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 March 13, 2012 US PATENT AND TRADEMARK OFFICE Print Table of Contents 1376 OG 53 

OFFICIAL GAZETTE of the UNITED STATES PATENT AND TRADEMARK OFFICE

March 13, 2012 Volume 1376 Number 2

CONTENTS

 Patent and Trademark Office NoticesPage 
Patent Cooperation Treaty (PCT) Information1376 OG 54
Notice of Maintenance Fees Payable1376 OG 57
Notice of Expiration of Patents Due to Failure to Pay Maintenance Fee1376 OG 58
Patents Reinstated Due to the Acceptance of a Late Maintenance Fee from 02/13/20121376 OG 76
Reissue Applications Filed1376 OG 77
Requests for Ex Parte Reexamination Filed1376 OG 79
Requests for Inter Partes Reexamination Filed1376 OG 80
Notice of Expiration of Trademark Registrations Due to Failure to Renew1376 OG 81
Service by Publication1376 OG 85
37 CFR 1.47 Notice by Publication1376 OG 86
37 CFR § 1.47 Notice by Publication1376 OG 87
Registration to Practice1376 OG 90
Notice of Exclusion1376 OG 91
Notice of Exclusion on Consent1376 OG 92
Notice of Reprimand1376 OG 94
Notice of Public Reprimand and Probation1376 OG 95
Notice of Suspension1376 OG 96
Changes to Implement Inter Partes Review Proceedings1376 OG 97
Changes to Implement Post-Grant Review Proceedings1376 OG 133
Changes to Implement Transitional Program for Covered Business Method Patents1376 OG 171
Transitional Program for Covered Business Method Patents - Definition of Technological Invention1376 OG 198
Changes to Implement Derivation Proceedings1376 OG 223
Practice Guide for Proposed Trial Rules and Rules of Practice for Trials Before the Patent Trial and Appeal Board and Judicial Review of Patent Trial and Appeal Board Decisions; Proposed Rules1376 OG 247
Rules of Practice for Trials Before the Patent Trial and Appeal Board and Judicial Review of Patent Trial and Appeal Board Decisions1376 OG 270
Patents Available for License or Sale1376 OG 338
Errata1376 OG 341
Erratum1376 OG 343
Certificates of Correction1376 OG 344
Summary of Final Decisions Issued by the Trademark Trial and Appeal Board1376 OG 346

Mailing and Hand Carry Addresses for Mail to the United States Patent and Trademark Office
Reference Collections of U.S. Patents Available for Public Use in Patent and Trademark Resource Centers
Patent Technology Centers



COPIES OF PATENTS are furnished by the Patent and Trademark Office at $3.00 each; PLANT PATENTS in color, $15.00 each; copies of TRADEMARKS at $3.00 each. Address orders to the Commissioner of Patents and Trademarks, P.O. Box 1450, Alexandria, VA., 22313-1450, or click here for online ordering.


Printing by U.S.P.T.O. in electronic form is authorized by 35 U.S.C. § 10(a)3


Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 54 

Patent Cooperation Treaty (PCT) Information
                  Patent Cooperation Treaty (PCT) Information

   For information concerning PCT member countries, see the notice
appearing in the Official Gazette at 1369 O.G. 5, on August 2, 2011.

   For information on subject matter under Rule 39 that a particular
International Searching Authority will not search, see Annex D of the PCT
Applicants' Guide.

European Patent Office as Searching and Examining Authority

   The European Patent Office (EPO) may act as the International Searching
Authority (ISA) for an international application filed with the United
States Receiving Office or the International Bureau (IB) as Receiving
Office where at least one of the applicants is either a national or
resident of the United States of America. However, the EPO is no longer
a competent ISA, within the meaning of PCT Article 16(3), for
international applications filed by U.S. residents or nationals on or
after March 1, 2002, in the USPTO or IB as a Receiving Office, and where
the application contains one or more claims directed to the field of
business methods. For the definition of what the EPO considers to be
precluded subject matter in the field of business methods, applicants
should see the "Notice from the President of the European Patent
Office", dated November 26, 2001, and which was published as Annex A in
the "Notice Concerning EPO Competence to Act as PCT Authority" in the
Official Gazette at 1255 O.G. 878, on February 19, 2002.

   The European Patent Office may act as the International Preliminary
Examining Authority (IPEA) for an international application filed in the
United States Receiving Office or the International Bureau as Receiving
Office where at least one of the applicants is either a national or
resident of the United States of America, provided that the European
Patent Office acted as the International Searching Authority. However,
the EPO is no longer a competent IPEA, within the meaning of PCT Article
32(3), for international applications filed by U.S. residents or nationals
in the USPTO or IB as a Receiving Office where the corresponding demand is
filed with the EPO on or after March 1, 2002, and where the application
contains one or more claims directed to the field of business methods.

   The search fee of the European Patent Office was decreased, effective
January 1, 2012, and was announced in the Official Gazette at 1373 O.G.
177, on December 27, 2011.

Korean Intellectual Property Office as Searching and Examining Authority

   For use of the Korean Intellectual Property Office as an International
Searching Authority and International Preliminary Examining Authority for
international applications filed in the United States Receiving Office,
see the notice appearing in the Official Gazette at 1302 O.G. 1261 on
January 17, 2006.

   The search fee of the Korean Intellectual Property Office was decreased,
effective January 1, 2012, and was announced in the Official Gazette at
1373 O.G. 177, on December 27, 2011.

Australian Patent Office as Searching and Examining Authority

   The Australian Patent Office (IP Australia) may act as the International
Searching Authority (ISA) for an international application filed with the
United States Receiving Office or the International Bureau (IB) as
Receiving Office where at least one of the applicants is either a national
or resident of the United States of America. However, IP Australia is not a
competent ISA, within the meaning of PCT Artical 16(3), for international
applications filed by U.S. residents or nationals in the USPTO or IB as a
Receiving Office, and where the application contains one or more claims
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 55 

directed to the field of business methods or mechanical inventions.

   IP Australia may act as the International Preliminary Examining
Authority (IPEA) for an international application filed in the United
States Receiving Office or the International Bureau as Receiving Office
where at least one of the applicants is either a national or resident of
the United States of America, provided that IP Australia acted as the
International Searching Authority. However, IP Australia is not a competent
IPEA, within the meaning of PCT Article 32(3), for international
applications filed by U.S. residents or nationals in the USPTO or IB as a
Receiving Office where the corresponding demand is filed with IP Australia
and where the application contains one or more claims directed to the
fields of business methods or mechanical engineering or analogous fields of
technology as defined by specified areas of the International Patent
Classification System, as indicated in Annex A to the agreement between the
USPTO and IP Australia. See the notice appearing in the Official Gazette
at 1337 O.G. 261 on December 23, 2008.

   For use of IP Australia as an International Searching Authority and
International Preliminary Examining Authority for international
applications filed in the United States Receiving Office, see the notice
appearing in the Official Gazette at 1337 O.G. 265 on December 23, 2008.

   The search fee of IP Australia was increased, effective January 1, 2012,
and was announced in the Official Gazette at 1373 O.G. 177, on December 27,
2011.

Fees

   The transmittal fee for the USPTO was changed to include a basic portion
and a non-electronic filing fee portion, effective November 15, 2011, and
was announced in the Federal Register on November 15, 2011. Search fees for
the USPTO were changed, effective January 12, 2009, and were announced in
the Federal Register on November 12, 2008. The fee for filing a request for
the restoration of the right of priority was established, effective
November 9, 2007, and was announced in the Federal Register on September 10,
2007.

   International filing fees were increased, effective January 1, 2012,
and were announced in the Official Gazette at 1373 O.G. 177, on December
27, 2011.

   The schedule of PCT fees (in U.S. dollars), as of January 1, 2012, is as
follows:

International Application (PCT Chapter I) fees:

   Transmittal fee
      Basic Portion                                                 $240.00
      Non-electronic filing fee portion for international
       applications (other than plant applications) filed
       on or after 15 November 2011 other than by the
       Office electronic filing system (other than a
       small entity)                                                $400.00
      Non-electronic filing fee portion for international
       applications (other than plant applications) filed
       on or after 15 November 2011 other than by the
       Office electronic filing system (small entity)               $200.00

   Search fee

      U.S. Patent and Trademark Office (USPTO) as
      International Searching Authority (ISA)
         - Search fee                                             $2,080.00
         - Supplemental search fee, per additional
            invention (payable only upon invitation)              $2,080.00
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 56 

      European Patent Office as ISA                               $2,370.00
      Korean Intellectual Property Office as ISA
         - for international applications filed in English        $1,101.00
      IP Australia as ISA                                         $1,833.00

   International fees

      International filing fee                                    $1,453.00
      International filing fee-filed in paper
         with PCT EASY zip file or
         electronically without PCT EASY zip file                 $1,344.00
      International filing fee-filed
         electronically with PCT EASY zip files                   $1,494.00
      Supplemental fee for each page over 30                      $1,234.00

   Restoration of Priority

      Filing a request for the restoration of the
      right of priority under § 1.452                             $1,410.00

   International Application (PCT Chapter II) fees associated
   with filing a Demand for Preliminary Examination:

      Handling fee                                                  $219.00
      Handling fee-90% reduction, if applicants meet criteria
      specified at:
        http://www.wipo.int/pct/en/fees/fee_reduction.pdf            $21.90
      Preliminary Examination Fee
         USPTO as International Preliminary
         Examining Authority (IPEA)
            - USPTO was ISA in PCT Chapter I                        $600.00
            - USPTO was not ISA in PCT Chapter I                    $750.00
            - Additional preliminary examination fee,
              per additional invention
              (payable only upon invitation)                        $600.00

   U.S. National Stage fees (for international applications entering
the U.S. national phase under 35 U.S.C. 371) can be found on the USPTO's
Web site (www.uspto.gov).

January 9, 2012                                         ANDREW H. HIRSHFELD
                                                 Associate Commissioner for
                                                  Patent Examination Policy
                                  United States Patent and Trademark Office
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 57 

Notice of Maintenance Fees Payable
                   Notice of Maintenance Fees Payable

   Title 37 Code of Federal Regulations (CFR), Section 1.362(d) provides
that maintenance fees may be paid without surcharge for the six-month
period beginning 3, 7, and 11 years after the date of issue of patents
based on applications filed on or after Dec. 12, 1980. An additional
six-month grace period is provided by 35 U.S.C. 41(b) and 37 CFR 1.362(e)
for payment of the maintenance fee with the surcharge set forth in 37 CFR
1.20(h), as amended effective Dec. 16, 1991. If the maintenance fee is
not paid in the patent requiring such payment the patent will expire on
the 4th, 8th, or 12th anniversary of the grant.

   Attention is drawn to the patents that were issued on March 3, 2009
for which maintenance fees due at 3 years and six months may now be paid
The patents have patent numbers within the following ranges:

        Utility Patents 7,496,968 through 7,500,272
        Reissue Patents based on the above identified patents.

   Attention is drawn to the patents that were issued on March 1, 2005
for which maintenance fees due at 7 years and six months may now be paid
The patents have patent numbers within the following ranges:

        Utility Patents 6,859,938 through 6,862,742
        Reissue Patents based on the above identified patents.

   Attention is drawn to the patents that were issued on February 27, 2001
for which maintenance fees due at 11 years and six months may now be paid.
The patents have patent numbers within the following ranges:

        Utility Patents 6,192,519 through 6,195,797
        Reissue Patents based on the above identified patents.

   No maintenance fees are required for design or plant patents.

   Payments of maintenance fees in patents may be submitted electronically
over the Internet at www.uspto.gov. Click on the "Site Index" link at the
top of the homepage (www.uspto.gov), and then scroll down and click on the
"Maintenance Fees" link for more information.

   Payments of maintenance fees in patents not submitted electronically
over the Internet should be mailed to "United States Patent and Trademark
Office, P.O. Box 979070, St. Louis, MO 63197-9000".

   Correspondence related to maintenance fees other than payments of
maintenance fees in patents is not to be mailed to P.O. Box 979070,
St. Louis, MO 63197-9000, but must be mailed to "Mail Stop M
Correspondence, Director of the U.S. Patent and Trademark Office, P.O.
Box 1450, Alexandria, VA 22313-1450".

   Patent owners must establish small entity status according to 37 CFR
1.27 if they have not done so and if they wish to pay the small entity
amount.

   The current amounts of the maintenance fees due at 3 years and six
months, 7 years and six months, and 11 years and six months are set forth
in the most recently amended provisions in 37 CFR 1.20(e)-(g). To obtain
the current maintenance fee amounts, please call the USPTO Contact Center
at (800)-786-9199 or see the current USPTO fee schedule posted on the USPTO
Internet web site. At the top of the USPTO homepage at www.uspto.gov, click
on the "Site Index" link and then scroll down and click on the "Fees,
USPTO" link to find the current USPTO fee schedule.
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 58 

Notice of Expiration of Patents Due to Failure to Pay Maintenance Fee
                        Notice of Expiration of Patents
                     Due to Failure to Pay Maintenance Fee

   35 U.S.C. 41 and 37 CFR 1.362(g) provide that if the required
maintenance fee and any applicable surcharge are not paid in a patent
requiring such payment, the patent will expire at the end of the 4th, 8th
or 12th anniversary of the grant of the patent depending on the first
maintenance fee which was not paid.
   According to the records of the Office, the patents listed below have
expired due to failure to pay the required maintenance fee and any
applicable surcharge.

                   PATENTS WHICH EXPIRED ON January 25, 2012
                    DUE TO FAILURE TO PAY MAINTENANCE FEES

Patent                          Application                         Issue
Number                             Number                            Date

6,016,574                       09/228,765                       01/25/00
6,016,587                       09/000,399                       01/25/00
6,016,591                       09/300,352                       01/25/00
6,016,601                       08/653,780                       01/25/00
6,016,602                       08/797,619                       01/25/00
6,016,619                       09/050,234                       01/25/00
6,016,622                       09/193,449                       01/25/00
6,016,626                       08/992,776                       01/25/00
6,016,628                       08/913,289                       01/25/00
6,016,633                       08/999,276                       01/25/00
6,016,637                       09/094,530                       01/25/00
6,016,638                       09/173,693                       01/25/00
6,016,639                       09/033,542                       01/25/00
6,016,649                       09/303,857                       01/25/00
6,016,650                       09/157,243                       01/25/00
6,016,656                       09/117,633                       01/25/00
6,016,662                       08/867,432                       01/25/00
6,016,675                       09/188,292                       01/25/00
6,016,686                       09/042,601                       01/25/00
6,016,689                       08/752,460                       01/25/00
6,016,692                       08/967,681                       01/25/00
6,016,698                       09/163,828                       01/25/00
6,016,699                       09/163,829                       01/25/00
6,016,704                       09/042,679                       01/25/00
6,016,705                       09/087,645                       01/25/00
6,016,708                       09/090,347                       01/25/00
6,016,718                       09/001,014                       01/25/00
6,016,719                       08/828,802                       01/25/00
6,016,730                       08/917,462                       01/25/00
6,016,733                       09/006,907                       01/25/00
6,016,740                       08/977,997                       01/25/00
6,016,749                       08/711,984                       01/25/00
6,016,750                       09/085,554                       01/25/00
6,016,760                       08/673,079                       01/25/00
6,016,763                       09/000,189                       01/25/00
6,016,768                       09/363,830                       01/25/00
6,016,775                       09/151,237                       01/25/00
6,016,779                       08/921,255                       01/25/00
6,016,786                       09/117,340                       01/25/00
6,016,794                       09/014,153                       01/25/00
6,016,802                       08/932,039                       01/25/00
6,016,810                       09/060,950                       01/25/00
6,016,811                       09/144,725                       01/25/00
6,016,814                       09/175,525                       01/25/00
6,016,824                       09/109,065                       01/25/00
6,016,849                       08/875,130                       01/25/00
6,016,867                       09/103,770                       01/25/00
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 59 

6,016,868                       09/103,590                       01/25/00
6,016,881                       08/992,338                       01/25/00
6,016,884                       08/949,652                       01/25/00
6,016,892                       08/905,246                       01/25/00
6,016,895                       09/067,518                       01/25/00
6,016,899                       08/989,974                       01/25/00
6,016,901                       08/790,748                       01/25/00
6,016,914                       09/266,405                       01/25/00
6,016,915                       09/304,394                       01/25/00
6,016,924                       09/028,949                       01/25/00
6,016,925                       09/133,487                       01/25/00
6,016,930                       09/015,173                       01/25/00
6,016,936                       09/099,830                       01/25/00
6,016,939                       09/023,044                       01/25/00
6,016,950                       08/983,494                       01/25/00
6,016,951                       09/141,930                       01/25/00
6,016,953                       08/911,448                       01/25/00
6,016,962                       08/988,885                       01/25/00
6,016,975                       09/070,744                       01/25/00
6,016,984                       09/183,259                       01/25/00
6,016,996                       08/655,751                       01/25/00
6,016,997                       08/958,927                       01/25/00
6,017,013                       08/928,199                       01/25/00
6,017,014                       09/028,104                       01/25/00
6,017,034                       08/970,807                       01/25/00
6,017,036                       09/207,726                       01/25/00
6,017,048                       08/811,138                       01/25/00
6,017,049                       08/958,339                       01/25/00
6,017,058                       09/152,435                       01/25/00
6,017,061                       08/953,409                       01/25/00
6,017,067                       08/998,813                       01/25/00
6,017,068                       09/014,672                       01/25/00
6,017,070                       09/046,038                       01/25/00
6,017,072                       09/059,626                       01/25/00
6,017,082                       09/190,753                       01/25/00
6,017,087                       09/135,908                       01/25/00
6,017,095                       08/926,024                       01/25/00
6,017,096                       09/027,814                       01/25/00
6,017,097                       08/999,048                       01/25/00
6,017,099                       08/981,670                       01/25/00
6,017,101                       08/752,951                       01/25/00
6,017,103                       09/109,208                       01/25/00
6,017,117                       08/550,698                       01/25/00
6,017,120                       09/073,801                       01/25/00
6,017,122                       09/038,413                       01/25/00
6,017,125                       08/928,243                       01/25/00
6,017,131                       09/174,353                       01/25/00
6,017,148                       09/311,235                       01/25/00
6,017,150                       08/988,823                       01/25/00
6,017,160                       08/773,582                       01/25/00
6,017,164                       09/153,584                       01/25/00
6,017,167                       09/149,525                       01/25/00
6,017,173                       08/969,276                       01/25/00
6,017,178                       08/928,302                       01/25/00
6,017,195                       08/924,050                       01/25/00
6,017,196                       09/010,984                       01/25/00
6,017,202                       08/989,038                       01/25/00
6,017,206                       08/822,287                       01/25/00
6,017,210                       08/720,289                       01/25/00
6,017,212                       09/228,394                       01/25/00
6,017,217                       09/072,953                       01/25/00
6,017,221                       08/866,040                       01/25/00
6,017,222                       09/191,229                       01/25/00
6,017,223                       08/882,910                       01/25/00
6,017,224                       09/154,862                       01/25/00
6,017,225                       09/145,637                       01/25/00
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 60 

6,017,239                       08/965,504                       01/25/00
6,017,242                       08/864,177                       01/25/00
6,017,249                       09/205,363                       01/25/00
6,017,254                       09/050,625                       01/25/00
6,017,258                       08/963,858                       01/25/00
6,017,281                       09/072,935                       01/25/00
6,017,288                       09/189,647                       01/25/00
6,017,296                       09/347,851                       01/25/00
6,017,297                       09/131,869                       01/25/00
6,017,305                       08/593,299                       01/25/00
6,017,312                       09/017,583                       01/25/00
6,017,314                       09/059,156                       01/25/00
6,017,326                       08/006,081                       01/25/00
6,017,328                       08/695,596                       01/25/00
6,017,334                       08/725,404                       01/25/00
6,017,344                       09/261,977                       01/25/00
6,017,351                       09/192,849                       01/25/00
6,017,359                       08/877,255                       01/25/00
6,017,360                       09/195,502                       01/25/00
6,017,368                       09/102,538                       01/25/00
6,017,369                       09/197,711                       01/25/00
6,017,375                       09/017,068                       01/25/00
6,017,376                       08/952,063                       01/25/00
6,017,386                       09/235,476                       01/25/00
6,017,391                       09/271,420                       01/25/00
6,017,400                       09/079,964                       01/25/00
6,017,402                       08/919,721                       01/25/00
6,017,407                       08/955,585                       01/25/00
6,017,410                       07/931,330                       01/25/00
6,017,415                       08/924,360                       01/25/00
6,017,419                       08/931,854                       01/25/00
6,017,438                       08/938,555                       01/25/00
6,017,446                       09/131,145                       01/25/00
6,017,454                       08/839,680                       01/25/00
6,017,455                       08/945,862                       01/25/00
6,017,458                       09/140,743                       01/25/00
6,017,464                       09/207,797                       01/25/00
6,017,468                       08/909,629                       01/25/00
6,017,473                       09/135,544                       01/25/00
6,017,477                       08/686,208                       01/25/00
6,017,479                       09/196,576                       01/25/00
6,017,481                       09/019,097                       01/25/00
6,017,484                       08/786,784                       01/25/00
6,017,488                       09/075,247                       01/25/00
6,017,495                       09/078,825                       01/25/00
6,017,496                       08/709,435                       01/25/00
6,017,500                       09/174,024                       01/25/00
6,017,504                       09/116,732                       01/25/00
6,017,509                       08/092,355                       01/25/00
6,017,512                       08/931,095                       01/25/00
6,017,513                       08/987,436                       01/25/00
6,017,514                       09/268,543                       01/25/00
6,017,516                       08/962,099                       01/25/00
6,017,518                       08/944,452                       01/25/00
6,017,521                       08/951,419                       01/25/00
6,017,528                       09/257,025                       01/25/00
6,017,531                       08/867,331                       01/25/00
6,017,533                       08/637,437                       01/25/00
6,017,535                       08/325,426                       01/25/00
6,017,536                       08/360,107                       01/25/00
6,017,543                       08/467,302                       01/25/00
6,017,556                       08/931,392                       01/25/00
6,017,558                       08/967,214                       01/25/00
6,017,559                       08/960,937                       01/25/00
6,017,572                       09/203,977                       01/25/00
6,017,577                       08/382,478                       01/25/00
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 61 

6,017,583                       08/913,809                       01/25/00
6,017,589                       09/167,871                       01/25/00
6,017,590                       08/760,757                       01/25/00
6,017,592                       09/151,337                       01/25/00
6,017,600                       09/093,643                       01/25/00
6,017,603                       08/981,576                       01/25/00
6,017,604                       08/696,570                       01/25/00
6,017,605                       09/066,824                       01/25/00
6,017,608                       08/970,688                       01/25/00
6,017,615                       08/918,064                       01/25/00
6,017,619                       08/937,969                       01/25/00
6,017,620                       09/055,961                       01/25/00
6,017,621                       08/996,612                       01/25/00
6,017,628                       08/776,216                       01/25/00
6,017,633                       08/887,188                       01/25/00
6,017,641                       09/038,988                       01/25/00
6,017,649                       09/022,741                       01/25/00
6,017,653                       08/641,500                       01/25/00
6,017,654                       08/906,024                       01/25/00
6,017,658                       07/882,226                       01/25/00
6,017,660                       09/094,184                       01/25/00
6,017,663                       09/277,735                       01/25/00
6,017,664                       09/181,188                       01/25/00
6,017,665                       09/030,925                       01/25/00
6,017,673                       09/053,015                       01/25/00
6,017,674                       08/786,640                       01/25/00
6,017,681                       08/554,499                       01/25/00
6,017,684                       08/982,517                       01/25/00
6,017,688                       09/014,193                       01/25/00
6,017,695                       08/040,741                       01/25/00
6,017,701                       08/779,355                       01/25/00
6,017,706                       08/852,355                       01/25/00
6,017,711                       09/137,686                       01/25/00
6,017,713                       09/266,950                       01/25/00
6,017,717                       09/069,484                       01/25/00
6,017,721                       08/789,096                       01/25/00
6,017,725                       09/136,775                       01/25/00
6,017,727                       08/760,534                       01/25/00
6,017,728                       08/978,454                       01/25/00
6,017,731                       08/989,251                       01/25/00
6,017,735                       09/012,126                       01/25/00
6,017,737                       08/419,810                       01/25/00
6,017,738                       08/761,862                       01/25/00
6,017,740                       08/836,986                       01/25/00
6,017,741                       09/257,542                       01/25/00
6,017,742                       09/009,541                       01/25/00
6,017,747                       08/984,417                       01/25/00
6,017,753                       09/179,794                       01/25/00
6,017,754                       08/518,835                       01/25/00
6,017,757                       08/804,136                       01/25/00
6,017,762                       08/115,753                       01/25/00
6,017,772                       09/260,633                       01/25/00
6,017,777                       08/954,051                       01/25/00
6,017,781                       08/755,734                       01/25/00
6,017,785                       08/698,675                       01/25/00
6,017,789                       08/881,561                       01/25/00
6,017,792                       08/650,581                       01/25/00
6,017,809                       08/988,221                       01/25/00
6,017,812                       09/119,974                       01/25/00
6,017,816                       08/805,295                       01/25/00
6,017,829                       08/829,851                       01/25/00
6,017,835                       08/147,759                       01/25/00
6,017,837                       08/657,203                       01/25/00
6,017,839                       09/020,993                       01/25/00
6,017,841                       08/846,667                       01/25/00
6,017,856                       09/205,183                       01/25/00
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 62 

6,017,881                       08/756,164                       01/25/00
6,017,885                       09/080,120                       01/25/00
6,017,889                       09/219,704                       01/25/00
6,017,892                       08/880,255                       01/25/00
6,017,897                       08/896,500                       01/25/00
6,017,903                       08/884,479                       01/25/00
6,017,906                       09/072,182                       01/25/00
6,017,908                       09/079,838                       01/25/00
6,017,910                       08/451,726                       01/25/00
6,017,914                       08/923,072                       01/25/00
6,017,924                       09/373,460                       01/25/00
6,017,925                       09/006,626                       01/25/00
6,017,934                       09/009,616                       01/25/00
6,017,939                       09/142,408                       01/25/00
6,017,942                       08/742,018                       01/25/00
6,017,949                       08/904,708                       01/25/00
6,017,952                       08/737,851                       01/25/00
6,017,954                       07/940,123                       01/25/00
6,017,959                       08/981,404                       01/25/00
6,017,960                       09/076,355                       01/25/00
6,017,963                       08/557,279                       01/25/00
6,017,965                       08/763,480                       01/25/00
6,017,972                       09/322,589                       01/25/00
6,017,973                       08/857,639                       01/25/00
6,017,974                       09/053,519                       01/25/00
6,017,983                       09/015,163                       01/25/00
6,017,989                       08/831,148                       01/25/00
6,017,990                       08/825,171                       01/25/00
6,017,992                       09/107,505                       01/25/00
6,018,009                       08/771,889                       01/25/00
6,018,010                       08/635,302                       01/25/00
6,018,016                       08/999,552                       01/25/00
6,018,019                       08/256,839                       01/25/00
6,018,021                       08/326,119                       01/25/00
6,018,022                       08/467,976                       01/25/00
6,018,026                       08/980,400                       01/25/00
6,018,036                       08/463,876                       01/25/00
6,018,038                       09/225,244                       01/25/00
6,018,042                       08/914,961                       01/25/00
6,018,044                       09/219,943                       01/25/00
6,018,048                       08/989,157                       01/25/00
6,018,054                       08/979,751                       01/25/00
6,018,055                       08/892,707                       01/25/00
6,018,058                       08/860,481                       01/25/00
6,018,064                       09/016,210                       01/25/00
6,018,066                       09/266,837                       01/25/00
6,018,068                       09/000,102                       01/25/00
6,018,073                       08/991,963                       01/25/00
6,018,082                       08/933,986                       01/25/00
6,018,083                       09/283,450                       01/25/00
6,018,089                       08/987,554                       01/25/00
6,018,094                       08/939,983                       01/25/00
6,018,096                       08/055,105                       01/25/00
6,018,098                       08/973,449                       01/25/00
6,018,106                       09/116,879                       01/25/00
6,018,117                       09/090,517                       01/25/00
6,018,119                       08/973,073                       01/25/00
6,018,120                       08/888,617                       01/25/00
6,018,123                       08/774,011                       01/25/00
6,018,124                       09/007,631                       01/25/00
6,018,127                       09/003,707                       01/25/00
6,018,129                       09/084,940                       01/25/00
6,018,136                       09/315,338                       01/25/00
6,018,139                       09/010,065                       01/25/00
6,018,140                       09/028,255                       01/25/00
6,018,141                       08/635,140                       01/25/00
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 63 

6,018,142                       09/033,612                       01/25/00
6,018,153                       09/000,187                       01/25/00
6,018,159                       08/987,818                       01/25/00
6,018,161                       09/127,454                       01/25/00
6,018,167                       08/998,713                       01/25/00
6,018,170                       08/885,463                       01/25/00
6,018,173                       08/892,928                       01/25/00
6,018,185                       08/861,218                       01/25/00
6,018,189                       09/052,156                       01/25/00
6,018,190                       09/028,954                       01/25/00
6,018,191                       09/035,104                       01/25/00
6,018,192                       09/126,576                       01/25/00
6,018,193                       09/343,161                       01/25/00
6,018,202                       09/029,781                       01/25/00
6,018,204                       09/007,047                       01/25/00
6,018,210                       08/920,902                       01/25/00
6,018,213                       09/196,610                       01/25/00
6,018,234                       08/931,730                       01/25/00
6,018,246                       08/953,356                       01/25/00
6,018,248                       08/845,943                       01/25/00
6,018,261                       08/801,665                       01/25/00
6,018,267                       09/037,233                       01/25/00
6,018,279                       08/952,387                       01/25/00
6,018,282                       08/965,229                       01/25/00
6,018,291                       09/090,613                       01/25/00
6,018,292                       09/342,881                       01/25/00
6,018,295                       09/135,462                       01/25/00
6,018,297                       08/737,761                       01/25/00
6,018,321                       08/851,182                       01/25/00
6,018,329                       09/018,656                       01/25/00
6,018,334                       08/803,445                       01/25/00
6,018,336                       08/800,030                       01/25/00
6,018,337                       08/873,577                       01/25/00
6,018,355                       08/808,860                       01/25/00
6,018,356                       09/012,140                       01/25/00
6,018,368                       08/999,073                       01/25/00
6,018,370                       08/848,387                       01/25/00
6,018,388                       09/252,311                       01/25/00
6,018,393                       08/899,721                       01/25/00
6,018,396                       08/930,531                       01/25/00
6,018,407                       08/859,205                       01/25/00
6,018,409                       09/088,485                       01/25/00
6,018,413                       09/064,325                       01/25/00
6,018,422                       09/165,789                       01/25/00
6,018,428                       09/107,179                       01/25/00
6,018,431                       09/293,622                       01/25/00
6,018,434                       08/782,183                       01/25/00
6,018,435                       08/782,312                       01/25/00
6,018,439                       09/104,875                       01/25/00
6,018,446                       09/072,727                       01/25/00
6,018,457                       08/969,805                       01/25/00
6,018,462                       09/104,824                       01/25/00
6,018,467                       09/362,465                       01/25/00
6,018,469                       08/994,402                       01/25/00
6,018,470                       09/165,673                       01/25/00
6,018,475                       09/173,326                       01/25/00
6,018,476                       08/972,369                       01/25/00
6,018,477                       09/169,037                       01/25/00
6,018,481                       09/174,534                       01/25/00
6,018,483                       09/209,199                       01/25/00
6,018,484                       09/183,591                       01/25/00
6,018,486                       09/093,210                       01/25/00
6,018,488                       09/104,626                       01/25/00
6,018,500                       09/252,833                       01/25/00
6,018,504                       09/077,658                       01/25/00
6,018,566                       08/957,541                       01/25/00
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 64 

6,018,568                       08/721,785                       01/25/00
6,018,580                       08/946,668                       01/25/00
6,018,582                       08/779,257                       01/25/00
6,018,587                       08/886,293                       01/25/00
6,018,589                       08/437,379                       01/25/00
6,018,595                       08/890,206                       01/25/00
6,018,596                       08/816,154                       01/25/00
6,018,599                       08/371,443                       01/25/00
6,018,611                       08/495,025                       01/25/00
6,018,613                       08/245,954                       01/25/00
6,018,614                       09/303,111                       01/25/00
6,018,618                       08/296,975                       01/25/00
6,018,630                       08/441,697                       01/25/00
6,018,632                       09/168,612                       01/25/00
6,018,641                       08/838,773                       01/25/00
6,018,647                       08/966,623                       01/25/00
6,018,649                       08/916,779                       01/25/00
6,018,678                       08/545,236                       01/25/00
6,018,693                       08/931,726                       01/25/00
6,018,701                       08/921,788                       01/25/00
6,018,702                       09/102,294                       01/25/00
6,018,713                       09/057,560                       01/25/00
6,018,729                       08/932,439                       01/25/00
6,018,755                       08/748,854                       01/25/00
6,018,812                       07/600,204                       01/25/00
6,018,818                       08/943,307                       01/25/00

                   PATENTS WHICH EXPIRED ON January 20, 2012
                    DUE TO FAILURE TO PAY MAINTENANCE FEES

Patent                          Application                         Issue
Number                             Number                            Date

6,678,894                       10/142,591                       01/20/04
6,678,898                       09/905,763                       01/20/04
6,678,903                       10/338,446                       01/20/04
6,678,909                       10/218,832                       01/20/04
6,678,910                       10/073,325                       01/20/04
6,678,912                       09/763,284                       01/20/04
6,678,915                       10/044,086                       01/20/04
6,678,917                       10/058,365                       01/20/04
6,678,920                       10/178,175                       01/20/04
6,678,931                       10/261,841                       01/20/04
6,678,933                       10/301,954                       01/20/04
6,678,934                       09/679,220                       01/20/04
6,678,940                       09/885,657                       01/20/04
6,678,941                       09/603,970                       01/20/04
6,678,947                       09/763,460                       01/20/04
6,678,948                       09/530,536                       01/20/04
6,678,958                       10/137,206                       01/20/04
6,678,965                       10/426,344                       01/20/04
6,678,971                       10/061,787                       01/20/04
6,678,974                       10/330,396                       01/20/04
6,678,977                       10/348,303                       01/20/04
6,678,980                       09/949,019                       01/20/04
6,678,984                       09/657,899                       01/20/04
6,678,989                       10/342,635                       01/20/04
6,678,992                       10/116,937                       01/20/04
6,678,997                       09/509,705                       01/20/04
6,679,009                       10/075,214                       01/20/04
6,679,013                       10/004,112                       01/20/04
6,679,014                       10/274,183                       01/20/04
6,679,022                       10/088,031                       01/20/04
6,679,023                       10/095,764                       01/20/04
6,679,024                       10/082,887                       01/20/04
6,679,026                       09/717,025                       01/20/04
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 65 

6,679,027                       09/725,977                       01/20/04
6,679,029                       09/957,904                       01/20/04
6,679,036                       09/977,181                       01/20/04
6,679,043                       10/008,611                       01/20/04
6,679,044                       10/015,547                       01/20/04
6,679,049                       10/054,644                       01/20/04
6,679,052                       10/201,719                       01/20/04
6,679,053                       10/173,223                       01/20/04
6,679,054                       10/136,693                       01/20/04
6,679,075                       10/164,312                       01/20/04
6,679,081                       10/292,071                       01/20/04
6,679,083                       10/211,137                       01/20/04
6,679,089                       10/052,211                       01/20/04
6,679,091                       10/153,190                       01/20/04
6,679,097                       10/148,198                       01/20/04
6,679,100                       10/264,068                       01/20/04
6,679,101                       10/009,905                       01/20/04
6,679,102                       10/200,841                       01/20/04
6,679,107                       08/515,964                       01/20/04
6,679,118                       10/019,126                       01/20/04
6,679,126                       09/902,238                       01/20/04
6,679,127                       09/935,977                       01/20/04
6,679,130                       09/779,148                       01/20/04
6,679,131                       09/966,585                       01/20/04
6,679,133                       09/857,450                       01/20/04
6,679,134                       10/379,797                       01/20/04
6,679,136                       10/012,403                       01/20/04
6,679,138                       10/241,930                       01/20/04
6,679,150                       10/352,732                       01/20/04
6,679,151                       09/404,085                       01/20/04
6,679,153                       10/281,238                       01/20/04
6,679,154                       10/302,960                       01/20/04
6,679,167                       10/382,513                       01/20/04
6,679,170                       10/029,317                       01/20/04
6,679,171                       09/799,545                       01/20/04
6,679,172                       10/170,075                       01/20/04
6,679,175                       09/909,493                       01/20/04
6,679,176                       09/586,379                       01/20/04
6,679,178                       10/023,260                       01/20/04
6,679,181                       09/865,088                       01/20/04
6,679,193                       10/041,201                       01/20/04
6,679,199                       10/283,296                       01/20/04
6,679,200                       10/183,737                       01/20/04
6,679,204                       10/216,199                       01/20/04
6,679,207                       10/370,621                       01/20/04
6,679,210                       10/144,902                       01/20/04
6,679,221                       10/002,118                       01/20/04
6,679,226                       09/997,371                       01/20/04
6,679,228                       10/069,316                       01/20/04
6,679,230                       10/391,549                       01/20/04
6,679,238                       10/101,988                       01/20/04
6,679,241                       10/253,951                       01/20/04
6,679,242                       10/338,159                       01/20/04
6,679,244                       10/292,424                       01/20/04
6,679,246                       10/151,091                       01/20/04
6,679,247                       10/145,670                       01/20/04
6,679,251                       09/807,104                       01/20/04
6,679,253                       10/222,127                       01/20/04
6,679,255                       10/085,350                       01/20/04
6,679,263                       10/201,399                       01/20/04
6,679,267                       09/945,226                       01/20/04
6,679,268                       10/098,838                       01/20/04
6,679,281                       10/019,084                       01/20/04
6,679,282                       09/987,147                       01/20/04
6,679,288                       10/265,847                       01/20/04
6,679,291                       10/285,197                       01/20/04
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 66 

6,679,295                       10/206,606                       01/20/04
6,679,296                       10/385,477                       01/20/04
6,679,301                       10/095,268                       01/20/04
6,679,309                       10/121,686                       01/20/04
6,679,312                       09/740,629                       01/20/04
6,679,315                       10/047,871                       01/20/04
6,679,316                       09/677,720                       01/20/04
6,679,317                       10/007,240                       01/20/04
6,679,334                       09/867,972                       01/20/04
6,679,338                       10/031,550                       01/20/04
6,679,340                       10/200,143                       01/20/04
6,679,345                       09/880,002                       01/20/04
6,679,351                       10/077,324                       01/20/04
6,679,352                       10/045,983                       01/20/04
6,679,357                       10/199,398                       01/20/04
6,679,359                       10/157,122                       01/20/04
6,679,361                       10/199,537                       01/20/04
6,679,367                       10/167,026                       01/20/04
6,679,369                       09/984,120                       01/20/04
6,679,372                       10/043,519                       01/20/04
6,679,375                       09/831,437                       01/20/04
6,679,378                       09/856,992                       01/20/04
6,679,382                       09/926,582                       01/20/04
6,679,386                       10/159,244                       01/20/04
6,679,403                       10/092,575                       01/20/04
6,679,408                       10/323,783                       01/20/04
6,679,412                       10/223,517                       01/20/04
6,679,415                       10/212,290                       01/20/04
6,679,416                       10/066,601                       01/20/04
6,679,419                       10/062,945                       01/20/04
6,679,421                       09/968,160                       01/20/04
6,679,424                       10/287,494                       01/20/04
6,679,429                       09/768,548                       01/20/04
6,679,431                       10/313,375                       01/20/04
6,679,438                       10/353,133                       01/20/04
6,679,446                       10/321,527                       01/20/04
6,679,451                       09/937,037                       01/20/04
6,679,454                       10/123,823                       01/20/04
6,679,469                       10/193,007                       01/20/04
6,679,474                       10/424,802                       01/20/04
6,679,476                       09/879,473                       01/20/04
6,679,482                       09/946,275                       01/20/04
6,679,483                       10/249,411                       01/20/04
6,679,495                       10/306,508                       01/20/04
6,679,498                       09/967,825                       01/20/04
6,679,502                       09/942,020                       01/20/04
6,679,510                       10/055,330                       01/20/04
6,679,513                       09/926,374                       01/20/04
6,679,514                       09/949,589                       01/20/04
6,679,519                       10/360,455                       01/20/04
6,679,531                       09/848,037                       01/20/04
6,679,532                       09/987,199                       01/20/04
6,679,535                       09/443,464                       01/20/04
6,679,536                       10/252,229                       01/20/04
6,679,540                       10/383,382                       01/20/04
6,679,543                       10/177,314                       01/20/04
6,679,567                       09/658,542                       01/20/04
6,679,568                       09/770,910                       01/20/04
6,679,571                       09/891,889                       01/20/04
6,679,586                       10/242,781                       01/20/04
6,679,604                       10/219,259                       01/20/04
6,679,609                       10/097,414                       01/20/04
6,679,611                       10/279,066                       01/20/04
6,679,614                       10/013,574                       01/20/04
6,679,620                       10/122,470                       01/20/04
6,679,624                       09/551,045                       01/20/04
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 67 

6,679,630                       10/113,241                       01/20/04
6,679,635                       09/916,301                       01/20/04
6,679,637                       10/206,994                       01/20/04
6,679,649                       10/330,809                       01/20/04
6,679,655                       09/992,906                       01/20/04
6,679,658                       10/215,709                       01/20/04
6,679,665                       10/090,367                       01/20/04
6,679,668                       09/730,793                       01/20/04
6,679,670                       10/243,202                       01/20/04
6,679,685                       10/118,156                       01/20/04
6,679,688                       10/076,908                       01/20/04
6,679,694                       09/958,837                       01/20/04
6,679,700                       10/131,454                       01/20/04
6,679,701                       09/533,256                       01/20/04
6,679,704                       10/079,332                       01/20/04
6,679,715                       10/152,631                       01/20/04
6,679,716                       10/324,006                       01/20/04
6,679,723                       09/990,904                       01/20/04
6,679,728                       10/329,344                       01/20/04
6,679,732                       10/076,155                       01/20/04
6,679,742                       10/178,735                       01/20/04
6,679,748                       10/340,343                       01/20/04
6,679,749                       10/104,796                       01/20/04
6,679,752                       10/441,305                       01/20/04
6,679,754                       10/013,106                       01/20/04
6,679,761                       10/111,410                       01/20/04
6,679,764                       09/793,683                       01/20/04
6,679,768                       09/920,046                       01/20/04
6,679,780                       10/273,128                       01/20/04
6,679,792                       10/346,265                       01/20/04
6,679,793                       10/070,040                       01/20/04
6,679,809                       10/212,494                       01/20/04
6,679,815                       09/817,565                       01/20/04
6,679,825                       10/068,368                       01/20/04
6,679,832                       09/054,840                       01/20/04
6,679,838                       09/754,892                       01/20/04
6,679,840                       09/677,365                       01/20/04
6,679,845                       09/928,539                       01/20/04
6,679,847                       10/136,880                       01/20/04
6,679,852                       09/614,269                       01/20/04
6,679,855                       09/870,368                       01/20/04
6,679,859                       09/530,075                       01/20/04
6,679,860                       09/885,072                       01/20/04
6,679,866                       09/483,540                       01/20/04
6,679,869                       09/640,165                       01/20/04
6,679,873                       10/462,182                       01/20/04
6,679,876                       09/982,780                       01/20/04
6,679,880                       09/910,026                       01/20/04
6,679,885                       09/995,425                       01/20/04
6,679,898                       09/965,124                       01/20/04
6,679,904                       09/284,664                       01/20/04
6,679,905                       09/795,164                       01/20/04
6,679,908                       09/752,341                       01/20/04
6,679,913                       09/291,443                       01/20/04
6,679,914                       09/712,100                       01/20/04
6,679,922                       09/645,076                       01/20/04
6,679,924                       10/355,641                       01/20/04
6,679,938                       10/055,912                       01/20/04
6,679,940                       10/070,946                       01/20/04
6,679,947                       10/237,603                       01/20/04
6,679,959                       09/767,297                       01/20/04
6,679,960                       09/840,909                       01/20/04
6,679,963                       09/987,522                       01/20/04
6,679,974                       10/089,800                       01/20/04
6,679,975                       10/036,416                       01/20/04
6,679,979                       10/015,528                       01/20/04
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 68 

6,679,986                       09/571,894                       01/20/04
6,679,987                       09/432,742                       01/20/04
6,679,991                       09/831,789                       01/20/04
6,679,993                       09/913,012                       01/20/04
6,679,995                       09/913,458                       01/20/04
6,679,998                       10/227,262                       01/20/04
6,680,001                       10/135,283                       01/20/04
6,680,011                       09/683,177                       01/20/04
6,680,012                       10/093,272                       01/20/04
6,680,019                       09/700,799                       01/20/04
6,680,022                       09/998,299                       01/20/04
6,680,029                       09/823,068                       01/20/04
6,680,042                       09/706,809                       01/20/04
6,680,047                       09/925,715                       01/20/04
6,680,052                       09/465,478                       01/20/04
6,680,053                       09/865,483                       01/20/04
6,680,055                       09/980,063                       01/20/04
6,680,061                       09/749,233                       01/20/04
6,680,068                       09/898,107                       01/20/04
6,680,073                       09/545,486                       01/20/04
6,680,079                       09/871,742                       01/20/04
6,680,086                       09/743,165                       01/20/04
6,680,089                       09/983,514                       01/20/04
6,680,098                       10/019,090                       01/20/04
6,680,101                       09/560,999                       01/20/04
6,680,107                       10/045,160                       01/20/04
6,680,113                       09/501,435                       01/20/04
6,680,128                       09/963,605                       01/20/04
6,680,133                       09/731,704                       01/20/04
6,680,141                       09/795,016                       01/20/04
6,680,142                       09/939,288                       01/20/04
6,680,144                       10/140,033                       01/20/04
6,680,154                       10/431,314                       01/20/04
6,680,157                       09/687,189                       01/20/04
6,680,171                       09/489,155                       01/20/04
6,680,172                       09/571,479                       01/20/04
6,680,175                       09/234,395                       01/20/04
6,680,182                       08/379,611                       01/20/04
6,680,185                       09/889,463                       01/20/04
6,680,188                       10/238,709                       01/20/04
6,680,189                       09/786,256                       01/20/04
6,680,192                       09/726,653                       01/20/04
6,680,204                       09/926,368                       01/20/04
6,680,210                       09/895,643                       01/20/04
6,680,215                       10/272,707                       01/20/04
6,680,216                       10/187,241                       01/20/04
6,680,229                       09/770,909                       01/20/04
6,680,257                       09/916,877                       01/20/04
6,680,260                       10/244,412                       01/20/04
6,680,268                       10/217,235                       01/20/04
6,680,269                       09/892,364                       01/20/04
6,680,275                       09/788,371                       01/20/04
6,680,293                       10/139,946                       01/20/04
6,680,297                       09/605,304                       01/20/04
6,680,298                       09/724,114                       01/20/04
6,680,299                       09/917,107                       01/20/04
6,680,306                       10/176,235                       01/20/04
6,680,309                       10/337,506                       01/20/04
6,680,313                       10/182,179                       01/20/04
6,680,317                       10/221,908                       01/20/04
6,680,318                       10/149,981                       01/20/04
6,680,320                       10/202,850                       01/20/04
6,680,321                       09/631,116                       01/20/04
6,680,322                       09/728,316                       01/20/04
6,680,323                       09/873,746                       01/20/04
6,680,324                       10/000,280                       01/20/04
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 69 

6,680,327                       10/221,165                       01/20/04
6,680,330                       10/225,333                       01/20/04
6,680,331                       09/907,547                       01/20/04
6,680,336                       10/077,154                       01/20/04
6,680,339                       10/100,399                       01/20/04
6,680,343                       09/720,007                       01/20/04
6,680,355                       09/786,360                       01/20/04
6,680,369                       09/883,096                       01/20/04
6,680,371                       09/921,640                       01/20/04
6,680,375                       10/114,464                       01/20/04
6,680,379                       09/614,891                       01/20/04
6,680,380                       09/398,412                       01/20/04
6,680,385                       10/055,016                       01/20/04
6,680,387                       09/841,351                       01/20/04
6,680,390                       10/173,277                       01/20/04
6,680,401                       09/807,955                       01/20/04
6,680,402                       10/261,122                       01/20/04
6,680,403                       10/030,369                       01/20/04
6,680,404                       09/979,440                       01/20/04
6,680,406                       10/322,786                       01/20/04
6,680,409                       09/900,409                       01/20/04
6,680,416                       09/646,003                       01/20/04
6,680,418                       10/023,025                       01/20/04
6,680,424                       08/849,303                       01/20/04
6,680,426                       10/223,160                       01/20/04
6,680,427                       09/535,315                       01/20/04
6,680,431                       10/345,840                       01/20/04
6,680,435                       09/628,756                       01/20/04
6,680,444                       10/283,203                       01/20/04
6,680,451                       09/572,702                       01/20/04
6,680,457                       10/047,567                       01/20/04
6,680,461                       10/118,978                       01/20/04
6,680,462                       10/282,114                       01/20/04
6,680,466                       09/814,544                       01/20/04
6,680,467                       10/299,669                       01/20/04
6,680,468                       10/218,453                       01/20/04
6,680,470                       09/992,527                       01/20/04
6,680,473                       10/014,344                       01/20/04
6,680,479                       09/601,325                       01/20/04
6,680,480                       09/987,209                       01/20/04
6,680,499                       09/988,138                       01/20/04
6,680,510                       09/996,753                       01/20/04
6,680,513                       10/216,361                       01/20/04
6,680,543                       09/341,595                       01/20/04
6,680,546                       09/576,400                       01/20/04
6,680,551                       09/931,921                       01/20/04
6,680,563                       09/893,115                       01/20/04
6,680,565                       09/983,003                       01/20/04
6,680,567                       10/094,652                       01/20/04
6,680,571                       09/441,972                       01/20/04
6,680,581                       10/270,668                       01/20/04
6,680,582                       09/684,196                       01/20/04
6,680,583                       10/092,606                       01/20/04
6,680,591                       10/286,163                       01/20/04
6,680,593                       10/087,635                       01/20/04
6,680,599                       10/026,550                       01/20/04
6,680,601                       10/160,577                       01/20/04
6,680,606                       09/701,840                       01/20/04
6,680,607                       10/146,195                       01/20/04
6,680,609                       10/193,514                       01/20/04
6,680,614                       10/013,362                       01/20/04
6,680,617                       10/266,611                       01/20/04
6,680,623                       10/029,201                       01/20/04
6,680,625                       10/066,031                       01/20/04
6,680,642                       10/154,045                       01/20/04
6,680,659                       10/133,062                       01/20/04
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 70 

6,680,666                       10/265,966                       01/20/04
6,680,671                       09/812,561                       01/20/04
6,680,672                       09/779,246                       01/20/04
6,680,673                       09/272,309                       01/20/04
6,680,676                       09/491,671                       01/20/04
6,680,684                       10/331,552                       01/20/04
6,680,686                       10/213,627                       01/20/04
6,680,688                       10/339,347                       01/20/04
6,680,700                       09/973,308                       01/20/04
6,680,702                       10/043,987                       01/20/04
6,680,707                       10/043,524                       01/20/04
6,680,716                       09/802,364                       01/20/04
6,680,719                       10/224,330                       01/20/04
6,680,741                       09/424,424                       01/20/04
6,680,744                       10/096,904                       01/20/04
6,680,745                       10/012,096                       01/20/04
6,680,750                       09/269,753                       01/20/04
6,680,758                       08/784,440                       01/20/04
6,680,759                       09/778,060                       01/20/04
6,680,761                       09/490,776                       01/20/04
6,680,762                       10/154,713                       01/20/04
6,680,775                       09/671,481                       01/20/04
6,680,776                       09/960,274                       01/20/04
6,680,781                       10/082,120                       01/20/04
6,680,786                       09/502,468                       01/20/04
6,680,797                       09/888,041                       01/20/04
6,680,801                       09/829,842                       01/20/04
6,680,804                       09/960,309                       01/20/04
6,680,810                       09/733,088                       01/20/04
6,680,815                       09/726,444                       01/20/04
6,680,816                       09/841,685                       01/20/04
6,680,819                       10/411,204                       01/20/04
6,680,826                       09/810,821                       01/20/04
6,680,828                       10/165,562                       01/20/04
6,680,839                       10/034,167                       01/20/04
6,680,840                       09/943,704                       01/20/04
6,680,853                       10/351,950                       01/20/04
6,680,854                       10/222,476                       01/20/04
6,680,868                       10/044,706                       01/20/04
6,680,873                       10/042,937                       01/20/04
6,680,878                       09/422,352                       01/20/04
6,680,882                       09/207,333                       01/20/04
6,680,883                       10/387,386                       01/20/04
6,680,886                       09/548,264                       01/20/04
6,680,890                       10/199,019                       01/20/04
6,680,891                       10/429,422                       01/20/04
6,680,892                       09/994,715                       01/20/04
6,680,895                       09/674,614                       01/20/04
6,680,896                       09/950,021                       01/20/04
6,680,898                       09/964,711                       01/20/04
6,680,903                       09/348,253                       01/20/04
6,680,905                       09/351,346                       01/20/04
6,680,907                       09/392,336                       01/20/04
6,680,914                       09/324,420                       01/20/04
6,680,915                       09/313,859                       01/20/04
6,680,924                       09/737,184                       01/20/04
6,680,929                       09/389,322                       01/20/04
6,680,931                       09/344,139                       01/20/04
6,680,935                       09/475,160                       01/20/04
6,680,937                       09/690,843                       01/20/04
6,680,939                       09/661,844                       01/20/04
6,680,946                       09/302,286                       01/20/04
6,680,957                       09/515,493                       01/20/04
6,680,965                       10/057,310                       01/20/04
6,680,970                       09/577,216                       01/20/04
6,680,981                       09/501,369                       01/20/04
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 71 

6,680,983                       10/041,716                       01/20/04
6,680,985                       09/639,446                       01/20/04
6,680,988                       09/531,147                       01/20/04
6,680,989                       09/430,443                       01/20/04
6,680,990                       09/578,698                       01/20/04
6,680,993                       09/725,017                       01/20/04
6,680,994                       10/139,463                       01/20/04
6,680,995                       09/682,914                       01/20/04
6,681,008                       09/870,692                       01/20/04
6,681,026                       10/010,702                       01/20/04
6,681,035                       09/647,269                       01/20/04
6,681,036                       09/587,237                       01/20/04
6,681,038                       09/486,234                       01/20/04
6,681,040                       09/285,878                       01/20/04
6,681,044                       09/538,101                       01/20/04
6,681,053                       09/368,631                       01/20/04
6,681,070                       10/056,077                       01/20/04
6,681,073                       09/812,097                       01/20/04
6,681,074                       09/670,019                       01/20/04
6,681,076                       09/551,724                       01/20/04
6,681,083                       09/665,360                       01/20/04
6,681,086                       10/287,145                       01/20/04
6,681,095                       10/369,608                       01/20/04
6,681,100                       09/524,745                       01/20/04
6,681,109                       09/567,454                       01/20/04
6,681,112                       10/213,444                       01/20/04
6,681,116                       09/304,185                       01/20/04
6,681,123                       09/325,583                       01/20/04
6,681,140                       09/601,230                       01/20/04
6,681,144                       09/806,028                       01/20/04
6,681,145                       08/867,857                       01/20/04
6,681,146                       09/954,049                       01/20/04
6,681,153                       09/631,373                       01/20/04
6,681,166                       10/191,130                       01/20/04
6,681,179                       10/075,229                       01/20/04
6,681,186                       09/658,161                       01/20/04
6,681,194                       10/036,576                       01/20/04
6,681,198                       09/931,623                       01/20/04
6,681,221                       09/691,966                       01/20/04
6,681,224                       09/795,489                       01/20/04
6,681,226                       09/681,152                       01/20/04
6,681,232                       09/861,887                       01/20/04
6,681,245                       09/344,328                       01/20/04
6,681,257                       09/459,498                       01/20/04
6,681,260                       09/553,477                       01/20/04
6,681,267                       09/819,586                       01/20/04
6,681,277                       09/644,204                       01/20/04
6,681,282                       09/653,180                       01/20/04
6,681,294                       09/537,354                       01/20/04
6,681,309                       10/058,185                       01/20/04
6,681,331                       09/309,755                       01/20/04
6,681,343                       09/644,696                       01/20/04
6,681,355                       09/538,260                       01/20/04
6,681,361                       09/565,505                       01/20/04
6,681,368                       09/225,325                       01/20/04
6,681,372                       09/429,168                       01/20/04
6,681,375                       09/905,451                       01/20/04
6,681,381                       09/475,568                       01/20/04
6,681,395                       09/271,383                       01/20/04
6,681,398                       09/228,929                       01/20/04

                   PATENTS WHICH EXPIRED ON January 22, 2012
                    DUE TO FAILURE TO PAY MAINTENANCE FEES

Patent                          Application                         Issue
Number                             Number                            Date
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 72 


7,320,145                       11/474,131                       01/22/08
7,320,147                       11/243,681                       01/22/08
7,320,148                       11/287,439                       01/22/08
7,320,150                       10/890,835                       01/22/08
7,320,155                       11/075,122                       01/22/08
7,320,161                       10/540,116                       01/22/08
7,320,165                       11/456,757                       01/22/08
7,320,172                       11/032,580                       01/22/08
7,320,176                       11/025,951                       01/22/08
7,320,180                       10/141,185                       01/22/08
7,320,185                       10/462,421                       01/22/08
7,320,196                       11/318,733                       01/22/08
7,320,207                       11/210,600                       01/22/08
7,320,210                       11/178,124                       01/22/08
7,320,217                       10/553,099                       01/22/08
7,320,223                       11/047,343                       01/22/08
7,320,227                       10/399,820                       01/22/08
7,320,231                       10/829,020                       01/22/08
7,320,234                       11/338,250                       01/22/08
7,320,261                       11/036,388                       01/22/08
7,320,266                       11/591,055                       01/22/08
7,320,273                       10/540,583                       01/22/08
7,320,276                       10/804,015                       01/22/08
7,320,280                       11/147,678                       01/22/08
7,320,282                       10/524,419                       01/22/08
7,320,291                       11/432,701                       01/22/08
7,320,292                       11/725,003                       01/22/08
7,320,293                       10/532,675                       01/22/08
7,320,298                       11/057,309                       01/22/08
7,320,305                       11/541,257                       01/22/08
7,320,306                       10/581,209                       01/22/08
7,320,310                       10/551,461                       01/22/08
7,320,317                       11/415,900                       01/22/08
7,320,321                       10/787,522                       01/22/08
7,320,339                       11/219,105                       01/22/08
7,320,341                       11/383,772                       01/22/08
7,320,342                       11/413,261                       01/22/08
7,320,343                       10/559,948                       01/22/08
7,320,348                       10/423,645                       01/22/08
7,320,349                       10/740,148                       01/22/08
7,320,350                       11/177,579                       01/22/08
7,320,351                       11/064,947                       01/22/08
7,320,375                       11/184,719                       01/22/08
7,320,382                       11/076,000                       01/22/08
7,320,390                       11/057,810                       01/22/08
7,320,394                       11/261,148                       01/22/08
7,320,397                       11/145,913                       01/22/08
7,320,406                       11/118,055                       01/22/08
7,320,410                       11/636,399                       01/22/08
7,320,417                       10/240,968                       01/22/08
7,320,418                       11/476,465                       01/22/08
7,320,433                       11/607,993                       01/22/08
7,320,437                       10/467,778                       01/22/08
7,320,441                       10/549,577                       01/22/08
7,320,445                       11/107,482                       01/22/08
7,320,447                       11/215,175                       01/22/08
7,320,449                       11/364,109                       01/22/08
7,320,451                       10/862,196                       01/22/08
7,320,453                       11/065,526                       01/22/08
7,320,459                       10/488,141                       01/22/08
7,320,460                       11/515,190                       01/22/08
7,320,466                       11/345,578                       01/22/08
7,320,471                       11/427,901                       01/22/08
7,320,473                       11/690,980                       01/22/08
7,320,475                       11/148,355                       01/22/08
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 73 

7,320,489                       11/422,072                       01/22/08
7,320,491                       10/520,247                       01/22/08
7,320,495                       10/555,302                       01/22/08
7,320,498                       11/293,767                       01/22/08
7,320,499                       11/260,747                       01/22/08
7,320,504                       11/207,136                       01/22/08
7,320,506                       10/605,596                       01/22/08
7,320,514                       11/273,133                       01/22/08
7,320,515                       11/281,724                       01/22/08
7,320,521                       11/174,714                       01/22/08
7,320,526                       10/904,451                       01/22/08
7,320,530                       11/476,265                       01/22/08
7,320,537                       11/329,734                       01/22/08
7,320,541                       10/916,068                       01/22/08
7,320,548                       10/894,332                       01/22/08
7,320,549                       11/129,888                       01/22/08
7,320,553                       11/555,876                       01/22/08
7,320,571                       10/663,653                       01/22/08
7,320,573                       10/631,360                       01/22/08
7,320,602                       11/635,224                       01/22/08
7,320,609                       11/627,110                       01/22/08
7,320,611                       11/499,932                       01/22/08
7,320,618                       11/355,776                       01/22/08
7,320,628                       11/404,203                       01/22/08
7,320,630                       11/320,100                       01/22/08
7,320,631                       11/496,664                       01/22/08
7,320,638                       11/381,190                       01/22/08
7,320,647                       11/141,277                       01/22/08
7,320,652                       11/238,268                       01/22/08
7,320,657                       11/196,417                       01/22/08
7,320,666                       10/664,195                       01/22/08
7,320,672                       10/547,885                       01/22/08
7,320,680                       10/928,030                       01/22/08
7,320,684                       11/232,193                       01/22/08
7,320,687                       11/121,747                       01/22/08
7,320,703                       11/077,890                       01/22/08
7,320,719                       10/504,494                       01/22/08
7,320,728                       11/557,291                       01/22/08
7,320,735                       11/093,394                       01/22/08
7,320,741                       10/466,640                       01/22/08
7,320,748                       10/938,565                       01/22/08
7,320,758                       10/903,410                       01/22/08
7,320,760                       10/496,672                       01/22/08
7,320,764                       10/709,510                       01/22/08
7,320,765                       10/709,388                       01/22/08
7,320,783                       10/619,809                       01/22/08
7,320,784                       09/913,401                       01/22/08
7,320,786                       11/297,880                       01/22/08
7,320,794                       11/276,614                       01/22/08
7,320,796                       10/622,407                       01/22/08
7,320,797                       10/604,999                       01/22/08
7,320,798                       11/418,626                       01/22/08
7,320,799                       11/418,871                       01/22/08
7,320,803                       10/076,514                       01/22/08
7,320,813                       10/735,208                       01/22/08
7,320,816                       10/736,233                       01/22/08
7,320,819                       10/808,862                       01/22/08
7,320,847                       10/705,218                       01/22/08
7,320,857                       10/888,401                       01/22/08
7,320,861                       10/485,454                       01/22/08
7,320,873                       10/344,872                       01/22/08
7,320,877                       10/070,277                       01/22/08
7,320,878                       10/494,903                       01/22/08
7,320,880                       10/478,926                       01/22/08
7,320,883                       10/450,681                       01/22/08
7,320,887                       10/836,959                       01/22/08
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 74 

7,320,893                       10/795,237                       01/22/08
7,320,951                       10/257,824                       01/22/08
7,320,953                       10/938,384                       01/22/08
7,320,955                       11/348,152                       01/22/08
7,320,960                       10/316,205                       01/22/08
7,320,964                       10/491,644                       01/22/08
7,320,972                       10/986,570                       01/22/08
7,320,973                       10/724,179                       01/22/08
7,320,975                       10/505,146                       01/22/08
7,320,977                       10/511,225                       01/22/08
7,320,981                       10/332,562                       01/22/08
7,320,982                       10/773,073                       01/22/08
7,320,987                       11/726,339                       01/22/08
7,320,989                       10/924,181                       01/22/08
7,320,996                       10/218,910                       01/22/08
7,320,998                       10/888,480                       01/22/08
7,321,000                       10/484,241                       01/22/08
7,321,003                       11/205,140                       01/22/08
7,321,023                       09/968,433                       01/22/08
7,321,025                       10/483,328                       01/22/08
7,321,035                       10/991,505                       01/22/08
7,321,040                       10/776,953                       01/22/08
7,321,044                       10/270,080                       01/22/08
7,321,045                       10/770,380                       01/22/08
7,321,055                       11/498,752                       01/22/08
7,321,056                       10/596,256                       01/22/08
7,321,059                       10/492,606                       01/22/08
7,321,061                       11/064,241                       01/22/08
7,321,062                       10/753,548                       01/22/08
7,321,066                       10/544,764                       01/22/08
7,321,068                       10/581,802                       01/22/08
7,321,072                       10/545,770                       01/22/08
7,321,073                       10/799,173                       01/22/08
7,321,074                       10/129,599                       01/22/08
7,321,075                       10/234,854                       01/22/08
7,321,077                       10/719,996                       01/22/08
7,321,092                       11/273,926                       01/22/08
7,321,093                       11/512,894                       01/22/08
7,321,098                       10/709,209                       01/22/08
7,321,113                       11/137,675                       01/22/08
7,321,121                       11/195,726                       01/22/08
7,321,128                       10/529,616                       01/22/08
7,321,132                       11/080,293                       01/22/08
7,321,148                       10/913,275                       01/22/08
7,321,152                       11/498,800                       01/22/08
7,321,173                       11/347,927                       01/22/08
7,321,183                       10/890,989                       01/22/08
7,321,186                       10/812,903                       01/22/08
7,321,208                       11/430,026                       01/22/08
7,321,218                       10/439,862                       01/22/08
7,321,232                       11/348,246                       01/22/08
7,321,233                       11/652,788                       01/22/08
7,321,253                       10/499,867                       01/22/08
7,321,262                       10/570,324                       01/22/08
7,321,270                       11/404,443                       01/22/08
7,321,274                       11/011,914                       01/22/08
7,321,280                       10/842,431                       01/22/08
7,321,287                       11/429,322                       01/22/08
7,321,291                       10/973,493                       01/22/08
7,321,303                       11/242,846                       01/22/08
7,321,304                       11/148,840                       01/22/08
7,321,308                       11/217,992                       01/22/08
7,321,310                       11/348,014                       01/22/08
7,321,315                       10/749,790                       01/22/08
7,321,321                       11/139,178                       01/22/08
7,321,338                       10/743,408                       01/22/08
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 75 

7,321,345                       10/849,874                       01/22/08
7,321,356                       11/012,970                       01/22/08
7,321,358                       11/213,369                       01/22/08
7,321,363                       10/775,866                       01/22/08
7,321,407                       10/677,875                       01/22/08
7,321,414                       10/508,936                       01/22/08
7,321,461                       10/699,846                       01/22/08
7,321,465                       11/071,699                       01/22/08
7,321,476                       11/192,860                       01/22/08
7,321,477                       11/335,127                       01/22/08
7,321,491                       11/308,273                       01/22/08
7,321,517                       11/260,200                       01/22/08
7,321,529                       10/504,755                       01/22/08
7,321,530                       10/830,213                       01/22/08
7,321,541                       10/530,942                       01/22/08
7,321,542                       11/033,625                       01/22/08
7,321,543                       10/923,674                       01/22/08
7,321,574                       10/743,207                       01/22/08
7,321,578                       10/621,688                       01/22/08
7,321,582                       10/897,160                       01/22/08
7,321,586                       10/613,016                       01/22/08
7,321,594                       10/736,984                       01/22/08
7,321,599                       10/209,118                       01/22/08
7,321,605                       10/851,247                       01/22/08
7,321,609                       10/675,185                       01/22/08
7,321,620                       10/383,746                       01/22/08
7,321,654                       10/857,927                       01/22/08
7,321,656                       10/655,576                       01/22/08
7,321,657                       10/740,873                       01/22/08
7,321,666                       10/698,409                       01/22/08
7,321,676                       10/859,427                       01/22/08
7,321,681                       11/582,585                       01/22/08
7,321,699                       10/657,723                       01/22/08
7,321,714                       10/559,850                       01/22/08
7,321,726                       11/021,488                       01/22/08
7,321,733                       10/515,228                       01/22/08
7,321,753                       10/104,123                       01/22/08
7,321,754                       10/486,332                       01/22/08
7,321,763                       10/020,240                       01/22/08
7,321,766                       10/348,556                       01/22/08
7,321,802                       11/120,347                       01/22/08
7,321,803                       10/842,370                       01/22/08
7,321,805                       11/005,330                       01/22/08
7,321,818                       10/507,276                       01/22/08
7,321,830                       09/960,706                       01/22/08
7,321,840                       11/146,672                       01/22/08
7,321,862                       11/268,706                       01/22/08
7,321,866                       10/146,912                       01/22/08
7,321,868                       10/291,685                       01/22/08
7,321,878                       11/087,130                       01/22/08
7,321,885                       11/183,341                       01/22/08
7,321,890                       10/781,488                       01/22/08
7,321,921                       10/889,859                       01/22/08
7,321,938                       09/965,030                       01/22/08
7,321,955                       10/935,080                       01/22/08
7,321,967                       10/423,253                       01/22/08
7,321,977                       10/504,095                       01/22/08
7,322,003                       11/064,412                       01/22/08
7,322,006                       09/472,062                       01/22/08
7,322,025                       10/622,324                       01/22/08
7,322,029                       10/434,025                       01/22/08
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 76 

Patents Reinstated Due to the Acceptance of a Late Maintenance Fee from 02/13/2012
                 Patents Reinstated Due to the Acceptance of a
                     Late Maintenance Fee from 02/13/2012

Patent           Application       Filing          Issue           Granted
Number           Number            Date            Date            Date

5,733,590        08/749,739        11/15/96        03/31/98        02/13/12
5,871,499        08/842,985        04/25/97        02/16/99        02/16/12
5,884,924        08/944,262        10/06/97        03/23/99        02/15/12
5,891,949        08/850,811        05/02/97        04/06/99        02/17/12
5,995,858        08/969,407        11/07/97        11/30/99        02/16/12
6,007,496        08/774,799        12/30/96        12/28/99        02/15/12
6,014,843        09/023,445        02/13/98        01/18/00        02/16/12
6,316,141        09/419,940        10/18/99        11/13/01        02/14/12
6,443,817        09/778,525        02/06/01        09/03/02        02/14/12
6,554,078        09/888,983        06/25/01        04/29/03        02/16/12
6,616,901        09/598,348        06/21/00        09/09/03        02/16/12
6,620,393        09/911,213        07/23/01        09/16/03        02/16/12
6,648,799        09/843,022        04/26/01        11/18/03        02/17/12
6,658,454        09/499,502        02/07/00        12/02/03        02/14/12
6,664,359        08/930,771        10/02/97        12/16/03        02/15/12
6,668,525        10/231,270        08/30/02        12/30/03        02/15/12
6,960,512        10/602,241        06/24/03        11/01/05        02/13/12
6,971,612        10/716,088        11/18/03        12/06/05        02/13/12
6,997,653        10/181,369        07/18/02        02/14/06        02/13/12
7,020,997        10/179,944        06/25/02        04/04/06        02/13/12
7,042,902        10/215,806        08/08/02        05/09/06        02/13/12
7,146,402        09/945,130        08/31/01        12/05/06        02/14/12
7,164,368        10/724,550        11/28/03        01/16/07        02/15/12
7,227,158        11/269,147        11/08/05        06/05/07        02/13/12
7,239,651        10/094,768        03/11/02        07/03/07        02/17/12
7,243,035        10/444,249        05/23/03        07/10/07        02/13/12
7,253,401        10/809,066        03/15/04        08/07/07        02/13/12
7,260,767        10/924,038        08/23/04        08/21/07        02/17/12
7,273,595        11/027,972        12/30/04        09/25/07        02/16/12
7,278,900        11/087,929        03/23/05        10/09/07        02/15/12
7,287,356        10/663,419        09/16/03        10/30/07        02/16/12
7,293,483        11/464,745        08/15/06        11/13/07        02/13/12
7,305,329        11/384,606        03/20/06        12/04/07        02/13/12
7,310,356        10/603,038        06/24/03        12/18/07        02/13/12
7,310,671        09/650,867        08/30/00        12/18/07        02/13/12
7,315,242        10/817,000        04/02/04        01/01/08        02/17/12
7,318,476        10/990,617        11/16/04        01/15/08        02/14/12
7,318,488        11/429,041        05/05/06        01/15/08        02/14/12
7,319,829        11/212,218        08/26/05        01/15/08        02/13/12
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 77 

Reissue Applications Filed
                           Reissue Applications Filed

   Notice under 37 CFR 1.11(b). The reissue applications listed below
are open to public inspection by the general public through the Image
File Wrapper (IFW) system (http://portal.uspto.gov/external/portal/pair)
on the USPTO internet web site (www.uspto.gov), and copies may be obtained
by paying the fee therefor (37 CFR 1.19).

   D. 643,785, Re. S.N.: 29/412,583, Feb. 02, 2012, Cl.: D12/111, FRAME FOR A
BICYCLE, Song Joon Kyu, Owner of Record: Mando Corporation, Attorney or Agent:
Stephen A. Becker, Ex. Gp.: 2913

   6,500,186, Re. S.N. 13/368,116, Feb. 07, 2012, Cl. 606,159, IN-STENT
ABLATIVE TOOL, Daniel M. Lafontaine, et al., Owner of Record: Boston
Scientific Scimed, Inc., Maple Grove, MN, Attorney or Agent: Jason Burgmaier,
Ex. Gp.: 3731

   6,597,792, Re. S.N.: 13/299,298, Nov. 17, 2011, Cl: 381/071, HEADSET NOISE
REDUCING, Tadaaki MaRoman Sapiejewski, et.al., Owner of Record: Bose
Corporation, Framingham, MA, Attorney or Agent: Charles Hieken, Ex. Gp.: 2614

   6,738,263, Re. S.N. 13,350,978, Jan. 16, 2012, Cl. 438,000, STACKABLE BALL
GRID ARRAY PACKAGE, David J. Corisis et. al., Owner of Record: ROUND ROCK
RESEARCH, LLC., Attorney or Agent: John J. Farrell, Ex. Gp.: 2826

   6,793,296, Re. S.N. 13,352,689, Jan. 18, 2012, Cl. 305,000, ENDLESS
TRACTION BAND WITH ASYMMETRICAL SUPPORT, Andre Deland et. al., Owner of
Record: SOUCY INTERNATIONAL INC., Attorney or Agent: Michael B. Lasky,
Ex. Gp.: 3617

   7,168,590, Re. S.N.: 13,313,294, Dec. 07, 2011, CL: 220, TRUCK BED TOOLBOX
LID, Larry K. Jones, et.al., Owner of Record: Thule Sweden AB, Attorney or
Agent: Thomas a Corrado, Ex. GP.: 3788

   7,212,465, Re. S.N.: 13,367,023, Feb. 06, 2012, CL: 327, CLOCK SIGNAL
GENERATION APPARATUS FOR USE IN SEMICONDUCTOR MEMORY DEVICE AND ITS METHOD,
Tae-Jin Kang, et,al., Owner of Record: 658868 N.B. Inc, Attorney or Agent:
James Ortega, Ex. GP.: 2816

   7,529,681, Re. S.N. 13,368,201, Feb. 07, 2012, Cl. 705,001, TICKET
TRACKING, REMINDING AND REDEEMING SYSTEM AND METHOD, Robert G. Barnes, et al.,
Owner of Record: American Express Travel Related Services Company, Inc., New
York, NY, Attorney or Agent: Todd Komaromy, Ex. Gp.: 3629

   7,634,017, Re. S.N.: 13,326,024, Dec. 14, 2011, CL: 375, WIRELESS
COMMUNICATION SYSTEM, Ryo Sawai, Owner of Record: Sony Corporation,
Attorney or Agent: Bradley D. Lytle, Ex. GP.: 2611

   7,655,535, Re. S.N. 13,363,073, Jan. 31, 2012, Cl. 257,173, METHOD FOR
FABRICATING SEMICONDUCTOR DEVICE HAVING TRENCH ISOLATION LAYER, Hyo Seob Yoon
et. al., Owner of Record: HYNIX SEMICONDUCTOR INC., Attorney or Agent:
Jennifer Burnette, Ex. Gp.: 2811

   7,655,581, Re. S.N. 13,385,113, Feb. 02, 2012, Cl. 442,205, HYBRID THREE-
DIMENSIONAL WOVEN,LAMINATED STRUTS FOR COMPOSITE STRUCTURAL APPLICATIONS,
Jonathan Goering, Owner of Record: Albany Engineered Composites, Inc.,
Rochester, NH, Attorney or Agent: Ronald R. Santucci, Ex. Gp.: 1786

   7,657,706, Re. S.N. 13,365,136, Feb. 02, 2012, Cl. 711,156, HIGH SPEED
MEMORY AND INPUT,OUTPUT PROCESSOR SUBSYSTEM FOR EFFICIENTLY ALLOCATING AND
USING HIGH-SPEED MEMORY AND SLOWER-SPEED MEMORY, Sundar Iyer, Owner of Record:
Cisco Technology, Inc., San Jose, CA, Attorney or Agent: Stephen C. Durant,
Ex. Gp.: 2189

   7,658,971, Re. S.N.: 13,369,269, Feb. 08, 2012, CL: 423, METHOD OF
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 78 

PRODUCING CARBON NANOSTRUCTURE, Takeshi HIKATA, Owner of Record: Sumitomo
Electric Industries, LTD., Attorney or Agent: Ted Tittmaster, Ex. GP.: 1736

   7,665,656, Re. S.N. 13/367,658, Feb. 07, 2012, Cl. 235/379, ELECTRONIC
FUND TRANSFER OR TRANSACTION SYSTEM, James G. Gatto, Owner of Record:
Arigern Capital L.L.C., Attorney or Agent: David S. Lee, Ex. Gp.: 2876

   7,928,249, Re. S.N. 13,396,252, Feb. 14, 2012, Cl. 549,059, CONJUGATED
MONOMERS AND POLYMERS AND PREPARATION AND USE THEREOF, Tobin J. Marks, et al.,
Owner of Record: Northwestern University, Evanston, IL, Attorney or Agent:
Karen K. Chan, Ex. Gp.: 1622

   7,939,322, Re. S.N. 13,372,641, Feb. 14, 2012, Cl. 435,377, CELLS
EXPRESSING PLURIPOTENCY MARKERS AND EXPRESSING MARKERS CHARACTERISTIC OF THE
DEFINITIVE ENDODERM, Alireza Rezania, Owner of Record: Centocor Ortho Biotech
Inc., Horsham, PA, Attorney or Agent: Mark R. Warfield, Ex. Gp.: 1653

   7,962,397, Re. S.N. 13,372,416, Feb. 13, 2012, Cl. 705,036, EMPLOYEE STOCK
OPTION APPRECIATION RIGHTS SECURITIES AUCTION PROCESS, William David Hemingway,
et al., Owner of Record: Zion Bancorporation, Salt Lake City, UT, Attorney or
Agent: Kory Christensen, Ex. Gp.: 3693

   7,962,397, Re. S.N. 13,396,442, Feb. 14, 2012, Cl. 705,036, ESTIMATING A
VALUE OF AN ASSET USING A DERIVATIVE SECURITIES AUCTION PROCESS, William David
Hemingway, et al., Owner of Record: Zion Bancorporation, Salt Lake City, UT,
Attorney or Agent: Kory Christensen, Ex. Gp.: 3693

   8,027,698, Re. S.N.: 13/357,681, Jan. 25, 2012, Cl.: 455/522, COMMUNICATION
METHOD, Kazuhito Niwano, et.al., Owner of Record: Research In Motion Limited,
Waterloo, CANADA, Attorney or Agent: Jeffrey A. Berkowitz, Ex. Gp.: 2618

   8,093,467, Re. S.N.: 13/360,032, Jan. 27, 2012, Cl.: 800/312, SOYBEAN
CULTIVAR S080186, Harumasa Arita, et.al., Owner of Record: Rohto
Pharmaceutical Co, Ltd, Osaka-shi, JP, Attorney or Agent: Drew Hissong,
Ex. Gp.: 1655
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 79 

Requests for Ex Parte Reexamination Filed
                   Requests for Ex Parte Reexamination Filed

   5,337,753, Reexam. C.N. 90/012,104, Requested Date: Jan. 25, 2012,
Cl. 600/014, Title: HEART RATE MONITOR, Inventor: Gregory Lekhtman,
Owners of Record: Biosig Instruments, Inc., Canada, Attorney or Agent:
Chilton Alix & Van Kirk, Hartford, CT, Ex. Gp.: 3992, Requester: Nautilus,
Inc., Matthew C. Phillips, Stoel Rives, LLP., Portland, OR

   5,689,094, Reexam. C.N. 90/012,103, Requested Date: Jan. 24, 2012,
Cl. 187/384, Title: ELEVATOR INSTALLATION, Inventor: Paul Friedli et al.,
Owners of Record: Inventio AG, Switzerland, Attorney or Agent: Greenblum &
Bernstein, PLC., Reston, VA, Ex. Gp.: 3992, Requester: W. Todd Baker, Oblon
Spivak McClelland Maier & Neustadt, LLP., Alexandria, VA

   6,478,274, Reexam. C.N. 90/012,099, Requested Date: Jan. 20, 2012,
Cl. 248/274, Title: ARM APPARATUS FOR MOUNTING ELECTRONIC DEVICES, Inventer:
Todd N. Oddsen, Jr., Owners of Record: Innovative Office Products, Inc.,
Easton, PA, Attorney or Agent: Desing IP, PC., Allentown, PA, Ex. Gp.: 3993,
Requester: Carl A. Hjort, III, SpaceCo, Business Solution, Inc., Denver, CO

   7,328,845, Reexam. C.N. 90/012,102, Requested Date: Jan. 26, 2012,
Cl. 235/454, Title: METHOD FOR PRODUCING INDICATORS AND PROCESSING APPARATUS
AND SYSTEM UTILIZING THE INDICATORS, Inventor: Yao-Hung Tsai, Owners of
Record: Sonix Technology, Co., LTD., Taiwan, Attorney or Agent: Jianq Chyun
Intellectual Property Office, Taiwan, Ex. Gp.: 3992, Requester: Generalplus
Technology, Inc., Weiguo Chen, Finnegan Henderson Farabow Garrett & Dunner,
LLP., Washington, DC

   7,357,891, Reexam. C.N. 90/012,098, Requested Date: Jan. 20, 2012,
Cl. 264/211, Title: PROCESS FOR MAKING AN INGESTIBLE FILM, Inventor: Robert
K. Yang et al., Owners of Record: MonoSol RX, LLC., Portage, IN, Attorney or
Agent: Hoffmann & Baron, LLP., Syosset, NY, Ex. Gp.: 3991, Requester:
Danielle L. Herritt, McCarter & English, LLP., Boston, MA

   7,732,243, Reexam. C.N. 90/012,107, Requested Date: Jan. 25, 2012,
Cl. 257/448, Title: SUBSTRATE STRUCTURES FOR INTEGRATED SERIES CONNECTED
PHOTOVOLTAIC ARRAYS AND PROCESS OF MANUFACTURE OF SUCH ARRAYS, Inventor:
Daniel Luch, Owners of Record: Solannex, Inc., Morgan Hill, CA, Attorney or
Agent: Daniel Luch, Morgan Hill, CA, Ex. Gp.: 3992, Requester: Nanosolar,
Inc., Paul M. Anderson, Paul M. Anderson, PLLC., Austin, TX

   7,898,053, Reexam. C.N. 90/012,105, Requested Date: Jan. 25, 2012,
Cl. 257/448, Title: SUBSTRATE STRUCTURES FOR INTEGRATED SERIES CONNECTED
PHOTOVOLTAIC ARRAYS AND PROCESS OF MANUFACTURE OF SUCH ARRAYS, Inventor:
Daniel Luch, Owners of Record: Solannex, Inc., Morgan Hill, CA, Attorney or
Agent: Daniel Luch, Morgan Hill, CA, Ex. Gp.: 3992, Requester: Nanosolar,
Inc., Paul M. Anderson, Paul M. Anderson, PLLC., Austin, TX

   7,898,054, Reexam. C.N. 90/012,106, Requested Date: Jan. 25, 2012,
Cl. 257/448, Title: SUBSTRATE STRUCTURES FOR INTEGRATED SERIES CONNECTED
PHOTOVOLTAIC ARRAYS AND PROCESS OF MANUFACTURE OF SUCH ARRAYS, Inventor:
Daniel Luch, Owners of Record: Solannex, Inc., Morgan Hill, CA, Attorney or
Agent: Daniel Luch, Morgan Hill, CA, Ex. Gp.: 3992, Requester: Nanosolar,
Inc., Paul M. Anderson, Paul M. Anderson, PLLC., Austin, TX

   8,075,461, Reexam. C.N. 90/012,101, Requested Date: Jan. 23, 2012,
Cl. 482/126, Title: REINFORCED CORD WELL LIFTING BAR ASSEMBLY, Inventor:
Douglas C. Terry et al., Owners of Record: Terry C. Douglas, Salt Lake City,
UT, Attorney or Agent: Jeffrey M. Lillywhite, PC., Draper, UT, Ex. Gp.:
3993, Requester: Craig A. Fieschko, Dewitt Ross & Stevens, SC., Madison, WI
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 80 

Requests for Inter Partes Reexamination Filed
                  Requests for Inter Partes Reexamination Filed

   6,860,925, Reexam. C.N.: 95/001,879, Requested Date: Feb. 1, 2012,
Cl.: 106/001, Title: PRINTED CIRCUIT BOARD MANUFACTURE, Inventor:
Andrew McIntosh Soutar et al., Owners of Record: Enthone, Inc., West Haven,
CT, Attorney or Agent: Senniger Powers, LLP., St. Louis, MO, Ex. Gp.: 3991,
Requester: Third Party Requester:  MacDermid, Inc.; (Att'y Is: Arthur G.
Schaier, Carmody & Torrance, LLP., Waterbury, CT), Real Party in Interest:
Same As Third Party Requester

   7,086,131, Reexam. C.N.: 95/001,878, Requested Date: Jan. 27, 2012,
Cl.: 029/282, Title: DEFORMABLE MECHANICAL PIPE COUPLING, Inventor: John Gibb
et al., Owners of Record: Victaulic Company, Easton, PA, Attorney or Agent:
Ballard Spahr, LLP., Atlanta, GA, Ex. Gp.: 3993, Requester: Third Party
Requester: Anvil International, LLC.; (Att'y Is: Jeffrey R. Kuester, Taylor
English Duma, LLP., Atlanta, GA), Real Party in Interest: Same As Third Party
Requester

   7,585,527, Reexam. C.N.: 95/001,868, Requested Date: Jan. 24, 2012,
Cl.: 426/032, Title: COMPOSITION AND METHOD FOR TREATING IRON DEFICIENCY
ANEMIA, Inventor: Bala Venkataraman et al., Owners of Record: Alaven
Pharmaceutical, LLC., Marietta, GA; Colorado, Biolabs, Inc., Cozad, NE,
Attorney or Agent: Thompson Hine, LLP., Dayton, OH, Ex. Gp.: 3991,
Requester: Third Party Requester: WH Nutritionals, LLC.: (Att'y Is:
Steven Hultquist, Hultquist, IP, Research Triangle Park, NC), Real Party
in Interest: Same As Third Party Requester

   7,712,796, Reexam. C.N.: 95/001,880, Requested Date: Feb. 1, 2012,
Cl.: 285/413, Title: DEFORMABLE MECHANICAL PIPE COUPLING, Inventor: John Gibb
et al., Owners of Record: Victaulic Company, Easton, PA, Attorney or Agent:
Ballard Spahr, LLP., Atlanta, GA, Ex. Gp.: 3993, Requester: Third Party
Requester: Anvil International, LLC.; (Att'y Is: Jeffrey R. Kuesler, Taylor
English Duma, LLP., Atlanta, GA), Real Party in Interest: Same As Third Party
Requester
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 81 

Notice of Expiration of Trademark Registrations Due to Failure to Renew
                Notice of Expiration of Trademark Registrations
                            Due to Failure to Renew

   15 U.S.C. 1059 provides that each trademark registration may be
renewed for periods of ten years from the end of the expiring period
upon payment of the prescribed fee and the filing of an acceptable
application for renewal. This may be done at any time within one year
before the expiration of the period for which the registration was
issued or renewed, or it may be done within six months after such
expiration on payment of an additional fee.
   According to the records of the Office, the trademark registrations
listed below are expired due to failure to renew in accordance with 15
U.S.C. 1059.

