporting evidence concerning disputed material facts will be viewed
in the light most favorable to the petitioner for purposes of deciding
whether to institute an inter partes review. If the patent owner
submits supporting evidence with its preliminary response, the
petitioner may seek leave to file a reply to the preliminary response
in accordance with Sec. 42.24(c).
Subpart C--Post-Grant Review
0
8. Section 42.200 is amended by revising paragraph (b) to read as
follows:
Sec. 42.200 Procedure; pendency.
* * * * *
(b) A claim in an unexpired patent that will not expire before a
final written decision is issued shall be given its broadest reasonable
construction in light of the specification of the patent in which it
appears.
* * * * *
0
9. Section 42.207 is amended by revising paragraph (a) and removing and
reserving paragraph (c) to read as follows:
Sec. 42.207 Preliminary response to petition.
(a) The patent owner may file a preliminary response to the
petition. The response may set forth the reasons why no post-grant
review should be instituted under 35 U.S.C. 324 and can include
supporting evidence. The preliminary response is subject to the word
count under Sec. 42.24.
* * * * *
(c) [Reserved]
* * * * *
0
10. Section 42.208 is amended by revising paragraph (c) to read as
follows:
Sec. 42.208 Institution of post-grant review.
* * * * *
(c) Sufficient grounds. Post-grant review shall not be instituted
for a ground of unpatentability unless the Board decides that the
petition supporting the ground would, if unrebutted, demonstrate that
it is more likely than not that at least one of the claims challenged
in the petition is unpatentable. The Board's decision will take into
account a patent owner preliminary response where such a response is
filed, but supporting evidence concerning disputed material facts will
be viewed in the light most favorable to the petitioner for purposes of
deciding whether to institute a post-grant review. If the patent owner
submits supporting evidence with its preliminary response, the
petitioner may seek leave to file a reply to the preliminary response
in accordance with Sec. 42.24(c).
* * * * *
Subpart D--Transitional Program for Covered Business Method Patents
0
11. Section 42.300 is amended by revising paragraph (b) to read as
follows:
Sec. 42.300 Procedure; pendency.
* * * * *
(b) A claim in an unexpired patent that will not expire before a
final written decision is issued shall be given its broadest reasonable
construction in light of the specification of the patent in which it
appears.
* * * * *
Dated: August 12, 2015.
Michelle K. Lee,
Under Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office.
[FR Doc. 2015-20227 Filed 8-19-15; 8:45 am]
BILLING CODE 3510-16-P