                     TRADEMARK REGISTRATIONS WHICH EXPIRED
                               February 17, 2012
                            DUE TO FAILURE TO RENEW

Reg. Number                   Serial Number                     Reg. Date

2,967,215                      79/000,005                      07/12/2005
2,967,217                      79/000,038                      07/12/2005
2,967,221                      79/000,194                      07/12/2005
2,967,222                      79/000,195                      07/12/2005
2,967,223                      79/000,238                      07/12/2005
2,967,225                      79/000,253                      07/12/2005
2,967,227                      79/000,277                      07/12/2005
2,967,228                      79/000,320                      07/12/2005
2,967,230                      79/000,326                      07/12/2005
2,967,231                      79/000,346                      07/12/2005
2,967,235                      79/000,409                      07/12/2005
1,160,674                      73/219,489                      07/14/1981
2,466,814                      74/367,865                      07/10/2001
2,468,046                      74/601,908                      07/10/2001
2,468,054                      75/124,830                      07/10/2001
2,468,068                      75/292,118                      07/10/2001
2,468,075                      75/320,739                      07/10/2001
2,468,096                      75/387,172                      07/10/2001
2,468,100                      75/394,247                      07/10/2001
2,466,849                      75/395,912                      07/10/2001
2,468,105                      75/403,973                      07/10/2001
2,466,856                      75/431,508                      07/10/2001
2,468,116                      75/431,754                      07/10/2001
2,468,120                      75/438,769                      07/10/2001
2,468,126                      75/457,624                      07/10/2001
2,466,859                      75/460,099                      07/10/2001
2,466,862                      75/464,601                      07/10/2001
2,468,135                      75/469,628                      07/10/2001
2,466,865                      75/478,614                      07/10/2001
2,468,145                      75/484,649                      07/10/2001
2,468,155                      75/510,296                      07/10/2001
2,468,161                      75/524,966                      07/10/2001
2,468,164                      75/532,739                      07/10/2001
2,466,899                      75/561,268                      07/10/2001
2,466,904                      75/571,675                      07/10/2001
2,466,907                      75/572,969                      07/10/2001
2,466,911                      75/577,853                      07/10/2001
2,468,202                      75/584,998                      07/10/2001
2,468,206                      75/590,490                      07/10/2001
2,468,208                      75/592,533                      07/10/2001
2,466,919                      75/593,625                      07/10/2001
2,466,922                      75/596,844                      07/10/2001
2,466,928                      75/605,220                      07/10/2001
2,468,232                      75/616,538                      07/10/2001
2,466,941                      75/617,884                      07/10/2001
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 82 

2,466,942                      75/619,473                      07/10/2001
2,466,943                      75/619,474                      07/10/2001
2,468,239                      75/621,121                      07/10/2001
2,466,947                      75/623,270                      07/10/2001
2,466,948                      75/623,809                      07/10/2001
2,466,952                      75/627,547                      07/10/2001
2,466,953                      75/628,252                      07/10/2001
2,468,250                      75/630,987                      07/10/2001
2,466,956                      75/633,228                      07/10/2001
2,468,259                      75/635,281                      07/10/2001
2,466,965                      75/642,894                      07/10/2001
2,468,271                      75/648,990                      07/10/2001
2,466,970                      75/650,466                      07/10/2001
2,468,288                      75/662,225                      07/10/2001
2,466,985                      75/665,306                      07/10/2001
2,468,291                      75/667,932                      07/10/2001
2,466,994                      75/676,533                      07/10/2001
2,468,305                      75/682,592                      07/10/2001
2,468,309                      75/685,820                      07/10/2001
2,468,312                      75/689,671                      07/10/2001
2,467,003                      75/691,936                      07/10/2001
2,467,007                      75/697,797                      07/10/2001
2,467,008                      75/697,846                      07/10/2001
2,467,009                      75/698,061                      07/10/2001
2,467,010                      75/698,208                      07/10/2001
2,467,012                      75/698,867                      07/10/2001
2,468,563                      75/709,626                      07/10/2001
2,467,022                      75/710,483                      07/10/2001
2,467,023                      75/711,664                      07/10/2001
2,468,333                      75/713,771                      07/10/2001
2,467,033                      75/719,181                      07/10/2001
2,467,049                      75/732,830                      07/10/2001
2,468,357                      75/742,321                      07/10/2001
2,467,070                      75/747,959                      07/10/2001
2,467,074                      75/749,359                      07/10/2001
2,468,362                      75/749,857                      07/10/2001
2,467,081                      75/755,951                      07/10/2001
2,467,091                      75/764,118                      07/10/2001
2,467,095                      75/768,096                      07/10/2001
2,468,571                      75/771,404                      07/10/2001
2,467,109                      75/778,816                      07/10/2001
2,467,112                      75/779,444                      07/10/2001
2,467,118                      75/781,222                      07/10/2001
2,468,394                      75/782,778                      07/10/2001
2,468,395                      75/783,185                      07/10/2001
2,468,398                      75/784,580                      07/10/2001
2,467,133                      75/788,199                      07/10/2001
2,468,403                      75/790,698                      07/10/2001
2,467,137                      75/790,727                      07/10/2001
2,468,404                      75/791,283                      07/10/2001
2,467,141                      75/794,680                      07/10/2001
2,468,411                      75/796,152                      07/10/2001
2,468,413                      75/797,165                      07/10/2001
2,468,414                      75/797,217                      07/10/2001
2,467,158                      75/805,624                      07/10/2001
2,467,178                      75/813,082                      07/10/2001
2,467,183                      75/814,154                      07/10/2001
2,468,439                      75/816,521                      07/10/2001
2,467,200                      75/820,870                      07/10/2001
2,468,442                      75/821,703                      07/10/2001
2,468,446                      75/825,474                      07/10/2001
2,468,450                      75/828,766                      07/10/2001
2,468,456                      75/832,257                      07/10/2001
2,468,459                      75/834,135                      07/10/2001
2,468,460                      75/834,628                      07/10/2001
2,467,231                      75/835,291                      07/10/2001
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 83 

2,467,235                      75/836,396                      07/10/2001
2,468,465                      75/838,561                      07/10/2001
2,468,468                      75/839,985                      07/10/2001
2,468,473                      75/841,654                      07/10/2001
2,467,255                      75/847,242                      07/10/2001
2,467,258                      75/847,488                      07/10/2001
2,467,261                      75/848,517                      07/10/2001
2,468,489                      75/850,258                      07/10/2001
2,467,270                      75/853,419                      07/10/2001
2,467,271                      75/853,994                      07/10/2001
2,468,492                      75/854,867                      07/10/2001
2,467,278                      75/856,204                      07/10/2001
2,467,284                      75/859,074                      07/10/2001
2,467,296                      75/861,250                      07/10/2001
2,467,305                      75/862,793                      07/10/2001
2,468,499                      75/863,615                      07/10/2001
2,467,320                      75/868,976                      07/10/2001
2,467,322                      75/870,934                      07/10/2001
2,468,506                      75/872,467                      07/10/2001
2,468,508                      75/873,231                      07/10/2001
2,467,331                      75/873,974                      07/10/2001
2,467,332                      75/874,263                      07/10/2001
2,468,577                      75/875,713                      07/10/2001
2,467,337                      75/876,142                      07/10/2001
2,468,579                      75/876,695                      07/10/2001
2,467,342                      75/877,172                      07/10/2001
2,467,346                      75/877,928                      07/10/2001
2,467,349                      75/878,773                      07/10/2001
2,467,361                      75/881,501                      07/10/2001
2,467,362                      75/881,886                      07/10/2001
2,467,365                      75/882,219                      07/10/2001
2,467,368                      75/882,799                      07/10/2001
2,467,375                      75/883,830                      07/10/2001
2,467,378                      75/884,491                      07/10/2001
2,467,392                      75/887,912                      07/10/2001
2,467,395                      75/888,523                      07/10/2001
2,467,412                      75/894,436                      07/10/2001
2,467,419                      75/898,102                      07/10/2001
2,467,420                      75/898,552                      07/10/2001
2,467,422                      75/899,291                      07/10/2001
2,468,521                      75/901,966                      07/10/2001
2,467,430                      75/903,126                      07/10/2001
2,468,523                      75/904,506                      07/10/2001
2,468,524                      75/907,457                      07/10/2001
2,467,441                      75/912,284                      07/10/2001
2,468,527                      75/913,259                      07/10/2001
2,468,528                      75/914,675                      07/10/2001
2,467,452                      75/917,276                      07/10/2001
2,467,459                      75/920,840                      07/10/2001
2,468,587                      75/925,846                      07/10/2001
2,468,588                      75/926,447                      07/10/2001
2,467,489                      75/931,250                      07/10/2001
2,467,502                      75/939,649                      07/10/2001
2,467,506                      75/942,489                      07/10/2001
2,467,511                      75/943,598                      07/10/2001
2,468,536                      75/945,004                      07/10/2001
2,468,538                      75/979,709                      07/10/2001
2,467,518                      76/001,635                      07/10/2001
2,467,525                      76/004,317                      07/10/2001
2,467,537                      76/007,532                      07/10/2001
2,467,545                      76/010,979                      07/10/2001
2,468,599                      76/011,750                      07/10/2001
2,467,549                      76/012,367                      07/10/2001
2,467,555                      76/014,090                      07/10/2001
2,467,567                      76/018,299                      07/10/2001
2,467,580                      76/022,575                      07/10/2001
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 84 

2,467,581                      76/023,151                      07/10/2001
2,467,583                      76/024,472                      07/10/2001
2,468,605                      76/026,350                      07/10/2001
2,467,600                      76/029,888                      07/10/2001
2,467,611                      76/032,577                      07/10/2001
2,467,615                      76/033,081                      07/10/2001
2,467,623                      76/034,021                      07/10/2001
2,467,624                      76/034,024                      07/10/2001
2,467,626                      76/034,841                      07/10/2001
2,467,638                      76/037,989                      07/10/2001
2,467,648                      76/040,405                      07/10/2001
2,467,649                      76/040,468                      07/10/2001
2,467,660                      76/043,742                      07/10/2001
2,467,677                      76/047,269                      07/10/2001
2,467,686                      76/049,438                      07/10/2001
2,467,687                      76/049,851                      07/10/2001
2,467,689                      76/049,968                      07/10/2001
2,467,691                      76/051,098                      07/10/2001
2,467,693                      76/051,356                      07/10/2001
2,467,703                      76/052,984                      07/10/2001
2,467,704                      76/053,192                      07/10/2001
2,467,713                      76/054,488                      07/10/2001
2,467,716                      76/054,598                      07/10/2001
2,467,717                      76/054,602                      07/10/2001
2,467,729                      76/057,902                      07/10/2001
2,467,737                      76/059,532                      07/10/2001
2,467,742                      76/060,120                      07/10/2001
2,467,746                      76/060,573                      07/10/2001
2,467,779                      76/067,273                      07/10/2001
2,467,781                      76/067,352                      07/10/2001
2,467,787                      76/068,592                      07/10/2001
2,467,794                      76/070,061                      07/10/2001
2,467,798                      76/070,285                      07/10/2001
2,467,803                      76/070,880                      07/10/2001
2,467,809                      76/072,343                      07/10/2001
2,467,811                      76/072,840                      07/10/2001
2,467,814                      76/073,268                      07/10/2001
2,467,818                      76/073,776                      07/10/2001
2,467,825                      76/074,930                      07/10/2001
2,467,835                      76/076,554                      07/10/2001
2,467,843                      76/077,887                      07/10/2001
2,467,853                      76/079,223                      07/10/2001
2,467,857                      76/079,441                      07/10/2001
2,467,864                      76/080,713                      07/10/2001
2,467,870                      76/082,210                      07/10/2001
2,467,890                      76/086,227                      07/10/2001
2,467,904                      76/087,194                      07/10/2001
2,467,906                      76/087,401                      07/10/2001
2,467,911                      76/087,969                      07/10/2001
2,467,914                      76/088,141                      07/10/2001
2,467,921                      76/088,801                      07/10/2001
2,467,939                      76/090,772                      07/10/2001
2,467,952                      76/091,994                      07/10/2001
2,467,972                      76/094,416                      07/10/2001
2,467,977                      76/096,477                      07/10/2001
2,467,981                      76/097,314                      07/10/2001
2,467,989                      76/098,622                      07/10/2001
2,468,001                      76/100,275                      07/10/2001
2,468,002                      76/100,785                      07/10/2001
2,468,005                      76/101,217                      07/10/2001
2,468,007                      76/101,219                      07/10/2001
2,468,008                      76/101,221                      07/10/2001
2,468,010                      76/101,659                      07/10/2001
2,468,012                      76/101,949                      07/10/2001
2,468,033                      78/005,182                      07/10/2001
2,468,043                      78/022,321                      07/10/2001
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 85 

Service by Publication
                            Service by Publication

   A notice of opposition to the registration of the mark in the application
identified below having been filed, and the notice of such proceeding sent to
applicant at the last known address having been returned by the Postal Service
as undeliverable, notice is hereby given that unless the applicant listed
herein, its assigns or legal representatives, shall enter an appearance within
thirty days of this publication, the opposition will proceed as in the case of
default.

Alvaro Santoscoy Padilla, Quadalajara, Mexico, Application Serial No.
85214774 for the mark "BILLY JACK", Opposition No. 91201683.

                                                            NICOLE M. THIER
                                                       Paralegal Specialist
                                      Trademark Trial and Appeal Board, for
                                                            DEBORAH S. COHN
                                                Commissioner for Trademarks


                            Service by Publication

   A petition to cancel the registration identified below having been filed,
and the notice of such proceeding sent to registrant at the last known address
having been returned by the Postal Service as undeliverable, notice is hereby
given that unless the registrant listed herein, its assigns or legal
representatives, shall enter an appearance within thirty days of this
publication, the cancellation will proceed as in the case of default.

Cyphermint Inc., Marlborough, MA, Registration No. 3343868 for the mark
"PAYCASH", Cancellation No. 92054893.

                                                           MILLICENT CANADY
                                                       Paralegal Specialist
                                      Trademark Trial and Appeal Board, for
                                                            DEBORAH S. COHN
                                                Commissioner for Trademarks


                            Service by Publication

   A petition to cancel the registration identified below having been filed,
and the notice of such proceeding sent to registrant at the last known address
having been returned by the Postal Service as undeliverable, notice is hereby
given that unless the registrant listed herein, its assigns or legal
representatives, shall enter an appearance within thirty days of this
publication, the cancellation will proceed as in the case of default.

Robert Malta, New York, NY, Registration No. 4044144 for the mark
"PUTTANESCA", Cancellation No. 92055034.

                                                         KARL KOCHERSPERGER
                                                       Paralegal Specialist
                                      Trademark Trial and Appeal Board, for
                                                            DEBORAH S. COHN
                                                Commissioner for Trademarks
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 86 

37 CFR 1.47 Notice by Publication
                      37 CFR 1.47 Notice of Publication

   Notice is hereby given of the filing of an application with a petition
under 37 CFR 1.47 requesting acceptance of the application without the
signature of all the inventors. The petition has been granted. A notice has
been sent to the last known address of the non-signing inventor, Jorge
Vincente BLASCO CLARET. The inventor whose signature is missing may join in
the application by promptly filing an appropriate oath or declaration
complying with 37 CFR 1.63. The international application number is
PCT/ES2009/070273 and was filed 03 July 2009 in the names of Jorge Vincente
BLASCO CLARET, Salvador IRANZO MOLINERO, Agustin BADENES CORELLA, Jose Luis
GONZALEZ MORENO, and Luis Manuel TORRES CANTON for the invention entitled
MULTI-BAND DATA TRANSMISSION METHOD. The national stage number is 13/054,024
and has a 35 U.S.C. 371(c) date of 29 November 2011.


                      37 CFR 1.47 Notice of Publication

   Notice is hereby given of the filing of an application with a petition
under 37 CFR 1.47 requesting acceptance of the application without the
signature of all the inventors. The petition has been granted. A notice has
been sent to the last known address of the non-signing inventor. The inventor
whose signature is missing (Toby Proctor) may join in the application by
promptly filing an appropriate oath or declaration complying with 37 CFR 1.63.
The international application number is PCT/EP2009/053733 and was filed 30
March 2009 in the names of Roger Beck and Toby Proctor for the invention
entitled CONFIGURATION OF ACCESS POINTS IN A TELECOMMUNICATION NETWORK. The
national stage number is 12/736,336 and has a 35 U.S.C. 371(c) date of 22
April 2011.
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 87 

37 CFR § 1.47 Notice by Publication
                      37 CFR § 1.47 Notice by Publication

   Notice is hereby given of the filing of the following applications with a
petition under 37 CFR § 1.47 requesting the acceptance of the application
without the signature of all inventors or, if the inventor is deceased, the
legal representative of the deceased inventor.  The petition in each
application has been granted. A notice has been sent to the last known address
of the non-signing inventor or legal representative. The inventors or legal
representatives whose signatures are missing may join in the application by
promptly filing an oath or declaration complying with 37 CFR § 1.63.

                                Non-Signing
                                Inventor(s)
Application                     or Legal
No.             Filing Date     Representative(s)   Title of Invention

29/373,153      Mar. 7, 2011    Luca Borgogno       Automobile With Automobile
                                                    Body Having Visible
                                                    Carbon Fibre
29/390,338      Apr. 22, 2011   Terence Sean Yoo    Seat Portio

10/811,397      Mar. 25, 2004   Curtis R. Priem     Unified Driver
                                                    Architecture Device
                                                    Identifier Strategy

10/889,765      Jul. 13, 2004   David Jarman        Vegetation Pruning Device

11/234,726      Sep. 23, 2005   Stephen Mead        Memory Management Method
                                                    And Apparatus For
                                                    Automated Biological
                                                    Reaction System

12/191,466      Aug. 14, 2008   David Jarman        Vegetation Pruning Device

12/196,557      Aug. 22, 2008   Yih-Sien Kao        User Group Assignment
                                                    Method For Key
                                                    Management

12/298,937      Oct. 29, 2008   Stephen Scheufele   Sample Collection System
                                                    And Method

12/475,273      May 29, 2009    Ryota Kuki          Dielectric Ceramic And
                                                    Capacitor

12/510,502      Jul. 28, 2009   John P. Wallner     Active Head Restraint
                                                    For A Vehicle Seat

12/614,314      Nov. 6, 2009    Mirimajid Seyyedy   Hybrid MRAR Array
                                                    Structure And Operation

12/757,279      Apr. 9, 2010    Satish Laxmanrao    Managing Access Commands
                                            Rege    By Multiple Level
                                                    Caching

12/789,311      May 27, 2010    Jiwoong Lee         Recursive Header
                                                    Compression For
                                                    Relay Nodes

12/806,208      Sep. 2, 2009    Mo-Han Fong         Differential Encoding
                                                    With Adaptive Resetting

12/915,709      Oct. 29, 2010   Oxana Guerassimenko Therapeutic Approaches
                                                    For Treating Alzheimer
                                                    Disease And Related
                                                    Disorders Through A
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 88 

                                                    Modulation Of Angiogenesis

12/967,506      Dec. 14, 2010   Chien-Sheng Yang    Thin Film Solar Cell And
                                                    Thin Film Solar Cell
                                                    System

12/978,359      Dec. 23, 2010   Seongiun Park       Semiconductor Device
                                                    Contacts

12/980,223      Dec. 28, 2010   Samuel M. Khamis    Hybrid Sensor Array

13/005,613      Jan. 13, 2011   Timo Ahopelto       Conversion Management
                                                    System Method And
                                                    Computer Program

13/012,557      Jan. 24, 2011   Eui-Joon Youm       Interactive Asynchronous
                                                    Game Play Architecture

13/014,327      Jan. 26, 2011   Murray J. Burke     Method And Apparatus For
                                Sunalie N. Hillier  Treating A Cellulosic
                                                    Feedstock

13/021,263      Feb. 4, 2011    Andreas Kopnick     Fitting For A Corner
                                                    Cupboard And A Corner
                                                    Cupboard

13/035,933      Feb. 26, 2011   Luis E. Arroyo      Integrated Portable
                                                    Checkpoint System

13/038,570      Mar. 2, 2011    Bruce Cloutier      Systems And Methods For
                                                    Detection Mechanisms For
                                                    Magnetic Cards And Devices

13/047,541      Mar. 14, 2011   Jerome Shimizu      Methods And Apparatus For
                                                    Integrating Volume Metric
                                                    Sales Data, Media
                                                    Consumption Information,
                                                    And Geographic-
                                                    Demographic Data To
                                                    Target Advertisements

13/050,931      Mar. 17, 2011   Laurent Olivier     Method And System For
                                                    Processing Of Aquatic
                                                    Species

13/068,556      May 13, 2011    Elizabeth A. Brooks User Interface Enabling
                                                    Value Analysis Of
                                                    Different Products
                                                    Or Services

13/069,354      Mar. 22, 2011   Lawrence Mosca      Bone Plate System

13/077,594      Mar. 31, 2011   Hyunchul Ko         System And Method For
                                                    Color Mixing Lens Array

13/089,123      Apr. 18, 2011   Minwen Ji           Host Selection For
                                                    Virtual Machine Placement

13/092,823      Apr. 22, 2011   Leland Shapiro      Methods And Compositions
                                                    For Islet Cell Preservation

13/092,825      Apr. 22, 2011   Leland Shapiro      Methods And Compositions
                                                    For Treatment Of Graft
                                                    Rejection And Promotion
                                                    Of Graft Survival

 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 89 

13/104,378      May 10, 2011    Christian Cojocaru  Systems And Methods For
                                Tudor Lipan         Controlling Local
                                                    Oscillator Feed-Through

13/104,900      May 10, 2011    Xiaogen Feng        Process For Preparing
                                Xiaohui Mao         4-Aminodiphenylamine
                                Nongyue Wang
                                Ruibiao Yu

13/106,180      May 12, 2011    James A. O'Neil     System And Method For
                                                    Cryogenic Cooling

13/136,339      Jul. 29, 2011   Charles Larue       Method And Apparatus For
                                Bryant, Jr.         Cutting And Removing
                                                    Pipe From A Well

13/165,631      Jun. 21, 2011   Sandeep Yadav       Deduplication In An
                                                    Extent-Based Architecture

13/183,921      Jul. 15, 2011   Peter Porshnev      Methods And Apparatus For
                                                    Controlling Power
                                                    Distribution In Substrate
                                                    Processing Systems

13/187,297      Jul. 20, 2011   Alexei Savtchenko   Activation And Monitoring
                                                    Of Cellular Transmembrane
                                                    Potentials

13/188,029      Jul. 21, 2011   Paul Prior          Light Engine Device With
                                                    Direct To Linear System
                                                    Driver

13/192,458      Jul. 27, 2011   Dani Essindi        Generating A Conversation
                                                    In A Social Network Based
                                                    On Visual Search Results

13/193,492      Jul. 28, 2011   Lu Chen             Detecting Defects On A
                                                    Wafer

13/199,719      Sep. 7, 2011    Robert Owen White   Thick Laminate
                                                    Manufacturing
                                                    Apparatus And Method

13/199,720      Sep. 7, 2011    Robert Owen White   Tip Jet Attachment
                                                    Apparatus And Method

13/216,950      Aug. 24, 2011   Mark H.A. Tigges    Detail-In-Context Terrain
                                                    Displacement Algorithm With
                                                    Optimizations

13/222,980      Aug. 31, 2011   Rong-Chung Liang    Methods And Compositions
                                                    For Improved
                                                    Electrophoretic Display
                                                    Performance

13/225,266      Sep. 2, 2011    Nigel Dunn-Coleman  Polypeptides Having
                                                    Alpha-Amylase And Granular
                                                    Starch Hydrolyzing Activity

13/239,771      Sep. 22, 2011   Dr. Luis C. S.      Constructs For Enhancing
                                      Ferreira      Immune Responses

13/284,394      Oct. 28, 2011   Keith Carl Trares   Tire Having Modular Ply
                                                    Construction And
                                                    Method Of Making Same
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Registration to Practice
                           Registrattion to Practice

   The following list contains the names of persons seeking for registration
to practice before the United States Patent and Trademark Office. Final
approval for registration is subject to establishing to the satisfaction of
the Director of the Office of Enrollment and Discipline that the person
seeking registration is of good moral character and repute. 37 CFR § 11.7
Accordingly, any information tending to affect the eligibility of any of the
following persons on moral ethical or other grounds should be furnished to
the Director of Enrollment and Discipline on or before April 2, 2012 at the
following address: Mail Stop OED United States Patent and Trademark Office
P.O. Box 1450 Alexandria VA 22314

Aliasgharpour, Sina, 11740 Wilshire Boulevard, Apartment #A2407, Los Angeles,
CA 90025

Cate, Andrew Earl, 1785 Hayes Street, San Francisco, CA 94117

Chang, Clifford Shawn, 100 S. Alameda Street, #278, Los Angeles, CA 90012

Cotton, Stephen Joshua, 668 Alameda de Las Pulgas, San Carlos, CA 94070

Georgas, Bobae Kim, 2666 S Forrest Green Drive, Decatur, IL 62521

German, Jason Randall, Baker Botts, L.L.P., 620 Hansen Way, Palo Alto,
CA 94304

Goyea, Olusegun Olaitan, United States Patent and Trademark Office, 600
Dulany Street, Alexandria, VA 22314

Gutenberg, Peter, 8398 New Salem Street, Unit #14, San Diego, CA 92126

Hodges, Benjamin James, Senniger Powers LLP, 100 N Broadway, 17th Floor,
Saint Louis, MO 63102

Hwang, Won Suk, 3949 Persimmon Drive, Apartment #101, Fairfax, VA 22031

Kim, David Dongsuk, 5925 Pebblestone Lane, Plano, TX 75093

Kim, Minjung, 10 Cyril Magnin Street #706, San Francisco, CA 94102

Koo, Young Seok, Ladas & Parry LLP, 5670 Wilshire Boulevard, Suite 2100,
Los Angeles, CA 90036

Martin, John Conrad, 7808 Belleflower Drive, Springfield, VA 22152

Mihalkanin, Danielle Marie, Baker Botts, LLP, 620 Hansen Way, Palo Alto,
CA 94304

Momeyer, Brian Lee, Qualcomm Inc., 5775 Morehouse Drive, San Diego, CA 92121

Ohanyerenwa, Chiedo Raymond, 4906 First Street NW, Washington, DC 20011

Shewmake, Thomas Arthur, 9270 N. 99th Way, Scottsdale, AZ 85258

Shibaike, Yumiko, Morrison & Foerster LLP, 1650 Tyson Boulevard, Suite 400,
McLean, VA 22102-4220

Sinha, Rita Kumari, Toyota Motor Corporation, c/o De Novo Legal, 2140
Duckhorn Court, Waldorf, MD 20601

Veeraraghavan, Sriranga Raghavan, Tessera Incorporated, 3025 Orchard Parkway,
San Jose, CA 95134

Yamaguchi, Maki, Taiyo, Nakajima & Kato, 401 Holland Lane, Suite 407,
Alexandria, VA 22314

You, Wansik, Hershkovitz & Associates, LLC, 2845 Duke Street, Alexandria,
VA 22314

Zivojnovic, Ognjen, Ropes & Gray LLP, Office #6/13, 1900 University Avenue,
East Palo Alto, CA 94303

February 16, 2012                                        WILLIAM J. GRIFFIN
                               Acting Director of Enrollment and Discipline
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Notice of Exclusion
                             Notice of Exclusion

   This concerns David E. Fox of Washington, D.C., an attorney licensed by
the state of Maryland and the District of Columbia who is not a registered
practitioner and who is not authorized to practice patent law before the
United States Patent and Trademark Office ("USPTO"). In a reciprocal
disciplinary proceeding, the USPTO Director has ordered that Mr. Fox be
excluded from the practice of trademark and non-patent law before the USPTO
for violating 37 C.F.R. § 10.23(b)(6) via 37 C.F.R. § 10.23(c)(5)(i) by being
disbarred on ethical grounds from the practice of law in the State of
Maryland.

   The Court of Appeals of Maryland issued an order, dated December 20, 2010,
disbarring Mr. Fox for neglecting a client matter, making a misrepresentation
to a client, settling a matter without consulting with the client, and
failing to cooperate with the office of Bar Counsel. The Court of Appeals of
Maryland disbarred Mr. Fox after he was found to have violated Maryland
Lawyer's Rules of Professional Conduct 1.1, 1.2(a), 1.3, 1.4(a) and (b),
1.16(d), 8.1(b) and 8.4(a) and (c).

   This action is taken pursuant to the provisions of 35 U.S.C. §§ 2(b)(2)(D)
and 32, and 37 C.F.R. §§ 11.24 and 11.59. Disciplinary decisions involving
practitioners are posted for public reading at the Office of Enrollment and
Discipline's Reading Room located at:
http://des.uspto.gov/Foia/OEDReadingRoom.jsp.

February 14, 2012                                            JAMES O. PAYNE
                                     Deputy General Counsel for General Law
                                  United States Patent and Trademark Office

                                                               on behalf of

                                                               DAVID KAPPOS
                  Under Secretary of Commerce For Intellectual Property and
                  Director of the United States Patent and Trademark Office
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Notice of Exclusion on Consent
                        Notice of Exclusion on Consent

   This notice concerns Wesley B. Ames, registered patent practitioner
(Registration No. 40,893). Pursuant to 37 C.F.R. § 11.27(b), the Director of
the United States Patent and Trademark Office ("USPTO" or "Office") has
accepted Mr. Ames' affidavit of resignation, prepared pursuant to 37 C.F.R.
§ 11.27(b), and ordered his exclusion on consent from the practice of patent,
trademark, and non-patent law before Office.

   Mr. Ames voluntarily submitted his affidavit at a time when a disciplinary
complaint was pending against him. He acknowledged that the Deputy General
Counsel for Enrollment and Discipline and Director of the USPTO's Office of
Enrollment and Discipline ("OED Director") was of the opinion that his
conduct violated 37 C.F.R. §§ 10.23(a) via 10.23(c)(3), 10.23(b)(6) via
10.23(c)(8), 10.77(c), 10.84(a)(1), 10.84(a)(2), and 10.89(c)(6) in
connection with his representation of two clients before the Office. While
Mr. Ames did not admit to violating any of the Disciplinary Rules of the
USPTO Code of Professional Responsibility as alleged in the pending
disciplinary complaint, he acknowledged that, if and when he applies for
reinstatement, the OED Director will conclusively presume, for the limited
purpose of determining the application for reinstatement, that (i) the
allegations set forth in the disciplinary complaint against him are true and
(ii) he could not have successfully defended himself against such allegations.

   This action is taken pursuant to the provisions of 35 U.S.C. §§ 2(b)(2)(D)
and 32, and 37 C.F.R. §§ 11.27 and 11.59. Disciplinary decisions involving
practitioners are posted for public reading at the Office of Enrollment and
Discipline Reading Room located at:
http://des.uspto.gov/Foia/OEDReadingRoom.jsp.

February 14, 2012                                            JAMES O. PAYNE
                                     Deputy General Counsel for General Law
                                  United States Patent and Trademark Office

                                                               on behalf of

                                                            DAVID M. KAPPOS
                  Under Secretary of Commerce for Intellectual Property and
                  Director of the United States Patent and Trademark Office


                        Notice of Exclusion on Consent

   This notice concerns David Burkenroad, of Los Angeles, California, an
attorney admitted to practice law in California, who is not registered to
practice before the United States Patent and Trademark Office ("USPTO" or
"Office") in patent matters. Pursuant to 37 C.F.R. § 11.27(b), the USPTO
Director has accepted Mr. Burkenroad's affidavit of resignation, prepared
pursuant to 37 C.F.R. § 11.27(a), and ordered his exclusion on consent from
the practice of trademark and other non-patent law before Office.
Mr. Burkenroad is not registered to practice in patent matters before the
Office. See 37 C.F.R. § 11.5.

   Mr. Burkenroad voluntarily submitted his affidavit at a time when he was
subject to a disciplinary investigation pursuant to 37 C.F.R. § 11.22(a).
Mr. Burkenroad acknowledged that the Deputy General Counsel for Enrollment
and Discipline and Director of the USPTO's Office of Enrollment and
Discipline ("OED Director") was of the opinion that his conduct violated
37 C.F.R. §§ 10.23(a) and (b) via 37 C.F.R. § 10.23(c)(5) by being disbarred
on ethical grounds by the State Bar of California from the practice of law in
California, effective April 23, 2011. While Mr. Burkenroad did not admit to
violating any of the Disciplinary Rules of the USPTO Code of Professional
Responsibility referenced in a letter of investigation, he acknowledged that,
if and when he applies for reinstatement, the OED Director will conclusively
presume, for the limited purpose of determining the application for
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 93 

reinstatement, that (i) the allegations set forth in the disciplinary
complaint are true and (ii) Mr. Burkenroad could not have successfully
defended himself against such allegations.

   This action is taken pursuant to the provisions of 35 U.S.C. §§ 2(b)(2)(D)
and 32, and 37 C.F.R. §§ 11.27 and 11.59. Disciplinary decisions involving
practitioners are posted for public reading at the Office of Enrollment and
Discipline Reading Room located at:
http://des.uspto.gov/Foia/OEDReadingRoom.jsp.

February 14, 2012                                            JAMES O. PAYNE
                                     Deputy General Counsel for General Law
                                  United States Patent and Trademark Office

                                                               on behalf of

                                                            DAVID M. KAPPOS
                  Under Secretary of Commerce for Intellectual Property and
                  Director of the United States Patent and Trademark Office
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 94 

Notice of Reprimand
                            Notice of Reprimand

   This notice concerns Francis L. Kubler of Miami, Florida, a registered
patent attorney (Registration Number 32,738). The United States Patent and
Trademark Office has reprimanded Mr. Kubler for having violated 37 C.F.R.
§ 10.77(c) by neglecting to communicate adequately with certain clients about
certain aspects of patent legal matters entrusted to him.

   Mr. Kubler acknowledges that, between 2007 and 2009, he and his office
lacked a uniform system of client notification and reply to client inquiries
that resulted in inconsistent client communications practices and some
communications delay. Consequently, in connection with the representation of
certain clients before the Office during that time, he did not always
communicate adequately, and specifically promptly, with the clients about
aspects of the patent legal matters entrusted to him. Mr. Kubler acknowledges
that prompt and complete communication with his clients is a vital component
of the practitioner-client relationship. Mr. Kubler has taken remedial action
in connection with his client communications and related office management
skills. He also has taken continuing legal education to improve his client
communications and related office management skills.

   This action is the result of a settlement agreement between Mr. Kubler and
the OED Director pursuant to the provisions of 35 U.S.C. § 2(b)(2)(D) and 37
C.F.R. §§ 11.26 and 11.59. Disciplinary decisions involving practitioners are
posted at the Office of Enrollment and Discipline's Reading Room located at:
http://des.uspto.gov/Foia/OEDReadingRoom.jsp.

February 15, 2012                                            JAMES O. PAYNE
                                     Deputy General Counsel for General Law
                                  United States Patent and Trademark Office

                                                               on behalf of

                                                            DAVID M. KAPPOS
                  Under Secretary of Commerce for Intellectual Property and
                  Director of the United States Patent and Trademark Office
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 95 

Notice of Public Reprimand and Probation
                   Notice of Public Reprimand and Probation

   This notice concerns Olga A. Karasik of Los Angeles, California, an
attorney licensed in California and authorized to represent others before
the United States Patent and Trademark Office ("USPTO") in trademark and
non-patent matters. Ms. Karasik has been publicly reprimanded and placed on
probation for three years by the USPTO for violating 37 C.F.R. § 10.23(b)(6)
when she was suspended on ethical grounds by the Supreme Court of California.
Ms. Karasik will be permitted to practice in trademark and non-patent matters
before the USPTO during her probationary period provided that she otherwise
satisfies the conditions of 37 C.F.R. § 11.14(a) and unless subsequently
suspended by order of the USPTO Director. Ms. Karasik is not a registered
patent practitioner and is not authorized to practice patent law before the
USPTO.

   The California Supreme Court suspended Ms. Karasik for two years with the
entire suspension stayed and placed Ms. Karasik on probation for three years
for violating California Rule of Professional Conduct 3-310(E)(2). The
suspension was predicated on Ms. Karasik accepting representation of more
than one client in a matter in which the interests of the clients actually
conflicted without the informed written consent of each client.

   This action is the result of a settlement agreement between Ms. Karasik
and the OED Director pursuant to 35 U.S.C. §§ 2(b)(2)(D) and 37 C.F.R.
§§ 11.20, 11.26, and 11.59. Disciplinary decisions involving practitioners
are posted for public reading at the Office of Enrollment and Discipline's
Reading Room located at: http://des.uspto.gov/Foia/OEDReadingRoom.jsp

February 15, 2012                                            JAMES O. PAYNE
                                     Deputy General Counsel for General Law
                                  United States Patent and Trademark Office

                                                               on behalf of

                                                            DAVID M. KAPPOS
                  Under Secretary of Commerce for Intellectual Property and
                  Director of the United States Patent and Trademark Office
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 96 

Notice of Suspension
                             Notice of Suspension

   This concerns James O. Okorafor, of Houston, Texas, a registered patent
attorney, registration number 34,525. In a disciplinary proceeding, the
Director of the United States Patent and Trademark Office has ordered
Mr. Okorafor be suspended from the practice before the United States Patent
and Trademark Office in patent, trademark and other non-patent law cases for
violating 37 C.F.R. §§ 10.23(a) and (b) via 37 C.F.R. § 23(c)(5) by being
suspended for two years from the practice of law in the State of Texas for
misconduct that was deceitful, dishonest, and constituted misrepresentations
to a third party.

   This action is taken pursuant to the provisions of 35 U.S.C. § 32, and
37 C.F.R. § 11.24. Disciplinary decisions involving practitioners are posted
for public reading at the Office of Enrollment and Discipline's Reading Room
located at: http://des.uspto.gov/Foia/OEDReadingRoom.jsp.

February 15, 2012                                            JAMES O. PAYNE
                                     Deputy General Counsel for General Law
                                  United States Patent and Trademark Office

                                                               on behalf of

                                                            DAVID M. KAPPOS
                  Under Secretary of Commerce for Intellectual Property and
                  Director of the United States Patent and Trademark Office


                             Notice of Suspension

   This concerns Ben E. Lofstedt of Fullerton, California, a registered
patent attorney (Registration Number 25,998) admitted to practice law in the
State of California. In a reciprocal disciplinary proceeding, Mr. Lofstedt
has been suspended for two years from the practice of patent, trademark, and
other non-patent law before the United States Patent and Trademark Office
("USPTO") for violating 37 C.F.R. § 10.23(b)(6) via 37 C.F.R.
§ 10.23(c)(5)(i) when he was suspended on ethical grounds from the practice
of law in the State of California and has been placed on a two year
probation. After completing thirty days of his suspension, Mr. Lofstedt may
seek reinstatement pursuant to 37 C.F.R. § 11.60. After being reinstated,
Mr. Lofstedt will be permitted to practice patent law before the USPTO during
his probationary period, and trademark and non-patent law provided he
satisfies 37 C.F.R. §§ 11.14(a), unless a stay of the suspension is lifted by
order of the USPTO Director.

   The Supreme Court of California suspended Mr. Lofstedt in connection with
two client matters. In the first matter, he failed to file an Offer of
Compromise with the Internal Revenue Service on behalf of his clients, failed
to perform legal services competently, and failed to adequately communicate
with his clients. In the second matter, Mr. Lofstedt failed to provide an
accounting to a receiver as ordered by the court in the client's marital
dissolution and delayed approximately sixteen months before providing an
accounting to counsel for the client's ex-husband.

   This action is taken pursuant to the provisions of 35 U.S.C. §§ 2(b)(2)(D)
and 32, and 37 C.F.R. §§ 11.24 and 11.59. Disciplinary decisions involving
practitioners are posted for public reading at the Office of Enrollment and
Discipline's Reading Room located at:
http://des.uspto.gov/Foia/OEDReadingRoom.jsp.

February 16, 2012                                            JAMES O. PAYNE
                                     Deputy General Counsel for General Law
                                  United States Patent and Trademark Office

                                                               on behalf of

                                                            DAVID M. KAPPOS
                  Under Secretary of Commerce for Intellectual Property and
                  Director of the United States Patent and Trademark Office
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 97 

Changes to Implement Inter Partes Review Proceedings
                            DEPARTMENT OF COMMERCE
                          Patent and Trademark Office
                                37 CFR Part 42
                         [Docket No. PTO-P-2011-0083]
                                 RIN 0651-AC71

             Changes to Implement Inter Partes Review Proceedings

AGENCY: United States Patent and Trademark Office, Commerce.

ACTION: Notice of proposed rulemaking.

SUMMARY: The United States Patent and Trademark Office (Office or
USPTO) proposes new rules to implement the provisions of the Leahy-
Smith America Invents Act that create a new inter partes review
proceeding to be conducted before the Patent Trial and Appeal Board
(Board). These provisions of the Leahy-Smith America Invents Act will
take effect on September 16, 2012, one year after the date of
enactment, and apply to any patent issued before, on, or after the
effective date.

DATES: The Office solicits comments from the public on this proposed
rulemaking. Written comments must be received on or before April 10,
2012 to ensure consideration.

ADDRESSES: Comments should be sent by electronic mail message over the
Internet addressed to: inter_partes_review@uspto.gov. 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 Michael Tierney, Inter partes Review 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 eRulemaking Portal.
   Although comments may be submitted by postal mail, the Office
prefers to receive comments by electronic mail message over the
Internet because sharing comments with the public is more easily
accomplished. Electronic comments are preferred to be submitted in
plain text, but also may be submitted in ADOBE® portable
document format or MICROSOFT WORD® format. Comments not
submitted electronically should be submitted on paper in a format that
facilitates convenient digital scanning into ADOBE® portable
document format.
   The comments will be available for public inspection at the Board
of Patent Appeals and Interferences, 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/). Because comments will be made available for
public inspection, information that the submitter does not desire to
make public, such as an address or phone number, should not be included
in the comments.

FOR FURTHER INFORMATION CONTACT: Michael Tierney, Lead Administrative
Patent Judge, Scott Boalick, Lead Administrative Patent Judge, Robert
Clarke, Administrative Patent Judge, and Lynn Kryza, Senior
Administrator, Board of Patent Appeals and Interferences, by telephone
at (571) 272-9797.

SUPPLEMENTARY INFORMATION: On September 16, 2011, the Leahy-Smith
America Invents Act was enacted into law (Pub. L. 112-29, 125 Stat. 284
(2011)). The purpose of the Leahy-Smith America Invents Act and these
proposed regulations is to establish a more efficient and streamlined
patent system that will improve patent quality and limit unnecessary
and counterproductive litigation costs. The preamble of this notice
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 98 

sets forth in detail the procedures by which the Board will conduct
inter partes review proceedings. The USPTO is engaged in a transparent
process to create a timely, cost-effective alternative to litigation.
Moreover, the rulemaking process is designed to ensure the integrity of
the trial procedures. See 35 U.S.C. 316(b), as amended. The proposed
rules would provide a set of rules relating to Board trial practice for
inter partes review.
   Section 6 of the Leahy-Smith America Invents Act is entitled
"POST-GRANT REVIEW PROCEEDINGS" (Pub. L. 112-29, 125 Stat. 284, 299-
305 (2011)). Section 6(a) of the Leahy-Smith America Invents Act,
entitled "INTER PARTES REVIEW," amends chapter 31 of title 35, United
States Code, also entitled "INTER PARTES REVIEW." In particular,
section 6(a) of the Leahy-Smith America Invents Act amends 35 U.S.C.
311-318 and adds 35 U.S.C. 319.
   Section 6(a) of the Leahy-Smith America Invents Act amends 35
U.S.C. 311, entitled "Inter partes review." 35 U.S.C. 311(a), as
amended, will provide that, subject to the provisions of chapter 31 of
title 35, United States Code, a person who is not the owner of a patent
may file a petition with the Office to institute an inter partes review
of the patent. 35 U.S.C. 311(a), as amended, will also provide that the
Director will establish, by regulation, fees to be paid by the person
requesting the review, in such amounts as the Director determines to be
reasonable, considering the aggregate costs of the review. 35 U.S.C.
311(b), as amended, will provide that a petitioner in an inter partes
review may request to cancel as unpatentable one or more claims of a
patent only on a ground that could be raised under 35 U.S.C. 102 or 103
and only on the basis of prior art consisting of patents or printed
publications. 35 U.S.C. 311(c), as amended, will provide that a
petition for inter partes review may be filed after the later of
either: (1) the date that is nine months after the grant of a patent or
issuance of a reissue of a patent; or (2) if a post-grant review is
instituted under chapter 32 of title 35, United States Code, the date
of the termination of that post-grant review.
   The grounds for seeking an inter partes review will be limited
compared with post-grant review. The grounds for seeking inter partes
review are limited to issues raised under 35 U.S.C. 102 or 103 and only
on the basis of prior art consisting of patents or printed
publications. In contrast, the grounds for seeking post-grant review
include any ground that could be raised under 35 U.S.C. 282(b)(2) or
(3). Such grounds for post-grant review include grounds that could be
raised under 35 U.S.C. 102 or 103 including those based on prior
art consisting of patents or printed publications. Other grounds
available for post-grant review include 35 U.S.C. 101 and 112, with the
exception of compliance with the best mode requirement.
   Section 6(a) of the Leahy-Smith America Invents Act amends 35
U.S.C. 312, entitled "Petitions." 35 U.S.C. 312(a), as amended, will
provide that a petition filed under 35 U.S.C. 311, as amended, may be
considered only if certain conditions are met. First, the petition must
be accompanied by payment of the fee established by the Director under
35 U.S.C. 311, as amended. Second, the petition must identify all real
parties in interest. Third, the petition must identify, in writing and
with particularity, each claim challenged, the grounds on which the
challenge to each claim is based, and the evidence that supports the
grounds for the challenge to each claim, including: (A) Copies of
patents and printed publications that the petitioner relies upon in
support of the petition and (B) affidavits or declarations of
supporting evidence and opinions, if the petitioner relies on expert
opinions. Fourth, the petition must provide such other information as
the Director may require by regulation. Fifth, the petitioner must
provide copies of any of the documents required under paragraphs (2),
(3), and (4) of 35 U.S.C. 312(a) to the patent owner or, if applicable,
the designated representative of the patent owner. 35 U.S.C. 312(b), as
amended, will provide that, as soon as practicable after the receipt of
a petition under 35 U.S.C. 311, as amended, the Director will make the
petition available to the public.
   Section 6(a) of the Leahy-Smith America Invents Act amends 35
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 99 

U.S.C. 313, entitled "Preliminary response to petition." 35 U.S.C.
313, as amended, will provide that, if an inter partes review petition
is filed under 35 U.S.C. 311, as amended, within a time period set by
the Director, the patent owner has the right to file a preliminary
response to the petition that sets forth reasons why no inter partes
review should be instituted based upon the failure of the petition to
meet any requirement of chapter 31 of title 35, United States Code.
   Section 6(a) of the Leahy-Smith America Invents Act amends 35
U.S.C. 314, entitled "Institution of inter partes review." 35 U.S.C.
314(a), as amended, will provide that the Director may not authorize an
inter partes review to be instituted, unless the Director determines
that the information presented in the petition filed under 35 U.S.C.
311 and any response filed under 35 U.S.C. 313 shows that there is a
reasonable likelihood that the petitioner would prevail with respect to
at least one of the claims challenged in the petition. 35 U.S.C.
314(b), as amended, will provide that the Director will determine
whether to institute an inter partes review under chapter 31 of title
35, United States Code, pursuant to a petition filed under 35 U.S.C.
311, as amended, within three months after: (1) Receiving a preliminary
response to the petition under 35 U.S.C. 313, as amended; or (2) if no
such preliminary response is filed, the last date on which such
response may be filed. 35 U.S.C. 314(c), as amended, will provide that
the Director will notify the petitioner and patent owner, in writing,
of the Director's determination under 35 U.S.C. 314(a), and will make
the notice available to the public as soon as is practicable. 35 U.S.C.
314(c), as amended, will also provide that the notice will include the
date on which the review will commence. 35 U.S.C. 314(d), as amended,
will provide that the determination by the Director whether to
institute an inter partes review under 35 U.S.C. 314 will be final and
nonappealable.
   Section 6(a) of the Leahy-Smith America Invents Act amends 35
U.S.C. 315, entitled "Relation to other proceedings or actions." 35
U.S.C. 315(a)(1), as amended, will provide that an inter partes review
may not be instituted if, before the date on which the petition for
review is filed, the petitioner or real party in interest filed a civil
action challenging the validity of a claim of the patent. 35 U.S.C.
315(a)(2), as amended, will provide for an automatic stay of a civil
action brought by the petitioner or real party in interest challenging
the validity of a claim of the patent and filed on or after the date on
which the petition for inter partes review was filed, until certain
specified conditions are met. 35 U.S.C. 315(a)(3), as amended, will
provide that a counterclaim challenging the validity of a claim of a
patent does not constitute a civil action challenging the validity of a
claim of a patent for purposes of 35 U.S.C. 315(a), as amended.
   35 U.S.C. 315(b), as amended, will provide that an inter partes
review may not be instituted if the petition requesting the proceeding
is filed more than one year after the date on which the petitioner,
real party in interest, or privy of the petitioner is served with a
complaint alleging infringement of the patent. However, the time
limitation set forth in 35 U.S.C. 315(b), as amended, will not apply to
a request for joinder under 35 U.S.C. 315(c), as amended.
   35 U.S.C. 315(c), as amended, will provide that if the Director
institutes an inter partes review, the Director may, in the Director's
discretion, join as a party to that inter partes review any person who
properly files a petition under 35 U.S.C. 311 that the Director, after
receiving a preliminary response under 35 U.S.C. 313 or the expiration
of the time for filing such a response, determines warrants the
institution of an inter partes review under 35 U.S.C. 314.
   35 U.S.C. 315(d), as amended, will provide that, notwithstanding 35
U.S.C. 135(a), as amended, 251, and 252, and chapter 30 of title 35,
United States Code, during the pendency of an inter partes review, if
another proceeding or matter involving the patent is before the Office,
the Director may determine the manner in which the inter partes review
or other proceeding or matter may proceed, including providing for
stay, transfer, consolidation, or termination of any such matter or
proceeding.
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   35 U.S.C. 315(e)(1), as amended, will provide that the petitioner
in an inter partes review of a claim in a patent under chapter 31 of
title 35, United States Code, that results in a final written decision
under 35 U.S.C. 318(a), or the real party in interest or privy of the
petitioner, may not request or maintain a proceeding before the Office
with respect to that claim on any ground that the petitioner raised or
reasonably could have raised during that inter partes review. 35 U.S.C.
315(e)(2), as amended, will provide for estoppel against an inter
partes review petitioner, or the real party in interest or privy of the
petitioner, in certain civil actions and certain other proceedings
before the International Trade Commission if that inter partes review
results in a final written decision under 35 U.S.C. 318(a).
   Section 6(a) of the Leahy-Smith America Invents Act amends 35
U.S.C. 316, entitled "Conduct of inter partes review." 35 U.S.C.
316(a), as amended, will provide that the Director will prescribe
regulations: (1) Providing that the file of any proceeding under
chapter 31 of title 35, United States Code, will be made available to
the public, except that any petition or document filed with the intent
that it be sealed will, if accompanied by a motion to seal, be treated
as sealed pending the outcome of the ruling on the motion; (2) setting
forth the standards for the showing of sufficient grounds to institute
a review under 35 U.S.C. 314(a); (3) establishing procedures for the
submission of supplemental information after the petition is filed; (4)
establishing and governing inter partes review under chapter 31 of
title 35, United States Code, and the relationship of such review to
other proceedings under title 35, United States Code; (5) setting forth
standards and procedures for discovery of relevant evidence, including
that such discovery will be limited to: (A) The deposition of witnesses
submitting affidavits or declarations, and (B) what is otherwise
necessary in the interest of justice; (6) prescribing sanctions for
abuse of discovery, abuse of process, or any other improper use of the
proceeding, such as to harass or to cause unnecessary delay or an
unnecessary increase in the cost of the proceeding; (7) providing for
protective orders governing the exchange and submission of confidential
information; (8) providing for the filing by the patent owner of a
response to the petition under 35 U.S.C. 313, as amended, after an
inter partes review has been instituted, and require that the patent
owner file with such response, through affidavits or declarations, any
additional factual evidence and expert opinions on which the patent
owner relies in support of the response; (9) setting forth standards
and procedures for allowing the patent owner to move to amend the
patent under 35 U.S.C. 316(d), as amended, to cancel a challenged claim
or propose a reasonable number of substitute claims, and ensure that
any information submitted by the patent owner in support of any
amendment entered under 35 U.S.C. 316(d), as amended, is made available
to the public as part of the prosecution history of the patent; (10)
providing either party with the right to an oral hearing as part of the
proceeding; (11) requiring that the final determination in an inter
partes review will be issued not later than one year after the date on
which the Director notices the institution of a review under chapter 31
of title 35, United States Code, except that the Director may, for good
cause shown, extend the one-year period by not more than six months,
and may adjust the time periods in this paragraph in the case of
joinder under 35 U.S.C. 315(c), as amended; (12) setting a time period
for requesting joinder under 35 U.S.C. 315(c), as amended; and (13)
providing the petitioner with at least one opportunity to file written
comments within a time period established by the Director.
   35 U.S.C. 316(b), as amended, will provide that in prescribing
regulations under 35 U.S.C. 316, the Director will consider the effect
of any such regulation on the economy, the integrity of the patent
system, the efficient administration of the Office, and the ability of
the Office to complete timely proceedings instituted under chapter 31
of title 35, United States Code.
   35 U.S.C. 316(c), as amended, will provide that the Patent Trial
and Appeal Board will, in accordance with 35 U.S.C. 6, conduct each
inter partes review instituted under chapter 31 of title 35, United
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States Code.
   35 U.S.C. 316(d)(1), as amended, will provide that during an inter
partes review instituted under chapter 31 of title 35, United States
Code, the patent owner may file one motion to amend the patent in one
or more of the following ways: (A) Cancel any challenged patent claim;
and (B) for each challenged claim, propose a reasonable number of
substitute claims. 35 U.S.C. 316(d)(2), as amended, provides that
additional motions to amend may be permitted upon the joint request of
the petitioner and the patent owner to materially advance the
settlement of a proceeding under 35 U.S.C. 317, as amended, or as
permitted by regulations prescribed by the Director. 35 U.S.C.
316(d)(3), as amended, will provide that an amendment under 35 U.S.C.
316(d) may not enlarge the scope of the claims of the patent or
introduce new matter.
   35 U.S.C. 316(e), as amended, will provide that in an inter partes
review instituted under chapter 31 of title 35, United States Code, the
petitioner has the burden of proving a proposition of unpatentability
by a preponderance of the evidence.
   Section 6(a) of the Leahy-Smith America Invents Act amends 35
U.S.C. 317, entitled "Settlement." 35 U.S.C. 317(a), as amended, will
provide that an inter partes review instituted under chapter 31 of
title 35, United States Code, will be terminated with respect to any
petitioner upon the joint request of the petitioner and the patent
owner, unless the Office has decided the merits of the proceeding
before the request for termination is filed. 35 U.S.C. 317(a), as
amended, will also provide that if the inter partes review is
terminated with respect to a petitioner under 35 U.S.C. 317, no
estoppel under 35 U.S.C. 315(e), as amended, will attach to the
petitioner, or to the real party in interest or privy of the
petitioner, on the basis of that petitioner's institution of that inter
partes review. 35 U.S.C. 317(a), as amended, will further provide that
if no petitioner remains in the inter partes review, the Office may
terminate the review or proceed to a final written decision under 35
U.S.C. 318(a).
   35 U.S.C. 317(b), as amended, will provide that any agreement or
understanding between the patent owner and a petitioner, including any
collateral agreements referred to in the agreement or understanding,
made in connection with, or in contemplation of, the termination of an
inter partes review under 35 U.S.C. 317 will be in writing and a true
copy of such agreement or understanding will be filed in the Office
before the termination of the inter partes review as between the
parties. 35 U.S.C. 317(b), as amended, will also provide that at the
request of a party to the proceeding, the agreement or understanding
will be treated as business confidential information, will be kept
separate from the file of the involved patents, and will be made
available only to Federal Government agencies on written request, or to
any person on a showing of good cause.
   Section 6(a) of the Leahy-Smith America Invents Act amends 35
U.S.C. 318, entitled "Decision of the Board." 35 U.S.C. 318(a), as
amended, will provide that if an inter partes review is instituted and
not dismissed under chapter 31 of title 35, United States Code, the
Patent Trial and Appeal Board will issue a final written decision with
respect to the patentability of any patent claim challenged by the
petitioner and any new claim added under 35 U.S.C. 316(d). 35 U.S.C.
318(b), as amended, will provide that if the Patent Trial and Appeal
Board issues a final written decision under 35 U.S.C. 318(a) and the
time for appeal has expired or any appeal has terminated, the Director
will issue and publish a certificate canceling any claim of the patent
finally determined to be unpatentable, confirming any claim of the
patent determined to be patentable, and incorporating in the patent by
operation of the certificate any new or amended claim determined to be
patentable. 35 U.S.C. 318(c), as amended, will provide that any
proposed amended or new claim determined to be patentable and
incorporated into a patent following an inter partes review under
chapter 31 of title 35, United States Code, will have the same effect
as that specified in 35 U.S.C. 252 for reissued patents on the right of
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any person who made, purchased, or used within the United States, or
imported into the United States, anything patented by such proposed
amended or new claim, or who made substantial preparation therefor,
before the issuance of a certificate under 35 U.S.C. 318(b). 35 U.S.C.
318(d), as amended, will provide that the Office will make available to
the public data describing the length of time between the institution
of, and the issuance of a final written decision under 35 U.S.C.
318(a), for each inter partes review.
   Section 6(a) of the Leahy-Smith America Invents Act adds 35 U.S.C.
319, entitled "Appeal." 35 U.S.C. 319 will provide that a party
dissatisfied with the final written decision of the Patent Trial and
Appeal Board under 35 U.S.C. 318(a), as amended, may appeal the
decision pursuant to 35 U.S.C. 141-144. 35 U.S.C. 319 will also provide
that any party to the inter partes review will have the right to be a
party to the appeal.
   Section 6(c) of the Leahy-Smith America Invents Act is entitled
"REGULATIONS AND EFFECTIVE DATE." Section 6(c)(1) of the Leahy-Smith
America Invents Act provides that the Director will, not later than the
date that is one year after the date of the enactment of the Leahy-
Smith America Invents Act, issue regulations to carry out chapter 31 of
title 35, United States Code, as amended by section 6(a) of the Leahy-
Smith America Invents Act.
   Section 6(c)(2)(A) of the Leahy-Smith America Invents Act provides
that the amendments made by section 6(a) of the Leahy-Smith America
Invents Act will take effect upon the expiration of the one-year period
beginning on the date of the enactment of the Leahy-Smith America
Invents Act, and will apply to any patent issued before, on, or after
that effective date.
   Section 6(c)(2)(B) of the Leahy-Smith America Invents Act provides
that the Director may impose a limit on the number of inter partes
reviews that may be instituted under chapter 31 of title 35, United
States Code, during each of the first four one-year periods in which
the amendments made by section 6(a) of the Leahy-Smith America Invents
Act are in effect, if such number in each year equals or exceeds the
number of inter partes reexaminations that are ordered under chapter 31
of title 35, United States Code, in the last fiscal year ending before
the effective date of the amendments made by section 6(a) of the Leahy-
Smith America Invents Act.
   Section 6(c)(3) Leahy-Smith America Invents Act provides a
transition provision for the granting, conduct, and termination of
inter partes reexaminations on or after the effective date of the
Leahy-Smith America Invents Act. The Office in a separate rulemaking
revised the rules governing inter partes reexamination to implement the
transition provision that changes the standard for granting a request
for inter partes reexamination, and to reflect the termination of inter
partes reexamination effective September 16, 2012. See Revision of
Standard for Granting an Inter partes Reexamination Request, 76 FR
59055 (Sept. 23, 2011) (final rule).

Discussion of Specific Rules

   This notice proposes new rules to implement the provisions of the
Leahy-Smith America Invents Act for instituting and conducting inter
partes review proceedings before the Patent Trial and Appeal Board
(Board). As previously discussed, 35 U.S.C. 316(a)(4), as amended by
the Leahy-Smith America Invents Act, provides that the Director will
prescribe regulations establishing and governing inter partes review
and the relationship of the review to other proceedings under title 35
of the United States Code. In particular, this notice proposes to add a
new subpart B to 37 CFR part 42 to provide rules specific to inter
partes review.
   Additionally, the Office in a separate rulemaking is proposing to
add part 42, (RIN 0651-AC70) including subpart A, that would include a
consolidated set of rules relating to Board trial practice. More
specifically, the proposed subpart A of part 42 would set forth the
policies, practices, and definitions common to all trial proceedings
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before the Board. The proposed rules in the instant notice and
discussion below may reference the proposed rules in subpart A of part
42. Furthermore, the Office in separate rulemakings is proposing to add
a new subpart C to 37 CFR part 42 (RIN 0651-AC72) to provide rules
specific to post-grant review, a new subpart D to 37 CFR part 42 (RIN
0651-AC73; RIN 0651-AC75) to provide rules specific to the transitional
program for covered business method patents, and a new subpart E to 37
CFR part 42 (RIN 0651-AC74) to provide rules specific to derivation.
   Title 37 of the Code of Federal Regulations, Chapter I, Part 42,
Subpart B, entitled "Inter partes Review" is proposed to be added as
follows:

   Section 42.100: Proposed § 42.100 would set forth policy
considerations for inter partes review proceedings.
   Proposed § 42.100(a) would provide that an inter partes review
is a trial and subject to the rules set forth in subpart A of title 42,
Code of Federal Regulations.
   Proposed § 42.100(b) would provide that a claim in an unexpired
patent shall be given its broadest reasonable construction in light of
the specification in which it appears. This proposed rule would be
consistent with longstanding established principles of claim
construction before the Office. In re Am. Acad. of Sci. Tech Ctr., 367
F.3d 1359, 1364 (Fed. Cir. 2004); In re Yamamoto, 740 F.2d 1569, 1571
(Fed. Cir. 1984). As explained in Yamamoto, a party's ability to amend
claims to avoid prior art distinguishes Office proceedings from
district court proceedings and justifies the difficult standard for
claim interpretation. Yamamoto, 740 F.2d at 1572.
   Proposed § 42.100(c) would provide a one-year time frame for
administering the proceeding after institution, with up to a six-month
extension for good cause. This proposed rule is consistent with 35
U.S.C. 316(a)(11), as amended, which sets forth statutory time frames
for inter partes review.

   Section 42.101: Proposed § 42.101 would provide who may file a
petition for inter partes review.
   Proposed § 42.101(a) would provide that a party or real party
in interest must file a petition prior to the filing of a civil action
challenging the validity of a claim of the patent. The proposed rule
would follow the statutory language of 35 U.S.C. 315(a), as amended,
which will provide that inter partes reviews are barred by prior filing
of such a civil action.
   Proposed § 42.101(b) would provide that a petition may not be
filed more than one year after the date on which the petitioner, the
petitioner's real party in interest, or a privy of the petitioner was
served with a complaint alleging infringement. The proposed rule would
follow the statutory language of 35 U.S.C. 315(b), as amended, which
will provide a one-year time limit after date of service of complaint.
   Proposed § 42.101(c) would provide that a person may not file a
petition where the petitioner, the petitioner's real party in interest,
or a privy of the petitioner is estopped from challenging the claims.
The proposed rule is consistent with 35 U.S.C. 315(e)(1), as amended,
which will provide for estoppel arising from a final written decision
in an inter partes review. The proposed rule is also consistent with 35
U.S.C. 325(e)(1), which will provide for estoppel arising from a final
written decision in a post-grant review or a covered business method
review.

   Section 42.102: Proposed § 42.102 would provide a timeliness
requirement for filing an inter partes review petition.
   Proposed § 42.102(a) would provide that a petition for inter
partes review must be filed consistent with the requirements set forth
in 35 U.S.C. 311(c), as amended. Petitions requesting the institution
of an inter partes review that are filed nine months after the grant of
the patent or of the issuance of the reissue patent, but prior to the
institution of a post-grant review would be considered timely filed.
Additionally, petitions filed after termination of a post-grant review
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would be considered timely.
   Proposed § 42.102(b) would provide that the Director may set a
limit on the number of inter partes reviews that may be instituted
during each of the first four one-year periods after inter partes
review takes effect. This proposed rule is consistent with section
6(c)(2)(B) of the Leahy-Smith America Invents Act (Pub. L. 112-29, 125
Stat. 284, 304 (2011)), which provides for graduated implementation of
inter partes reviews. The Office however, does not expect to limit the
number of petitions at this time.

   Section 42.103: Proposed § 42.103 would set forth the fee requirement
for filing an inter partes review petition.
   Proposed § 42.103(a) would provide that a fee under § 42.15(a) must
accompany a petition for inter partes review.
   Proposed § 42.103(b) would provide that no filing date will be
accorded until full payment is received. This proposed rule is
consistent with 35 U.S.C. 312(a)(1), as amended, which will provide
that a petition may only be considered if the petition is accompanied
by the payment of the fee established by the Director.

   Section 42.104: Proposed § 42.104 would provide for the content
of petitions to institute an inter partes review. The proposed rule is
consistent with 35 U.S.C 312(a)(4), as amended, which allows the
Director to prescribe regulations concerning the information provided
with the petition.
   Proposed § 42.104(a) would provide that a petition must
demonstrate that the petitioner has standing. To establish standing, a
petitioner, at a minimum, must certify that the patent is available for
inter partes review and that the petitioner is not barred or estopped
from requesting an inter partes review. This proposed requirement would
attempt to ensure that a party has standing to file the inter partes
review and would help prevent spuriously-instituted inter partes
reviews. Facially-improper standing would be a basis for denying the
petition without proceeding to the merits of the petition.
   Proposed § 42.104(b) would require that the petition identify
the precise relief requested for the claims challenged. Specifically,
the proposed rule would require that the petition identify each claim
being challenged, the specific grounds on which each claim is
challenged, how the claims are to be construed, why the claims as
construed are unpatentable under the identified grounds, and the
exhibit numbers of the evidence relied upon with a citation to the
portion of the evidence that is relied upon to support the challenge.
This proposed rule is consistent with 35 U.S.C. 312(a)(3), as amended,
which requires that the petition identify, in writing and with
particularity, each claim challenged, the grounds on which the
challenge to each claim is based, and the evidence supporting the
challenge. It is also consistent with 35 U.S.C. 312(a)(4), as amended,
which allows the Director to require additional information as part of
the petition. The proposed rule would provide an efficient means for
identifying the legal and factual basis for satisfying the threshold
for instituting inter partes review and would provide the patent owner
with a minimum level of notice as to the basis for the challenge to the
claims.
   Proposed § 42.104(c) would provide that a petitioner seeking to
correct clerical or typographical mistakes in a petition could file a
motion to correct the mistakes. The proposed rule would also provide
that the grant of such a motion would not alter the filing date of the
petition.

   Section 42.105: Proposed § 42.105 would provide petition and
exhibit service requirements in addition to the service requirements of
§ 42.6.
   Proposed § 42.105(a) would require that the petitioner serve
the patent owner at the correspondence address of record for the
subject patent and permits service at any other address known to the
petitioner as likely to effect service as well. Once a patent has
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issued, communications between the Office and the patent owner often
suffer. Ray v. Lehman, 55 F.3d 606 (Fed. Cir. 1995) (patentee's failure
to maintain correspondence address contributed to failure to pay
maintenance fee and therefore expiration of the patent). While the
proposed rule requires service at the correspondence address of record
in the patent, the petitioner will already be in communication with the
patent owner in many cases at a better service address than the
correspondence address of record for the subject patent.
   Proposed § 42.105(b) would address the situation where service
to the official correspondence address of the patent does not result in
actual service on the patent owner. When the petitioner becomes aware
of a service problem, the petitioner would be required to promptly
advise the Board of the problem. The petitioner might then be required
to certify that it is not aware of any better address for service of
the patent owner. The Board may authorize other forms of service, such
as service by publication in the Official Gazette of the United States
Patent and Trademark Office or Federal Register.

   Section 42.106: Proposed § 42.106 would provide for the filing
date requirements of an inter partes review petition.
   Proposed § 42.106(a) would provide requirements for a complete
petition. 35 U.S.C. 312(a), as amended, states that a petition may only
be considered when the petition identifies all the real parties in
interest, when a copy of the petition is provided to the patent owner
or the owner's representative and the petition is accompanied by the
fee established by the Director. Consistent with the statute, the
proposed rule would require that a petition to institute an inter
partes review will not be accorded a filing date until the petition:
(1) Complies with § 42.104; (2) is served upon the patent owner at
the correspondence address of record provided in § 42.105(a); and
(3) is accompanied by the fee set forth in § 42.15(a).
   Proposed § 42.106(b) would provide petitioners a one month time
frame to correct defective petitions to institute an inter partes
review. The proposed rule is consistent with the requirement of 35
U.S.C. 312(a), as amended, that the Board may not consider a petition
that fails to meet the statutory requirements for a petition. In
determining whether to grant a filing date, the Board would review the
petitions for procedural compliance. Where a procedural defect is
noted, e.g., failure to state the claims being challenged, the Board
would notify the petitioner that the petition was incomplete and
identify any non-compliance issues.

   Section 42.107: Proposed § 42.107 would set forth the procedure
in which the patent owner may file a preliminary response.
   Proposed § 42.107(a) would provide that the patent owner may
file a preliminary response to the petition. The rule is consistent
with 35 U.S.C. 313, as amended, which provides for such a response.
   Proposed § 42.107(b) would provide that the due date for the
preliminary response to petition is no later than two months from the
date of the notice that the request to institute an inter partes review
has been granted a filing date. This proposed rule is consistent with
35 U.S.C. 313, as amended, which provides that the Director shall set a
time period for filing the preliminary patent owner response.
   Under 35 U.S.C. 314(b), as amended, the Board has three months from
the filing of the preliminary patent owner response, or three months
from the date such a response was due, to determine whether to
institute the review. A patent owner seeking a shortened period for
such a determination may wish to file a preliminary patent owner
response well before the date the preliminary patent owner response is
due, including filing a paper stating that no preliminary patent owner
response will be filed. No adverse inferences will be drawn where a patent
owner elects not to file a response or elects to waive the response.
   Proposed § 42.107(c) would provide that the preliminary patent
owner response would not be allowed to present new testimony evidence,
for example, expert witness testimony on patentability. 35 U.S.C. 313,
as amended, will provide that a preliminary patent owner response set
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forth reasons why no inter partes review should be instituted. In
contrast, 35 U.S.C. 316(a)(8), as amended, provides for a patent owner
response after institution and requires the presentation, through
affidavits or declarations, of any additional factual evidence and
expert opinions on which the patent owner relies in support of the
response. The difference in statutory language demonstrates that 35
U.S.C. 313, as amended, does not require the presentation of evidence
in the form of testimony in support of a preliminary patent owner
response and the proposed rule reflects this distinction. In certain
instances, however, a patent owner may be granted additional discovery
before filing their preliminary response and submit any testimonial
evidence obtained through the discovery. For example, additional
discovery may be authorized where patent owner raises sufficient
concerns regarding the petitioner's certification of standing.
   Proposed § 42.107(d) would provide that the preliminary patent
owner response would not be allowed to include any amendment. See
proposed § 42.121 for filing a motion to amend the patent after an
inter partes review has been instituted.
   Proposed § 42.107(e) would provide that the patent owner may
file a statutory disclaimer under 35 U.S.C. 253(a) in compliance with
§ 1.321(a), disclaiming one or more claims in the patent, and no
inter partes review will be instituted based on disclaimed claims.

   Section 42.108: Proposed § 42.108 would provide for the
institution of an inter partes review.
   35 U.S.C. 314(a), as amended, states that the Director may not
authorize an inter partes review to be instituted, unless the Director
determines that the information in the petition, and any preliminary
patent owner response, shows that there is a reasonable likelihood of
success that the petitioner would prevail with respect to at least one
of the claims challenged in the petition. Proposed § 42.108 is
consistent with this statutory requirement and identifies how the Board
may authorize such a review to proceed.
   Proposed § 42.108(a) would provide that the Board may authorize
the review to proceed on all or some of the challenged claims and on
all or some of the grounds of unpatentability asserted for each claim.
Specifically, in instituting the review, the Board would authorize the
review to proceed on the challenged claims for which the threshold
requirements for the proceeding have been met. The Board will identify
which of the grounds the review will proceed upon on a claim-by-claim
basis. Any claim or issue not included in the authorization for review
is not part of the review. The Office intends to publish a notice of
the institution of an inter partes review in the Official Gazette.
   Proposed § 42.108(b) would provide that the Board, prior to
institution of a review, may deny some or all grounds for
unpatentability on some or all of the challenged claims. This proposed
rule is consistent with the efficient administration of the Office,
which is a consideration in prescribing inter partes review regulations
under 35 U.S.C. 316(b), as amended.
   Proposed § 42.108(c) would provide that the institution is
based on a reasonable likelihood standard and is consistent with the
requirements of 35 U.S.C. 314(a), as amended. A reasonable likelihood
standard is a somewhat flexible standard that allows the judge room for
the exercise of judgment.

   Section 42.120: Proposed § 42.120 would set forth the procedure
in which the patent owner may file a patent owner response.
   Proposed § 42.120(a) would provide for a patent owner response
and is consistent with the requirements of 35 U.S.C. 316(a)(8), as
amended.
   Proposed § 42.120(b) would provide that if no time for filing a
patent owner response to a petition is provided in a Board order, the
default time for filing the response would be two months from the date
the inter partes review was instituted. The Board's experience with
patent owner responses is that two months provides a sufficient amount
of time to respond in a typical case, especially as the patent owner
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would already have been provided two months to file a preliminary
patent owner response prior to institution of the inter partes review.
Additionally, the proposed time for response is consistent with the
requirement that the trial be conducted such that a final decision is
rendered within one year of the institution of the review. 35 U.S.C.
316(a)(11), as amended.

   Section 42.121: Proposed § 42.121 would provide a procedure for
a patent owner to file motions to amend the patent.
   Proposed § 42.121(a) would make it clear that the first motion
to amend need not be authorized by the Board. If the motion complies
with the timing and procedural requirements, the motion would be
entered. Additional motions to amend would require prior Board
authorization. All motions to amend, even if entered, will not
automatically result in entry of the proposed amendment into the
patent.
   The requirement to consult the Board reflects the Board's need to
regulate the substitution of claims and the amendment of the patent to
control unnecessary proliferation of issues and abuses. The proposed
rule aids in the efficient administration of the Office and the timely
completion of the review under 35 U.S.C. 316(b), as amended.
   Proposed § 42.121(b) would provide that a motion to amend the
claims must set forth: (1) The support in the original disclosure of
the patent for each claim that is added or amended, and (2) the support
in an earlier filed disclosure for each claim for which benefit of the
filing date of the earlier filed disclosure is sought.
   Proposed § 42.121(c) would provide that a motion to amend the
claims will not be authorized where the amendment does not respond to
the ground of unpatentability involved in the trial or seeks to enlarge
the scope of the claims or introduce new matter. The proposed rule aids
the efficient administration of the Office and the timely completion of
the review under 35 U.S.C. 316(b), as amended, and also is consistent
with 35 U.S.C. 316(d)(3), as amended, which prohibits enlarging the
scope of the claims or introducing new matter.
   Under the proposed rules, a patent owner may request filing more
than one motion to amend its claims during the course of the
proceeding. Additional motions to amend may be permitted upon a
demonstration of good cause by the patent owner. In considering whether
good cause is shown, the Board will take into account how the filing of
such motions would impact the timely completion of the proceeding and
the additional burden placed on the petitioner. Specifically, belated
motions to amend may cause the integrity and efficiency of the review
to suffer as the petitioner may be required to devote significant time
and resources on claims that are of constantly changing scope. Further,
due to time constraints, motions to amend late in the process may not
provide a petitioner a full and fair opportunity to respond to the
newly presented subject matter. Accordingly, the longer a patent owner
waits to request authorization to file an additional motion to amend, the
higher the likelihood the request will be denied. Similarly, motions to
amend may be permitted upon a joint request of the petitioner and the
patent owner to advance settlement where the motion does not jeopardize
the ability of the Office to timely complete the proceeding.

   Section 42.122: Proposed § 42.122 would prescribe a rule
consistent with the requirements of 35 U.S.C. 315(d), as amended,
regarding multiple proceedings involving the subject patent. When there
is a question of a stay concerning a matter for which a statutory time
period is running in one of the proceedings, it is expected that the
Director would be consulted prior to issuance of a stay, given that the
stay would impact the ability of the Office to meet the statutory
deadline. For example, it is expected that the Board would consult the
Director prior to the issuance of a stay in an ex parte reexamination
proceeding where the three month statutory time period under 35 U.S.C.
303 is running.

   Section 42.123: Proposed § 42.123 would provide for the filing
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 108 

of supplemental information. 35 U.S.C. 316(a)(3), as amended, provides
that the Director will establish regulations establishing procedures
for filing supplemental information after the petition is filed. 35
U.S.C. 314(a), as amended, provides that the institution of an inter
partes review is based upon the information filed in the petition under
35 U.S.C. 311 and any response filed under 35 U.S.C. 313, as amended.
As the institution of the inter partes review is not based upon
supplemental information, the proposed rule would provide that motions
identifying supplemental information be filed after the institution of
the inter partes review.

Rulemaking Considerations

   A. Administrative Procedure Act (APA): This notice proposes rules
of practice concerning the procedure for requesting an inter partes
review, and the trial process after initiation of such a review. The
changes being proposed in this notice do not change the substantive
criteria of patentability. These proposed changes involve rules of
agency practice and procedure and/or interpretive rules. See Bachow
Commc'ns Inc. v. FCC, 237 F.3d 683, 690 (DC 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 standard 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).
   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.SC.
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), does not require notice and comment rule making for
"interpretative rules, general statements of policy, or rules of
agency organization, procedure, or practice") (quoting 5 U.S.C.
553(b)(A)). The Office, however, is publishing these changes and the
Initial Regulatory Flexibility Act analysis, below, for comment as it
seeks the benefit of the public's views on the Office's proposed
implementation of these provisions of the Leahy-Smith America Invents
Act.
   B. Regulatory Flexibility Act: The Office estimates that 460
petitions for inter partes review will be filed in fiscal year 2013.
This will be the first fiscal year in which inter partes review
proceedings will be available for an entire fiscal year. The estimate
for inter partes review petitions is partially based on the number of
inter partes reexamination requests under 37 CFR 1.915 that have been
filed in fiscal years 2010 and 2011.
   The Office received 281 requests for inter partes reexamination in
fiscal year 2010. See Table 13B of the United States Patent and
Trademark Office Performance and Accountability Report for Fiscal Year
2010, available at
http://www.uspto.gov/about/stratplan/ar/2010/USPTOFY2010PAR.pdf.
   The Office received 374 requests for inter partes reexamination in
fiscal year 2011. See Table 14B of the United States Patent and
Trademark Office Performance and Accountability Report for Fiscal Year
2011, available at
http://www.uspto.gov/about/stratplan/ar/2011/USPTOFY2011PAR.pdf.
   Additionally, the Office takes into consideration the recent growth
rate in the number of requests for inter partes reexamination, the
projected growth due to an expansion in the number of eligible patents
under the inter partes review provisions of the Leahy-Smith America
Invents Act (see § 6(c)), and the more restrictive filing time
period in 35 U.S.C. 315(b), as amended by the Leahy-Smith America
Invents Act.
   The Office has reviewed the entity status of patents for which
inter partes reexamination was requested from October 1, 2000, to
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 109 

September 23, 2011. This data only includes filings granted a filing
date in the particular year rather than fillings in which a request was
received in the year. The first inter partes reexamination was filed on
July 27, 2001. A summary of that review is provided in Table 1 below.
As shown by Table 1, patents known to be owned by a small entity
represented 32.79% of patents for which inter partes reexamination was
requested. Based on an assumption that the same percentage of patents
owned by small entities will be subject to inter partes review, it is
estimated that 151 petitions for inter partes review would be filed to
seek review of patents owned by a small entity in fiscal year 2013, the
first full fiscal year that these proceedings will be available.


           Table 1 - Inter partes Reexamination Requests Filed with
                             Parent Entity Type *

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

2011                  329                      123               37.39
2010                  255                       94               36.86
2009                  240                       62               25.83
2008                  155                       52               33.55
2007                  127                       35               27.56
2006                   61                       17               27.87
2005                   59                       18               30.51
2004                   26                        5               19.23
2003                   21                       12               57.14
2002                    4                        1               25.00
2001                    1                        0                0.00

                    1,278                      419               32.79

* Small entity status determined by reviewing preexamination small entity
indicator for the parent patent.


   Based on the number of patents issued during fiscal years 1995
through 1999 that paid the small entity third stage maintenance fee,
the number of patents issued during fiscal years 2000 through 2003 that
paid the small entity second stage maintenance fee, the number of
patents issued during fiscal years 2004 through 2007 that paid the
first stage maintenance fee, and the number of patents issued during
fiscal years 2008 through 2011 that paid a small entity issue fee,
there are no less than 375,000 patents owned by small entities in force
as of October 1, 2011.
   Furthermore, the Office recognizes that there would be an offset to
this number for patents that expire earlier than twenty years from
their filing date due to a benefit claim to an earlier application or
due to a filing of a terminal disclaimer. The Office likewise
recognizes that there would be an offset in the opposite manner due to
the accrual of patent term extension and adjustment. The Office,
however, does not maintain data on the date of expiration by operation
of a terminal disclaimer. Therefore, the Office has not adjusted the
estimate of 375,000 patents owned by small entities in force as of
October 1, 2011. While the Office maintains information regarding
patent term extension and adjustment accrued by each patent, the Office
does not collect data on the expiration date of patents that are
subject to a terminal disclaimer. As such, the Office has not adjusted
the estimated of 375,000 patents owned by small entities in force as of
October 1, 2011, for accrual of patent term extension and adjustment,
because in view of the incomplete terminal disclaimer data issue, would
be incomplete and any estimate adjustment would be administratively
burdensome. Thus, it is estimated that the number of small entity
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 110 

patents in force in fiscal year 2013 will be at least 375,000.
   Based on the estimated number of patents in force, the number of
small entity owned patents impacted by inter partes review in fiscal
year 2013 (151 patents) would be less than 0.05% (151/375,000) of all
patents in force that are owned by small entities. The USPTO
nonetheless has undertaken an Initial Regulatory Flexibility Act
Analysis of the proposed rule.

   1. Description of the Reasons That Action by the Office Is Being
Considered: On September 16, 2011, the Leahy-Smith America Invents Act
was enacted into law (Pub. L. 112-29, 125 Stat. 284 (2011)). Section 6
of the Leahy-Smith America Invents Act amends chapter 31 of title 35,
United States Code, to create a new inter partes review proceeding
which will take effect on September 16, 2012, one year after the date
of enactment, and eliminate inter partes reexamination (except for
requests filed before the effective date of September 16, 2012). For
the implementation, § 6(c) of the Leahy-Smith America Invents Act
requires that the Director issue regulations to carry out chapter 31 as
amended of title 35, United States Code, within one year after the date
of enactment. Public Law 112-29, § 6(c), 125 Stat. 284, 304 (2011).

   2. Succinct Statement of the Objectives of, and Legal Basis for,
the Proposed Rules: The proposed rules seek to implement inter partes
review as authorized by the Leahy-Smith America Invents Act. The Leahy-
Smith America Invents Act requires that the Director prescribe rules
for the inter partes review that result in a final determination not
later than one year after the date on which the Director notices the
institution of a proceeding. The one-year period may be extended for
not more than six months if good cause is shown. See 35 U.S.C.
316(a)(11), as amended. The Leahy-Smith America Invents Act also
requires that the Director, in prescribing rules for the inter partes
review, consider the effect of the rules on the economy, the integrity
of the patent system, the efficient administration of the Office, and
the ability of the Office to complete timely the instituted
proceedings. See 35 U.S.C. 316(b), as amended. Consistent with the time
periods provided in 35 U.S.C. 316(a)(11), as amended, the proposed
rules are designed to, except where good cause is shown to exist,
result in a final determination by the Patent Trial and Appeal Board
within one year of the notice of initiation of the review. This one-
year review will enhance the effect on the economy, and improve the
integrity of the patent system and the efficient administration of the
Office.

   3. Description and Estimate of the Number of Affected Small
Entities: The Small Business Administration (SBA) small business size
standards applicable to most analyses conducted to comply with the
Regulatory Flexibility Act are set forth in 13 CFR 121.201. These
regulations generally define small businesses as those with fewer than
a specified maximum number of employees or less than a specified level
of annual receipts for the entity's industrial sector or North American
Industry Classification System (NAICS) code. As provided by the
Regulatory Flexibility Act, and after consultation with the Small
Business Administration, the Office has formally adopted an alternate
size standard as the size standard for the purpose of conducting an
analysis or making a certification under the Regulatory Flexibility Act
for patent-related regulations. See Business Size Standard for Purposes
of United States Patent and Trademark Office Regulatory Flexibility
Analysis for Patent-Related Regulations, 71 FR 67109 (Nov. 20, 2006),
1313 Off. Gaz. Pat. Office 60 (Dec. 12, 2006). This alternate small
business size standard is SBA's previously established size standard
that identifies the criteria entities must meet to be entitled to pay
reduced patent fees. See 13 CFR 121.802. If patent applicants identify
themselves on a patent application as qualifying for reduced patent
fees, the Office captures this data in the Patent Application Location
and Monitoring (PALM) database system, which tracks information on each
patent application submitted to the Office.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 111 

   Unlike the SBA small business size standards set forth in 13 CFR
121.201, the size standard for USPTO is not industry-specific. The
Office's definition of a small business concernfor Regulatory Flexibility
Act purposes is a business or other concern that: (1) Meets the SBA's
definition of a "business concern or concern" set forth in 13 CFR 121.105;
and (2) meets the size standards set forth in 13 CFR 121.802 for the purpose
of paying reduced patent fees, namely an entity: (a) Whose number of
employees, including affiliates, does not exceed 500 persons; and (b) which
has not assigned, granted, conveyed, or licensed (and is under no obligation
to do so) any rights in the invention to any person who made it and could
not be classified as an independent inventor, or to any concern which
would not qualify as a non-profit organization or a small business
concern under this definition. See Business Size Standard for Purposes
of United States Patent and Trademark Office Regulatory Flexibility
Analysis for Patent-Related Regulations, 71 FR at 67112 (Nov 20, 2006),
1313 Off. Gaz. Pat. Office at 63 (Dec. 12, 2006).
   As discussed above, it is anticipated that 460 petitions for inter
partes review will be filed in fiscal year 2013. The Office has
reviewed the percentage of patents for which inter partes reexamination
was requested from October 1, 2000, to September 23, 2011. A summary of
that review is provided in Table 1 above. As demonstrated by Table 1,
patents known to be owned by a small entity represent 32.79% of patents
for which inter partes reexamination was requested. Based on an
assumption that the same percentage of patents owned by small entities
will be subject to the new review proceedings, it is estimated that 151
patents owned by small entities would be affected by an inter partes
review.
   The USPTO estimates that 2.5% of patent owners will file a request
for adverse judgment prior to a decision to institute and that another
2.5% will file a request for adverse judgment or fail to participate
after initiation. Specifically, an estimated 21 patent owners will file
a request for adverse judgment or fail to participate after institution
in inter partes review. Based on the percentage of small entity owned
patents that were the subject of inter partes reexamination (32.79%)
from October 1, 2000 to September 23, 2011, it is estimated that 7
small entities will file such requests or fail to participate in inter
partes review proceedings.
   Under the proposed rules, prior to determining whether to institute
a review, the patent owner may file an optional patent owner
preliminary response to the petition. Given the new time period
requirements to file a petition for review before the Board relative to
patent enforcement proceedings and the desire to avoid the cost of a
trial and delays to related infringement actions, it is anticipated
that 90% of petitions, other than those for which a request for adverse
judgment is filed, will result in the filing of a patent owner
preliminary response. Where an inter partes review petition is filed
close to the expiration of the one-year period set forth in 35 U.S.C.
315(b), as amended, a patent owner would likely be advantaged by filing
a successful preliminary response. In view of these considerations, it
is anticipated that 90% of patent owners will file a preliminary
response. Specifically, the Office estimates that 406 patent owners
will file a preliminary response to an inter partes review petition.
Based on the percentage of small entity owned patents that were the
subject of inter partes reexamination (32.79%), it is estimated that
133 small entities will file a preliminary response to an inter partes
review petition in fiscal year 2013.
   Under the proposed rules, the Office will determine whether to
institute a trial within three months after the earlier of: (1) The
submission of a patent owner preliminary response, (2) the waiver of
filing a patent owner preliminary response, or (3) the expiration of
the time period for filing a patent owner preliminary response. If the
Office decides not to institute a trial, the petitioner may file a
request for reconsideration of the Office's decision. In estimating the
number of requests for reconsideration, the Office considered the
percentage of inter partes reexaminations that were denied relative to
those that were ordered (24 divided by 342, or 7%) in fiscal year 2011.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 112 

See Reexaminations - FY 2011, http://www.uspto.gov/patents/Reexamination_
operational_statistic_through_FY2011Q4.pdf. The Office also considered the
impact of: (1) Patent owner preliminary responses under newly authorized
in 35 U.S.C. 313, as amended, (2) the enhanced thresholds for instituting
reviews set forth in 35 U.S.C. 314(a), as amended, which would tend
to increase the likelihood of dismissing a petition for review, and
(3) the more restrictive time period for filing a petition for review in
35 U.S.C. 315(b), as amended, which would tend to reduce the likelihood of
dismissing a petition. Based on these considerations, it is estimated that
10% of the petitions for review (45 divided by 449) would be dismissed.
   During fiscal year 2011, the Office issued twenty-one decisions
following a request for reconsideration of a decision on appeal in
inter partes reexamination. The average time from original decision to
decision on reconsideration was 4.4 months. Thus, the decisions on
reconsideration were based on original decisions issued from July 2010
until June 2011. During this time period, the Office mailed sixty-three
decisions on appeals in inter partes reexamination. See BPAI
Statistics--Receipts and Dispositions by Technology Center,
http://www.uspto.gov/ip/boards/bpai/stats/receipts/index.jsp (monthly data).
Based on the assumption that the same rate of reconsideration (21
divided by 63 or 33.333%) will occur, the Office estimates that 15
requests for reconsideration will be filed. Based on the percentage of
small entity owned patents that were the subject of inter partes
reexamination (32.79%), it is estimated that five small entities will
file a request for a reconsideration of a decision dismissing the
petition for inter partes review in fiscal year 2013.
   The Office reviewed motions, oppositions, and replies in a number
of contested trial proceedings before the trial section of the Board.
The review included determining whether the motion, opposition, and
reply were directed to patentability grounds and non-priority non-
patentability grounds. Based on the review, it is anticipated that
inter partes reviews will have an average of 6.92 motions, oppositions,
and replies per trial after institution. Settlement is estimated to
occur in 20% of instituted trials at various points of the trial. In
the trials that are settled, it is estimated that only 50% of the noted
motions, oppositions, and replies would be filed.
   After an inter partes review trial has been instituted but prior to
a final written decision, parties to a review may request an oral
hearing. It is anticipated that 411 requests for oral hearings will be
filed based on the number of requests for oral hearings in inter partes
reexamination, the stated desirability for oral hearings during the
legislative process, and the public input received prior to this notice
of proposed rulemaking. Based on the percentage of small entity owned
patents that were the subject of inter partes reexamination (32.79%),
it is estimated that 135 small entities will file a request for oral
hearing in the inter partes reviews instituted in fiscal year 2013.
   Parties to an inter partes review may file requests to treat a
settlement as business confidential and requests for adverse judgment.
A written request to make a settlement agreement available may also be
filed. Given the short time period set for conducting trials, it is
anticipated that the alternative dispute resolution options will be
infrequently used. The Office estimates that 16 requests to treat a
settlement as business confidential and 91 requests for adverse judgment,
default adverse judgment, or settlement notices will be filed. The Office
also estimates that 16 requests to make a settlement available will be
filed. Based on the percentage of small entity owned patents that were the
subject of inter partes reexamination (32.79%), it is estimated that 5
small entities will file a request to treat a settlement as business
confidential, and thirty small entities will file a request for adverse
judgment, default adverse judgment notices, or settlement notices in the
inter partes reviews instituted in fiscal year 2013.
   Parties to an inter partes review may seek judicial review of the
final decision of the Board. Historically, 33% of examiner's decisions
in inter partes reexamination proceedings have been appealed to the
Board. It is anticipated that 16% of final decisions of the Board would
be appealed. The reduction in appeal rate is based on the higher
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 113 

threshold for institution, the focused process, and the experience of
the Board in conducted contested cases. Therefore, it is estimated that
46 would seek judicial review of the final decisions of the Board in
inter partes reviews instituted in fiscal year 2013. Furthermore, based
on the percentage of small entity owned patents that were the subject
of inter partes reexamination (32.79%), it is estimated that fifteen
small entities would seek judicial review of final decisions of the
Board in the inter partes reviews instituted in fiscal year 2013.

   4. Description of the Reporting, Recordkeeping, and Other
Compliance Requirements of the Proposed Rule, Including an Estimate of
the Classes of Small Entities Which Will Be Subject to the Requirement
and the Type of Professional Skills Necessary for Preparation of the
Report or Record: Based on the filing trends of inter partes
reexamination requests, it is anticipated that petitions for inter
partes review will be filed across all technologies with approximately
50% being filed in electrical technologies, approximately 30% in
mechanical technologies, and the remaining 20% in chemical technologies
and design. Under the proposed rules, a person who is not the owner of
a patent may file a petition to institute a review of the patent, with
a few exceptions. Given this, it is anticipated that a petition for
review is likely to be filed by an entity practicing in the same or
similar field as the patent. Therefore, it is anticipated that 50% of
the petitions for review will be filed in the electronic field, 30% in
the mechanical field, and 20% in the chemical or design fields.
   Preparation of the petition would require analyzing the patent
claims, locating evidence supporting arguments of unpatentability, and
preparing the petition seeking review of the patent. This notice
provides the proposed procedural requirements that are common for the
new trials. Additional requirements are provided in contemporaneous
trial specific proposed rulemaking. The procedures for petitions to
institute an inter partes review are proposed in § 42.5, 42.6,
42.8, 42.11, 42.13, 42.20, 42.21, 42.22, 42.24(a)(1), 42.63, 42.65, and
42.101 through 42.105.
   The skills necessary to prepare a petition for review and to
participate in a trial before the Patent Trial and Appeal Board would
be similar to those needed to prepare a request for inter partes
reexamination, to represent a party in an inter partes reexamination,
and to represent a party in an interference proceeding before the
Patent Trial and Appeal Board. This level of skill is typically
possessed by a registered patent practitioner having devoted
professional time to the particular practice area, typically under the
supervision of a practitioner skilled in the particular practice area.
Where authorized by the Board, a non-registered practitioner may be
admitted pro hac vice, on a case-by-case basis based on the facts and
circumstances of the trial and party, as well as the skill of the
practitioner.
   The cost of preparing a petition for inter partes review is
anticipated to be the same as the cost for preparing a request for
inter partes reexamination. The American Intellectual Property Law
Association's AIPLA Report of the Economic Survey 2011 reported that
the average cost of preparing a request for inter partes reexamination
was $46,000. Based on the work required to prepare and file such a
request, the Office considers the reported cost as a reasonable
estimate. Accordingly, the Office estimates that the cost of preparing
a petition for inter partes review would be $46,000 (including expert
costs).
   The filing of a petition for review would also require payment by
the petitioner of the appropriate petition fee to recover the aggregate
cost for providing the review. The appropriate petition fee would be
determined by the number of claims for which review is sought and the
type of review. The proposed fees for filing a petition for inter
partes review are: $27,200 for requesting review of 20 or fewer claims,
$34,000 to request review of 21 to 30 claims, $40,800 to request review
of 31 to 40 claims, $54,400 to request review of 41 to 50 claims,
$68,000 to request review of 51 to 60 claims, and an additional $27,200
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 114 

to request review of additional groups of 10 claims.
   In setting fees, the estimated information technology cost to
establish the process and maintain the filing and storage system
through 2017 is to be recovered by charging each petition $2,270. The
remainder of the fee is to recover the cost for judges to determine
whether to institute a review and conduct the review, together with a
proportionate share of indirect costs, e.g., rent, utilities,
additional support, and administrative costs. Based on the direct and
indirect costs, the fully burdened cost per hour for judges to decide a
petition and conduct a review is estimated to be $258.32.
   For a petition for inter partes review with 20 or fewer challenged
claims, it is anticipated that 97 hours of judge time would be
required. For 21 to 30 challenged claims, an additional 24 hours is
anticipated for a total of 121 hours of judge time. For 31 to 40
challenged claims, an additional 48 hours is anticipated for a total of
145 hours of judge time. For 41 to 50 challenged claims, an additional
97 hours is anticipated for a total of 194 hours of judge time. For 51
to 60 claims, an additional 145 hours is anticipated for a total of 242
hours of judge time. The increase in adjustment reflects the added
complexity that typically occurs as more claims are in dispute.
   The proposed rules would permit the patent owner to file a
preliminary response to the petition setting forth the reasons why no
review should be initiated. The procedures for a patent owner to file a
preliminary response as an opposition are proposed in § 42.6,
42.8, 42.11, 42.13, 42.21, 42.23, 42.24(b), 42.51, 42.52, 42.53, 42.54,
42.63, 42.64, 42.65, 42.107, 42.120, 42.207, and 42.220. The patent
owner is not required to file a preliminary response. The Office
estimates that the preparation and filing of a patent owner preliminary
response would require 100 hours of professional time and cost $34,000
(including expert costs). The AIPLA Report of the Economic Survey 2011
reported that the average cost for inter partes reexamination including
of the request ($46,000), the first patent owner response, and third
party comments was $75,000 (see I-175) and the median billing rate for
professional time of $340 per hour for attorneys in private firms (see
8). Thus, the cost of the first patent owner reply and the third party
statement is $29,000. The Office finds these costs to be reasonable
estimates. The patent owner reply and third party statement, however,
occur after the examiner has made an initial threshold determination
and made only the appropriate rejections. Accordingly, it is
anticipated that filing a patent owner preliminary response to a
petition for review would cost more than the initial reply in a
reexamination, an estimated $34,000 (including expert costs).
   The Office will determine whether to institute a trial within three
months after the earlier of: (1) The submission of a patent owner
preliminary response, (2) the waiver of filing a patent owner
preliminary response, or (3) the expiration of the time period for
filing a patent owner preliminary response. If the Office decides not
to institute a trial, the petitioner may file a request for
reconsideration of the Office's decision. It is anticipated that a
request for reconsideration will require 80 hours of professional time
to prepare and file, for a cost of $27,200. This estimate is based on
the complexity of the issues and desire to avoid time bars imposed by
35 U.S.C. 315(b), as amended, and 35 U.S.C. 325(b).
   Following institution of a trial, the parties may be authorized to
file various motions, e.g., motions to amend and motions for additional
discovery. Where a motion is authorized, an opposition may be
authorized, and where an opposition is authorized, a reply may be
authorized. The procedures for filing a motion are proposed in
§§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.22, 42.24(a)(5), 42.51,
42.52, 42.53, 42.54, 42.63, 42.64, 42.65, 42.121, 42.221, 42.123, and
42.223. The procedures for filing an opposition are proposed in
§§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.23, 42.24(b), 42.51,
42.52, 42.53, 42.54, 42.63, 42.64, 42.65, 42.107, 42.120, 42.207, and
42.220. The procedures for filing a reply are proposed in §§ 42.6,
42.8, 42.11, 42.13, 42.21, 42.23, 42.24(c), 42.51, 42.52, 42.53,
42.54, 42.63, and 42.65. As discussed previously, the Office estimates
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 115 

that the average inter partes review will have 6.92 motions,
oppositions, and replies after institution.
   The AIPLA Report of the Economic Survey 2011 reported that the
average cost in contested cases before the trial section of the Board
prior to the priority phase was $322,000 per party. Because of the
overlap of issues in patentability grounds, it is expected that the
cost per motion will decline as more motions are filed in a proceeding.
It is estimated that a motion, opposition, or reply in an inter partes
review is estimated at $47,600 (including expert costs). Based on the
work required to file and prepare such briefs, the Office considers the
reported cost as a reasonable estimate.
   After a trial has been instituted but prior to a final written
decision, parties to a review may request an oral hearing. The
procedure for filing requests for oral argument is proposed in
§ 42.70. The AIPLA Report of the Economic Survey 2011 reported that the
third quartile cost of an ex parte appeal with an oral argument is
$12,000, while the third quartile cost of an ex parte appeal without an
oral argument is $6,000. In view of the reported costs, which the
Office finds reasonable, and the increased complexity of an oral
hearing with multiple parties, it is estimated that the cost per party
for oral hearings would be $6,800 or $800 more than the reported third
quartile cost for an ex parte oral hearing.
   Parties to an inter partes review may file requests to treat a
settlement as business confidential and requests for adverse judgment.
A written request to make a settlement agreement available may also be
filed. The procedures to file requests that a settlement be treated as
business confidential are proposed in § 42.74(c). The procedures to
file requests for adverse judgment are proposed in § 42.73(b). The
procedures to file requests to make a settlement agreement available
are proposed in § 42.74(c)(2). It is anticipated that requests to
treat a settlement as business confidential will require two hours of
professional time or $680. It is anticipated that requests for adverse
judgment will require one hour of professional time or $340. It is
anticipated that requests to make a settlement agreement available will
require 1 hour of professional time or $340. The requests to make a
settlement agreement available will also require payment of a fee of
$400 specified in proposed § 42.15(d).
   Parties to a review proceeding may seek judicial review of the
judgment of the Board. The procedures to file notices of judicial
review of a Board decision, including notices of appeal and notices of
election provided for 35 U.S.C. 141, 142, 145, and 146, are proposed in
§ 90.1 through 90.3. The submission of a copy of a notice of
appeal or a notice of election is anticipated to require six minutes of
professional time at a cost of $34.

   5. Description of Any Significant Alternatives to the Proposed
Rules Which Accomplish the Stated Objectives of Applicable Statutes and
Which Minimize Any Significant Economic Impact of the Rules on Small
Entities:
   Size of petitions and motions: The Office considered whether to
apply a page limit and what an appropriate page limit would be. The
Office does not currently have a page limit on inter partes
reexamination requests. The inter partes reexamination requests from
October 1, 2010, to June 30, 2011, averaged 246 pages. Based on the
experience of processing inter partes reexamination requests, the
Office finds that the very large size of the requests has created a
burden on the Office that hinders the efficiency and timeliness of
processing the requests, and creates a burden on patent owners. The
quarterly reported average processing time from the filing of a request
to the publication of a reexamination certificate ranged from 28.9
months to 41.7 months in fiscal year 2009, from 29.5 months to 37.6
months in fiscal year 2010, and from 31.9 to 38.0 months in fiscal year
2011. See Reexaminations - FY 2011, http://www.uspto.gov/patents/
Reexamination_operational_statistic_through_FY2011Q4.pdf.
   By contrast, the Office has a page limit on the motions filed in
contested cases, except where parties are specifically authorized to
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 116 

exceed the limitation. The typical contested case proceeding is subject
to a standing order that sets a 50 page limit for motions and
oppositions on priority, a 15 page limit for miscellaneous motions
(§ 41.121(a)(3)) and oppositions (§ 41.122), and a 25 page
limit for other motions (§ 41.121(a)(2)) and oppositions to other
motions. In typical proceedings, replies are subject to a 15 page limit
if directed to priority, 5 page limit for miscellaneous issues, and 10
page limit for other motions. The average contested case was terminated
in 10.1 months in fiscal year 2009, in 12 months in fiscal year 2010,
and in 9 months in fiscal year 2011. The percentage of contested cases
terminated within two years was 93.7% in fiscal year 2009, 88.0% in
fiscal year 2010, and 94.0% in fiscal year 2011. See BPAI Statistics -
Performance Measures,
http://www.uspto.gov/ip/boards/bpai/stats/perform/index.jsp.
   Comparing the average time period for terminating a contested case,
10.0 to 12.0 months, with the average time period, during fiscal years
2009 through 2011, for completing an inter partes reexamination, 28.9
to 41.7 months, indicates that the average interference takes from 24%
(10.0/41.7) to 42% (12.0/28.9) of the time of the average inter partes
reexamination. While several factors contribute to the reduction in
time, limiting the size of the requests and motions is considered a
significant factor. Proposed § 42.24 would provide page limits for
petitions, motions, oppositions, and replies. 35 U.S.C. 316(b), as
amended, provides considerations that are to be taken into account when
prescribing regulations including the integrity of the patent system,
the efficient administration of the Office, and the ability to complete
timely the trials. The page limits proposed in these rules are consistent
with these considerations.
   Federal courts routinely use page limits in managing motions
practice as "[e]ffective writing is concise writing." Spaziano v.
Singletary, 36 F.3d 1028, 1031 n.2 (11th Cir. 1994). Many district
courts restrict the number of pages that may be filed in a motion
including, for example, the District of Delaware, the District of New
Jersey, the Eastern District of Texas, the Northern, Central, and
Southern Districts of California, and the Eastern District of Virginia.
   Federal courts have found that page limits ease the burden on both
the parties and the courts, and patent cases are no exception. Eolas
Techs., Inc. v. Adobe Sys., Inc., No. 6:09-CV-446, at 1 (E.D. Tex.
Sept. 2, 2010) ("The Local Rules' page limits ease the burden of
motion practice on both the Court and the parties."); Blackboard, Inc.
v. Desire2Learn, Inc., 521 F. Supp. 2d 575, 576 (E.D. Tex. 2007) (The
parties "seem to share the misconception, popular in some circles,
that motion practice exists to require federal judges to shovel through
steaming mounds of pleonastic arguments in a Herculean effort to
uncover a hidden gem of logic that will ineluctably compel a favorable
ruling. Nothing could be farther from the truth."); Broadwater v.
Heidtman Steel Prods., Inc., 182 F. Supp. 2d 705, 710 (S.D. Ill. 2002)
("Counsel are strongly advised, in the future, to not ask this Court
for leave to file any memoranda (supporting or opposing dispositive
motions) longer than 15 pages. The Court has handled complicated patent
cases and employment discrimination cases in which the parties were
able to limit their briefs supporting and opposing summary judgment to
10 or 15 pages." (Emphasis omitted)).
   The Board's contested cases experience with page limits in motions
practice is consistent with that of the federal courts. The Board's use
of page limits has shown it to be beneficial without being unduly
restrictive for the parties. Page limits have encouraged the parties to
focus on dispositive issues, easing the burden of motions practice on
the parties and on the Board.
   The Board's contested cases experience with page limits is informed
by its use of different approaches over the years. In the early 1990s,
page limits were not routinely used for motions, and the practice
suffered from lengthy and unacceptable delays. To reduce the burden on
the parties and on the Board and thereby reduce the time to decision,
the Board instituted page limits in the late 1990s for every motion.
Page limit practice was found to be effective in reducing the burdens
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on the parties and improving decision times at the Board. In 2006, the
Board revised the page limit practice and allowed unlimited findings of
fact and generally limited the number of pages containing argument. Due
to abuses of the system, the Board recently reverted back to page
limits for the entire motion (both argument and findings of fact).
   The Board's current page limits are consistent with the 25-page
limits in the Northern, Central, and Southern Districts of California
and the Middle District of Florida and exceed the limits in the
District of Delaware (20), the Northern District of Illinois (15), the
District of Massachusetts (20), the Eastern District of Michigan (20),
the Southern District of Florida (20), and the Southern District of
Illinois (20).
   In a typical proceeding before the Board, a party may be authorized
to file a single motion for unpatentability based on prior art, a
single motion for unpatentability based upon failure to comply with 35
U.S.C. 112, lack of written description, and/or enablement, and
potentially another motion for lack of compliance with 35 U.S.C. 101,
although a 35 U.S.C. 101 motion may be required to be combined with the
35 U.S.C. 112 motion. Each of these motions is currently limited to 25
pages in length, unless good cause is shown that the page limits are
unduly restrictive for a particular motion.
   Under the proposed rules, an inter partes review petition would be
based upon any grounds identified in 35 U.S.C. 311(b), as amended,
i.e., only a ground that could be raised under 35 U.S.C. 102 or 103 and
only on the basis of patents or printed publications. Generally, under
current practice, a party is limited to filing a single prior art
motion, limited to 25 pages in length. The proposed rule would provide
up to 50 pages in length for a motion requesting inter partes review.
Thus, as the proposed page limit doubles the default page limit
currently set for a motion before the Board, a 50 page limit is
considered sufficient in all but exceptional cases and is consistent
with the considerations provided in 35 U.S.C. 316(b), as amended.
   The proposed rule would provide that petitions to institute a trial
must comply with the stated page limits but may be accompanied by a
motion that seeks to waive the page limits. The petitioner must show in
the motion how a waiver of the page limits is in the interests of
justice. A copy of the desired non-page limited petition must accompany
the motion. Generally, the Board would decide the motion prior to
deciding whether to institute the trial.
   Current Board practice provides a limit of 25 pages for other
motions and 15 pages for miscellaneous motions. The Board's experience
is that such page limits are sufficient for the parties filing them and
do not unduly burden the opposing party or the Board. Petitions to
institute a trial would generally replace the current practice of
filing motions for unpatentability, as most motions for relief are
expected to be similar to the current interference miscellaneous motion
practice. Accordingly, the proposed 15 page limit is considered
sufficient for most motions but may be adjusted where the limit is
determined to be unduly restrictive for the relief requested.
   Proposed § 42.24(b) would provide page limits for oppositions
filed in response to motions. Current contested cases practice provides
an equal number of pages for an opposition as its corresponding motion.
This is generally consistent with motions practice in federal courts.
The proposed rule would continue the current practice.
   Proposed § 42.24(c) would provide page limits for replies.
Current contested case practice provides a 15 page limit for priority
motion replies, a 5 page limit for miscellaneous (procedural) motion
replies, and a 10 page limit for all other motions. The proposed rule
is consistent with current contested case practice for procedural
motions. The proposed rule would provide a 15 page limit for reply to
petitions requesting a trial, which the Office believes is sufficient
based on current practice. Current contested case practice has shown
that such page limits do not unduly restrict the parties and, in fact,
have provided sufficient flexibility to parties to not only reply to
the motion but also help to focus on the issues. Thus, it is
anticipated that default page limits would minimize the economic impact
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on small entities by focusing on the issues in the trials.
   The Leahy-Smith America Invents Act requires that the Director, in
prescribing rules for the inter partes reviews, consider the effect of
the rules on the economy, the integrity of the patent system, the
efficient administration of the Office, and the ability of the Office
to complete timely the instituted proceedings. See 35 U.S.C. 316(b), as
amended. In view of the actual results of the duration of proceedings
in inter partes reexamination (without page limits) and contested cases
(with page limits), proposing procedures with reasonable page limits would
be consistent with the objectives set forth in the Leahy-Smith America
Invents Act. Based on our experience on the time needed to complete a
non-page limited proceeding, the option of non-page limited proceedings was
not adopted.
   Fee Setting: 35 U.S.C. 311(a), as amended, requires the Director to
establish fees to be paid by the person requesting the review in such
amounts as the Director determines to be reasonable, considering the
aggregate costs of the review. In contrast to current 35 U.S.C. 311(b)
and 312(c), the Leahy-Smith America Invents Act requires the Director
to establish more than one fee for reviews based on the total cost of
performing the reviews, and does not provide for refund of any part of
the fee when the Director determine that the review should not be
initiated.
   35 U.S.C. 312(a)(1), as amended, further requires that the fee
established by the Director under 35 U.S.C. 311(a), as amended,
accompany the petition on filing. Accordingly, in interpreting the fee
setting authority in 35 U.S.C. 311(a), as amended, it is reasonable
that the Director should set a number of fees for filing a petition
based on the anticipated aggregate cost of conducting the review
depending on the complexity of the review, and require payment of the
fee upon filing of the petition.
   Based on experience with contested cases and inter partes
reexamination proceedings, the following characteristics of requests
were considered as potential factors for fee setting as each would
likely impact the cost of providing the new services. The Office also
considered the relative difficulty in administrating each option in
selecting the characteristics for which different fees should be paid
for requesting review.

   I. Adopted Option. Number of claims for which review is requested.
The number of claims often impacts the complexity of the request and
increases the demands placed on the deciding officials. Cf. In re Katz
Interactive Call Processing Patent Litig., 639 F.3d 1303, 1309 (Fed.
Cir. 2011) (limiting number of asserted claims is appropriate to
efficiently manage a case). Moreover, the number of claims for which
review is requested can be easily determined and administered, which
avoids delays in the Office and the impact on the economy or patent
system that would occur if an otherwise meritorious request is refused
due to improper fee payment. Any subsequent petition would be time
barred in view 35 U.S.C. 315(b), as amended.

   II. Alternative Option I. Number of grounds for which review is
requested. The Office has experience with large numbers of cumulative
grounds being presented in inter partes reexaminations which often add
little value to the proceedings. Allowing for a large number of grounds
to be presented on payment of an additional fee(s) is not favored.
Determination of the number of grounds in a request may be contentious
and difficult and may result in a large amount of high-level petition
work. As such, the option would have a negative impact on small
entities. Moreover, interferences instituted in the 1980s and early
1990s suffered from this problem as there was no page limit for motions
and the parties had little incentive to focus the issues for decision.
The resulting interference records were often a collection of disparate
issues and evidence. This led to lengthy and unwarranted delays in
deciding interference cases as well as increased costs for parties and
the Office. Accordingly, this alternative is inconsistent with
objectives of the Leahy-Smith America Invents Act that the Director, in
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prescribing rules for the inter partes reviews, consider the effect of
the rules on the economy, the integrity of the patent system, the
efficient administration of the Office, and the ability of the Office
to timely complete the instituted proceedings.

   III. Alternative Option II. Pages of argument. The Office has
experience with large requests in inter partes reexamination in which
the merits of the proceedings could have been resolved in a shorter
request. Allowing for unnecessarily large requests on payment of an
additional fee(s) is not favored. Moreover, determination of what
should be counted as "argument" as compared with "evidence" has
often proven to be contentious and difficult as administered in the
current inter partes reexamination appeal process.
   In addition, the trial section of the Board recently experimented
with motions having a fixed page limit for the argument section and an
unlimited number of pages for the statement of facts. Unlimited pages
for the statement of facts led to a dramatic increase in the number of
alleged facts and pages associated with those facts. For example, one
party used approximately 10 pages for a single "fact" that merely cut
and pasted a portion of a declarant's cross-examination. Based upon the
trial section's experience with unlimited pages of facts, the Board
recently reverted back to a fixed page limit for the entire motion
(argument and facts). Accordingly, this alternative is inconsistent
with objectives of the Leahy-Smith America Invents Act that the
Director, in prescribing rules for the inter partes patent reviews,
consider the effect of the rules on the economy, the integrity of the
patent system, the efficient administration of the Office, and the
ability of the Office to complete timely the instituted proceedings.

   IV. Alternative Option III. The Office considered an alternative
fee setting regime in which fees are charged at various steps in the
review process, a first fee on filing of the petition, a second fee if
instituted, a third fee on filing a motion in opposition to amended
claims, etc. The alternative fee setting regime would hamper the
ability of the Office to complete timely reviews, would result in
dismissal of pending proceedings with patentability in doubt due to
non-payment of required fees by third parties, and would be
inconsistent with 35 U.S.C. 312, as amended, that requires the fee
established by the Director be paid at the time of filing the petition.
Accordingly, this alternative is inconsistent with objectives of the
Leahy-Smith America Invents Act that the Director, in prescribing rules
for inter partes reviews, consider the effect of the rules on the
economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to complete
timely the instituted proceedings.

   V. Alternative Option IV. The Office also considered setting
reduced fees for small and micro entities and to provide refunds if a
review is not instituted. The Office may set the fee to recover the
cost of providing the services under 35 U.S.C. 41(d)(2)(a). Fees set
under this authority are not reduced for small entities, see 35 U.S.C.
42(h)(1), as amended. Moreover, the Office does not have authority to
refund fees that when paid were not paid by mistake or in excess of
that owed. See 35 U.S.C. 42(d).
   Discovery: The Office considered a procedure for discovery similar
to the one available during district court litigation. Discovery of
that scope has been criticized sharply, particularly when attorneys use
discovery tools as tactical weapons, which hinders the "just, speedy,
and inexpensive determination of every action and proceeding." See
Introduction to An E-Discovery Model Order, available at
http://www.cafc.uscourts.gov/images/stories/announcements/Ediscovery_
Model_Order.pdf. Accordingly, this alternative would have been inconsistent
with objectives of the Leahy-Smith America Invents Act that the
Director, in prescribing rules for the inter partes reviews, consider
the effect of the rules on the economy, the integrity of the patent system,
the efficient administration of the Office, and the ability of the Office
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to complete timely the instituted proceedings.
   Additional discovery increases trial costs and increases the
expenditures of time by the parties and the Board. To promote effective
discovery, the proposed rule would require a showing that additional
requested discovery is in the interests of justice, placing an
affirmative burden upon a party seeking the discovery to show how the
proposed discovery would be productive. The Board's interference
experience, however, is that such showings are often lacking and
authorization for additional discovery is expected to be rare.
   The proposed interest of justice standard for additional discovery
is consistent with considerations identified in 35 U.S.C. 316(b), as
amended, including the efficient administration of the Board and the
Board's ability to complete timely trials. Further, the proposed
interest of justice standard is consistent with 35 U.S.C. 316(a)(5), as
amended, which states that discovery other than depositions of
witnesses submitting affidavits and declarations be what is otherwise
necessary in the interests of justice.
   The Office has proposed a default scheduling order to provide
limited discovery as a matter of right and also the ability to seek
additional discovery on a case-by-case basis. In weighing the need for
additional discovery, should a request be made, the economic impact on
the opposing party would be considered which would tend to limit
additional discovery where a party is a small entity.
   Pro Hac Vice: The Office considered whether to allow counsel to
appear pro hac vice. In certain cases, highly skilled, but non-
registered, attorneys have appeared satisfactorily before the Board in
contested cases. The Board may recognize counsel pro hac vice during a
proceeding upon a showing of good cause. Proceedings before the Office
can be technically complex. Consequently, the grant of a motion to
appear pro hac vice is a discretionary action taking into account the
specifics of the proceedings. Similarly, the revocation of pro hac vice
is a discretionary action taking into account various factors,
including incompetence, unwillingness to abide by the Office's Rules of
Professional Conduct, prior findings of misconduct before the Office in
other proceedings, and incivility.
   The Board's past practice has required the filing of a motion by a
registered patent practitioner seeking pro hac vice representation
based upon a showing of: (1) How qualified the unregistered
practitioner is to represent the party in the proceeding when measured
against a registered practitioner, and (2) whether the party has a
genuine need to have the particular unregistered practitioner represent
it during the proceeding. This practice has proven effective in the
limited number of contested cases where such requests have been
granted. The proposed rule, if adopted, would allow for this practice
in the new proceedings authorized by the Leahy-Smith America Invents
Act.
   The proposed rules would provide a limited delegation to the Board
under 35 U.S.C. 2(b)(2) and 32 to regulate the conduct of counsel in
Board proceedings. The proposed rule would delegate to the Board the
authority to conduct counsel disqualification proceedings while the
Board has jurisdiction over a proceeding. The rule would also delegate
to the Chief Administrative Patent Judge the authority to make final a
decision to disqualify counsel in a proceeding before the Board for the
purposes of judicial review. This delegation would not derogate from
the Director the prerogative to make such decisions, nor would it
prevent the Chief Administrative Patent Judge from further delegating
authority to an administrative patent judge.
   The Office considered broadly permitting practitioners not
registered to practice by the Office to represent parties in trial as
well as categorically prohibiting such practice. A prohibition on the
practice would be inconsistent with the Board's experience, and more
importantly, might result in increased costs particularly where a small
entity has selected its district court litigation team for
representation before the Board and has a patent review filed after
litigation efforts have commenced. Alternatively, broadly making the
practice available would create burdens on the Office in administering
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 121 

the trials and in completing the trial within the established time
frame, particularly if the selected practitioner does not have the
requisite skill. In weighing the desirability of admitting a
practitioner pro hac vice, the economic impact on the party in interest
would be considered which would tend to increase the likelihood that a
small entity could be represented by a non-registered practitioner.
Accordingly, the alternatives to eliminate pro hac vice practice or to
permit it more broadly would have been inconsistent with objectives of
the Leahy-Smith America Invents Act that the Director, in prescribing
rules for the inter partes reviews, consider the effect of the rules on
the economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to complete
timely the instituted proceedings.
   Threshold for Instituting a Review: The Office considered whether
the threshold for instituting a review could be set as low as or lower
than the threshold for ex parte reexamination. This alternative could
not be adopted in view of the statutory requirements in 35 U.S.C. 314,
as amended.
   Default Electronic Filing: The Office considered a paper filing
system and a mandatory electronic filing system (without any
exceptions) as alternatives to the proposed requirement that all papers
are to be electronically filed, unless otherwise authorized.
   Based on the Office's experience, a paper-based filing system
increases delay in processing papers, delay in public availability, and
the chance that a paper may be misplaced or made available to an
improper party if confidential. Accordingly, the alternative of a
paper-based filing system would have been inconsistent with objectives
of the Leahy-Smith America Invents Act that the Director, in
prescribing rules for the inter partes reviews, consider the effect of
the rules on the economy, the integrity of the patent system, the
efficient administration of the Office, and the ability of the Office
to complete timely the instituted proceedings.
   An electronic filing system (without any exceptions) that is
rigidly applied would result in unnecessary cost and burdens,
particularly where a party lacks the ability to file electronically. By
contrast, if the proposed option is adopted, it is expected that the
entity size and sophistication would be considered in determining
whether alternative filing methods would be authorized.

   6. Identification, to the Extent Practicable, of All Relevant
Federal Rules Which May Duplicate, Overlap, or Conflict with the
Proposed Rules:

   37 CFR 1.99 provides for the submission of information after
publication of a patent application during examination by third
parties.
   37 CFR 1.171-1.179 provide for applications to reissue a patent to
correct errors, including where a claim in a patent is overly broad.
   37 CFR 1.291 provides for the protest against the issuance of a
patent during examination.
   37 CFR 1.321 provides for the disclaimer of a claim by a patentee.
   37 CFR 1.501 and 1.502 provide for ex parte reexamination of
patents. Under these rules, a person may submit to the Office prior art
consisting of patents or printed publications that are pertinent
to the patentability of any claim of a patent, and request
reexamination of any claim in the patent on the basis of the cited
prior art patents or printed publications. Consistent with 35 U.S.C.
302-307, ex parte reexamination rules provide a different threshold for
initiation, require the proceeding to be conducted by an examiner with
a right of appeal to the Patent Trial and Appeal Board, and allow for
limited participation by third parties.
   37 CFR 1.902-1.997 provide for inter partes reexamination of
patents. Similar to ex parte reexamination, inter partes reexamination
provides a procedure in which a third party may request reexamination
of any claim in a patent on the basis of the cited prior art patents
and printed publication. The inter partes reexamination practice will
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 122 

be eliminated, except for requests filed before the effective date,
September 16, 2012. See § 6(c)(3)(C) of the Leahy-Smith America
Invents Act.
   Other countries have their own patent laws, and an entity desiring
a patent in a particular country must make an application for patent in
that country, in accordance with the applicable law. Although the
potential for overlap exists internationally, this cannot be avoided
except by treaty (such as the Paris Convention for the Protection of
Industrial Property, or the Patent Cooperation Treaty (PCT)).
Nevertheless, the Office believes that there are no other duplicative
or overlapping foreign rules.
   C. Executive Order 12866 (Regulatory Planning and Review): This
rulemaking has been determined to be significant for purposes of
Executive Order 12866 (Sept. 30, 1993), as amended by Executive Order
13258 (Feb. 26, 2002) and Executive Order 13422 (Jan. 18, 2007).
   The Office estimates that the aggregate burden of the proposed
rules on the public for implementing the new review procedures is
approximately $54.1 million for fiscal year 2013. The USPTO considered
several factors in making this estimate.
   Based on the petition and other filing requirements for initiating
an inter partes review proceeding, the USPTO initially estimated the
burden of the proposed rules to be $174,500,217 in fiscal year 2013,
which represents the sum of the estimated total annual (hour)
respondent cost burden ($158,025,744) plus the estimated total annual
non-hour respondent cost burden ($16,474,473) provided in Part O,
Section II, of this notice, infra. However, since the Leahy-Smith
America Invents Act also eliminates inter partes reexamination practice
(except for requests filed before the effective date of September 16,
2012), the burden of the proposed rules should be offset by the
elimination of the proceeding and its associated burdens.
   It is estimated that 460 new requests for inter partes
reexamination would have been filed in FY 2012 if the Leahy-Smith
America Invents Act had not been enacted. This estimate is based on the
number of proceedings filed in fiscal years 2011 (374), 2010 (281), and
2009 (258). Elimination of 460 proceedings reduces the public's burden
to pay filing fees by $4,048,000 (460 filings with $8,800 filing fee
due) and the public's burden to prepare the requests by $21,160,000
(460 filings with $46,000 average cost to prepare). Based on the
assumption that 93% of the requests would be ordered (consistent with
the fiscal year 2011 grant rate), the burden to conduct the proceeding
till close of prosecution will reduce the public's burden by
$89,880,000 (428 proceedings that would be estimated to be granted
reexamination multiplied by $210,000 which is average cost cited in the
AIPLA Report of the Economic Survey 2011 per party cost until close of
prosecution reduced by the $46,000 request preparation cost).
Additionally, the burden on the public to appeal to the Board by
$5,358,000 (based on an estimate that 141 proceedings would be appealed
to the Board which is estimated based on the number of granted
proceedings (428) and the historical rate of appeal to the Board (1-3)
and an average public cost of $38,000). Thus, $120,446,000 in
public burden will be eliminated by the elimination of new filings of
inter partes reexamination (the sum of $4,048,000 (the filing fees),
$21,160,000 (the cost of preparing requests), $89,880,000 (the
prosecution costs), plus $5,358,000 (the burden to appeal to the
Board)).
   Therefore, the estimated aggregate burden of the proposed rules for
implementing the new review proceedings would be $54,054,217
($174,500,217 minus $120,446,000) in fiscal year 2013.
   The USPTO expect several benefits to flow from the Leahy-Smith
America Invents Act and these proposed rules. It is anticipated that
the proposed rules will reduce the time for reviewing patents at the
USPTO. Specifically, 35 U.S.C. 316(a), as amended, provides that the
Director prescribe regulations requiring a final determination by the
Board within one year of initiation, which may be extended for up to
six months for good cause. In contrast, currently for inter partes
reexamination, the average time from the filing to the publication of a
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 123 

certificate ranged from 28.9 to 41.7 months during fiscal years 2009-
2011. See Reexamination - FY 2011, http://www.uspto.gov/patents/
Reexamination_operational_statistic_through_FY2011Q4.pdf.
   Likewise, it is anticipated that the proposed rules will minimize
duplication of efforts. In particular, the Leahy-Smith America Invents
Act provides more coordination between district court infringement
litigation and inter partes review to reduce duplication of efforts and
costs. For instance, 35 U.S.C. 315(b), as amended, will require that a
petition for inter partes review be filed within one year of the date
of service of a complaint alleging infringement of a patent. By
requiring the filing of an inter partes review petition earlier than a
request for inter partes reexamination, and by providing shorter
timelines for inter partes review compared with reexamination, it is
anticipated that the current high level of duplication between
litigation and reexamination will be reduced.
   The AIPLA Report of the Economic Survey 2011 reports that the total
cost of patent litigation where the damages at risk are less than
$1,000,000 average $916,000, where the damages at risk are between
$1,000,000 and $25,000,000 average $2,769,000, and where the damages at
risk exceed $25,000,000 average $6,018,000. There may be a significant
reduction in overall burden if, as intended, the Leahy-Smith America
Invents Act and the proposed rules reduce the overlap between review at
the USPTO of issued patents and validity determination during patent
infringement actions. Data from the United States district courts
reveals that 2,830 patent cases were filed in 2006, 2,896 in 2007,
2,909 in 2008, 2,792 in 2009, and 3,301 in 2010. See U.S. Courts,
Judicial Business of the United States Courts, www.uscourts.gov/uscourts/
Statistics/JudicialBusiness/2010/appendices/C02ASep10.pdf
(last visited Nov. 11, 2011) (hosting annual reports for 1997-2010).
Thus, the Office estimates that a total of approximately 3,300 patent
cases (the highest number of yearly filings between 2006 and 2010
rounded to the nearest 100) are likely to be filed annually. The
aggregate burden estimate above ($54,054,144) was not offset by a
reduction in burden based on improved coordination between district
court patent litigation and the new inter partes review proceedings.

   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 determination that the benefits justify the costs of
the rule; (2) tailored the rule to impose the least burden on society
consistent with obtaining the regulatory objectives; (3) selected a
regulatory approach that maximizes net benefits; (4) specified performance
objectives; (5) identified and assessed available alternatives; (6) involved
the public in an open exchange of information and perspectives among experts
in relevant disciplines, affected stakeholders in the private sector, and
the public as a whole, and provided online access to the rule making
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).

 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 124 

   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). This rulemaking carries out a
statute designed to lessen litigation. See H.R. Rep. No. 112-98, at 45-
48.

   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 effect 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. 801-808), prior to issuing any final rule, the United
States Patent and Trademark Office will submit a report containing the
final rule and other required information to the U.S. Senate, the U.S.
House of Representatives, and the Comptroller General of the Government
Accountability Office. The changes in this notice 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 notice is not expected to result in a "major rule" as
defined in 5 U.S.C. 804(2).

   L. Unfunded Mandates Reform Act of 1995: The changes proposed in
this notice 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.
1501-1571.

   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. 4321-4370h.

   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 USPTO consider the impact of
paperwork and other information collection burdens imposed on the
public. This proposed rulemaking 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.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 125 

3501-3549). The collection of information involved in this notice has
been submitted to OMB under OMB control number 0651-00xx. In the Notice
"Rules of Practice for Trials before the Patent Trial and Appeal Board
and Judicial Review of Patent Trial and Appeal Board Decisions," RIN
0651-AC70, the information collection for all of the new trials
authorized by the Leahy-Smith America Invents Act were provided. This
notice provides the subset of burden created by the inter partes review
provisions. The proposed collection will be available at the OMB's
Information Collection Review Web site at: www.reginfo.gov/public/do/PRAMain.
   The USPTO is submitting the information collection to OMB for its
review and approval because this notice of proposed rulemaking will add
the following to a collection of information:

   (1) Petitions to institute an inter partes review (§ 42.5,
42.6, 42.8, 42.11, 42.13, 42.20, 42.21, 42.22, 42.24(a)(1), 42.63,
42.65, and 42.101 through 42.105);
   (2) motions (§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.22,
42.24(a)(5), 42.51 through 42.54, 42.63, 42.64, 42.65, and 42.121);
   (3) oppositions (§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.23,
42.24(b), 42.51, 42.52, 42.53, 42.54, 42.63, 42.64, 42.65, 42.107, and
42.120); and
   (4) replies provided for in 35 U.S.C. 135 and 311-318, as amended,
and new 35 U.S.C. 319 (§ 42.6, 42.8, 42.11, 42.13, 42.21,
42.23, 42.24(c), 42.51, 42.52, 42.53, 42.54, 42.63, and 42.65).
   The proposed rules also permit filing requests for oral argument
(§ 42.70) provided for in 35 U.S.C. 316(a)(10), as amended,
requests for rehearing (§ 42.71(c)), requests for adverse judgment
(§ 42.73(b)), requests that a settlement be treated as business
confidential (§ 42.74(b)) provided for in 35 U.S.C. 317, as amended.

I. Abstract: The USPTO is required by 35 U.S.C. 131 and 151 to
examine applications and, when appropriate, issue applications as
patents.

   Chapter 31 of title 35, United States Code, in effect on September
16, 2012, provides for inter partes review proceedings allowing third
parties to petition the USPTO to review the patentability of an issued
patent under 35 U.S.C. 102 and 103 based on patents and printed
publications. If a trial is initiated by the USPTO based on the
petition, as authorized by the USPTO, additional motions may be filed
by the petitioner. A patent owner may file a response to the petition
and if a trial is instituted, as authorized by the USPTO, may file
additional motions.
   In estimating the number of hours necessary for preparing a
petition to institute an inter partes review, the USPTO considered the
estimated cost of preparing a request for inter partes reexamination
($46,000), the median billing rate ($340/hour), and the observation
that the cost of inter partes reexamination has risen the fastest of
all litigation costs since 2009 in the AIPLA Report of the Economic
Survey 2011. It was estimated that a petition for an inter partes
review and an inter partes reexamination request would cost the same to
the preparing party ($46,000).
   In estimating the number of hours necessary for preparing motions
after instituting and participating in the review, the USPTO considered
the AIPLA Report of the Economic Survey 2011 which reported the average
cost of a party to a two-party interference to the end of the
preliminary motion phase ($322,000) and inclusive of all costs
($631,000). The Office considered that the preliminary motion phase is
a good proxy for patentability reviews since that is the period of
current contested cases before the trial section of the Board where
most patentability motions are currently filed.
   The USPTO also reviewed recent contested cases before the trial
section of the Board to make estimates on the average number of motions
for any matter including priority, the subset of those motions directed
to non-priority issues, the subset of those motions directed to non-
priority patentability issues, and the subset of those motions directed
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 126 

to patentability issues based on a patent or printed publication on the
basis of 35 U.S.C. 102 or 103. The review of current contested cases
before the trial section of the Board indicated that approximately 15%
of motions were directed to prior art grounds, 18% of motions were
directed to other patentability grounds, 27% were directed to
miscellaneous issues, and 40% were directed to priority issues. It was
estimated that the cost per motion to a party in current contested
cases before the trial section of the Board declines because of overlap
in subject matter, expert overlap, and familiarity with the technical
subject matter. Given the overlap of subject matter, a proceeding with
fewer motions will have a somewhat less than proportional decrease in
costs since the overlapping costs will be spread over fewer motions.
   It is estimated that the cost of an inter partes review would be
60% of the cost of current contested cases before the trial section of
the Board to the end of the preliminary motion period. An inter partes
review should have many fewer motions since only one party will have a
patent that is the subject of the proceeding (compared with each party
having at least a patent or an application in current contested cases
before the trial section of the Board). Moreover, fewer issues can be
raised since inter partes review will not have priority-related issues
that must be addressed in current contested cases before the trial
section of the Board. Consequently, a 60% weighting factor should
capture the typical costs of an inter partes review.
   The title, description, and respondent description of the
information collection are shown below with an estimate of the annual
reporting burdens for the inter partes review provisions. Included in
this estimate is the time for reviewing instructions, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. The principal impact of the proposed changes
in this notice of proposed rulemaking is to implement the changes to
Office practice necessitated by section 6(a) of the Leahy-Smith America
Invents Act.
   The public uses this information collection to request inter partes
review and to ensure that the associated fees and documentation are
submitted to the USPTO.

II. Data

   Needs and Uses: The information supplied to the USPTO by a petition
to institute an inter partes review as well as the motions authorized
following the institution is used by the USPTO to determine whether to
initiate a review under 35 U.S.C. 314, as amended, and to prepare a
final decision under 35 U.S.C. 318, as amended.
   OMB Number: 0651-00xx.
   Title: Patent Review and Derivation Proceedings.
   Form Numbers: None.
   Type of Review: New Collection.
   Likely Respondents/Affected Public: Individuals or households,
businesses, or other for-profit, not-for-profit institutions, farms,
Federal Government, and state, local, or tribal governments.
   Estimated Number of Respondents/Frequency of Collection: 920
respondents and 4,024 responses per year.
   Estimated Time per Response: The USPTO estimates that it will take
the public from 0.1 to 180.4 hours to gather the necessary information,
prepare the documents, and submit the information to the USPTO.
   Estimated Total Annual Respondent Burden Hours: 464,781.6 hours per
year.
   Estimated Total Annual (Hour) Respondent Cost Burden: $158,025,744
per year. The USPTO expects that the information in this collection
will be prepared by attorneys. Using the professional rate of $340 per
hour for attorneys in private firms, the USPTO estimates that the
respondent cost burden for this collection will be approximately
$158,025,744 per year (464,781.6 hours per year multiplied by $340 per
hour).
   Estimated Total Annual Non-hour Respondent Cost Burden: $16,474,473
per year. There are no capital start-up or maintenance costs associated
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 127 

with this information collection. However, this collection does have
annual (non-hour) costs in the form of filing fees and postage costs
where filing via mail is authorized. It is estimated that filing via
mail will be authorized in one inter partes review petition filing and
3 subsequent papers. There are filing fees associated with petitions
for inter partes review, post-grant review, and covered business method
patent review and for requests to treat a settlement as business
confidential. The total filing fees for this collection are calculated
in the accompanying table. The USPTO estimates that filings authorized
to be filed via mail will be mailed to the USPTO by Express Mail using
the U.S. Postal Service's flat rate envelope, which can accommodate
varying submission weights, estimated in this case to be 16 ounces for
the petitions and two ounces for the other papers. The cost of the flat
rate envelope is $18.30. The USPTO estimates that the total postage
cost associated with this collection will be approximately $73 per
year. The USPTO estimates that the total fees associated with this
collection will be approximately $16,474,473 per year.
   Therefore, the total cost burden in fiscal year 2013 is estimated
to be $174,500,217 (the sum of the estimated total annual (hour)
respondent cost burden ($158,025,744) plus the estimated total annual
non-hour respondent cost burden ($16,474,473)).

                               Estimated                     Estimated
                               time for      Estimated       annual
                               response      annual          burden
Item                           (hours)       responses       hours

Petition for inter partes      135.3            460           62,238
   review
Reply to initial inter         100              406           40,600
   partes review petition
Request for Reconsideration     80              127           10,160
Motions, replies,              140            2,453          343,420
   and oppositions after
   institution in inter
   partes review
Request for oral hearing        20              411            8,220
Request to treat a settlement    2               16               32
   as business confidential
Request for adverse judgment,    1               91               91
   default adverse judgment,
   or settlement
Request to make a settlement     1               16               16
   agreement available
Notice of judicial review of     0.1             46              4.6
   a Board decision (e.g.,
   notice of appeal under 3
   5 U.S.C. 142)

   Totals                                     4,026       464,781.6


                                                          Estimated
                               Estimated                     annual
                               annual                        filing
Item                           responses   Fee Amount        costs

Petition for inter partes        460       $35,800           $16,468,000
   review
Reply to inter partes            406             0                     0
   review petition
Request for Reconsideration      127             0                     0
Motions, replies, and          2,453             0                     0
   oppositions after
   initiation in inter
   partes review
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 128 

Request for oral hearing         411             0                     0
Request to treat a settlement     16             0                     0
   as business confidential
Request for adverse judgment,     91             0                     0
   default adverse judgment,
   or settlement
Request to make a settlement      16           400                 6,400
   agreement available
Notice of judicial review of      46             0                     0
   a Board decision (e.g.,
   notice of appeal under
   35 U.S.C. 142)

   Totals                      4,026                          16,474,400


III. Solicitation

   The agency is soliciting comments to: (1) Evaluate whether the
proposed information requirement is necessary for the proper
performance of the functions of the agency, including whether the
information will have practical utility; (2) evaluate the accuracy of
the agency's estimate of the burden; (3) enhance the quality, utility,
and clarity of the information to be collected; and (4) minimize the
burden of collecting the information on those who are to respond,
including by using appropriate automated, electronic, mechanical, or
other technological collection techniques or other forms of information
technology.
   Interested persons are requested to send comments regarding this
information collection by April 10, 2012, to: (1) The Office of
Information and Regulatory Affairs, Office of Management and Budget,
New Executive Office Building, Room 10202, 725 17th Street NW.,
Washington, DC 20503, Attention: Nicholas A. Fraser, the Desk Officer
for the United States Patent and Trademark Office, and via email at
nfraser@omb.eop.gov; and (2) The Board of Patent Appeals and
Interferences by electronic mail message over the Internet addressed to
inter_partes_review@uspto.gov, or by 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 Michael Tierney, Inter partes Review Proposed
Rules."
   Notwithstanding any other provision of law, no person is required
to respond to nor shall a 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,
Lawyers.

Proposed Amendments to the Regulatory Text

   For the reasons stated in the preamble, the Under Secretary of
Commerce for Intellectual Property and Director of the United States
Patent and Trademark Office propose to amend 37 CFR part 42 as proposed
to be added in the February 9, 2012, issue of the Federal Register as
follows:

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

   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,
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 129 

316, 321-326 and Leahy-Smith America Invents Act, Pub. L. 112-29,
sections 6(c), 6(f), and 18, 125 Stat. 284, 304, 311, and 329
(2011).

   2. Add subpart B to read as follows:
Subpart B - Inter Partes Review

General

§
42.100 Procedure; pendency.
42.101 Who may petition for inter partes review.
42.102 Time for filing.
42.103 Inter partes review fee.
42.104 Content of petition.
42.105 Service of petition.
42.106 Filing date.
42.107 Preliminary response to petition.

Instituting Inter Partes Review

42.108 Institution of inter partes review.

After Institution of Inter Partes Review

42.120 Patent owner response.
42.121 Amendment of the patent.
42.122 Multiple proceedings.
42.123 Filing of supplemental information.

Subpart B - Inter Partes Review

General

§ 42.100  Procedure; pendency.

   (a) An inter partes review is a trial subject to the procedures set
forth in subpart A of this part.
   (b) A claim in an unexpired patent shall be given its broadest
reasonable construction in light of the specification of the patent in
which it appears.
   (c) An inter partes review proceeding shall be administered such
that pendency before the Board after institution is normally no more
than one year. The time can be extended by up to six months for good
cause by the Chief Administrative Patent Judge.

§ 42.101  Who may petition for inter partes review.

   A person who is not the owner of a patent may file with the Office
a petition to institute an inter partes review of the patent unless:
   (a) Before the date on which the petition for review is filed, the
petitioner or real party in interest filed a civil action challenging
the validity of a claim of the patent;
   (b) The petition requesting the proceeding is filed more than one
year after the date on which the petitioner, the petitioner's real
party in interest, or a privy of the petitioner is served with a
complaint alleging infringement of the patent; or
   (c) The petitioner, the petitioner's real party in interest, or a
privy of the petitioner is estopped from challenging the claims on the
grounds identified in the petition.

§ 42.102  Time for filing.

   (a) A petition for inter partes review of a patent must be filed
after the later of:
   (1) The date that is nine months after the date of the grant of the
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 130 

patent or of the issuance of the reissue patent; or
   (2) If a post-grant review is instituted as set forth in subpart C
of this part, the date of the termination of such post-grant review.
   (b) The Director may impose a limit on the number of inter partes
reviews that may be instituted during each of the first four one-year
periods in which the amendment made to chapter 31 of title 35, United
States Code, is in effect by providing notice in the Office's Official
Gazette or Federal Register. Petitions filed after an established limit
has been reached will be deemed untimely.

§ 42.103  Inter partes review fee.

   (a) An inter partes review fee set forth in § 42.15(a) must
accompany the petition.
   (b) No filing date will be accorded to the petition until full
payment is received.

§ 42.104  Content of petition.

   In addition to the requirements of § 42.8 and 42.22, the
petition must set forth:
   (a) Grounds for standing. The petitioner must certify that the
patent for which review is sought is available for inter partes review
and that the petitioner is not barred or estopped from requesting an
inter partes review of the patent.
   (b) Identification of challenge. Provide a statement of the precise
relief requested for each claim challenged. The statement must identify
the following:
   (1) The claim;
   (2) The specific statutory grounds under 35 U.S.C. 102 or 103 on
which the challenge to the claim is based and the patents or printed
publications relied upon for each ground;
   (3) How the challenged claim is to be construed. Where the claim to
be construed contains a means-plus-function or step-plus-function
limitation as permitted under 35 U.S.C. 112, sixth paragraph, the
construction of the claim must identify the specific portions of the
specification that describe the structure, material, or acts
corresponding to each claimed function;
   (4) How the construed claim is unpatentable under the statutory
grounds identified in paragraph (b)(2) of this section. The petition
must specify where each element of the claim is found in the prior art
patents or printed publications relied upon; and
   (5) The exhibit number of the supporting evidence relied upon to
support the challenge and state the relevance of the evidence to the
challenge raised, including identifying specific portions of the
evidence that support the challenge. The Board may exclude or give no
weight to the evidence where a party has failed to state its relevance
or to identify specific portions of the evidence that support the
challenge.
   (c) A motion may be filed that seeks to correct a clerical or
typographical mistake in the petition. The grant of such a motion does
not change the filing date of the petition.

§ 42.105  Service of petition.

   In addition to the requirements of § 42.6, the petitioner must
serve the petition and exhibits relied upon in the petition as follows:
   (a) The petition and supporting evidence must be served on the
patent owner at the correspondence address of record for the subject
patent. The petitioner may additionally serve the petition and
supporting evidence on the patent owner at any other address known to
the petitioner as likely to effect service.
   (b) If the petitioner cannot effect service of the petition and
supporting evidence on the patent owner at the correspondence address
of record for the subject patent, the petitioner must immediately
contact the Board to discuss alternate modes of service.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 131 


§ 42.106  Filing date.

   (a) Complete petition. A petition to institute inter partes review
will not be accorded a filing date until the petition satisfies all of
the following requirements:
   (1) Complies with § 42.104;
   (2) Service of the petition on the correspondence address of record
as provided in § 42.105(a); and
   (3) Is accompanied by the fee to institute required in §
42.15(a).
   (b) Incomplete petition. Where a party files an incomplete
petition, no filing date will be accorded, and the Office will dismiss
the petition if the deficiency in the petition is not corrected within
one month from the notice of an incomplete petition.

§ 42.107  Preliminary response to petition.

   (a) The patent owner may file a preliminary response to the
petition. The response is limited to setting forth the reasons why no
inter partes review should be instituted under 35 U.S.C. 314. The
response can include evidence except as provided in paragraph (c) of
this section. The preliminary response is an opposition for purposes of
determining page limits under § 42.24.
   (b) Due date. The preliminary response must be filed no later than
two months after the date of a notice indicating that the request to
institute an inter partes review has been granted a filing date. A
patent owner may expedite the proceeding by filing an election to waive
the preliminary patent owner response.
   (c) No new testimonial evidence. The preliminary response shall not
present new testimony evidence beyond that already of record.
   (d) No amendment. The preliminary response shall not include any
amendment.
   (e) Disclaim Patent Claims. The patent owner may file a statutory
disclaimer under 35 U.S.C. 253(a) in compliance with § 1.321(a),
disclaiming one or more claims in the patent. No inter partes review
will be instituted based on disclaimed claims.

Instituting Inter Partes Review

§ 42.108  Institution of inter partes review.

   (a) When instituting inter partes review, the Board may authorize
the review to proceed on all or some of the challenged claims and on
all or some of the grounds of unpatentability asserted for each claim.
   (b) At any time prior to institution of inter partes review, the
Board may deny some or all grounds for unpatentability for some or all
of the challenged claims. Denial of a ground is a Board decision not to
institute inter partes review on that ground.
   (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, if unrebutted, 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 preliminary patent owner response where such a
response is filed.

After Institution of Inter Partes Review

§ 42.120  Patent owner response.

   (a) Scope. A patent owner may file a response to the petition
addressing any ground for unpatentability not already denied. A patent
owner response is filed as an opposition and is subject to the page
limits provided in § 42.24.
   (b) Due date for response. If no time for filing a patent owner
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response to a petition is provided in a Board order, the default date
for filing a patent owner response is two months from the date the
inter partes review was instituted.

§ 42.121  Amendment of the patent.

   (a) A patent owner may file one motion to amend a patent but only
after conferring with the Board. Any additional motions to amend may
not be filed without Board authorization.
   (b) A motion to amend must set forth:
   (1) The support in the original disclosure of the patent for each
claim that is added or amended; and
   (2) The support in an earlier filed disclosure for each claim for
which benefit of the filing date of the earlier filed disclosure is
sought.
   (c) A motion to amend the claims of a patent will not be authorized
where:
   (1) The amendment does not respond to a ground of unpatentability
involved in the trial; or
   (2) The amendment seeks to enlarge the scope of the claims of the
patent or introduce new subject matter.

§ 42.122  Multiple proceedings.

   Where another matter involving the patent is before the Office, the
Board may during the pendency of the inter partes review enter any
appropriate order regarding the additional matter including providing
for the stay, transfer, consolidation, or termination of any such
matter.

§ 42.123  Filing of supplemental information.

   Once a trial has been instituted, a petitioner may request
authorization to file a motion identifying supplemental information
relevant to a ground for which the trial has been instituted. The
request must be made within one month of the date the trial is
instituted.

January 31, 2012                                            DAVID J. KAPPOS
                  Under Secretary of Commerce for Intellectual Property and
                  Director of the United States Patent and Trademark Office
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 133 

Changes to Implement Post-Grant Review Proceedings
                            DEPARTMENT OF COMMERCE
                          Patent and Trademark Office
                                37 CFR Part 42
                         [Docket No. PTO-P-2011-0084]
                                 RIN 0651-AC72

              Changes to Implement Post-Grant Review Proceedings

AGENCY: United States Patent and Trademark Office, Commerce.

ACTION: Notice of proposed rulemaking.

SUMMARY: The United States Patent and Trademark Office (Office or
USPTO) proposes new rules to implement the provisions of the Leahy-
Smith America Invents Act that create a new post-grant review
proceeding to be conducted before the Patent Trial and Appeal Board
(Board). These provisions of the Leahy-Smith America Invents Act will
take effect on September 16, 2012, one year after the date of
enactment, and generally apply to patents issuing from applications
subject to first-inventor-to-file provisions of the Leahy-Smith America
Invents Act.

DATES: The Office solicits comments from the public on this proposed
rulemaking. Written comments must be received on or before April 10,
2012 to ensure consideration.

ADDRESSES: Comments should be sent by electronic mail message over the
Internet addressed to: post_grant_review@uspto.gov. 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 Michael Tierney, Post-Grant Review 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 eRulemaking Portal.
   Although comments may be submitted by postal mail, the Office
prefers to receive comments by electronic mail message over the
Internet because sharing comments with the public is more easily
accomplished. Electronic comments are preferred to be submitted in
plain text, but also may be submitted in ADOBE® portable
document format or MICROSOFT WORD® format. Comments not
submitted electronically should be submitted on paper in a format that
facilitates convenient digital scanning into ADOBE® portable
document format.
   The comments will be available for public inspection at the Board
of Patent Appeals and Interferences, 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/). Because comments will be made available for
public inspection, information that the submitter does not desire to
make public, such as an address or phone number, should not be included
in the comments.

FOR FURTHER INFORMATION CONTACT: Michael Tierney, Lead Administrative
Patent Judge, Sally Lane, Administrative Patent Judge, Scott Boalick,
Lead Administrative Patent Judge, and Robert Clarke, Administrative
Patent Judge, Board of Patent Appeals and Interferences, by telephone
at (571) 272-9797.

SUPPLEMENTARY INFORMATION: On September 16, 2011, the Leahy-Smith
America Invents Act was enacted into law (Pub. L. 112-29, 125 Stat. 284
(2011)). The purpose of the Leahy-Smith America Invents Act and these
proposed regulations is to establish a more efficient and streamlined
patent system that will improve patent quality and limit unnecessary
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and counterproductive litigation costs. The preamble of this notice
sets forth in detail the procedures by which the Board will conduct
post-grant review proceedings. The USPTO is engaged in a transparent
process to create a timely, cost-effective alternative to litigation.
Moreover, the rulemaking process is designed to ensure the integrity of
the trial procedures. See 35 U.S.C. 326(b). The proposed rules would
provide a set of rules relating to Board trial practice for post-grant
review.
   More grounds for seeking post-grant review will be available as
compared with inter partes review. The grounds for seeking post-grant
review includes any ground that could be raised under 35 U.S.C.
282(b)(2) or (3). Such grounds for post-grant review include grounds
that could be raised under 35 U.S.C. 102 or 103 including those based
on prior art consisting of patents or printed publications. Other
grounds available for post-grant review include 35 U.S.C. 101 and 112,
with the exception of compliance with the best mode requirement. In
contrast, the grounds for seeking inter partes review are limited to
issues raised under 35 U.S.C. 102 or 103 and only on the basis of prior
art consisting of patents or printed publications.
   Section 6 of the Leahy-Smith America Invents Act is entitled
"POST-GRANT REVIEW PROCEEDINGS." Section 6(d) of the Leahy-Smith
America Invents Act, entitled "POST-GRANT REVIEW," adds chapter 32 of
title 35, United States Code, also entitled "POST-GRANT REVIEW." In
particular, § 6(d) adds 35 U.S.C. 321-329. Public Law 112-29, 125
Stat. 284, 305-311 (2011).
   Section 6(d) of the Leahy-Smith America Invents Act adds 35 U.S.C.
321, entitled "Post-grant review." 35 U.S.C. 321(a) will provide
that, subject to the provisions of chapter 32 of title 35, United
States Code, a person who is not the owner of a patent may file a
petition with the Office to institute a post-grant review of the
patent. 35 U.S.C. 321(a) will also provide that the Director will
establish, by regulation, fees to be paid by the person requesting the
review, in such amounts as the Director determines to be reasonable,
considering the aggregate costs of the post-grant review. 35 U.S.C.
321(b) will provide that a petitioner in a post-grant review may
request to cancel as unpatentable one or more claims of a patent on any
ground that could be raised under 35 U.S.C. 282(b)(2) or (3) (relating
to invalidity of the patent or any claim). 35 U.S.C. 321(c) will
provide that a petition for post-grant review may only be filed not
later than the date that is nine months after the date of the grant of
the patent or of the issuance of a reissue patent.
   Section 6(d) of the Leahy-Smith America Invents Act adds 35 U.S.C.
322, entitled "Petitions." 35 U.S.C. 322(a) will provide that a
petition filed under 35 U.S.C. 321 may be considered only if: (1) The
petition is accompanied by payment of the fee established by the
Director under 35 U.S.C. 321; (2) the petition identifies all real
parties in interest; (3) the petition identifies, in writing and with
particularity, each claim challenged, the grounds on which the
challenge to each claim is based, and the evidence that supports the
grounds for the challenge to each claim, including (A) copies of
patents and printed publications that the petitioner relies upon in
support of the petition and (B) affidavits or declarations of
supporting evidence and opinions, if the petitioner relies on other
factual evidence or on expert opinions; (4) the petition provides such
other information as the Director may require by regulation; and (5)
the petitioner provides copies of any of the documents required under
paragraphs (2), (3), and (4) of 35 U.S.C. 322(a) to the patent owner
or, if applicable, the designated representative of the patent owner.
35 U.S.C. 322(b) will provide that, as soon as practicable after the
receipt of a petition under 35 U.S.C. 321, the Director will make the
petition available to the public.
   Section 6(d) of the Leahy-Smith America Invents Act adds 35 U.S.C.
323, entitled "Preliminary response to petition." 35 U.S.C. 323 will
provide that, if a post-grant review petition is filed under 35 U.S.C.
321, the patent owner has the right to file a preliminary response to
the petition, within a time period set by the Director, that sets forth
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reasons why no post-grant review should be instituted based upon the
failure of the petition to meet any requirement of chapter 32 of title
35, United States Code.
   Section 6(d) of the Leahy-Smith America Invents Act adds 35 U.S.C.
324, entitled "Institution of post-grant review." 35 U.S.C. 324(a)
will provide that the Director may not authorize a post-grant review to
be instituted, unless the Director determines that the information
presented in the petition filed under 35 U.S.C. 321, if such
information is not rebutted, would demonstrate that it is more likely
than not that at least one of the claims challenged in the petition is
unpatentable. 35 U.S.C. 324(b) will provide that the determination
required under 35 U.S.C. 324(a) may also be satisfied by a showing that
the petition raises a novel or unsettled legal question that is
important to other patents or patent applications. 35 U.S.C. 324(c)
will provide that the Director will determine whether to institute a
post-grant review under chapter 32 of title 35, United States Code,
pursuant to a petition filed under 35 U.S.C. 321 within three months
after: (1) Receiving a preliminary response to the petition under 35
U.S.C. 323; or (2) if no such preliminary response is filed, the last
date on which such response may be filed. 35 U.S.C. 324(d) will provide
that the Director will notify the petitioner and patent owner, in
writing, of the Director's determination under 35 U.S.C. 324(a) or (b),
and will make such notice available to the public as soon as is
practicable. 35 U.S.C. 324(d) will also provide that such notice will
include the date on which the review will commence. 35 U.S.C. 324(e)
will provide that the determination by the Director whether to
institute a post-grant review under 35 U.S.C. 324 will be final and
nonappealable.
   Section 6(d) of the Leahy-Smith America Invents Act adds 35 U.S.C.
325, entitled "Relation to other proceedings or actions." 35 U.S.C.
325(a)(1) will provide that a post-grant review may not be instituted
under chapter 32 of title 35, United States Code, if, before the date
on which the petition for such a review is filed, the petitioner or
real party in interest filed a civil action challenging the validity of
a claim of the patent. 35 U.S.C. 325(a)(2) will provide for an
automatic stay of a civil action brought by the petitioner or real
party in interest challenging the validity of a claim of the patent and
filed on or after the date on which the petition for post-grant review
was filed, until certain specified conditions are met. 35 U.S.C.
325(a)(3) will provide that a counterclaim challenging the validity of
a claim of a patent does not constitute a civil action challenging the
validity of a claim of a patent for purposes of 35 U.S.C. 325(a).
   35 U.S.C. 325(b) will provide that if a civil action alleging
infringement of a patent is filed within three months after the date on
which the patent is granted, the court may not stay its consideration
of the patent owner's motion for a preliminary injunction against
infringement of the patent on the basis that a petition for post-grant
review has been filed or instituted under chapter 32 of title 35,
United States Code.
   35 U.S.C. 325(c) will provide that if more than one petition for a
post-grant review under chapter 32 of title 35, United States Code, is
properly filed against the same patent and the Director determines that
more than one of these petitions warrants the institution of a post-
grant review under 35 U.S.C. 324, the Director may consolidate such
reviews into a single post-grant review.
   35 U.S.C. 325(d) will provide that, notwithstanding 35 U.S.C. 135(a),
251, and 252, and chapter 30 of title 35, United States Code, during the
pendency of any post-grant review under chapter 32 of title 35, United
States Code, if another proceeding or matter involving the patent is
before the Office, the Director may determine the manner in which the
post-grant review or other proceeding or matter may proceed, including
providing for the stay, transfer, consolidation, or termination of any
such matter or proceeding. 35 U.S.C. 325(d) will also provide that, in
determining whether to institute or order a proceeding under chapter 32
of title 35, United States Code, chapter 30 of title 35, United States
Code, or chapter 31 of title 35, United States Code, the Director may
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take into account whether, and reject the petition because, the same or
substantially the same prior art or arguments previously were presented
to the Office.
   35 U.S.C. 325(e)(1) will provide that the petitioner in a post-
grant review of a claim in a patent under chapter 32 of title 35,
United States Code, that results in a final written decision under 35
U.S.C. 328(a), or the real party in interest or privy of the
petitioner, may not request or maintain a proceeding before the Office
with respect to that claim on any ground that the petitioner raised or
reasonably could have raised during that post-grant review. 35 U.S.C.
325(e)(2) will provide for estoppel against a post-grant review
petitioner, or the real party in interest or privy of the petitioner,
in certain civil actions and certain other proceedings before the
International Trade Commission if that post-grant review results in a
final written decision under 35 U.S.C. 328(a).
   35 U.S.C. 325(f) will provide that a post-grant review may not be
instituted under chapter 32 of title 35, United States Code, if the
petition requests cancellation of a claim in a reissue patent that is
identical to or narrower than a claim in the original patent from which
the reissue patent was issued, and the time limitations in 35 U.S.C.
321(c) would bar filing a petition for a post-grant review for such
original patent.
   Section 6(d) of the Leahy-Smith America Invents Act adds 35 U.S.C.
326, entitled "Conduct of post-grant review." 35 U.S.C. 326(a) will
provide that the Director will prescribe regulations: (1) Providing
that the file of any proceeding under chapter 32 of title 35, United
States Code, will be made available to the public, except that any
petition or document filed with the intent that it be sealed will, if
accompanied by a motion to seal, be treated as sealed pending the
outcome of the ruling on the motion; (2) setting forth the standards
for the showing of sufficient grounds to institute a review under 35
U.S.C. 324(a) and (b); (3) establishing procedures for the submission
of supplemental information after the petition is filed; (4)
establishing and governing a post-grant review under chapter 32 of
title 35, United States Code, and the relationship of such review to
other proceedings under title 35, United States Code; (5) setting forth
standards and procedures for discovery of relevant evidence, including
that such discovery will be limited to evidence directly related to
factual assertions advanced by either party in the proceeding; (6)
prescribing sanctions for abuse of discovery, abuse of process, or any
other improper use of the proceeding, such as to harass or to cause
unnecessary delay or an unnecessary increase in the cost of the
proceeding; (7) providing for protective orders governing the exchange
and submission of confidential information; (8) providing for the
filing by the patent owner of a response to the petition under 35
U.S.C. 323 after a post-grant review has been instituted, and requiring
that the patent owner file with such response, through affidavits or
declarations, any additional factual evidence and expert opinions on
which the patent owner relies to support the response; (9) setting
forth standards and procedures for allowing the patent owner to move to
amend the patent under 35 U.S.C. 326(d) to cancel a challenged claim or
propose a reasonable number of substitute claims, and ensuring that any
information submitted by the patent owner in support of any amendment
entered under 35 U.S.C. 326(d) is made available to the public as part
of the prosecution history of the patent; (10) providing either party
with the right to an oral hearing as part of the proceeding; (11)
requiring that the final determination in any post-grant review be
issued not later than one year after the date on which the Director
notices the institution of a proceeding under chapter 32 of title 35,
United States Code, except that the Director may, for good cause shown,
extend the one-year period by not more than six months, and may adjust
the time periods in this paragraph in the case of joinder under 35
U.S.C. 325(c); and (12) providing the petitioner with at least one
opportunity to file written comments within a time period established
by the Director.
   35 U.S.C. 326(b) will provide that in prescribing regulations under
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35 U.S.C. 326, the Director will consider the effect of any such
regulation on the economy, the integrity of the patent system, the
efficient administration of the Office, and the ability of the Office
to complete timely proceedings instituted under chapter 32 of title 35,
United States Code.
   35 U.S.C. 326(c) will provide that the Patent Trial and Appeal
Board will, in accordance with 35 U.S.C. 6, conduct each post-grant
review instituted under chapter 32 of title 35, United States Code.
   35 U.S.C. 326(d)(1) will provide that during a post-grant review
instituted under chapter 32 of title 35, United States Code, the patent
owner may file a single motion to amend the patent in one or more of
the following ways: (A) Cancel any challenged patent claim; and/or (B)
for each challenged claim, propose a reasonable number of substitute
claims. 35 U.S.C. 326(d)(2) provides that additional motions to amend
may be permitted upon the joint request of the petitioner and the
patent owner to materially advance the settlement of a proceeding under
35 U.S.C. 327, or upon the request of the patent owner for good cause
shown. 35 U.S.C. 326(d)(3) will provide that an amendment under 35
U.S.C. 326(d) may not enlarge the scope of the claims of the patent or
introduce new matter. 35 U.S.C. 326(e) will provide that in a post-
grant review instituted under chapter 32 of title 35, United States
Code, the petitioner will have the burden of proving a proposition of
unpatentability by a preponderance of the evidence.
   Section 6(d) of the Leahy-Smith America Invents Act adds 35 U.S.C.
327, entitled "Settlement." 35 U.S.C. 327(a) will provide that a
post-grant review instituted under chapter 32 of title 35, United
States Code, will be terminated with respect to any petitioner upon the
joint request of the petitioner and the patent owner, unless the Office
has decided the merits of the proceeding before the request for
termination is filed. 35 U.S.C. 327(a) will also provide that if the
post-grant review is terminated with respect to a petitioner under 35
U.S.C. 327, no estoppel under 35 U.S.C. 325(e) will attach to the
petitioner, or to the real party in interest or privy of the
petitioner, on the basis of that petitioner's institution of that post-
grant review. 35 U.S.C. 327(a) will further provide that if no
petitioner remains in the post-grant review, the Office may terminate
the post-grant review or proceed to a final written decision under 35
U.S.C. 328(a).
   35 U.S.C. 327(b) will provide that any agreement or understanding
between the patent owner and a petitioner, including any collateral
agreements referred to in such agreement or understanding, made in
connection with, or in contemplation of, the termination of a post-
grant review under 35 U.S.C. 327 will be in writing, and a true copy of
such agreement or understanding will be filed in the Office before the
termination of the post-grant review as between the parties. 35 U.S.C.
327(b) will also provide that at the request of a party to the proceeding,
the agreement or understanding will be treated as business confidential
information, will be kept separate from the file of the involved patents,
and will be made available only to Federal Government agencies on written
request, or to any person on a showing of good cause.
   Section 6(d) of the Leahy-Smith America Invents Act adds 35 U.S.C.
328, entitled "Decision of the Board." 35 U.S.C. 328(a) will provide
that if a post-grant review is instituted and not dismissed under
chapter 32 of title 35, United States Code, the Patent Trial and Appeal
Board will issue a final written decision with respect to the
patentability of any patent claim challenged by the petitioner and any
new claim added under 35 U.S.C. 326(d).
   35 U.S.C. 328(b) will provide that if the Patent Trial and Appeal
Board issues a final written decision under 35 U.S.C. 328(a) and the
time for appeal has expired or any appeal has terminated, the Director
will issue and publish a certificate canceling any claim of the patent
finally determined to be unpatentable, confirming any claim of the
patent determined to be patentable, and incorporating in the patent by
operation of the certificate any new or amended claim determined to be
patentable.
   35 U.S.C. 328(c) will provide that any proposed amended or new
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claim determined to be patentable and incorporated into a patent
following a post-grant review under chapter 32 of title 35, United
States Code, will have the same effect as that specified in 35 U.S.C.
252 for reissued patents on the right of any person who made,
purchased, or used within the United States, or imported into the
United States, anything patented by such proposed amended or new claim,
or who made substantial preparation therefor, before the issuance of a
certificate under 35 U.S.C. 328(b).
   35 U.S.C. 328(d) will provide that the Office will make available
to the public data describing the length of time between the
institution of, and the issuance of, a final written decision under 35
U.S.C. 328(a) for each post-grant review.
   Section 6(d) of the Leahy-Smith America Invents Act adds 35 U.S.C.
329, entitled "Appeal." 35 U.S.C. 329 will provide that a party
dissatisfied with the final written decision of the Patent Trial and
Appeal Board under 35 U.S.C. 328(a) may appeal the decision pursuant to
35 U.S.C. 141-144. 35 U.S.C. 329 will also provide that any party to
the post-grant review will have the right to be a party to the appeal.
   Section 6(f) of the Leahy-Smith America Invents Act is entitled
"REGULATIONS AND EFFECTIVE DATE." Section 6(f)(1) of the Leahy-Smith
America Invents Act provides that the Director will, not later than the
date that is one year after the date of the enactment of the Leahy-
Smith America Invents Act, issue regulations to carry out chapter 32 of
title 35, United States Code, as added by § 6(d) of the Leahy-Smith
America Invents Act.
   Section 6(f)(2)(A) of the Leahy-Smith America Invents Act provides
that the amendments made by § 6(d) of the Leahy-Smith America
Invents Act will take effect upon the expiration of the one-year period
beginning on the date of the enactment of the Leahy-Smith America
Invents Act and, except as provided in § 18 of the America Invents
Act and in § 6(f)(3) of the Leahy-Smith America Invents Act, will
apply only to patents described in § 3(n)(1) of the Leahy-Smith
America Invents Act. Section 3(n) of the Leahy-Smith America Invents
Act is entitled "EFFECTIVE DATE." Section 3(n)(1) of the Leahy-Smith
America Invents Act provides:

   (n) EFFECTIVE DATE. -
   (1) IN GENERAL. - Except as otherwise provided in this section,
the amendments made by this section shall take effect upon the
expiration of the 18-month period beginning on the date of the
enactment of this Act, and shall apply to any application for
patent, and to any patent issuing thereon, that contains or
contained at any time -
   (A) a claim to a claimed invention that has an effective filing
date as defined in section 100(i) of title 35, United States Code,
that is on or after the effective date described in this paragraph;
or
   (B) a specific reference under section 120, 121, or 365(c) of
title 35, United States Code, to any patent or application that
contains or contained at any time such a claim.

   For example, the post-grant review provisions will apply to patents
issued from applications that have an effective filing date on or after
March 16, 2013, eighteen months after the date of enactment.
   Section 6(f)(2)(B) of the Leahy-Smith America Invents Act provides
that the Director may impose a limit on the number of post-grant
reviews that may be instituted under chapter 32 of title 35, United
States Code, during each of the first four one-year periods in which
the amendments made by § 6(d) of the Leahy-Smith America Invents
Act are in effect.
   Section 6(f)(3) of the Leahy-Smith America Invents Act is entitled
"PENDING INTERFERENCES." Section 6(f)(3)(A) of the Leahy-Smith
America Invents Act provides that the Director will determine, and
include in the regulations issued under § 6(f)(1) of the Leahy-
Smith America Invents Act, the procedures under which an interference
commenced before the effective date set forth in § 6(f)(2)(A) of
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 139 

the Leahy-Smith America Invents Act is to proceed, including whether
such interference: (i) is to be dismissed without prejudice to the
filing of a petition for a post-grant review under chapter 32 of title
35, United States Code; or (ii) is to proceed as if the Leahy-Smith
America Invents Act had not been enacted.
   Section 6(f)(3)(B) of the Leahy-Smith America Invents Act provides
that, for purposes of an interference that is commenced before the
effective date set forth in § 6(f)(2)(A) of the Leahy-Smith America
Invents Act, the Director may deem the Patent Trial and Appeal Board to
be the Board of Patent Appeals and Interferences, and may allow the
Patent Trial and Appeal Board to conduct any further proceedings in
that interference.
   Section 6(f)(3)(C) of the Leahy-Smith America Invents Act provides
that the authorization to appeal or have remedy from derivation
proceedings in §§ 141(d) and 146 of title 35, United States
Code, as amended, and the jurisdiction to entertain appeals from
derivation proceedings in 28 U.S.C. 1295(a)(4)(A), as amended, will be
deemed to extend to any final decision in an interference that is
commenced before the effective date set forth in § 6(f)(2)(A) of
the Leahy-Smith America Invents Act and that is not dismissed pursuant
to this paragraph.

Discussion of Specific Rules

   The proposed new rules would implement the provisions of the Leahy-
Smith America Invents Act for instituting and conducting post-grant
review proceedings before the Patent Trial and Appeal Board (Board). 35
U.S.C. 326(a)(4), as added by the Leahy-Smith America Invents Act,
provides that the Director will prescribe regulations establishing and
governing post-grant review and the relationship of the review to other
proceedings under title 35 of the United States Code. Public Law 112-
29, § 6(d), 125 Stat. 284, 308 (2011). In particular, this notice
proposes to add a new subpart C to 37 CFR part 42 to provide rules
specific to post-grant reviews.
   Additionally, the Office in a separate rulemaking is proposing to add
part 42, including subpart A, (RIN 0651-AC70) that will include a
consolidated set of rules relating to Board trial practice. Specifically,
the proposed subpart A of part 42 would set forth the policies, practices,
and definitions common to all trial proceedings before the Board. The
proposed rules in the instant notice and discussion below may reference
the proposed rules in subpart A of part 42. Furthermore, the Office in
separate rulemakings is proposing to add a new subpart B to 37 CFR part
42 (RIN 0651-AC71) to provide rules specific to inter partes reviews, a
new subpart D to 37 CFR part 42 (RIN 0651-AC73; RIN 0651-AC75) to
provide rules specific to the transitional program for covered business
method patents, and a new subpart E to 37 CFR part 42 (RIN 0651-AC74)
to provide rules specific to derivation proceedings.
   Title 37 of the Code of Federal Regulations, Chapter I, Part 42,
Subpart C, entitled "Post-Grant Review" is proposed to be added as
follows:

   Section 42.200: Proposed § 42.200 would set forth policy
considerations for post-grant review proceedings.
   Proposed § 42.200(a) would provide that a post-grant review is
a trial and subject to the rules set forth in subpart A.
   Proposed § 42.200(b) would provide that a claim in an unexpired
patent shall be given its broadest reasonable construction in light of
the specification in which it appears. This proposed rule would be
consistent with longstanding established principles of claim
construction before the Office. In re Am. Acad. of Sci. Tech Ctr., 367
F.3d 1359, 1364 (Fed. Cir. 2004); In re Yamamoto, 740 F.2d 1569, 1571
(Fed. Cir. 1984). As explained in Yamamoto, a party's ability to amend
claims to avoid prior art distinguishes Office proceedings from
district court proceedings and justifies the difficult standard for
claim interpretation. Yamamoto, 740 F.2d at 1572.
   Proposed § 42.200(c) would provide a one-year timeframe for
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 140 

administering the proceeding after institution, with up to a six-month
extension for good cause. This proposed rule is consistent with 35
U.S.C. 326(a)(11), which sets forth statutory time frames for post-
grant review.
   Proposed § 42.200(d) would provide that interferences commenced
within one year of enactment of the Leahy-Smith America Invents Act
shall proceed under part 41 of 37 CFR except as the Chief
Administrative Patent Judge may otherwise order in the interests of
justice. The expectation is that dismissal will be rarely, if ever,
ordered. Hence, any case where such an order arises would be
exceptional and should be handled as its circumstances require. This
proposed rule is consistent with § 6(f)(3) of the Leahy-Smith
America Invents Act, which provides that the Director shall include in
regulations the procedures under which an interference commenced before
the effective date of the act is to proceed.

   Section 42.201: Proposed § 42.201 would provide who may file a
petition for post-grant review.
   Proposed § 42.201(a) would provide that a person who is not the
patent owner may file a petition to institute a post-grant review,
unless the petitioner or real party in interest had already filed a
civil action challenging the validity of a claim of the patent. The
proposed rule would follow the statutory language of 35 U.S.C.
325(a)(1), which provides that post-grant reviews are barred by prior
civil action.
   Proposed § 42.201(b) would provide that a petition may not be
filed where the petitioner, the petitioner's real party in interest, or
a privy of the petitioner is estopped from challenging the claims on
the grounds identified in the petition. The proposed rule is consistent
with 35 U.S.C. 325(e)(1) and 315(e)(1), as amended, which provide for
estoppel based upon a final written decision in a post-grant review, a
covered business method review, or inter partes review.

   Section 42.202: Proposed § 42.202 would set forth the
timeliness requirement for filing a post-grant review petition.
   Proposed § 42.202(a) would provide that a petition for a post-
grant review of a patent must be filed no later than the date that is
nine months after the date of the grant of a patent or of the issuance
of a reissue patent. Proposed § 42.202(a) would also provide that a
petition may not request a post-grant review for a claim in a reissue
patent that is identical to or narrower than a claim in the original
patent from which the reissue patent was issued unless the petition is
filed not later than the date that is nine months after the date of the
grant of the original patent. The proposed rule would be consistent
with the requirements of 35 U.S.C. 321(c).
   Proposed § 42.202(b) would provide that the Director may limit
the number of post-grant reviews that may be instituted during each of
the first four 1-year periods after post-grant review takes effect.
This proposed rule is consistent with § 6(f)(2)(B) of the Leahy-
Smith America Invents Act (Pub. L. 112-29, 125 Stat. 284, 311 (2011)),
which provides for graduated implementation of post-grant reviews. The
Office, however, does not expect to limit the number of petitions at
this time.

   Section 42.203: Proposed § 42.203 would provide that a fee must
accompany a petition for post-grant review and that no filing date will
be accorded until full payment is received. This proposed rule is
consistent with 35 U.S.C. 322(a)(1), which provides that a petition may
only be considered if the petition is accompanied by the payment of the
fee established by the Director.

   Section 42.204: Proposed § 42.204 would provide for the content
of petitions to institute a post-grant review. The proposed rule is
consistent with 35 U.S.C. 322(a)(4), which allows the Director to
prescribe regulations concerning the information provided with the
petition.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 141 

   Proposed § 42.204(a) would provide that a petition must
demonstrate that the petitioner has standing. To establish standing, a
petitioner, at a minimum, must certify that the patent is available for
post-grant review and that the petitioner is not barred or estopped
from requesting a post-grant review. This proposed requirement attempts
to ensure that a party has standing to file the post-grant review and
would help prevent spuriously-instituted post-grant reviews. Facially,
improper standing is a basis for denying the petition without
proceeding to the merits of the petition.
   Proposed § 42.204(b) would require that the petition identify
the precise relief requested for the claims challenged. Specifically,
the proposed rule would require that the petition identify each claim
being challenged, the specific grounds on which each claim is
challenged, how the claims are to be construed, how the claims as
construed are unpatentable, why the claims as construed are
unpatentable under the identified grounds, and the exhibit numbers of
the evidence relied upon with a citation to the portion of the evidence
that is relied upon to support the challenge. This proposed rule is
consistent with 35 U.S.C. 322(a)(3), which requires that the petition
identify, in writing and with particularity, each claim challenged, the
grounds on which the challenge to each claim is based, and the evidence
supporting the challenge. It is also consistent with 35 U.S.C.
322(a)(4), which allows the Director to require additional information
as part of the petition. The proposed rule would provide an efficient
means for identifying the legal and factual basis satisfying the
threshold for instituting a proceeding and would provide the patent
owner with a minimum level of notice as to the basis for the challenge
to the claims.
   Proposed § 42.204(c) would provide that a petitioner seeking to
correct clerical or typographical mistakes in a petition could file a
procedural motion to correct the mistakes. The proposed rule would also
provide that the grant of such a motion would not alter the filing date
of the petition.

   Section 42.205: Proposed § 42.205 would provide petition and
exhibit service requirements in addition to the service requirements of
§ 42.6.
   Proposed § 42.205(a) would require the petitioner to serve the
patent owner at the correspondence address of record for the patent,
and permits service at any other address known to the petitioner as
likely to effect service as well. Once a patent has issued,
communications between the Office and the patent owner often suffer.
Ray v. Lehman, 55 F.3d 606 (Fed. Cir. 1995) (patentee's failure to
maintain correspondence address contributed to failure to pay
maintenance fee and therefore expiration of the patent). While the
proposed rule requires service at the correspondence address of record
in the patent, the petitioner will already be in communication with the
patent owner, in many cases, at a better service address than the
official correspondence address.
   Proposed § 42.205(b) would address the situation where service
to a patent's correspondence address does not result in actual service
on the patent owner. When the petitioner becomes aware of a service
problem, it must promptly advise the Board of the problem. The
petitioner may be required to certify that it is not aware of any
better address for service of the patent owner. The Board may authorize
other forms of service, such as service by publication in the Official
Gazette of the United States Patent and Trademark Office.

   Section 42.206: Proposed § 42.206 would provide for the filing
date requirements of a post-grant review petition.
   Proposed § 42.206(a) would set forth the requirements for a
complete petition. 35 U.S.C. 322 states that a petition may only be
considered when the petition identifies all the real parties in
interest, when a copy of the petition is provided to the patent owner
or the owner's representative, and that the petition be accompanied by
the fee established by the Director. Consistent with the statute, the
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 142 

proposed rule would require that a complete petition be filed along
with the fee and that it be served upon the patent owner.
   Proposed § 42.206(b) would provide one month to correct
defective requests to institute a post-grant review, unless the
statutory deadline in which to file a petition for post-grant review
has expired. The proposed rule is consistent with the requirement of 35
U.S.C. 322 that the Board may not consider a petition that fails to
meet the statutory requirements for a petition. In determining whether
to grant a filing date, the Board would review a petition for
procedural compliance. Where a procedural defect is noted, e.g.,
failure to state the claims being challenged, the Board would notify
the petitioner that the petition was incomplete and identify any non-
compliance issues.

   Section 42.207: Proposed § 42.207(a) would provide that the
patent owner may file a preliminary response to the petition. The rule
is consistent with 35 U.S.C. 323, which provides for such a response.
   Proposed § 42.207(b) would provide that the due date for the
preliminary response to petition is no later than two months from the
date of the notice that the request to institute a post-grant review
has been granted a filing date. This proposed rule is consistent with
35 U.S.C. 323, which provides that the Director shall set a time period
for filing the preliminary patent owner response.
   Within three months from the filing of the preliminary patent owner
response, or three months from the date such a response was due, the
Board would determine whether to institute the review. A patent owner
seeking a shortened period for the determination may wish to file a
preliminary response well before the date the response is due,
including filing a paper stating that no preliminary response will be
filed. No adverse inference will be drawn where a patent owner elects
not to file a response or elects to waive the response.
   Proposed § 42.207(c) would provide that the preliminary patent
owner response would not be allowed to present new testimony evidence,
for example, expert witness testimony on patentability. 35 U.S.C. 323
provides that a preliminary patent owner response set forth reasons why
no post-grant review should be instituted. In contrast, 35 U.S.C.
326(a)(8) provides for a patent owner response after institution and
requires the presentation, through affidavits or declarations, of any
additional factual evidence and expert opinions on which the patent
owner relies in support of the response. The difference in statutory
language demonstrates that 35 U.S.C. 323 does not permit for the
presentation of evidence as a matter of right in the form of testimony
in support of a preliminary patent owner response, and the proposed
rule reflects this distinction. In certain instances, however, a patent
owner may be granted additional discovery before filing their
preliminary response and submit any testimonial evidence obtained
through the discovery. For example, additional discovery may be
authorized where patent owner raises sufficient concerns regarding the
petitioner's certification of standing.
   Although 35 U.S.C. 324 does not require that a preliminary patent
owner response be considered, the Board expects to consider such a
response in all but exceptional cases.
   Proposed § 42.207(d) would provide that the preliminary patent
owner response would not be allowed to include any amendment. See
proposed § 42.221 for filing a motion to amend the patent after a
post-grant review has been instituted.
   Proposed § 42.207(e) would provide that the patent owner may
file a statutory disclaimer under 35 U.S.C. 253(a) in compliance with
§ 1.321(a), disclaiming one or more claims in the patent, and no
post-grant review will be instituted based on disclaimed claims.

   Section 42.208: Proposed § 42.208 would provide for the
institution of a post-grant review.
   35 U.S.C. 324(a), as amended, states that the Director may not
authorize a post-grant review to be instituted, unless the Director
determines that the information in the petition, if such information is
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 143 

not rebutted, demonstrate that it is more likely than not at least one
of the claims challenged in the petition is unpatentable.
Alternatively, the Director may institute a post-grant review by a
showing that the petition raises a novel or unsettled legal question
that is important to other patents or patent applications. Proposed
§ 42.208 is consistent with this statutory requirement and
identifies how the Board may authorize such a review to proceed.
   Proposed § 42.208(a) would provide that the Board may authorize
the review to proceed on all or some of the challenged claims and on
all or some of the grounds of unpatentability asserted for each claim.
Specifically, in instituting the review, the Board would authorize the
review to proceed on the challenged claims for which the threshold
requirements for the proceeding have been met. The Board would identify
which of the grounds the review will proceed upon on a claim-by-claim
basis. Any claim or issue not included in the authorization for review
would not be part of the post-grant review. The Office intends to
publish a notice of the institution of a post-grant review in the
Official Gazette.
   Proposed § 42.208(b) would provide that the Board, prior to
institution of a review, may deny some or all grounds for
unpatentability on some or all of the challenged claims. This proposed
rule is consistent with the efficient administration of the Office, which
is a consideration in prescribing post-grant review regulations under
35 U.S.C. 326(b).
   Proposed § 42.208(c) would provide that the institution may be
based on a more likely than not standard and is consistent with the
requirements of 35 U.S.C. 324(a).
   Proposed § 42.208(d) would provide that a determination under
§ 42.208(c) may be satisfied by a showing that the petition raises
a novel or unsettled legal question that is important to other patents
or patent applications. This proposed rule is consistent with 35 U.S.C.
324(b). The expectation is that this ground for a post-grant review
would be used sparingly.

   Section 42.220: Proposed § 42.220 would set forth the procedure
in which the patent owner may file a patent owner response.
   Proposed § 42.220(a) would provide for a patent owner response
and is consistent with the requirements of 35 U.S.C. 326(a)(8).
   Proposed § 42.220(b) would provide that if no time for filing a
patent owner response to a petition is provided in a Board order, the
default time for filing the response would be two months from the date
the post-grant review is instituted. The Board's experience with patent
owner responses is that two months provides a sufficient amount of time
to respond in a typical case, especially as the patent owner would
already have been provided two months to file a preliminary patent
owner response prior to institution. Additionally, the proposed time
for response is consistent with the requirement that the trial be
conducted such that the Board renders a final decision within one year
of the institution of the review. 35 U.S.C. 326(a)(11).

   Section 42.221: Proposed § 42.221 would provide a procedure for
a patent owner to file motions to amend the patent.
   Proposed § 42.221(a) would make it clear that the first motion
to amend need not be authorized by the Board. If the motion complies
with the timing and procedural requirements, the motion would be
entered. Additional motions to amend would require prior Board
authorization. All motions to amend, even if entered, will not
automatically result in entry of the proposed amendment into the
patent.
   The requirement to consult the Board reflects the Board's need to
regulate the substitution of claims and the amendment of the patent to
control unnecessary proliferation of issues and abuses. The proposed
rule aids in the efficient administration of the Office and the timely
completion of the review. 35 U.S.C. 326(b).
   Proposed § 42.221(b) would provide that a motion to amend the
claims must set forth: (1) The support in the original disclosure of
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 144 

the patent for each claim that is added or amended, and (2) the support
in an earlier filed disclosure for each claim for which benefit of the
filing date of the earlier filed disclosure is sought.
   Proposed § 42.221(c) would provide that a motion to amend the
claims will not be authorized where the amendment does not respond to
the ground of unpatentability involved in the trial or seeks to enlarge
the scope of the claims or introduce new matter.
   The proposed rule aids the efficient administration of the Office
and the timely completion of the review, 35 U.S.C. 326(b), and is also
consistent with 35 U.S.C. 326(d)(3), which prohibits enlarging the
scope of claims or introducing new matter.
   Under the proposed rules, a patent owner may request filing more
than one motion to amend its claims during the course of the
proceeding. Additional motions to amend may be permitted upon a
demonstration of good cause by the patent owner. In considering whether
good cause is shown, the Board will take into account how the filing of
such motions would impact the timely completion of the proceeding and
the additional burden placed on the petitioner. Specifically, belated
motions to amend may cause the integrity and efficiency of the review
to suffer as the petitioner may be required to devote significant time
and resources on claims that are of constantly changing scope.
Furthermore, due to time constraints, motions to amend late in the
process may not provide a petitioner a full and fair opportunity to
respond to the newly presented subject matter. Accordingly, the longer
a patent owner waits to request authorization to file an additional
motion to amend, the higher the likelihood the request will be denied.
Similarly, motion to amend may be permitted upon a joint request of the
petitioner and the patent owner to advance settlement where the motion
does not jeopardize the ability of the Office to timely complete the
proceeding.

   Section 42.222: Proposed § 42.222 would prescribe a rule
consistent with the requirements of 35 U.S.C. 325(d) regarding multiple
proceedings involving the subject patent. When there is a question of a
stay concerning a matter for which a statutory time period is running
in one of the proceedings, where the stay would impact the ability of
the Office to meet the statutory deadline, it is expected that the
Director would be consulted prior to issuance of a stay, given that the
stay would impact the ability of the Office to meet the statutory
deadline for completing the post-grant review. For example, it is
expected that the Board would consult the Director prior to the
issuance of a stay in an ex parte reexamination proceeding where the
three month statutory time period under 35 U.S.C. 303 is running.

   Section 42.223: Proposed § 42.223 would provide for the filing
of supplemental information. 35 U.S.C. 326(a)(3) provides that the
Director shall establish regulations establishing procedures for filing
supplemental information after the petition is filed. 35 U.S.C. 324(a)
provides that the institution of a post-grant review is based upon the
information filed in the petition under 35 U.S.C. 321 and any response
filed under 35 U.S.C. 323. As the institution of the post-grant review
is not based upon supplemental information, the proposed rule would
provide that motions identifying supplemental information be filed
after the institution of the post-grant review.

   Section 42.224: Proposed § 42.224 would provide that additional
discovery in a post-grant review is limited to evidence directly
related to factual assertions advanced by a party to the proceeding and
that the standard for additional discovery is good cause. The proposed
rule is consistent with 35 U.S.C. 326(a)(5), which provides that the
Director shall prescribe regulations setting forth the standards and
procedures for discovery of relevant evidence that is directly related
to factual assertions by either party.
   While an interests-of-justice standard will be employed in granting
additional discovery in inter partes reviews and derivation
proceedings, new subpart C will provide that a good cause standard is
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 145 

employed in post-grant reviews, and by consequence, in covered business
method patent reviews. Good cause and interests of justice are closely
related standards, but on balance, the interests-of-justice standard is
slightly higher than good cause. While a good cause standard requires a
party to show a specific factual reason to justify the needed
discovery, interests of justice would mean that the Board would look at
all relevant factors. The interests-of-justice standard covers
considerable more ground than the good cause standard, and in using
such a standard the Board will attempt to consider whether the additional
discovery is necessary in light of "the totality of the relevant
circumstances." U.S. v. Roberts, 978 F.2d 17, 22 (1st Cir. 1992).

Rulemaking Considerations

   A. Administrative Procedure Act (APA): This notice proposes rules
of practice concerning the procedure for requesting a post-grant or
covered business method patent review, and the trial process after
initiation of such a review. The changes being proposed in this notice
do not change the substantive criteria of patentability. These proposed
changes involve rules of agency practice and procedure and/or
interpretive rules. See Bachow Commc'ns Inc. v. FCC, 237 F.3d 683, 690
(DC 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 standard 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).
   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), does 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)). The Office, however, is publishing these changes and the
Initial Regulatory Flexibility Act analysis, below, for comment as it
seeks the benefit of the public's views on the Office's proposed
implementation of these provisions of the Leahy-Smith America Invents
Act.
   B. Regulatory Flexibility Act: The Office estimates that 50
petitions for post-grant and covered business method patent review will
be filed in fiscal year 2013. This will be the first fiscal year in
which the review proceeding will be available for an entire fiscal
year.
   In fiscal year 2013, it is expected that no post-grant review
petitions will be received, other than those filed under the
transitional program for covered business method patents. Thus, the
estimated number of post-grant and covered business method patent
review petitions is based on the number of inter partes reexamination
requests filed in fiscal year 2011 for patents having an original
classification in class 705 of the United States Patent Classification
System. Class 705 is the classification for patents directed to data
processing in the following areas: financial, business practice,
management, or cost/price determination. See
http://www.uspto.gov/web/patents/classification/uspc705/sched705.pdf.

   The following is the class definition and description for Class
705:

   This is the generic class for apparatus and corresponding
methods for performing data processing operations, in which there is
a significant change in the data or for performing calculation
operations wherein the apparatus or method is uniquely designed for
or utilized in the practice, administration, or management of an
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 146 

enterprise, or in the processing of financial data.
   This class also provides for apparatus and corresponding methods
for performing data processing or calculating operations in which a
charge for goods or services is determined.
   This class additionally provides for subject matter described in
the two paragraphs above in combination with cryptographic apparatus
or method.
   Subclasses 705/300-348 were established prior to complete
reclassification of all project documents. Documents that have not
yet been reclassified have been placed in 705/1.1. Until
reclassification is finished a complete search of 705/300-348 should
include a search of 705/1.1. Once the project documents in 705/1.1
have been reclassified they will be moved to the appropriate subclasses
and this note will be removed.

   SCOPE OF THE CLASS
   1. The arrangements in this class are generally used for
problems relating to administration of an organization, commodities
or financial transactions.
   2. Mere designation of an arrangement as a "business machine"
or a document as a "business form" or "business chart" without
any particular business function will not cause classification in
this class or its subclasses.
   3. For classification herein, there must be significant claim
recitation of the data processing system or calculating computer and
only nominal claim recitation of any external art environment.
Significantly claimed apparatus external to this class, claimed in
combination with apparatus under the class definition, which perform
data processing or calculation operations are classified in the
class appropriate to the external device unless specifically
excluded therefrom.
   4. Nominally claimed apparatus external to this class in
combination with apparatus under the class definition is classified
in this class unless provided for in the appropriate external class.
   5. In view of the nature of the subject matter included herein,
consideration of the classification schedule for the diverse art or
environment is necessary for proper search.

   See Classification Definitions (Feb. 2011) available at
http://www.uspto.gov/web/patents/classification/uspc705/defs705.htm.
   Accordingly, patents subject to covered business method patent
review are anticipated to be typically classifiable in Class 705. It is
anticipated that the number of patents in Class 705 that do not qualify
as covered business method patents would approximate the number of
patents classified in other classes that do qualify.
   The Office received 20 requests for inter partes reexamination of
patents classified in Class 705 in fiscal year 2011. The Office is
estimating the number of petitions for covered business method patent
review to be higher than 20 requests due to an expansion of the grounds
for which review may be requested including subject matter eligibility
grounds, the greater coordination with litigation, and the provision
that patents will be eligible for the proceeding regardless of filing
date of the application which resulted in the patent. It is not
anticipated that any post-grant review petitions will be received in
fiscal year 2013 as only patents issuing based on certain applications
filed on or after March 16, 2013 are eligible for post-grant review, or
certain applications involved in an interference proceeding commenced
before September 12, 2012. Public Law 112-29, § 6(f), 125 Stat.
284, 311 (2011).
   The Office has reviewed the entity status of patents for which
inter partes reexamination was requested from October 1, 2000, to
September 23, 2011. This data only includes filings granted a filing
date in the particular year rather than filings in which a request was
received in the year. The first inter partes reexamination was filed on
July 27, 2001. A summary of that review is provided in Table 1 below.
As shown by Table 1, patents known to be owned by a small entity
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 147 

represented 32.79% of patents for which inter partes reexamination was
requested. Based on an assumption that the same percentage of patents
owned by small entities will be subject to post-grant and covered
business method patent review, it is estimated that 16 petitions for
post-grant and covered business method patent review would be filed to
seek review of patents owned by a small entity in fiscal year 2013, the
first full fiscal year that these proceedings will be available.


Table 1 - Inter partes Reexamination Requests Filed
With Parent Entity Type *

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

2011                      329              123            37.39
2010                      255               94            36.86
2009                      240               62            25.83
2008                      155               52            33.55
2007                      127               35            27.56
2006                       61               17            27.87
2005                       59               18            30.51
2004                       26                5            19.23
2003                       21               12            57.14
2002                        4                1            25.00
2001                        1                0             0.00

                        1,278              419            32.79

* Small entity status determined by reviewing preexamination small entity
indicator for the parent patent.

   Based on the number of patents issued during fiscal years 1995
through 1999 that paid the small entity third stage maintenance fee,
the number of patents issued during fiscal years 2000 through 2003 that
paid the small entity second stage maintenance fee, the number of
patents issued during fiscal years 2004 through 2007 that paid the
first stage maintenance fee, and the number of patents issued during
fiscal years 2008 through 2011 that paid a small entity issue fee,
there are no less than 375,000 patents owned by small entities in force
as of October 1, 2011.
   Furthermore, the Office recognizes that there would be an offset to
this number for patents that expire earlier than 20 years from their
filing date due to a benefit claim to an earlier application or due to
a filing of a terminal disclaimer. The Office likewise recognizes that
there would be an offset in the estimate in the opposite manner due to
the accrual of patent term extension and adjustment. The Office,
however, does not maintain data on the date of expiration by operation
of a terminal disclaimer. Therefore, the Office has not adjusted the
estimate of 375,000 patents owned by small entities in force as of
October 1, 2011. While the Office maintains information regarding
patent term extension and adjustment accrued by each patent, the Office
does not collect data on the expiration date of patents that are
subject to a terminal disclaimer. As such, the Office has not adjusted
the estimated of 375,000 patents owned by small entities in force as of
October 1, 2011, for accrual of patent term extension and adjustment,
because in view of the incomplete terminal disclaimer data issue, would
be incomplete and any estimate adjustment would be administratively
burdensome. Thus, it is estimated that the number of small entity
patents in force in fiscal year 2013 will be at least 375,000.
   Based on the estimated number of patents in force, the number of
small entity owned patents impacted by post-grant and covered business
method patent review in fiscal year 2013 (16 patents) would be less
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 148 

than 0.005% (16/375,000) of all patents in force that are owned by
small entities. The USPTO nonetheless has undertaken an Initial
Regulatory Flexibility Act Analysis of the proposed rule.

   1. Description of the Reasons That Action by the Office Is Being
Considered: On September 16, 2011, the Leahy-Smith America Invents Act
was enacted into law (Pub. L. 112-29, 125 Stat. 284 (2011)). Section 6
of the Leahy-Smith America Invents Act amends title 35, United States
Code, by adding chapter 32 to create a new post-grant review
proceeding. Section 18 of the Leahy-Smith America Invents Act provides
for a transitional program for covered business method patents which
will employ the standards and procedures of the post-grant review
proceeding with a few exceptions. For the implementation, § 6(f) of
the Leahy-Smith America Invents Act requires that the Director issue
regulations to carry out chapter 32 of title 35, United States Code,
within one year after the date of enactment. Public Law 112-29, §
6(f), 125 Stat. 284, 311 (2011).

   2. Succinct Statement of the Objectives of, and Legal Basis for,
the Proposed Rules: The proposed rules seek to implement post-grant and
covered business method patent review as authorized by the Leahy-Smith
America Invents Act. The Leahy-Smith America Invents Act requires that
the Director prescribe rules for the post-grant and covered business
method patent reviews that result in a final determination not later
than one year after the date on which the Director notices the
institution of a proceeding. The one-year period may be extended for
not more than 6 months if good cause is shown. See 35 U.S.C.
326(a)(11). The Leahy-Smith America Invents Act also requires that the
Director, in prescribing rules for post-grant and covered business
method patent reviews, consider the effect of the rules on the economy,
the integrity of the patent system, the efficient administration of the
Office, and the ability of the Office to complete timely the instituted
proceedings. See 35 U.S.C. 326(b). Consistent with the time periods
provided in 35 U.S.C. 326(a)(11), the proposed rules are designed to,
except where good cause is shown to exist, result in a final
determination by the Patent Trial and Appeal Board within one year of
the notice of initiation of the review. This one-year review will
enhance the effect on the economy, and improve the integrity of the
patent system and the efficient administration of the Office.

   3. Description and Estimate of the Number of Affected Small
Entities: The Small Business Administration (SBA) small business size
standards applicable to most analyses conducted to comply with the
Regulatory Flexibility Act are set forth in 13 CFR 121.201. These
regulations generally define small businesses as those with fewer than
a specified maximum number of employees or less than a specified level
of annual receipts for the entity's industrial sector or North American
Industry Classification System (NAICS) code. As provided by the
Regulatory Flexibility Act, and after consultation
with the Small Business Administration, the Office formally adopted an
alternate size standard as the size standard for the purpose of
conducting an analysis or making a certification under the Regulatory
Flexibility Act for patent-related regulations. See Business Size
Standard for Purposes of United States Patent and Trademark Office
Regulatory Flexibility Analysis for Patent-Related Regulations, 71 FR
67109 (Nov. 20, 2006), 1313 Off. Gaz. Pat. Office 60 (Dec. 12, 2006).
This alternate small business size standard is SBA's previously
established size standard that identifies the criteria entities must
meet to be entitled to pay reduced patent fees. See 13 CFR 121.802. If
patent applicants identify themselves on a patent application as
qualifying for reduced patent fees, the Office captures this data in
the Patent Application Location and Monitoring (PALM) database system,
which tracks information on each patent application submitted to the
Office.
   Unlike the SBA small business size standards set forth in 13 CFR
121.201, the size standard for USPTO is not industry-specific. The
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Office's definition of a small business concern for Regulatory
Flexibility Act purposes is a business or other concern that: (1) Meets
the SBA's definition of a "business concern or concern" set forth in
13 CFR 121.105; and (2) meets the size standards set forth in 13 CFR
121.802 for the purpose of paying reduced patent fees, namely an
entity: (a) Whose number of employees, including affiliates, does not
exceed 500 persons; and (b) which has not assigned, granted, conveyed,
or licensed (and is under no obligation to do so) any rights in the
invention to any person who made it and could not be classified as an
independent inventor, or to any concern which would not qualify as a
non-profit organization or a small business concern under this
definition. See Business Size Standard for Purposes of United States
Patent and Trademark Office Regulatory Flexibility Analysis for Patent-
Related Regulations, 71 FR at 67112 (Nov 20, 2006), 1313 Off. Gaz. Pat.
Office at 63 (Dec. 12, 2006).
   As discussed above, it is anticipated that 50 petitions for post-
grant and covered business method patent review will be filed in fiscal
year 2013. The Office has reviewed the percentage of patents for which
inter partes reexamination was requested from October 1, 2000 to
September 23, 2011. A summary of that review is provided in Table 1
above. As demonstrated by Table 1, patents known to be owned by a small
entity represent 32.79% of patents for which inter partes reexamination
was requested. Based on an assumption that the same percentage of
patents owned by small entities will be subject to the new review
proceedings, it is estimated that 16 patents owned by small entities
would be affected by a post-grant or covered business method patent
review.
   The USPTO estimates that 2.5% of patent owners will file a request
for adverse judgment prior to a decision to institute and that another
2.5% will file a request for adverse judgment or fail to participate
after initiation. Specifically, an estimated 2 patent owners will file
a request for adverse judgment or fail to participate after institution
in post-grant and covered business method patent review proceedings
combined. Based on the percentage of small entity owned patents that
were the subject of inter partes reexamination (32.79%) from October 1,
2000 to September 23, 2011, it is estimated that 1 small entity will
file such requests or fail to participate in post-grant and covered
business method patent review combined.
   Under the proposed rules, prior to determining whether to institute
a review, the patent owner may file an optional patent owner
preliminary response to the petition. Given the new time period
requirements to file a petition for review before the Board relative to
patent enforcement proceedings and the desire to avoid the cost of a
trial and delays to related infringement actions, it is anticipated
that 90% of petitions, other than those for which a request for adverse
judgment is filed, will result in the filing of a patent owner
preliminary response. Specifically, the Office estimates that 45 patent
owners will file a preliminary response to a post-grant or covered
business method petition. Based on the percentage of small entity owned
patents that were the subject of inter partes reexamination (32.79%),
it is estimated that 15 small entities will file a preliminary response
to a post-grant or covered business method patent review petition filed
in fiscal year 2013.
   Under the proposed rules, the Office will determine whether to
institute a trial within three months after the earlier of: (1) The
submission of a patent owner preliminary response, (2) the waiver of
filing a patent owner preliminary response, or (3) the expiration of
the time period for filing a patent owner preliminary response. If the
Office decides not to institute a trial, the petitioner may file a
request for reconsideration of the Office's decision. In estimating the
number of requests for reconsideration, the Office considered the
percentage of inter partes reexaminations that were denied relative to
those that were ordered (24 divided by 342, or 7%) in fiscal year 2011.
See Reexamination - FY 2011, http://www.uspto.gov/patents/Reexamination_
operational_statistic_through_FY2011Q4.pdf. The Office also considered the
impact of: (1) Patent owner preliminary responses under newly authorized
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in 35 U.S.C. 323, (2) the enhanced thresholds for instituting reviews
set forth in 35 U.S.C. 324(a), which would tend to increase the likelihood
of dismissing a petition for review, and (3) the more restrictive time
period for filing a petition for review in 35 U.S.C. 325(b), which would
tend to reduce the likelihood of dismissing a petition. Based on these
considerations, it is estimated that 10% of the petitions for review (5
divided by 49) would be dismissed.
   During fiscal year 2011, the Office issued 21 decisions following a
request for reconsideration of a decision on appeal in inter partes
reexamination. The average time from original decision to decision on
reconsideration was 4.4 months. Thus, the decisions on reconsideration
were based on original decisions issued from July 2010 until June 2011.
During this time period, the Office mailed 63 decisions on appeals in
inter partes reexamination. See BPAI Statistics - Receipts and
Dispositions by Technology Center, http://www.uspto.gov/ip/boards/
bpai/stats/receipts/index.jsp (monthly data). Based on the assumption
that the same rate of reconsideration (21 divided by 63 or 33.333%) will
occur, the Office estimates that 2 requests for reconsideration will be
filed. Based on the percentage of small entity owned patents that were
the subject of inter partes reexamination (32.79%), it is estimated
that 1 small entity will file a request for a reconsideration of a
decision dismissing the petition for post-grant and covered business
method patent review filed in fiscal year 2013.
   The Office reviewed motions, oppositions, and replies in a number
of contested trial proceedings before the trial section of the Board.
The review included determining whether the motion, opposition, and
reply were directed to patentability grounds and non-priority non-
patentability grounds. Based on the review, it is anticipated that
post-grant and covered business method patent reviews will have an
average of 8.89 motions, oppositions, and replies per trial after
institution. Settlement is estimated to occur in 20% of instituted
trials at various points of the trial. In the trials that are settled,
it is estimated that only 50% of the noted motions, oppositions, and
replies would be filed.
   After a trial has been instituted but prior to a final written
decision, parties to a post-grant or covered business method patent
review may request an oral hearing. It is anticipated that 45 requests
for oral hearings will be filed based on the number of requests for
oral hearings in inter partes reexamination, the stated desirability
for oral hearings during the legislative process, and the public input
received prior to this notice of proposed rulemaking. Based on the
percentage of small entity owned patents that were the subject of inter
partes reexamination (32.79%), it is estimated that 15 small entities
will file a request for oral hearing in the post-grant or covered
business method patent reviews instituted in fiscal year 2013.
   Parties to a post-grant or covered business method patent review
may file requests to treat a settlement as business confidential, and
request for adverse judgment. A written request to make a settlement
agreement available may also be filed. Given the short time period set
for conducting trials, it is anticipated that the alternative dispute
resolution options will be infrequently used. The Office estimates that
2 requests to treat a settlement as business confidential, and 10
requests for adverse judgment, default adverse judgment, or settlement
notices will be filed. The Office also estimates that 2 requests to
make a settlement available will be filed. Based on the percentage of
small entity owned patents that were the subject of inter partes
reexamination (32.79%), it is estimated that 1 small entity will file a
request to treat a settlement as business confidential and 3 small
entities will file a request for adverse judgment, default adverse
judgment notices, or settlement notices in the reviews instituted in
fiscal year 2013.
   Parties to a post-grant or covered business method patent review
may seek judicial review of the final decision of the Board.
Historically, 33% of examiner's decisions in inter partes reexamination
proceedings have been appealed to the Board. It is anticipated that 16%
of final decision of the Board would be appealed. The reduction in
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appeal rate is based the higher threshold for institution, the focused
process, and the experience of the Board in conducted contested cases.
Therefore, it is estimated that 5 parties would seek judicial review of
the final decisions of the Board in post-grant or covered business
method patent reviews instituted in fiscal year 2013. Furthermore,
based on the percentage of small entity owned patents that were the
subject of inter partes reexamination (32.79%), it is estimated that 2
small entities would seek judicial review of final decisions of the
Board in the post-grant or covered business method patent reviews
instituted in fiscal year 2013.

   4. Description of the Reporting, Recordkeeping, and Other
Compliance Requirements of the Proposed Rule, Including an Estimate of
the Classes of Small Entities Which Will Be Subject to the Requirement
and the Type of Professional Skills Necessary for Preparation of the
Report or Record: Based on the filing trends of inter partes
reexamination requests, it is anticipated that petitions for post-grant
review will be filed across all technologies with approximately 50%
being filed in electrical technologies, approximately 30% in mechanical
technologies, and the remaining 20% in chemical technologies and
design. Under the proposed rules, a person who is not the owner of a
patent may file a petition to institute a review of the patent, with a
few exceptions. Given this, a petition for review is likely to be filed
by an entity practicing in the same or similar field as the patent.
Therefore, it is anticipated that 50% of the petitions for review will
be filed in the electronic field, 30% in the mechanical field, and 20%
in the chemical or design fields for post-grant review.
   Covered business method patent reviews would be limited to business
method patents that are not patents for technological inventions. Under
the proposed rules, a person who is not the owner of a patent may file
a petition to institute a review of the patent, with a few exceptions.
Given this, it is anticipated that a petition for review is likely to
be filed by an entity practicing in the business method field for
covered business methods.
   Preparation of the petition would require analyzing the patent
claims, locating evidence supporting arguments of unpatentability, and
preparing the petition seeking review of the patent. This notice
provides the proposed procedural requirements that are common for the
new trials. Additional requirements are provided in contemporaneous
trial specific proposed rulemaking. The procedures for petitions to
institute a post-grant review are proposed in §§ 42.5, 42.6,
42.8, 42.11, 42.13, 42.20, 42.21, 42.22, 42.24(a)(2)), 42.63, 42.65,
and 42.201 through 42.205. The procedures for petitions to institute a
covered business method patent review are proposed in §§ 42.5,
42.6, 42.8, 42.11, 42.13, 42.20, 42.21, 42.22, 42.24(a)(3), 42.63,
42.65, 42.203, 42.205, and 42.302 through 42.304.
   The skills necessary to prepare a petition for review and to
participate in a trial before the Patent Trial and Appeal Board would
be similar to those needed to prepare a request for inter partes
reexamination, to represent a party in an inter partes reexamination,
and to represent a party in an interference proceeding before the
Patent Trial and Appeal Board. The level of skill is typically
possessed by a registered patent practitioner having devoted
professional time to the particular practice area, typically under the
supervision of a practitioner skilled in the particular practice area.
Where authorized by the Board, a non-registered practitioner may be
admitted pro hac vice, on a case-by-case basis based on the facts and
circumstances of the trial and party, as well as the skill of the
practitioner.
   The cost of preparing a petition for post-grant or covered business
method patent review is estimated to be 33.333% higher than the cost of
preparing an inter partes review petition because the petition for
post-grant or covered business method patent review may seek to
institute a proceeding on additional grounds such as subject matter
eligibility. The American Intellectual Property Law Association's AIPLA
Report of the Economic Survey 2011 reported that the average cost of
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preparing a request for inter partes reexamination was $46,000. Based
on the work required to prepare and file such a request, the Office
considers the reported cost as a reasonable estimate. Therefore, the
Office estimates that the cost of preparing a petition for post-grant
or covered business method patent review would be $61,333 (including
expert costs).
   The filing of a petition for review would also require payment by
the petitioner of the appropriate petition fee to recover the aggregate
cost for providing the review. The appropriate petition fee would be
determined by the number of claims for which review is sought and the
type of review. The proposed fees for filing a petition for post-grant
or covered business method patent review would be: $35,800 to request
review of 20 or fewer claims, $44,750 to request review of 21 to 30
claims, $53,700 to request review of 31 to 40 claims, $71,600 to
request review of 41 to 50 claims, $89,500 to request review of 51 to
60 claims, and an additional $35,800 to request review of additional
groups of 10 claims.
   In setting fees, the estimated information technology cost to
establish the process and maintain the filing and storage system
through 2017 is to be recovered by charging each petition $2,270. The
remainder of the fee is to recover the cost for judges to determine
whether to institute a review and conduct the review, together with a
proportionate share of indirect costs, e.g., rent, utilities, additional
support, and administrative costs. Based on the direct and indirect costs,
the fully burdened cost per hour for judges to decide a petition and
conduct a review is estimated to be $258.32.
   For a petition for post-grant or covered business method patent
review with 20 or fewer challenged claims, it is anticipated that 121
hours of judge time would be required. For 21 to 30 challenged claims,
an additional 30 hours is anticipated for a total of 151 hours of judge
time. For 31 to 40 challenged claims, an additional 60 hours is
anticipated for a total of 181 hours of judge time. For 41 to 50
challenged claims, an additional 121 hours is anticipated for a total
of 242 hours of judge time. For 51 to 60 challenged claims, an
additional 181 hours is anticipated for a total of 302 hours of judge
time. The increase in adjustment reflects the added complexity that
typically occurs as more claims are in dispute.
   The proposed rules would permit the patent owner to file a
preliminary response to the petition setting forth the reasons why no
review should be initiated. The procedures for a patent owner to file a
preliminary response as an opposition are proposed in §§ 42.6,
42.8, 42.11, 42.13, 42.21, 42.23, 42.24(b), 42.51, 42.52, 42.53, 42.54,
42.63, 42.64, 42.65, 42.107, 42.120, 42.207, and 42.220. The patent
owner is not required to file a preliminary response. The Office
estimates that the preparation and filing of a patent owner preliminary
response would require 100 hours of professional time and cost $34,000
(including expert costs). The AIPLA Report of the Economic Survey 2011
reported that the average cost for inter partes reexamination including
of the request ($46,000), the first patent owner response, and third-
party comments was $75,000 (see I-175) and the median billing rate for
professional time of $340 per hour for attorneys in private firms (see
8). Thus, the cost of the first patent owner reply and the third party
statement is $29,000. The Office finds these costs to be reasonable
estimates. The patent owner reply and third party statement, however,
occur after the examiner has made an initial threshold determination
and made only the appropriate rejections. Accordingly, it is
anticipated that filing a patent owner preliminary response to a
petition for review would cost more than the initial reply in a
reexamination, or an estimated $34,000 (including expert costs).
   The Office will determine whether to institute a trial within three
months after the earlier of: (1) The submission of a patent owner
preliminary response, (2) the waiver of filing a patent owner
preliminary response, or (3) the expiration of the time period for
filing a patent owner preliminary response. If the Office decides not
to institute a trial, the petitioner may file a request for
reconsideration of the Office's decision. It is anticipated that a
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request for reconsideration will require 80 hours of professional time
to prepare and file, for a cost of $27,200. This estimate is based on
the complexity of the issues and desire to avoid time bars imposed by
35 U.S.C. 325(b).
   Following institution of a trial, the parties may be authorized to
file various motions, e.g., motions to amend and motions for additional
discovery. Where a motion is authorized, an opposition may be
authorized, and where an opposition is authorized, a reply may be
authorized. The procedures for filing a motion are proposed in
§§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.22, 42.24(a)(5), 42.51,
42.52, 42.53, 42.54, 42.63, 42.64, 42.65, 42.221, and 42.223. The
procedures for filing an opposition are proposed in §§ 42.6,
42.8, 42.11, 42.13, 42.21, 42.23, 42.24(b), 42.51, 42.52, 42.53, 42.54,
42.63, 42.64, 42.65, 42.207, and 42.220. The procedures for filing a
reply are proposed in §§ 42.6, 42.8, 42.11, 42.13, 42.21,
42.23, 42.24(c), 42.51, 42.52, 42.53, 42.54, 42.63, and 42.65. As
discussed previously, the Office estimates that the average post-grant
or covered business method patent review will have 8.89 motions,
oppositions, and replies after institution.
   The AIPLA Report of the Economic Survey 2011 reported that the
average cost in contested cases before the trial section of the Board
prior to the priority phase was $322,000 per party. Because of the
overlap of issues in patentability grounds, it is expected that the
cost per motion will decline as more motions are filed in a proceeding.
It is estimated that a motion, opposition, or reply in a derivation
would cost $34,000, which is estimated by dividing the total public
cost for all motions in current contested cases divided by the
estimated number of motions in derivations under 35 U.S.C. 135, as
amended. The cost of a motion, opposition, or reply in a post-grant or
covered business method patent review is estimated at $44,200
(including expert costs), reflecting the reduction in overlap between
motions relative to derivation. Based on the work required to file and
prepare such briefs, the Office considers the reported cost as a
reasonable estimate.
   After a trial has been instituted but prior to a final written
decision, parties to a post-grant or covered business method patent
review may request an oral hearing. The procedure for filing requests
for oral argument is proposed in § 42.70. The AIPLA Report of the
Economic Survey 2011 reported that the third quartile cost of an ex
parte appeal with an oral argument is $12,000, while the third quartile
cost of an ex parte appeal without an oral argument is $6,000. In view
of the reported costs, which the Office finds reasonable, and the
increased complexity of an oral hearing with multiple parties, it is
estimated that the cost per party for oral hearings would be $6,800 or
$800 more than the reported third quartile cost for an ex parte oral
hearing.
   Parties to a post-grant or covered business method patent review
may file requests to treat a settlement as business confidential, or
file a request for adverse judgment. A written request to make a
settlement agreement available may also be filed. The procedures to
file requests that a settlement be treated as business confidential are
proposed in § 42.74(c). The procedures to file requests for adverse
judgment are proposed in § 42.73(b). The procedures to file
requests to make a settlement agreement available are proposed in
§ 42.74(c)(2). It is anticipated that requests to treat a settlement as
business confidential will require 2 hours of professional time or
$680. It is anticipated that requests for adverse judgment will require
1 hour of professional time or $340. It is anticipated that requests to
make a settlement agreement available will require 1 hour of
professional time or $340. The requests to make a settlement agreement
available will also require payment of a fee of $400 specified in
proposed § 42.15(d).
   Parties to a review proceeding may seek judicial review of the
judgment of the Board. The procedures to file notices of judicial
review of a Board decision, including notices of appeal and notices of
election provided for in 35 U.S.C. 141, 142, 145, and 146, are proposed
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in §§ 90.1 through 90.3. The submission of a copy of a notice
of appeal or a notice of election is anticipated to require 6 minutes
of professional time at a cost of $34.

   5. Description of Any Significant Alternatives to the Proposed
Rules Which Accomplish the Stated Objectives of Applicable Statutes and
Which Minimize Any Significant Economic Impact of the Rules on Small
Entities:
   Size of petitions and motions: The Office considered whether to
apply a page limit and what an appropriate page limit would be. The Office
does not currently have a page limit on inter partes reexamination requests.
The inter partes reexamination requests from October 1, 2010 to June 30,
2011, averaged 246 pages. Based on the experience of processing inter
partes reexamination requests, the Office finds that the very large size of
the requests has created a burden on the Office that hinders the efficiency
and timeliness of processing the requests, and creates a burden on patent
owners. The quarterly reported average processing time from the filing
of a request to the publication of a reexamination certificate ranged
from 28.9 months to 41.7 months in fiscal year 2009, from 29.5 months
to 37.6 months in fiscal year 2010, and from 31.9 to 38.0 months in
fiscal year 2011. See Reexaminations - FY 2011, http://www.uspto.gov/
patents/Reexamination_operational_statistic_through_FY2011Q4.pdf.
   By contrast, the Office has a page limit on the motions filed in
contested cases, except where parties are specifically authorized to
exceed the limitation. The typical contested case proceeding is subject
to a standing order that sets a 50 page limit for motions and
oppositions on priority, a 15 page limit for miscellaneous motions
(§ 41.121(a)(3)) and oppositions (§ 41.122), and a 25 page
limit for other motions (§ 41.121(a)(2)) and oppositions to other
motions. In typical proceedings, replies are subject to a 15 page limit
if directed to priority, a 5 page limit for miscellaneous issues, and
10 pages for other motions. The average contested case was terminated
in 10.1 months in fiscal year 2009, in 12 months in fiscal year 2010,
and 9 months in fiscal year 2011. The percentage of contested cases
terminated within 2 years was 93.7% in fiscal year 2009, 88.0% in
fiscal year 2010, and 94.0% in fiscal year 2011. See BPAI Statistics -
Performance Measures,
http://www.uspto.gov/ip/boards/bpai/stats/perform/index.jsp.
   Comparing the average time period for terminating a contested case,
10.0 to 12.0 months, with the average time period, during fiscal years
2009 through 2011, for completing an inter partes reexamination, 28.9
to 41.7 months, indicates that the average interference takes from 24%
(10.0/41.7) to 42% (12.0/28.9) of the time of the average inter partes
reexamination. While several factors contribute to the reduction in
time, limiting the size of the requests and motions is considered a
significant factor. Proposed § 42.24 would provide page limits for
petitions, motions, oppositions, and replies. 35 U.S.C. 326(b) provides
considerations that are to be taken into account when prescribing
regulations including the integrity of the patent system, the efficient
administration of the Office, and the ability to complete timely the
trials. The page limits proposed in these rules are consistent with
these considerations.
   Federal courts routinely use page limits in managing motions
practice as "[e]ffective writing is concise writing." Spaziano v.
Singletary, 36 F.3d 1028, 1031 n.2 (11th Cir. 1994). Many district
courts restrict the number of pages that may be filed in a motion
including, for example, the District of Delaware, the District of New
Jersey, the Eastern District of Texas, the Northern, Central, and
Southern Districts of California, and the Eastern District of Virginia.
   Federal courts have found that page limits ease the burden on both
the parties and the courts, and patent cases are no exception. Eolas
Techs., Inc. v. Adobe Sys., Inc., No. 6:09-CV-446, at 1 (E.D. Tex.
Sept. 2, 2010) ("The Local Rules' page limits ease the burden of
motion practice on both the Court and the parties."); Blackboard, Inc.
v. Desire2Learn, Inc., 521 F. Supp. 2d 575, 576 (E.D. Tex. 2007) (The
parties "seem to share the misconception, popular in some circles,
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 155 

that motion practice exists to require federal judges to shovel through
steaming mounds of pleonastic arguments in Herculean effort to uncover
a hidden gem of logic that will ineluctably compel a favorable ruling.
Nothing could be farther from the truth."); Broadwater v. Heidtman
Steel Prods., Inc., 182 F. Supp. 2d 705, 710 (S.D. Ill. 2002)
("Counsel are strongly advised, in the future, to not ask this Court
for leave to file any memoranda (supporting or opposing dispositive
motions) longer than 15 pages. The Court has handled complicated patent
cases and employment discrimination cases in which the parties were
able to limit their briefs supporting and opposing summary judgment to
10 or 15 pages." (Emphasis omitted)).
   The Board's contested cases experience with page limits in motions
practice is consistent with that of the federal courts. The Board's use
of page limits has shown it to be beneficial without being unduly
restrictive for the parties. Page limits have encouraged the parties to
focus on dispositive issues, easing the burden of motions practice on
the parties and on the Board.
   The Board's contested cases experience with page limits is informed
by its use of different approaches over the years. In the early 1990s,
page limits were not routinely used for motions, and the practice
suffered from lengthy and unacceptable delays. To reduce the burden on
the parties and on the Board and thereby reduce the time to decision,
the Board instituted page limits in the late 1990s for every motion.
Page limit practice was found to be effective in reducing the burdens
on the parties and improving decision times at the Board. In 2006, the
Board revised the page limit practice and allowed unlimited findings of
fact and generally limited the number of pages containing argument. Due
to abuses of the system, the Board recently reverted back to page
limits for the entire motion (both argument and findings of fact).
   The Board's current page limits are consistent with the 25 page
limits in the Northern, Central, and Southern Districts of California,
and the Middle District of Florida and exceed the limits in the
District of Delaware (20), the Northern District of Illinois (15), the
District of Massachusetts (20), the Eastern District of Michigan (20),
the Southern District of Florida (20), and the Southern District of
Illinois (20).
   In a typical proceeding before the Board, a party may be authorized
to file a single motion for unpatentability based on prior art, a
single motion for unpatentability based upon failure to comply with 35
U.S.C. 112, lack of written description, and/or enablement, and
potentially another motion for lack of compliance with 35 U.S.C. 101,
although a 35 U.S.C. 101 motion may be required to be combined with the
35 U.S.C. 112 motion. Each of these motions is currently limited to 25
pages in length, unless good cause is shown that the page limits are
unduly restrictive for a particular motion.
   A petition requesting the institution of a trial proceeding would
be similar to motions currently filed with the Board. Specifically,
petitions to institute a trial seek a final written decision that the
challenged claims are unpatentable, where derivation is a form of
unpatentability. Accordingly, a petition to institute a trial based on
prior art would, under current practice, be limited to 25 pages, and by
consequence, a petition raising unpatentability based on prior art and
unpatentability under 35 U.S.C. 101 and/or 112 would be limited to 50
pages.
   Under the proposed rules, a post-grant review petition would be
based upon any grounds identified in 35 U.S.C. 321(b), e.g., failure to
comply with 35 U.S.C. 101, 102, 103, and 112 (except best mode). Under
current practice, a party would be limited to filing two or three
motions, each limited to 25 pages, for a maximum of 75 pages. Where
there is more than one motion for unpatentability based upon different
statutory grounds, the Board'sexperience is that the motions contain
similar discussions of technology and claim constructions. Such overlap
is unnecessary where a single petition for unpatentability is filed. Thus,
the proposed 70 page limit is considered sufficient in all but exceptional
cases.
   Covered business method patent review is similar in scope to that
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 156 

of post-grant review as there is substantial overlap in the statutory
grounds permitted for review. Thus, the proposed page limit for
proposed covered business method patent reviews is 70 pages, which is
the same as that proposed for post-grant review.
   The proposed rule would provide that petitions to institute a trial
must comply with the stated page limits but may be accompanied by a
motion that seeks to waive the page limits. The petitioner must show in
the motion how a waiver of the page limits is in the interests of
justice. A copy of the desired non-page limited petition must accompany
the motion. Generally, the Board would decide the motion prior to
deciding whether to institute the trial.
   Current Board practice provides a limit of 25 pages for other
motions and 15 pages for miscellaneous motions. The Board's experience
is that such page limits are sufficient for the parties filing them and
do not unduly burden the opposing party or the Board. Petitions to
institute a trial would generally replace the current practice of
filing motions for unpatentability, as most motions for relief are
expected to be similar to the current interference miscellaneous motion
practice. Accordingly, the proposed 15 page limit is considered
sufficient for most motions but may be adjusted where the limit is
determined to be unduly restrictive for the relief requested.
   Proposed § 42.24(b) would provide page limits for oppositions
filed in response to motions. Current contested cases practice provides
an equal number of pages for an opposition as its corresponding motion.
This is generally consistent with motions practice in federal courts.
The proposed rule would continue the current practice.
   Proposed § 42.24(c) would provide page limits for replies.
Current contested cases practice provides a 15 page limit for priority
motion replies, a 5 page limit for miscellaneous (procedural) motion
replies, and a 10 page limit for all other motions. The proposed rule
is consistent with current contested case practice for procedural
motions. The proposed rule would provide a 15 page limit for reply to
petitions requesting a trial, which the Office believes is sufficient
based on current practice. Current contested cases practice has shown
that such page limits do not unduly restrict the parties and, in fact,
have provided sufficient flexibility to parties to not only reply to
the motion but also help to focus on the issues. Thus, it is
anticipated that default page limits would minimize the economic impact
on small entities by focusing on the issues in the trials.
   The Leahy-Smith America Invents Act requires that the Director, in
prescribing rules for post-grant and covered business method patent
reviews, consider the effect of the rules on the economy, the integrity
of the patent system, the efficient administration of the Office, and
the ability of the Office to complete timely the instituted
proceedings. See 35 U.S.C. 326(b). In view of the actual results of the
duration of proceedings in inter partes reexamination (without page
limits) and contested cases (with page limits), proposing procedures
with reasonable page limits would be consistent with the objectives set
forth in the Leahy-Smith America Invents Act. Based on our experience
on the time needed to complete a non-page limited proceeding, the
option of non-page limited proceedings was not adopted.
   Fee Setting: 35 U.S.C. 321(a) requires the Director to establish
fees to be paid by the person requesting the review in such amounts as
the Director determines to be reasonable, considering the aggregate
costs of the review. In contrast to current 35 U.S.C. 311(b) and
312(c), the Leahy-Smith America Invents Act requires the Director to
establish more than one fee for reviews based on the total cost of
performing the reviews, and does not provide for refund of any part of
the fee when the Director determines that the review should not be
initiated.
   35 U.S.C. 322(a)(1) further requires that the fee established by
the Director under 35 U.S.C. 321 accompany the petition on filing.
Accordingly, in interpreting the fee setting authority in 35 U.S.C.
321(a), it is reasonable that the Director should set a number of fees
for filing a petition based on the anticipated aggregate cost of
conducting the review depending on the complexity of the review, and
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 157 

require payment of the fee upon filing of the petition.
   Based on experience with contested cases and inter partes
reexamination proceedings, the following characteristics of requests
were considered as potential factors for fee setting as each would
likely impact the cost of providing the new services. The Office also
considered the relative difficulty in administrating each option in
selecting the characteristics for which different fees should be paid
for requesting review.

   I. Adopted Option. Number of claims for which review is requested.
The number of claims often impacts the complexity of the request and
increases the demands placed on the deciding officials. Cf. In re Katz
Interactive Call Processing Patent Litig., 639 F.3d 1303, 1309 (Fed.
Cir. 2011) (limiting number of asserted claims is appropriate to
efficiently manage a case). Moreover, the number of claims for which
review is requested can be easily determined and administered, which
avoids delays in the Office and the impact on the economy or patent
system that would occur if an otherwise meritorious request is refused
due to improper fee payment. Any subsequent petition would be time
barred in view 35 U.S.C. 325.

   II. Alternative Option I. Number of grounds for which review is
requested. The Office has experience with large numbers of cumulative
grounds being presented in inter partes reexaminations, which often add
little value to the proceedings. Allowing for a large number of grounds
to be presented on payment of an additional fee(s) is not favored.
Determination of the number of grounds in a request may be contentious
and difficult and may result in a large amount of high-level petition
work. As such, the option would have a negative impact on small
entities. Moreover, interferences instituted in the 1980s and early
1990s suffered from this problem as there was no page limit for motions
and the parties had little incentive to focus the issues for decision.
The resulting interference records were often a collection of disparate
issues and evidence. This led to lengthy and unwarranted delays in
deciding interference cases as well as increased costs for parties and
the Office. Accordingly, this alternative is inconsistent with
objectives of the Leahy-Smith America Invents Act that the Director, in
prescribing rules for the post-grant and covered business method patent
reviews, consider the effect of the rules on the economy, the integrity
of the patent system, the efficient administration of the Office, and
the ability of the Office to timely complete the instituted
proceedings.

   III. Alternative Option II. Pages of argument. The Office has
experience with large requests in inter partes reexamination in which
the merits of the proceedings could have been resolved in a shorter
request. Allowing for unnecessarily large requests on payment of an
additional fee(s) is not favored. Moreover, determination of
what should be counted as "argument" as compared with "evidence"
has often proven to be contentious and difficult as administered in the
current inter partes reexamination appeal process.
   In addition, the trial section of the Board recently experimented
with motions having a fixed page limit for the argument section and an
unlimited number of pages for the statement of facts. Unlimited pages
for the statement of facts led to a dramatic increase in the number of
alleged facts and pages associated with those facts. For example, one
party used approximately 10 pages for a single "fact" that merely cut
and pasted a portion of a declarant's cross-examination. Based upon the
trial section's experience with unlimited pages of facts, the Board
recently reverted back to a fixed page limit for the entire motion
(argument and facts). Accordingly, this alternative is inconsistent
with objectives of the Leahy-Smith America Invents Act that the
Director, in prescribing rules for the post-grant and covered business
method patent reviews, consider the effect of the rules on the economy,
the integrity of the patent system, the efficient administration of the
Office, and the ability of the Office to complete timely the instituted
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 158 

proceedings.

   IV. Alternative Option III. The Office considered an alternative
fee setting regime in which fees would be charged at various steps in
the review process, a first fee on filing of the petition, a second fee
if instituted, a third fee on filing a motion in opposition to amended
claims, etc. The alternative fee setting regime would hamper the
ability of the Office to complete timely reviews, would result in
dismissal of pending proceedings with patentability in doubt due to
non-payment of required fees by third parties, and would be
inconsistent with 35 U.S.C. 322 that requires the fee established by
the Director be paid at the time of filing the petition. Accordingly,
this alternative is inconsistent with objectives of the Leahy-Smith
America Invents Act that the Director, in prescribing rules for post-
grant and covered business method patent reviews, consider the effect
of the rules on the economy, the integrity of the patent system, the
efficient administration of the Office, and the ability of the Office
to complete timely the instituted proceedings.

   V. Alternative Option IV. The Office considered setting reduced
fees for small and micro entities and to provide refunds if a review is
not instituted. The Office may set the fee to recover the cost of
providing the services under 35 U.S.C. 41(d)(2)(a). Fees set under this
authority are not reduced for small entities, see 35 U.S.C. 42(h)(1),
as amended. Moreover, the Office does not have authority to refund fees
that were not paid by mistake or in excess of that owed. See 35 U.S.C.
42(d).
   Discovery: The Office considered a procedure for discovery similar
to the one available during district court litigation. Discovery of
that scope has been criticized sharply, particularly when attorneys use
discovery tools as tactical weapons, which hinder the "just, speedy,
and inexpensive determination of every action and proceedings." See
Introduction to An E-Discovery Model Order available at
http://www.cafc.uscourts.gov/images/stories/announcements/Ediscovery_
Model_Order.pdf. Accordingly, this alternative would have been
inconsistent with objectives of the Leahy-Smith America Invents Act that
the Director, in prescribing rules for the post-grant and covered business
method patent reviews, consider the effect of the rules on the economy,
the integrity of the patent system, the efficient administration of the
Office, and the ability of the Office to complete timely the instituted
proceedings.
   Additional discovery increases trial costs and increases the
expenditures of time by the parties and the Board. To promote effective
discovery, the proposed rule would require a showing of good cause to
authorize additional requested discovery. To show good cause, a party
must make a particular and specific demonstration of fact. The moving
party must also show that it was fully diligent in seeking discovery,
and that there is no undue prejudice to the non-moving party.
   The Office has proposed a default scheduling order to provide
limited discovery as a matter of right and also the ability to seek
additional discovery on a case-by-case basis. In weighing the need for
additional discovery, should a request be made, the economic impact on
the opposing party would be considered which would tend to limit
additional discovery where a party is a small entity.
   Pro Hac Vice: The Office considered whether to allow counsel to
appear pro hac vice. In certain cases, highly skilled, but non-
registered, attorneys have appeared satisfactorily before the Board in
contested cases. The Board may recognize counsel pro hac vice during a
proceeding upon a showing of good cause. Proceedings before the Office
can be technically complex. Consequently, the grant of a motion to
appear pro hac vice is a discretionary action taking into account the
specifics of the proceedings. Similarly, the revocation of pro hac vice
is a discretionary action taking into account various factors,
including incompetence, unwillingness to abide by the Office's Rules of
Professional Conduct, prior findings of misconduct before the Office in
other proceedings, and incivility.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 159 

   The Board's past practice has required the filing of a motion by a
registered patent practitioner seeking pro hac vice representation
based upon a showing of: (1) How qualified the unregistered
practitioner is to represent the party in the proceeding when measured
against a registered practitioner, and, (2) whether the party has a
genuine need to have the particular unregistered practitioner represent
it during the proceeding. This practice has proven effective in the
limited number of contested cases where such requests have been
granted. The proposed rule, if adopted, would allow for this practice
in the new proceedings authorized by the Leahy-Smith America Invents
Act.
   The proposed rules would provide a limited delegation to the Board
under 35 U.S.C. 2(b)(2) and 32 to regulate the conduct of counsel in
Board proceedings. The proposed rule would delegate to the Board the
authority to conduct counsel disqualification proceedings while the
Board has jurisdiction over a proceeding. The rule would also delegate
to the Chief Administrative Patent Judge the authority to make final a
decision to disqualify counsel in a proceeding before the Board for the
purposes of judicial review. This delegation would not derogate from
the Director the prerogative to make such decisions, nor would it
prevent the Chief Administrative Patent Judge from further delegating
authority to an administrative patent judge.
   The Office considered broadly permitting practitioners not
registered to practice by the Office to represent parties in trial as
well as categorically prohibiting such practice. A prohibition on the
practice would be inconsistent with the Board's experience, and more
importantly, might result in increased costs particularly where a small
entity has selected its district court litigation team for
representation before the Board and has a patent review filed after
litigation efforts have commenced. Alternatively, broadly making the
practice available would create burdens on the Office in administering
the trials and in completing the trial within the established
timeframe, particularly if the selected practitioner does not have the
requisite skill. In weighing the desirability of admitting a
practitioner pro hac vice, the economic impact on the party in interest
would be considered which would tend toincrease the likelihood that a
small entity could be represented by a non-registered practitioner.
Accordingly, the alternatives to eliminate pro hac vice practice or to
permit it more broadly would have been inconsistent with objectives
of the Leahy-Smith America Invents Act that the Director, in prescribing
rules for the post-grant and covered business method patent reviews,
consider the effect of the rules on the economy, the integrity of the
patent system, the efficient administration of the Office, and the ability
of the Office to complete timely the instituted proceedings.
   Threshold for Instituting a Review: The Office considered whether
the threshold for instituting a review could be set as low as or lower
than the threshold for ex parte reexamination. This alternative could
not be adopted in view of the statutory requirements in 35 U.S.C. 324.
   Default Electronic Filing: The Office considered a paper filing
system and a mandatory electronic filing system (without any
exceptions) as alternatives to the proposed requirement that all papers
are to be electronically filed, unless otherwise authorized.
   Based on the Office's experience, a paper based filing system
increases delay in processing papers, delay in public availability, and
the chance that a paper may be misplaced or made available to an
improper party if confidential. Accordingly, the alternative of a paper
based filing system would have been inconsistent with objectives of the
Leahy-Smith America Invents Act that the Director, in prescribing rules
for the post-grant and covered business method patent reviews, consider
the effect of the rules on the economy, the integrity of the patent
system, the efficient administration of the Office, and the ability of
the Office to complete timely the instituted proceedings.
   An electronic filing system (without any exceptions) that is
rigidly applied would result in unnecessary cost and burdens,
particularly where a party lacks the ability to file electronically. By
contrast, if the proposed option is adopted, it is expected that the
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 160 

entity size and sophistication would be considered in determining
whether alternative filing methods would be authorized.

   6. Identification, to the Extent Practicable, of All Relevant
Federal Rules Which May Duplicate, Overlap, or Conflict With the
Proposed Rules:

   37 CFR 1.99 provides for the submission of information after
publication of a patent application during examination by third
parties.
   37 CFR 1.171-1.179 provide for applications to reissue a patent to
correct errors, including where a claim in a patent is overly broad.
   37 CFR 1.291 provides for the protest against the issuance of a
patent during examination.
   37 CFR 1.321 provides for the disclaimer of a claim by a patentee.
   37 CFR 1.501 and 1.502 provide for ex parte reexamination of
patents. Under these rules, a person may submit to the Office prior art
consisting of patents or printed publications that are pertinent to the
patentability of any claim of a patent, and request reexamination of
any claim in the patent on the basis of the cited prior art patents or
printed publications. Consistent with 35 U.S.C. 302-307, ex parte
reexamination rules provide a different threshold for initiation,
require the proceeding to be conducted by an examiner with a right of
appeal to the Patent Trial and Appeal Board, and allow for limited
participation by third parties.
   37 CFR 1.902-1.997 provide for inter partes reexamination of
patents. Similar to ex parte reexamination, inter partes reexamination
provides a procedure in which a third party may request reexamination
of any claim in a patent on the basis of the cited prior art patents
and printed publication. The inter partes reexamination practice will
be eliminated, except for requests filed before the effective date of
September 16, 2012. See § 6(c)(3)(C) of the Leahy-Smith America
Invents Act.
   Other countries have their own patent laws, and an entity desiring
a patent in a particular country must make an application for patent in
that country, in accordance with the applicable law. Although the
potential for overlap exists internationally, this cannot be avoided
except by treaty (such as the Paris Convention for the Protection of
Industrial Property, or the Patent Cooperation Treaty (PCT)).
Nevertheless, the Office believes that there are no other duplicative
or overlapping foreign rules.
   C. Executive Order 12866 (Regulatory Planning and Review): This
rulemaking has been determined to be significant for purposes of
Executive Order 12866 (Sept. 30, 1993), as amended by Executive Order
13258 (Feb. 26, 2002) and Executive Order 13422 (Jan. 18, 2007).
   Based on the petition and other filing requirements for initiating
a review proceeding, the USPTO estimates the burden of the proposed
rules on the public to be $22,761,410 in fiscal year 2013 which
represents the sum of the estimated total annual (hour) respondent cost
burden ($20,405,610) plus the estimated total annual non-hour
respondent cost burden ($2,355,800) provided in Part O, Section II, of
this notice, infra.
   The USPTO expect several benefits to flow from the Leahy-Smith
America Invents Act and these proposed rules. It is anticipated that
the proposed rules will reduce the time for reviewing patents at the
USPTO. Specifically, 35 U.S.C. 326(a) provides that the Director
prescribe regulations requiring a final determination by the Board
within one year of initiation, which may be extended for up to six
months for good cause. In contrast, currently for inter partes
reexamination, the average time from the filing to the publication of a
certificate ranged from 28.9 to 41.7 months during fiscal years 2009-
2011. See Reexaminations - FY 2011, http://www.uspto.gov/patents/
Reexamination_operational_statistic_through_FY2011Q4.pdf.
   Likewise, it is anticipated that the proposed rules will minimize
duplication of efforts. In particular, the Leahy-Smith America Invents
Act provides more coordination between district court infringement
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 161 

litigation and post-grant or covered business method patent reviews to
reduce duplication of efforts and costs.
   The AIPLA Report of the Economic Survey 2011 reports that the total
cost of patent litigation where the damages at risk are less than
$1,000,000 average $916,000, where the damages at risk are between
$1,000,000 and $25,000,000 average $2,769,000, and where the damages at
risk exceed $25,000,000 average $6,018,000. There may be a significant
reduction in overall burden if, as intended, the Leahy-Smith America
Invents Act and the proposed rules reduce the overlap between review at
the USPTO of issued patents and validity determination during patent
infringement actions. Data from the United States district courts
reveals that 2,830 patent cases were filed in 2006, 2,896 in 2007,
2,909 in 2008, 2,792 in 2009, and 3,301 in 2010. See U.S. Courts,
Judicial Business of the United States Courts, www.uscourts.gov/uscourts/
Statistics/JudicialBusiness/2010/appendices/C02ASep10.pdf (last visited
Nov. 11, 2011) (hosting annual reports for 1997 through 2010). Thus, the
Office estimates that no more than 3,300 patent cases (the highest number
of yearly filings between 2006 and 2010 rounded to the nearest 100) are
likely to be filed annually. The aggregate burden estimate above
($22,761,410) was not offset by a reduction in burden based on improved
coordination between district court patent litigation and the new inter
partes review proceedings.

   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 determination that the benefits justify the costs
of the rule; (2) tailored the rule to impose the least burden on
society consistent with obtaining the regulatory objectives; (3)
selected a regulatory approach that maximizes net benefits; (4)
specified performance objectives; (5) identified and assessed available
alternatives; (6) involved the public in an open exchange of
information and perspectives among experts in relevant disciplines,
affected stakeholders in the private sector, and the public as a whole,
and provided online access to the rulemaking docket; (7) attempted to
promote coordination, simplification, and harmonization across
government agencies and identified goals designed to promote
innovation; (8) considered approaches that reduce burdens and maintain
flexibility and freedom of choice for the public; and (9) ensured the
objectivity of scientific and technological information and processes.

   E. Executive Order 13132 (Federalism): This rulemaking 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). This rulemaking carries out a
statute designed to lessen litigation. See H.R. Rep. No. 112-98, at 45-
48.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 162 


   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 effect 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. 801-808), prior to issuing any final rule, the United
States Patent and Trademark Office will submit a report containing the
final rule and other required information to the U.S. Senate, the U.S.
House of Representatives, and the Comptroller General of the Government
Accountability Office. The changes in this notice 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 notice is not expected to result in a "major rule" as
defined in 5 U.S.C. 804(2).

   L. Unfunded Mandates Reform Act of 1995: The changes proposed in
this notice 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.
1501-1571.

   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. 4321-4370h.

   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 USPTO consider the impact of
paperwork and other information collection burdens imposed on the
public. This proposed rulemaking 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). The collection of information involved in this notice has
been submitted to OMB under OMB control number 0651-00xx. In the Notice
"Rules of Practice for Trials before the Patent Trial and Appeal Board
and Judicial Review of Patent Trial and Appeal Board Decisions," RIN
0651-AC70, the information collection for all of the new trials
authorized by the Leahy-Smith America Invents Act were provided. In the
Notice "Changes to Implement Post-Grant Review Proceedings," RIN
0651-AC72, the information collection for post-grant review and covered
business method patent review combined authorized by the Leahy-Smith
America Invents Act were provided. This notice also provides the subset
of burden created by the covered business method patent review
provisions. The proposed collection will be available at the OMB's
Information Collection Review Web site (www.reginfo.gov/public/do/PRAMain).
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 163 

   The USPTO is submitting the information collection to OMB for its
review and approval because this notice of proposed rulemaking will add
the following to a collection of information:
   (1) Petitions to institute a post-grant review (§§ 42.6,
42.8, 42.11, 42.13, 42.21, 42.22, 42.24(a)(2), 42.63, 42.65, and 42.201
through 42.205);
   (2) petitions to institute a covered business method patent review
(§§ 42.5, 42.6, 42.8, 42.11, 42.13, 42.20, 42.21, 42.22,
42.24(a)(3), 42.63, 42.65, 42.203, 42.205, and 42.302 through 42.304);
   (3) motions (§§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.22,
42.24(a)(5), 42.51 through 42.54, 42.63, 42.64, 42.65, 42.221, 42.123,
and 42.223);
   (4) oppositions (§§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.23,
42.24(b), 42.51, 42.52, 42.53, 42.54, 42.63, 42.64, 42.65, 42.207, and
42.220);
   (5) replies provided for in 35 U.S.C. 321-329 (§§ 42.6,
42.8, 42.11, 42.13, 42.21, 42.23, 42.24(c), 42.51, 42.52, 42.53, 42.54,
42.63, and 42.65).
   The proposed rules also permit filing requests for oral argument
(§ 42.70) provided for in 35 U.S.C. 326(a)(10), requests for
rehearing (§ 42.71(c)), requests for adverse judgment (§ 42.73(b)),
and requests that a settlement be treated as business confidential
(§ 42.74(b)) provided for in 35 U.S.C. 327.

   I. Abstract: The USPTO is required by 35 U.S.C. 131 and 151 to
examine applications and, when appropriate, issue applications as
patents.
   Chapter 32 of title 35 U.S.C. in effect on September 16, 2012,
provides for post-grant review proceedings allowing third parties to
petition the USPTO to review the patentability of an issued patent
under any ground authorized under 35 U.S.C. 282(b)(2). If a trial is
initiated by the USPTO based on the petition, as authorized by the
USPTO, additional motions may be filed by the petitioner. A patent
owner may file a response to the petition and if a trial is instituted,
as authorized by the USPTO, may file additional motions.
   Section 18 of the Leahy-Smith America Invents Act provides for a
transitional program for covered business method patents, which will
employ the standards and procedures of the post-grant review proceeding
with a few exceptions.
   In estimating the number of hours necessary for preparing a
petition to institute a post-grant or covered business method patent
review, the USPTO considered the estimated cost of preparing a request
for inter partes reexamination ($46,000), the median billing rate
($340/hour), and the observation that the cost of inter partes
reexamination has risen the fastest of all litigation costs since 2009
in the AIPLA Report of the Economic Survey 2011. Since additional
grounds are provided in post-grant or covered business method patent
review, the Office estimates the cost of preparing a petition to
institute a review will be 33.333% more than the estimated cost of
preparing a request for inter partes reexamination, or $61,333.
   In estimating the number of hours necessary for preparing motions
after instituting and participating in the review, the USPTO considered
the AIPLA Report of the Economic Survey 2011 which reported the average
cost of a party to a two-party interference to the end of the
preliminary motion phase ($322,000) and inclusive of all costs
($631,000). The Office considered that the preliminary motion phase is
a good proxy for patentability reviews since that is the period of
current contested cases before the trial section of the Board where
most patentability motions are currently filed.
   The USPTO also reviewed recent contested cases before the trial
section of the Board to make estimates on the average number of motions
for any matter including priority, the subset of those motions directed
to non-priority issues, the subset of those motions directed to non-
priority patentability issues, and the subset of those motions directed
to patentability issues based on a patent or printed publication on the
basis of 35 U.S.C. 102 or 103. The review of current contested cases
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 164 

before the trial section of the Board indicated that approximately 15%
of motions were directed to prior art grounds, 18% of motions were
directed to other patentability grounds, 27% were directed to
miscellaneous issues, and 40% were directed to priority issues. It was
estimated that the cost per motion to a party in current contested
cases before the trial section of the Board declines because of overlap
in subject matter, expert overlap, and familiarity with the technical
subject matter. Given the overlap of subject matter, a proceeding with
fewer motions will have a somewhat less than proportional decrease in
costs since the overlapping costs will be spread over fewer motions.
   It is estimated that the cost of an inter partes review would be
60% of the cost of current contested cases before the trial section of
the Board to the end of the preliminary motion period. An inter partes
review should have many fewer motions since only one party will have a
patent that is the subject of the proceeding (compared with each party
having at least a patent or an application in current contested cases
before the trial section of the Board). Moreover, fewer issues can be
raised since inter partes review will not have priority-related issues
that must be addressed in current contested cases before the trial
section of the Board. Consequently, a 60% weighting factor should
capture the typical costs of an inter partes review.
   It is estimated that the cost of a post-grant or covered business
method patent review would be 75% of the cost of current contested
cases before the trial section of the Board to the end of the
preliminary motion period. A post-grant or covered business method
patent review should have many fewer motions since only one party will
have a patent that is the subject of the proceeding (compared with each
party having at least a patent or an application in current contested
cases before the trial section of the Board). Moreover, fewer issues
can be raised since post-grant and covered business method patent
reviews will not have the priority-related issues that must be
addressed in current contested cases before the trial section of the
Board before the priority phase. Again, a 75% weighting factor should
capture the typical costs of a post-grant or covered business method
patent review.
   The title, description, and respondent description of the
information collection are shown below with an estimate of the annual
reporting burdens for the post-grant and covered business method patent
review provisions. Included in this estimate is the time for reviewing
instructions, gathering and maintaining the data needed, and completing
and reviewing the collection of information. The principal impact of
the proposed changes in this notice of proposed rulemaking is to
implement the changes to Office practice necessitated by §§
6(d) and 18 of the Leahy-Smith America Invents Act.
   The public uses this information collection to request review and
derivation proceedings and to ensure that the associated fees and
documentation are submitted to the USPTO.

II. Data

   Needs and Uses: The information supplied to the USPTO by a petition
to institute a review as well as the motions authorized following the
institution is used by the USPTO to determine whether to initiate a
review under 35 U.S.C. 324 and to prepare a final decision under 35
U.S.C. 328.
   OMB Number: 0651-00xx.
   Title: Patent Review and Derivation Proceedings.
   Form Numbers: None.
   Type of Review: New Collection.
   Likely Respondents/Affected Public: Individuals or households,
businesses or other for profit, not-for-profit institutions, farms,
Federal Government, and state, local, or tribal governments.
   Estimated Number of Respondents/Frequency of Collection: 100
respondents and 515 responses per year.
   Estimated Time per Response: The USPTO estimates that it will take
the public from 0.1 to 180.4 hours to gather the necessary information,
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 165 

prepare the documents, and submit the information to the USPTO.
   Estimated Total Annual Respondent Burden Hours: 60,016.5 hours per
year.
   Estimated Total Annual (Hour) Respondent Cost Burden: $20,405,610
per year. The USPTO expects that the information in this collection
will be prepared by attorneys. Using the professional rate of $340 per
hour for attorneys in private firms, the USPTO estimates that the
respondent cost burden for this collection will be approximately
$20,405,610 per year (60,016.5 hours per year multiplied by $340 per
hour).
   Estimated Total Annual Non-hour Respondent Cost Burden: $2,355,800
per year. There are no capital start-up or maintenance costs associated
with this information collection. However, this collection does have
annual (non-hour) costs in the form of filing fees. There are filing
fees associated with petitions for post-grant and covered business
method patent review and for requests to treat a settlement as business
confidential. The total fees for this collection are calculated in the
accompanying table. The USPTO estimates that the total fees associated
with this collection will be approximately $2,355,800 per year.
   Therefore, the total estimated cost burden in fiscal year 2013 is
estimated to be $22,761,410 (the sum of the estimated total annual
(hour) respondent cost burden ($20,405,610) plus the estimated total
annual non-hour respondent cost burden ($2,355,800)).

                            Estimated time     Estimated        Estimated
                             for response       annual        annual burden
Item                            (hours)        responses          hours

Petition for post-grant or           180.4            50            9,020
   covered business method
   patent review
Reply to initial post-grant          100              45            4,500
   or covered business
   method patent review
Request for Reconsideration           80              14            1,120
Motions, replies and                 130             342           44,460
   oppositions after
   institution in post-grant
   or covered business method
   patent review
Request for oral hearing              20              45              900
Request to treat a settlement          2               2                4
   as business confidential
Request for adverse judgment,          1              10               10
   default adverse judgment or
   settlement
Request to make a settlement           1               2                2
   agreement available
Notice of judicial review of           0.1             5                0.5
   a Board decision (e.g.,
   notice of appeal under
   35 U.S.C. 142)

Totals                                               515           60,016.5



                                  Estimated                     Estimated
                                   annual                     annual filing
Item                              responses     Fee amount        costs

Petition for post-grant or           50           $47,100       $2,355,000
   covered business method
   patent review
Reply to post-grant or               45                 0                0
   covered business method
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 166 

   patent review petition
Request for Reconsideration          14                 0                0
Motions, replies and oppositions    342                 0                0
   after initiation in post-grant
   or covered business method
   patent review
Request for oral hearing             45                 0                0
Request to treat a settlement         2                 0                0
   as business confidential
Request for adverse judgment,        10                 0                0
   default adverse judgment or
   settlement
Request to make a settlement          2               400              800
   agreement available
Notice of judicial review of a        5                 0                0
   Board decision (e.g., notice
   of appeal under 35 U.S.C. 142)

Totals                              515                         $2,355,800


III. Solicitation

   The agency is soliciting comments to: (1) Evaluate whether the
proposed information requirement is necessary for the proper
performance of the functions of the agency, including whether the
information will have practical utility; (2) evaluate the accuracy of
the agency's estimate of the burden; (3) enhance the quality, utility,
and clarity of the information to be collected; and (4) minimize the
burden of collecting the information on those who are to respond,
including by using appropriate automated, electronic, mechanical, or
other technological collection techniques or other forms of information
technology.
   Interested persons are requested to send comments regarding this
information collection by April 10, 2012, to: (1) The Office of
Information and Regulatory Affairs, Office of Management and Budget,
New Executive Office Building, Room 10202, 725 17th Street NW.,
Washington, DC 20503, Attention: Nicholas A. Fraser, the Desk Officer
for the United States Patent and Trademark Office, and via email at
nfraser@omb.eop.gov; and (2) The Board of Patent Appeals and
Interferences by electronic mail message over the Internet addressed
to: post_grant_review@uspto.gov, or by 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 Michael Tierney, Post-Grant Review Proposed
Rules."
   Notwithstanding any other provision of law, no person is required
to respond to nor shall a 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,
Lawyers.

Proposed Amendments to the Regulatory Text

   For the reasons stated in the preamble, the Under Secretary of
Commerce for Intellectual Property and Director of the United States
Patent and Trademark Office propose to amend 37 CFR part 42 as proposed
to be added in the February 9, 2012, issue of the Federal Register as
follows:

PART 42 - TRIAL PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 167 


   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 Leahy-Smith America Invents Act, Pub. L. 112-29,
sections 6(c), 6(f), and 18, 125 Stat. 284, 304, 311, and 329
(2011).

   2. A subpart C is added to read as follows:

Subpart C - Post-Grant Review

General

§
42.200 Procedure; pendency.
42.201 Who may petition for a post-grant review.
42.202 Time for filing.
42.203 Post-grant review fee.
42.204 Content of petition.
42.205 Service of petition.
42.206 Filing date.
42.207 Preliminary response to petition.

Instituting Post-Grant Review

42.208 Institution of post-grant review.

After Institution of Post-Grant Review

42.220 Patent owner response.
42.221 Amendment of the patent.
42.222 Multiple proceedings.
42.223 Filing of supplemental information.
42.224 Discovery.

Subpart C - Post-Grant Review

General

§ 42.200  Procedure; pendency.

   (a) A post-grant review is a trial subject to the procedures set
forth in subpart A of this part.
   (b) A claim in an unexpired patent shall be given its broadest
reasonable construction in light of the specification of the patent in
which it appears.
   (c) A post-grant review proceeding shall be administered such that
pendency before the Board after institution is normally no more than
one year. The time can be extended by up to six months for good cause
by the Chief Administrative Patent Judge.
   (d) Interferences commenced before September 16, 2012, shall
proceed under part 41 of this chapter except as the Chief
Administrative Patent Judge, acting on behalf of the Director, may
otherwise order in the interests of justice.

§ 42.201  Who may petition for a post-grant review.

   A person who is not the owner of a patent may file with the Office
a petition to institute a post-grant review of the patent unless:
   (a) Before the date on which the petition for review is filed, the
petitioner or real party in interest filed a civil action challenging
the validity of a claim of the patent; or
   (b) The petitioner, the petitioner's real party in interest, or a
privy of the petitioner is estopped from challenging the claims on the
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 168 

grounds identified in the petition.

§ 42.202  Time for filing.

   (a) A petition for a post-grant review of a patent must be filed no
later than the date that is nine months after the date of the grant of
a patent or of the issuance of a reissue patent. A petition, however,
may not request a post-grant review for a claim in a reissue patent
that is identical to or narrower than a claim in the original patent
from which the reissue patent was issued unless the petition is filed
not later than the date that is nine months after the date of the grant
of the original patent.
   (b) The Director may impose a limit on the number of post-grant
reviews that may be instituted during each of the first four one-year
periods in which 35 U.S.C. 321 is in effect by providing notice in the
Office's Official Gazette or Federal Register. Petitions filed after an
established limit has been reached will be deemed untimely.

§ 42.203  Post-grant review fee.

   (a) A post-grant review fee set forth in § 42.15(b) must
accompany the petition.
   (b) No filing date will be accorded to the petition until full
payment is received.

§ 42.204  Content of petition.

   In addition to the requirements of §§ 42.8 and 42.22, the
petition must set forth:
   (a) Grounds for standing. The petitioner must certify that the
patent for which review is sought is available for post-grant review
and that the petitioner is not barred or estopped from requesting a
post-grant review of the patent.
   (b) Identification of challenge. Provide a statement of the precise
relief requested for each claim challenged. The statement must identify
the following:
   (1) The claim;
   (2) The specific statutory grounds permitted under paragraph (2) or
(3) of 35 U.S.C. 282(b) on which the challenge to the claim is based;
   (3) How the challenged claim is to be construed. Where the claim to
be construed contains a means-plus-function or step-plus-function
limitation as permitted under 35 U.S.C. 112, sixth paragraph, the
construction of the claim must identify the specific portions of the
specification that describe the structure, material, or acts
corresponding to each claimed function;
   (4) How the construed claim is unpatentable under the statutory
grounds identified in paragraph (b)(2) of this section. Where the
grounds for unpatentability are based on prior art, the petition must
specify where each element of the claim is found in the prior art. For
all other grounds of unpatentability, the petition must identify the
specific part of the claim that fails to comply with the statutory
grounds raised and state how the identified subject matter fails to
comply with the statute; and
   (5) The exhibit number of the supporting evidence relied upon to
support the challenge and state the relevance of the evidence to the
challenge raised, including identifying specific portions of the
evidence that support the challenge. The Board may exclude or give no
weight to the evidence where a party has failed to state its relevance
or to identify specific portions of the evidence that support the
challenge.
   (c) A motion may be filed that seeks to correct a clerical or
typographical mistake in the petition. The grant of such a motion does
not change the filing date of the petition.

§ 42.205  Service of petition.

 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 169 

   In addition to the requirements of § 42.6, the petitioner must
serve the petition and exhibits relied upon in the petition as follows:
   (a) The petition and supporting evidence must be served on the
patent owner at the correspondence address of record for the subject
patent. The petitioner may additionally serve the petition and
supporting evidence on the patent owner at any other address known to
the petitioner as likely to effect service.
   (b) If the petitioner cannot effect service of the petition and
supporting evidence on the patent owner at the correspondence address
of record for the subject patent, the petitioner must immediately
contact the Board to discuss alternate modes of service.

§ 42.206  Filing date.

   (a) Complete petition. A petition to institute a post grant review
will not be accorded a filing date until the petition satisfies all of
the following requirements:
   (1) Complies with § 42.204 or § 42.304,
   (2) Service of the petition on the correspondence address of record
as provided in § 42.205(a); and
   (3) Is accompanied by the filing fee in § 42.15(b).
   (b) Incomplete request. Where a party files an incomplete petition,
no filing date will be accorded and the Office will dismiss the request
if the deficiency in the petition is not corrected within the earlier
of either one month from the notice of an incomplete petition, or the
expiration of the statutory deadline in which to file a petition for
post-grant review.

§ 42.207  Preliminary response to petition.

   (a) The patent owner may file a preliminary response to the
petition. The response is limited to setting forth the reasons why no
post-grant review should be instituted under 35 U.S.C. 324. The
response can include evidence except as provided in paragraph (c) of
this section. The preliminary response is an opposition for purposes of
determining page limits under § 42.24.
   (b) Due date. The preliminary response must be filed no later than
two months after the date of a notice indicating that the request to
institute a post-grant review has been granted a filing date. A patent
owner may expedite the proceeding by filing an election to waive the
preliminary patent owner response.
   (c) No new testimonial evidence. The preliminary response shall not
present new testimony evidence beyond that already of record.
   (d) No amendments. The preliminary response shall not include any
amendment.
   (e) Disclaim Patent Claims. The patent owner may file a statutory
disclaimer under 35 U.S.C. 253(a) in compliance with § 1.321(a),
disclaiming one or more claims in the patent. No post-grant review will
be instituted based on disclaimed claims.

Instituting Post-Grant Review

§ 42.208  Institution of post-grant review.

   (a) When instituting post-grant review, the Board may authorize the
review to proceed on all or some of the challenged claims and on all or
some of the grounds of unpatentability asserted for each claim.
   (b) At any time prior to institution of post-grant review, the
Board may deny some or all grounds for unpatentability for some or all
of the challenged claims. Denial of a ground is a Board decision not to
institute post-grant review on that ground.
   (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
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 170 

account a preliminary patent owner response where such a response is
filed.
   (d) Additional grounds. Sufficient grounds under § 42.208(c)
may be a showing that the petition raises a novel or unsettled legal
question that is important to other patents or patent applications.

After Institution of Post-Grant Review

§ 42.220  Patent owner response.

   (a) Scope. A patent owner may file a response to the petition
addressing any ground for unpatentability not already denied. A patent
owner response is filed as an opposition and is subject to the page
limits provided in § 42.24.
   (b) Due date for response. If no date for filing a patent owner
response to a petition is provided in a Board order, the default date
for filing a patent owner response is two months from the date the
post-grant review is instituted.

§ 42.221  Amendment of the patent.

   (a) A patent owner may file one motion to amend a patent but only
after conferring with the Board. Any additional motions to amend may
not be filed without Board authorization.
   (b) A motion to amend must set forth:
   (1) The support in the original disclosure of the patent for each
claim that is added or amended; and
   (2) The support in an earlier filed disclosure for each claim for
which benefit of the filing date of the earlier filed disclosure is
sought.
   (c) A motion to amend the claims of a patent will not be authorized
where:
   (1) The amendment does not respond to a ground of unpatentability
involved in the trial; or
   (2) The amendment seeks to enlarge the scope of the claims of the
patent or introduce new subject matter.

§ 42.222  Multiple proceedings.

   Where another matter involving the patent is before the Office, the
Board may during the pendency of the post-grant review enter any
appropriate order regarding the additional matter including providing
for the stay, transfer, consolidation, or termination of any such
matter.

§ 42.223  Filing of supplemental information.

   Once a trial has been instituted, a petitioner may request
authorization to file a motion identifying supplemental information
relevant to a ground for which the trial has been instituted. The
request must be made within one month of the date the trial is
instituted.

§ 42.224  Discovery.

   Notwithstanding the discovery provisions of subpart A:
   (a) Requests for additional discovery may be granted upon a showing
of good cause as to why the discovery is needed; and
   (b) Discovery is limited to evidence directly related to factual
assertions advanced by either party in the proceeding.

January 31, 2012                                            DAVID J. KAPPOS
                  Under Secretary of Commerce for Intellectual Property and
                  Director of the United States Patent and Trademark Office
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 171 

Changes to Implement Transitional Program for Covered Business Method Patents
                     DEPARTMENT OF COMMERCE
                  Patent and Trademark Office
                         37 CFR Part 42
                   [Docket No. PTO-P-2011-0085]
                         RIN 0651-AC73

            Changes To Implement Transitional Program for
                  Covered Business Method Patents

AGENCY: United States Patent and Trademark Office, Commerce.

ACTION: Notice of proposed rulemaking.

SUMMARY: The United States Patent and Trademark Office (Office or
USPTO) proposes new rules to implement the provisions of the Leahy-
Smith America Invents Act that create a new transitional post-grant
review proceeding for covered business method patents to be conducted
before the Patent Trial and Appeal Board (Board). These provisions of
the Leahy-Smith America Invents Act will take effect on September 16,
2012, one year after the date of enactment. These provisions and any
regulations issued under these provisions will be repealed on September
16, 2020, with respect to any new petitions under the transitional
program.

DATES: The Office solicits comments from the public on this proposed
rulemaking. Written comments must be received on or before April 10,
2012 to ensure consideration.

ADDRESSES: Comments should be sent by electronic mail message over the
Internet addressed to: TPCBMP_Rules@uspto.gov. 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
Michael Tierney, Covered Business Method Patent Review 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 eRulemaking Portal.
   Although comments may be submitted by postal mail, the Office
prefers to receive comments by electronic mail message over the
Internet because sharing comments with the public is more easily
accomplished. Electronic comments are preferred to be submitted in
plain text, but also may be submitted in ADOBE® portable
document format or MICROSOFT WORD® format. Comments not
submitted electronically should be submitted on paper in a format that
facilitates convenient digital scanning into ADOBE® portable
document format.
   The comments will be available for public inspection at the Board
of Patent Appeals and Interferences, 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/). Because comments will be made available for
public inspection, information that the submitter does not desire to
make public, such as an address or phone number, should not be included
in the comments.

FOR FURTHER INFORMATION CONTACT: Michael Tierney, Lead Administrative
Patent Judge, Sally Medley, Administrative Patent Judge, Robert Clarke,
Administrative Patent Judge, and Joni Chang, Administrative Patent
Judge, Board of Patent Appeals and Interferences, by telephone at (571)
272-9797.

SUPPLEMENTARY INFORMATION: On September 16, 2011, the Leahy-Smith
America Invents Act was enacted into law (Pub. L. 112-29, 125 Stat. 284
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 172 

(2011)). The purpose of the Leahy-Smith America Invents Act and these
proposed regulations is to establish a more efficient and streamlined
patent system that will improve patent quality and limit unnecessary
and counterproductive litigation costs. The preamble of this notice
sets forth in detail the procedures by which the Board will conduct
transitional covered business method patent review proceedings. The
USPTO is engaged in a transparent process to create a timely, cost-
effective alternative to litigation. Moreover, the rulemaking process
is designed to ensure the integrity of the trial procedures. See 35
U.S.C. 326(b). The proposed rules would provide a set of rules relating
to Board trial practice for transitional covered business method review
proceedings.
   Section 18 of the Leahy-Smith America Invents Act provides that the
Director will establish regulations establishing and implementing a
transitional program for the review of covered business method patents.
Section 18(a)(1) of the Leahy-Smith America Invents Act provides that
the transitional proceeding will be regarded as, and will employ the
standards and procedures of, a post-grant review under chapter 32 of
title 35, United States Code, subject to certain exceptions. For
instance, a petitioner in a covered business method patent review may
request to cancel as unpatentable one or more claims of a patent on any
ground that could be raised under 35 U.S.C. 282(b)(2) or (3) (relating
to invalidity of the patent or any claim) (see 35 U.S.C. 321(b)); and
the determination by the Director whether to institute a covered
business method patent review will be final and nonappealable (see 35
U.S.C. 324(e)). Section 18(a)(1)(A) of the Leahy-Smith America Invents
Act provides that 35 U.S.C. 321(c) and 35 U.S.C. 325(b), (e)(2), and
(f) will not apply to a transitional proceeding.
   Section 18(a)(1)(B) of the Leahy-Smith America Invents Act
specifies that a person may not file a petition for a transitional
proceeding with respect to a covered business method patent unless the
person or person's real party in interest or privy has been sued for
infringement of the patent or has been charged with infringement under
that patent.
   Section 18(a)(1)(C) of the Leahy-Smith America Invents Act further
provides that limited prior art shall apply for those challenged
covered business method patents granted under first-to-invent
provisions. Specifically, section 18(a)(1)(C) provides:

    A petitioner in a transitional proceeding who
challenges the validity of 1 or more claims in a covered business
method patent on a ground raised under section 102 or 103 of title
35, United States Code, as in effect on the day before the effective
date set forth in section 3(n)(1), may support such ground only on
the basis of -
    prior art that is described by section 102(a) of such
title (as in effect on the day before such effective date); or
    prior art that -
   ° discloses the invention more than 1 year before the date
of the application for patent in the United States; and
   ° would be described by section 102(a) of such title (as in
effect on the day before the effective date set forth in section
3(n)(1)) if the disclosure had been made by another before the
invention thereof by the applicant for patent.

   Section 18 of the Leahy-Smith America Invents Act provides that the
Director may institute a transitional proceeding only for a patent that
is a covered business method patent. Section 18(d)(1) of the Leahy-
Smith America Invents Act specifies that a covered business method
patent is a patent that claims a method or corresponding apparatus for
performing data processing or other operations used in the practice,
administration, or management of a financial product or service, except
that the term does not include patents for technological inventions.
Section 18(d)(2) provides that the Director will issue regulations for
determining whether a patent is for a technological invention.
   The Leahy-Smith America Invents Act provides that the transitional
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 173 

program for the review of covered business method patents will take
effect on September 16, 2012, one year after the date of enactment, and
applies to any covered business method patent issued before, on, or
after September 16, 2012. Section 18 of the Leahy-Smith America Invents
Act and the regulations issued under § 18 are repealed on September
16, 2020. Section 18 and the regulations issued will continue to apply
after September 16, 2020, to any petition for a transitional proceeding
that is filed before September 16, 2020. The Office will not consider a
petition for a transitional proceeding that is filed on or after
September 16, 2020.

Discussion of Specific Rules

   This notice proposes new rules to implement the provisions of the
Leahy-Smith America Invents Act for the transitional program for
covered business method patents. As previously discussed, § 18(a)(1)
of the Leahy-Smith America Invents Act provides that the
Director shall issue regulations establishing and implementing a
transitional post-grant review proceeding for the review of covered
business method patents. In particular, this notice proposes to add a
new subpart D to 37 CFR part 42 to provide rules specific to
transitional post-grant review of covered business method patents.
Pursuant to § 18(d)(2) of the Leahy-Smith America Invents Act, the
Office in a separate rulemaking is proposing the definition of a
technological invention (RIN 0651-AC75).
   Additionally, the Office in a separate rulemaking is proposing to
add part 42, including subpart A, (0651-AC70) that would include a
consolidated set of rules relating to Board trial practice. More
specifically, the proposed subpart A of part 42 would set forth the
policies, practices, and definitions common to all trial proceedings
before the Board. The proposed rules in the instant notice and
discussion below may reference the proposed rules in subpart A of part
42. Furthermore, the Office in separate rulemakings is proposing to add
a new subpart B to 37 CFR part 42 (RIN 0651-AC71) to provide rules
specific to inter partes review, a new subpart C to 37 CFR part 42 (RIN
0651-AC72) to provide rules specific to post-grant review, and a new
subpart E to 37 CFR part 42 (RIN 0651-AC74) to provide rules specific to
derivation. The notices of proposed rulemaking are available on the
USPTO Internet Web site at http://www.uspto.gov/.
   Title 37 of the Code of Federal Regulations, Chapter I, Part 42,
Subpart D, entitled "Transitional Program for Covered Business Method
Patents" is proposed to be added as follows:

   Section 42.300: Proposed § 42.300 would set forth policy
considerations for covered business method patent review proceedings.
   Proposed § 42.300(a) would provide that a covered business
method patent review is a trial and subject to the rules set forth in
subpart A and also subject to the post-grant review procedures set
forth in subpart C except for §§ 42.200, 42.201, 42.202, and
42.204. This is consistent with § 18(a)(1) of the Leahy-Smith
America Invents Act, which provides that the transitional proceeding
shall be regarded as, and shall employ the standards and procedures of,
a post-grant review with certain exceptions.
   Proposed § 42.300(b) would provide that a claim in an unexpired
patent shall be given its broadest reasonable construction in light of
the specification in which it appears. This proposed rule would be
consistent with longstanding established principles of claim
construction before the Office. See, e.g., In re Am. Acad. of Sci. Tech
Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004); In re Yamamoto, 740 F.2d
1569, 1571 (Fed. Cir. 1984). As explained in Yamamoto, a party's
ability to amend claims to avoid prior art distinguishes Office
proceedings from district court proceedings and justifies the difficult
standard for claim interpretation. Yamamoto, 740 F.2d at 1572.
   Proposed § 42.300(c) would provide a one-year timeframe for
administering the proceeding after institution, with a six-month
extension for good cause. This proposed rule is consistent with 35
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 174 

U.S.C. 326(a)(11), which sets forth statutory timeframes for post-grant
review.
   Proposed § 42.300(d) would provide that the rules in subpart D
are in effect until September 15, 2020, except that the rules shall
continue to apply to any covered business method patent review filed
before the date of repeal. This is consistent with § 18(a)(3) of
the Leahy-Smith America Invents Act, which provides that the
regulations issued are repealed effective upon the expiration of the
eight-year period beginning on the date that the regulations take
effect.

   Section 42.301: Proposed § 42.301 would provide definitions
specific to covered business method patent reviews.
   Proposed § 42.301(a) would adopt the definition for covered
business method patents provided in § 18(d)(1) of the Leahy-Smith
America Invents Act. Specifically, the proposed definition would
provide that covered business method patent means a patent that claims
a method or corresponding apparatus for performing data processing or
other operations used in the practice, administration, or management of
a financial product or service, except that the term does not include
patents for technological inventions.
   Pursuant to § 18(d)(2) of the Leahy-Smith America Invents Act,
the Office in a separate rulemaking is proposing the definition of a
technological invention, which would be set forth in proposed
§ 42.301(b).

   Section 42.302: Proposed § 42.302 would identify who may file a
petition for a covered business method patent review.
   Proposed § 42.302(a) would provide that a petitioner may not
file a petition to institute a covered business method patent review of
the patent unless the petitioner, the petitioner's real party in
interest, or a privy of the petitioner has been sued for infringement
of the patent or has been charged with infringement under that patent.
This proposed rule is consistent with § 18(a)(1)(B) of the Leahy-
Smith America Invents Act.
   Proposed § 42.302(b) would provide that a petitioner may not
file a petition to institute a covered business method patent review of
the patent where the petitioner, the petitioner's real party in
interest, or a privy of the petitioner is estopped from challenging the
claims on the grounds identified in the petition. The proposed rule is
consistent with 35 U.S.C. 325(e)(1), which provides for estoppel based
upon a final written decision in a post-grant review.

   Section 42.303: Proposed § 42.303 would provide that a petition
for a covered business method patent review may be filed at any time
prior to or after the time a petition for a post-grant review of the
patent would satisfy the requirements of 35 U.S.C. 321(c). This
proposed rule is consistent with § 18(a)(2) of the Leahy-Smith
America Invents Act.

   Section 42.304: Proposed § 42.304 would provide for the content
of petitions to institute a covered business method patent review. The
proposed rule is consistent with 35 U.S.C. 322(a)(4), which allows the
Director to prescribe regulations concerning the information provided
with the petition to institute a covered business patent review.
   Proposed § 42.304(a) would provide that a petition under this
section must demonstrate that the petitioner has grounds for standing.
To establish standing, a petitioner, at a minimum, would be required to
certify that the patent is available for covered business method patent
review and that the petitioner meets the eligibility requirements of
§ 42.302. This proposed requirement attempts to ensure that a party
has standing to file the covered business method patent review and
would help prevent spuriously instituted reviews. Facially improper
standing would be a basis for denying the petition without proceeding
to the merits of the decision.
   Proposed § 42.304(b) would require that the petition identify
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 175 

the precise relief requested for the claims challenged. Specifically,
the proposed rule would require that the petition identify each claim
being challenged, the specific grounds on which each claim is
challenged, how the claims are to be construed, why the claims as
construed are unpatentable, and the exhibit numbers of the evidence
relied upon with a citation to the portion of the evidence that is
relied upon to support the challenge. This proposed rule is consistent
with 35 U.S.C. 322(a)(3), which requires that the petition identify, in
writing and with particularity, each claim challenged, the grounds on
which the challenge to each claim is based, and the evidence supporting
the challenge. It is also consistent with 35 U.S.C. 322(a)(4), which
allows the Director to require additional information as part of the
petition. The proposed rule would provide an efficient means for
identifying the legal and factual basis supporting a prima facie case
of relief and would provide the patent owner with a minimum level of
notice as to the basis for the challenge to the claims.
   Proposed § 42.304(c) would provide that a petitioner seeking to
correct clerical or typographical mistakes could file a motion to
correct the mistakes. The proposed rule would also provide that the
grant of such a motion would not alter the filing date of the petition.

Rulemaking Considerations

   A. Administrative Procedure Act (APA): This notice proposes rules
of practice concerning the procedure for requesting a covered business
method patent review, and the trial process after
initiation of such a review. The changes being proposed in this notice
do not change the substantive criteria of patentability. These proposed
changes involve rules of agency practice and procedure and/or
interpretive rules. See Bachow Commc'ns Inc. v. FCC, 237 F.3d 683, 690
(DC 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 standard 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).
   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), does 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)). The Office, however, is publishing these changes and the
Initial Regulatory Flexibility Act analysis, below, for comment as it
seeks the benefit of the public's views on the Office's proposed
implementation of these provisions of the Leahy-Smith America Invents
Act.
   B. Regulatory Flexibility Act: The Office estimates that 50
petitions for covered business method patent review will be filed in
fiscal year 2013. This will be the first fiscal year in which the
review proceeding will be available for an entire fiscal year. The
estimated number of covered business method patent review petitions is
based on the number of inter partes reexamination requests filed in
fiscal year 2011 for patents having an original classification in class
705 of the United States Patent Classification System. Class 705 is the
classification for patents directed to data processing in the following
areas: financial, business practice, management, or cost/price
determination. See
http://www.uspto.gov/web/patents/classification/uspc705/sched705.pdf.

   The following is the class definition and description for Class
705:

 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 176 

   This is the generic class for apparatus and corresponding
methods for performing data processing operations, in which there is
a significant change in the data or for performing calculation
operations wherein the apparatus or method is uniquely designed for
or utilized in the practice, administration, or management of an
enterprise, or in the processing of financial data.
   This class also provides for apparatus and corresponding methods
for performing data processing or calculating operations in which a
charge for goods or services is determined.
   This class additionally provides for subject matter described in
the two paragraphs above in combination with cryptographic apparatus
or method.
   Subclasses 705/300-348 were established prior to complete
reclassification of all project documents. Documents that have not
yet been reclassified have been placed in 705/1.1. Until
reclassification is finished a complete search of 705/300-348 should
include a search of 705/1.1. Once the project documents in 705/1.1
have been reclassified they will be moved to the appropriate
subclasses and this note will be removed.

Scope of the Class

   1. The arrangements in this class are generally used for
problems relating to administration of an organization, commodities
or financial transactions.
   2. Mere designation of an arrangement as a "business machine"
or a document as a "business form" or "business chart" without
any particular business function will not cause classification in
this class or its subclasses.
   3. For classification herein, there must be significant claim
recitation of the data processing system or calculating computer and
only nominal claim recitation of any external art environment.
Significantly claimed apparatus external to this class, claimed in
combination with apparatus under the class definition, which perform
data processing or calculation operations are classified in the
class appropriate to the external device unless specifically
excluded therefrom.
   4. Nominally claimed apparatus external to this class in
combination with apparatus under the class definition is classified
in this class unless provided for in the appropriate external class.
   5. In view of the nature of the subject matter included herein,
consideration of the classification schedule for the diverse art or
environment is necessary for proper search.

   See Classification Definitions (Feb. 2011) available at
http://www.uspto.gov/web/patents/classification/uspc705/defs705.htm.
   Accordingly, patents subject to covered business method patent
review are anticipated to be typically classifiable in Class 705. It is
anticipated that the number of patents in Class 705 that do not qualify
as covered business method patents would approximate the number of
patents classified in other classes that do qualify.
   The Office received 20 requests for inter partes reexamination of
patents classified in Class 705 in fiscal year 2011. The Office in
estimating the number of petitions for covered business method patent
review to be higher than 20 requests due to an expansion of the grounds
for which review may be requested including subject matter eligibility
grounds, the greater coordination with litigation, and the provision
that patents will be eligible for the proceeding regardless of filing
date of the application which resulted in the patent.
   The Office has reviewed the entity status of patents for which
inter partes reexamination was requested from October 1, 2000, to
September 23, 2011. This data only includes filings granted a filing
date in the particular year rather than filings in which a request was
received in the year. The first inter partes reexamination was filed on
July 27, 2001. A summary of that review is provided in Table 1 below.
As shown by Table 1, patents known to be owned by a small entity
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 177 

represented 32.79% of patents for which inter partes reexamination was
requested. Based on an assumption that the same percentage of patents
owned by small entities will be subject to covered business method
patent review, it is estimated that 16 petitions for covered business
method patent review would be filed to seek review of patents owned by
a small entity in fiscal year 2013, the first full fiscal year that
these proceedings will be available.


              Table 1 - Inter partes Reexamination Requests Filed
                           With Parent Entity Type *

                       Inter partes    Number filed where    Percent small
                        examination     parent patent is     entity type of
Fiscal year            requests filed   small entity type        total

2011                        329               123                  37.39
2010                        255                94                  36.86
2009                        240                62                  25.83
2008                        155                52                  33.55
2007                        127                35                  27.56
2006                         61                17                  27.87
2005                         59                18                  30.51
2004                         26                 5                  19.23
2003                         21                12                  57.14
2002                          4                 1                  25.00
2001                          1                 0                   0.00

Totals                    1,278               419                  32.79

* Small entity status determined by reviewing preexamination small entity
indicator for the parent patent.

   Based on the number of patents issued during fiscal years 1995
through 1999 that paid the small entity third stage maintenance fee,
the number of patents issued during fiscal years 2000 through 2003 that
paid the small entity second stage maintenance fee, the number of
patents issued during fiscal years 2004 through 2007 that paid the
first stage maintenance fee, and the number of patents issued during
fiscal years 2008 through 2011 that paid a small entity issue fee,
there are no less than 375,000 patents owned by small entities in force
as of October 1, 2011.
   Furthermore, the Office recognizes that there would be an offset to
this number for patents that expire earlier than 20 years from their
filing date due to a benefit claim to an earlier application or due to
a filing of a terminal disclaimer. The Office likewise recognizes that
there would be an offset in the opposite manner due to the accrual of
patent term extension and adjustment. The Office, however, does not
maintain data on the date of expiration by operation of a terminal
disclaimer. Therefore, the Office has not adjusted the estimate of
375,000 patents owned by small entities in force as of October 1, 2011.
While the Office maintains information regarding patent term extension
and adjustment accrued by each patent, the Office does not collect data
on the expiration date of patents that are subject to a terminal
disclaimer. As such, the Office has not adjusted the estimated of
375,000 patents owned by small entities in force as of October 1, 2011,
for accrual of patent term extension and adjustment, because in view of
the incomplete terminal disclaimer data issue, would be incomplete and
any estimate adjustment would be administratively burdensome. Thus, it
is estimated that the number of small entity patents in force in fiscal
year 2013 will be at least 375,000.
   Based on the estimated number of patents in force, the number of
small entity owned patents impacted by covered business method patent
review in fiscal year 2013 (16 patents) would be less than 0.005% (16/
375,000) of all patents in force that are owned by small entities. The
USPTO nonetheless has undertaken an Initial Regulatory Flexibility Act
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 178 

Analysis of the proposed rule.
   1. Description of the Reasons That Action by the Office Is Being
Considered: On September 16, 2011, the Leahy-Smith America Invents Act
was enacted into law (Pub. L. 112-29, 125 Stat. 284 (2011)). Section 18
of the Leahy-Smith America Invents Act provides for a transitional
program for covered business method patents which will employ the
standards and procedures of the post-grant review proceeding with a few
exceptions. For the implementation, § 6(f) of the Leahy-Smith
America Invents Act requires that the Director issue regulations to
carry out chapter 32 of title 35, United States Code, within one year
after the date of enactment. Public Law 112-29, § 6(f), 125 Stat.
284, 311 (2011).
   2. Succinct Statement of the Objectives of, and Legal Basis for,
the Proposed Rules: The proposed rules seek to implement covered
business method patent review as authorized by the Leahy-Smith America
Invents Act. The Leahy-Smith America Invents Act requires that the
Director prescribe rules for the covered business method patent reviews
that result in a final determination not later than one year after the
date on which the Director notices the institution of a proceeding. The
one-year period may be extended for not more than 6 months if good
cause is shown. See 35 U.S.C. 326(a)(11). The Leahy-Smith America
Invents Act also requires that the Director, in prescribing rules for
covered business method patent reviews, consider the effect of the
rules on the economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to complete
timely the instituted proceedings. See 35 U.S.C. 326(b). Consistent
with the time periods provided in 35 U.S.C. 326(a)(11), the proposed
rules are designed to, except where good cause is shown to exist,
result in a final determination by the Patent Trial and Appeal Board
within one year of the notice of initiation of the review. This one-
year review will enhance the effect on the economy, and improve the
integrity of the patent system and the efficient administration of the
Office.
   3. Description and Estimate of the Number of Affected Small
Entities: The Small Business Administration (SBA) small business size
standards applicable to most analyses conducted to comply with the
Regulatory Flexibility Act are set forth in 13 CFR 121.201. These
regulations generally define small businesses as those with fewer than
a specified maximum number of employees or less than a specified level
of annual receipts for the entity's industrial sector or North American
Industry Classification System (NAICS) code. As provided by the
Regulatory Flexibility Act, and after consultation with the Small
Business Administration, the Office formally adopted an alternate size
standard as the size standard for the purpose of conducting an analysis
or making a certification under the Regulatory Flexibility Act for
patent-related regulations. See Business Size Standard for Purposes of
United States Patent and Trademark Office Regulatory Flexibility
Analysis for Patent-Related Regulations, 71 FR 67109 (Nov. 20, 2006),
1313 Off. Gaz. Pat. Office 60 (Dec. 12, 2006). This alternate small
business size standard is SBA's previously established size standard
that identifies the criteria entities must meet to be entitled to pay
reduced patent fees. See 13 CFR 121.802. If patent applicants identify
themselves on a patent application as qualifying for reduced patent
fees, the Office captures this data in the Patent Application Location
and Monitoring (PALM) database system, which tracks information on each
patent application submitted to the Office.
   Unlike the SBA small business size standards set forth in 13 CFR
121.201, the size standard for USPTO is not industry-specific. The
Office's definition of a small business concern for Regulatory
Flexibility Act purposes is a business or other concern that: (1) Meets
the SBA's definition of a "business concern or concern" set forth in
13 CFR 121.105; and (2) meets the size standards set forth in 13 CFR
121.802 for the purpose of paying reduced patent fees, namely an
entity: (a) Whose number of employees, including affiliates, does not
exceed 500 persons; and (b) which has not assigned, granted, conveyed,
or licensed (and is under no obligation to do so) any rights in the
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 179 

invention to any person who made it and could not be classified as an
independent inventor, or to any concern which would not qualify as a
non-profit organization or a small business concern under this
definition. See Business Size Standard for Purposes of United States
Patent and Trademark Office Regulatory Flexibility Analysis for Patent-
Related Regulations, 71 FR at 67112 (Nov 20, 2006), 1313 Off. Gaz. Pat.
Office at 63 (Dec. 12, 2006).
   As discussed above, it is anticipated that 50 petitions for covered
business method patent review will be filed in fiscal year 2013. The
Office has reviewed the percentage of patents for which inter partes
reexamination was requested from October 1, 2000 to September 23, 2011.
A summary of that review is provided in Table 1 above. As demonstrated
by Table 1, patents known to be owned by a small entity represent
32.79% of patents for which inter partes reexamination was requested.
Based on an assumption that the same percentage of patents owned by
small entities will be subject to the new review proceedings, it is
estimated that 16 patents owned by small entities would be affected by
covered business method patent review.
   The USPTO estimates that 2.5% of patent owners will file a request
for adverse judgment prior to a decision to institute and that another
2.5% will file a request for adverse judgment or fail to participate
after initiation. Specifically, an estimated 2 patent owners will file
a request for adverse judgment or fail to participate after institution
in covered business method proceedings. Based on the percentage of
small entity owned patents that were the subject of inter partes
reexamination (32.79%) from October 1, 2000 to September 23, 2011, it
is estimated that 1 small entity will file such requests or fail to
participate in covered business method patent review.
   Under the proposed rules, prior to determining whether to institute
a review, the patent owner may file an optional patent owner
preliminary response to the petition. Given the new time period
requirements to file review petitions relative to patent enforcement
proceedings and the desire to avoid the cost of a trial and delays to
related infringement actions, it is anticipated that 90% of petitions,
other than those for which a request for adverse judgment is filed,
will result in the filing of a patent owner preliminary response.
Specifically, the Office estimates that 45 patent owners will file a
preliminary response to a covered business method petition. Based on
the percentage of small entity owned patents that were the subject of
inter partes reexamination (32.79%), it is estimated that 15 small
entities will file a preliminary response to a covered business method
patent review petition filed in fiscal year 2013.
   Under the proposed rules, the Office will determine whether to
institute a trial within three months after the earlier of: (1) The
submission of a patent owner preliminary response, (2) the waiver of
filing a patent owner preliminary response, or (3) the expiration of
the time period for filing a patent owner preliminary response. If the
Office decides not to institute a trial, the petitioner may file a
request for reconsideration of the Office's decision. In estimating the
number of requests for reconsideration, the Office considered the
percentage of inter partes reexaminations that were denied relative to
those that were ordered (24 divided by 342, or 7%) in fiscal year 2011.
See Reexamination - FY 2011, http://www.uspto.gov/patents/Reexamination_
operational_statistic_through_FY2011Q4.pdf. The Office also considered
the impact of: (1) Patent owner preliminary responses under newly
authorized in 35 U.S.C. 323, (2) the enhanced thresholds for instituting
reviews set forth in 35 U.S.C. 324(a), which would tend to increase the
likelihood of dismissing a petition for review, and (3) the more
restrictive time period for filing a petition for review in 35 U.S.C.
325(b), which would tend to reduce the likelihood of dismissing a petition.
Based on these considerations, it is estimated that 10% of the petitions
for review (5 divided by 49) would be dismissed.
   During fiscal year 2011, the Office issued 21 decisions following a
request for reconsideration of a decision on appeal in inter partes
reexamination. The average time from original decision to decision on
reconsideration was 4.4 months. Thus, the decisions on reconsideration
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 180 

were based on original decisions issued from July 2010 until June 2011.
During this time period, the Office mailed 63 decisions on appeals in
inter partes reexamination. See BPAI Statistics - Receipts and
Dispositions by Technology Center, http://www.uspto.gov/ip/boards/bpai/
stats/receipts/index.jsp (monthly data). Based on the assumption that
the same rate of reconsideration (21 divided by 63 or 33.333%) will
occur, the Office estimates that 2 requests for reconsideration will be
filed. Based on the percentage of small entity owned patents that were
the subject of inter partes reexamination (32.79%), it is estimated
that 1 small entity will file a request for a reconsideration of a
decision dismissing the petition for post-grant or covered business
method patent review filed in fiscal year 2013.
   The Office reviewed motions, oppositions, and replies in a number
of contested trial proceedings before the trial section of the Board.
The review included determining whether the motion, opposition, and
reply were directed to patentability grounds and non-priority non-
patentability grounds. Based on the review, it is anticipated that
covered business method patent reviews will have an average of 8.89
motions, oppositions, and replies per trial after institution.
Settlement is estimated to occur in 20% of instituted trials at various
points of the trial. In the trials that are settled, it is estimated
that only 50% of the noted motions, oppositions, and replies would be
filed.
   After a trial has been instituted but prior to a final written
decision, parties to a covered business method patent review may
request an oral hearing. It is anticipated that 45 requests for oral
hearings will be filed based on the number of requests for oral
hearings in inter partes reexamination, the stated desirability for
oral hearings during the legislative process, and the public input
received prior to this notice of proposed rulemaking. Based on the
percentage of small entity owned patents that were the subject of inter
partes reexamination (32.79%), it is estimated that 15 small entities
will file a request for oral hearing in the covered business method
patent reviews instituted in fiscal year 2013.
   Parties to a covered business method patent review may file
requests to treat a settlement as business confidential, and request
for adverse judgment. A written request to make a settlement agreement
available may also be filed. Given the short time period set for
the alternative dispute resolution options will be infrequently used.
The Office estimates that 2 requests to treat a settlement as business
confidential, and 10 requests for adverse judgment, default adverse
judgment, or settlement notices will be filed. The Office also
estimatesthat 2 requests to make a settlement available will be filed.
Based on the percentage of small entity owned patents that were the
subject of inter partes reexamination (32.79%), it is estimated that 1
small entity will file a request to treat a settlement as business
confidential and 3 small entities will file a request for adverse
judgment, default adverse judgment notices, or settlement notices in
the reviews instituted in fiscal year 2013.
   Parties to a covered business method patent review may seek
judicial review of the final decision of the Board. Historically, 33%
of examiner's decisions in inter partes reexamination proceedings have
been appealed to the Board. It is anticipated that 16% of final
decisions of the Board would be appealed. The reduction in appeal rate
is based on the higher threshold for institution, the focused process,
and the experience of the Board in conducted contested cases.
Therefore, it is estimated that 5 parties would seek judicial review of
the final decisions of the Board in covered business method patent
reviews instituted in fiscal year 2013. Furthermore, based on the
percentage of small entity owned patents that were the subject of inter
partes reexamination (32.79%), it is estimated that 2 small entities
would seek judicial review of final decisions of the Board in the
covered business method patent reviews instituted in fiscal year 2013.
   4. Description of the Reporting, Recordkeeping, and Other
Compliance Requirements of the Proposed Rule, Including an Estimate of
the Classes of Small Entities Which Will Be Subject to the Requirement
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 181 

and the Type of Professional Skills Necessary for Preparation of the
Report or Record: Covered business method patent reviews would be
limited to business method patents that are not patents for
technological inventions. Under the proposed rules, a person who is not
the owner of a patent may file a petition to institute a review of the
patent, with a few exceptions. Given this, it is anticipated that a
petition for review is likely to be filed by an entity practicing in
the business method field for covered business methods.
   Preparation of the petition would require analyzing the patent
claims, locating evidence supporting arguments of unpatentability, and
preparing the petition seeking review of the patent. This notice
provides the proposed procedural requirements that are common for the
new trials. Additional requirements are provided in contemporaneous
trial specific proposed rulemaking. The procedures for petitions to
institute a covered business method patent review are proposed in
§§42.5, 42.6, 42.8, 42.11, 42.13, 42.20, 42.21, 42.22,
42.24(a)(3), 42.63, 42.65, 42.203, 42.205, and 42.302 through 42.304.
   The skills necessary to prepare a petition for review and to
participate in a trial before the Patent Trial and Appeal Board would
be similar to those needed to prepare a request for inter partes
reexamination, to represent a party in an inter partes reexamination,
and to represent a party in an interference proceeding before the
Patent Trial and Appeal Board. The level of skill is typically
possessed by a registered patent practitioner having devoted
professional time to the particular practice area, typically under the
supervision of a practitioner skilled in the particular practice area.
Where authorized by the Board, a non-registered practitioner may be
admitted pro hac vice, on a case-by-case basis based on the facts and
circumstances of the trial and party, as well as the skill of the
practitioner.
   The cost of preparing a petition for covered business method patent
review is estimated to be 33.333% higher than the cost of preparing an
inter partes review petition because the petition for covered business
method patent review may seek to institute a proceeding on additional
grounds such as subject matter eligibility. The American Intellectual
Property Law Association's AIPLA Report of the Economic Survey 2011
reported that the average cost of preparing a request for inter partes
reexamination was $46,000. Based on the Office's consideration of the
work required to prepare and file such a request, the Office estimates
that the cost of preparing a petition for covered business method
patent review would be $61,333 (including expert costs).
   The filing of a petition for review would also require payment by
the petitioner of the appropriate petition fee to recover the aggregate
cost for providing the review. The appropriate petition fee would be
determined by the number of claims for which review is sought and the
type of review. The proposed fees for filing a petition for covered
business method patent review would be: $35,800 to request review of 20
or fewer claims, $44,750 to request review of 21 to 30 claims, $53,700
to request review of 31 to 40 claims, $71,600 to request review of 41
to 50 claims, $89,500 to request review of 51 to 60 claims, and an
additional $35,800 to request review of additional groups of 10 claims.
   In setting fees, the estimated information technology cost to
establish the process and maintain the filing and storage system
through 2017 is to be recovered by charging each petition $2,270. The
remainder of the fee is to recover the cost for judges to determine
whether to institute a review and conduct the review, together with a
proportionate share of indirect costs, e.g., rent, utilities,
additional support, and administrative costs. Based on the direct and
indirect costs, the fully burdened cost per hour for judges to decide a
petition and conduct a review is estimated to be $258.32.
   For a petition for covered business method patent review with 20 or
fewer challenged claims, it is anticipated that 121 hours of judge time
would be required. For 21 to 30 challenged claims, an additional 30
hours is anticipated for a total of 151 hours of judge time. For 31 to
40 challenged claims, an additional 60 hours is anticipated for a total
of 181 hours of judge time. For 41 to 50 challenged claims, an
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additional 121 hours is anticipated for a total of 242 hours of judge
time. For 51 to 60 challenged claims, an additional 181 hours is
anticipated for a total of 302 hours of judge time. The increase in
adjustment reflects the added complexity that typically occurs as more
claims are in dispute.
   The proposed rules would permit the patent owner to file a
preliminary response to the petition setting forth the reasons why no
review should be initiated. The procedures for a patent owner to file a
preliminary response as an opposition are proposed in §§ 42.6,
42.8, 42.11, 42.13, 42.21, 42.23, 42.24(b), 42.51, 42.52, 42.53, 42.54,
42.63, 42.64, 42.65, 42.107, 42.120, 42.207, and 42.220. The patent
owner is not required to file a preliminary response. The Office
estimates that the preparation and filing of a patent owner preliminary
response would require 100 hours of professional time and cost $34,000
(including expert costs). The AIPLA Report of the Economic Survey 2011
reported that the average cost for inter partes reexamination including
of the request ($46,000), the first patent owner response, and third
party comments was $75,000 (see I-175) and the median billing rate for
professional time of $340 per hour for attorneys in private firms (see
8). Thus, the cost of the first patent owner reply and the third party
statement is $29,000. The Office finds these costs to be reasonable
estimates. The patent owner reply and third party statement, however,
occur after the examiner has made an initial threshold determination and
made only the appropriate rejections. Accordingly, it is anticipated that
filing a patent owner preliminary response to a petition for review would
cost more than the initial reply in a reexamination, or an estimated
$34,000 (including expert costs).
   The Office will determine whether to institute a trial within three
months after the earlier of: (1) The submission of a patent owner
preliminary response, (2) the waiver of filing a patent owner
preliminary response, or (3) the expiration of the time period for
filing a patent owner preliminary response. If the Office decides not
to institute a trial, the petitioner may file a request for
reconsideration of the Office's decision. It is anticipated that a
request for reconsideration will require 80 hours of professional time
to prepare and file, for a cost of $27,200. This estimate is based on
the complexity of the issues and desirability to avoid time bars
imposed by 35 U.S.C. 325(b).
   Following institution of a trial, the parties may be authorized to
file various motions, e.g., motions to amend and motions for additional
discovery. Where a motion is authorized, an opposition may be
authorized, and where an opposition is authorized, a reply may be
authorized. The procedures for filing a motion are proposed in
§§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.22, 42.24(a)(5), 42.51,
42.52, 42.53, 42.54, 42.63, 42.64, 42.65, 42.221, and 42.223. The
procedures for filing an opposition are proposed in §§ 42.6,
42.8, 42.11, 42.13, 42.21, 42.23, 42.24(b), 42.51, 42.52, 42.53, 42.54,
42.63, 42.64, 42.65, 42.207, and 42.220. The procedures for filing a
reply are proposed in §§ 42.6, 42.8, 42.11, 42.13, 42.21,
42.23, 42.24(c), 42.51, 42.52, 42.53, 42.54, 42.63, and 42.65. As
discussed previously, the Office estimates that the average covered
business method patent review will have 8.89 motions, oppositions, and
replies after institution.
   The AIPLA Report of the Economic Survey 2011 reported that the
average cost in contested cases before the trial section of the Board
prior to the priority phase was $322,000 per party. Because of the
overlap of issues in patentability grounds, it is expected that the
cost per motion will decline as more motions are filed in a proceeding.
It is estimated that a motion, opposition, or reply in a derivation
would cost $34,000, which is estimated by dividing the total public
cost for all motions in current contested cases divided by the
estimated number of motions in derivations under 35 U.S.C. 135, as
amended. The cost of a motion, opposition, or reply in a covered
business method patent review is estimated at $44,200 (including expert
costs), reflecting the reduction in overlap between motions relative to
derivation. Based on the work required to file and prepare such briefs,
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the Office considers the reported cost as a reasonable estimate.
   After a trial has been instituted but prior to a final written
decision, parties to a covered business method patent review may
request an oral hearing. The procedure for filing requests for oral
argument is proposed in § 42.70. The AIPLA Report of the Economic
Survey 2011 reported that the third quartile cost of an ex parte appeal
with an oral argument is $12,000, while the third quartile cost of an
ex parte appeal without an oral argument is $6,000. In view of the
reported costs, which the Office finds reasonable, and the increased
complexity of an oral hearing with multiple parties, it is estimated
that the cost per party for oral hearings would be $6,800 or $800 more
than the reported third quartile cost for an ex parte oral hearing.
   Parties to a covered business method patent review may file
requests to treat a settlement as business confidential, or file a
request for adverse judgment. A written request to make a settlement
agreement available may also be filed. The procedures to file requests
that a settlement be treated as business confidential are proposed in
§ 42.74(b). The procedures to file requests for adverse judgment
are proposed in § 42.73(b). The procedures to file requests to make
a settlement agreement available are proposed in § 42.74(c)(2). It
is anticipated that requests to treat a settlement as business
confidential will require 2 hours of professional time or $680. It is
anticipated that requests for adverse judgment will require 1 hour of
professional time or $340. It is anticipated that requests to make a
settlement agreement available will require 1 hour of professional time
or $340. The requests to make a settlement agreement available will
also require payment of a fee of $400 specified in proposed §42.15(d).
   Parties to a review proceeding may seek judicial review of the
judgment of the Board. The procedures to file notices of judicial
review of a Board decision, including notices of appeal and notices of
election provided for in 35 U.S.C. 141, 142, 145, and 146, are proposed
in §§ 90.1 through 90.3. The submission of a copy of a notice
of appeal or a notice of election is anticipated to require 6 minutes
of professional time at a cost of $34.
   5. Description of Any Significant Alternatives to the Proposed
Rules Which Accomplish the Stated Objectives of Applicable Statutes and
Which Minimize Any Significant Economic Impact of the Rules on Small
Entities:
   Size of petitions and motions: The Office considered whether to
apply a page limit and what an appropriate page limit would be. The
Office does not currently have a page limit on inter partes
reexamination requests. The inter partes reexamination requests from
October 1, 2010 to June 30, 2011, averaged 246 pages. Based on the
experience of processing inter partes reexamination requests, the
Office finds that the very large size of the requests has created a
burden on the Office that hinders the efficiency and timeliness of
processing the requests, and creates a burden on patent owners. The
quarterly reported average processing time from the filing of a request
to the publication of a reexamination certificate ranged from 28.9
months to 41.7 months in fiscal year 2009, from 29.5 months to 37.6
months in fiscal year 2010, and from 31.9 to 38.0 months in fiscal year
2011. See Reexaminations - FY 2011, http://www.uspto.gov/patents/
Reexamination_operational_statistic_through_FY2011Q4.pdf.
   By contrast, the Office has a page limit on the motions filed in
contested cases, except where parties are specifically authorized to
exceed the limitation. The typical contested case proceeding is subject
to a standing order that sets a 50 page limit for motions and
oppositions on priority, a 15 page limit for miscellaneous motions
(§ 41.121(a)(3)) and oppositions (§ 41.122), and a 25 page
limit for other motions (§ 41.121(a)(2)) and oppositions to other
motions. In typical proceedings, replies are subject to a 15 page limit
if directed to priority, 5 page limit for miscellaneous issues, and 10
page limit for other motions. The average contested case was terminated
in 10.1 months in fiscal year 2009, in 12 months in fiscal year 2010,
and 9 months in fiscal year 2011. The percentage of contested cases
terminated within 2 years was 93.7% in fiscal year 2009, 88.0% in
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fiscal year 2010, and 94.0% in fiscal year 2011. See BPAI Statistics -
Performance Measures,
http://www.uspto.gov/ip/boards/bpai/stats/perform/index.jsp.
   Comparing the average time period for terminating a contested case,
10.0 to 12.0 months, with the average time period, during fiscal years
2009 through 2011, for completing an inter partes reexamination, 28.9
to 41.7 months, indicates that the average interference takes from 24%
(10.0/41.7) to 42% (12.0/28.9) of the time of the average inter partes
reexamination. While several factors contribute to the reduction in time,
limiting the size of the requests and motions is considered a significant
factor. Proposed § 42.24 would provide page limits for petitions, motions,
oppositions, and replies. 35 U.S.C. 326(b) provides considerations that
are to be taken into account when prescribing regulations including the
integrity of the patent system, the efficient administration of the
Office, and the ability to complete timely the trials. The page limits
proposed in these rules are consistent with these considerations.
   Federal courts routinely use page limits in managing motions
practice as "[e]ffective writing is concise writing." Spaziano v.
Singletary, 36 F.3d 1028, 1031 n.2 (11th Cir. 1994). Many district
courts restrict the number of pages that may be filed in a motion
including, for example, the District of Delaware, the District of New
Jersey, the Eastern District of Texas, the Northern, Central, and
Southern Districts of California, and the Eastern District of Virginia.
   Federal courts have found that page limits ease the burden on both
the parties and the courts, and patent cases are no exception. Eolas
Techs., Inc. v. Adobe Sys., Inc., No. 6:09-CV-446, at 1 (E.D. Tex.
Sept. 2, 2010) ("The Local Rules' page limits ease the burden of
motion practice on both the Court and the parties."); Blackboard, Inc.
v. Desire2Learn, Inc., 521 F. Supp. 2d 575, 576 (E.D. Tex. 2007) (The
parties "seem to share the misconception, popular in some circles,
that motion practice exists to require federal judges to shovel through
steaming mounds of pleonastic arguments in Herculean effort to uncover
a hidden gem of logic that will ineluctably compel a favorable ruling.
Nothing could be farther from the truth."); Broadwater v. Heidtman
Steel Prods., Inc., 182 F. Supp. 2d 705, 710 (S.D. Ill. 2002)
("Counsel are strongly advised, in the future, to not ask this Court
for leave to file any memoranda (supporting or opposing dispositive
motions) longer than 15 pages. The Court has handled complicated patent
cases and employment discrimination cases in which the parties were
able to limit their briefs supporting and opposing summary judgment to
10 or 15 pages." (Emphasis omitted)).
   The Board's contested cases experience with page limits in motions
practice is consistent with that of the federal courts. The Board's use
of page limits has shown it to be beneficial without being unduly
restrictive for the parties. Page limits have encouraged the parties to
focus on dispositive issues, easing the burden of motions practice on
the parties and on the Board.
   The Board's contested cases experience with page limits is informed
by its use of different approaches over the years. In the early 1990s,
page limits were not routinely used for motions, and the practice
suffered from lengthy and unacceptable delays. To reduce the burden on
the parties and on the Board and thereby reduce the time to decision,
the Board instituted page limits in the late 1990s for every motion.
Page limit practice was found to be effective in reducing the burdens
on the parties and improving decision times at the Board. In 2006, the
Board revised the page limit practice and allowed unlimited findings of
fact and generally limited the number of pages containing argument. Due
to abuses of the system, the Board recently reverted back to page
limits for the entire motion (both argument and findings of fact).
   The Board's current page limits are consistent with the 25 page
limits in the Northern, Central, and Southern Districts of California,
and the Middle District of Florida and exceed the limits in the
District of Delaware (20), the Northern District of Illinois (15), the
District of Massachusetts (20), the Eastern District of Michigan (20),
the Southern District of Florida (20), and the Southern District of
Illinois (20).
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   In a typical proceeding before the Board, a party may be authorized
to file a single motion for unpatentability based on prior art, a
single motion for unpatentability based upon failure to comply with 35
U.S.C. 112, lack of written description, and/or enablement, and
potentially another motion for lack of compliance with 35 U.S.C. 101,
although a 35 U.S.C. 101 motion may be required to be combined with the
35 U.S.C. 112 motion. Each of these motions is currently limited to 25
pages in length, unless good cause is shown that the page limits are
unduly restrictive for a particular motion.
   A petition requesting the institution of a trial proceeding would
be similar to motions currently filed with the Board. Specifically,
petitions to institute a trial seek a final written decision that the
challenged claims are unpatentable, where derivation is a form of
unpatentability. Accordingly, a petition to institute a trial based on
prior art would, under current practice, be limited to 25 pages, and by
consequence, a petition raising unpatentability based on prior art and
unpatentability under 35 U.S.C. 101 and/or 112 would be limited to 50
pages.
   Under the proposed rules, a covered business method patent review
petition would be based upon most grounds identified in 35 U.S.C.
321(b), e.g., failure to comply with 35 U.S.C. 101, 102 (based on
certain references), 103, and 112 (except best mode). Under current
practice, a party would be limited to filing two or three motions, each
limited to 25 pages, for a maximum of 75 pages. Where there is more
than one motion for unpatentability based upon different statutory
grounds, the Board's experience is that the motions contain similar
discussions of technology and claim constructions. Such overlap is
unnecessary where a single petition for unpatentability is filed. Thus,
the proposed 70 page limit is considered sufficient in all but
exceptional cases.
   The proposed rule would provide that petitions to institute a trial
must comply with the stated page limits, but may be accompanied by a
motion that seeks to waive the page limits. The petitioner must show in
the motion how a waiver of the page limits is in the interests of
justice. A copy of the desired non-page limited petition must accompany
the motion. Generally, the Board would decide the motion prior to
deciding whether to institute the trial.
   Current Board practice provides a limit of 25 pages for other
motions and 15 pages for miscellaneous motions. The Board's experience
is that such page limits are sufficient for the parties filing them and
do not unduly burden the opposing party or the Board. Petitions to
institute a trial would generally replace the current practice of
filing motions for unpatentability, as most motions for relief are
expected to be similar to the current interference miscellaneous motion
practice. Accordingly, the proposed 15 page limit is considered
sufficient for most motions but may be adjusted where the limit is
determined to be unduly restrictive for the relief requested.
   Proposed § 42.24(b) would provide page limits for oppositions
filed in response to motions. Current contested cases practice provides
an equal number of pages for an opposition as its corresponding motion.
This is generally consistent with motions practice in federal courts.
The proposed rule would continue the current practice.
   Proposed § 42.24(c) would provide page limits for replies.
Current contested cases practice provides a 15 page limit for priority
motion replies, a 5 page limit for miscellaneous (procedural) motion
replies, and a 10 page limit for all other motions. The proposed rule
is consistent with current contested case practice for procedural
motions. The proposed rule would provide a 15 page limit for reply to
petitions requesting a trial, which the Office believes is sufficient
based on current practice. Current contested cases practice has shown
that such page limits do not unduly restrict the parties and, in fact,
have provided sufficient flexibility to parties to not only reply to
the motion but also help to focus on the issues. Thus, it is
anticipated that default page limits would minimize the economic impact
on small entities by focusing on the issues in the trials.
   The Leahy-Smith America Invents Act requires that the Director, in
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 186 

prescribing rules for covered business method patent reviews, consider
the effect of the rules on the economy, the integrity of the patent
system, the efficient administration of the Office, and the ability of
the Office to complete timely the instituted proceedings. See 35 U.S.C.
326(b). In view of the actual results of the duration of proceedings in
inter partes reexamination (without page limits) and contested cases
(with page limits), proposing procedures with reasonable page limits
would be consistent with the objectives set forth in the Leahy-Smith
America Invents Act. Based on our experience on the time needed to
complete a non-page limited proceeding, the option of non-page limited
proceedings was not adopted.
   Fee Setting: 35 U.S.C. 321(a) requires the Director to establish
fees to be paid by the person requesting the review in such amounts as
the Director determines to be reasonable, considering the aggregate
costs of the review. In contrast to current 35 U.S.C. 311(b) and
312(c), the Leahy-Smith America Invents Act requires the Director to
establish more than one fee for reviews based on the total cost of
performing the reviews, and does not provide for refund of any part of
the fee when the Director determine that the review should not be
initiated.
   35 U.S.C. 322(a)(1) further requires that the fee established by
the Director under 35 U.S.C. 321 accompany the petition on filing.
Accordingly, in interpreting the fee setting authority in 35 U.S.C.
321(a), it is reasonable that the Director should set a number of fees
for filing a petition based on the anticipated aggregate cost of
conducting the review depending on the complexity of the review, and
require payment of the fee upon filing of the petition.
   Based on experience with contested cases and inter partes
reexamination proceedings, the following characteristics of requests
were considered as potential factors for fee setting as each would
likely impact the cost of providing the new services. The Office also
considered the relative difficulty in administrating each option in
selecting the characteristics for which different fees should be paid
for requesting review.

   I. Adopted Option. Number of claims for which review is requested.
The number of claims often impacts the complexity of the request and
increases the demands placed on the deciding officials. Cf. In re Katz
Interactive Call Processing Patent Litig., 639 F.3d 1303, 1309 (Fed.
Cir. 2011) (limiting number of asserted claims is appropriate to
efficiently manage a case). Moreover, the number of claims for which
review is requested can be easily determined and administered, which
avoids delays in the Office and the impact on the economy or patent
system that would occur if an otherwise meritorious request is refused
due to improper fee payment. Any subsequent petition would be time
barred in view 35 U.S.C. 325.

   II. Alternative Option I. Number of grounds for which review is
requested. The Office has experience with large numbers of cumulative
grounds being presented in inter partes reexaminations which often add
little value to the proceedings. Allowing for a large number of grounds
to be presented on payment of an additional fee(s) is not favored.
Determination of the number of grounds in a request may be contentious
and difficult and may result in a large amount of high-level petition
work. As such, the option would have a negative impact on small
entities. Moreover, interferences instituted in the 1980s and early
1990s suffered from this problem as there was no page limit for motions
and the parties had little incentive to focus on the issues for
decision. The resulting interference records were often a collection of
disparate issues and evidence. This led to lengthy and unwarranted
delays in deciding interference cases as well as increased costs for
parties and the Office. Accordingly, this alternative is inconsistent
with objectives of the Leahy-Smith America Invents Act that the
Director, in prescribing rules for the covered business method patent
reviews, consider the effect of the rules on the economy, the integrity
of the patent system, the efficient administration of the Office, and
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 187 

the ability of the Office to timely complete the instituted
proceedings.

   III. Alternative Option II. Pages of argument. The Office has
experience with large requests in inter partes reexamination in which
the merits of the proceedings could have been resolved in a shorter
request. Allowing for unnecessarily large requests on payment of an
additional fee(s) is not favored. Moreover, determination of what
should be counted as "argument" as compared with "evidence" has
often proven to be contentious and difficult as administered in the
current inter partes reexamination appeal process.
   In addition, the trial section of the Board recently experimented
with motions having a fixed page limit for the argument section and an
unlimited number of pages for the statement of facts. Unlimited pages
for the statement of facts led to a dramatic increase in the number of
alleged facts and pages associated with those facts. For example, one
party used approximately 10 pages for a single "fact" that merely cut
and pasted a portion of a declarant's cross-examination. Based upon the
trial section's experience with unlimited pages of facts, the Board
recently reverted back to a fixed page limit for the entire motion
(argument and facts). Accordingly, this alternative is inconsistent
with objectives of the Leahy-Smith America Invents Act that the
Director, in prescribing rules for the covered business method patent
reviews, consider the effect of the rules on the economy, the integrity
of the patent system, the efficient administration of the Office, and
the ability of the Office to complete timely the instituted
proceedings.

   IV. Alternative Option III. The Office considered an alternative
fee setting regime in which fees would be charged at various steps in
the review process, a first fee on filing of the petition, a second fee
if instituted, a third fee on filing a motion in opposition to amended
claims, etc. The alternative fee setting regime would hamper the
ability of the Office to complete timely reviews, would result in
dismissal of pending proceedings with patentability in doubt due to
non-payment of required fees by third parties, and would be
inconsistent with 35 U.S.C. 322 that requires the fee established by
the Director be paid at the time of filing the petition. Accordingly,
this alternative is inconsistent with objectives of the Leahy-Smith
America Invents Act that the Director, in prescribing rules for covered
business method patent reviews, consider the effect of the rules on the
economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to complete
timely the instituted proceedings.

   V. Alternative Option IV. The Office considered setting reduced
fees for small and micro entities and to provide refunds if a review is
not instituted. The Office may set the fee to recover the cost
of providing the services under 35 U.S.C. 41(d)(2)(a). Fees set under
this authority are not reduced for small entities, see 35 U.S.C.
42(h)(1), as amended. Moreover, the Office does not have authority to
refund fees that were not paid by mistake or in excess of that owed.
See 35 U.S.C. 42(d).
   Discovery: The Office considered a procedure for discovery similar
to the one available during district court litigation. Discovery of
that scope has been criticized sharply, particularly when attorneys use
discovery tools as tactical weapons, which hinder the "just, speedy,
and inexpensive determination of every action and proceedings." See
Introduction to An E-Discovery Model Order available at
http://www.cafc.uscourts.gov/images/stories/announcements/Ediscovery_
Model_Order.pdf. Accordingly, this alternative would have been incon-
sistent with objectives of the Leahy-Smith America Invents Act that the
Director, in prescribing rules for the covered business method patent
reviews, consider the effect of the rules on the economy, the integrity
of the patent system, the efficient administration of the Office, and
the ability of the Office to complete timely the instituted proceedings.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 188 

   Additional discovery increases trial costs and increases the
expenditures of time by the parties and the Board. To promote effective
discovery, the proposed rule would require a showing of good cause to
authorize additional requested discovery. To show good cause, a party
must make a particular and specific demonstration of fact. The moving
party must also show that it was fully diligent in seeking discovery,
and that there is no undue prejudice to the non-moving party.
   The Office has proposed a default scheduling order to provide
limited discovery as a matter of right and also the ability to seek
additional discovery on a case-by-case basis. In weighing the need for
additional discovery, should a request be made, the economic impact on
the opposing party would be considered which would tend to limit
additional discovery where a party is a small entity.
   Pro Hac Vice: The Office considered whether to allow counsel to
appear pro hac vice. In certain cases, highly skilled, but non-
registered, attorneys have appeared satisfactorily before the Board in
contested cases. The Board may recognize counsel pro hac vice during a
proceeding upon a showing of good cause. Proceedings before the Office
can be technically complex. Consequently, the grant of a motion to
appear pro hac vice is a discretionary action taking into account the
specifics of the proceedings. Similarly, the revocation of pro hac vice
is a discretionary action taking into account various factors,
including incompetence, unwillingness to abide by the Office's Rules of
Professional Conduct, prior findings of misconduct before the Office in
other proceedings, and incivility.
   The Board's past practice has required the filing of a motion by a
registered patent practitioner seeking pro hac vice representation
based upon a showing of: (1) How qualified the unregistered
practitioner is to represent the party in the proceeding when measured
against a registered practitioner, and, (2) whether the party has a
genuine need to have the particular unregistered practitioner represent
it during the proceeding. This practice has proven effective in the
limited number of contested cases where such requests have been
granted. The proposed rule, if adopted, would allow for this practice
in the new proceedings authorized by the Leahy-Smith America Invents
Act.
   The proposed rules would provide a limited delegation to the Board
under 35 U.S.C. 2(b)(2) and 32 to regulate the conduct of counsel in
Board proceedings. The proposed rule would delegate to the Board the
authority to conduct counsel disqualification proceedings while the
Board has jurisdiction over a proceeding. The rule would also delegate
to the Chief Administrative Patent Judge the authority to make final a
decision to disqualify counsel in a proceeding before the Board for the
purposes of judicial review. This delegation would not derogate from
the Director the prerogative to make such decisions, nor would it
prevent the Chief Administrative Patent Judge from further delegating
authority to an administrative patent judge.
   The Office considered broadly permitting practitioners not
registered to practice by the Office to represent parties in trial as
well as categorically prohibiting such practice. A prohibition on the
practice would be inconsistent with the Board's experience, and more
importantly, might result in increased costs particularly where a small
entity has selected its district court litigation team for
representation before the Board and has a patent review filed after
litigation efforts have commenced. Alternatively, broadly making the
practice available would create burdens on the Office in administering
the trials and in completing the trial within the established time
frame, particularly if the selected practitioner does not have the
requisite skill. In weighing the desirability of admitting a
practitioner pro hac vice, the economic impact on the party in interest
would be considered which would tend to increase the likelihood that a
small entity could be represented by a non-registered practitioner.
Accordingly, the alternatives to eliminate pro hac vice practice or to
permit it more broadly would have been inconsistent with objectives of
the Leahy-Smith America Invents Act that the Director, in prescribing
rules for the covered business method patent reviews, consider the
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 189 

effect of the rules on the economy, the integrity of the patent system,
the efficient administration of the Office, and the ability of the
Office to complete timely the instituted proceedings.
   Threshold for Instituting a Review: The Office considered whether
the threshold for instituting a review could be set as low as or lower
than the threshold for ex parte reexamination. This alternative could
not be adopted in view of the statutory requirements in 35 U.S.C. 324.
   Default Electronic Filing: The Office considered a paper filing
system and a mandatory electronic filing system (without any
exceptions) as alternatives to the proposed requirement that all papers
are to be electronically filed, unless otherwise authorized.
   Based on the Office's experience, a paper based filing system
increases delay in processing papers, delay in public availability, and
the chance that a paper may be misplaced or made available to an
improper party if confidential. Accordingly, the alternative of a paper
based filing system would have been inconsistent with objectives of the
Leahy-Smith America Invent Act that the Director, in prescribing rules
for the covered business method patent reviews, consider the effect of
the rules on the economy, the integrity of the patent system, the
efficient administration of the Office, and the ability of the Office
to complete timely the instituted proceedings.
   An electronic filing system (without any exceptions) that is
rigidly applied would result in unnecessary cost and burdens,
particularly where a party lacks the ability to file electronically. By
contrast, if the proposed option is adopted, it is expected that the
entity size and sophistication would be considered in determining
whether alternative filing methods would be authorized.

   6. Identification, to the Extent Practicable, of All Relevant
Federal Rules Which May Duplicate, Overlap, or Conflict With the
Proposed Rules:

   37 CFR 1.99 provides for the submission of information after
publication of a patent application during examination by third
parties.
   37 CFR 1.171-1.179 provide for applications to reissue a patent to
correct errors, including where a claim in a patent is overly broad.
   37 CFR 1.291 provides for the protest against the issuance of a
patent during examination.
   37 CFR 1.321 provides for the disclaimer of a claim by a patentee.
   37 CFR 1.501 and 1.502 provide for ex parte reexamination of
patents. Under these rules, a person may submit to the Office prior art
consisting of patents or printed publications that are pertinent to the
patentability of any claim of a patent, and request reexamination of
any claim in the patent on the basis of the cited prior art patents or
printed publications. Consistent with 35 U.S.C. 302-307, ex parte
reexamination rules provide a different threshold for initiation,
require the proceeding to be conducted by an examiner with a right of
appeal to the Patent Trial and Appeal Board, and allow for limited
participation by third parties.
   37 CFR 1.902-1.997 provide for inter partes reexamination of
patents. Similar to ex parte reexamination, inter partes reexamination
provides a procedure in which a third party may request reexamination
of any claim in a patent on the basis of the cited prior art patents
and printed publication. The inter partes reexamination practice will
be eliminated, except for requests filed before the effective date,
September 16, 2012. See § 6(c)(3)(C) of the Leahy-Smith America
Invents Act.
   Other countries have their own patent laws, and an entity desiring
a patent in a particular country must make an application for patent in
that country, in accordance with the applicable law. Although the
potential for overlap exists internationally, this cannot be avoided
except by treaty (such as the Paris Convention for the Protection of
Industrial Property, or the Patent Cooperation Treaty (PCT)).
Nevertheless, the Office believes that there are no other duplicative
or overlapping foreign rules.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 190 


   C. Executive Order 12866 (Regulatory Planning and Review): This
rulemaking has been determined to be significant for purposes of
Executive Order 12866 (Sept. 30, 1993), as amended by Executive Order
13258 (Feb. 26, 2002) and Executive Order 13422 (Jan. 18, 2007).
   Based on the petition and other filing requirements for initiating
a review proceeding, the USPTO initially estimates the burden of the
proposed rules on the public to be $22,761,410 in fiscal year 2013,
which represents the sum of the estimated total annual (hour)
respondent cost burden ($20,405,610) plus the estimated total annual
non-hour respondent cost burden ($2,355,800) provided in Part O,
Section II, of this notice, infra.
   The USPTO expect several benefits to flow from the Leahy-Smith
America Invents Act and these proposed rules. It is anticipated that
the proposed rules will reduce the time for reviewing patents at the
USPTO. Specifically, 35 U.S.C. 326(a) provides that the Director
prescribe regulations requiring a final determination by the Board
within one year of initiation, which may be extended for up to six
months for good cause. In contrast, currently for inter partes
reexamination, the average time from the filing to the publication of a
certificate ranged from 28.9 to 41.7 months during fiscal years 2009-
2011. See Reexaminations - FY 2011, http://www.uspto.gov/patents/
Reexamination_operational_statistic_through_FY2011Q4.pdf.
   Likewise, it is anticipated that the proposed rules will minimize
duplication of efforts. In particular, the Leahy-Smith America Invents
Act provides more coordination between district court infringement
litigation and covered business method patent review to reduce
duplication of efforts and costs.
   The AIPLA Report of the Economic Survey 2011 reports that the total
cost of patent litigation where the damages at risk are less than
$1,000,000 average $916,000, where the damages at risk are between
$1,000,000 and $25,000,000 average $2,769,000, and where the damages at
risk exceed $25,000,000 average $6,018,000. There may be a significant
reduction in overall burden if, as intended, the Leahy-Smith America
Invents Act and the proposed rules reduce the overlap between review at
the USPTO of issued patents and validity determination during patent
infringement actions. Data from the United States district courts
reveals that 2,830 patent cases were filed in 2006, 2,896 in 2007,
2,909 in 2008, 2,792 in 2009, and 3,301 in 2010. See U.S. Courts,
Judicial Business of the United States Courts, www.uscourts.gov/uscourts/
Statistics/JudicialBusiness/2010/appendices/C02ASep10.pdf
(last visited Nov. 11, 2011) (hosting annual reports for 1997 through
2010). Thus, the Office estimates that no more than 3,300 patent cases
(the highest number of yearly filings between 2006 and 2010 rounded to
the nearest 100) are likely to be filed annually. The aggregate burden
estimate above ($22,761,410) was not offset by a reduction in burden
based on improved coordination between district court patent litigation
and the new inter partes review proceedings.

   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 determination that the benefits justify the costs
of the rule; (2) tailored the rule to impose the least burden on
society consistent with obtaining the regulatory objectives; (3)
selected a regulatory approach that maximizes net benefits; (4)
specified performance objectives; (5) identified and assessed available
alternatives; (6) involved the public in an open exchange of
information and perspectives among experts in relevant disciplines,
affected stakeholders in the private sector, and the public as a whole,
and provided online access to the rulemaking docket; (7) attempted to
promote coordination, simplification, and harmonization across
government agencies and identified goals designed to promote
innovation; (8) considered approaches that reduce burdens and maintain
flexibility and freedom of choice for the public; and (9) ensured the
objectivity of scientific and technological information and processes.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 191 


   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). This rulemaking
carries out a statute designed to lessen litigation. See H.R. Rep. No.
112-98, at 45-48.

   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 effect 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. 801-808), prior to issuing any final rule, the United
States Patent and Trademark Office will submit a report containing the
final rule and other required information to the U.S. Senate, the U.S.
House of Representatives, and the Comptroller General of the Government
Accountability Office. The changes in this notice 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 notice is not expected to result in a "major rule" as
defined in 5 U.S.C. 804(2).

   L. Unfunded Mandates Reform Act of 1995: The changes proposed in
this notice 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.
1501-1571.

   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. 4321-4370h.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 192 


   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 USPTO consider the impact of
paperwork and other information collection burdens imposed on the
public. This proposed rulemaking 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). The collection of information involved in this notice has
been submitted to OMB under OMB control number 0651-00xx. In the Notice
"Rules of Practice for Trials before the Patent Trial and Appeal Board
and Judicial Review of Patent Trial and Appeal Board Decisions," RIN
0651-AC70, the information collection for all of the new trials
authorized by the Leahy-Smith America Invents Act were provided. In the
Notice "Changes to Implement Post-Grant Review Proceedings," RIN
0651-AC72, the information collection for post-grant review and covered
business method patent review combined authorized by the Leahy-Smith
America Invents Act were provided. This notice also provides the subset
of burden created by the covered business method patent review
provisions. The proposed collection will be available at the OMB's
Information Collection Review Web site (www.reginfo.gov/public/do/PRAMain).
   The USPTO is submitting the information collection to OMB for its
review and approval because this notice of proposed rulemaking will add
the following to a collection of information:
   (1) Petitions to institute a covered business method patent review
(§§ 42.5, 42.6, 42.8, 42.11, 42.13, 42.20, 42.21, 42.22,
42.24(a)(3), 42.63, 42.65, 42.203, 42.205, and 42.302 through 42.304);
   (2) motions (§§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.22,
42.24(a)(5), 42.51 through 42.54, 42.63, 42.64, 42.65, 42.221, 42.123,
and 42.223);
   (3) oppositions (§§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.23,
42.24(b), 42.51, 42.52, 42.53, 42.54, 42.63, 42.64, 42.65, 42.207, and
42.220);
   (4) replies provided for in 35 U.S.C. 321-329 (§§ 42.6,
42.8, 42.11, 42.13, 42.21, 42.23, 42.24(c), 42.51, 42.52, 42.53, 42.54,
42.63, and 42.65).
   The proposed rules also permit filing requests for oral argument
(§ 42.70) provided for in 35 U.S.C. 326(a)(10), requests for
rehearing (§ 42.71(c)), requests for adverse judgment (§ 42.73(b)),
and requests that a settlement be treated as business
confidential (§ 42.74(b)) provided for in 35 U.S.C. 327.

   I. Abstract: The USPTO is required by 35 U.S.C. 131 and 151 to
examine applications and, when appropriate, issue applications as
patents.
   Chapter 32 of title 35 U.S.C. in effect on September 16, 2012,
provides for post-grant review proceedings allowing third parties to
petition the USPTO to review the patentability of an issued patent
under any ground authorized under 35 U.S.C. 282(b)(2). If a trial is
initiated by the USPTO based on the petition, as authorized by the
USPTO, additional motions may be filed by the petitioner. A patent
owner may file a response to the petition and if a trial is instituted,
as authorized by the USPTO, may file additional motions.
   Section 18 of the Leahy-Smith America Invents Act provides for a
transitional program for covered business method patents which will
employ the standards and procedures of the post-grant review proceeding
with a few exceptions.
   In estimating the number of hours necessary for preparing a
petition to institute a covered business method patent review, the
USPTO considered the estimated cost of preparing a request for inter
partes reexamination ($46,000), the median billing rate ($340/hour),
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 193 

and the observation that the cost of inter partes reexamination has
risen the fastest of all litigation costs since 2009 in the AIPLA
Report of the Economic Survey 2011. Since additional grounds are
provided in covered business method patent review, the Office estimates
the cost of preparing a petition to institute a review will be 33.333%
more than the estimated cost of preparing a request for inter partes
reexamination, or $61,333.
   In estimating the number of hours necessary for preparing motions
after instituting and participating in the review, the USPTO considered
the AIPLA Report of the Economic Survey 2011 which reported the average
cost of a party to a two-party interference to the end of the
preliminary motion phase ($322,000) and inclusive of all costs
($631,000). The Office considered that the preliminary motion phase is
a good proxy for patentability reviews since that is the period of
current contested cases before the trial section of the Board where
most patentability motions are currently filed.
   The USPTO also reviewed recent contested cases before the trial
section of the Board to make estimates on the average number of motions
for any matter including priority, the subset of those motions directed
to non-priority issues, the subset of those motions
directed to non-priority patentability issues, and the subset of those
motions directed to patentability issues based on a patent or printed
publication on the basis of 35 U.S.C. 102 or 103. The review of current
contested cases before the trial section of the Board indicated that
approximately 15% of motions were directed to prior art grounds, 18% of
motions were directed to other patentability grounds, 27% were directed
to miscellaneous issues, and 40% were directed to priority issues. It
was estimated that the cost per motion to a party in current contested
cases before the trial section of the Board declines because of overlap
in subject matter, expert overlap, and familiarity with the technical
subject matter. Given the overlap of subject matter, a proceeding with
fewer motions will have a somewhat less than proportional decrease in
costs since the overlapping costs will be spread over fewer motions.
   It is estimated that the cost of an inter partes review would be
60% of the cost of current contested cases before the trial section of
the Board to the end of the preliminary motion period. An inter partes
review should have many fewer motions since only one party will have a
patent that is the subject of the proceeding (compared with each party
having at least a patent or an application in current contested cases
before the trial section of the Board). Moreover, fewer issues can be
raised since inter partes review will not have priority-related issues
that must be addressed in current contested cases before the trial
section of the Board. Consequently, a 60% weighting factor should
capture the typical costs of an inter partes review.
   It is estimated that the cost of a covered business method patent
review would be 75% of the cost of current contested cases before the
trial section of the Board to the end of the preliminary motion period.
A covered business method patent review should have many fewer motions
since only one party will have a patent that is the subject of the
proceeding (compared with each party having at least a patent or an
application in current contested cases before the trial section of the
Board). Moreover, fewer issues can be raised since covered business
method patent reviews will not have the priority-related issues that
must be addressed in current contested cases before the trial section
of the Board before the priority phase. Again, a 75% weighting factor
should capture the typical costs of a covered business method patent
review.
   The title, description, and respondent description of the
information collection are shown below with an estimate of the annual
reporting burdens for the covered business method patent review
provisions. Included in this estimate is the time for reviewing
instructions, gathering and maintaining the data needed, and completing
and reviewing the collection of information. The principal impact of
the proposed changes in this notice of proposed rulemaking is to
implement the changes to Office practice necessitated by §§ 6(d) and 18
of the Leahy-Smith America Invents Act.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 194 

   The public uses this information collection to request review and
derivation proceedings and to ensure that the associated fees and
documentation are submitted to the USPTO.

II. Data

   Needs and Uses: The information supplied to the USPTO by a petition
to institute a review as well as the motions authorized following the
institution is used by the USPTO to determine whether to initiate a
review under 35 U.S.C. 324 and to prepare a final decision under 35
U.S.C. 328.
   OMB Number: 0651-00xx.
   Title: Patent Review and Derivation Proceedings.
   Form Numbers: None.
   Type of Review: New Collection.
   Likely Respondents/Affected Public: Individuals or households,
businesses or other for profit, not-for-profit institutions, farms,
Federal Government, and state, local, or tribal governments.
   Estimated Number of Respondents/Frequency of Collection: 100
respondents and 515 responses per year.
   Estimated Time per Response: The USPTO estimates that it will take
the public from 0.1 to 180.4 hours to gather the necessary information,
prepare the documents, and submit the information to the USPTO.
   Estimated Total Annual Respondent Burden Hours: 60,016.5 hours per
year.
   Estimated Total Annual (Hour) Respondent Cost Burden: $20,405,610
per year. The USPTO expects that the information in this collection
will be prepared by attorneys. Using the professional rate of $340 per
hour for attorneys in private firms, the USPTO estimates that the
respondent cost burden for this collection will be approximately
$20,405,610 per year (60,016.5 hours per year multiplied by $340 per
hour).
   Estimated Total Annual Non-hour Respondent Cost Burden: $2,355,800
per year. There are no capital start-up or maintenance costs associated
with this information collection. However, this collection does have
annual (non-hour) costs in the form of filing fees. There are filing
fees associated with petitions for covered business method patent
review and for requests to treat a settlement as business confidential.
The total fees for this collection are calculated in the accompanying
table. The USPTO estimates that the total fees associated with this
collection will be approximately $2,355,800 per year.
   Therefore, the total estimated cost burden in fiscal year 2013 is
estimated to be $22,761,410 (the sum of the estimated total annual
(hour) respondent cost burden ($20,405,610) plus the estimated total
annual non-hour respondent cost burden ($2,355,800)).

                                Estimated time    Estimated     Estimated
                                 or response       annual     annual burden
Item                                hours         responses       hours

Petition for covered business      180.4            50         9,020
   method patent review
Reply to initial covered       100              45         4,500
   business method patent
   review
Request for Reconsideration             80              14         1,120
Motions, replies and      130             342        44,460
   oppositions after
   institution in
   covered business method
   patent review
Request for oral hearing                20              45           900
Request to treat a settlement
   as business confidential              2               2             4
Request for adverse judgment,
   default adverse judgment              1              10            10
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 195 

   or settlement
Request to make a settlement
   agreement available                   1               2             2
Notice of judicial review of
   a Board decision (e.g.,               0.1             5             0.5
   notice of appeal under
   35 U.S.C. 142)

Totals                                                 515        60,016.5


                                Estimated                      Estimated
                                 annual                      annual filing
Item                            responses     Fee amount         costs

Petition for covered business       50           $47,100        $2,355,000
   method patent review
Reply to covered business           45                 0                 0
   method patent review
   petition
Request for Reconsideration         14                 0                 0
Motions, replies and
   oppositions after
   initiation in covered           342                 0                 0
   business method patent
   review
Request for oral hearing            45                 0                 0
Request to treat a settlement        2                 0                 0
   as business confidential
Request for adverse judgment,       10                 0                 0
   default adverse judgment
   or settlement
Request to make a settlement         2               400               800
   agreement available
Notice of judicial review of         5                 0                 0
   a Board decision (e.g.,
   notice of appeal under
   35 U.S.C. 142)

Totals                             515                           2,355,800


III. Solicitation

   The agency is soliciting comments to: (1) Evaluate whether the
proposed information requirement is necessary for the proper
performance of the functions of the agency, including whether the
information will have practical utility; (2) evaluate the accuracy of
the agency's estimate of the burden; (3) enhance the quality, utility,
and clarity of the information to be collected; and (4) minimize the
burden of collecting the information on those who are to respond,
including by using appropriate automated, electronic, mechanical, or
other technological collection techniques or other forms of information
technology.
   Interested persons are requested to send comments regarding this
information collection by April 10, 2012, to: (1) The Office of
Information and Regulatory Affairs, Office of Management and Budget,
New Executive Office Building, Room 10202, 725 17th Street NW.,
Washington, DC 20503, Attention: Nicholas A. Fraser, Desk Officer for
the United States Patent and Trademark Office, and via email at
nfraser@omb.eop.gov; and (2) The Board of Patent Appeals and
Interferences by electronic mail message over the Internet addressed
to: TPCBMP_Rules@uspto.gov, or by 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 Michael Tierney, Covered Business Method Patent Review Proposed
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 196 

Rules."
   Notwithstanding any other provision of law, no person is required
to respond to nor shall a 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,
Lawyers.

Proposed Amendments to the Regulatory Text

   For the reasons stated in the preamble, the Under Secretary of
Commerce for Intellectual Property and Director of the United States
Patent and Trademark Office propose to amend 37 CFR part 42 as proposed
to be added in the February 9, 2012, issue of the Federal Register as
follows:

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

   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 Leahy-Smith America Invents Act, Pub. L. 112-29,
sections 6(c), 6(f), and 18, 125 Stat. 284, 304, 311, and 329
(2011).

   2. A new subpart D is added to read as follows:

Subpart D - Transitional Program for Covered Business Method Patents

§
42.300 Procedure; pendency.
42.301 Definitions.
42.302 Who may petition for a covered business method patent review.
42.303 Time for filing.
42.304 Content of petition.

§ 42.300  Procedure; pendency.

   (a) A covered business method patent review is a trial subject to
the procedures set forth in subpart A of this part and is also subject
to the post-grant review procedures set forth in subpart C except for
§§ 42.200, 42.201, 42.202, and 42.204.
   (b) A claim in an unexpired patent shall be given its broadest
reasonable construction in light of the specification of the patent in
which it appears.
   (c) A covered business method patent review proceeding shall be
administered such that pendency before the Board after institution is
normally no more than one year. The time can be extended by up to six
months by the Chief Administrative Patent Judge for good cause.
   (d) The rules in this subpart are effective until September 15,
2020, except that the rules shall continue to apply to any petition for
a covered business method patent review filed before the date of
repeal.

§ 42.301  Definitions.

   In addition to the definitions in § 42.2, the following
definitions apply to proceedings under this subpart:
   (a) Covered business method patent means a patent that claims a
method or corresponding apparatus for performing data processing or
other operations used in the practice, administration, or management of
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 197 

a financial product or service, except that the term does not include
patents for technological inventions.
   (b) [Reserved].

§ 42.302  Who may petition for a covered business method patent
review.

   (a) A petitioner may not file with the Office a petition to
institute a covered business method patent review of the patent unless
the petitioner, the petitioner's real party in interest, or a privy of
the petitioner has been sued for infringement of the patent or has been
charged with infringement under that patent.
   (b) A petitioner may not file a petition to institute a covered
business method patent review of the patent where the petitioner, the
petitioner's real party in interest, or a privy of the petitioner is
estopped from challenging the claims on the grounds identified in the
petition.

§ 42.303  Time for filing.

   A petition requesting a covered business method patent review may
be filed any time except during the period in which a petition for a
post-grant review of the patent would satisfy the requirements of 35
U.S.C. 321(c).

§ 42.304  Content of petition.

   In addition to any other notices required by subparts A and C of
this part, a petition must request judgment against one or more claims
of a patent identified by patent number. In addition to the
requirements of § 42.22, the petition must set forth:
   (a) Grounds for standing. The petitioner must demonstrate that the
patent for which review is sought is a covered business method patent,
and that the petitioner meets the eligibility requirements of § 42.302.
   (b) Identification of challenge. Provide a statement of the precise
relief requested for each claim challenged. The statement must identify
the following:
   (1) The claim;
   (2) The specific statutory grounds permitted under paragraph (2) or
(3) of 35 U.S.C. 282(b) on which the challenge to the claim is based;
   (3) How the challenged claim is to be construed. Where the claim to
be construed contains a means-plus-function or step-plus-function
limitation as permitted under 35 U.S.C. 112, paragraph 6, the
construction of the claim must identify the specific portions of the
specification that describe the structure, material, or acts
corresponding to each claimed function;
   (4) How the construed claim is unpatentable under the statutory
grounds identified in paragraph (b)(2) of this section. Where the
grounds for unpatentability are based on prior art, the petition must
specify where each element of the claim is found in the prior art. For
all other grounds of unpatentability, the petition must identify the
specific part of the claim that fails to comply with the statutory
grounds raised and state how the identified subject matter fails to
comply with the statute; and
   (5) The exhibit number of supporting evidence relied upon to
support the challenge and state the relevance of the evidence to the
challenge raised including identifying specific portions of the
evidence that support the challenge. The Board may exclude or give no
weight to evidence where a party has failed to state its relevance or
to identify specific portions of the evidence that support the
challenge.
   (c) A motion may be filed that seeks to correct a mistake in the
petition where the mistake is of a clerical or typographical nature.
The grant of such a motion does not change the filing date of the
petition.

January 31, 2012                                            DAVID J. KAPPOS
                  Under Secretary of Commerce for Intellectual Property and
                  Director of the United States Patent and Trademark Office
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 198 

Transitional Program for Covered Business Method Patents - Definition of Technological Invention
                            DEPARTMENT OF COMMERCE
                          Patent and Trademark Office
                                37 CFR Part 42
                          [Docket No. PTO-P-2011-0087]
                                RIN 0651-AC75

          Transitional Program for Covered Business Method Patents -
                     Definition of Technological Invention

AGENCY: United States Patent and Trademark Office, Commerce.

ACTION: Notice of proposed rulemaking.

SUMMARY: The United States Patent and Trademark Office (Office or
USPTO) proposes a new rule to implement the provision of the Leahy-
Smith America Invents Act that requires the Office to issue regulations
for determining whether a patent is for a technological invention in a
transitional post-grant review proceeding for covered business method
patents. The provision of the Leahy-Smith America Invents Act will take
effect on September 16, 2012, one year after the date of enactment. The
provision and any regulations issued under the provision will be
repealed on September 16, 2020, with respect to any new petitions under
the transitional program.

DATES: The Office solicits comments from the public on this proposed
rulemaking. Written comments must be received on or before April 10,
2012 to ensure consideration.

ADDRESSES: Comments should be sent by electronic mail message over the
Internet addressed to: TPCBMP_Definition@uspto.gov. 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 Michael Tierney, Covered Business Method Patent Review Proposed
Definition for Technological Invention."
    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 eRulemaking Portal.
    Although comments may be submitted by postal mail, the Office
prefers to receive comments by electronic mail message over the
Internet because sharing comments with the public is more easily
accomplished. Electronic comments are preferred to be submitted in
plain text, but also may be submitted in ADOBE® portable
document format or MICROSOFT WORD® format. Comments not
submitted electronically should be submitted on paper in a format that
facilitates convenient digital scanning into ADOBE® portable
document format.
    The comments will be available for public inspection at the Board
of Patent Appeals and Interferences, 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/). Because comments will be made available for
public inspection, information that the submitter does not desire to
make public, such as an address or phone number, should not be included
in the comments.

FOR FURTHER INFORMATION CONTACT: Sally Medley, Administrative Patent
Judge, Robert Clarke, Administrative Patent Judge, Michael Tierney,
Lead Administrative Patent Judge, and Joni Chang, Administrative Patent
Judge, Board of Patent Appeals and Interferences, by telephone at (571)
272-9797.

SUPPLEMENTARY INFORMATION: On September 16, 2011, the Leahy-Smith
America Invents Act was enacted into law (Pub. L. 112-29, 125 Stat. 284
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 199 

(2011)). The purpose of the Leahy-Smith America Invents Act and the
proposed regulations is to establish a more efficient and streamlined
patent system that will improve patent quality and limit unnecessary
and counterproductive litigation costs. The preamble of this notice sets
forth in detail the definition of technological invention that the Board
will use in conducting transitional covered business method patent review
proceedings. The USPTO is engaged in a transparent process to create a
timely, cost-effective alternative to litigation. Moreover, the rulemaking
process is designed to ensure the integrity of the trial procedures.
See 35 U.S.C. 326(b). The proposed rules would provide a definition of
technological invention that the Board will use in conducting
transitional covered business method review proceedings.
    Section 18 of the Leahy-Smith America Invents Act provides that the
Director may institute a transitional proceeding only for a patent that
is a covered business method patent. Section 18(d)(1) of the Leahy-
Smith America Invents Act specifies that a covered business method
patent is a patent that claims a method or corresponding apparatus for
performing data processing or other operations used in the practice,
administration, or management of a financial product or service, except
that the term does not include patents for technological inventions.
Section 18(d)(2) provides that the Director will issue regulations for
determining whether a patent is for a technological invention. This
rulemaking provides regulations for determining whether a patent is for
a technological invention. The Leahy-Smith America Invents Act provides
that the transitional program for the review of covered business method
patents will take effect on September 16, 2012, one year after the date
of enactment, and applies to any covered business method patent issued
before, on, or after September 16, 2012. Section 18 of the Leahy-Smith
America Invents Act and the regulations issued under Sec.  18 will be
repealed on September 16, 2020. Section 18 and the regulations issued
will continue to apply after September 16, 2020, to any petition for a
transitional proceeding that is filed before September 16, 2020.

Discussion of Specific Rules

    This notice proposes a new rule to implement the provisions of
Section 18(d)(2) of the Leahy-Smith America Invents Act that provides
that the Director will issue regulations for determining whether a
patent is for a technological invention. A separate notice proposes new
rules to implement the provisions of the Leahy-Smith America Invents
Act for the transitional program for covered business method patents
(RIN 0651-AC73). The separate notice proposes to add a new subpart D to
37 CFR part 42 to provide rules specific to transitional post-grant
review of covered business method patents, including the definition for
covered business method patent in proposed § 42.301(a).
    Additionally, the Office in a separate rulemaking is proposing to
add part 42, including subpart A, (RIN 0651-AC70) that would include a
consolidated set of rules relating to Board trial practice. More
specifically, the proposed subpart A of part 42 would set forth the
policies, practices, and definitions common to all trial proceedings
before the Board. Furthermore, the Office in separate rulemakings is
proposing to add a new subpart B to 37 CFR part 42 (RIN 0651-AC71) to
provide rules specific to inter partes review, a new subpart C to 37
CFR part 42 (RIN 0651-AC72) to provide rules specific to post-grant
review, and a new subpart E to 37 CFR part 42 (0651-AC74) to provide
rules specific to derivation. The notices of proposed rulemaking are
available on the USPTO Internet Web site at http://www.uspto.gov/.
    Pursuant to § 18(d)(2) of the Leahy-Smith America Invents Act,
the Office is proposing the definition of a technological invention in
this rulemaking. This notice proposes to add the definition of
technological invention to new subpart D of 37 CFR 42, specifically to
proposed § 42.301(b).
    Title 37 of the Code of Federal Regulations, Part 42, Subpart D,
the definition for technological invention is proposed to be added to
Section 42.301 as follows:

 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 200 

    Section 42.301: Proposed § 42.301(b) would set forth the
definition for technological invention for covered business method
patent review proceedings. The proposed definition of technological
invention would provide that in determining whether a patent is for a
technological invention the following will be considered on a case-by-
case basis: Whether the claimed subject matter as a whole (1) recites a
technological feature that is novel and unobvious over the prior art;
and (2) solves a technical problem using a technical solution. The
Office recognizes that, in prescribing a regulation to define
technological invention, the Office must consider the efficient
administration of the proceedings by the Office, and its ability to
timely complete them, consistent with 35 U.S.C. 326(b).
    The proposed definition is consistent with the legislative history
of the Leahy-Smith America Invents Act. See, e.g., 157 Cong. Rec. S1364
(daily ed. Mar. 8, 2011) (statement of Sen. Schumer) ("The `patents
for technological inventions' exception only excludes those patents
whose novelty turns on a technological innovation over the prior art
and are concerned with a technical problem which is solved with a
technical solution and which requires the claims to state the technical
features which the inventor desires to protect."); 157 Cong. Rec.
H4497 (daily ed. June 23, 2011) (statement of Rep. Smith) ("Patents
for technological inventions are those patents whose novelty turns on a
technological innovation over the prior art and are concerned with a
technical problem which is solved with a technical solution."); 157
Cong. Rec. S5428 (daily ed. Sept. 8, 2011) (statement of Sen. Coburn)
("Patents for technological inventions are those patents whose novelty
turns on a technological innovation over the prior art and are
concerned with a technical problem which is solved with a technical
solution.").

Rulemaking Considerations

    A. Administrative Procedure Act (APA): This notice proposes rules
of practice concerning the procedure for requesting a covered business
method patent review, and the trial process after initiation of such a
review. The changes being proposed in this notice do not change the
substantive criteria of patentability. These proposed changes involve
interpretive rules. See Cooper Tech. Co. v. Dudas, 536 F.3d 1330, 1336-
37 (Fed. Cir. 2008) (explaining that "a rule that merely clarifies or
explains existing law or regulations is `interpretive' " and holding
USPTO's rules implementing inter partes reexamination proceedings to be
interpretive rules not subject to the notice and comment requirements
of the Administrative Procedures Act); 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).
    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), does 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)). The Office, however, is publishing these changes and
the Initial Regulatory Flexibility Act analysis, below, for
comment as it seeks the benefit of the public's views on the Office's
proposed implementation of these provisions of the Leahy-Smith America
Invents Act.

    B. Regulatory Flexibility Act: The Office estimates that 50
petitions for covered business method patent review will be filed in
fiscal year 2013. This will be the first fiscal year in which the
review proceeding will be available for an entire fiscal year.
    The estimated number of covered business method patent review
petitions is based on the number of inter partes reexamination requests
filed in fiscal year 2011 for patents having an original classification
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 201 

in class 705 of the United States Patent Classification System. Class
705 is the classification for patents directed to data processing in
the following areas: Financial, business practice, management, or cost/
price determination. See
http://www.uspto.gov/web/patents/classification/uspc705/sched705.pdf.

    The following is the class definition and description for Class
705:

    This is the generic class for apparatus and corresponding
methods for performing data processing operations, in which there is
a significant change in the data or for performing calculation
operations wherein the apparatus or method is uniquely designed for
or utilized in the practice, administration, or management of an
enterprise, or in the processing of financial data.
    This class also provides for apparatus and corresponding methods
for performing data processing or calculating operations in which a
charge for goods or services is determined.
    This class additionally provides for subject matter described in
the two paragraphs above in combination with cryptographic apparatus
or method.
    Subclasses 705/300-348 were established prior to complete
reclassification of all project documents. Documents that have not
yet been reclassified have been placed in 705/1.1. Until
reclassification is finished a complete search of 705/300-348 should
include a search of 705/1.1. Once the project documents in 705/1.1
have been reclassified they will be moved to the appropriate
subclasses and this note will be removed.

Scope of the Class

    1. The arrangements in this class are generally used for
problems relating to administration of an organization, commodities
or financial transactions.
    2. Mere designation of an arrangement as a "business machine"
or a document as a "business form" or "business chart" without
any particular business function will not cause classification in
this class or its subclasses.
    3. For classification herein, there must be significant claim
recitation of the data processing system or calculating computer and
only nominal claim recitation of any external art environment.
Significantly claimed apparatus external to this class, claimed in
combination with apparatus under the class definition, which perform
data processing or calculation operations are classified in the
class appropriate to the external device unless specifically
excluded therefrom.
    4. Nominally claimed apparatus external to this class in
combination with apparatus under the class definition is classified
in this class unless provided for in the appropriate external class.
    5. In view of the nature of the subject matter included herein,
consideration of the classification schedule for the diverse art or
environment is necessary for proper search.

    See Classification Definitions (Feb. 2011) available at
http://www.uspto.gov/web/patents/classification/uspc705/defs705.htm.
    Accordingly, patents subject to covered business method patent
review are anticipated to be typically classifiable in Class 705. It is
anticipated that the number of patents in Class 705 that do not qualify
as covered business method patents would approximate the number of
patents classified in other classes that do qualify.
    The Office received 20 requests for inter partes reexamination of
patents classified in Class 705 in fiscal year 2011. The Office in
estimating the number of petitions for covered business method patent
review to be higher than 20 requests due to an expansion of the grounds
for which review may be requested including subject matter eligibility
grounds, the greater coordination with litigation, and the provision
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 202 

that patents will be eligible for the proceeding regardless of filing
date of the application which resulted in the patent.
    The Office has reviewed the entity status of patents for which
inter partes reexamination was requested from October 1, 2000, to
September 23, 2011. This data only includes filings granted a filing
date rather than filings in which a request was received. The first
inter partes reexamination was filed on July 27, 2001. A summary of
that review is provided in Table 1 below. As shown by Table 1, patents
known to be owned by a small entity represented 32.79% of patents for
which inter partes reexamination was requested. Based on an assumption
that the same percentage of patents owned by small entities will be
subject to covered business method patent review, it is estimated that
16 petitions for covered business method patent review would be filed
to seek review of patents owned by a small entity in fiscal year 2013,
the first full fiscal year that these proceedings will be available.

           Table 1 - Inter partes Reexamination Requests Filed with
                             Parent Entity Type *

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

2011                  329                      123               37.39
2010                  255                       94               36.86
2009                  240                       62               25.83
2008                  155                       52               33.55
2007                  127                       35               27.56
2006                   61                       17               27.87
2005                   59                       18               30.51
2004                   26                        5               19.23
2003                   21                       12               57.14
2002                    4                        1               25.00
2001                    1                        0                0.00

Totals              1,278                      419               32.79

* Small entity status determined by reviewing preexamination small entity
indicator for the parent patent.

    Based on the number of patents issued during fiscal years 1995
through 1999 that paid the small entity third stage maintenance fee,
the number of patents issued during fiscal years 2000 through 2003 that
paid the small entity second stage maintenance fee, the number of
patents issued during fiscal years 2004 through 2007 that paid the
first stage maintenance fee, and the number of patents issued during
fiscal years 2008 through 2011 that paid a small entity issue fee,
there are no less than 375,000 patents owned by small entities in force
as of October 1, 2011.
    Furthermore, the Office recognizes that there would be an offset to
this number for patents that expire earlier than 20 years from their
filing date due to a benefit claim to an earlier application or due to
a filing of a terminal disclaimer. The Office likewise recognizes that
there would be an offset in the opposite manner due to the accrual of
patent term extension and adjustment. The Office, however, does not
maintain data on the date of expiration by operation of a terminal
disclaimer. Therefore, the Office has not adjusted the estimate of
375,000 patents owned by small entities in force as of October 1, 2011.
While the Office maintains information regarding patent term extension
and adjustment accrued by each patent, the Office does not collect data
on the expiration date of patents that are subject to a terminal
disclaimer. As such, the Office has not adjusted the estimated of
375,000 patents owned by small entities in force as of October 1, 2011,
for accrual of patent term extension and adjustment, because in view of
the incomplete terminal disclaimer data issue, would be incomplete and
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 203 

any estimate adjustment would be administratively burdensome. Thus, it
is estimated that the number of small entity patents in force in fiscal
year 2013 will be at least 375,000.
    Based on the estimated number of patents in force, the number of
small entity owned patents impacted by covered business method patent
review in fiscal year 2013 (16 patents) would be less than 0.005% (16/
375,000) of all patents in force that are owned by small entities. The
USPTO nonetheless has undertaken an Initial Regulatory Flexibility Act
Analysis of the proposed rule.

    1. Description of the Reasons That Action by the Office Is Being
Considered: On September 16, 2011, the Leahy-Smith America Invents Act
was enacted into law (Pub. L. 112-29, 125 Stat. 284 (2011)). Section 18
of the Leahy-Smith America Invents Act provides for a transitional
program for covered business method patents which will employ the
standards and procedures of the post-grant review proceeding with a few
exceptions. For the implementation, § 6(f) of the Leahy-Smith
America Invents Act requires that the Director issue regulations to
carry out chapter 32 of title 35, United States Code, within one year
after the date of enactment. Public Law 112-29, § 6(f), 125 Stat.
284, 311 (2011).

    2. Succinct Statement of the Objectives of, and Legal Basis for,
the Proposed Rules: The proposed rules seek to implement covered
business method patent review as authorized by the Leahy-Smith America
Invents Act. The Leahy-Smith America Invents Act requires that the
Director prescribe rules for the covered business method patent reviews
that result in a final determination not later than one year after the
date on which the Director notices the institution of a proceeding. The
one-year period may be extended for not more than 6 months if good
cause is shown. See 35 U.S.C. 326(a)(11). The Leahy-Smith America
Invents Act also requires that the Director, in prescribing rules for
covered business method patent reviews, consider the effect of the
rules on the economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to complete
timely the instituted proceedings. See 35 U.S.C. 326(b). Consistent
with the time periods provided in 35 U.S.C. 326(a)(11), the proposed
rules are designed to, except where good cause is shown to exist,
result in a final determination by the Patent Trial and Appeal Board
within one year of the notice of initiation of the review. This one-
year review will enhance the effect on the economy, and improve the
integrity of the patent system and the efficient administration of the
Office.

    3. Description and Estimate of the Number of Affected Small
Entities: The Small Business Administration (SBA) small business size
standards applicable to most analyses conducted to comply with the
Regulatory Flexibility Act are set forth in 13 CFR 121.201. These
regulations generally define small businesses as those with fewer than
a specified maximum number of employees or less than a specified level
of annual receipts for the entity's industrial sector or North American
Industry Classification System (NAICS) code. As provided by the
Regulatory Flexibility Act, and after consultation with the Small
Business Administration, the Office formally adopted an alternate size
standard as the size standard for the purpose of conducting an analysis
or making a certification under the Regulatory Flexibility Act for
patent-related regulations. See Business Size Standard for Purposes of
United States Patent and Trademark Office Regulatory Flexibility
Analysis for Patent-Related Regulations, 71 FR 67109 (Nov. 20, 2006),
1313 Off. Gaz. Pat. Office 60 (Dec. 12, 2006). This alternate small
business size standard is SBA's previously established size standard
that identifies the criteria entities must meet to be entitled to pay
reduced patent fees. See 13 CFR 121.802. If patent applicants identify
themselves on a patent application as qualifying for reduced patent
fees, the Office captures this data in the Patent Application Location
and Monitoring (PALM) database system, which tracks information on each
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 204 

patent application submitted to the Office.
    Unlike the SBA small business size standards set forth in 13 CFR
121.201, the size standard for USPTO is not industry-specific. The
Office's definition of a small business concern for Regulatory
Flexibility Act purposes is a business or other concern that: (1) Meets
the SBA's definition of a "business concern or concern" set forth in
13 CFR 121.105; and (2) meets the size standards set forth in 13 CFR
121.802 for the purpose of paying reduced patent fees, namely an
entity: (a) Whose number of employees, including affiliates, does not
exceed 500 persons; and (b) which has not assigned, granted, conveyed,
or licensed (and is under no obligation to do so) any rights in the
invention to any person who made it and could not be classified as an
independent inventor, or to any concern which would not qualify as a
non-profit organization or a small business concern under this
definition. See Business Size Standard for Purposes of United States
Patent and Trademark Office Regulatory Flexibility Analysis for Patent-
Related Regulations, 71 FR at 67112 (Nov 20, 2006), 1313 Off. Gaz. Pat.
Office at 63 (Dec. 12, 2006).
    As discussed above, it is anticipated that 50 petitions for covered
business method patent review will be filed in fiscal year 2013. The
Office has reviewed the percentage of patents for which inter partes
reexamination was requested from October 1, 2000 to September 23, 2011.
A summary of that review is provided in Table 1 above. As demonstrated
by Table 1, patents known to be owned by a small entity represent
32.79% of patents for which inter partes reexamination was requested.
Based on an assumption that the same percentage of patents owned by
small entities will be subject to the new review proceedings, it is
estimated that 16 patents owned by small entities wouldbe affected by
covered business method patent review.
    The USPTO estimates that 2.5% of patent owners will file a request
for adverse judgment prior to a decision to institute and that another
2.5% will file a request for adverse judgment or fail to participate
after initiation. Specifically, an estimated 2 patent owners will file
a request for adverse judgment or fail to participate after institution
in covered business method proceedings. Based on the percentage of
small entity owned patents that were the subject of inter partes
reexamination (32.79%) from October 1, 2000 to September 23, 2011, it
is estimated that 1 small entity will file such request or fail to
participate in covered business method patent review.
    Under the proposed rules, prior to determining whether to institute
a review, the patent owner may file an optional patent owner
preliminary response to the petition. Given the new time period
requirements to file a petition for review before the Board relative to
patent enforcement proceedings and the desirability to avoid the cost
of a trial and delays to related infringement actions, it is
anticipated that 90% of petitions, other than those for which a request
for adverse judgment is filed, will result in the filing of a patent
owner preliminary response. Specifically, the Office estimates that 45
patent owners will file a preliminary response to a covered business
method patent petition. Based on the percentage of small entity owned
patents that were the subject of inter partes reexamination (32.79%),
it is estimated that 15 small entities will file a preliminary response
to a covered business method patent review petition filed in fiscal
year 2013.
    Under the proposed rules, the Office will determine whether to
institute a trial within three months after the earlier of: (1) The
submission of a patent owner preliminary response, (2) the waiver of
filing a patent owner preliminary response, or (3) the expiration of
the time period for filing a patent owner preliminary response. If the
Office decides not to institute a trial, the petitioner may file a
request for reconsideration of the Office's decision. In estimating the
number of requests for reconsideration, the Office considered the
percentage of inter partes reexaminations that were denied relative to
those that were ordered (24 divided by 342, or 7%) in fiscal year 2011.
See Reexamination - FY 2011, http://www.uspto.gov/patents/Reexamination_
operational_statistic_through_FY2011Q4.pdf. The Office also considered
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 205 

the impact of: (1) patent owner preliminary responses under newly
authorized in 35 U.S.C. 323, (2) the enhanced thresholds for instituting
reviews set forth in 35 U.S.C. 324(a), which would tend to increase the
likelihood of dismissing a petition for review, and (3) the more
restrictive time period for filing a petition for review in 35 U.S.C.
325(b), which would tend to reduce the likelihood of dismissing a petition.
Based on these considerations, it is estimated that 10% of the petitions
for review (5 divided by 49) would be dismissed.
    Thus, the Office estimates that no more than 5 entities (2 small
entities) would be subject to a denial of the petition to initiate
covered business method review. This estimate is based upon either the
patent failing to meet the proposed definition for technological
invention or because the petitioner failed to meet the likelihood of
success standard. Of the remaining 90% of petitions that proceed to
trial, all entities (large or small) could be subject to the proposed
definition for technological invention since jurisdictional issues may
be raised at any time.
    During fiscal year 2011, the Office issued 21 decisions following a
request for reconsideration of a decision on appeal in inter partes
reexamination. The average time from original decision to decision on
reconsideration was 4.4 months. Thus, the decisions on reconsideration
were based on original decisions issued from July 2010 until June 2011.
During this time period, the Office mailed 63 decisions on appeals in
inter partes reexamination. See BPAI Statistics - Receipts and
Dispositions by Technology Center, http://www.uspto.gov/ip/boards/bpai/
stats/receipts/index.jsp (monthly data). Based on the assumption that
the same rate of reconsideration (21 divided by 63 or 33.333%) will occur,
the Office estimates that 2 requests for reconsideration will be filed.
Based on the percentage of small entity owned patents that were the subject
of inter partes reexamination (32.79%),it is estimated that 1 small entity
will file a request for a reconsiderationof a decision dismissing the
petition for post-grant or covered business method patent review filed
in fiscal year 2013.
    The Office reviewed motions, oppositions, and replies in a number
of contested trial proceedings before the trial section of the Board.
The review included determining whether the motion, opposition, and
reply were directed to patentability grounds and non-priority non-
patentability grounds. Based on the review, it is anticipated that
covered business method patent reviews will have an average of 8.89
motions, oppositions, and replies per trial after institution.
Settlement is estimated to occur in 20% of instituted trials at various
points of the trial. In the trials that are settled, it is estimated
that only 50% of the noted motions, oppositions, and replies would be
filed.
    After a trial has been instituted but prior to a final written
decision, parties to a covered business method patent review may
request an oral hearing. It is anticipated that 45 requests for oral
hearings will be filed based on the number of requests for oral
hearings in inter partes reexamination, the stated desirability for
oral hearings during the legislative process, and the public input
received prior to this notice of proposed rulemaking. Based on the
percentage of small entity owned patents that were the subject of inter
partes reexamination (32.79%), it is estimated that 15 small entities
will file a request for oral hearing in the covered business method
patent reviews instituted in fiscal year 2013.
    Parties to a covered business method patent review may file
requests to treat a settlement as business confidential, and request
for adverse judgment. A written request to make a settlement agreement
available may also be filed. Given the short time period set for
conducting trials, it is anticipated that the alternative dispute
resolution options will be infrequently used. The Office estimates that
2 requests to treat a settlement as business confidential, and 10
requests for adverse judgment, default adverse judgment, or settlement
notices will be filed. The Office also estimates that 2 requests to
make a settlement available will be filed. Based on the percentage of
small entity owned patents that were the subject of inter partes
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 206 

reexamination (32.79%), it is estimated that 1 small entity will file a
request to treat a settlement as business confidential and 3 small
entities will file a request for adverse judgment, default adverse
judgment notices, or settlement notices in the reviews instituted in
fiscal year 2013.
    Parties to a covered business method patent review may seek
judicial review of the final decision of the Board. Historically, 33%
of examiner's decisions in inter partes reexamination proceedings have
been appealed to the Board. It is anticipated that 16% of final
decisions of the Board would be appealed. The reduction in appeal rate
is based on the higher threshold for institution, the focused process,
and the experience of the Board in conducted contested cases.
Therefore, it is estimated that 5 parties would seek judicial review of
the final decisions of the Board in covered business method
patent reviews instituted in fiscal year 2013. Furthermore, based on
the percentage of small entity owned patents that were the subject of
inter partes reexamination (32.79%), it is estimated that 2 small
entities would seek judicial review of final decisions of the Board in
the covered business method patent reviews instituted in fiscal year
2013.

    4. Description of the Reporting, Recordkeeping, and Other
Compliance Requirements of the Proposed Rule, Including an Estimate of
the Classes of Small Entities Which Will Be Subject to the Requirement
and the Type of Professional Skills Necessary for Preparation of the
Report or Record: Covered business method patent reviews would be
limited to business method patents that are not patents for
technological inventions. Under the proposed rules, a person who is not
the owner of a patent may file a petition to institute a review of the
patent, with a few exceptions. Given this, it is anticipated that a
petition for review is likely to be filed by an entity practicing in
the business method field for covered business methods.
    Preparation of the petition would require analyzing the patent
claims, locating evidence supporting arguments of unpatentability, and
preparing the petition seeking review of the patent. This notice
provides the proposed procedural requirements that are common for the
new trials. Additional requirements are provided in contemporaneous
trial specific proposed rulemaking. The procedures for petitions to
institute a covered business method patent review are proposed in
§§  42.5, 42.6, 42.8, 42.11, 42.13, 42.20, 42.21, 42.22,
42.24(a)(3), 42.63, 42.65, 42.203, 42.205, and 42.302 through 42.304.
    The skills necessary to prepare a petition for review and to
participate in a trial before the Patent Trial and Appeal Board would
be similar to those needed to prepare a request for inter partes
reexamination, to represent a party in an inter partes reexamination,
and to represent a party in an interference proceeding before the
Patent Trial and Appeal Board. The level of skill is typically
possessed by a registered patent practitioner having devoted
professional time to the particular practice area, typically under the
supervision of a practitioner skilled in the particular practice area.
Where authorized by the Board, a non-registered practitioner may be
admitted pro hac vice, on a case-by-case basis based on the facts and
circumstances of the trial and party, as well as the skill of the
practitioner.
    The cost of preparing a petition for covered business method patent
review is estimated to be 33.333% higher than the cost of preparing an
inter partes review petition because the petition for covered business
method patent review may seek to institute a proceeding on additional
grounds such as subject matter eligibility. The American Intellectual
Property Law Association's AIPLA Report of the Economic Survey 2011
reported that the average cost of preparing a request for inter partes
reexamination was $46,000. Based on the Office's consideration of the
work required to prepare and file such a request, the Office estimates
that the cost of preparing a petition for covered business method
patent review would be $61,333 (including expert costs).
    The filing of a petition for review would also require payment by
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 207 

the petitioner of the appropriate petition fee to recover the aggregate
cost for providing the review. The appropriate petition fee would be
determined by the number of claims for which review is sought and the
type of review. The proposed fees for filing a petition for covered
business method patent review would be: $35,800 to request review of 20
or fewer claims, $44,750 to request review of 21 to 30 claims, $53,700
to request review of 31 to 40 claims, $71,600 to request review of 41
to 50 claims, $89,500 to request review of 51 to 60 claims, and an
additional $35,800 to request review of additional groups of 10 claims.
    In setting fees, the estimated information technology cost to
establish the process and maintain the filing and storage system
through 2017 is to be recovered by charging each petition $2,270. The
remainder of the fee is to recover the cost for judges to determine
whether to institute a review and conduct the review, together with a
proportionate share of indirect costs, e.g., rent, utilities,
additional support, and administrative costs. Based on the direct and
indirect costs, the fully burdened cost per hour for judges to decide a
petition and conduct a review is estimated to be $258.32.
    For a petition for covered business method patent review with 20 or
fewer challenged claims, it is anticipated that 121 hours of judge time
would be required. For 21 to 30 challenged claims, an additional 30
hours is anticipated for a total of 151 hours of judge time. For 31 to
40 challenged claims, an additional 60 hours is anticipated for a total
of 181 hours of judge time. For 41 to 50 challenged claims, an
additional 121 hours is anticipated for a total of 242 hours of judge
time. For 51 to 60 challenged claims, an additional 181 hours is
anticipated for a total of 302 hours of judge time. The increase in
adjustment reflects the added complexity that typically occurs as more
claims are in dispute.
    The proposed rules would permit the patent owner to file a
preliminary response to the petition setting forth the reasons why no
review should be initiated. The procedures for a patent owner to file a
preliminary response as an opposition are proposed in §§ 42.6,
42.8, 42.11, 42.13, 42.21, 42.23, 42.24(b), 42.51, 42.52, 42.53, 42.54,
42.63, 42.64, 42.65, 42.107, 42.120, 42.207, and 42.220. The patent
owner is not required to file a preliminary response. The Office
estimates that the preparation and filing of a patent owner preliminary
response would require 100 hours of professional time and cost $34,000
(including expert costs). The AIPLA Report of the Economic Survey 2011
reported that the average cost for inter partes reexamination including
of the request ($46,000), the first patent owner response, and third
party comments was $75,000 (see I-175) and the median billing rate for
professional time of $340 per hour for attorneys in private firms (see
8). Thus, the cost of the first patent owner reply and the third party
statement is $29,000. The Office finds these costs to be reasonable
estimates. The patent owner reply and third party statement, however,
occur after the examiner has made an initial threshold determination
and made only the appropriate rejections. Accordingly, it is
anticipated that filing a patent owner preliminary response to a
petition for review would cost more than the initial reply in a
reexamination, or an estimated $34,000 (including expert costs).
    The Office will determine whether to institute a trial within three
months after the earlier of: (1) The submission of a patent owner
preliminary response, (2) the waiver of filing a patent owner
preliminary response, or (3) the expiration of the time period for
filing a patent owner preliminary response. If the Office decides not
to institute a trial, the petitioner may file a request for
reconsideration of the Office's decision. It is anticipated that a
request for reconsideration will require 80 hours of professional time
to prepare and file, at a cost of $340 per hour, for a total estimated
cost of $27,200. This estimate is based on the complexity of the issues
and desire to avoid time bars imposed by 35 U.S.C. 325(b).
    Following institution of a trial, the parties may be authorized to
file various motions, e.g., motions to amend and motions for additional
discovery. Where a motion is authorized, an opposition may be authorized,
and where an opposition is authorized, a reply may be authorized. The
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 208 

procedures for filing a motion are proposed in §§ 42.6, 42.8, 42.11,
42.13, 42.21, 42.22, 42.24(a)(5), 42.51, 42.52, 42.53, 42.54, 42.63,
42.64, 42.65, 42.221, and 42.223. The procedures for filing an opposition
are proposed in §§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.23,
42.24(b), 42.51, 42.52, 42.53, 42.54, 42.63, 42.64, 42.65, 42.207, and
42.220. The procedures for filing a reply are proposed in §§ 42.6,
42.8, 42.11, 42.13, 42.21, 42.23, 42.24(c), 42.51, 42.52, 42.53,
42.54, 42.63, and 42.65. As discussed previously, the Office estimates
that the average covered business method patent review will have 8.89
motions, oppositions, and replies after institution.
    The AIPLA Report of the Economic Survey 2011 reported that the
average cost in contested cases before the trial section of the Board
prior to the priority phase was $322,000 per party. Because of the
overlap of issues in patentability grounds, it is expected that the
cost per motion will decline as more motions are filed in a proceeding.
It is estimated that a motion, opposition, or reply in a derivation
would cost $34,000, which is estimated by dividing the total public
cost for all motions in current contested cases divided by the
estimated number of motions in derivations under 35 U.S.C. 135, as
amended. The cost of a motion, opposition, or reply in a covered
business method patent review is estimated at $44,200 (including expert
costs), reflecting the reduction in overlap between motions relative to
derivation. Based on the work required to file and prepare such briefs,
the Office considers the reported cost as a reasonable estimate.
    After a trial has been instituted but prior to a final written
decision, parties to a covered business method patent review may
request an oral hearing. The procedure for filing requests for oral
argument is proposed in § 42.70. The AIPLA Report of the Economic
Survey 2011 reported that the third quartile cost of an ex parte appeal
with an oral argument is $12,000, while the third quartile cost of an
ex parte appeal without an oral argument is $6,000. In view of the
reported costs, which the Office finds reasonable, and the increased
complexity of an oral hearing with multiple parties, it is estimated
that the cost per party for oral hearings would be $6,800 or $800 more
than the reported third quartile cost for an ex parte oral hearing.
    Parties to a covered business method patent review may file
requests to treat a settlement as business confidential, or file a
request for adverse judgment. A written request to make a settlement
agreement available may also be filed. The procedures to file requests
that a settlement be treated as business confidential are proposed in
§ 42.74(c). The procedures to file requests for adverse judgment
are proposed in § 42.73(b). The procedures to file requests to make
a settlement agreement available are proposed in § 42.74(c)(2). It
is anticipated that requests to treat a settlement as business
confidential will require 2 hours of professional time or $680. It is
anticipated that requests for adverse judgment will require 1 hour of
professional time or $340. It is anticipated that requests to make a
settlement agreement available will require 1 hour of professional time
or $340. The requests to make a settlement agreement available will
also require payment of a fee of $400 specified in proposed § 42.15(d).
    Parties to a review proceeding may seek judicial review of the
judgment of the Board. The procedures to file notices of judicial
review of a Board decision, including notices of appeal and notices of
election provided for in 35 U.S.C. 141, 142, 145, and 146, are proposed
in §§ 90.1 through 90.3. The submission of a copy of a notice
of appeal or a notice of election is anticipated to require 6 minutes
of professional time at a cost of $34.
    5. Description of Any Significant Alternatives to the Proposed
Rules Which Accomplish the Stated Objectives of Applicable Statutes and
Which Minimize Any Significant Economic Impact of the Rules on Small
Entities:
    Definition of Technological Invention: The definition proposed is
consistent with the legislative history of the Leahy-Smith America
Invents Act. See, e.g., 157 Cong. Rec. S1364 (daily ed. Mar. 8, 2011)
(statement of Sen. Schumer) ("The `patents for technological
inventions' exception only excludes those patents whose novelty turns
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 209 

on a technological innovation over the prior art and are concerned with
a technical problem which is solved with a technical solution and which
requires the claims to state the technical features which the inventor
desires to protect."). The Office considered proposing that a
technological invention be defined as any claimed invention in any
patent having an original classification in any class other than Class
705 of the United States Patent Classification System. Adoption of the
alternative definition as applied to certain patents would have been
either overly narrow or overly broad. For example, there are patents
that are originally classified in Class 705 which solve technical
problems with technical solutions and which are patentable over the
prior art based on a technological innovation. Similarly there are
patents that are originally classified in classes other than Class 705
which fail to solve a technical problem with a technical solution and
fail to be patentable over the prior art based on a technological
innovation. For those reasons, the other considered definition was not
adopted in view of the legislative history.
    Size of petitions and motions: The Office considered whether to
apply a page limit and what an appropriate page limit would be. The
Office does not currently have a page limit on inter partes
reexamination requests. The inter partes reexamination requests from
October 1, 2010 to June 30, 2011, averaged 246 pages. Based on the
experience of processing inter partes reexamination requests, the
Office finds that the very large size of the requests has created a
burden on the Office that hinders the efficiency and timeliness of
processing the requests, and creates a burden on patent owners. The
quarterly reported average processing time from the filing of a request
to the publication of a reexamination certificate ranged from 28.9
months to 41.7 months in fiscal year 2009, from 29.5 months to 37.6
months in fiscal year 2010, and from 31.9 to 38.0 months in fiscal year
2011. See Reexaminations - FY 2011, http://www.uspto.gov/patents/
Reexamination_operational_statistic_through_FY2011Q4.pdf.
    By contrast, the Office has a page limit on the motions filed in
contested cases, except where parties are specifically authorized to
exceed the limitation. The typical contested case proceeding is subject
to a standing order that sets a 50 page limit for motions and
oppositions on priority, a 15 page limit for miscellaneous motions
(§ 41.121(a)(3)) and oppositions (§ 41.122), and a 25 page
limit for other motions (§ 41.121(a)(2)) and oppositions to other
motions. In typical proceedings, replies are subject to a 15 page limit
if directed to priority, 5 page limit for miscellaneous issues, and 10
page limit for other motions. The average contested case was terminated
in 10.1 months in fiscal year 2009, in 12 months in fiscal year 2010,
and 9 months in fiscal year 2011. The percentage of contested cases
terminated within 2 years was 93.7% in fiscal year 2009, 88.0% in
fiscal year 2010, and 94.0% in fiscal year 2011. See BPAI Statistics -
Performance Measures,
http://www.uspto.gov/ip/boards/bpai/stats/perform/index.jsp.
    Comparing the average time period for terminating a contested case,
10.0 to 12.0 months, with the average time period, during fiscal years
2009 through 2011, for completing an inter partes reexamination, 28.9 to
41.7 months, indicates that the average interference takes from 24%
(10.0/41.7) to 42% (12.0/28.9) of the time of the average inter partes
reexamination. While several factors contribute to the reduction in
time, limiting the size of the requests and motions is considered a
significant factor. Proposed § 42.24 would provide page limits for
petitions, motions, oppositions, and replies. 35 U.S.C. 326(b) provides
considerations that are to be taken into account when prescribing
regulations including the integrity of the patent system, the efficient
administration of the Office, and the ability to complete timely the
trials. The page limits proposed in these rules are consistent with
these considerations.
    Federal courts routinely use page limits in managing motions
practice as "[e]ffective writing is concise writing." Spaziano v.
Singletary, 36 F.3d 1028, 1031 n.2 (11th Cir. 1994). Many district
courts restrict the number of pages that may be filed in a motion
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 210 

including, for example, the District of Delaware, the District of New
Jersey, the Eastern District of Texas, the Northern, Central, and
Southern Districts of California, and the Eastern District of Virginia.
    Federal courts have found that page limits ease the burden on both
the parties and the courts, and patent cases are no exception. Eolas
Techs., Inc. v. Adobe Sys., Inc., No. 6:09-CV-446, at 1 (E.D. Tex.
Sept. 2, 2010) ("The Local Rules' page limits ease the burden of
motion practice on both the Court and the parties."); Blackboard, Inc.
v. Desire2Learn, Inc., 521 F. Supp. 2d 575, 576 (E.D. Tex. 2007) (The
parties "seem to share the misconception, popular in some circles,
that motion practice exists to require federal judges to shovel through
steaming mounds of pleonastic arguments in Herculean effort to uncover
a hidden gem of logic that will ineluctably compel a favorable ruling.
Nothing could be farther from the truth."); Broadwater v. Heidtman
Steel Prods., Inc., 182 F. Supp. 2d 705, 710 (S.D. Ill. 2002)
("Counsel are strongly advised, in the future, to not ask this Court
for leave to file any memoranda (supporting or opposing dispositive
motions) longer than 15 pages. The Court has handled complicated patent
cases and employment discrimination cases in which the parties were
able to limit their briefs supporting and opposing summary judgment to
10 or 15 pages." (Emphasis omitted)).
    The Board's contested cases experience with page limits in motions
practice is consistent with that of the federal courts. The Board's use
of page limits has shown it to be beneficial without being unduly
restrictive for the parties. Page limits have encouraged the parties to
focus on dispositive issues, easing the burden of motions practice on
the parties and on the Board.
    The Board's contested cases experience with page limits is informed
by its use of different approaches over the years. In the early 1990s,
page limits were not routinely used for motions, and the practice
suffered from lengthy and unacceptable delays. To reduce the burden on
the parties and on the Board and thereby reduce the time to decision,
the Board instituted page limits in the late 1990s for every motion.
Page limit practice was found to be effective in reducing the burdens
on the parties and improving decision times at the Board. In 2006, the
Board revised the page limit practice and allowed unlimited findings of
fact and generally limited the number of pages containing argument. Due
to abuses of the system, the Board recently reverted back to page
limits for the entire motion (both argument and findings of fact).
    The Board's current page limits are consistent with the 25 page
limits in the Northern, Central, and Southern Districts of California,
and the Middle District of Florida and exceed the limits in the
District of Delaware (20), the Northern District of Illinois (15), the
District of Massachusetts (20), the Eastern District of Michigan (20),
the Southern District of Florida (20), and the Southern District of
Illinois (20).
    In a typical proceeding before the Board, a party may be authorized
to file a single motion for unpatentability based on prior art, a
single motion for unpatentability based upon failure to comply with 35
U.S.C. 112, lack of written description, and/or enablement, and
potentially another motion for lack of compliance with 35 U.S.C. 101,
although a 35 U.S.C. 101 motion may be required to be combined with the
35 U.S.C. 112 motion. Each of these motions is currently limited to 25
pages in length, unless good cause is shown that the page limits are
unduly restrictive for a particular motion.
    A petition requesting the institution of a trial proceeding would
be similar to motions currently filed with the Board. Specifically,
petitions to institute a trial seek a final written decision that the
challenged claims are unpatentable, where derivation is a form of
unpatentability. Accordingly, a petition to institute a trial based on
prior art would, under current practice, be limited to 25 pages, and by
consequence, a petition raising unpatentability based on prior art and
unpatentability under 35 U.S.C. 101 and/or 112 would be limited to 50
pages.
    Under the proposed rules, a covered business method patent review
petition would be based upon any grounds identified in 35 U.S.C.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 211 

321(b), e.g., failure to comply with 35 U.S.C. 101, 102 (based on
certain references), 103, and 112 (except best mode). Under current
practice, a party would be limited to filing two or three motions, each
limited to 25 pages, for a maximum of 75 pages. Where there is more
than one motion for unpatentability based upon different statutory
grounds, the Board's experience is that the motions contain similar
discussions of technology and claim constructions. Such overlap is
unnecessary where a single petition for unpatentability is filed. Thus,
the proposed 70 page limit is considered sufficient in all but
exceptional cases.
    The proposed rule would provide that petitions to institute a trial
must comply with the stated page limits but may be accompanied by a
motion that seeks to waive the page limits. The petitioner must show in
the motion how a waiver of the page limits is in the interests of
justice. A copy of the desired non-page limited petition must accompany
the motion. Generally, the Board would decide the motion prior to
deciding whether to institute the trial.
    Current Board practice provides a limit of 25 pages for other
motions and 15 pages for miscellaneous motions. The Board's experience
is that such page limits are sufficient for the parties filing them and
do not unduly burden the opposing party or the Board. Petitions to
institute a trial would generally replace the current practice of
filing motions for unpatentability, as most motions for relief are
expected to be similar to the current interference miscellaneous motion
practice. Accordingly, the proposed 15 page limit is considered
sufficient for most motions but may be adjusted where the limit is
determined to be unduly restrictive for the relief requested.
    Proposed § 42.24(b) would provide page limits for oppositions
filed in response to motions. Current contested cases practice provides
an equal number of pages for an opposition as its corresponding motion.
This is generally consistent with motions practice in federal courts.
The proposed rule would continue the current practice.
    Proposed § 42.24(c) would provide page limits for replies.
Current contested cases practice provides a 15 page limit for priority
motion replies, a 5 page limit for miscellaneous
(procedural) motion replies, and a 10 page limit for all other motions.
The proposed rule is consistent with current contested case practice
for procedural motions. The proposed rule would provide a 15 page limit
for reply to petitions requesting a trial, which the Office believes is
sufficient based on current practice. Current contested cases practice
has shown that such page limits do not unduly restrict the parties and,
in fact, have provided sufficient flexibility to parties to not only
reply to the motion but also help to focus on the issues. Thus, it is
anticipated that default page limits would minimize the economic impact
on small entities by focusing on the issues in the trials.
    The Leahy-Smith America Invents Act requires that the Director, in
prescribing rules for covered business method patent reviews, consider
the effect of the rules on the economy, the integrity of the patent
system, the efficient administration of the Office, and the ability of
the Office to complete timely the instituted proceedings. See 35 U.S.C.
326(b). In view of the actual results of the duration of proceedings in
inter partes reexamination (without page limits) and contested cases
(with page limits), proposing procedures with reasonable page limits
would be consistent with the objectives set forth in the Leahy-Smith
America Invents Act. Based on our experience on the time needed to
complete a non-page limited proceeding, the option of non-page limited
proceedings was not adopted.
    Fee Setting: 35 U.S.C. 321(a) requires the Director to establish
fees to be paid by the person requesting the review in such amounts as
the Director determines to be reasonable, considering the aggregate
costs of the review. In contrast to current 35 U.S.C. 311(b) and
312(c), the Leahy-Smith America Invents Act requires the Director to
establish more than one fee for reviews based on the total cost of
performing the reviews, and does not provide for refund of any part of
the fee when the Director determines that the review should not be
initiated.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 212 

    35 U.S.C. 322(a)(1) further requires that the fee established by
the Director under 35 U.S.C. 321 accompany the petition on filing.
Accordingly, in interpreting the fee setting authority in 35 U.S.C.
321(a), it is reasonable that the Director should set a number of fees
for filing a petition based on the anticipated aggregate cost of
conducting the review depending on the complexity of the review, and
require payment of the fee upon filing of the petition.
    Based on experience with contested cases and inter partes
reexamination proceedings, the following characteristics of requests
were considered as potential factors for fee setting as each would
likely impact the cost of providing the new services. The Office also
considered the relative difficulty in administrating each option in
selecting the characteristics for which different fees should be paid
for requesting review.

    I. Adopted Option. Number of claims for which review is requested.
The number of claims often impacts the complexity of the request and
increases the demands placed on the deciding officials. Cf. In re Katz
Interactive Call Processing Patent Litig., 639 F.3d 1303, 1309 (Fed.
Cir. 2011) (limiting number of asserted claims is appropriate to
efficiently manage a case). Moreover, the number of claims for which
review is requested can be easily determined and administered, which
avoids delays in the Office and the impact on the economy or patent
system that would occur if an otherwise meritorious request is refused
due to improper fee payment. Any subsequent petition would be time
barred in view of 35 U.S.C. 325.

    II. Alternative Option I. Number of grounds for which review is
requested. The Office has experience with large numbers of cumulative
grounds being presented in inter partes reexaminations which often add
little value to the proceedings. Allowing for a large number of grounds
to be presented on payment of an additional fee(s) is not favored.
Determination of the number of grounds in a request may be contentious
and difficult and may result in a large amount of high-level petition
work. As such, the option would have a negative impact on small
entities. Moreover, interferences instituted in the 1980s and early
1990s suffered from this problem as there was no page limit for motions
and the parties had little incentive to focus the issues for decision.
The resulting interference records were often a collection of disparate
issues and evidence. This led to lengthy and unwarranted delays in
deciding interference cases as well as increased costs for parties and
the Office. Accordingly, this alternative is inconsistent with
objectives of the Leahy-Smith America Invents Act that the Director, in
prescribing rules for the covered business method patent reviews,
consider the effect of the rules on the economy, the integrity of the
patent system, the efficient administration of the Office, and the
ability of the Office to timely complete the instituted proceedings.

   III. Alternative Option II. Pages of argument. The Office has
experience with large requests in inter partes reexamination in which
the merits of the proceedings could have been resolved in a shorter
request. Allowing for unnecessarily large requests on payment of an
additional fee(s) is not favored. Moreover, determination of what
should be counted as "argument" as compared with "evidence" has
often proven to be contentious and difficult as administered in the
current inter partes reexamination appeal process.
    In addition, the trial section of the Board recently experimented
with motions having a fixed page limit for the argument section and an
unlimited number of pages for the statement of facts. Unlimited pages
for the statement of facts led to a dramatic increase in the number of
alleged facts and pages associated with those facts. For example, one
party used approximately 10 pages for a single "fact" that merely cut
and pasted a portion of a declarant's cross-examination. Based upon the
trial section's experience with unlimited pages of facts, the Board
recently reverted back to a fixed page limit for the entire motion
(argument and facts). Accordingly, this alternative is inconsistent
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 213 

with objectives of the Leahy-Smith America Invents Act that the
Director, in prescribing rules for the covered business method patent
reviews, consider the effect of the rules on the economy, the integrity
of the patent system, the efficient administration of the Office, and
the ability of the Office to complete timely the instituted
proceedings.

    IV. Alternative Option III. The Office considered an alternative
fee setting regime in which fees would be charged at various steps in
the review process, a first fee on filing of the petition, a second fee
if instituted, a third fee on filing a motion in opposition to amended
claims, etc. The alternative fee setting regime would hamper the
ability of the Office to complete timely reviews, would result in
dismissal of pending proceedings with patentability in doubt due to
non-payment of required fees by third parties, and would be
inconsistent with 35 U.S.C. 322 that requires the fee established by
the Director be paid at the time of filing the petition. Accordingly,
this alternative is inconsistent with objectives of the Leahy-Smith
America Invents Act that the Director, in prescribing rules for covered
business method patent reviews, consider the effect of the rules on the
economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to complete
timely the instituted proceedings.

    V. Alternative Option IV. The Office considered setting reduced
fees for small and micro entities and to provide refunds if a review is
not instituted. The Office may set the fee to recover the cost of
providing the services under 35 U.S.C. 41(d)(2)(a). Fees set under this
authority are not reduced for small entities, see 35 U.S.C. 42(h)(1),
as amended. Moreover, the Office does not have authority to refund fees
that were not paid by mistake or in excess of that owed. See 35 U.S.C.
42(d).
    Discovery: The Office considered a procedure for discovery similar
to the one available during district court litigation. Discovery of
that scope has been criticized sharply, particularly when attorneys use
discovery tools as tactical weapons, which hinder the "just, speedy,
and inexpensive determination of every action and proceedings." See
Introduction to An E-Discovery Model Order available at
http://www.cafc.uscourts.gov/images/stories/announcements/Ediscovery_
Model_Order.pdf. Accordingly, this alternative would have been inconsistent
with objectives of the Leahy-Smith America Invents Act that the
Director, in prescribing rules for the covered business method patent
reviews, consider the effect of the rules on the economy, the integrity
of the patent system, the efficient administration of the Office, and
the ability of the Office to complete timely the instituted
proceedings.
    Additional discovery increases trial costs and increases the
expenditures of time by the parties and the Board. To promote effective
discovery, the proposed rule would require a showing of good cause to
authorize additional requested discovery. To show good cause, a party
must make a particular and specific demonstration of fact. The moving
party must also show that it was fully diligent in seeking discovery,
and that there is no undue prejudice to the non-moving party.
    The Office has proposed a default scheduling order to provide
limited discovery as a matter of right and also the ability to seek
additional discovery on a case-by-case basis. In weighing the need for
additional discovery, should a request be made, the economic impact on
the opposing party would be considered which would tend to limit
additional discovery where a party is a small entity.
    Pro Hac Vice: The Office considered whether to allow counsel to
appear pro hac vice. In certain cases, highly skilled, but non-
registered, attorneys have appeared satisfactorily before the Board in
contested cases. The Board may recognize counsel pro hac vice during a
proceeding upon a showing of good cause. Proceedings before the Office
can be technically complex. Consequently, the grant of a motion to
appear pro hac vice is a discretionary action taking into account the
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 214 

specifics of the proceedings. Similarly, the revocation of pro hac vice
is a discretionary action taking into account various factors,
including incompetence, unwillingness to abide by the Office's Rules of
Professional Conduct, prior findings of misconduct before the Office in
other proceedings, and incivility.
    The Board's past practice has required the filing of a motion by a
registered patent practitioner seeking pro hac vice representation
based upon a showing of: (1) How qualified the unregistered
practitioner is to represent the party in the proceeding when measured
against a registered practitioner, and, (2) whether the party has a
genuine need to have the particular unregistered practitioner represent
it during the proceeding. This practice has proven effective in the
limited number of contested cases where such requests have been
granted. The proposed rule, if adopted, would allow for this practice
in the new proceedings authorized by the Leahy-Smith America Invents
Act.
    The proposed rules would provide a limited delegation to the Board
under 35 U.S.C. 2(b)(2) and 32 to regulate the conduct of counsel in
Board proceedings. The proposed rule would delegate to the Board the
authority to conduct counsel disqualification proceedings while the
Board has jurisdiction over a proceeding. The rule would also delegate
to the Chief Administrative Patent Judge the authority to make final a
decision to disqualify counsel in a proceeding before the Board for the
purposes of judicial review. This delegation would not derogate from
the Director the prerogative to make such decisions, nor would it
prevent the Chief Administrative Patent Judge from further delegating
authority to an administrative patent judge.
    The Office considered broadly permitting practitioners not
registered to practice by the Office to represent parties in trial as
well as categorically prohibiting such practice. A prohibition on the
practice would be inconsistent with the Board's experience, and more
importantly, might result in increased costs particularly where a small
entity has selected its district court litigation team for
representation before the Board and has a patent review filed after
litigation efforts have commenced. Alternatively, broadly making the
practice available would create burdens on the Office in administering
the trials and in completing the trial within the established time
frame, particularly if the selected practitioner does not have the
requisite skill. In weighing the desirability of admitting a
practitioner pro hac vice, the economic impact on the party in interest
would be considered which would tend to increase the likelihood that a
small entity could be represented by a non-registered practitioner.
Accordingly, the alternatives to eliminate pro hac vice practice or to
permit more broadly it would have been inconsistent with objectives of
the Leahy-Smith America Invents Act that the Director, in prescribing
rules for the covered business method patent reviews, consider the
effect of the rules on the economy, the integrity of the patent system,
the efficient administration of the Office, and the ability of the
Office to complete timely the instituted proceedings.
    Threshold for Instituting a Review: The Office considered whether
the threshold for instituting a review could be set as low as or lower
than the threshold for ex parte reexamination. This alternative could
not be adopted in view of the statutory requirements in 35 U.S.C. 324.
    Default Electronic Filing: The Office considered a paper filing
system and a mandatory electronic filing system (without any
exceptions) as alternatives to the proposed requirement that all papers
are to be electronically filed, unless otherwise authorized.
    Based on the Office's experience, a paper based filing system
increases delay in processing papers, delay in public availability, and
the chance that a paper may be misplaced or made available to an
improper party if confidential. Accordingly, the alternative of a paper
based filing system would have been inconsistent with objectives of the
Leahy-Smith America Invent Act that the Director, in prescribing rules
for the covered business method patent reviews, consider the effect of
the rules on the economy, the integrity of the patent system, the
efficient administration of the Office, and the ability of the Office
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 215 

to complete timely the instituted proceedings.
    An electronic filing system (without any exceptions) that is
rigidly applied would result in unnecessary cost and burdens,
particularly where a party lacks the ability to file electronically. By
contrast, if the proposed option is adopted, it is expected that the
entity size and sophistication would be considered in determining
whether alternative filing methods would be authorized.

    6. Identification, to the Extent Practicable, of All Relevant
Federal Rules Which May Duplicate, Overlap, or Conflict With the
Proposed Rules:

    37 CFR 1.99 provides for the submission of information after
publication of a patent application during examination by third
parties.
    37 CFR 1.171-1.179 provide for applications to reissue a patent to
correct errors, including where a claim in a patent is overly broad.
    37 CFR 1.291 provides for the protest against the issuance of a
patent during examination.
    37 CFR 1.321 provides for the disclaimer of a claim by a patentee.
    37 CFR 1.501 and 1.502 provide for ex parte reexamination of
patents. Under these rules, a person may submit to the Office prior art
consisting of patents or printed publications that are pertinent to the
patentability of any claim of a patent, and request reexamination of
any claim in the patent on the basis of the cited prior art patents or
printed publications. Consistent with 35 U.S.C. 302-307, ex parte
reexamination rules provide a different threshold for initiation,
required the proceeding to be conducted by an examiner with a right of
appeal to the Patent Trial and Appeal Board, and allow for limited
participation by third parties.
    37 CFR 1.902-1.997 provide for inter partes reexamination of
patents. Similar to ex parte reexamination, inter partes reexamination
provides a procedure in which a third party may request reexamination
of any claim in a patent on the basis of the cited prior art patents
and printed publication. The inter partes reexamination practice will
be eliminated, except for requests filed before the effective date,
September 16, 2012. See § 6(c)(3)(C) of the Leahy-Smith America
Invents Act.
    Other countries have their own patent laws, and an entity desiring
a patent in a particular country must make an application for patent in
that country, in accordance with the applicable law. Although the
potential for overlap exists internationally, this cannot be avoided
except by treaty (such as the Paris Convention for the Protection of
Industrial Property, or the Patent Cooperation Treaty (PCT)).
Nevertheless, the Office believes that there are no other duplicative
or overlapping foreign rules.

    C. Executive Order 12866 (Regulatory Planning and Review): This
rulemaking has been determined to be significant for purposes of
Executive Order 12866 (Sept. 30, 1993), as amended by Executive Order
13258 (Feb. 26, 2002) and Executive Order 13422 (Jan. 18, 2007).
    Based on the petition and other filing requirements for initiating
a review proceeding, the USPTO estimates the burden of the proposed
rules on the public to be $22,761,410 in fiscal year 2013, which
represents the sum of the estimated total annual (hour) respondent cost
burden ($20,405,610) plus the estimated total annual non-hour
respondent cost burden ($2,355,800) provided in Part O, Section II, of
this notice, infra.
    The USPTO expect several benefits to flow from the Leahy-Smith
America Invents Act and these proposed rules. It is anticipated that
the proposed rules will reduce the time for reviewing patents at the
USPTO. Specifically, 35 U.S.C. 326(a) provides that the Director
prescribe regulations requiring a final determination by the Board
within one year of initiation, which may be extended for up to six
months for good cause. In contrast, currently for inter partes
reexamination, the average time from the filing to the publication of a
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 216 

certificate ranged from 28.9 to 41.7 months during fiscal years 2009-
2011. See Reexaminations - FY 2011, http://www.uspto.gov/patents/
Reexamination_operational_statistic_through_FY2011Q4.pdf.
    Likewise, it is anticipated that the proposed rules will minimize
duplication of efforts. In particular, the Leahy-Smith America Invents
Act provides more coordination between district court infringement
litigation and covered business method patent review to reduce
duplication of efforts and costs.
    The AIPLA Report of the Economic Survey 2011 reports that the total
cost of patent litigation where the damages at risk are less than
$1,000,000 average $916,000, where the damages at risk are between
$1,000,000 and $25,000,000 average $2,769,000, and where the damages at
risk exceed $25,000,000 average $6,018,000. There may be a significant
reduction in overall burden if, as intended, the Leahy-Smith America
Invents Act and the proposed rules reduce the overlap between review at
the USPTO of issued patents and validity determination during patent
infringement actions. Data from the United States district courts
reveals that 2,830 patent cases were filed in 2006, 2,896 in 2007,
2,909 in 2008, 2,792 in 2009, and 3,301 in 2010. See U.S. Courts,
Judicial Business of the United States Courts, www.uscourts.gov/uscourts/
Statistics/JudicialBusiness/2010/appendices/C02ASep10.pdf
(last visited Nov. 11, 2011) (hosting annual reports for 1997 through
2010). Thus, the Office estimates that no more than 3,300 (the highest
number of yearly filings between 2006 and 2010 rounded to the nearest
100) patent cases are likely to be filed annually. The aggregate burden
estimate above ($22,761,410) was not offset by a reduction in burden
based on improved coordination between district court patent litigation
and the new inter partes review proceedings.

    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 determination that the benefits justify the costs
of the rule; (2) tailored the rule to impose the least burden on
society consistent with obtaining the regulatory objectives; (3)
selected a regulatory approach that maximizes net benefits; (4)
specified performance objectives; (5) identified and assessed available
alternatives; (6) involved the public in an open exchange of
information and perspectives among experts in relevant disciplines,
affected stakeholders in the private sector, and the public as a whole,
and provided online access to the rulemaking docket; (7) attempted to
promote coordination, simplification, and harmonization across
government agencies and identified goals designed to promote
innovation; (8) considered approaches that reduce burdens and maintain
flexibility and freedom of choice for the public; and (9) ensured the
objectivity of scientific and technological information and processes.

    E. Executive Order 13132 (Federalism): This rulemaking 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).

 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 217 

    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). This rulemaking carries out a statute
designed to lessen litigation. See H.R. Rep. No. 112-98, at 45-48.

    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 effect 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. 801-808), prior to issuing any final rule, the United
States Patent and Trademark Office will submit a report containing the
final rule and other required information to the U.S. Senate, the U.S.
House of Representatives, and the Comptroller General of the Government
Accountability Office. The changes in this notice 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 notice is not expected to result in a "major rule" as
defined in 5 U.S.C. 804(2).

    L. Unfunded Mandates Reform Act of 1995: The changes proposed in
this notice 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.
1501-1571.

    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. 4321-4370h.

    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 USPTO consider the impact of
paperwork and other information collection burdens imposed on the
public. This proposed rulemaking 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). The collection of information involved in this notice has
been submitted to OMB under OMB control number 0651-00xx. In the Notice
"Rules of Practice for Trials before the Patent Trial and Appeal Board
and Judicial Review of Patent Trial and Appeal Board Decisions," RIN
0651-AC70, the information collection for all of the new trials
authorized by the Leahy-Smith America Invents Act were provided. In the
Notice "Changes to Implement Transitional Program for Covered Business
Method Patents," RIN 0651-AC73, the information collection for covered
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 218 

business methods authorized by the Leahy-Smith America Invents Act were
provided. This notice also provides the subset of burden created by the
covered business method patent review provisions. The proposed
collection will be available at the OMB's Information Collection Review
Web site (www.reginfo.gov/public/do/PRAMain).
    The USPTO is submitting the information collection to OMB for its
review and approval because this notice of proposed rulemaking will add
the following to a collection of information:
    (1) Petitions to institute a covered business method patent review
(§§ 42.5, 42.6, 42.8, 42.11, 42.13, 42.20, 42.21, 42.22,
42.24(a)(3), 42.63, 42.65, 42.203, 42.205, and 42.302 through 42.304);
    (2) motions (§§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.22,
42.24(a)(5), 42.51 through 42.54, 42.63, 42.64, 42.65, 42.221, 42.123,
and 42.223);
    (3) oppositions (§§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.23,
42.24(b), 42.51, 42.52, 42.53, 42.54, 42.63, 42.64, 42.65, 42.207, and
42.220);
    (4) replies provided for in 35 U.S.C. 321-329 (§§ 42.6,
42.8, 42.11, 42.13, 42.21, 42.23, 42.24(c), 42.51, 42.52, 42.53, 42.54,
42.63, and 42.65).
    The proposed rules also permit filing requests for oral argument
(§ 42.70) provided for in 35 U.S.C. 326(a)(10), requests for
rehearing (§ 42.71(c)), requests for adverse judgment (§ 42.73(b)),
and requests that a settlement be treated as business
confidential (§ 42.74(b)) provided for in 35 U.S.C. 327.
    I. Abstract: The USPTO is required by 35 U.S.C. 131 and 151 to
examine applications and, when appropriate, issue applications as
patents.
    Chapter 32 of title 35 U.S.C. in effect on September 16, 2012,
provides for post-grant review proceedings allowing third parties to
petition the USPTO to review the patentability of an issued patent
under any ground authorized under 35 U.S.C. 282(b)(2). If a trial is
initiated by the USPTO based on the petition, as authorized by the
USPTO, additional motions may be filed by the petitioner. A patent
owner may file a response to the petition and if a trial is instituted,
as authorized by the USPTO, may file additional motions.
    Section 18 of the Leahy-Smith America Invents Act provides for a
transitional program for covered business method patents which will
employ the standards and procedures of the post-grant review proceeding
with a few exceptions.
    In estimating the number of hours necessary for preparing a
petition to institute a covered business method patent review, the
USPTO considered the estimated cost of preparing a request for inter
partes reexamination ($46,000), the median billing rate ($340/hour),
and the observation that the cost of inter partes reexamination has
risen the fastest of all litigation costs since 2009 in the AIPLA
Report of the Economic Survey 2011. Since additional grounds are
provided in covered business method patent review, the Office estimates
the cost of preparing a petition to institute a review will be 33.333%
more than the estimated cost of preparing a request for inter partes
reexamination, or $61,333.
    In estimating the number of hours necessary for preparing motions
after instituting and participating in the review, the USPTO considered
the AIPLA Report of the Economic Survey 2011 which reported the average
cost of a party to a two-party interference to the end of the
preliminary motion phase ($322,000) and inclusive of all costs
($631,000). The Office considered that the preliminary motion phase is
a good proxy for patentability reviews since that is the period of
current contested cases before the trial section of the Board where
most patentability motions are currently filed.
    The USPTO also reviewed recent contested cases before the trial
section of the Board to make estimates on the
average number of motions for any matter including priority, the subset
of those motions directed to non-priority issues, the subset of those
motions directed to non-priority patentability issues, and the subset
of those motions directed to patentability issues based on a patent or
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 219 

printed publication on the basis of 35 U.S.C. 102 or 103. The review of
current contested cases before the trial section of the Board indicated
that approximately 15% of motions were directed to prior art grounds,
18% of motions were directed to other patentability grounds, 27% were
directed to miscellaneous issues and, 40% were directed to priority
issues. It was estimated that the cost per motion to a party in current
contested cases before the trial section of the Board declines because
of overlap in subject matter, expert overlap, and familiarity with the
technical subject matter. Given the overlap of subject matter, a
proceeding with fewer motions will have a somewhat less than
proportional decrease in costs since the overlapping costs will be
spread over fewer motions.
    It is estimated that the cost of an inter partes review would be
60% of the cost of current contested cases before the trial section of
the Board to the end of the preliminary motion period. An inter partes
review should have many fewer motions since only one party will have a
patent that is the subject of the proceeding (compared with each party
having at least a patent or an application in current contested cases
before the trial section of the Board). Moreover, fewer issues can be
raised since inter partes review will not have priority-related issues
that must be addressed in current contested cases before the trial
section of the Board. Consequently, a 60% weighting factor should
capture the typical costs of an inter partes review.
    It is estimated that the cost of a covered business method patent
review would be 75% of the cost of current contested cases before the
trial section of the Board to the end of the preliminary motion period.
A covered business method patent review should have many fewer motions
since only one party will have a patent that is the subject of the
proceeding (compared with each party having at least a patent or an
application in current contested cases before the trial section of the
Board). Moreover, fewer issues can be raised since covered business
method patent reviews will not have the priority-related issues that
must be addressed in current contested cases before the trial section
of the Board before the priority phase. Again, a 75% weighting factor
should capture the typical costs of a covered business method patent
review.
    The title, description, and respondent description of the
information collection are shown below with an estimate of the annual
reporting burdens for the covered business method patent review
provisions. Included in this estimate is the time for reviewing
instructions, gathering and maintaining the data needed, and completing
and reviewing the collection of information. The principal impact of
the proposed changes in this notice of proposed rulemaking is to
implement the changes to Office practice necessitated by §§ 6(d) and
18 of the Leahy-Smith America Invents Act.
    The public uses this information collection to request review and
derivation proceedings and to ensure that the associated fees and
documentation are submitted to the USPTO.

II. Data

    Needs and Uses: The information supplied to the USPTO by a petition
to institute a review as well as the motions authorized following the
institution is used by the USPTO to determine whether to initiate a
review under 35 U.S.C. 324 and to prepare a final decision under 35
U.S.C. 328.
    OMB Number: 0651-00xx.
    Title: Patent Review and Derivation Proceedings.
    Form Numbers: None.
    Type of Review: New Collection.
    Likely Respondents/Affected Public: Individuals or households,
businesses or other for profit, not-for-profit institutions, farms,
Federal Government, and state, local, or tribal governments.
    Estimated Number of Respondents/Frequency of Collection: 100
respondents and 515 responses per year.
    Estimated Time per Response: The USPTO estimates that it will take
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 220 

the public from 0.1 to 180.4 hours to gather the necessary information,
prepare the documents, and submit the information to the USPTO.
    Estimated Total Annual Respondent Burden Hours: 60,016.5 hours per
year.
    Estimated Total Annual (hour) Respondent Cost Burden: $20,405,610
per year. The USPTO expects that the information in this collection
will be prepared by attorneys. Using the professional rate of $340 per
hour for attorneys in private firms, the USPTO estimates that the
respondent cost burden for this collection will be approximately
$20,405,610 per year (60,016.5 hours per year multiplied by $340 per
hour).
    Estimated Total Annual Non-hour Respondent Cost Burden: $2,355,800
per year. There are no capital start-up or maintenance costs associated
with this information collection. However, this collection does have
annual (non-hour) costs in the form of filing fees. There are filing
fees associated with petitions for covered business method patent
review and for requests to treat a settlement as business confidential.
The total fees for this collection are calculated in the accompanying
table. The USPTO estimates that the total fees associated with this
collection will be approximately $2,355,800 per year.
    Therefore, the total estimated cost burden in fiscal year 2013 is
estimated to be $22,761,410 (the sum of the estimated total annual
(hour) respondent cost burden ($20,405,610) plus the estimated total
annual non-hour respondent cost burden ($2,355,800)).

                               Estimated                     Estimated
                               time for      Estimated         annual
                               response       annual           burden
Item                           (hours)       responses         hours

Petition for covered business    180.4            50           9,020
   method patent review
Reply to initial covered         100              45           4,500
   business method patent
   review
Request for Reconsideration       80              14           1,120
Motions, replies and             130             342          44,460
   oppositions after
   institution in covered
   business method patent review
Request for oral hearing          20              45             900
Request to treat a settlement      2               2               4
   as business confidential
Request for adverse judgment,      1              10              10
   default adverse judgment
   or settlement                   1               2               2
   agreement available
Notice of judicial review of a     0.1             5               0.5
   Board decision (e.g., notice
   of appeal under 35 U.S.C. 142)

Totals                                           515          60,016.5


                                                          Estimated
                               Estimated                   annual
                                annual                     filing
Item                           responses   Fee Amount      costs

Petition for covered business     50         $47,100      $2,355,000
   method patent review
Reply to covered business         45               0               0
   method patent review
   petition
Request for Reconsideration       14               0               0
Motions, replies and             342               0               0
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 221 

   oppositions after
   initiation in covered
   business method patent
   review
Request for oral hearing          45               0               0
Request to treat a settlement      2               0               0
   as business confidential
Request for adverse judgment,     10               0               0
   default adverse judgment
   or settlement
Request to make a settlement       2             400             800
   agreement available
Notice of judicial review of       5               0               0
   a Board decision (e.g.,
   notice of appeal under
   35 U.S.C. 142)

Totals                           515                       2,355,800


III. Solicitation

    The agency is soliciting comments to: (1) Evaluate whether the
proposed information requirement is necessary for the proper
performance of the functions of the agency, including whether the
information will have practical utility; (2) evaluate the accuracy of
the agency's estimate of the burden; (3) enhance the quality, utility,
and clarity of the information to be collected; and (4) minimize the
burden of collecting the information on those who are to respond,
including by using appropriate automated, electronic, mechanical, or
other technological collection techniques or other forms of information
technology.
    Interested persons are requested to send comments regarding this
information collection by April 10, 2012 to: (1) The Office of
Information and Regulatory Affairs, Office of Management and Budget,
New Executive Office Building, Room 10202, 725 17th Street NW.,
Washington, DC 20503, Attention: Nicholas A. Fraser, Desk Officer for
the United States Patent and Trademark Office, and via email at
nfraser@omb.eop.gov; and (2) The Board of Patent Appeals and
Interferences by electronic mail message over the Internet addressed
to: TPCBMP_Definition@uspto.gov, or by 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 Michael Tierney, Covered Business Method
Patent Review Proposed Definition for Technological Invention."
    Notwithstanding any other provision of law, no person is required
to respond to nor shall a 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,
Lawyers.

Proposed Amendments to the Regulatory Text

    For the reasons stated in the preamble, the Under Secretary of
Commerce for Intellectual Property and Director of the United States
Patent and Trademark Office propose to amend 37 CFR part 42 as proposed
to be added in the February 9, 2012, issue of the Federal Register as
follows:

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

 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 222 

    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 Leahy-Smith America Invents Act, Pub. L. 112-29,
§§ 6(c), 6(f), and 18, 125 Stat. 284, 304, 311, and 329
(2011).

    2. Add § 42.301 to subpart D to read as follows:

§ 42.301  Definitions.

    In addition to the definitions in § 42.2, the following
definitions apply to proceedings under this subpart D:
    (a) Covered business method patent means a patent that claims a
method or corresponding apparatus for performing data processing or
other operations used in the practice, administration, or management of
a financial product or service, except that the term does not include
patents for technological inventions.
    (b) Technological invention. In determining whether a patent is for
a technological invention solely for purposes of the Transitional
Program for Covered Business Methods (section 42.301(a)), the following
will be considered on a case-by-case basis: whether the claimed subject
matter as a whole recites a technological feature that is novel and
unobvious over the prior art; and solves a technical problem using a
technical solution.

January 31, 2012                                            DAVID J. KAPPOS
                  Under Secretary of Commerce for Intellectual Property and
                  Director of the United States Patent and Trademark Office
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 223 

Changes to Implement Derivation Proceedings
                            DEPARTMENT OF COMMERCE
                          Patent and Trademark Office
                                37 CFR Part 42
                         [Docket No. PTO-P-2011-0086]
                                 RIN 0651-AC74

                  Changes To Implement Derivation Proceedings

AGENCY: United States Patent and Trademark Office, Commerce.

ACTION: Notice of proposed rulemaking.

SUMMARY: The United States Patent and Trademark Office (Office or
USPTO) proposes new rules to implement the provisions of the Leahy-
Smith America Invents Act that create a new derivation proceeding to be
conducted before the Patent Trial and Appeal Board (Board). These
provisions of the Leahy-Smith America Invents Act will take effect on
March 16, 2013, eighteen months after the date of enactment, and apply
to applications for patent, and any patent issuing thereon, that are
subject to first-inventor-to-file provisions of the Leahy-Smith America
Invents Act.

DATES: The Office solicits comments from the public on this proposed
rulemaking. Written comments must be received on or before April 10,
2012 to ensure consideration.

ADDRESSES: Comments should be sent by electronic mail message over the
Internet addressed to: derivation@uspto.gov. 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
Michael Tierney, Derivation 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 eRulemaking Portal.
   Although comments may be submitted by postal mail, the Office
prefers to receive comments by electronic mail message over the
Internet because sharing comments with the public is more easily
accomplished. Electronic comments are preferred to be submitted in
plain text, but also may be submitted in ADOBE® portable document
format or MICROSOFT WORD® format. Comments not submitted
electronically should be submitted on paper in a format that
facilitates convenient digital scanning into ADOBE® portable
document format.
   The comments will be available for public inspection at the Board
of Patent Appeals and Interferences, 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/). Because comments will be made available for
public inspection, information that the submitter does not desire to
make public, such as an address or phone number, should not be included
in the comments.

FOR FURTHER INFORMATION CONTACT: Michael Tierney, Lead Administrative
Patent Judge, Richard Torczon, Administrative Patent Judge, Sally Lane,
Administrative Patent Judge, and Sally Medley, Administrative Patent
Judge, Board of Patent Appeals and Interferences, by telephone at (571)
272-9797.

SUPPLEMENTARY INFORMATION: On September 16, 2011, the Leahy-Smith
America Invents Act was enacted into law (Pub. L. 112-29, 125 Stat. 284
(2011)). The purpose of the Leahy-Smith America Invents Act and these
proposed regulations is to establish a more efficient and streamlined
patent system. The preamble of this notice sets forth in detail the
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procedures by which the Board will conduct a new administrative
proceeding called a derivation proceeding. Derivation proceedings were
created to ensure that the first person to file the application is
actually a true inventor. This new proceeding will ensure that a person
will not be able to obtain a patent for the invention that he did not
actually invent. If a dispute arises as to which of two applicants is a
true inventor (as opposed to who invented it first), it will be
resolved through derivation proceeding by the Board. The USPTO is
engaged in a transparent process to create the procedures for
derivation proceedings. The proposed rules would provide a set of rules
relating to Board trial practice for derivation proceedings.
   Section 3(i) of the Leahy-Smith America Invents Act amends 35
U.S.C. 135 to provide for derivation proceedings and to eliminate the
interference practice as to applications and patents having an
effective filing date on or after March 16, 2013 (with a few
exceptions). Derivation proceedings will be conducted in a manner
similar to inter partes reviews and post-grant reviews. Unlike patent
interferences, derivations will be conducted in a single phase without
the use of a "count." An inventor seeking a derivation proceeding
must file an application. 35 U.S.C. 135(a). An inventor, however, may
copy an alleged deriver's application, make any necessary changes to
reflect accurately what the inventor invented, and provoke a derivation
proceeding by the timely filing of a petition and fee.
   In particular, 35 U.S.C. 135(a), as amended, will provide that an
applicant for patent may file a petition to institute a derivation
proceeding in the Office. 35 U.S.C. 135(a), as amended, will provide
that the petition must state with particularity the basis for finding
that a named inventor in the earlier application derived the claimed
invention from an inventor named in the petitioner's application and,
without authorization, filed the earlier application. 35 U.S.C. 135(a),
as amended, also will provide that the petition must be filed within
one year of the first publication by the earlier applicant of a claim
to the same or substantially the same invention, made under oath, and
be supported by substantial evidence. 35 U.S.C. 135(a), as amended,
will also provide that if the Director determines that the petition
demonstrates that the standards for instituting a derivation proceeding
are met, the Director may institute a derivation proceeding and that
the determination of whether to initiate a derivation proceeding is
final and nonappealable. A derivation is unlikely to be declared even
where the Director thinks the standard for instituting a derivation
proceeding is met if the petitioner's claim is not otherwise in
condition for allowance. Cf. Brenner v. Manson, 383 U.S. 519, 528 n.12
(1966); accord Ewing v. Fowler Car Co., 244 U.S. 1, 7 (1917).
   35 U.S.C. 135(b), as amended, will provide that, once a derivation
proceeding is initiated, the Patent Trial and Appeal Board will
determine whether a named inventor in the earlier application derived
the claimed invention from a named inventor in the petitioner's
application and, without authorization, filed the earlier application.
35 U.S.C. 135(b), as amended, will also provide that the Patent and
Trial and Appeal Board may correct the naming of the inventor of any
application or patent at issue in appropriate circumstances, and that
the Director will prescribe regulations for the conduct of derivation
proceedings, including requiring parties to provide sufficient evidence
to prove and rebut a claim of derivation.
   35 U.S.C. 135(c), as amended, will provide that the Patent Trial
and Appeal Board may defer action on a petition for derivation
proceeding for up to three months after a patent is issued from the
earlier application that includes a claim that is the subject of the
petition. 35 U.S.C. 135(c), as amended, will further provide that the
Patent Trial and Appeal Board also may defer action on a petition for a
derivation proceeding or stay the proceeding after it has been
initiated until the termination of a proceedings under chapter 30, 31,
or 32 involving the patent of the earlier applicant.
   35 U.S.C. 135(d), as amended, will provide that a decision that is
adverse to claims in an application constitutes the final refusal of
the claims by the Office, while a decision adverse to claims in a
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patent constitutes cancellation of the claims, if no appeal or other
review of the decision has been taken or had. 35 U.S.C. 135(d), as
amended, will provide that a notice of cancellation must be endorsed on
copies of the patent distributed after the cancellation.
   Section 3(i) of the Leahy-Smith America Invents Act further adds
two new provisions, 35 U.S.C. 135(e) and (f). In particular, new
paragraph (e) will provide that the parties to a derivation proceeding
may terminate the proceeding by filing a written statement reflecting
the agreement of the parties as to the correct inventors of the claimed
invention in dispute. 35 U.S.C. 135(e) will provide that the Patent
Trial and Appeal Board must take action consistent with the agreement,
unless the Board finds the agreement to be inconsistent with the
evidence of record. 35 U.S.C. 135(e) will further provide that the
written settlement or understanding of the parties must be filed with
the Director and, at the request of a party, will be treated as
business confidential information, will be kept separate from the file
of the involved patents or applications, and will be made available
only to Government agencies on written request, or to any person on a
showing of good cause.
   New paragraph (f) of 35 U.S.C. 135 will allow the parties to a
derivation proceeding to determine the contest, or
any aspect thereof, by arbitration within a time specified by the
Director, and will provide that the arbitration is governed by the
provisions of title 9, to the extent that title is not inconsistent
with 35 U.S.C. 135. 35 U.S.C. 135(f) will also provide that the parties
must give notice of any arbitration award to the Director, that the
award is not enforceable until such notice is given, and that the
award, as between the parties to the arbitration, is dispositive of the
issues to which it relates but does not preclude the Director from
determining the patentability of the claimed inventions involved in the
proceeding. The Director will delegate to the Board authority to
resolve patentability issues that arise during derivation proceedings
when there is good cause to do so.

Discussion of Specific Rules

   This notice proposes new rules to implement the provisions of the
Leahy-Smith America Invents Act for instituting and conducting
derivation proceedings before the Patent Trial and Appeal Board
(Board). 35 U.S.C. 135(b), as amended, will provide that the Director
will prescribe regulations setting forth standards for the conduct of
derivation proceedings. This notice proposes to add a new subpart E to
37 CFR part 42 to provide rules specific to derivation proceedings.
   Additionally, the Office in a separate rulemaking is proposing to
add part 42, including subpart A, (RIN 0651-AC70) that would include a
consolidated set of rules relating to Board trial practice. More
specifically, the proposed subpart A of part 42 would set forth the
policies, practices, and definitions common to all trial proceedings
before the Board. The proposed rules in the instant notice and
discussion below may reference the proposed rules in subpart A of part
42. Furthermore, the Office in separate rulemakings proposes to add a
new subpart B to 37 CFR part 42 (RIN 0651-AC71) to provide rules
specific to inter partes review, a new subpart C to 37 CFR part 42 (RIN
0651-AC72) to provide rules specific to post-grant review, and a new
subpart D to 37 CFR part 42 (RIN 0651-AC73; RIN 0651-AC75) to provide
rules specific to transitional program covered business method patents.

   Title 37 of the Code of Federal Regulations, Chapter I, Part 42,
Subpart E, entitled "Derivation" is proposed to be added as follows:

   Section 42.400: Proposed § 42.400 would set forth policy
considerations for derivation proceedings.
   Proposed § 42.400(a) would provide that a derivation proceeding
is a trial and subject to the rules set forth in subpart A.
   Proposed § 42.400(b) would delegate to the Board the Director's
authority to resolve patentability issues when there is good cause to
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do so. See the last sentence of 35 U.S.C. 135(f), as amended. For
example, an issue of claim indefiniteness (35 U.S.C. 112) might need to
be resolved before derivation can be substantively addressed on the
merits. Resolution of such issues promotes procedural efficiency, and
may even encourage party settlement, by providing clear guidance on the
scope of the contested issues.

   Section 42.401: Proposed § 42.401 would set forth definitions
specific to derivation proceedings, in addition to definitions set
forth in § 42.2 of this part.
   Definitions proposed:
   Agreement or understanding under 35 U.S.C. 135(e): The proposed
definition would reflect the terminology used in 35 U.S.C. 135(e), as
amended, to describe a settlement between parties to a derivation
proceeding.
   Applicant: The proposed definition would make it clear that reissue
applicants are considered applicants, and not patentees, for purposes
of a derivation proceeding.
   Application: The proposed definition would make it clear that a
reissue application is an application, not a patent, for purposes of a
derivation proceeding. Specifically, the proposed definition includes
both an application for an original patent and an application for a
reissued patent.
   Petitioner: The proposed definition of petitioner incorporates the
statutory requirement (35 U.S.C. 135(a), as amended) that the
petitioner be an applicant.
   Respondent: The proposed definition of respondent identifies the
respondent as the party other than the petitioner.

   Section 42.402: Proposed § 42.402 would provide who may file a
petition for a derivation proceeding.

   Section 42.403: Proposed § 42.403 would provide that a petition
for a derivation proceeding must be filed within one year after the
first publication of a claim to an invention that is the same or
substantially the same as the respondent's earlier application's claim
to the invention. Such publication may be the publication by the USPTO
of an application for patent or patent or by the World Intellectual
Property Organization of an international application designating the
United States. 35 U.S.C. 135(a), as amended, will provide that a
petition for instituting a derivation proceeding may only be filed
within the one-year period of the first publication to a claim to an
invention that is the same or substantially the same as the earlier
application's claim to the invention. The proposed rule is consistent
with 35 U.S.C. 135(a), as amended, because the earlier application's
first publication of the allegedly derived invention triggers the one-
year bar date. While the statute's use of the phrase "a claim" is
ambiguous inasmuch as it could include the petitioner's claim as a
trigger, such a broad construction could violate due process. For
example, the petitioner could be barred by publication of its own claim
before it had any knowledge of the respondent's application. Such
problems may be avoided if the trigger for the deadline is publication
of the respondent's claim.

   Section 42.404: Proposed § 42.404 would provide that a fee must
accompany the petition for a derivation proceeding and that no filing
date will be accorded until payment is complete.

   Section 42.405: Proposed § 42.405 would identify the content of
a petition to institute a derivation proceeding. The proposed rule is
consistent with 35 U.S.C. 135(b), as amended, which will allow the
Director to prescribe regulations setting forth standards for the
conduct of derivation proceedings, including requiring parties to
provide sufficient evidence to prove and rebut a claim of derivation.
   Proposed § 42.405(a) would require a petition to demonstrate
that the petitioner has standing. To establish standing, a petitioner,
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at a minimum, must timely file a petition that demonstrates that the
named inventor on the earlier filed application derived the claimed
invention and filed the earlier application without authorization from
the petitioner. This proposed requirement attempts to ensure that a
party has standing to file the petition and would help prevent
spuriously instituted derivation proceedings. This proposed rule also
ensures that the petitioner has taken steps to obtain patent protection
for the same or substantially same invention, thus promoting the useful
arts. Facially improper standing would be a basis for denying the
petition without proceeding to the merits of the decision.
   Proposed § 42.405(b) would require that the petition identify
the precise relief requested. The petition must provide sufficient
information to identify the application or patent subject to a
derivation proceeding. The petition must also demonstrate that the
claimed invention in the subject application or patent was derived from
an inventor named in the petitioner's application and, without
authorization, the earliest application claiming such invention was
filed. The petitioner must further show why the claim is not patentably
distinct from the invention disclosed to the respondent. For each of
the respondent's targeted claims, the petitioner must likewise identify
how the claim to the allegedly derived invention is to be construed.
Where the claim to be construed contains a means-plus-function or step-
plus-function limitation as permited under 35 U.S.C. 112, sixth
paragraph, the construction of the claim must identify the specific
portions of the specification that describe the structure, material, or
acts corresponding to each claimed function. The proposed rule would
provide an efficient means for identifying the legal and factual basis
supporting a prima facie case of relief and would provide the opponent
with a minimum level of notice as to the basis for the allegations of
derivation.
   Proposed § 42.405(c) would provide that a derivation showing is
not sufficient unless it is supported by substantial evidence and at
least one affidavit addressing communication and lack of authorization,
consistent with 35 U.S.C. 135(a), as amended. The showing of
communication must be corroborated.

   Section 42.406: Proposed § 42.406 would provide requirements
for the service of a petition in addition to the requirements set forth
in § 42.6(e).
   Proposed § 42.406(a) would require that the petitioner serve
the respondent at the correspondence address of record. Petition may
also attempt service at any other address known to the petitioner as
likely to effect service. Once a patent has issued, communications
between the Office and the patent owner often suffer. Ray v. Lehman, 55
F.3d 606 (Fed. Cir. 1995) (patentee's failure to maintain
correspondence address contributed to failure to pay maintenance fee
and therefore expiration of the patent). While the proposed rule
requires service at the correspondence address of record, in many
cases, the petitioner will already be in communication with the owner
of the earlier application at a better service address than the
official correspondence address.
   Proposed § 42.406(b) would address the situation where delivery
to an earlier application's correspondence address does not result in
actual service. When the petitioner becomes aware of a service problem,
it would be required to promptly advise the Board of the problem. The
Board may authorize other forms of service, such as service by
publication in the Official Gazette of the United States Patent and
Trademark Office. Cf. 37 CFR 1.47(c) (notice by publication).

   Section 42.407: Proposed § 42.407(a) would provide requirements
for a complete petition. 35 U.S.C. 135(b), as amended, will provide
that the Director establish regulations concerning the standards for
the conduct of derivation proceedings. 35 U.S.C. 135(a), as amended,
will provide that a derivation proceeding may be instituted where the
Director determines that a petition demonstrates that the standards for
instituting a derivation proceeding are met. Consistent with statute,
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the proposed rule would require that a complete petition be filed along
with the fee and that it be served at the correspondence address of
record for the earlier application.
   Proposed § 42.407(b) would provide petitioners a one month time
frame to correct defective requests to institute a derivation
proceeding, unless the statutory deadline in which to file a petition
for derivation has expired. In determining whether to grant a filing
date, the Board would review the requests for procedural compliance.
Where a procedural defect is noted, e.g., failure to state the claims
being challenged, the Board would notify the petitioner that the
request was incomplete and identify any non-compliance issues.

   Section 42.408: Proposed § 42.408 would provide that an
administrative patent judge institutes and may reinstitute a derivation
proceeding on behalf of the Director.

   Section 42.409: Proposed § 42.409 would make it clear that an
agreement or understanding filed under 35 U.S.C. 135(e) would be a
settlement agreement for purposes of § 42.74.

   Section 42.410: Proposed § 42.410 would provide for arbitration
of derivation proceedings. Proposed § 42.410(a) will provide that
parties to a derivation proceeding may determine such contest, or any
aspect thereof, by arbitration, except that nothing shall preclude the
Office from determining the patentability of the claimed inventions
involved in the proceeding. The proposed rule is consistent with 35
U.S.C. 135(f) because it would permit arbitration but would not
preclude the Office from independently determining issues of
patentability during the course of the proceeding. Proposed §
42.410(b) provides that the Board will not set a time for, or otherwise
modify the proceeding for, an arbitration unless the listed procedural
requirements are met.

   Section 42.411: Proposed § 42.411 would provide that an
administrative patent judge may decline to institute or continue a
derivation proceeding between an application and a patent or another
application that are commonly owned. Common ownership in a derivation
proceeding is a concern because it can lead to manipulation of the
process. The proposed rule would be stated permissively because not all
cases of overlapping ownership would be cause for concern. The cases of
principal concern involve a real party in interest with the ability to
control the conduct of more than one party.

   Section 42.412: Proposed § 42.412 would provide for public
availability of Board records.

Rulemaking Considerations

   A. Administrative Procedure Act (APA): This notice proposes rules
of practice concerning the procedure for requesting a derivation and
the trial process after initiation of such a review. The changes being
proposed in this notice do not change the substantive criteria of
patentability. These proposed changes involve rules of agency practice
and procedure and/or interpretive rules. See Bachow Commc'ns Inc. v.
FCC, 237 F.3d 683, 690 (DC 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 standard for reviewing claims); Nat'l Org. of Veterans'
Advocates v. Sec'y of Veterans Affairs, 260 F.3d 1365, 1375 (Fed. Cir.
2001) (a rule that clarifies interpretation of a statute is
interpretive).
   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
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1330, 1336-37 (Fed. Cir. 2008) (stating that 5 U.S.C. 553, and thus 35
U.S.C. 2(b)(2)(B), does 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)). The Office, however, is publishing these changes and the
Initial Regulatory Flexibility Act analysis, below, for comment as it
seeks the benefit of the public's views on the Office's proposed
implementation of these provisions of the Leahy-Smith America Invents
Act.

   B. Regulatory Flexibility Act: The Office estimates that no more
than 50 petitions for derivation will be filed in fiscal year 2013.
This will be the first fiscal year in which derivation petitions will
be available.
   The Office has reviewed the percentage of applications and patents
for which an interference was declared in fiscal year 2011.
Applications and patents known to be owned by a small entity represent
19.62% of applications and patents for which interference was declared
in FY 2011. Based on the assumption that the same percentage of
applications and patents owned by small entities will be involved in a
derivation proceeding, 20 small entity owned applications or patents
would be affected by derivation review of the 100 parties to the 50
derivation proceedings.
   1. Description of the Reasons That Action by the Office Is Being
Considered: On September 16, 2011, the Leahy-Smith America Invents Act
was enacted into law (Pub. L. 112-29, 125 Stat. 284 (2011)). Section
3(i) of the Leahy-Smith America Invents Act amends 35 U.S.C. 135 to
provide for derivation proceedings and eliminate the interference
practice as to applications and patents that have an effective filing
date on or after March 16, 2013 (with a few exceptions). 35 U.S.C.
135(b), as amended, will require that the Director prescribe
regulations to set forth the standards for conducting derivation
proceedings, including requiring parties to provide sufficient evidence
to prove and rebut a claim of derivation.
   2. Succinct Statement of the Objectives of, and Legal Basis for,
the Proposed Rules: The proposed rules seek to implement derivation
proceedings as authorized by the Leahy-Smith America Invents Act.
   3. Description and Estimate of the Number of Affected Small
Entities: The Small Business Administration (SBA) small business size
standards applicable to most analyses conducted to comply with the
Regulatory Flexibility Act are set forth in 13 CFR 121.201. These
regulations generally define small businesses as those with fewer than
a specified maximum number of employees or less than a specified level
of annual receipts for the entity's industrial sector or North American
Industry Classification System (NAICS) code. As provided by the
Regulatory Flexibility Act, and after consultation with the Small
Business Administration, the Office formally adopted an alternate size
standard as the size standard for the purpose of conducting an analysis
or making a certification under the Regulatory Flexibility Act for
patent-related regulations. See Business Size Standard for Purposes of
United States Patent and Trademark Office Regulatory Flexibility
Analysis for Patent-Related Regulations, 71 FR 67109 (Nov. 20, 2006),
1313 Off. Gaz. Pat. Office 60 (Dec. 12, 2006). This alternate small
business size standard is SBA's previously established size standard
that identifies the criteria entities must meet to be entitled to pay
reduced patent fees. See 13 CFR 121.802. If patent applicants identify
themselves on a patent application as qualifying for reduced patent
fees, the Office captures this data in the Patent Application Location
and Monitoring (PALM) database system, which tracks information on each
patent application submitted to the Office.
   Unlike the SBA small business size standards set forth in 13 CFR
121.201, the size standard for USPTO is not industry-specific. The
Office's definition of a small business concern for Regulatory
Flexibility Act purposes is a business or other concern that: (1) Meets
the SBA's definition of a "business concern or concern" set forth in
13 CFR 121.105; and (2) meets the size standards set forth in 13 CFR
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121.802 for the purpose of paying reduced patent fees, namely an
entity: (a) Whose number of employees, including affiliates, does not
exceed 500 persons; and (b) which has not assigned, granted, conveyed,
or licensed (and is under no obligation to do so) any rights in the
invention to any person who made it and could not be classified as an
independent inventor, or to any concern which would not qualify as a
non-profit organization or a small business concern under this
definition. See Business Size Standard for Purposes of United States
Patent and Trademark Office Regulatory Flexibility Analysis for Patent-
Related Regulations, 71 FR at 67112 (Nov 20, 2006), 1313 Off. Gaz. Pat.
Office at 63 (Dec. 12, 2006).
   As discussed above, it is anticipated that 50 petitions for
derivation will be filed in fiscal year 2013. The Office has reviewed
the percentage of applications and patents for which an interference
was declared in fiscal year 2011. Applications and patents known to be
owned by a small entity represent 19.62% of applications and patents
for which interference was declared in FY 2011. Based on the assumption
that the same percentage of applications and patents owned by small
entities will be involved in a derivation proceeding, 20 small entity
owned applications or patents would be affected by derivation
proceeding.
   The Office predicts that it will institute 10 derivation
proceedings based on petitions seeking derivation filed in fiscal year
2013. This estimate is based on the low number of interference
proceedings declared as well as the limited number of eligible
applications.
   During fiscal year 2011, the Office issued 21 decisions following a
request for reconsideration of a decision on appeal in inter partes
reexamination. The average time from original decision to decision on
reconsideration was 4.4 months. Thus, the decisions on reconsideration
were based on original decisions issued from July 2010 until June 2011.
During this time period, the Office mailed 63 decisions on appeals in
inter partes reexamination. See BPAI Statistics - Receipts and
Dispositions by Technology Center, http://www.uspto.gov/ip/boards/bpai/
stats/receipts/index.jsp (monthly data). Based on the assumption that
the same rate of reconsideration (21 divided by 63 or 33.3%) will
occur, the Office estimates that 2 requests for reconsideration will be
filed. Based on the percentage of small entity owned patent
applications or patents that were the subject of an interference
declared in fiscal year 2010 (19.62%) it is estimated that 1 small
entity will file a request for a reconsideration of a decision
dismissing the petition for derivation in fiscal year 2013.
   The Office reviewed motions, oppositions, and replies in a number
of contested trial proceedings before the trial section of the Board.
The review included determining whether the motion, opposition and
reply were directed to patentability grounds and non-priority non-
patentability grounds. Based on the review, it is anticipated that
derivation proceedings will have an average of 23.4 motions,
oppositions, and replies per trial after institution. Settlement is
estimated to occur in 20% of instituted trials at various points of the
trial. In the trials that are settled, it is estimated that only 50% of
the noted motions, oppositions, and replies would be filed.
   After a trial has been instituted but prior to a final written
decision, parties to a derivation proceeding may request an oral
hearing. It is anticipated that 5 requests for oral hearings will be
filed. Based on the percentage of small entity owned patent
applications or patents that were the subject of an interference
declared in fiscal year 2010 (19.62%), it is estimated that 2 small
entities will file a request for oral hearing derivation proceedings
instituted in fiscal year 2013.
   Parties to a review or derivation proceeding may file requests to
treat a settlement as business confidential, request for adverse
judgment, and arbitration agreements and awards. A written request to
make a settlement agreement available may also be filed. Given the
short time period set for conducting trials, it is anticipated that
the alternative dispute resolution options will be infrequently used.
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The Office estimates that 2 requests to treat a settlement as business
confidential, 2 written requests to make a settlement agreement
available, 2 requests for adverse judgment, default adverse judgment,
or settlement notices and 2 arbitration agreements and awards will be
filed. Based on the percentage of small entity owned patent
applications or patents that were the subject of an interference
declared in fiscal year 2010 (19.62%), it is estimated that 1 small
entity will file a request to treat a settlement as business
confidential, 1 small entity will file a request for adverse judgment,
default adverse judgment notice, or settlement notice, and 1 small
entity will file an arbitration agreement and award in the derivation
proceedings instituted in fiscal year 2013.
   Parties to a derivation proceeding may seek judicial review of the
final decision of the Board. The Office projects that no more than 5
derivation proceedings filed in fiscal year 2013 will be appealed.
Based on the percentage of small entity owned patent applications or
patents that were the subject of an interference declared in fiscal
year 2010 (19.62%), it is estimated that 2 small entities will seek
judicial review of final decisions of the Board in the derivation
proceedings instituted in fiscal year 2013.
   4. Description of the Reporting, Recordkeeping, and Other
Compliance Requirements of the Proposed Rule, Including an Estimate of
the Classes of Small Entities Which Will Be Subject to the Requirement
and the Type of Professional Skills Necessary for Preparation of the
Report or Record: Based on the trends of declared contested cases in
fiscal year 2011, it is anticipated that petitions for derivation will
be filed across all technologies with approximately 16% being filed in
electrical technologies, approximately 17% in mechanical technologies,
and the remaining 67% in chemical technologies and design. A derivation
petition is likely to be filed by an entity practicing in the same or
similar field as the patent. Therefore, it is anticipated that 16% of
the petitions for review will be filed in the electronic field, 17% in
the mechanical field, and 67% in the chemical or design fields.
   Preparation of the petition would require analyzing the patent
claims, locating evidence supporting arguments of communication, and
preparing the petition seeking review of the patent. The procedures for
petitions to institute a derivation proceeding are proposed in
§§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.22, 42.24(a)(4), 42.63,
42.65, and 42.402 through 42.406.
   The skills necessary to prepare a petition seeking a derivation
proceeding and to participate in a trial before the Patent Trial and
Appeal Board would be similar to those needed to prepare a request for
inter partes reexamination, and to represent a party in an inter partes
reexamination before the Patent Trial and Appeal Board. The level of
skill is typically possessed by a registered patent practitioner having
devoted professional time to the particular practice area, typically
under the supervision of a practitioner skilled in the particular
practice area. Where authorized by the Board, a non-registered
practitioner may be admitted pro hac vice, on a case-by-case basis
based on the facts and circumstances of the trial and party, as well as
the skill of the practitioner.
   The cost of preparing a petition for inter partes review is
anticipated to be same as the cost for preparing a request for inter
partes reexamination. The American Intellectual Property Law
Association's AIPLA Report of the Economic Survey 2011 reported that
the average cost of preparing a request for inter partes reexamination
was $46,000. Based on the work required to file and prepare such
request, the Office considers the reported cost as a reasonable
estimate. Accordingly, the Office estimates that the cost of preparing
a petition for inter partes review will be $46,000.
   The cost of preparing a petition for post-grant or covered business
method patent review is estimated to be 33.333% higher than the cost of
preparing a petition for inter partes review because the petition for
post-grant or covered business method patent review may seek to
institute a proceeding on additional grounds such as subject matter
eligibility. Therefore, the Office estimates that the cost of preparing
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 232 

a petition for post-grant or covered business method patent review
would be $61,333. It is expected that petitions for derivation would
have the same complexity and cost as a petition for post-grant review
because derivation proceedings raise issues of communication, which
have similar complexity to the issues that can be raised in a post-
grant review, i.e., public use and sale and written description. Thus,
the Office estimates that the cost of preparing a petition for
derivation would also be $61,333.
   Following institution of a trial, the parties may be authorized to
file various motions, e.g., motions to amend and motions for additional
discovery. Where a motion is authorized, an opposition may be
authorized, and where an opposition is authorized, a reply may be
authorized. The procedures for filing a motion are proposed in
§§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.22, 42.24(a)(5), 42.51,
42.52, 42.53, 42.54, 42.63, 42.64, and 42.65. The procedures for filing
an opposition are proposed in §§ 42.6, 42.8, 42.11, 42.13,
42.21, 42.23, 42.24(b), 42.51, 42.52, 42.53, 42.54, 42.63, 42.64, and
42.65. The procedures for filing a reply are proposed in §§ 42.6,
42.8, 42.11, 42.13, 42.21, 42.23, 42.24(c), 42.51, 42.52, 42.53,
42.54, 42.63, and 42.65. As discussed previously, the Office estimates
that the average derivation proceeding is anticipated to have 23.4
motions, oppositions, and replies after institution.
   The AIPLA Report of the Economic Survey 2011 reported that the
average cost in contested cases before the trial section of the Board
prior to the priority phase was $322,000 per party. Because of the
overlap of issues in patentability grounds, it is expected that the
cost per motion will decline as more motions are filed in a proceeding.
It is estimated that a motion, opposition, or reply in a derivation is
estimated at $34,000, which is estimated by dividing the total public
cost for all motions in current contested cases divided by the
estimated number of motions in derivations under 35 U.S.C. 135, as
amended. Based on the work required to file and prepare such briefs,
the Office considers the reported cost as a reasonable estimate.
   After a trial has been instituted but prior to a final written
decision, parties to a review or derivation proceeding may request an
oral hearing. The procedure for filing requests for oral argument is
proposed in § 42.70. The AIPLA Report of the Economic Survey 2011
reported that the third quartile cost of an ex parte appeal with an
oral argument is $12,000, while the third quartile cost of an ex parte
appeal without an oral argument is $6,000. In view of the reported
costs, which the Office finds reasonable, and the increased complexity
of an oral hearing with multiple parties, it is estimated that the cost
per party for oral hearings would be $6,800 or $800 more than the
reported third quartile cost for an ex parte oral hearing.
   Parties to a derivation proceeding may file requests to treat a
settlement as business confidential, request for adverse judgment, and
arbitration agreements and awards. A written request to make a
settlement agreement available may also be filed. The procedures to
file requests that a settlement be treated as business confidential are
proposed in §§ 42.74(c) and 42.409. The procedures to file requests for
adverse judgment are proposed in § 42.73(b). The procedures to file
arbitration agreements and awards are proposed in § 42.410. The procedures
to file requests to make a settlement agreement available are proposed in
§ 42.74(c)(2). It is anticipated that requests to treat a
settlement as business confidential will require 2 hours of
professional time or $680. It is anticipated that requests for adverse
judgment will require 1 hour of professional time or $340. It is
anticipated that arbitration agreements and awards will require 4 hours
of professional time or $1,360. It is anticipated that requests to make
a settlement agreement available will require 1 hour of professional
time or $340. The requests to make a settlement agreement available
will also require payment of a fee of $400 specified in proposed
§ 42.15(d). The fee proposed would be the same as currently set forth
in § 41.20(a) for petitions to the Chief Administrative Patent Judge.
   Parties to a review proceeding may seek judicial review of the
judgment of the Board. The procedures to file notices of judicial
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 233 

review of a Board decision, including notices of appeal and notices of
election provided for in 35 U.S.C. 141, 142, 145, and 146, are proposed
in §§ 90.1 through 90.3. The submission of a copy of a notice
of appeal or a notice of election is anticipated to require 6 minutes
of professional time at a cost of $34.
   5. Description of Any Significant Alternatives to the Proposed
Rules Which Accomplish the Stated Objectives of Applicable Statutes and
Which Minimize Any Significant Economic Impact of the Rules on Small
Entities:
   Size of petitions and motions: The Office considered whether to
apply a page limit and what an appropriate page limit would be. The
Office does not currently have a page limit on inter partes
reexamination requests. The inter partes reexamination requests from
October 1, 2010 to June 30, 2011, averaged 246 pages. Based on the
experience of processing inter partes reexamination requests, the
Office finds that the very large size of the requests has created a
burden on the Office that hinders the efficiency and timeliness of
processing the requests, and creates a burden on patent owners. The
quarterly reported average processing time from the filing of a request
to the publication of a reexamination certificate ranged from 28.9
months to 41.7 months in fiscal year 2009, from 29.5 months to 37.6
months in fiscal year 2010, and from 31.9 to 38.0 months in fiscal year
2011. See Reexaminations - FY 2011, http://www.uspto.gov/patents/
Reexamination_operational_statistic_through_FY2011Q4.pdf.
   By contrast, the Office has a page limit on the motions filed in
contested cases, except where parties are specificially authorized to
exceed the limitation. The typical contested case proceeding is subject
to a standing order that sets a 50 page limit for motions and
oppositions on priority, a 15 page limit for miscellaneous motions
(§ 41.121(a)(3)) and oppositions (§ 41.122), and a 25 page
limit for other motions (§ 41.121(a)(2)) and oppositions to other
motions. In typical proceedings, replies are subject to a 15 page limit
if directed to priority, 5 page limit for miscellaneous issue, and 10
page limit for other motions. The average contested case was terminated
in 10.1 months in fiscal year 2009, in 12 months in fiscal year 2010,
and 9 months in fiscal year 2011. The percentage of contested cases
terminated within 2 years was 93.7% in fiscal year 2009, 88.0% in
fiscal year 2010, and 94.0% in fiscal year 2011. See BPAI Statistics -
Performance Measures,
http://www.uspto.gov/ip/boards/bpai/stats/perform/index.jsp.
   Comparing the average time period for terminating a contested case,
10.0 to 12.0 months, with the average time period, during fiscal years
2009 through 2011, for completing an inter partes reexamination, 28.9
to 41.7 months, indicates that the average interference takes from 24%
(10.0/41.7) to 42% (12.0/28.9) of the time of the average inter partes
reexamination. While several factors contribute to the reduction in
time, limiting the size of the requests and motions is considered a
significant factor. Proposed § 42.24 would provide page limits for
petitions, motions, oppositions, and replies.
   Federal courts routinely use page limits in managing motions
practice as "[e]ffective writing is concise writing." Spaziano v.
Singletary, 36 F.3d 1028, 1031 n.2 (11th Cir. 1994). Many district
courts restrict the number of pages that may be filed in a motion
including, for example, the District of Delaware, the District of New
Jersey, the Eastern District of Texas, the Northern, Central, and
Southern Districts of California, and the Eastern District of Virginia.
   Federal courts have found that page limits ease the burden on both
the parties and the courts, and patent cases are no exception. Eolas
Techs., Inc. v. Adobe Sys., Inc., No. 6:09-CV-446, at 1 (E.D. Tex.
Sept. 2, 2010) ("The Local Rules' page limits ease the burden of
motion practice on both the Court and the parties."); Blackboard, Inc.
v. Desire2Learn, Inc., 521 F. Supp. 2d 575, 576 (E.D. Tex. 2007) (The
parties "seem to share the misconception, popular in some circles,
that motion practice exists to require federal judges to shovel through
steaming mounds of pleonastic arguments in Herculean effort to uncover
a hidden gem of logic that will ineluctably compel a favorable ruling.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 234 

Nothing could be farther from the truth."); Broadwater v. Heidtman
Steel Prods., Inc., 182 F. Supp. 2d 705, 710 (S.D. Ill. 2002)
("Counsel are strongly advised, in the future, to not ask this Court
for leave to file any memoranda (supporting or opposing dispositive
motions) longer than 15 pages. The Court has handled complicated patent
cases and employment discrimination cases in which the parties were
able to limit their briefs supporting and opposing summary judgment to
10 or 15 pages." (Emphasis omitted)).
   The Board's contested cases experience with page limits in motions
practice is consistent with that of the federal courts. The Board's use
of page limits has shown it to be beneficial without being unduly
restrictive for the parties. Page limits have encouraged the parties to
focus on dispositive issues, easing the burden of motions practice on
the parties and on the Board.
   The Board's contested cases experience with page limits is informed
by its use of different approaches over the years. In the early 1990s,
page limits were not routinely used for motions, and the practice
suffered from lengthy and unacceptable delays. To reduce the burden on
the parties and on the Board and thereby reduce the time to decision,
the Board instituted page limits in the late 1990s for every motion.
Page limit practice was found to be effective in reducing the burdens
on the parties and improving decision times at the Board. In 2006, the
Board revised the page limit practice and allowed unlimited findings of
fact and generally limited the number of pages containing argument. Due
to abuses of the system, the Board recently reverted back to page
limits for the entire motion (both argument and findings of fact).
   The Board's current page limits are consistent with the 25 page
limits in the Northern, Central, and Southern Districts of California,
and the Middle District of Florida and exceed the limits in the
District of Delaware (20), the Northern District of Illinois (15), the
District of Massachusetts (20), the Eastern District of Michigan (20),
the Southern District of Florida (20), and the Southern District of
Illinois (20).
   In a typical proceeding before the Board, a party may be authorized
to file a single motion for unpatentability based on prior art, a single
motion for unpatentability based upon failure to comply with 35 U.S.C.
112, lack of written description, and/or enablement, and potentially
another motion for lack of compliance with 35 U.S.C. 101, although a 35
U.S.C. 101 motion may be required to be combined with the 35 U.S.C. 112
motion. Each of these motions is currently limited to 25 pages in
length, unless good cause is shown that the page limits are unduly
restrictive for a particular motion.
   A petition requesting the institution of a trial proceeding would
be similar to motions currently filed with the Board. Specifically,
petitions to institute a trial seek a final written decision that the
challenged claims are unpatentable, where derivation is a form of
unpatentability. Accordingly, a petition to institute a trial based on
prior art would, under current practice, be limited to 25 pages, and by
consequence, a petition raising unpatentability based on prior art and
unpatentability under 35 U.S.C. 101 and/or 112 would be limited to 50
pages.
   Petitions to institute derivation proceedings, while distinct from
interference practice, raise similar issues to those that may be raised
in interferences in a motion for judgment on priority of invention.
Currently, motions for judgment on priority of invention, including
issues such as conception, corroboration, and diligence, are generally
limited to 50 pages. Thus, the proposed 50 page limit is considered
sufficient in all but exceptional cases.
   The proposed rule would provide that petitions to institute a trial
must comply with the stated page limits, but may be accompanied by a
motion that seeks to waive the page limits. The petitioner must show in
the motion how a waiver of the page limits is in the interests of
justice. A copy of the desired non-page limited petition must accompany
the motion. Generally, the Board would decide the motion prior to
deciding whether to institute the trial.
   Current Board practice provides a limit of 25 pages for other
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 235 

motions and 15 pages for miscellaneous motions. The Board's experience
is that such page limits are sufficient for the parties filing them and
do not unduly burden the opposing party or the Board. Petitions to
institute a trial would generally replace the current practice of
filing motions for unpatentability, as most motions for relief are
expected to be similar to the current contested cases miscellaneous
motion practice. Accordingly, the proposed 15 page limit is considered
sufficient for most motions but may be adjusted where the limit is
determined to be unduly restrictive for the relief requested.
   Proposed § 42.24(b) would provide page limits for oppositions
filed in response to motions. Current contested case practice provides
an equal number of pages for an opposition as its corresponding motion.
This is generally consistent with motions practice in federal courts.
The proposed rule would continue the current practice.
   Proposed § 42.24(c) would provide page limits for replies.
Current contested case practice provides a 15 page limit for priority
motion replies, a 5 page limit for miscellaneous (procedural) motion
replies, and a 10 page limit for all other motions. The proposed rule
is consistent with current contested case practice for procedural
motions. The proposed rule would provide a 15 page limit for reply to
petitions requesting a trial, which the Office believes is sufficient
based on current practice. Current contested case practice has shown
that such page limits do not unduly restrict the parties and, in fact,
have provided sufficient flexibility to parties to not only reply to
the motion but also help to focus on the issues. Thus, it is
anticipated that default page limits would minimize the economic impact
on small entities by focusing on the issues in the trials.
   Discovery: The Office considered a procedure for discovery similar
to the one available during district court litigation. Discovery of
that scope has been criticized sharply particularly when attorneys use
discovery tools as tactical weapons, which hinder the "just, speedy,
and inexpensive determination of every action and proceedings." See
Introduction to An E-Discovery Model Order available at
http://www.cafc.uscourts.gov/images/stories/announcements/Ediscovery_
Model_Order.pdf. Accordingly, this alternative would have been inconsistent
with objective of the Leahy-Smith America Invents Act that the
Director, in prescribing rules for the inter partes, post-grant and
covered business method patent reviews, consider the effect of the
rules on the economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to complete
timely the instituted proceedings. Prescribing the same standard for
derivations allows for efficient proceedings using practices that are
consistent as possible. It is envisioned that the public burden would
be reduced by setting discover standards consistently across all trial
proceedings at the Board.
   Additional discovery increases trial costs and increases the
expenditures of time by the parties and the Board. To promote effective
discovery, the proposed rule would require a showing that the
additional requested discovery is in the interests of justice, placing
an affirmative burden upon a party seeking the discovery to show how
the proposed discovery would be productive. The Board's experience in
conducted contested cases, however, is that such showings are often
lacking and authorization for additional discovery is expected to be
rare.
   The Office is proposing a default scheduling order to provide
limited discovery as a matter of right and provide parties with the
ability to seek additional discovery on a case-by-case basis. In
weighing the need for additional discovery, should a request be made,
the Board would consider the economic impact on the opposing party.
This would tend to limit additional discovery where a party is a small
entity.
   Pro Hac Vice: The Office considered whether to allow counsel to
appear pro hac vice. In certain cases, highly skilled, but non-
registered attorneys have appeared satisfactorily before the Board in
contested cases. The Board may recognize counsel pro hac vice during a
proceeding upon a showing of good cause. Proceedings before the Office
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 236 

can be technically complex. Consequently, the grant of a motion to
appear pro hac vice is a discretionary action taking into account the
specifics of the proceedings. Similarly, the revocation of pro hac vice
is a discretionary action taking into account various factors,
including incompetence, unwillingness to abide by the Office's Rules of
Professional Conduct, prior findings of misconduct before the Office in
other proceedings, and incivility.
   The Board's past practice has required the filing of a motion by a
registered patent practitioner seeking pro hac vice representation
based upon a showing of: (1) How qualified the unregistered
practitioner is to represent the party in the proceeding when measured
against a registered practitioner, and, (2) whether the party has a
genuine need to have the particular unregistered practitioner represent
it during the proceeding. This practice has proven effective in the
limited number of contested cases where such requests have been
granted. The proposed rule, if adopted, would allow for this practice
in the new proceedings authorized by the Leahy-Smith America Invents
Act.
   The proposed rules would provide a limited delegation to the Board
under 35 U.S.C. 2(b)(2) and 32 to regulate the conduct of counsel in
Board proceedings. The proposed rule would delegate to the Board the
authority to conduct counsel disqualification proceedings while the Board
has jurisdiction over a proceeding. The rule would also delegate to the
Chief Administrative Patent Judge the authority to make final a decision
to disqualify counsel in a proceeding before the Board for the purposes
of judicial review. This delegation would not derogate from the Director
the prerogative to make such decisions, nor would it prevent the Chief
Administrative Patent Judge from further delegating authority to an
administrative patent judge.
   The Office considered broadly permitting practitioners not
registered to practice by the Office to represent parties in trial as
well as categorically prohibiting such practice. A prohibition on the
practice would be inconsistent with the Board's experience, and more
importantly, might result in increased costs particularly where a small
entity has selected its district court litigation team for
representation before the Board, and has a patent review filed after
litigation efforts have commenced. Alternatively, broadly making the
practice available would create burdens on the Office in administering
the trials and in completing the trial within the established
timeframe, particularly if the selected practitioner does not have the
requisite skill. In weighing the desirability of admitting a
practitioner pro hac vice, the economic impact on the party in interest
would be considered which would tend to increase the likelihood that a
small entity could be represented by a non-registered practitioner.
Accordingly, the alternatives to eliminate pro hac vice practice or to
permit it more broadly would have been inconsistent with the efficient
administration of the Office and the integrity of the patent system.
   Default Electronic Filing: The Office considered a paper filing
system and a mandatory electronic filing system (without any
exceptions) as alternatives to the proposed requirement that all papers
are to be electronically filed, unless otherwise authorized.
   Based on the Office's experience, a paper based filing system
increases delay in processing papers, delay in public availability, and
the chance that a paper may be misplaced or made available to an
improper party if confidential. Accordingly, the alternative of a paper
based filing system would have been inconsistent with the efficient
administration of the Office.
   An electronic filing system (without any exceptions) that is
rigidly applied would result in unnecessary cost and burdens,
particularly where a party lacks the ability to file electronically. By
contrast, if the proposed option is adopted, it is expected that the
entity size and sophistication would be considered in determining
whether alternative filing methods would be authorized.
   6. Identification, to the Extent Practicable, of All Relevant
Federal Rules Which May Duplicate, Overlap, or Conflict With the
Proposed Rules:
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 237 


   37 CFR 1.99 provides for the submission of information after
publication of a patent application during examination by third
parties.
   37 CFR 1.171-1.179 provide for applications to reissue a patent to
correct errors, including where a claim in a patent is overly broad.
   37 CFR 1.291 provides for the protest against the issuance of a
patent during examination.
   37 CFR 1.321 provides for the disclaimer of a claim by a patentee.
   37 CFR 1.501 and 1.502 provide for ex parte reexamination of
patents. Under these rules, a person may submit to the Office prior art
consisting of patents or printed publications that are pertinent to the
patentability of any claim of a patent, and request reexamination of
any claim in the patent on the basis of the cited prior art patents or
printed publications. Consistent with 35 U.S.C. 302-307, ex parte
reexamination rules provide a different threshold for initiation,
require the proceeding to be conducted by an examiner with a right of
appeal to the Patent Trial and Appeal Board, and allow for limited
participation by third parties.
   37 CFR 1.902-1.997 provide for inter partes reexamination of
patents. Similar to ex parte reexamination, inter partes reexamination
provides a procedure in which a third party may request reexamination
of any claim in a patent on the basis of the cited prior art patents
and printed publication. The inter partes reexamination practice will
be eliminated, except for requests filed before the effective date of
September 16, 2012. See § 6(c)(3)(C) of the Leahy-Smith America
Invents Act.
   Other countries have their own patent laws, and an entity desiring
a patent in a particular country must make an application for patent in
that country, in accordance with the applicable law. Although the
potential for overlap exists internationally, this cannot be avoided
except by treaty (such as the Paris Convention for the Protection of
Industrial Property, or the Patent Cooperation Treaty (PCT)).
Nevertheless, the Office believes that there are no other duplicative
or overlapping foreign rules.

   C. Executive Order 12866 (Regulatory Planning and Review): This
rulemaking has been determined to be significant for purposes of
Executive Order 12866 (Sept. 30, 1993), as amended by Executive Order
13258 (Feb. 26, 2002) and Executive Order 13422 (Jan. 18, 2007).
   Based on the petition and other filing requirements for initiating
a derivation review proceeding, the USPTO estimates the burden of the
proposed rules on the public to be $11,865,210 in fiscal year 2013,
which represents the sum of the estimated total annual (hour)
respondent cost burden ($11,844,410) plus the estimated total annual
non-hour respondent cost burden ($20,800) provided in Part O, Section
II, of this notice, infra.

   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 determination that the benefits justify the costs of
the rule; (2) tailored the rule to impose the least burden on society
consistent with obtaining the regulatory objectives; (3) selected a
regulatory approach that maximizes net benefits; (4) specified
performance objectives; (5) identified and assessed available
alternatives; (6) involved the public in an open exchange of
information and perspectives among experts in relevant disciplines,
affected stakeholders in the private sector, and the public as a whole,
and provided online access to the rulemaking docket; (7) attempted to
promote coordination, simplification, and harmonization across
government agencies and identified goals designed to promote
innovation; (8) considered approaches that reduce burdens and maintain
flexibility and freedom of choice for the public; and (9) ensured the
objectivity of scientific and technological information and processes.

 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 238 

   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 effect 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. 801-808), prior to issuing any final rule, the United
States Patent and Trademark Office will submit a report containing the
final rule and other required information to the U.S. Senate, the U.S.
House of Representatives, and the Comptroller General of the Government
Accountability Office. The changes in this notice 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 notice is not expected to result in a "major rule" as
defined in 5 U.S.C. 804(2).

   L. Unfunded Mandates Reform Act of 1995: The changes proposed in
this notice 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.
1501-1571.

   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. 4321-4370h.

   N. National Technology Transfer and Advancement Act: The
requirements of section 12(d) of the National Technology Transfer and
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 239 

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 USPTO consider the impact of
paperwork and other information collection burdens imposed on the
public. This proposed rulemaking 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). The collection of information involved in this notice has
been submitted to OMB under OMB control number 0651-00xx. In the Notice
"Rules of Practice for Trials before the Patent Trial and Appeal Board
and Judicial Review of Patent Trial and Appeal Board Decisions," RIN
0651-AC70, the information collection for all of the new trials
authorized by the Leahy-Smith America Invents Act were provided. This
notice also provides the subset of burden created by the derivation
provisions. The proposed collection will be available at the OMB's
Information Collection Review Web site (www.reginfo.gov/public/do/PRAMain).
   The USPTO is submitting the information collection to OMB for its
review and approval because this notice of proposed rulemaking will add
the following to a collection of information:
   (1) Petitions to institute a derivation proceeding (§§ 42.6,
42.8, 42.11, 42.13, 42.21, 42.22, 42.24(a)(4),42.63, 42.65, and
42.402 through 42.406);
   (2) Motions (§§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.22,
42.24(a)(5), 42.51, 42.52, 42.53, 42.54, 42.63, 42.64, and 42.65);
   (3) Oppositions (§§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.23,
42.24(b), 42.51, 42.52, 42.53, 42.54, 42.63, 42.64, and 42.65); and
   (4) Replies (§§ 42.6, 42.8, 42.11, 42.13, 42.21, 42.23,
42.24(c), 42.51, 42.52, 42.53, 42.54, 42.63, and 42.65).
   The proposed rules also permit filing requests for oral argument
(§ 42.70), requests for rehearing (§ 42.71(c)), requests for
adverse judgment (§ 42.73(b)), requests that a settlement be
treated as business confidential (§ 42.74(b) and 42.409), and
arbitration agreements and awards (§ 42.410) to a collection of
information.

   I. Abstract: The USPTO is required by 35 U.S.C. 131 and 151 to
examine applications and, when appropriate, issue applications as
patents.
   35 U.S.C. 135 in effect on March 16, 2013, will provide for
petitions to institute a derivation proceeding at the USPTO for certain
applications. The new rules for initiating and conducting these
proceedings are proposed in this notice as a new subpart E of new part
42 of title 37 of the Code of Federal Regulations.
   In estimating the number of hours necessary for preparing a
petition to institute a derivation proceeding, the USPTO considered the
estimated cost of preparing a request for inter partes reexamination
($46,000), the median billing rate ($340/hour), and the observation
that the cost of inter partes reexamination has risen the fastest of
all litigation costs since 2009 in the AIPLA Report of the Economic
Survey 2011. It was estimated that a petition for an inter partes
review and an inter partes reexamination request would cost the same to
the preparing party ($46,000). The cost of preparing a petition for
post-grant or covered business method patent review is estimated to be
33.333% higher than that cost of preparing an inter partes review
petition because the petition for post-grant or covered business method
patent review may seek to institute a proceeding on additional grounds
such as subject matter eligibility. It is expected that petitions for
derivation will have the same complexity and cost as a petition for
post-grant review because derivation proceedings raise issues of
communication, which have similar complexity to the public use and sale
and written description issues that can be raised in a post-grant
review. Thus, the Office estimates that the cost of preparing a
petition for derivation will be $61,333.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 240 

   In estimating the number of hours necessary for preparing motions
after instituting and participating in the review, the USPTO considered
the AIPLA Report of the Economic Survey 2011 which reported the average
cost of a party to a two-party interference to the end of the
preliminary motion phase ($322,000) and inclusive of all costs
($631,000). The preliminary motion phase is a good proxy for
patentability reviews since that is the period of current contested
cases before the trial section of the Board where most patentability
motions are currently filed.
   The USPTO also reviewed recent contested cases before the trial
section of the Board to collect data on the average number of motions
for any matter including priority, the subset of those motions directed
to non-priority issues, the subset of those motions directed to non-
priority patentability issues, and the subset of those motions directed
to patentability issues based on a patent or printed publication on the
basis of 35 U.S.C. 102 or 103. The review of current contested cases
before the trial section of the Board indicated that approximately 15%
of motions were directed to prior art grounds, 18% of motions were
directed to other patentability grounds, 27% were directed to
miscellaneous issues, and 40% were directed to priority issues. It was
estimated that the cost per motion to a party in current contested
cases before the trial section of the Board declines because of overlap
in subject matter, expert overlap, and familiarity with the technical
subject matter. Given the overlap of subject matter, a proceeding with
fewer motions will have a somewhat less than proportional decrease in
costs since the overlapping costs will be spread over fewer motions.
   Derivations will be more like current contested cases before the
trial section of the Board inasmuch as they may have a period which
sets the stage for determining derivation and a derivation period. One
half of derivations are anticipated to end in the preliminary motion
period, while the other half are anticipated to proceed to decision on
derivation. While it is recognized that fewer than half of all current
contested cases before the trial section of the Board proceed to a
priority decision, derivation contests are often more protracted than
other current contested cases before the trial section of the Board.
The costs associated with derivations through the preliminary motion
period and through the derivation period should be comparable to the
corresponding costs of current contested cases before the trial section
of the Board.
   The title, description, and respondent description of the
information collection are shown below with an estimate of the annual
reporting burdens. Included in this estimate is the time for reviewing
instructions, gathering and maintaining the data needed, and completing
and reviewing the collection of information. The principal impact of
the proposed changes in this notice of proposed rulemaking is to
implement the changes to Office practice necessitated by § 3(i) of
the Leahy-Smith America Invents Act.
   The public uses this information collection to request review and
derivation proceedings and to ensure that the associated fees and
documentation are submitted to the USPTO.

II. Data

   Needs and Uses: The information supplied to the USPTO by a petition
to institute a derivation proceeding as well as the motions authorized
following the institution is used by the USPTO to determine whether to
initiate a derivation proceeding under 35 U.S.C. 135, as amended, and
to prepare a final decision under 35 U.S.C. 135, as amended.
   OMB Number: 0651-00xx.
   Title: Patent Review and Derivation Proceedings.
   Form Numbers: None.
   Type of Review: New Collection.
   Likely Respondents/Affected Public: Individuals or households,
businesses or other for profit, not-for-profit institutions, farms,
Federal Government, and state, local, or tribal governments.
   Estimated Number of Respondents/Frequency of Collection: 100
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 241 

respondents and 288 responses per year.
   Estimated Time per Response: The USPTO estimates that it will take
the public from 0.1 to 180.4 hours to gather the necessary information,
prepare the documents, and submit the information to the USPTO.
   Estimated Total Annual Respondent Burden Hours: 34,836.5 hours per
year.
   Estimated Total Annual (Hour) Respondent Cost Burden: $11,844,410
per year. The USPTO expects that the information in this collection
will be prepared by attorneys. Using the professional rate of $340 per
hour for attorneys in private firms, the USPTO estimates that the
respondent cost burden for this collection will be approximately
$11,844,410 per year (34,836.5 hours per year multiplied by $340 per
hour).
   Estimated Total Annual Non-hour Respondent Cost Burden: $20,800 per
year. There are no capital start-up or maintenance costs associated
with this information collection. However, this collection does have
annual (non-hour) costs in the form of filing fees. There are filing
fees associated with petitions for derivation proceedings and for
requests to treat a settlement as business confidential. The total fees
for this collection are calculated in the accompanying table. The USPTO
estimates that the total fees associated with this collection will be
approximately $20,800 per year.
   Therefore, the total cost burden in fiscal year 2013 is estimated
to be $11,865,210 (the sum of the estimated total annual (hour)
respondent cost burden ($11,844,410) plus the estimated total annual
non-hour respondent cost burden ($20,800)).


                               Estimated time  Estimated      Estimated
                                for response    annual          annual
Item                               (hours)     responses     burden hours

Petition for derivation             180.4           50           9,020
Request for Reconsideration          80              5             400
Motions, replies and                120            210          25,200
   oppositions in
   derivation proceeding
Request for oral hearing             20             10             200
Request to treat a                    2              2               4
   settlement as business
   confidential
Request for adverse judgment,         1              2               2
   default adverse judgment
   or settlement
Arbitration agreement and             4              2               8
   award
Request to make a settlement          1              2               2
   agreement available
Notice of judicial review of          0.1            5                .5
   a Board decision (e.g.,
   notice of appeal under
   35 U.S.C. 142)

Totals                                             288          34,836.5



                              Estimated annual              Estimated annual
Item                             responses      Fee amount     filing costs

Petition for derivation             50              $400         $20,000
Request for Reconsideration          5                 0               0
Motions, replies and               210                 0               0
   oppositions in derivation
   proceeding
Request for Oral Hearing            20                10             200
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 242 

Request to treat a settlement
   as business confidential          2                 0               0
Request for adverse judgment,        2                 0               0
   default adverse judgment
   or settlement
Arbitration agreement and awards     2                 0               0
Request to make a settlement         2               400             800
   agreement available
Notice of judicial review of         5                 0               0
   a Board decision (e.g.,
   notice of appeal under
   35 U.S.C. 142)

Totals                             288                            20,800

III. Solicitation

   The agency is soliciting comments to: (1) Evaluate whether the
proposed information requirement is necessary for the proper
performance of the functions of the agency, including whether the
information will have practical utility; (2) evaluate the accuracy of
the agency's estimate of the burden; (3) enhance the quality, utility,
and clarity of the information to be collected; and (4) minimize the
burden of collecting the information on those who are to respond,
including by using appropriate automated, electronic, mechanical, or
other technological collection techniques or other forms of information
technology.
   Interested persons are requested to send comments regarding this
information collection by April 10, 2012, to: (1) The Office of
Information and Regulatory Affairs, Office of Management and Budget,
New Executive Office Building, Room 10202, 725 17th Street NW.,
Washington, DC 20503, Attention: Nicholas A. Fraser, the Desk Officer
for the United States Patent and Trademark Office, and via email at
nfraser@omb.eop.gov; and (2) The Board of Patent Appeals and
Interferences by electronic mail message over the Internet addressed to
derivation@uspto.gov, or by 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 Michael Tierney, Derivation Proposed Rules."
   Notwithstanding any other provision of law, no person is required
to respond to nor shall a 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,
Lawyers.

Proposed Amendments to the Regulatory Text

   For the reasons stated in the preamble, the Under Secretary of
Commerce for Intellectual Property and Director of the United States
Patent and Trademark Office propose to amend 37 CFR part 42 as proposed
to be added in the February 9, 2012, issue of the Federal Register as
follows:

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

   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 Leahy-Smith America Invents Act, Pub. L. 112-29,
sections 6(c), 6(f) and 18, 125 Stat. 284, 304, 311, and 329 (2011).
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 243 


   2. A new subpart E is added to read as follows:

Subpart E - Derivation

General

§
42.400 Procedure; pendency.
42.401 Definitions.
42.402 Who may file a petition for a derivation proceeding.
42.403 Time for filing.
42.404 Derivation fee.
42.405 Content of petition.
42.406 Service of petition.
42.407 Filing date.

Instituting Derivation Proceeding

42.408 Institution of derivation proceeding.

After Institution of Derivation Proceeding

42.409 Settlement agreements.
42.410 Arbitration.
42.411 Common interests in the invention.
42.412 Public availability of Board records.

Subpart E - Derivation

General

§ 42.400  Procedure; pendency

   (a) A derivation proceeding is a trial subject to the procedures
set forth in subpart A of this part.
   (b) The Board may for good cause authorize or direct the parties to
address patentability issues that arise in the course of the derivation
proceeding.

§ 42.401  Definitions.

   In addition to the definitions in § 42.2, the following
additional definitions apply to proceedings under this subpart:
   Agreement or understanding under 35 U.S.C. 135(e) means settlement
for the purposes of § 42.74.
   Applicant includes a reissue applicant.
   Application includes both an application for an original patent and
an application for a reissued patent.
   Petitioner means a patent applicant who petitions for a
determination that another party named in an earlier-filed patent
application allegedly derived a claimed invention from an inventor
named in the petitioner's application and filed the earlier application
without authorization.
   Respondent means a party other than the petitioner.

§ 42.402  Who may file a petition for a derivation proceeding.

   An applicant for patent may file a petition to institute a
derivation proceeding in the Office.

§ 42.403  Time for filing.

   A petition for a derivation proceeding must be filed within one
year after the first publication of a claim to an invention that is the
same or substantially the same as the earlier application's claim to
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 244 

the allegedly derived invention.

§ 42.404  Derivation fee.

   (a) A derivation fee set forth in § 42.15(c) must accompany the
petition.
   (b) No filing date will be accorded to the petition until payment
is complete.

§ 42.405  Content of petition.

   (a) Grounds for standing. The petition must:
   (1) Demonstrate compliance with §§ 42.402 and 42.403; and
   (2) Show that the petitioner has at least one claim that is:
   (i) The same or substantially the same as the respondent's claimed
invention; and
   (ii) Not patentably distinct from the invention disclosed to the
respondent.
   (b) In addition to the requirements of §§ 42.8 and 42.22,
the petition must:
   (1) Provide sufficient information to identify the application or
patent for which the petitioner seeks a derivation proceeding;
   (2) Demonstrate that an invention was derived from an inventor
named in the petitioner's application and, without authorization, the
earliest application claiming such invention was filed; and
   (3) For each of the respondent's claims to the derived invention,
   (i) Show why the claimed invention is not patentably distinct from
the invention disclosed to the respondent, and
   (ii) Identify how the claim is to be construed. Where the claim to
be construed contains a means-plus-function or step-plus-function
limitation as permited under 35 U.S.C. 112, sixth paragraph, the
construction of the claim must identify the specific portions of the
specification that describe the structure, material, or acts
corresponding to each claimed function.
   (c) Sufficiency of showing. A derivation showing is not sufficient
unless it is supported by substantial evidence, including at least one
affidavit addressing communication of the derived invention and lack of
authorization that, if unrebutted, would support a determination of
derivation. The showing of communication must be corroborated.

§ 42.406  Service of petition.

   In addition to the requirements of § 42.6, the petitioner must
serve the petition and exhibits relied upon in the petition as follows:
   (a) The petition and supporting evidence must be served at the
correspondence address of record for the earlier application. The
petitioner may additionally serve the petition and supporting evidence
on the respondent at any other address known to the petitioner as
likely to effect service.
   (b) If the petitioner cannot effect service of the petition and
supporting evidence at the correspondence address of record for the
subject application or patent, the petitioner must immediately contact
the Board to discuss alternate modes of service.

§ 42.407  Filing date.

   (a) Complete petition. A petition to institute a derivation
proceeding will not be accorded a filing date until the petition
satisfies all of the following requirements:
   (1) Complies with § 42.405,
   (2) Service of the petition on the correspondence address of record
as provided in § 42.406, and
   (3) Is accompanied by the fee to institute required in § 42.15(c).
   (b) Incomplete request. Where the petitioner files an incomplete
request, no filing date will be accorded, and the Office will dismiss
the request if the deficiency in the request is not corrected within
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 245 

the earlier of either one month from notice of the incomplete request,
or the expiration of the statutory deadline in which to file a petition
for derivation.

Instituting Derivation Proceeding

§ 42.408  Institution of derivation proceeding.

   (a) An administrative patent judge institutes, and may as necessary
reinstitute, the derivation proceeding on behalf of the Director.
   (b) Additional derivation proceeding. The petitioner may suggest
the addition of a patent or application to the derivation proceeding.
The suggestion should make the showings required under § 42.405 of
this part and explain why the suggestion could not have been made in
the original petition.

After Institution of Derivation Proceeding

§ 42.409  Settlement agreements.

   An agreement or understanding under 35 U.S.C. 135(e) is a
settlement for the purposes of § 42.74.

§ 42.410  Arbitration.

   (a) Parties may resort to binding arbitration to determine any
issue. The Office is not a party to the arbitration. The Board is not
bound by, and may independently determine, any question of
patentability.
   (b) The Board will not set a time for, or otherwise modify the
proceeding for, an arbitration unless:
   (1) It is to be conducted according to Title 9 of the United States
Code;
   (2) The parties notify the Board in writing of their intention to
arbitrate;
   (3) The agreement to arbitrate:
   (i) Is in writing;
   (ii) Specifies the issues to be arbitrated;
   (iii) Names the arbitrator, or provides a date not more than 30
days after the execution of the agreement for the selection of the
arbitrator;
   (iv) Provides that the arbitrator's award shall be binding on the
parties and that judgment thereon can be entered by the Board;
   (v) Provides that a copy of the agreement is filed within 20 days
after its execution; and
   (vi) provides that the arbitration is completed within the time the
Board sets.
   (c) The parties are solely responsible for the selection of the
arbitrator and the conduct of the arbitration.
   (d) The Board may determine issues the arbitration does not
resolve.
   (e) The Board will not consider the arbitration award unless it:
   (1) Is binding on the parties;
   (2) Is in writing;
   (3) States in a clear and definite manner each issue arbitrated and
the disposition of each issue; and
   (4) Is filed within 20 days of the date of the award.
   (f) Once the award is filed, the parties to the award may not take
actions inconsistent with the award. If the award is dispositive of the
contested subject matter for a party, the Board may enter judgment as
to that party.

§ 42.411  Common interests in the invention.

   The Board may decline to institute, or if already instituted the
Board may issue judgment in, a derivation proceeding between an
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 246 

application and a patent or another application that are commonly
owned.

§ 42.412  Public availability of Board records

   (a) Publication-(1) Generally. Any Board decision is available for
public inspection without a party's permission if rendered in a file
open to the public pursuant to § 1.11 of this chapter or in an
application that has been published in accordance with §§ 1.211
to 1.221 of this chapter. The Office may independently publish any
Board decision that is available for public inspection.
   (2) Determination of special circumstances. Any Board decision not
publishable under paragraph (a)(1) of this section may be published or
made available for public inspection if the Director believes that
special circumstances warrant publication and a party does not petition
within two months after being notified of the intention to make the
decision public, objecting in writing on the ground that the decision
discloses the objecting party's trade secret or other confidential
information and stating with specificity that such information is not
otherwise publicly available.
   (b) Record of proceeding. (1) The record of a Board proceeding is
available to the public, unless a patent application not otherwise
available to the public is involved.
   (2) Notwithstanding paragraph (b)(1) of this section, after a final
Board decision in or judgment in a Board proceeding, the record of the
Board proceeding will be made available to the public if any involved
file is or becomes open to the public under § 1.11 of this title or
an involved application is or becomes published under §§ 1.211
to 1.221 of this chapter.

January 31, 2012                                            DAVID J. KAPPOS
                  Under Secretary of Commerce for Intellectual Property and
                  Director of the United States Patent and Trademark Office
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 247 

Practice Guide for Proposed Trial Rules and Rules of Practice for Trials Before the Patent Trial and Appeal Board and Judicial Review of Patent Trial and Appeal Board Decisions; Proposed Rules
                            Department of Commerce
                          Patent and Trademark Office
                                37 CFR Part 42
                         [Docket No.: PTO-P-2011-0094]

                 Practice Guide for Proposed Trial Rules and
                   Rules of Practice for Trials Before the
                      Patent Trial and Appeal Board and
         Judicial Review of Patent Trial and Appeal Board Decisions;
                                Proposed Rules

AGENCY: United States Patent and Trademark Office, Commerce.

ACTION: Request for Comments.

SUMMARY: The Leahy-Smith America Invents Act establishes several new
trial proceedings to be conducted by the Patent Trial and Appeal Board
(Board) including inter partes review, post-grant review, the
transitional program for covered business method patents, and
derivation proceedings. The Leahy-Smith America Invents Act also
requires the United States Patent and Trademark Office (Office or
USPTO) to promulgate rules specific to each proceeding. In separate
rulemakings elsewhere in this issue and in the February 10, 2012, issue
of the Federal Register, the Office proposes rules relating to Board
trial practice for the new proceedings. The Office publishes in this
document a practice guide for the proposed trial rules to advise the
public on the general framework of the proposed regulations, including
the structure and times for taking action in each of the new
proceedings.

DATES: Written comments must be received on or before April 9, 2012 to
ensure consideration.

ADDRESSES: Comments on the practice guide should be sent by electronic
mail message over the Internet addressed to: patent_trial_rules@uspto.gov.
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 Michael Tierney, Practice Guide for Patent Proposed Trial
Rules." Comments on the proposed rules should be directed to the addresses
provided in the notices of proposed rulemaking.
   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 eRulemaking Portal.
   Although comments may be submitted by postal mail, the Office
prefers to receive comments by electronic mail message over the
Internet because sharing comments with the public is more easily
accomplished. Electronic comments are preferred to be submitted in
plain text, but also may be submitted in ADOBE® portable
document format or MICROSOFT WORD® format. Comments not
submitted electronically should be submitted on paper in a format that
facilitates convenient digital scanning into ADOBE® portable
document format.
   The comments will be available for public inspection at the Board
of Patent Appeals and Interferences, 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/). Because comments will be made available for
public inspection, information that the submitter does not desire to
make public, such as an address or phone number, should not be included
in the comments.

FOR FURTHER INFORMATION CONTACT: Michael Tierney, Lead Administrative
Patent Judge, Board of Patent Appeals and Interferences, by telephone
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 248 

at (571) 272-9797.

SUPPLEMENTARY INFORMATION:

Executive Summary

   The proposed regulations lay out a framework for conducting the
proceedings aimed at streamlining and converging the issues for
decision. In doing so, the Office's goal is to conduct proceedings in a
timely, fair and efficient manner. Further, the Office designed the
proceedings to allow each party to determine the preferred manner of
putting forward its case, subject to the disinterested guidance of
judges who determine the needs of a particular case through procedural
and substantive rulings throughout the proceedings.

Background

   The Leahy-Smith America Invents Act (AIA) establishes several new
trial proceedings to be conducted by the Board including: (1) Inter
partes review (IPR); (2) post-grant review (PGR); (3) a transitional
program for covered business method patents (CBM); and (4) derivation
proceedings. The AIA requires the USPTO to promulgate rules specific to
each proceeding, with the PGR, IPR and CBM rules in effect one year
after AIA enactment and the derivation rules in effect 18 months after
AIA enactment. This Practice Guide is intended to advise the public on
the general framework of the proposed rules, including the structure
and times for taking action in each of the new proceedings.
   In developing the proposed rules and this guide, 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/patents/law/comments/aia_implementation.jsp.

Statutory Requirements

   The AIA provides certain minimum requirements for each of the new
proceedings. Provided below is a brief overview of these requirements.
   Proceedings begin with the filing of a petition to institute a
trial. The petition must be timely filed and be accompanied by the
evidence the petitioner seeks to rely upon. For IPR, PGR, and CBM, the
patent owner is afforded an opportunity to file a preliminary response.
35 U.S.C. 313, as amended, and 35 U.S.C. 323.
   The Director may institute a trial where the petitioner establishes
that the standards for instituting the requested trial are met.
Conversely, the Director may not authorize a trial where the
information presented in the petition, taking into account any
preliminary patent owner response, fails to meet the requisite standard
for instituting the trial, e.g., 35 U.S.C. 314, as amended, and 35
U.S.C. 324. Where there are multiple matters in the Office involving
the same patent, the Director may determine how the proceeding will
proceed, including providing for stay, transfer, consolidation, or
termination of any such matter, e.g., 35 U.S.C. 315, as amended, and 35
U.S.C. 325.
   The AIA requires that the Board conduct AIA trials and that the
Director prescribe regulations concerning the conduct of those trials.
35 U.S.C. 6, 135 and 316, as amended, and 35 U.S.C. 326. For example,
for IPR, PGR, and CBM, the AIA mandates the promulgation of rules
including motions to seal, procedures for filing supplemental
information, standards and procedures for discovery, sanctions for
improper use of the proceeding, entry of protective orders, and oral
hearings. Additionally, the AIA mandates the promulgation of rules for
IPR, PGR, and CBM concerning the submission of a patent owner response
with supporting evidence and allowing the patent owner a motion to
amend the patent.
   A petitioner and a patent owner may terminate the proceeding with
respect to the petitioner by filing a written agreement with the
Office, unless the Office has already decided the merits of the
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 249 

proceeding, e.g., 35 U.S.C. 317, as amended, and 35 U.S.C. 327. If no
petitioner remains in the proceeding, the Office may terminate the review
or proceed to a final written decision. For derivation proceedings, the
parties may arbitrate issues in the proceeding, but nothing precludes the
Office from determining the patentability of the claimed inventions
involved in the proceeding. 35 U.S.C. 135, as amended. Where a trial has
been instituted and not dismissed, the Board will issue a final written
decision with respect to the involved patent and/or applications. 35 U.S.C.
135 and 35 U.S.C. 318, as amended, and 35 U.S.C. 328.
   For IPR, PGR and CBM, the AIA requires that the Office consider the
effect of the regulations on the economy, the integrity of the patent
system, the efficient administration of the Office, and the ability of
the Office to timely complete the proceedings. 35 U.S.C. 316, as
amended, and 35 U.S.C. 326. In developing the general trial rules, as
well as the individual proceeding specific rules, the Office has taken
these considerations into account. Further, the individual proceeding
specific rules take into account the jurisdictional and timing
requirements for the particular proceedings.

General Overview

   Generally, the proceedings begin with the filing of a petition that
identifies all of the claims challenged and the grounds and supporting
evidence on a claim-by-claim basis. Within two months of notification
of a filing date, the patent owner in an IPR, PGR, or CBM proceeding
may file a preliminary response to the petition, including a simple
statement that patent owner elects not to respond to the petition prior
to the institution of a review. The Board will determine whether to
institute the requested proceeding within three months of the date the
patent owner's preliminary response was due or was filed, whichever is
first.
   In instituting a trial, the Board will narrow the issues for final
decision by authorizing the trial to proceed only on the challenged
claims for which the threshold requirements for the proceeding have
been met. Further, the Board will identify which of the grounds the
trial will proceed upon on a claim-by-claim basis. Any claim or issue
not included in the authorization for review is not part of the trial.
A party dissgatisfied with the Board's determination may request
rehearing as to points believed to have been overlooked or
misapprehended. See proposed § 42.71(c)(1).
   The Board will enter a Scheduling Order (Appendix A) concurrent
with the decision to institute the proceeding. The Scheduling Order
will set due dates for the proceeding taking into account the
complexity of the proceeding but ensuring that the trial is completed
within one year of institution.
   For example, a Scheduling Order for an IPR might provide a four
month deadline for patent owner discovery and for filing a patent owner
response and motion to amend. Once the patent owner's response and
motion to amend have been filed, the Scheduling Order might provide the
petitioner with two months for discovery and for filing a petitioner's
reply to the response and the petitioner's opposition to the amendment.
The Scheduling Order might then provide the patent owner with one month
for discovery and for filing a patent owner reply to petitioner's
opposition to a patent owner amendment. A representative timeline is
provided below:
[GRAPHIC] [TIFF OMITTED] TP09FE12.000

   Sequence of discovery. Once instituted, absent special
circumstances, discovery will proceed in a sequenced fashion. For
example, the patent owner may begin deposing the petitioner's
declarants once the proceeding is instituted. After patent owner has
filed a patent owner response and any motion to amend the claims, the
petitioner may depose the patent owner's declarants. Similarly, after
the petitioner has filed a reply to the patent owner's response and an
opposition to an amendment, the patent owner may depose the
petitioner's declarants and file a reply in support of its claim
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amendments. Where the patent owner relies upon new declaration evidence
in support of its amendments, the petitioner will be authorized to
depose the declarants and submit observations on the deposition. Once
the time for taking discovery in the trial has ended, the parties will
be authorized to file motions to exclude evidence believed to be
inadmissible. Admissibility of evidence is generally governed by the
Federal Rules of Evidence.
   Sequence of filing responses and motions. An initial conference
call will be held about one month from the date of institution to
discuss the motions that the parties intend to file and to determine if
any adjustment needs to be made to the Scheduling Order. After a patent
owner response has been filed, along with any motion to amend the
claims, the petitioner will have the opportunity to depose the patent
owner's declarants. The petitioner will then file a reply to the patent
owner's response and any opposition to the patent owner's amendment.
Both parties will be permitted an opportunity to file motions to
exclude an opponent's evidence believed to be inadmissible. After all
motions have been filed, the parties will be afforded an opportunity to
have an oral argument at the Board.

Summary of the Proposed Rules

   The following is a general summary of the rules for the proceedings.

I. General Procedures

   The rules are to be implemented so as to ensure the just, speedy,
and inexpensive resolution of a proceeding and, where appropriate, the
rules may be modified to accomplish these goals, proposed § 42.1(b);
proposed § 42.5(a) and (b) (references to proposed § 42.x refer to title
37 of the Code of Federal Regulations).

A. Jurisdiction and Management of the Record

   1. Jurisdiction: 35 U.S.C. 6(b), as amended, provides that the
Board is to conduct derivation proceedings, inter partes reviews, and
post-grant reviews. The Board also conducts transitional program for
covered business method reviews, which are subject to Board review
under 35 U.S.C. 6(b), as amended, and 35 U.S.C. 326(c) and Public Law
112-29, § 18. The Board therefore will have exclusive jurisdiction
within the Office over every application and patent that is involved in
a derivation, IPR, PGR or CBM proceeding. Ex parte reexamination
proceedings and inter partes reexamination proceedings are not involved
applications or patents in proceedings and are treated separately
unless specifically consolidated with a proceeding.

   2. Prohibition on Ex Parte Communications: All substantive
communications with the Board regarding a proceeding must include all
parties to the proceeding, except as otherwise authorized, proposed
§ 42.5(d). In general, it would be prudent to avoid substantive ex
parte discussions of a pending trial with a Board member or Board
employee. The prohibition on ex parte communications does not extend
to: (1) Ministerial communications with support staff (for instance, to
arrange a conference call); (2) conference calls or hearings in which
opposing counsel declines to participate; (3) informing the Board in
one proceeding of the existence or status of a related Board
proceeding; or (4) reference to a pending case in support of a general
proposition (for instance, citing a published opinion from a pending
case or referring to a pending case to illustrate a systemic problem).
   Arranging a conference call with the Board. When arranging a
conference call, be prepared to discuss with a Trial Section paralegal
why the call is needed and what materials may be needed during the
call, e.g., a particular exhibit.
   Refusal to participate. The Board has the discretion to permit a
hearing or conference call to take place even if a party refuses to
participate. In such cases, the Board may require additional
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safeguards, such as the recording of the communication and the entry of
the recording into the record.

B. Counsel

   Need for lead and back-up counsel. A party represented by counsel
should designate both a lead as well as a back-up counsel who can
conduct business on behalf of the lead counsel, as instances may arise
where lead counsel may be unavailable. Proposed § 42.10(a).
   Power of attorney. A power of attorney must be filed with the
designation of counsel, unless the designated counsel is already
counsel of record. Proposed § 42.10(b).
   Pro hac vice. The Board, consistent with current practice, may
recognize counsel pro hac vice during a proceeding upon a showing of
good cause, subject to such conditions as the Board may impose.
Proposed § 42.10(c). Proceedings before the Office can be
technically complex. For example, it is expected that amendments to a
patent will be sought. Consequently, the grant of a motion to appear
pro hac vice is a discretionary action taking into account the
specifics of the proceedings. Similarly, the revocation of pro hac vice
is a discretionary action taking into account various factors,
including incompetence, unwillingness to abide by the Office's Rules of
Professional Conduct, and incivility.

C. Electronic Filing

   Electronic filing is the default manner in which documents are to
be filed with the Board. Proposed § 42.6(b). Electronic filing of
legal documents is being implemented across the country in state and
federal courts. The use of electronic filing aids in the efficient
administration of the proceeding, improves public accessibility, and
provides a more effective document management system for the Office and
parties. The manner of submission will be established by the Board and
will be published on the Web site of the Office (http://www.uspto.gov/).
   Paper filing may be used where appropriate, but must be accompanied
by a motion explaining the need for non-electronic filing. Based upon
experience with contested cases, the Board does not expect to receive
many requests to file paper submissions. Circumstances where a paper
filing may be warranted include those occasions where the Office's
electronic filing system is unable to accept filings. Alternatively, if
a problem with electronic filing arises during normal business hours, a
party may contact the Board and request a one-day extension of time for
due dates that are set by rule or orders of the Board.

D. Mandatory Notices

   The rules require that parties to a proceeding provide certain
mandatory notices, including identification of the real parties in
interest, related matters, lead and back-up counsel and service
information. Proposed § 42.8. Where there is a change of
information, a party must file a revised notice within 21 days of the
change. Proposed § 42.8(a)(3).

   1. Real Party in Interest or privy: The identification of the real
party in interest helps the Office identify potential conflicts of
interests and helps identify potential statutory bars.
   Whether a party who is not a named participant in a given
proceeding nonetheless constitutes a "real party in interest" or
"privy" to that proceeding is a highly fact-dependent question. See
generally Taylor v. Sturgell, 553 U.S. 880 (2008); 18A Charles Alan
Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice &
Procedure Sec. § 4449, 4451 (2d ed. 2011). Such questions will be
handled by the Board on a case-by-case basis taking into consideration
how courts have viewed the terms "real party in interest" and
"privy." See, e.g., Taylor, 553 U.S. at 893-895 and 893 n.6 (noting
that "[t]he list that follows is meant only to provide a framework
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[for the decision], not to establish a definitive taxonomy").
   While there are multiple bases upon which a non-party may be
recognized as a "real party in interest" or "privy," a common
consideration is whether the non-party exercised or could have
exercised control over a party's participation in a proceeding. See,
e.g., Id. at 895; see generally Wright & Miller § 4451. The concept
of control generally means that "it should be enough that the nonparty
has the actual measure of control or opportunity to control that might
reasonably be expected between two formal coparties." Wright & Miller
§ 4451. Courts and commentators agree, however, that there is no
"bright-line test" for determining the necessary quantity or degree
of participation to qualify as a "real party in interest" or
"privy" based on the control concept. Gonzalez v. Banco Cent. Corp.,
27 F.3d 751, 759 (1st Cir. 1994). See also Wright & Miller § 44512
("The measure of control by a nonparty that justifies preclusion
cannot be defined rigidly."). Accordingly, the proposed rules do not
enumerate particular factors regarding a "control" theory of "real
party in interest" or "privy" under the statute.
   Many of the same considerations that apply in the context of "res
judicata" will likely apply in the "real party in interest" or
"privy" contexts. See Gonzalez, 27 F.3d at 759; see generally Wright
& Miller § 4451. Other considerations may also apply in the unique
context of statutory estoppel. See generally, e.g., In re Arviv
Reexamination Proceeding, Control No. 95/001,526, Decision Dismissing
§ 1.182 and § 1.183 Petitions, at 6 (Apr. 18, 2011); In re
Beierbach Reexamination Proceeding, Control No. 95/000,407, Decision on
§ 1.182 and § 1.183 Petitions, at 6 (July 28, 2010); In re
Schlecht Inter Partes Reexamination Proceeding, Control No. 95/001,206,
Decision Dismissing Petition, at 5 (June 22, 2010); In re Guan Inter
Partes Reexamination Proceeding, Control No. 95/001,045, Decision
Vacating Filing Date, at 8 (Aug. 25, 2008).

   2. Related Matters: Parties to a proceeding are to identify any
other judicial or administrative matter that would affect, or be
affected by, a decision in the proceeding. Judicial matters include
actions involving the patent in federal court. Administrative matters
that would be affected by a decision in the proceeding include every
application and patent claiming, or which may claim, the benefit of the
priority of the filing date of the party's involved patent or
application as well as any ex parte and inter partes reexaminations for
an involved patent.

   3. Identification of service information: Parties are required to
identify service information to allow for efficient communication
between the Board and the parties. Additionally, while the Board is
authorized to provide notice by means other than mailing to the
correspondence address of record, it is ultimately the responsibility
of the applicant or patent owner to maintain a proper correspondence
address in the record. Ray v. Lehman, 55 F.3d 606, 610 (Fed. Cir.
1995).

E. Public Availability and Confidentiality

   The proposed rules aim to strike a balance between the public's
interest in maintaining a complete and understandable file history and
the parties' interest in protecting truly sensitive information.

   1. Public availability: The record of a proceeding, including
documents and things, shall be made available to the public, except as
otherwise ordered. Proposed § 42.14. Accordingly, a document or
thing will be made publicly available, unless a party files a motion to
seal, which is granted by the Board.

   2. Confidential information: The rules identify confidential
information in a manner consistent with Federal Rule of Civil Procedure
26(c)(1)(G), which provides for protective orders for trade secret or
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other confidential research, development or commercial information.
Proposed § 42.54.

   3. Motion to seal: A party intending a document or thing to be
sealed may file a motion to seal the document or thing. Proposed
§ 42.14. The document or thing will be provisionally sealed on receipt of
the motion and remain so pending the outcome of the decision on motion.

   4. Protective orders: A party from whom discovery of confidential
information is sought may file a motion to seal where the motion
contains a proposed protective order. Proposed § 42.54.
Specifically, protective orders may be issued for good cause by the
Board to protect a party from disclosing confidential information.
Proposed § 42.54. Guidelines on proposing a protective order in a
motion to seal, including a Standing Protective Order, are provided in
Appendix B. The document or thing will be protected on receipt of the
motion and remain so, pending the outcome of the decision on motion.

   5. Confidential information in a petition: A petitioner filing
confidential information with a petition may file a motion to seal
concurrent with the petition, where the motion to seal contains a
proposed protective order. The confidential information may be served
to the patent owner under seal. The patent owner may only access the
sealed information if it agrees to the terms of the proposed protective
order. The institution of the proceeding will constitute a grant of the
motion to seal unless otherwise ordered by the Board. Proposed § 42.55.
   The proposed rule seeks to streamline the process of seeking
protective orders prior to the institution of the review while
balancing the need to protect confidential information against an
opponent's ability to access information used to challenge the
opponent's claims.

   6. Expungement of confidential information: Confidential
information that is subject to a protective order ordinarily would
become public 45 days after denial of a petition to institute a trial
or 45 days after final judgment in a trial. There is an expectation
that information will be made public where the existence of the
information is referred to in a decision to grant or deny a request to
institute a review or is identified in a final written decision. A
party seeking to maintain the confidentiality of information, however,
may file a motion to expunge the information from the record prior to
the information becoming public. Proposed § 42.56. The rule
balances the needs of the parties to submit confidential information
with the public interest in maintaining a complete and understandable
file history for public notices purposes. The rule encourages parties
to redact sensitive information, where possible, rather than seeking to
seal entire documents.

F. Discovery

   Discovery is a tool to develop a fair record and to aid the Board
in assessing the credibility of witnesses. To streamline the
proceedings, the rules and Scheduling Order provide a sequenced
discovery process upon institution of the trial. Specifically, each
party will be provided respective discovery periods, with the patent
owner going first. The sequenced discovery allows parties to conduct
meaningful discovery before they are required to submit their
respective motions and oppositions. Thus, discovery before the Board is
focused on what the parties reasonably need to respond to the grounds
raised by an opponent. In this way, the scope of the trial continually
narrows.

   1. Routine discovery: Routine discovery includes: (1) Production of
any exhibit cited in a paper or testimony, (2) the cross examination of
the other sides declarant, and (3) information that is inconsistent
with a position advanced during the proceeding. Routine discovery
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places the parties on a level playing field and streamlines the
proceeding. Board authorization is not required to conduct routine
discovery, although the Board will set the times for conducting this
discovery in its Scheduling Order.

   2. Additional discovery: A request for additional discovery must be
in the form of a motion, although the parties may agree to discovery
amongst themselves. The standard for granting such requests varies with
the proceeding. An "interests of justice" standard applies in IPR and
derivations, whereas the more liberal "good cause" standard applies
in PGR and CBM. An additional discovery request could be granted under
either standard, for example, when a party raises an issue where the
evidence on that issue is uniquely in the possession of the party that
raised it.
   3. Compelled testimony: A party can request authorization to compel
testimony under 35 U.S.C. 24. If a motion to compel testimony is
granted, testimony may be (1) ex parte, subject to subsequent cross
examination, or (2) inter partes. Therriault v. Garbe, 53 USPQ2d 1179,
1184 (BPAI 1999). Prior to moving for or opposing compelled testimony,
the parties should discuss which procedure is appropriate.

   4. Live testimony: Cross-examination may be ordered to take place
in the presence of an administrative patent judge. Occasionally, the Board
will require live testimony where the Board considers the demeanor of a
witness critical to assessing credibility. Examples of where such testimony
has been ordered in contested cases before the Board include cases where
derivation or inequitable conduct is an issue or where testimony is given
through an interpreter.

   5. Times and locations for taking cross examination: The rules do
not provide specific time limits for cross examination. The Board
expects to handle such issues via an Order requiring the parties to
confer to reach agreement on reasonable times, dates, and locations for
cross examination of witnesses.
   The Board has issued such Orders in contested cases and has not
experienced problems arising from such Orders.

II. Petitions and Motions Practice

A. General Motions Practice Information

   1. Motions practice: The proceedings begin with the filing of a
petition that lays out the petitioner's grounds and supporting evidence
for the requested proceeding. Additional relief in a proceeding must be
requested in the form of a motion. Proposed § 42.20(a).

   2. Prior authorization: Generally, a motion will not be entered
without prior Board authorization. Proposed § 42.20(b). Exceptions
include motions where it is impractical for a party to seek prior Board
authorization and motions for which authorization is automatically
granted. Motions where it is not practical to seek prior Board
authorization include motions to seal and motions filed with a
petition, such as motions to waive page limits. Motions where
authorization is automatically granted include requests for rehearing,
observations on cross-examination, and motions to exclude evidence. The
Board expects that the Scheduling Order will pre-authorize and set
times for the filing of observations on cross-examination and motions
to exclude evidence based on inadmissibility. See Appendix A,
Scheduling Order.
   Typically, authorization for a motion is obtained during an initial
conference call, which generally occurs within one month of the
institution of IPR, PGR, CBM, and derivation proceedings. Additionally,
where more immediate relief is required or the request arises after the
initial conference call, a party should institute a conference call to
obtain such authorization. The Board has found that this practice
simplifies a proceeding by focusing the issues early, reducing costs
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and efforts associated with motions that are beyond the scope of the
proceeding. By taking an active role in the proceeding, the Board can
eliminate delay in the proceeding and ensure that attorneys are
prepared to resolve the relevant disputed issues.

   3. Page Limits: Petitions, motions, oppositions, and replies filed
in a proceeding are subject to page limits in order to streamline the
proceedings. Proposed § 42.24. The rules set a limit of 50 pages
for petitions requesting inter partes reviews and derivation
proceedings, 70 pages for petitions requesting post-grant review and
covered business method patent reviews, and 15 pages for motions.
Proposed § 42.24(a). Oppositions are limited to an equal number of
pages as the corresponding motion. Proposed § 42.24(b). Replies to
petitions are limited to 15 pages and replies to motions are limited to
5 pages. Proposed § 42.24(c).
   Federal courts routinely use page limits to manage motions practice
as "[e]ffective writing is concise writing." Spaziano v. Singletary,
36 F.3d 1028, 1031 n.2 (11th Cir. 1994). Federal courts have found that
page limits ease the burden on both the parties and the courts, and
patent cases are no exception. Broadwater v. Heidtman Steel Prods.,
Inc., 182 F. Supp. 2d 705, 710 (S.D. Ill. 2002) ("Counsel are strongly
advised, in the future, to not ask this Court for leave to file any
memoranda (supporting or opposing dispositive motions) longer than 15
pages. The Court has handled complicated patent cases and employment
discrimination cases in which the parties were able to limit their
briefs supporting and opposing summary judgment to 10 or 15 pages.").
   Although parties are given wide latitude in how they present their
cases, the Board's experience is that the presentation of an
overwhelming number of issues tends to detract from the argument being
presented, and can cause otherwise meritorious issues to be overlooked
or misapprehended. Thus, parties should avoid submitting a repository
of all the information that a judge could possibly consider, and
instead focus on simple, well organized, easy to follow arguments
supported by readily identifiable evidence of record. Another factor to
keep in mind is that the judges of the Board are familiar with the
general legal principles involved in issues which come before the
Board. Accordingly, extended discussions of general patent law
principles are not necessary.

   4. Testimony Must Disclose Underlying Facts or Data: The Board
expects that most petitions and motions will rely upon affidavits of
experts. Affidavits expressing an opinion of an expert must disclose
the underlying facts or data upon which the opinion is based. See Fed.
R. Evid. 705; and proposed § 42.65. Opinions expressed without
disclosing the underlying facts or data may be given little or no
weight. Rohm & Haas Co. v. Brotech Corp., 127 F.3d 1089, 1092 (Fed.
Cir. 1997) (nothing in the Federal Rules of Evidence or Federal Circuit
jurisprudence requires the fact finder to credit unsupported assertions
of an expert witness).

   5. Tests and Data: Parties often rely on scientific tests and data
to support their positions. Examples include infra-red spectroscopy
graphs, high-performance liquid-chromatography data, etc. In addition
to providing the explanation required in proposed § 42.65, a party
relying on the test should provide any other information the party
believes would assist the Board in understanding the significance of
the test or the data.

   6. Secondary Indicia of Nonobviousness: The Board expects that most
petitions will raise issues of obviousness. In determining whether the
subject matter of a claim would have been obvious over the prior art,
the Board may review objective evidence of secondary considerations.

B. Petition

   Proceedings begin with the filing of a petition. The petition lays
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out the petitioner's grounds and supporting evidence, on a challenged
claim-by-claim basis, for instituting the requested proceeding.

   1. Filing date - Minimum Procedural Compliance: To obtain a filing
date, the petition must meet certain minimum standards. Generally, the
standards required for a petition are those set by statute for the
proceeding requested. For example, an IPR requires that a complete
petition be filed with the required fee, and include a certificate of
service for the petition, fee, and evidence relied upon. Proposed
§ 42.106. A complete petition for IPR requires that the petitioner
certify that the patent is eligible for inter partes review and that
the petitioner is not barred or estopped from requesting the review,
and must identify the claims being challenged and the specific basis
for the challenge. Proposed § 42.104. Similar petition requirements
apply to PGR (proposed § 42.204) and derivations (proposed § 42.404).
CBM reviews also require a petition demonstrate that the patent for
which review is sought is a covered business method patent.
Proposed § 42.304.

   2. Burden of Proof for Statutory Institution Thresholds: The burden
of proof in a proceeding before the Board is a preponderance of the
evidence. Proposed § 42.1(d).

   3. Specific Requirements for Petition: A petitioner must certify
that the patent or application is available for review and that the
petitioner is not barred or estopped from seeking the proceeding.
Proposed §§ 42.104, 42.204, 42.304, and 42.405. Additionally, a
petitioner must identify all the claims that are challenged and the
specific statutory grounds on which the challenge to the claim is
based, provide a claim construction for the challenged claims, and
state the relevance of the evidence to the issues raised. Id. For IPR,
PGR, and CBM proceedings, a petitioner must also identify how the
construed claim is unpatentable over the relevant evidence.

   4. Covered Business Method/Technological Invention: A petitioner in
a CBM proceeding must demonstrate that the patent for which review is
sought is a covered business method patent. Proposed § 42.304(a).
Covered business method patents do not include patents for
technological inventions.
   The following claim drafting techniques would not typically render
a patent a technological invention:
   (a) Mere recitation of known technologies, such as computer
hardware, communication or computer networks, software, memory,
computer-readable storage medium, scanners, display devices or
databases, or specialized machines, such as an ATM or point of sale
device.
   (b) Reciting the use of known prior art technology to accomplish a
process or method, even if that process or method is novel and non-
obvious.
   (c) Combining prior art structures to achieve the normal, expected,
or predictable result of that combination.
   The following are examples of covered business method patents that
are subject to a CBM review proceeding:

   (a) A patent that claims a method for hedging risk in the field
of commodities trading.
   (b) A patent that claims a method for verifying validity of a
credit card transaction.

   The following are examples of patents that claim a technological
invention that would not be subject to a CBM review proceeding:

   (a) A patent that claims a novel and non-obvious hedging machine
for hedging risk in the field of commodities trading.
   (b) A patent that claims a novel and non-obvious credit card
reader for verifying the validity of a credit card transaction.
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   5. General Practice Tips:
   Claim Charts. While not required, a petitioner may file a claim
chart to explain clearly and succinctly what the petitioner believes a
claim means in comparison to something else, such as another claim, a
reference, or a specification. Where appropriate, claim charts can
streamline the process of identifying key features of a claim and
comparing those features with specific evidence. Claim charts submitted
as part of a petition or motion count towards applicable page limits. A
claim chart from another proceeding that is submitted as an exhibit,
however, will not count towards page limits.

C. Preliminary Patent Owner Response

   For IPR, PGR, and CBM proceedings, a patent owner may file a
preliminary response no later than two months after the grant of a
filing date. Proposed §§ 42.107(b) and 42.207(b). The
preliminary response may present evidence other than testimonial
evidence to demonstrate that no review should be instituted. Proposed
§§ 42.107(c) and 42.207(c).
   Potential preliminary responses include:
   (1) The petitioner is statutorily barred from pursuing a review.
   (2) The references asserted to establish that the claims are
unpatentable are not in fact prior art.
   (3) The prior art lacks a material limitation in all of the
independent claims.
   (4) The prior art teaches or suggests away from a combination that
the petitioner is advocating.
   (5) The petitioner's claim interpretation for the challenged claims
is unreasonable.
   (6) If a petition for post-grant review raises 35 U.S.C. 101
grounds, a brief explanation as to how the challenged claims are
directed to a patent-eligible invention.
   Where a patent owner seeks to expedite the proceeding, the patent
owner may file an election to waive the preliminary patent owner
response. Proposed §§ 42.107(b) and 42.207(b). No adverse
inference will be taken by such an election. Moreover, a patent owner
may file a statutory disclaimer of one or more challenged claims to
streamline the proceedings. Where no challenged claims remain, the
Board would terminate the proceeding. Where one or more challenged
claims remain, the Board's decision on institution would be based
solely on the remaining claims. See Sony v. Dudas, 2006 WL 1472462
(E.D.Va. 2006).

D. Institution of Review

   1. Statutory Threshold Requirements: Generally, the Director may
institute a proceeding where a petitioner meets the threshold
requirements, although each proceeding has a different threshold
requirement for institution. Each of the statutory threshold
requirements are summarized below.
   (a) Inter Partes Review: 35 U.S.C. 314(a), as amended, provides
that the Director may not authorize institution of an inter partes
review, unless the Director determines that the information presented
in the petition filed under 35 U.S.C. 311, as amended, and any response
filed under 35 U.S.C. 313, as amended, shows that there is a reasonable
likelihood that the petitioner would prevail with respect to at least
one of the claims challenged in the petition. The "reasonable
likelihood" standard is a somewhat flexible standard that allows the
judge room for the exercise of judgment.
   (b) Post-Grant Review: 35 U.S.C. 324(a) provides that the Director
may not authorize institution of a post-grant review, unless the
Director determines that the information presented in the petition
filed under 35 U.S.C. 321, if such information is not rebutted, would
demonstrate that it is more likely than not that at least one of the
claims challenged in the petition is unpatentable. 35 U.S.C. 324(b)
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 258 

provides that the determination required under 35 U.S.C. 324(a) may
also be satisfied by a showing that the petition raises a novel or
unsettled legal question that is important to other patents or patent
applications.
   (c) Covered Business Method Patent Review: Section 18(a)(1) of the
AIA provides that the transitional proceeding for covered business
method patents will be regarded as, and will employ the standards and
procedures of, a post-grant review under chapter 32 of title 35 United
States Code, subject to certain exceptions. Section 18(a)(1)(B) of the
Leahy-Smith America Invents Act specifies that a person may not file a
petition for a transitional proceeding with respect to a covered
business method patent, unless the person or person's real party in
interest or privy has been sued for infringement of the patent or has
been charged with infringement under that patent. A covered business
method patent means a patent that claims a method or corresponding
apparatus for performing data processing or other operations used in
the practice, administration, or management of a financial product or
service. Covered business method patents do not include patents for
technological inventions.
   (d) Derivation: 35 U.S.C. 135(a), as amended, provides that an
applicant for a patent may file a petition to institute a derivation
proceeding. 35 U.S.C. 135(a), as amended, provides that the petition must
state with particularity the basis for finding that a named inventor
in the earlier application derived the claimed invention from an inventor
named in the petitioner's application and, without authorization, filed
the earlier application. The petition must be filed within one year of
the first publication by the earlier applicant of a claim to the same
or substantially the same invention, must be made under oath, and must
be supported by substantial evidence. 35 U.S.C. 135(a), as amended,
also provides that the Director may institute a derivation proceeding,
if the Director determines that the petition demonstrates that the
standards for instituting a derivation proceeding are met.

   2. Considerations in Instituting a Review: The Board institutes the
trial on behalf of the Director. Proposed § 42.4(a). In instituting
the trial, the Board will consider whether or not a party has satisfied
the statutory institution requirements. As part of its consideration,
the Board may take into account the existence of another proceeding
before the Board under 35 U.S.C. 315(d), as amended, and whether the
same or substantially the same prior art or arguments were previously
presented to the Office under 35 U.S.C. 325(d).

   3. Content of Decision on Whether to Institute: In instituting a
trial, the Board will streamline the issues for final decision by
authorizing the trial to proceed only on the challenged claims for
which the threshold requirements for the proceeding have been met. The
Board will identify the grounds the trial will proceed upon on a claim-
by-claim basis. Any claim or issue not included in the authorization
for review is not part of the trial.
   The Board expects that a Scheduling Order (Appendix A) will be
provided concurrent with the decision to institute the proceeding. The
Scheduling Order will set due dates for taking action accounting for
the complexity of the proceeding but ensuring that the trial is
completed within one year of institution.
   Where no trial is instituted, a decision to that effect will be
provided. The Board expects that the decision will contain a short
statement as to why the requirements were not met, although this may
not be necessary in all cases. A party dissatisfied with a decision may
file a request for rehearing before the Board, but the Board's
determination on whether to institute a trial is final and
nonappealable. 35 U.S.C. 135(a) and 314(d), as amended, 35 U.S.C.
324(e); and proposed § 42.71(c).

E. Initial Conference Call (One Month After Instituting Trial)

   The Board expects to initiate a conference call within about one
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month from the date of institution of the trial to discuss the
Scheduling Order and any motions that the parties anticipate filing
during the trial. Generally, the Board would require a list of proposed
motions to be filed no later than two business days prior to the
conference call. An accurate motions list is necessary to provide the
Board and the opposing parties adequate notice to prepare for the
conference call and to plan for the proceeding. The Board's contested
cases experience demonstrates that discussing the proposed motions aids
the administration of justice by (1) helping the Board and counsel
adjust the schedule for taking action, (2) permitting the Board to
determine whether the listed motions are both necessary and sufficient
to resolve the issues raised, and (3) revealing the possibility that
there may be a dispositive issue that may aid the settlement of the
trial. Submission of a list would not preclude the filing of additional
motions not contained in the list. However, the Board may require prior
authorization to file an additional motion and the set times are not
likely to change as a consequence of the new motion.

F. Patent Owner Response

   For IPR, PGR, and CBM, the patent owner will be provided an
opportunity to respond to the petition once a trial has been
instituted. 35 U.S.C. 316(a)(8), as amended, and 35 U.S.C. 326(a)(8).
For a derivation proceeding, the applicant or patent owner alleged to
have derived the invention will be provided an opportunity to respond
to the petition once the trial has been instituted, App. A-2,
Scheduling Order.
   The response is filed as an opposition to the petition and is
subject to the page limits for oppositions. Proposed §§ 42.120
and 42.220. The response should identify all the involved claims that
are believed to be patentable and state the basis for that belief.
Additionally, the response should include any affidavits or additional
factual evidence sought to be relied upon and explain the relevance of
such evidence. As with the petition, the response may contain a claim
chart identifying key features of a claim and comparing those features
with specific evidence. Where the patent owner elects not to file a
response, the patent owner will arrange for a conference call with the
Board to discuss whether or not the patent owner is abandoning the
contest.

G. Amendments

   1. IPR, PGR, and CBM Amendments: Patent owners in IPR, PGR and CBM
may file amendments subject to certain conditions. Only one motion to
amend will be permitted, absent a joint request by the petitioner and
patent owner to materially advance settlement of the proceeding, or
upon the request of the patent owner for good cause showing. 35 U.S.C.
316(d)(1), as amended, and 35 U.S.C. 326(d)(1). Patent owners seeking
to amend their claims would identify their intent to file such a motion
in a conference call with the Board. During the call, the patent owner
will be expected to identify the number and general scope of substitute
claims that would be filed in the motion to amend. Proposed §§ 42.121(a)
and 42.221(a). A patent owner will not be required to identify a fully
developed claim set.

   2. Amendments in Derivation Proceedings: The filing of an amendment
by a petitioner or respondent in a derivation proceeding will be
authorized upon a showing of good cause. An example of good cause is
where the amendment materially advances settlement between the parties
or seeks to cancel claims. The Board expects, however, that requests to
cancel all of a party's disputed claims will be treated as a request
for adverse judgment.

   3. General Practice Tips on Amendments: Amendments are expected to
be filed at the due dates set for filing a patent owner response or
respondent opposition to a petition. For amendments sought later in the
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proceeding, a demonstration of good cause will be required. Amendments
filed late in the proceeding may impair a petitioner's ability to mount
a full response in time to meet the statutory deadline for the
proceeding. Hence, in evaluating good cause, the Board will take into
account the timing of the submission with requests made earlier in the
proceeding requiring less compelling reasons than would be required for
amendments later in the proceeding. Cancellation of claims, however,
will generally be permitted even late in the proceeding as will
amendments seeking to correct simple and obvious typographical error to
reduce the number of issues in dispute.
   Amendments should clearly state "original," "cancelled,"
"replaced by proposed substitute," or "proposed substitute for
original claim X."
   Amendments should clearly state where the specification and any
drawings disclose all the limitations in the proposed substitute claims.
If the Board is unable to determine how the specification and drawings
support the proposed substitute claims, entry of the amendment will not
be permitted.
   Amendments should clearly state the patentably distinct features
for proposed substitute claims. This will aid the Board in determining
whether the amendment narrows the claims and if the amendment is
responsive to the grounds of unpatentability involved in the trial.
   The number of substitute claims must be "reasonable." There is a
general presumption that only one substitute claim would be needed to
replace each challenged claim. This presumption may be rebutted by a
demonstration of need. The presumption balances the one-year timeline
for final decision against the patent owner's need to appropriately
define their invention.

H. Petitioner Opposition to Amendment

   A petitioner will be afforded an opportunity to fully respond to a
patent owner's amendment. The time for filing an opposition will
generally be set in a Scheduling Order. No authorization is needed to
file an opposition to an amendment. Petitioners may supplement evidence
submitted with their petition to respond to new issues arising from
proposed substitute claims. This includes the submission of new expert
declarations that are directed to the proposed substitute claims.

I. Petitioner Reply to Patent Owner Response and Reply to Opposition To
Amend

   A reply may only respond to arguments raised in the corresponding
opposition. Proposed § 42.23. While replies can help crystalize
issues for decision, a reply that raises a new issue or belatedly
presents evidence will not be considered and may be returned. The Board
will not attempt to sort proper from improper portions of the reply.
Examples of indications that a new issue has been raised in a reply
include new evidence necessary to make out a prima facie case for the
patentability or unpatentability of an original or proposed substitute
claim, and new evidence that could have been presented in a petition or
amendment.

J. Additional Motions

   There are many types of motions that may be filed in a proceeding
in addition to motions to amend. Examples of additional motions include
motions to exclude evidence, motions to seal, motions for joinder,
motions to file supplemental information, motions for judgment based on
supplemental information, motions for observations on cross-
examination, etc.
   Where a party believes it has a basis to request relief on a ground
not identified in the rules, the party should contact the Board and
arrange for a conference call to discuss the requested relief with the
judge handling the proceeding.

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K. Oral Argument

   Each party to a proceeding will be afforded an opportunity to
present their case before at least three members of the Board. The time
for requesting an oral argument is normally set in the Scheduling Order
but may be modified on a case-by-case basis.
   Generally, a petitioner to a hearing will go first followed by the
patent owner or respondent after which a rebuttal may be given by the
petitioner. The order may be reversed, e.g., where the only dispute is
whether the patent owner's proposed substitute claims overcome the
grounds for unpatentability set forth in the petition.
   Special equipment or needs. A party should advise the Board as soon
as possible before an oral argument of any special needs. Examples of
such needs include additional space for a wheelchair, an easel for
posters, or an overhead projector. Parties should not make assumptions
about the equipment the Board may have on hand. Such requests should be
directed in the first instance to a Board Trial Section paralegal at
(571) 272-9797.
   Demonstrative exhibits. The Board has found that elaborate
demonstrative exhibits are more likely to impede than help an oral
argument. The most effective demonstrative exhibits tend to be a
handout or binder containing the demonstrative exhibits. The pages of
each exhibit should be numbered to facilitate identification of the
exhibits during the hearing, particularly if the hearing is recorded.
   Live testimony. The Board does not expect live testimony at oral
argument.
   No new evidence and arguments. A party may rely upon evidence that
has been previously submitted in the proceeding and may only present
arguments relied upon in the papers previously submitted. No new
evidence or arguments may be presented at the oral hearing.

L. Settlement

   There are strong public policy reasons to favor settlement between
the parties to a proceeding. The Board will be available to facilitate
settlement discussions, and where appropriate, may require a settlement
discussion as part of the proceeding. The Board expects that a
proceeding will terminate after the filing of a settlement agreement,
unless the Board has already decided the merits of the proceeding.

M. Final Decision

   For IPR, PGR and CBM, the Board will enter a final written decision
not more than one year from the date a trial is instituted, except that
the time may be extended up to six months for good cause. The Board
expects that a final written decision will address the issues necessary
for resolving the proceedings.
   In the case of derivation proceedings, although not required by
statute, the Board expects to provide a final decision not more than
one year from the institution of the proceeding. The Board will provide
a final decision as to whether an inventor named in the earlier
application derived the claimed invention from an inventor named in the
petitioner's application and filed the earlier application claiming
such invention without authorization.

N. Rehearing Requests

   A party dissatisfied with a decision of the Board may file a
request for rehearing. Proposed § 42.71. The burden of showing that
a decision should be modified lies with the party challenging the
decision. The request must specifically identify all matters the party
believes the Board misapprehended or overlooked, and where each matter
was previously addressed in a motion, an opposition, or a reply.
Evidence not already of record at the time of the decision will not be
admitted absent a showing of good cause.

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Appendix A-1: Scheduling Order for Inter Partes Review, Post-Grant
Review, and Covered Business Method Patents Review (Based on the
Proposed Trial Rules)

A. Due Dates

   This order sets due dates for the parties to take action after
institution of the proceeding. The parties may stipulate different
dates for Due Dates 1 through 5 (earlier or later, but no later than
Due Date 6). A notice of the stipulation, specifically identifying
the changed due dates, must be promptly filed. The parties may not
stipulate an extension of Due Dates 6-7.
   In stipulating different times, the parties should consider the
effect of the stipulation on times to object to evidence (proposed
§ 42.64(b)(1)), to supplement evidence (proposed § 42.64(b)(2)),
to conduct cross examination, and to draft papers depending on the
evidence and cross examination testimony (see section B, below).

1. Due Date 1

   The patent owner is not required to file anything in response to
the petition. The patent owner may file -
   a. A response to the petition, and
   b. A motion to amend the patent, if authorized.
   Any response or amendment must be filed by Due Date 1. If the
patent owner elects not to file anything, the patent owner must
arrange a conference call with the parties and the Board.

2. Due Date 2

   Any reply to the patent owner's response and opposition to
amendment filed by petitioner under proposed § 42.23 must be
filed by this date.

3. Due Date 3

   The patent owner must file any reply to the petitioner's
opposition by this date.

4. Due Date 4

   a. The petitioner must file any motion for an observation on the
cross examination testimony of a reply witness (see section C,
below). Proposed § 42.20.
   b. Each party must file any motion to exclude evidence (proposed
§ 42.64(c)) and any request for oral argument (proposed § 42.70(a)).

5. Due Date 5

   a. The patent owner must file any response to a petitioner
observation on cross examination testimony.
   b. Each party must file any opposition to a motion to exclude.

6. Due Date 6

   Each party must file any reply for a motion to exclude.

B. Cross Examination

   Except as the parties might otherwise agree, for each due date -
   1. Cross examination begins after any supplemental evidence is
due (proposed § 42.64(b)).
   2. Cross examination ends five business days before the next due
date (proposed § 42.64(b)).

C. Motion for Observation on Cross Examination
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   A motion for observation on cross examination provides the
petitioner with a mechanism to draw the Board's attention to
relevant cross examination testimony of a reply witness, since no
further substantive paper is permitted after the reply. The
observation must be a concise statement of the relevance of the
precisely identified testimony to a precisely identified argument or
portion of an exhibit. Each observation should not exceed a single,
short paragraph. The patent owner may respond to the observation.
Any response must be equally concise and specific.


                               Due Date Appendix

Due Date 1                                 4 months.
Patent owner post-institution
   response to the petition
Patent owner post-institution
   motion to amend patent
Due Date 2                                 2 months.
Petitioner reply to patent
   owner response
Petitioner opposition to
   patent owner amendment
Due Date 3                                 1 month.
Patent owner reply to
   petitioner opposition
Due Date 4                                 3 weeks.
Petitioner motion for
   observation regarding cross
   examination of reply witness
Motion to exclude
Request for oral argument
Due Date 5                                 2 weeks.
Patent owner response to
   observation
Opposition to motion to exclude
Due Date 6                                 1 week.
Reply to opposition to motion
   to exclude
Due Date 7                                 Set on request.
Oral argument


Appendix A-2: Scheduling Order for Derivation Proceedings
(Based on the Proposed Trial Rules)

A. Due Dates

   This order sets due dates for the parties to take action in this
proceeding. The parties may stipulate different dates for Due Dates
1 through 5 (earlier or later, but not later than Due Date 6). A
notice of the stipulation, specifically identifying the changed due
dates, must be promptly filed. The parties may not stipulate an
extension of Due Dates 6-7.
   In stipulating different times, the parties should consider the
effect of the stipulation on times to object to evidence (proposed
§ 42.64 (b)(1)), to supplement evidence (proposed § 42.64(b)(2)),
to conduct cross examination, and to draft papers depending on the
evidence and cross examination testimony (see section B, below).

1. Due Date 1

   The respondent is not required to file anything in response to
the petition. The respondent may file -
   a. A response to the petition, and
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   b. A motion to amend, if authorized.
   Any such response or motion to amend must be filed by Due Date
1. If the respondent elects not to file anything, the respondent
must arrange a conference call with the parties and the Board.

2. Due Date 2

   The petitioner must file any reply to the respondent's response
and opposition to amendment.

3. Due Date 3

   The respondent must file any reply to the petitioner's
opposition by this date.

4. Due Date 4

   a. The petitioner must file any observation on the cross
examination testimony of a reply witness (see section C, below).
   b. Each party must file any motion to exclude evidence (proposed
§ 42.64(c)) and any request for oral argument (proposed § 42.70(a)).

5. Due Date 5

   a. The respondent must file any response to a petitioner
observation on cross examination testimony.
   b. Each party must file any opposition to a motion to exclude.

6. Due Date 6

   Each party must file any reply for a motion to exclude.

B. Cross Examination

   Except as the parties might otherwise agree, for each due date -
   1. Cross examination begins after any supplemental evidence is
due (proposed § 42.64(b)(2)).
   2. Cross examination ends five business days before the next due
date.

C. Motion for Observation on Cross Examination

   A motion for observation on cross examination provides the
petitioner with a mechanism to draw the Board's attention to
relevant cross examination testimony of a reply witness, since no
further substantive paper is permitted after the reply. The
observation must be a concise statement of the relevance of the
precisely identified testimony to a precisely identified argument or
portion of an exhibit. Each observation should not exceed a single,
short paragraph. The patent owner may respond to the observation. Any
response must be equally concise and specific.


                               Due Date Appendix

Due Date 1                                 4 months.
Respondent post-institution
   response to the petition
Respondent post-institution
   motion to amend
Due Date 2                                 2 months.
Petitioner reply to
   Respondent response
Petitioner opposition to
   Respondent amendment
Due Date 3                                 1 month.
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Respondent reply to
   petitioner opposition
Due Date 4                                 3 weeks.
Petitioner motion for
   observation regarding
   cross examination of
   reply witness
Motion to exclude
Request for oral argument
Due Date 5                                 2 weeks.
Respondent response to
   observation
Opposition to motion to exclude
Due Date 6                                 1 week.
Reply to opposition to motion to
   exclude
Due Date 7                                 Set on request.
Oral argument


Appendix B: Protective Order Guidelines
(Based on the Proposed Trial Rules)

   (a) Purpose. This document provides guidance on the procedures
for filing of motions to seal and the entry of protective orders in
proceedings before the Board. The protective order governs the
protection of confidential information contained in documents,
discovery, or testimony adduced, exchanged, or filed with the Board.
The parties are encouraged to agree on the entry of a stipulated
protective order. Absent such agreement, the default standing
protective order will be automatically entered.
   (b) Timing; lifting or modification of the Protective Order. The
terms of a protective order take effect upon the filing of a Motion
to Seal by a party, and remain in place until lifted or modified by
the Board either on the motion of a party for good cause shown or
sua sponte by the Board.
   (c) Protective Order to Govern Treatment of Confidential
Information. The terms of a protective order govern the treatment of
the confidential portions of documents, testimony, and other
information designated as confidential, as well as the filing of
confidential documents or discussion of confidential information in
any papers filed with the Board. The Board shall have the authority
to enforce the terms of the Protective Order, to provide remedies
for its breach, and to impose sanctions on a party and a party's
representatives for any violations of its terms.
   (d) Contents. The Protective Order shall include the following
terms:
   (1) Designation of Confidential Information. The producing party
shall have the obligation to clearly mark as "PROTECTIVE ORDER
MATERIAL" any documents or information considered to be
confidential under the Protective Order.
   (2) Persons Entitled to Access to Confidential Information. A
party receiving confidential information shall strictly restrict
access to that information to the following individuals who first
have signed and filed an Acknowledgement as provided herein:
   (A) Parties. Persons who are owners of a patent involved in the
proceeding and other persons who are named parties to the
proceeding.
   (B) Party Representatives. Representatives of record for a party
in the proceeding.
   (C) Experts. Retained experts of a party in the proceeding who
further certify in the Acknowledgement that they are not a
competitor to any party, or a consultant for, or employed by, such a
competitor with respect to the subject matter of the proceeding.
   (D) In-house counsel. In-house counsel of a party.
   (E) Other Employees of a Party. Employees, consultants, or other
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persons performing work for a party, other than in-house counsel and
in-house counsel's support staff, who sign the Acknowledgement,
shall be extended access to confidential information only upon
agreement of the parties or by order of the Board upon a motion
brought by the party seeking to disclose confidential information to
that person. The party opposing disclosure to that person shall have
the burden of proving that such person should be restricted from
access to confidential information.
   (F) The Office. Employees and representatives of the U.S. Patent
and Trademark Office who have a need for access to the confidential
information shall have such access without the requirement to sign
an Acknowledgement. Such employees and representatives shall include
the Director, members of the Board and staff, other Office support
personnel, court reporters, and other persons acting on behalf of
the Office.
   (G) Support Personnel. Administrative assistants, clerical
staff, court reporters, and other support personnel of the foregoing
persons who are reasonably necessary to assist those persons in the
proceeding. Such support personnel shall not be required to sign an
Acknowledgement, but shall be informed of the terms and requirements
of the Protective Order by the person they are supporting who
receives confidential information.
   (3) Protection of Confidential Information. Persons receiving
confidential information shall take reasonable care to maintain the
confidentiality of that information, including:
   (i) Maintaining such information in a secure location to which
persons not authorized to receive the information shall not have
access;
   (ii) Otherwise using reasonable efforts to maintain the
confidentiality of the information, which efforts shall be no less
rigorous than those the recipient uses to maintain the
confidentiality of information not received from the disclosing
party;
   (iii) Ensuring that support personnel of the recipient who have
access to the confidential information understand and abide by the
obligation to maintain the confidentiality of information received
that is designated as confidential; and
   (iv) Limiting the copying of confidential information to a
reasonable number of copies needed to conduct the proceeding and
maintaining a record of the locations of such copies.
   (4) Treatment of Confidential Information. Persons receiving
confidential information shall use the following procedures to
maintain confidentiality of documents and other information -
   (A) Documents and Information Filed With the Board.
   (i) A party may file documents or information with the Board
under seal, together with a non-confidential description of the
nature of the confidential information that is under seal and the
reasons why the information is confidential and should not be made
available to the public. The submission shall be treated as
confidential and remain under seal, unless upon motion of a party
and after a hearing on the issue, or sua sponte, the Board
determines that the documents or information does not qualify for
confidential treatment.
   (ii) Where confidentiality is alleged as to some but not all of the
information submitted to the Board, the submitting party shall file
confidential and non-confidential versions of its submission,
together with a Motion to Seal the confidential version setting
forth the reasons why the information redacted from the non-
confidential version is confidential and should not be made publicly
available. The non-confidential version of the submission shall
clearly indicate the locations of information that has been
redacted. The confidential version of the submission shall be filed
under seal. The redacted information shall remain under seal, unless
upon motion of a party and after a hearing on the issue, or sua
sponte, the Board determines that some or all of the redacted
information does not qualify for confidential treatment.
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   (B) Documents and Information Exchanged Among the Parties.
Information designated as confidential that is disclosed to another
party during discovery or other proceedings before the Board shall
be clearly marked as "PROTECTIVE ORDER MATERIAL" and shall be
produced in a manner that maintains its confidentiality.
   (5) Confidential Testimony. Any person subject to deposition in
a proceeding may, on the record at the deposition, preliminarily
designate the entirety of the person's testimony and all
transcriptions thereof as Confidential, pending further review.
Within 10 days of the receipt of the transcript of the deposition,
that person, or the person's representative, shall advise the
opposing party of those portions of the testimony to which a claim
of confidentiality is to be maintained, and the reasons in support
of that claim. Such portions shall be treated as confidential and
maintained under seal in any filings to the Board unless, upon
motion of a party and after a hearing on the issue, or sua sponte,
the Board determines that some or all of the redacted information
does not qualify for confidential treatment.
   (6) Other Restrictions Imposed By the Board. In addition to the
foregoing, the Board may, in its discretion, include other terms and
conditions in a Protective Order it enters in any proceeding.
   (7) Requirement of Acknowledgement. Any person receiving
confidential information during a proceeding before the Board shall,
prior to receipt of any confidential information, first sign an
Acknowledgement, under penalty of perjury, stating the following:
   (A) The person has read the Protective Order and understands its
terms;
   (B) The person agrees to be bound by the Protective Order and
will abide by its terms;
   (C) The person will use the confidential information only in
connection with that proceeding and for no other purpose;
   (D) The person shall only extend access to the confidential
information to support personnel, such as administrative assistants,
clerical staff, paralegals and the like, who are reasonably
necessary to assist him or her in the proceeding. The person shall
inform such support personnel of the terms and requirements of the
Protective Order prior to disclosure of any confidential information
to such support personnel and shall be personally responsible for
their compliance with the terms of the Protective Order; and
   (E) The person agrees to submit to the jurisdiction of the
Office for purposes of enforcing the terms of the Protective Order
and providing remedies for its breach.
   (e) Filing of Executed Protective Order. The party filing a
Motion to Seal shall include with its supporting papers a copy of a
proposed Protective Order, signed by the party or its representative
of record, certifying that the party accepts and agrees to the terms
of the Protective Order. Prior to the receipt of confidential
information, any other party to the proceeding also shall file a
copy of the proposed Protective Order, signed by the party or its
representative of record, certifying that the party accepts and
agrees to the terms of the proposed Protective Order. The proposed
Protective Order shall remain in effect until superseded by a
Protective Order entered by the Board.
   (f) Duty To Retain Acknowledgements. Each party to the
proceeding shall maintain a signed Acknowledgement from each person
acting on its behalf who obtains access to confidential information
after signing an Acknowledgement, as set forth herein, and shall
produce such Acknowledgements to the Office upon request.
   (g) Motion to Seal. A party may file an opposition to the motion
that may include a request that the terms of the proposed Protective
Order be modified including limiting the persons who are entitled to
access under the Order. Any such opposition shall state with
particularity the grounds for modifying the proposed Protective
Order. The party seeking the modification shall have the burden of
proving that such modifications are necessary. While the motion is
pending, no disclosure of confidential information shall be made to
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the persons for whom disclosure is opposed, but the filing of the
motion shall not preclude disclosure of the confidential information
to persons for whom disclosure is not opposed and shall not toll the
time for taking any action in the proceeding.
   (h) Other Proceedings. Counsel for a party who receives
confidential information in a proceeding will not be restricted by
the Board from representing that party in any other proceeding or
matter before the Office. Confidential information received in a
proceeding may not be used in any other PTO proceeding in which the
providing party is not also a party.
   (i) Disposal of Confidential Information. Within one month after
final termination of a proceeding, including any appeals, or within
one month after the time for appeal has expired, each party shall
assemble all copies of all confidential information it has received,
including confidential information provided to its representatives
and experts, and shall destroy the confidential information and
provide a certification of destruction to the party who produced the
confidential information.

DEFAULT PROTECTIVE ORDER

   The following Standing Protective Order will be automatically
entered into the proceeding upon the filing of a petition for review
or institution of a derivation:

Standing Protective Order

   This standing protective order governs the treatment and filing
of confidential information, including documents and testimony.
   1. Confidential information shall be clearly marked "PROTECTIVE
ORDER MATERIAL."
   2. Access to confidential information is limited to the
following individuals who have executed the acknowledgment appended
to this order:
   (A) Parties. Persons who are owners of a patent involved in the
proceeding and other persons who are named parties to the
proceeding.
   (B) Party Representatives. Representatives of record for a party
in the proceeding.
   (C) Experts. Retained experts of a party in the proceeding who
further certify in the Acknowledgement that they are not a
competitor to any party, or a consultant for, or employed by, such a
competitor with respect to the subject matter of the proceeding.
   (D) In-house counsel. In-house counsel of a party.
   (E) Other Employees of a Party. Employees, consultants or other
persons performing work for a party, other than in-house counsel and
in-house counsel's support staff, who sign the Acknowledgement shall
be extended access to confidential information only upon agreement
of the parties or by order of the Board upon a motion brought by the
party seeking to disclose confidential information to that person.
The party opposing disclosure to that person shall have the burden
of proving that such person should be restricted from access to
confidential information.
   (F) The Office. Employees and representatives of the Office who
have a need for access to the confidential information shall have
such access without the requirement to sign an Acknowledgement. Such
employees and representatives shall include the Director, members of
the Board and their clerical staff, other support personnel, court
reporters, and other persons acting on behalf of the Office.
   (G) Support Personnel. Administrative assistants, clerical
staff, court reporters and other support personnel of the foregoing
persons who are reasonably necessary to assist those persons in the
proceeding shall not be required to sign an Acknowledgement, but
shall be informed of the terms and requirements of the Protective
Order by the person they are supporting who receives confidential
information.
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   3. Persons receiving confidential information shall use
reasonable efforts to maintain the confidentiality of the
information, including:
   (A) Maintaining such information in a secure location to which
persons not authorized to receive the information shall not have
access;
   (B) Otherwise using reasonable efforts to maintain the
confidentiality of the information, which efforts shall be no less
rigorous than those the recipient uses to maintain the
confidentiality of information not received from the disclosing
party;
   (C) Ensuring that support personnel of the recipient who have access
to the confidential information understand and abides by the obligation
to maintain the confidentiality of information received that is
designated as confidential; and
   (D) Limiting the copying of confidential information to a
reasonable number of copies needed for conduct of the proceeding and
maintaining a record of the locations of such copies.
   4. Persons receiving confidential information shall use the
following procedures to maintain the confidentiality of the
information:
   (A) Documents and Information Filed With the Board.
   (i) A party may file documents or information with the Board
under seal, together with a non-confidential description of the
nature of the confidential information that is under seal and the
reasons why the information is confidential and should not be made
available to the public. The submission shall be treated as
confidential and remain under seal, unless, upon motion of a party
and after a hearing on the issue, or sua sponte, the Board
determines that the documents or information does not qualify for
confidential treatment.
   (ii) Where confidentiality is alleged as to some but not all of
the information submitted to the Board, the submitting party shall
file confidential and non-confidential versions of its submission,
together with a Motion to Seal the confidential version setting
forth the reasons why the information redacted from the non-
confidential version is confidential and should not be made
available to the public. The nonconfidential version of the
submission shall clearly indicate the locations of information that
has been redacted. The confidential version of the submission shall
be filed under seal. The redacted information shall remain under
seal unless, upon motion of a party and after a hearing on the
issue, or sua sponte, the Board determines that some or all of the
redacted information does not qualify for confidential treatment.
   (B) Documents and Information Exchanged Among the Parties.
   Information designated as confidential that is disclosed to
another party during discovery or other proceedings before the Board
shall be clearly marked as "PROTECTIVE ORDER MATERIAL" and shall
be produced in a manner that maintains its confidentiality.
   (k) Standard Acknowledgement of Protective Order. The following
form may be used to acknowledge the protective orders and gain
access to information covered by a protective order:

[CAPTION]

Standard Acknowledgment for Access to Protective Order Material

   I __________________________________ , affirm that I have read the
Protective Order; that I will abide by its terms; that I will use
the confidential information only in connection with this proceeding
and for no other purpose; that I will only allow access to support
staff who are reasonably necessary to assist me in this proceeding;
that prior to any disclosure to such support staff I informed or
will inform them of the requirements of the Standing Protective
Order; that I am personally responsible for the requirements of the
terms of the Standing Protective Order and I agree to submit to the
jurisdiction of the Office and the United States District Court for
the Eastern District of Virginia for purposes of enforcing the terms
of the Protective Order and providing remedies for its breach.

[Signature]

January 31, 2012                                            DAVID J. KAPPOS
                  Under Secretary of Commerce for Intellectual Property and
                  Director of the United States Patent and Trademark Office
Top of Notices Top of Notices March 13, 2012 US PATENT AND TRADEMARK OFFICE Print This Notice 1376 OG 270 

Rules of Practice for Trials Before the Patent Trial and Appeal Board and Judicial Review of Patent Trial and Appeal Board Decisions
                            DEPARTMENT OF COMMERCE
                          Patent and Trademark Office
                            37 CFR Parts 42 and 90
                         [Docket No. PTO-P-2011-0082]
                                RIN 0651-AC70

                         Rules of Practice for Trials
                 Before the Patent Trial and Appeal Board and
          Judicial Review of Patent Trial and Appeal Board Decisions

AGENCY: United States Patent and Trademark Office, Commerce.

ACTION: Notice of proposed rulemaking.

SUMMARY: The United States Patent and Trademark Office (Office or
USPTO) proposes new rules of practice to implement the provisions of
the Leahy-Smith America Invents Act that provide for trials before the
Patent Trial and Appeal Board (Board). The proposed rules would provide
a consolidated set of rules relating to Board trial practice for inter
partes review, post-grant review, the transitional program for covered
business method patents, and derivation proceedings. The proposed rules
would also provide a consolidated set of rules to implement the
provisions of the Leahy-Smith America Invents Act related to seeking
judicial review of Board decisions.

DATES: The Office solicits comments from the public on this proposed
rulemaking. Written comments must be received on or before April 9,
2012 to ensure consideration.

ADDRESSES: Comments should be sent by electronic mail message over the
Internet addressed to: patent_trial_rules@uspto.gov. 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 Michael Tierney, 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 eRulemaking Portal.
   Although comments may be submitted by postal mail, the Office
prefers to receive comments by electronic mail message over the
Internet because sharing comments with the public is more easily
accomplished. Electronic comments are preferred to be submitted in
plain text, but also may be submitted in ADOBE® portable
document format or MICROSOFT WORD® format. Comments not
submitted electronically should be submitted on paper in a format that
facilitates convenient digital scanning into ADOBE® portable
document format.
   The comments will be available for public inspection at the Board
of Patent Appeals and Interferences, 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). Because comments will be made available for
public inspection, information that the submitter does not desire to
make public, such as an address or phone number, should not be included
in the comments.

FOR FURTHER INFORMATION CONTACT: Michael Tierney, Lead Administrative
Patent Judge, Scott Boalick, Lead Administrative Patent Judge, Robert
Clarke, Administrative Patent Judge, and Joni Chang, Administrative
Patent Judge, Board of Patent Appeals and Interferences, by telephone
at (571) 272-9797.

SUPPLEMENTARY INFORMATION: On September 16, 2011, the Leahy-Smith
America Invents Act was enacted into law (Pub. L. 112-29, 125 Stat. 284
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 271 

(2011)). The purpose of the Leahy-Smith America Invents Act and these
proposed regulations is to establish a more efficient and streamlined
patent system that will improve patent quality and limit unnecessary
and counterproductive litigation costs. The preamble of this notice
sets forth in detail the procedures by which the Board will conduct
trial proceedings. The USPTO is engaged in a transparent process to
create a timely, cost-effective alternative to litigation. Moreover,
the rulemaking process is designed to ensure the integrity of the trial
procedures. See 35 U.S.C. 316(b), as amended, and 35 U.S.C. 326(b). The
proposed rules would provide a consolidated set of rules relating to
Board trial practice for inter partes review, post-grant review, the
transitional program for covered business method patents, and
derivation proceedings. See 35 U.S.C. 316(b), as amended, and 35 U.S.C.
326(b).
   This notice proposes rules to implement the provisions of the
Leahy-Smith America Invents Act that provide for trials to be conducted
by the Board. In particular, the proposed rules would provide a
consolidated set of rules relating to Board trial practice for inter
partes review, post-grant review, derivation proceedings, and the
transitional program for covered business method patents by adding a
new part 42 including a new subpart A to title 37 of the Code of
Federal Regulations. The proposed rules would also provide a
consolidated set of rules to implement the provisions of the Leahy-
Smith America Invents Act related to seeking judicial review of Board
decisions by adding a new part 90 to title 37 of the Code of Federal
Regulations.
   Additionally, the Office in separate rulemakings proposes to add a
new subpart B to 37 CFR part 42 (RIN 0651-AC71) to provide rules
specific to inter partes review, a new subpart C to 37 CFR part 42 (RIN
0651-AC72) to provide rules specific to post-grant review, a new
subpart D to 37 CFR part 42 (RIN 0651-AC73; RIN 0651-AC75) to provide
rules specific to the transitional program for covered business method
patents, and a new subpart E to 37 CFR part 42 (RIN 0651-AC74) to
provide rules specific to derivation proceedings. For the proposed
rules, the Office also developed a Trial Practice Guide (which will be
revised accordingly when the Office implements the final rules). The
notices of proposed rulemaking and the Trial Practice Guide are
published in this issue and the next issue (February 10, 2012) of the
Federal Register.
   The instant notice refers to the proposed rules in subparts B
through E of part 42 set forth in the other notices. Moreover, rather
than repeating the statutory provisions set forth in the Leahy-Smith
America Invents Act for the implementation of inter partes review,
post-grant review, transitional program covered business method
patents, and derivation that are provided in the other notices of
proposed rulemaking, the instant notice only summarizes the provisions
related to the Board and judicial review of Board decisions that are
not provided in the other notices.

Patent Trial and Appeal Board

   Section 7 of the Leahy-Smith America Invents Act amends 35 U.S.C. 6
and provides for the constitution and duties of the Patent Trial and
Appeal Board. 35 U.S.C. 6(a), as amended, provides that the Patent
Trial and Appeal Board members will include the Director, Deputy
Director, Commissioner for Patents, Commissioner for Trademarks, and
administrative patent judges. 35 U.S.C. 6(a), as amended, further
provides that "administrative patent judges shall be persons of
competent legal knowledge and scientific ability and are appointed by
the Secretary, in consultation with the Director." 35 U.S.C. 6(b), as
amended, specifies that the duties of the Patent Trial and Appeal Board
are to: (1) Review adverse decisions of examiners upon an application
for patent; (2) review appeals of reexaminations pursuant to section
134(b); (3) conduct derivation proceedings pursuant to 35 U.S.C. 135;
and (4) conduct inter partes reviews and post-grant reviews pursuant to
chapters 31 and 32 of title 35, United States Code. Further, § 7 of
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the Leahy-Smith America Invents Act amends 35 U.S.C. 6 by adding
paragraphs (c) and (d). New paragraph (c) of 35 U.S.C. 6 provides that
each appeal, derivation proceeding, post-grant review including covered
business method patent review, and inter partes review shall be heard
by at least 3 members of the Board, who shall be designated by the
Director.

Judicial Review of Patent Trial and Appeal Board Decisions

   The Leahy-Smith America Invents Act amends title 35, United States
Code, to provide for certain changes to the provisions for judicial
review of Board decisions, such as amending 35 U.S.C. 134, 141, 145,
146, and 306 to change the Board's name to "Patent Trial and Appeal
Board" and to provide for judicial review of the final decisions of
the Board in inter partes reviews, post-grant reviews, covered business
method patent reviews, and derivation proceedings. The Leahy-Smith
America Invents Act also revises the provisions related to filing an
appeal or commencing a civil action in interferences under 35 U.S.C.
141 or 146, respectively.
   In particular, § 3(j) of the Leahy-Smith America Invents Act
eliminates references to interferences. Section 3(j)(1) of the Leahy-
Smith America Invents Act amends each of 35 U.S.C. 145 and 146 by
striking the phrase "Board of Patent Appeals and Interferences" each
place it appears and inserting "Patent Trial and Appeal Board."
Section (3)(j)(2)(A) of the Leahy-Smith America Invents Act amends 35
U.S.C. 146 by: (i) Striking "an interference" and inserting "a
derivation proceeding;" and (ii) striking "the interference" and
inserting "the derivation proceeding." Section (3)(j)(3) of the
Leahy-Smith America Invents Act amends the section heading for 35
U.S.C. 134 to read as follows: "§ 134. Appeal to the Patent Trial
and Appeal Board." Section (3)(j)(4) of the Leahy-Smith America
Invents Act amends the section heading for 35 U.S.C. 146 to read as
follows: "§ 146. Civil action in case of derivation proceeding."
Section (3)(j)(6) of the Leahy-Smith America Invents Act amends the
item relating to 35 U.S.C. 146 in the table of sections for chapter 13
of title 35, United States Code, to read as follows: "146. Civil
action in case of derivation proceeding."
   Section 6(f)(3)(C) of the Leahy-Smith America Invents Act provides
that the authorization to appeal or have remedy from derivation
proceedings in 35 U.S.C. 141(d) and 35 U.S.C. 146, as amended, and the
jurisdiction to entertain appeals from derivation proceedings under 28
U.S.C. 1295(a)(4)(A), as amended, shall be deemed to extend to any
final decision in an interference that is commenced before the
effective date (the date that is one year after the enactment date) and
that is not dismissed pursuant to § 6(f)(3)(A) of the Leahy-Smith
America Invents Act.
   Section 6(h)(2)(A) of the Leahy-Smith America Invents Act amends 35
U.S.C. 306 by striking "145" and inserting "144."
   Section 7(c)(1) of the Leahy-Smith America Invents Act amends 35
U.S.C. 141, entitled "Appeal to Court of Appeals for the Federal
Circuit." 35 U.S.C. 141(a), as amended, will provide that an applicant
who is dissatisfied with the final decision in an appeal to the Patent
Trial and Appeal Board under 35 U.S.C. 134(a) may appeal the Board's
decision to the United States Court of Appeals for the Federal Circuit.
35 U.S.C. 141(a), as amended, will further provide that, by filing an
appeal to the United States Court of Appeals for the Federal Circuit,
the applicant waives his or her right to proceed under 35 U.S.C. 145.
   Section 7(c)(1) of the Leahy-Smith America Invents Act amends 35
U.S.C. 141(b) to make clear that a patent owner who is dissatisfied
with the final decision in an appeal of a reexamination to the Patent
Trial and Appeal Board under 35 U.S.C. 134(b) may appeal the Board's
decision only to the United States Court of Appeals for the Federal
Circuit.
   Section 7(c)(1) of the Leahy-Smith America Invents Act amends 35
U.S.C. 141(c) to provide that a party to an inter partes review or a
post-grant review who is dissatisfied with the final written decision
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 273 

of the Patent Trial and Appeal Board under 35 U.S.C. 318(a) or 328(a)
may appeal the Board's decision only to the United States Court of
Appeals for the Federal Circuit.
   Section 7(c)(1) of the Leahy-Smith America Invents Act amends 35
U.S.C. 141(d) to provide that a party to a derivation proceeding who is
dissatisfied with the final decision of the Patent Trial and Appeal
Board in the proceeding may appeal the decision to the United States
Court of Appeals for the Federal Circuit, but such appeal shall be
dismissed if any adverse party to such derivation proceeding, within 20
days after the appellant has filed notice of appeal in accordance with
35 U.S.C. 142, files notice with the Director that the party elects to
have all further proceedings conducted as provided in 35 U.S.C. 146, as
amended. 35 U.S.C. 141(d), as amended, will also provide that if the
appellant does not, within 30 days after the filing of such notice by
the adverse party, file a civil action under 35 U.S.C. 146, the Board's
decision shall govern the further proceedings in the case.
   Section 7(c)(2) of the Leahy-Smith America Invents Act amends 28
U.S.C. 1295(a)(4)(A) to read as follows:

   "(A) the Patent Trial and Appeal Board of the United States
Patent and Trademark Office with respect to a patent application,
derivation proceeding, reexamination, post-grant review, or inter
partes review under title 35, at the instance of a party who
exercised that party's right to participate in the applicable
proceeding before or appeal to the Board, except that an applicant
or a party to a derivation proceeding may also have remedy by civil
action pursuant to section 145 or 146 of title 35; an appeal under
this subparagraph of a decision of the Board with respect to an
application or derivation proceeding shall waive the right of such
applicant or party to proceed under section 145 or 146 of title
35;"

   Section 7(c)(3) of the Leahy-Smith America Invents Act amends 35
U.S.C. 143 by striking the third sentence and inserting the following:

   In an ex parte case, the Director shall submit to the court in
writing the grounds for the decision of the Patent and Trademark
Office, addressing all of the issues raised in the appeal. The
Director shall have the right to intervene in an appeal from a
decision entered by the Patent Trial and Appeal Board in a
derivation proceeding under section 135 or in an inter partes or
post-grant review under chapter 31 or 32

   Section 7(c)(3) of the Leahy-Smith America Invents Act further
amends 35 U.S.C. 143 by striking the last sentence.
   Section 7(e) of the Leahy-Smith America Invents Act provides that
the amendments made by § 7 of the Leahy-Smith America Invents Act
shall take effect upon the expiration of the 1-year period beginning on
the date of the enactment of the Leahy-Smith America Invents Act and
shall apply to proceedings commenced on or after that effective date,
with the following exceptions. First, that the extension of
jurisdiction to the United States Court of Appeals for the Federal
Circuit to entertain appeals of decisions of the Patent Trial and
Appeal Board in reexaminations under the amendment made by § 7(c)(2)
shall be deemed to take effect on the date of the enactment of
the Leahy-Smith America Invents Act and shall extend to any decision of
the Board of Patent Appeals and Interferences with respect to a
reexamination that is entered before, on, or after the date of the
enactment of this Act. Second, that the provisions of 35 U.S.C. 6, 134,
and 141, in effect on the day before the effective date of the
amendments made by § 7 of the Leahy-Smith America Invents Act shall
continue to apply to inter partes reexaminations requested under 35
U.S.C. 311 before such effective date. Third, that the Patent Trial and
Appeal Board may be deemed to be the Board of Patent Appeals and
Interferences for purposes of appeals of inter partes reexaminations
requested under 35 U.S.C. 311 before the effective date of the
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amendments made by § 7 of the Leahy-Smith America Invents Act. And
finally, that the Director's right under the fourth sentence of 35
U.S.C. 143, as amended by § 7(c)(3) of the Leahy-Smith America
Invents Act, to intervene in an appeal from a decision entered by the
Patent Trial and Appeal Board shall be deemed to extend to inter partes
reexaminations requested under 35 U.S.C. 311 before the effective date
of the amendments made by § 7 of the Leahy-Smith America Invents
Act.
   Section 9(a) of the Leahy-Smith America Invents Act amends 35
U.S.C. 32, 145, 146, 154(b)(4)(A), and 293 by striking "United States
District Court for the District of Columbia" each place that term
appears and inserting "United States District Court for the Eastern
District of Virginia." Section 9(b) of the Leahy-Smith America Invents
Act provides that amendments made by § 9 of the Leahy-Smith America
Invents Act shall take effect on the date of the enactment of this Act
and shall apply to any civil action commenced on or after that date.

Discussion of Specific Rules

   The proposed rules would provide a consolidated set of rules
relating to Board trial practice for inter partes review, post-grant
review, derivation proceedings, and the transitional program for
covered business method patents by adding a new part 42 including a new
subpart A to title 37 of the Code of Federal Regulations. Interference
proceedings would not be covered by a new part 42 and the rules in part
41 governing contested cases and interferences would continue to remain
in effect so as to not disrupt ongoing interference proceedings.
Additionally, the proposed rules would also provide a consolidated set
of rules to implement the provisions of the Leahy-Smith America Invents
Act relating to filing appeals from Board decisions by adding a new
part 90 to title 37 of Code of Federal Regulations.
   Title 37 of the Code of Federal Regulations, Parts 42 and 90, are
proposed to be added as follows:

Part 42 - Trial Practice Before the Patent Trial and Appeal Board

General

   Section 42.1: Proposed § 42.1 would set forth general policy
considerations for part 42.
   Proposed § 42.1(a) would define the scope of the rules.
   Proposed § 42.1(b) would provide a rule of construction for all
the rules in proposed part 42. The proposed rule would mandate that all
the Board's rules be construed to achieve the just, speedy, and
inexpensive resolution of Board proceedings. This proposed rule
reflects considerations identified in 35 U.S.C. 316(b) and 326(b),
which state that the Office is to take into account the integrity of
the patent system, the efficient administration of the Office, and the
ability of the Office to complete timely the proceedings in
promulgating regulations.
   Proposed § 42.1(c) would require that decorum be exercised in
Board proceedings, including dealings with opposing parties. Board
officials would be similarly expected to treat parties with courtesy
and decorum.
   Proposed § 42.1(d) would provide that the default evidentiary
standard for each issue in a Board proceeding is a preponderance of the
evidence. This proposed rule implements the statute, which directs that
unpatentability issues must be proven by a preponderance of the
evidence. 35 U.S.C. 316(e), as amended, and 35 U.S.C. 326(e). The
proposed rule is also consistent with 35 U.S.C. 135(b), which provides
that the Director shall establish regulations requiring sufficient
evidence to prove and rebut a claim of derivation. See Price v. Symsek,
988 F.2d 1187, 1193 (Fed. Cir. 1993).

   Section 42.2: Proposed § 42.2 would set forth definitions for
Board proceedings under proposed part 42.
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 275 

   The proposed definition of affidavit would provide that affidavit
means affidavits or declarations under § 1.68. The proposed
definition also provides that a transcript of an ex parte deposition or
a declaration under 28 U.S.C. 1746 may be used as an affidavit.
   The proposed definition of Board would rename "the Board of Patent
Appeals and Interferences" to "the Patent Trial and Appeal Board."
The proposed definition would also provide that Board means a panel of
the Board or a member or employee acting with the authority of the
Board, consistent with 35 U.S.C. 6(b), as amended.
   The proposed definition of business day would provide that business
day means a day other than a Saturday, Sunday, or Federal holiday
within the District of Columbia.
   The proposed definition of confidential information would provide
that confidential information means trade secret or other confidential
research, development or commercial information. The proposed
definition would be consistent with Federal Rule of Civil Procedure
26(c)(1)(G), which provides for protective orders for trade secret or
other confidential research, development, or commercial information.
   The proposed definition of final would provide that final means
final for purposes of judicial review. The proposed definition would
also provide that a decision is final only if it disposes of all
necessary issues with regard to the party seeking judicial review, and
does not indicate that further action is required.
   The proposed definition of hearing would make it clear that a
hearing is a consideration of the issues involved in the trial.
   The proposed definition of involved would provide that involved
means an application, patent, or claim that is the subject of the
proceeding.
   The proposed definition of judgment would provide that judgment
means a final written decision by the Board. The proposed definition is
consistent with the requirement under 35 U.S.C. 318(a) and 328(a), as
amended, that the Board issue final written decisions for reviews that
are instituted and not dismissed. The proposed definition is also
consistent with 35 U.S.C. 135(d), as amended, which provides for final
decisions of the Board in derivation proceedings.
   The proposed definition of motion would clarify that motions are
requests for remedies but that the term motion does not include
petitions seeking to institute a trial.
   The proposed definition of Office would provide that Office means
the United States Patent and Trademark Office.
   The proposed definition of panel would provide that a panel is at
least three members of the Board. The proposed definition is consistent
with 35 U.S.C. 6(c), as amended, that each derivation proceeding, inter
partes review, post-grant review, covered business method patent review
proceeding shall be heard by at least three members of the Board.
   The proposed definition of party would include at least the
petitioner and the patent owner, as well as any applicant in a
derivation proceeding.
   The proposed definition of petition would provide that a petition
is a request that a trial be instituted and is consistent with the
requirements of 35 U.S.C. 135(a) and 311, as amended, 35 U.S.C. 321.
   The proposed definition of petitioner would provide that a
petitioner is a party requesting a trial be instituted. This proposed
definition is consistent with the requirements of 35 U.S.C. 135(a) and
311(a), as amended, and 35 U.S.C. 321(a), which provide that persons
seeking the institution of a trial may do so by filing a petition.
   The proposed definition of preliminary proceeding would provide
that a preliminary proceeding begins with the filing of a petition for
instituting a trial and ends with a written decision as to whether a
trial will be instituted.
   The proposed definition of proceeding would provide that a
proceeding means a trial or preliminary proceeding. This proposed
definition would encompass both the portion of the proceeding that
occurs prior to institution of a trial and the trial itself.
   The proposed definition of rehearing would provide that rehearing
means reconsideration.
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   The proposed definition of trial would provide that a trial is a
contested case instituted by the Board based upon a petition. This
proposed definition would encompass all contested cases before the
Board, except for interferences. The proposed definition would exclude
interferences so that interferences would continue, without disruption,
to use the rules provided in part 41. The existence of a contested case
would be a predicate for authorizing a subpoena under 35 U.S.C. 24. As
with part 41, inter partes reexaminations under 35 U.S.C. 134(c) are
not considered contested cases for the purposes of proposed part 42.
Similarly, written requests to make a settlement agreement available
would not be considered contested cases.

   Section 42.3: Proposed § 42.3 would set forth the jurisdiction
of the Board in a Board proceeding.
   Proposed § 42.3(a) would provide the Board with jurisdiction
over applications and patents involved in a Board proceeding. This is
consistent with 35 U.S.C. 6(b), as amended, which provides that the
Board is to conduct derivation proceedings, inter partes reviews, and
post-grant reviews. Additionally, the proposed rule is consistent with
the Board's role in conducting the transitional program for covered
business method patent reviews pursuant to § 18 of the Leahy-Smith
America Invents Act, as covered business method patent reviews are
subject to 35 U.S.C. 326(c), which provides that the Board conduct the
review.
   Proposed § 42.3(b) would provide that a petition to institute a
trial must be filed with the Board in a timely manner.

   Section 42.4: Proposed § 42.4 would provide for notice of
trial.
   Proposed § 42.4(a) would specifically delegate the
determination to institute a trial to an administrative patent judge.
   Proposed § 42.4(b) would provide that the Board will send a
notice of a trial to every party to the proceeding.
   Proposed § 42.4(c) would provide that the Board may authorize
additional modes of notice. Note that the failure to maintain a current
correspondence address may result in adverse consequences. Ray v.
Lehman, 55 F.3d 606, 610 (Fed. Cir. 1995) (finding notice of
maintenance fee provided by the Office to an obsolete, but not updated,
address of record to have been adequate).

   Section 42.5: Proposed § 42.5 would set forth the conduct of
the trial.
   Proposed Sec. § 42.5(a) and (b) would permit administrative
patent judges wide latitude in administering the proceedings to balance
the ideal of precise rules against the need for flexibility to achieve
reasonably fast, inexpensive, and fair proceedings. The decision to
waive a procedural requirement, for example default times for taking
action, would be committed to the discretion of the administrative
patent judge. By permitting the judges to authorize relief under parts
1, 41, and 42, the proposed rule avoids delay and permits related
issues to be resolved in the same proceeding in a uniform and efficient
manner.
   Proposed § 42.5(c) would provide that the Board may set times
by order. The proposed rule also provides that good cause must be shown
for extensions of time and to excuse late actions. Late action will also
be excused by the Board if it concludes that doing so is in the interests
of justice. This proposed requirement to show good cause to extend times
and to file belated papers is consistent with the requirements of 35 U.S.C.
316(a)(11), as amended, and 35 U.S.C. 326(a)(11), which provide that
the Board issue a final decision not less than 1 year after institution
of the review, extendable for good cause shown. The proposed rule is
also consistent with 35 U.S.C. 135(b), as amended, which provides that
the Director shall prescribe regulations setting forth standards for
the conduct of derivation proceedings.
   Proposed § 42.5(d) would prohibit ex parte communications about
a proceeding with a Board member or Board employee actually conducting
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the proceeding. Under the proposed rule, the initiation of an ex parte
communication could result in sanctions against the initiating party.
The prohibition would include communicating with any member of a panel
acting in the proceeding or seeking supervisory review in a proceeding
without including the opposing party in the communication. In general,
under these proposed rules, it would be wisest to avoid substantive
discussions of a pending trial with a Board member or Board employee.
The prohibition on ex parte communications would not extend to: (1)
Ministerial communications with support staff (for instance, to arrange
a conference call); (2) hearings in which opposing counsel declines to
participate; (3) informing the Board in one proceeding of the existence
or status of a related Board proceeding; or (4) reference to a pending
case in support of a general proposition (for instance, citing a
published opinion from a pending case or referring to a pending case to
illustrate a systemic problem).

   Section 42.6: Proposed § 42.6 would set forth the procedure for
filing documents, including exhibits, and service.
   Proposed § 42.6(a) would provide guidance for the filing of
papers. Under proposed § 42.6(a), papers to be filed would be
required to meet standards similar to those required in patent
prosecution, § 1.52(a), and in the filings at the Federal Circuit
under Fed. R. App. P. 32. The proposed prohibition against
incorporation by reference would minimize the chance that an argument
would be overlooked and would eliminate abuses that arise from
incorporation and combination. In DeSilva v. DiLeonardi, 181 F.3d 865,
866-67 (7th Cir. 1999), the court rejected "adoption by reference" as
a self-help increase in the length of the brief and noted that
incorporation is a pointless imposition on the court's time as it
requires the judges to play archeologist with the record. The same
rationale applies to Board proceedings. Cf. Globespanvirata, Inc. v.
Tex. Instruments, Inc., 2005 WL 3077915, *1 (D. N.J. 2005) (Defendants
provided cursory statements in motion and sought to make their case
through incorporation of expert declaration and a claim chart.
Incorporation by reference of argument not in motion was held to be a
violation of local rules governing page limitations and was not
permitted by the court); S. Indus., Inc. v. JL Audio, Inc., 29 F. Supp.
2d 878, 881-82 (N.D. Ill. 1998) (Parties should not use line spacing,
font size, or margins to evade page limits).
   Proposed § 42.6(b) would set electronic filing as the default
manner in which documents in a proceeding are filed with the Board. The
procedures for electronic filings in the proposed rule would be
consistent with the procedures for submission of electronic filings set
forth in § 2.126(b). Section 2.126(b) is a rule of the Trademark
Trial and Appeal Board (TTAB) which provides that submissions may be
made to the TTAB electronically according to parameters established by
the Board and published on the Web site of the Office.
   The use of electronic filing, such as that used with the Board's
Interference Web Portal, facilitates public accessibility and is
consistent with the requirements of 35 U.S.C. 316(a)(1), as amended,
and 35 U.S.C. 326(a)(1), which state that the files of a proceeding are
to be made available to the public, except for those documents filed
with the intent that they be sealed. Where needed, a party may file by
means other than electronic filing but a motion explaining such a need
must accompany the non-electronic filing. In determining whether
alternative filing methods would be authorized, the Office would
consider the entity size and the ability of the party to file
electronically.
   Proposed § 42.6(c) would require that exhibits be filed with
the first document in which the exhibit is cited so as to allow for
uniformity in citing to the record.
   Proposed § 42.6(d) would prohibit the filing of duplicate
documents absent Board authorization.
   Proposed § 42.6(e) would require service simultaneous with the
filing of the document, as well as require certificates of service.
Additional procedures to be followed when filing documents may be
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provided via a standing order of the Board. See In re Sullivan, 362
F.3d 1324 (Fed. Cir. 2004).

   Section 42.7: Proposed § 42.7 would provide that the Board may
vacate or hold in abeyance unauthorized papers and would limit the
filing of duplicate papers. This proposed rule would provide a tool for
preventing abuses that can occur in filing documents and would ensure
that the parties and the Board are consistent in their citation to the
underlying record.

   Section 42.8: Proposed § 42.8 would provide for certain
mandatory notices to be provided by the parties, including
identification of the real parties in interest, related matters, lead
and back-up counsel, and service information. The proposed rule would
require the identification of lead and back-up counsel and service
information. The mandatory notices concerning real parties in interest
and related matters are consistent with the requirements of 35 U.S.C.
315, as amended, and 35 U.S.C. 325. These statutes describe the
relationship between the trial and other related matters and authorize,
among other things, suspension of other proceedings before the Office
on the same patent and lack of standing for real parties in interest
that have previously filed civil actions against a patent for which a
trial is requested. Mandatory notices are also needed to judge any
subject matter estoppel triggered by a prior Board, district court, or
U.S. International Trade Commission proceeding.
   Examples of related administrative matters that would be affected
by a decision in the proceeding include every application and patent
claiming, or which may claim, the benefit of the priority of the filing
date of the party's involved patent or application as well as any ex
parte and inter partes reexaminations for an involved patent.
   The need for identification of the real party in interest helps
identify potential conflicts of interests for the Office. In the case
of the Board, a conflict would typically arise when an official has an
investment in a company with a direct interest in a Board proceeding.
Such conflicts can only be avoided if the parties promptly provide
information necessary to identify potential conflicts. The identity of
a real party-in-interest might also affect the credibility of evidence
presented in a proceeding. The Board would consider, on a case-by case
basis, relevant case law to resolve a real party in interest or privy
dispute that may arise during a proceeding. Further, in inter partes
and post-grant review proceedings before the Office, the petitioner
(including any real party-in-interest or privy of the petitioner) is
estopped from relitigating any ground that was or reasonably could have
been raised. See 35 U.S.C. 315(e)(1), as amended, and 35 U.S.C.
325(e)(1). What constitutes a real party-in-interest or privy is a
highly fact-dependent question. See generally 18A Wright & Miller Fed.
Prac. & Proc. Sec. § 4449, 4451; Taylor v. Sturgell, 553 U.S. 880
(2008). While many factors can lead to a determination that a
petitioner was a real party-in-interest or privy in a previous
proceeding, actual control or the opportunity to control the previous
proceeding is an important clue that such a relationship existed. See,
e.g., Taylor, 553 U.S. at 895; see generally 18A Wright & Miller §
4451. Factors for determining actual control or the opportunity to
control include existence of a controlling interest in the petitioner.

   Section 42.9: Proposed § 42.9 would permit action by an
assignee to the exclusion of an inventor. Orders permitting an assignee
of a partial interest to act to the exclusion of an inventor or co-
assignee would rarely be granted, and such orders would typically issue
only when the partial assignee was in a proceeding against its co-
assignee. Ex parte Hinkson, 1904 Comm'r. Dec. 342.

   Section 42.10: Proposed § 42.10(a) would provide that the Board
may require a party to designate a lead counsel. The proposed rule
would remind parties to designate back-up counsel who can conduct
business on behalf of the lead counsel as instances arise where lead
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counsel may be unavailable.
   Proposed § 42.10(b) would provide that a power of attorney must
be filed for counsel not of record in the party's involved patent or
application.
   Proposed § 42.10(c) would allow for pro hac vice representation
before the Board subject to such conditions as the Board may impose.
The Board may recognize counsel pro hac vice during a proceeding upon a
showing of good cause. Proceedings before the Office can be technically
complex. For example, it is expected that amendments to a patent will
be sought. Consequently, the grant of a motion to appear pro hac vice
is a discretionary action taking into account the specifics of the
proceedings. Similarly, the revocation of pro hac vice is a
discretionary action taking into account various factors, including
incompetence, unwillingness to abide by the Office's Rules of
Professional Conduct, and incivility.
   The proposed rule, if adopted, would allow for this practice in the
new proceedings authorized by the Leahy-Smith America Invents Act.
   Proposed § 42.10(d) would provide a limited delegation to the
Board under 35 U.S.C. 2(b)(2) and 32 to regulate the conduct of counsel
in Board proceedings. The proposed rule would delegate to the Board the
authority to conduct counsel disqualification proceedings while the
Board has jurisdiction over a proceeding. The rule would delegate to
the Chief Administrative Patent Judge the authority to make final a
decision to disqualify counsel in a proceeding before the Board for the
purposes of judicial review. This delegation would not derogate from
the Director the prerogative to make such decisions, nor would it
prevent the Chief Administrative Patent Judge from further delegating
authority to an administrative patent judge.
   Proposed § 42.10(e) provides that counsel may not withdraw from
a proceeding before the Board unless the Board authorizes such
withdrawal.

   Section 42.11: Proposed § 42.11 would remind parties, and
individuals associated with the parties, of their duty of candor and
good faith to the Office as honesty before the Office is essential to
the integrity of the proceeding.

   Section 42.12: Proposed § 42.12 would provide rules for
sanctions in trial proceedings before the Board. 35 U.S.C. 316(a)(6),
as amended, and 35 U.S.C. 326(a)(6) require that the Director prescribe
sanctions for abuse of discovery, abuse of process, and any other
improper use of the proceeding in inter partes review, post-grant
review, and covered business method patent review proceedings. The
proposed rule is also consistent with 35 U.S.C. 135(b), as amended,
which provides that the Director shall prescribe regulations setting
standards for the conduct of derivation proceedings.
   Proposed § 42.12(a) would identify types of misconduct for
which the Board may impose sanctions. The proposed rule would
explicitly provide that misconduct includes failure to comply with an
applicable rule, abuse of discovery, abuse of process, improper use of
the proceeding and misrepresentation of a fact. An example of a failure
to comply with an applicable rule includes failure to disclose a prior
relevant inconsistent statement.
   Proposed § 42.12(b) would recite the list of sanctions that may
be imposed by the Board.

   Section 42.13: Proposed § 42.13 would provide a uniform system
of citation to authority. The proposed rule would codify existing Board
practice and extends it to trial proceedings. Under the proposed rule,
a citation to a single source, in the priority order set out in the
rule, would be sufficient, thus minimizing the citation burden on the
public.

   Section 42.14: Proposed § 42.14 would provide that the record
of a proceeding be made available to the public, except as otherwise
ordered. An exception to public availability would be those documents
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or things accompanied by a motion to seal the document or thing. The
proposed rule reflects the provisions of 35 U.S.C. 316(a)(1), as
amended, and 35 U.S.C. 326(a)(1), which require that inter partes
review and post-grant review files be made available to the public,
except that any petition or document filed with the intent that it be
sealed, if accompanied by a motion to seal, be treated as sealed
pending the outcome of the ruling on the motion to seal.

Fees

   Sections 10(d) and (e) of the Leahy-Smith America Invents Act set
out a process that must be followed when the Office is using its
authority under section 10(a) to set or adjust patent fees. See Public
Law 112-29, 125 Stat. at 317-18. This process does not feasibly permit
the fees described herein to be in place by September 16, 2012 (the
effective date of many of the Board procedures required by the Leahy-
Smith America Invents Act and described herein). Therefore, the Office
is setting these fees pursuant to its authority under 35 U.S.C.
41(d)(2) in this rule making, which provides that fees for all
processing, services, or materials relating to patents not specified in
35 U.S.C. 41 are to be set at amounts to recover the estimated average
cost to the Office of such processing, services, or materials. See 35
U.S.C. 41(d)(2).
   The Office is also in the process of developing a proposal to
adjust patent fees under section 10 of the Leahy-Smith America Invents
Act. The fees proposed in this notice will be revisited in furtherance
of the Director's fee setting efforts in this area.

   Section 42.15: Proposed § 42.15 would set fees for the new
trial proceedings.
   Proposed § 42.15(a) would set the fee for a petition to
institute an inter partes review of a patent based upon the number of
challenged claims, and reflects the requirements of 35 U.S.C. 311 and
312(a), as amended, that the Director set fees for the petition and
that the petition be accompanied by payment of the fee established.
Basing the fees on the number of claims challenged allows for ease of
calculation and reduces the chance of insufficient payment. Further,
the proposed fees are generally reflective of the complexity of
the case because the number of claims often impacts the complexity of
the petition and increases the demands placed on the patent owner as
well as the deciding officials. Cf. In re Katz Interactive Call
Processing Patent Litig., 639 F.3d 1303, 1309 (Fed. Cir. 2011)
(limiting number of asserted claims is appropriate to efficiently
manage a case).
   To understand the scope of a dependent claim, the claims from which
the dependent claim depends must be construed along with the dependent
claim. Accordingly, for fee calculation purposes, each claim challenged
will be counted as well as any claim from which a claim depends, unless
the parent claim is also separately challenged. The following examples
are illustrative.

   Example 1:  Claims 1-30 are challenged where each of claims 2-30
are dependent claims and depend only upon claim 1. There are 30
claims challenged for purposes of fee calculation.
   Example 2:  Claims 20-40 are challenged where each of claims 20-
40 are dependent claims and depend only upon claim 1. As claims 20-
40 depend from claim 1, claim 1 counts toward the total number of
claims challenged. Thus, there are 21 claims challenged for fee
calculation purposes.
   Example 3: Claims 1, 11-20, and 31-40 are challenged. Each of
claims 1 and 31-40 are independent claims. Each of claims 11-20 are
dependent claims and depend upon claim 9, which in turn depends upon
claim 8, which in turn depends upon claim 1. As claims 11-20 depend
upon parent claims 8 and 9, claims 8 and 9 would count as challenged
claims towards the total number of claims challenged. As claim 1 is
separately challenged, it would not count twice towards the total
 March 13, 2012 US PATENT AND TRADEMARK OFFICE 1376 OG 281 

number of claims challenged. Thus, there are 23 claims challenged
for fee calculation purposes.
   Example 4:  Claims 1, 11-20, and 31-40 are challenged. Each of
claims 1 and 31-40 are independent claims. Claim 11 depends upon
claim 1 and claims 12-20 depend upon claim 11. As each of the
challenged claims is based on a separately challenged independent
claim, we need not include any further claims for fee calculations
purposes. Thus, there are 21 challenged claims.

   Proposed § 42.15(b) would set the fee for a petition to
institute a post-grant review or a covered business method patent
review of a patent based upon the number of challenged claims, and
would reflect the requirements of 35 U.S.C. 321, as amended, and 35
U.S.C. 322(a) that the Director set fees for the petition and that the
petition be accompanied by payment of the fee established. The analysis
of the number of claims challenged for fee calculation purposes would
be the same as for proposed § 42.15(a).
   Item (C) of the Rulemaking Considerations section of this notice,
infra, provides the Office's analysis of the cost to provide the
services requested for each of the proceedings.
   Proposed § 42.15(c) would set the fee for a petition to
institute a derivation proceeding in the amount of $400. Derivation
proceedings concern allegations that an inventor named in an earlier
application, without authorization, derived the claimed invention from
an inventor named in the petition. The fee is set to recover the
treatment of the petition as a request to transfer jurisdiction from
the examining corps to the Board and not the costs of instituting and
performing the derivation trial which is necessary to complete the
examination process for the applicant seeking the derivation.
   Proposed § 42.15(d) would set the fee for filing written
requests to make a settlement agreement available in the amount of
$400.

Petition and Motion Practice

   Section 42.20: Proposed § 42.20(a) would provide that relief,
other than a petition to institute a trial, must be in the form of a
motion. The proposed rule is consistent with the requirements of 35
U.S.C. 316(a)(1) and 316(d), as amended, and 35 U.S.C. 326(a)(1) and
326(d) which provide that requests to seal a document and requests to
amend the patent be filed in the form of a motion.
   Proposed § 42.20(b) would provide that motions will not be
entered absent Board authorization, and authorization may be provided
in an order of general applicability or during the proceeding.
Generally, the Board expects that authorization would follow the
current Board practice where a conference call would be required before
an opposed motion is filed as quite often the relief requested in such
motions can be granted (or denied) in a conference call. This practice
has significantly increased the speed and reduced the costs in
contested cases.
   Proposed § 42.20(c) would place the burden of proof on the
moving party. A motion that fails to justify the relief on its face
could be dismissed or denied without regard to subsequent briefing.
   Proposed § 42.20(d) would provide that the Board may order
briefing on any issue appropriate for a final written determination on
patentability. Specifically, 35 U.S.C. 318(a), as amended, and 328(a)
require that where a review is instituted and not dismissed the Board
shall issue a final written decision with respect to the patentability
of any patent claim challenged by the petitioner and any new claim
added. The proposed rule would provide for Board ordered briefing where
appropriate in order to efficiently and effectively render its final
decision on patentability.

   Section 42.21: Proposed § 42.21(a) would provide that the Board
may require a party to file a notice stating the relief it requests and
the basis for that relief in Board proceedings. The proposed rule would
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make clear that a notice must contain sufficient detail to serve its
notice function. The proposed rule would provide an effective mechanism
for administering cases efficiently and placing opponents on notice.
   Proposed § 42.21(b) would state the effect of a notice. The
proposed rule would make it clear that failure to state a sufficient
basis for relief would warrant a denial of the request.
   Proposed § 42.21(c) would permit correction of a notice after
the time set for filing the notice, but would set a high threshold for
entry of the correction, i.e., if the entry was in the interests of
justice. The proposed rule is consistent with 35 U.S.C. 316(a)(11), as
amended, and 35 U.S.C. 326(a)(11), which require good cause be shown to
extend the time for entering a final decision. In determining whether
good cause is shown, the Board would be permitted to consider the
ability of the Board to complete timely the proceeding should the
request be granted. Hence, requests made at the outset of a proceeding
would be more likely to demonstrate good cause than requests made later
in the proceeding.

   Section 42.22: Proposed § 42.22 concerns the general content of
motions.
   Proposed § 42.22(a) would require that each petition or motion
be filed as a separate paper to reduce the chance that an argument
would be overlooked and reduce the complexity of any given paper.
Proposed § 42.22(a)(1)-(3) would provide for a statement of precise
relief requested, a statement of material facts, and statement of the
reasons for relief. Vague arguments and generic citations to the record
are fundamentally unfair to an opponent and do not provide sufficient
notice to an opponent and creates inefficiencies for the Board.
   Proposed § 42.22(b) would require the movant to make showings
ordinarily required for the requested relief in other parts of the
Office. Many actions, particularly corrective actions like changes in
inventorship, filing reissue applications, and seeking a retroactive
foreign filing license, are governed by other rules of the Office. By
requiring the same showings the proposed rule would keep practice
uniform throughout the Office.
   Proposed § 42.22(c) would provide that a petition or motion shall
contain a statement of facts with specific citations to the portions of
the record that support a particular fact. Providing specific citations
to the record gives notice to an opponent of the basis for the fact and
provides the Board the information necessary for effective and
efficient administration of the proceeding.
   Proposed § 42.22(d) would allow the Board to order additional
showings or explanations as a condition for authorizing a motion.
Experience has shown that placing conditions on motions helps provide
guidance to the parties as to what issues and facts are of particular
importance and ensures that the parties are aware of controlling
precedent that should be addressed in a particular motion.

   Section 42.23: Proposed § 42.23 would provide that oppositions
and replies must comply with the content requirements for a motion and
that a reply may only respond to arguments raised in the corresponding
opposition. Oppositions and replies may rely upon appropriate evidence
to support the positions asserted. Reply evidence, however, must be
responsive and not merely new evidence that could have been presented
earlier to support the movant's motion.

   Section 42.24: Proposed § 42.24 would provide page limits for
petitions, motions, oppositions, and replies. 35 U.S.C. 316(b), as
amended, and 35 U.S.C. 326(b) provide considerations that are to be
taken into account when prescribing regulations, including the
integrity of the patent system, the efficient administration of the
Office, and the ability to timely complete the trials. The page limits
proposed in this rule are consistent with these considerations.
   Federal courts routinely use page limits in managing motions
practice as "[e]ffective writing is concise writing." Spaziano v.
Singletary, 36 F.3d 1028, 1031 n.2 (11th Cir. 1994). Many district
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courts restrict the number of pages that may be filed in a motion
including, for example, the District of Delaware, the District of New
Jersey, the Eastern District of Texas, the Northern, Central, and
Southern Districts of California, and the Eastern District of Virginia.
   Federal courts have found that page limits ease the burden on both
the parties and the courts, and patent cases are no exception. Eolas
Techs., Inc. v. Adobe Sys., Inc., No. 6:09-CV-446, at 1 (E.D. Tex.
Sept. 2, 2010) ("The Local Rules' page limits ease the burden of
motion practice on both the Court and the parties."); Blackboard, Inc.
v. Desire2Learn, Inc., 521 F. Supp. 2d 575, 576 (E.D. Tex. 2007) (The
parties "seem to share the misconception, popular in some circles,
that motion practice exists to require federal judges to shovel through
steaming mounds of pleonastic arguments in Herculean effort to uncover
a hidden gem of logic that will ineluctably compel a favorable ruling.
Nothing could be farther from the truth."); Broadwater v. Heidtman
Steel Prods., Inc., 182 F. Supp. 2d 705, 710 (S.D. Ill. 2002)
("Counsel are strongly advised, in the future, to not ask this Court
for leave to file any memoranda (supporting or opposing dispositive
motions) longer than 15 pages. The Court has handled complicated patent
cases and employment discrimination cases in which the parties were
able to limit their briefs supporting and opposing summary judgment to
10 or 15 pages." (Emphasis omitted)).
   The Board's experience with page limits in interference motions
practice is consistent with that of the federal courts. The Board's use
of page limits has shown it to be beneficial without it being unduly
restrictive for the parties. Page limits have encouraged the parties to
focus on dispositive issues, easing the burden of motions practice on
the parties and on the Board.
   The Board's experience with page limits in interference practice is
informed by its use of different approaches over the years. In the
early 1990s, page limits were not routinely used for motions, and the
practice suffered from lengthy and unacceptable delays. To reduce the
burden on the parties and on the Board and thereby reduce the time to
decision, the Board instituted page limits in the late 1990s for every
motion. Page limit practice was found to be effective in reducing the
burdens on the parties and improving decision times at the Board. In
2006, the Board revised the page limit practice and allowed unlimited
findings of fact and generally limited the number of pages containing
argument. Due to abuses of the system, the Board recently reverted back
to page limits for the entire motion (both argument and findings of
fact).
   Proposed § 42.24(a) would provide specific page limits for
petitions and motions. The proposed rule would set a limit of 50 pages
for petitions requesting inter partes reviews and derivation
proceedings, 70 pages for petitions requesting post-grant review and
covered business method patent reviews, and 15 pages for motions.
   The Board's current practice in interferences is to limit motions
for judgment on priority of invention to 50 pages, miscellaneous
motions to 15 pages and other motions to 25 pages. Hence, non-priority
motions for judgment of unpatentability are currently limited to 25
pages. The Board's current page limits are consistent with the 25 page
limits in the Northern, Central, and Southern Districts of California,
and the Middle District of Florida and exceed the limits in the
District of Delaware (20), the Northern District of Illinois (15), the
District of Massachusetts (20), the Eastern District of Michigan (20),
the Southern District of Florida (20), and the Southern District of
Illinois (20).
   In a typical proceeding before the Board, a party may be authorized
to file: A single motion for unpatentability based on prior art; a
single motion for unpatentability based upon failure to comply with 35
U.S.C. 112, lack of written description and/or enablement; and
potentially another motion for lack of compliance with 35 U.S.C. 101,
although a 35 U.S.C. 101 motion may be required to be combined with the
35 U.S.C. 112 motion. Each of these motions is currently limited to 25
pages in length, unless good cause is shown that the page limits are
unduly restrictive for a particular motion.
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   A petition requesting the institution of a trial proceeding would
be similar to motions currently filed with the Board. Specifically,
petitions to institute a trial seek a final written decision that the
challenged claims are unpatentable, where derivation is a form of
unpatentability. Accordingly, a petition to institute a trial based on
prior art would under current practice be limited to 25 pages, and by
consequence, a petition raising unpatentability based on prior art and
unpatentability under 35 U.S.C. 101 and/or 112 would be limited to 50
pages.
   Under the proposed rules, an inter partes review petition would be
based upon any grounds identified in 35 U.S.C. 311(b), as amended,
i.e., only a ground that could be raised under 35 U.S.C. 102 or 103 and
only on the basis of patents or printed publications. Generally, under
current practice, a party is limited to filing single prior art
motions, limited to 25 pages in length. The proposed rule would provide
up to 50 pages in length for a motion requesting inter partes review.
Thus, as the proposed page limit doubles the default page limit
currently set for a motion before the Board, a 50 page limit is
considered sufficient in all but exceptional cases and is consistent
with the considerations provided in 35 U.S.C. 316(b), as amended.
   Under the proposed rules, a post-grant review petition would be
based upon any grounds identified in 35 U.S.C. 321(b), e.g., failure to
comply with 35 U.S.C. 101, 102, 103, and 112 (except best mode). Under
current practice, a party would be limited to filing two or three motions,
each limited to 25 pages, for a maximum of 75 pages. Where there is more
than one motion for unpatentability based upon different statutory grounds,
the Board's experience is that the motions contain similar discussions of
technology and claim constructions. Such overlap is unnecessary where a
single petition for unpatentability is filed. Thus, the 70 proposed page
limit is considered sufficient in all but exceptional cases.
   Covered business method patent review is similar in scope to that
of post-grant review as there is substantial overlap in the statutory
grounds permitted for review. Thus, the proposed page limit for
proposed covered business method patent reviews of 70 pages is the same
as that proposed for post-grant review.
   Petitions to institute derivation proceedings raise a subset of the
issues that are currently raised in interferences in a motion for
judgment on priority of invention. Currently, motions for judgment on
priority of invention, including issues such as conception,
corroboration, and diligence, are generally limited to 50 pages in
length. Thus, the 50 proposed page limit is considered sufficient in
all but exceptional cases.
   The proposed rule would provide that petitions to institute a trial
must comply with the stated page limits but may be accompanied by a
motion that seeks to waive the page limits. The petitioner must show in
the motion how a waiver of the page limits is in the interests of
justice. A copy of the desired non-page limited petition must accompany
the motion. Generally, the Board would decide the motion prior to
deciding whether to institute the trial.
   Current Board practice provides a limit of 25 pages for other
motions and 15 pages for miscellaneous motions. The Board's experience
is that such page limits are sufficient for the filing parties and do
not unduly burden the opposing party and the Board. Petitions for
instituting a trial would generally replace the current practice of
filing motions for unpatentability. Most motions for relief are
expected to be similar to the current interference miscellaneous motion
practice. Accordingly, the proposed rule would provide a 15 page limit
for motions as this is considered sufficient for most motions but may
be adjusted where the limit is determined to be unduly restrictive for
the relief requested. A party may contact the Board and arrange for a
conference call to discuss the need for additional pages for a
particular motion. Except for a motion to waive the page limit
accompanying a petition seeking review, any motion to waive a page
limit must be granted in advance of filing a motion, opposition or
reply for which the waiver is necessary.
   Proposed § 42.24(b) would provide page limits for oppositions.
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Current interference practice provides an equal number of pages for an
opposition as its corresponding motion. This is generally consistent
with motions practice in federal courts. The proposed rule would
continue the current practice.
   Proposed § 42.24(c) would provide page limits for replies.
Current interference practice provides a 15-page limit for priority
motion replies, a 5 page limit for miscellaneous (procedural) motion
replies, and a 10 page limit for all other motions. The proposed rule
is consistent with current interference practice for procedural
motions. The proposed rule would provide a 15 page limit for reply to
petitions requesting a trial, which the Office believes is sufficient
based on current practice. Current interference practice has shown that
such page limits do not unduly restrict the parties and, in fact,
provide sufficient flexibility to parties to not only reply to the
motion but also help to focus on the issues.

   Section 42.25: Proposed § 42.25 would provide default times for
filing oppositions and replies. The expectation, however, is that the
Board would tailor times appropriate to each case as opposed to relying
upon the default times set by rule.

Testimony and Production

   The proposed rules would provide limitations for discovery and
testimony. Unlike in proceedings under the Federal Rules of Civil
Procedure, the burden of justifying discovery in Board proceedings
would lie with the party seeking discovery.
   Proceedings before the Board differ from most civil litigation in
that the proponent of an argument before the Board generally has access
to relevant evidence that is comparable to its opponent's access.
Consequently, the expense and complications associated with much of
discovery can be avoided. For instance, since rejections are commonly
based on the contents of the specification or on publicly available
references, there is no reason to presume that the patent owner has
better access to evidence of unpatentability on these grounds than the
petitioner. Exceptions occur particularly when the ground of
unpatentability arises out of conduct, particularly conduct of a
purported inventor. In such cases, discovery may be necessary to prove
such conduct, in which case the proponent of the evidence may move for
additional discovery. The Board may impose conditions on such discovery
to prevent abuse.

   Section 42.51: Proposed § 42.51(a) would provide for limited
discovery in the trial consistent with the goal of providing trials
that are timely, inexpensive, and fair. The proposed rule is consistent
with 35 U.S.C. 316(a)(5), as amended, and 326(a)(5), which provide for
discovery of relevant evidence but limit the scope of the discovery,
and 35 U.S.C. 135(b), as amended, which provides that the Director
shall prescribe regulations setting forth standards for the conduct of
derivation proceedings.
   Proposed § 42.51(b)(1) and (b)(2) would provide for routine
discovery of exhibits cited in a paper or testimony and provide for
cross examination of affidavit testimony without the need to request
authorization from the Board. The proposed rule would eliminate many
routine discovery requests and disputes. The rule would not require a
party to create materials or to provide materials not cited.
   Proposed § 42.51(b)(3) would ensure the timeliness of the
proceedings by requiring that parties, and individuals associated with
the parties, provide information that is inconsistent with a position
advanced by the patent owner or petitioner during the course of the
proceeding. The Office recognizes that this requirement may differ from
the proposed changes to § 1.56. But, Board experience has shown
that the information covered by proposed 42.51(b)(3) is typically
sought through additional discovery and that such information leads to
the production of relevant evidence. However, this practice of
authorizing additional discovery for such information risks significant
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delay to the proceeding and increased burdens on both the parties and
the Office. To avoid these issues, and to reduce costs and insure the
integrity and timeliness of the proceeding, the proposed rule makes the
production of such information routine. Similarly, while the Office
recognizes that some parties may be hesitant to use the new proceedings
because of this requirement, the benefit of the requirement outweighs
any impact on participation. Lastly this requirement does not override
legally-recognized privileges such as attorney-client or attorney work
product.
   The proposed rule would require that the information be provided as
a petition, motion, opposition, reply, preliminary patent owner response,
or patent owner response to petition. The proposed rule would also require
that the party submitting the information specify the relevance of the
document, where the relevant information appears in the document and,
where applicable, how the information is pertinent to the claims. This
information aids the Board in rendering decisions in trial proceedings
within statutory timeframes. See 35 U.S.C. 316(a)(11) and 318(a), as
amended, and 35 U.S.C. 326(a)(11) and 328(a). The identification of
portions of the document relied upon and the pertinence of the
information aids the Board's efficient and effective administration of
the proceeding by making the information accessible to the Board as
opposed to having the Board play archeologist with the record. See
DeSilva v. DiLeonardi, 181 F.3d at 866-67.
   Proposed § 42.51(c) would provide for additional discovery.
Additional discovery increases trial costs and increases the
expenditures of time by the parties and the Board. To promote effective
discovery, the proposed rule would require a showing that the
additional discovery sought in a proceeding other than a post-grant
review is in the interests of justice, which would place an affirmative
burden upon a party seeking the discovery to show how the proposed
discovery would be productive. A separate rule (§ 42.224) governs
additional discovery in post-grant proceedings. The Board's
interference experience, however, is that such showings are often
lacking and authorization for additional discovery is expected to be
rare.
   The proposed interests-of-justice standard for additional discovery
is consistent with considerations identified in 35 U.S.C. 316(b), as
amended, including the efficient administration of the Board and the
Board's ability to complete timely trials. Further, the proposed
interests-of-justice standard is consistent with 35 U.S.C. 316(a)(5),
as amended, which states that discovery other than depositions of
witnesses submitting affidavits and declarations be what is otherwise
necessary in the interests of justice.
   While the Board will employ an interests-of-justice standard in
granting additional discovery in inter partes reviews and derivation
proceedings, new subpart C will provide that a good cause standard will
be employed in post-grant reviews, and by consequence, in covered
business method patent reviews. Good cause and interests of justice are
closely related standards, but the interests-of-justice standard is
slightly higher than good cause. While a good cause standard requires a
party to show a specific factual reason to justify the needed
discovery, under the interests-of-justice standard, the Board would
look at all relevant factors. Specifically, to show good cause, a party
would be required to make a particular and specific demonstration of
fact. Under the interests-of-justice standard, the moving party would
also be required to show that it was fully diligent in seeking
discovery and that there is no undue prejudice to the non-moving party.
In contrast, the interests-of-justice standard covers considerable
ground, and in using such a standard, the Board expects to consider
whether the additional discovery is necessary in light of the totality
of the relevant circumstances.
   Proposed § 42.52 would provide procedures for compelling
testimony. Under 35 U.S.C. 23, the Director may establish rules for
affidavit and deposition testimony. Under 35 U.S.C. 24, a party in a
contested case may apply for a subpoena to compel testimony in the
United States, but only for testimony to be used in the contested case.
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Proposed § 42.52(a) would require the party seeking a subpoena to
first obtain authorization from the Board; otherwise, the compelled
evidence would not be admitted in the proceeding. Proposed
§ 42.52(b) would impose additional requirements on a party seeking
testimony or production outside the United States because the use of
foreign testimony generally increases the cost and complexity of the
proceeding for both the parties and the Board. The Board would give
weight to foreign deposition testimony to the extent warranted in view
of all the circumstances, including the laws of the foreign country
governing the testimony.

   Section 42.53: Proposed § 42.53 would provide for the taking of
testimony. To minimize costs, direct testimony would generally be taken
in the form of an affidavit. Cross-examination testimony and redirect
testimony would generally come in the form of a deposition transcript.
If the nature of the testimony makes direct observation of witness
demeanor necessary or desirable, the Board might authorize or even
require that the testimony be presented live or be video-recorded in
addition to filing of the required transcript. Cf. Applied Research
Sys. ARS Holdings N.V. v. Cell Genesys Inc., 68 USPQ2d 1863 (B.P.A.I.
2003) (non-precedential). The proponent of the witness would be
responsible for the cost of producing the witness for the deposition.
The parties would have latitude in choosing the time and place for the
deposition, provided the location is in the United States and the time
falls within a prescribed testimony period.
   Proposed § 42.53(c)(2) would provide for the time period for
cross-examination and would set a norm for the conference proposed in
§ 42.53(c)(1). A party seeking to move the deposition outside this
period would need to show good cause.
   Proposed § 42.53(d) would require that the party calling the
witness initiate a conference with the Board at least five business
days before a deposition with an interpreter is taken. Board experience
suggests that the complexity of foreign language depositions can be so
great that in many cases the resulting testimony is not useful to the
fact-finder. To avoid a waste of resources in the production of an
unhelpful record, the proposed rules would require that the Board
approve of the deposition format in advance. Occasionally the Board
will require live testimony where the Board considers the demeanor of a
witness critical to assessing credibility.
   Proposed § 42.53(e) would provide for the manner of taking
testimony.
   Proposed § 42.53(e)(1) would require that each witness before
giving deposition testimony be duly sworn according to law by the
officer before whom the deposition is to be taken. Proposed § 42.53(e)(1)
would also require that the officer be authorized to take testimony under
35 U.S.C. 23.
   Proposed § 42.53(e)(2) would require that testimony be taken in
answer to interrogatories with any questions and answers recorded in
their regular order by the officer, or by some other disinterested
person in the presence of the officer, unless the presence of the
officer is waived on the record by agreement of all parties.
   Proposed § 42.53(e)(3) would require that any exhibits used
during the deposition be numbered as required by § 42.63(b), and
must, if not previously served, be served at the deposition. Proposed
§ 42.53(e)(3) would also provide that exhibits objected to be
accepted pending a decision on the objection.
   Proposed § 42.53(e)(4) would require that all objections be
made at the time of the deposition to the qualifications of the officer
taking the deposition, the manner of taking it, the evidence presented,
the conduct of any party, and that any other objection to the
deposition be noted on the record by the officer.
   Proposed § 42.53(e)(5) would require the witness to read and sign
(in the form of an affidavit) a transcript of the deposition after the
testimony has been transcribed, unless the parties otherwise agree in
writing, the parties waive reading and signature by the witness on the
record at the deposition, or the witness refuses to read or sign the
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transcript of the deposition.
   The certification of proposed § 42.53(e)(6)(vi) would provide a
standard for disqualifying an officer from administering a deposition.
The use of financial interest as a disqualification, however, would be
broader than the employment interest currently barred. Payment for
ordinary services rendered in the ordinary course of administering the
deposition and preparing the transcript would not be a disqualifying
financial interest. An interest acknowledged by the parties on the
record without objection would not be a disqualifying interest.
   Proposed § 42.53(e)(7) would require the proponent of the
testimony to file the transcript of the testimony. If the original
proponent of the testimony declined to file the transcript (for
instance, because that party no longer intended to rely on the
testimony), but another party wished to rely on the testimony, the
party that wishes to file the testimony would become the proponent and
would be permitted to file the transcript as its own exhibit.

   Section 42.54: Proposed § 42.54 would provide for protective
orders. 35 U.S.C. 316(a)(7), as amended, and 35 U.S.C. 326(a)(7)
require that the Director prescribe rules that provide for protective
orders governing the exchange and submission of confidential
information. Proposed § 42.54 would provide such protective orders
and follows the procedure set forth in the Federal Rule of Civil
Procedure 26(c)(1).

   Section 42.55: Proposed § 42.55 would allow a petitioner filing
confidential information to file, concurrently with the filing of the
petition, a motion to seal as to the confidential information. The
petitioner must serve the patent owner the confidential information and
may do so under seal. The patent owner may access the confidential
information prior to institution of a trial by agreeing to the terms of
the proposed protective order contained in the motion to seal. The
institution of the trial would constitute a grant of the motion to seal
unless otherwise ordered by the Board. The proposed rule seeks to
streamline the process of seeking protective orders prior to the
institution of the review while balancing the need to protect
confidential information against an opponent's need to access
information used to challenge the opponent's claims.

   Section 42.56: Confidential information that is subject to a
protective order ordinarily would become public 45 days after denial of
a petition to institute a trial or 45 days after final judgment in a
trial. Proposed § 42.56 would allow a party to file a motion to
expunge from the record confidential information prior to the
information becoming public. Proposed § 42.56 reflects the
considerations identified in 35 U.S.C. 316(b), as amended, and 35
U.S.C. 326(b), which state that the Office is to take into account the
integrity of the patent system in promulgating regulations. The
proposed rule balances the needs of the parties to submit confidential
information with the public interest in maintaining a complete and
understandable file history for public notice purposes. Specifically,
there is an expectation that information be made public where the
existence of the information is referred to in a decision to grant or
deny a request to institute a review or identified in a final written
decision. As such, the proposed rule would encourage parties to redact
sensitive information, where possible, rather than seeking to seal
entire documents.

   Section 42.61: Proposed § 42.61 would provide for the
admissibility of evidence. Proposed § 42.61(a) would make the
failure to comply with the rules a basis for challenging admissibility
of evidence. Proposed § 42.61(b) would not require certification as
a condition for admissibility when the evidence is a record of the
Office that is accessible to all parties. This proposed rule would
avoid disputes on what otherwise would be technical noncompliance with
the rules. Proposed § 42.61(c) would provide that the specification
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and drawings are admissible only to prove what the specification and
drawings describe. This proposed rule would address a recurring problem
in which a party mistakenly relies on a specification to prove a fact
other than what the specification says. This proposed rule would make
clear that a specification of an application or patent involved in a
proceeding is admissible as evidence only to prove what the
specification or patent describes. If there is data in the
specification upon which a party intends to rely to prove the truth of
the data, an affidavit by an individual having first-hand knowledge of
how the data was generated (i.e., the individual who performed an
experiment reported as an example in the specification) must be filed.
Wojciak v. Nishiyama, 61 USPQ2d 1576, 1581 (B.P.A.I. 2001).

   Section 42.62: Proposed § 42.62 would adopt a modified version
of the Federal Rules of Evidence. The proposed rule would adopt the
more formal evidentiary rules used in district courts in view of the
adversarial nature of the proceedings before the Board. The Federal
Rules of Evidence embrace a well-developed body of case law and are
familiar to the courts charged with reviewing Board decisions in
contested cases.

   Section 42.63: Proposed § 42.63 would provide that all evidence
is to be submitted as an exhibit. For instance, the proposed rule would
provide that an exhibit filed with the petition must include the
petition's name and a unique exhibit number, for example: POE EXHIBIT
1001. For exhibits not filed with the petition, the proposed rule would
require the exhibit label to include the party's name followed by a
unique exhibit number, the names of the parties, and the trial number,
in the format of the following example:

OWENS EXHIBIT 2001, Poe v. Owens and Trial IPR2011OCT-00001.

   Section 42.64: Proposed § 42.64 would provide procedures for
challenging the admissibility of evidence. In a district court trial,
an opponent may object to evidence, and the proponent may have an
opportunity to cure the basis of the objection. The proposed rule
offers a similar, albeit limited, process for objecting and curing in a
trial at the Board.
   Proposed § 42.64(a) would provide that objections to the
admissibility of deposition evidence must be made during the
deposition. Proposed § 42.64(b) would provide guidance as to
objections and supplemental evidence for evidence other than deposition
testimony. The default time for serving an objection to evidence other
than testimony would be ten business days after service of the evidence
for evidence in the petition and five business days for subsequent
objections, and the party relying on evidence to which an objection was
timely served would have ten business days after service of the
objection to cure any defect in the evidence. The Board would not
ordinarily address an objection unless the objecting party filed a
motion to exclude under proposed § 42.64(c) because the objection
might have been cured or might prove unimportant in light of subsequent
developments. Proposed § 42.64(d) would permit a party to file a
motion in limine to obtain a ruling on admissibility.

   Section 42.65: Proposed § 42.65 would provide rules for expert
testimony, tests, and data.
   Proposed § 42.65(a) would remind parties that unsupported
expert testimony may be given little or no weight. Rohm & Haas Co. v.
Brotech Corp., 127 F.3d 1089, 1092 (Fed. Cir. 1997). United States
patent law is not an appropriate topic for expert testimony before the
Board, and expert testimony pertaining thereto would not be admitted
under the proposed rule.
   Proposed § 42.65(b) would provide guidance on how to present
tests and data. A party should not presume that the technical
competence of the trier-of-fact extends to a detailed knowledge of the
test at issue.
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Oral Argument, Decision and Settlement

   Section 42.70: Proposed § 42.70 would provide guidance on oral
arguments.
   Proposed § 42.70(a) would provide that a party may request oral
argument on an issue raised in a paper. The time for requesting oral
argument would be set by the Board.
   Proposed § 42.70(b) would provide that a party serve
demonstrative exhibits at least five business days before the oral
argument. Experience has shown that parties are more effective in
communicating their respective positions at oral argument when
demonstrative exhibits have been exchanged prior to the hearing.
Cumbersome exhibits, however, tend to detract from the user's argument
and would be discouraged. The use of a compilation with each
demonstrative exhibit separately tabbed would be encouraged,
particularly when a court reporter is transcribing the oral argument
because the tabs provide a convenient way to record which exhibit is
being discussed. It is helpful to provide a copy of the compilation to
each member of the panel hearing the argument so that the judges may
better follow the line of argument presented.

   Section 42.71: Proposed § 42.71 would provide for decisions on
petitions and motions.
   Proposed § 42.71(a) would provide that a petition or motion may
be taken up in any order so that issues may be addressed in a fair and
efficient manner. This rule is consistent with 35 U.S.C. 316(b), as
amended, and 35 U.S.C. 326(b), which state that, among other things,
that the Director shall consider the efficient administration of the
Office in prescribing regulations. Further, such a practice was noted
with approval in Berman v. Housey, 291 F.3d 1345, 1352 (Fed. Cir.
2002).
   Proposed § 42.71(b) would provide for interlocutory decisions.
The proposed rule would make clear that a decision short of judgment is
not final, but a decision by a panel would govern the trial. Experience
has shown that the practice of having panel decisions bind further
proceedings has eliminated much of the uncertainty and added cost that
result from deferring any final deci