Changes to Patent Term Adjustment in View of the Federal Circuit Decision in Novartis v. Lee, 1346-1357 [2015-00061]

Agencies

• DEPARTMENT OF COMMERCE
• United States Patent and Trademark Office

[Federal Register Volume 80, Number 6 (Friday, January 9, 2015)]
[Rules and Regulations]
[Pages 1346-1357]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-00061]


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DEPARTMENT OF COMMERCE

United States Patent and Trademark Office

37 CFR Part 1

[Docket No.: PTO-P-2014-0023]
RIN 0651-AC96


Changes to Patent Term Adjustment in View of the Federal Circuit 
Decision in Novartis v. Lee

AGENCY: United States Patent and Trademark Office, Commerce.

ACTION: Final rule.

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SUMMARY: The United States Patent and Trademark Office (Office) is 
revising the rules of practice pertaining to patent term adjustment in 
view of the decision by the U.S. Court of Appeals for the Federal 
Circuit (Federal Circuit) in Novartis AG v. Lee. The Federal Circuit 
confirmed in Novartis that any time consumed by continued examination 
is subtracted in determining the extent to which the period of 
application pendency exceeds three years, regardless of when the 
continued examination was initiated. The Federal Circuit, however, 
decided that the time consumed by continued examination does not 
include the time after a notice of allowance, unless the Office 
actually resumes examination of the application after allowance. 
Accordingly, the Office is revising the rules of practice to provide 
that the time consumed by continued examination does not include the 
time after a notice of allowance, unless the applicant files a request 
for continued examination after such allowance. The Office also is 
revising the rules of practice to provide that the submission of a 
request for continued examination after any notice of allowance has 
been mailed will constitute a failure of an applicant to engage in 
reasonable efforts to conclude processing or examination of an 
application and thus result in a reduction of any period of patent term 
adjustment. The Office is providing an exception to this patent term 
adjustment reduction provision for a request for continued examination 
filed solely to submit information cited in a patent office 
communication in a counterpart application that is submitted to the 
Office within thirty days of receipt of the patent office 
communication. Additionally, the Office is clarifying what papers may 
be submitted after a notice of allowance without the applicant being 
considered to have failed to engage in reasonable efforts to conclude 
processing or examination of the application.

DATES: Effective date: The changes to 37 CFR 1.703 in this final rule 
are effective on January 9, 2015, and the changes to 37 CFR 1.704 in 
this final rule are effective on March 10, 2015.
    Applicability date: The changes to 37 CFR 1.703 in this final rule 
apply to any patent granted before, on, or after January 9, 2015. 37 
CFR 1.704 as adopted in this final rule applies to all original 
applications (other than for a design patent) filed on or after May 29, 
2000, and to patents issued on such applications, except that 37 CFR 
1.704(c)(12) as adopted in this final rule applies only to applications 
in which a request for continued examination under 35 U.S.C. 132(b) and 
37 CFR 1.114 is filed on or after March 10, 2015, and 37 CFR 
1.704(c)(13) as adopted in this final rule applies only to patent 
applications filed under 35 U.S.C. 111 on or after December 18, 2013, 
and international patent applications in which the national stage 
commenced under 35 U.S.C. 371 on or after December 18, 2013.

FOR FURTHER INFORMATION CONTACT: Kery Fries, Senior Legal Advisor, 
Office of Patent Legal Administration, Office of the Deputy 
Commissioner for Patent Examination Policy, at telephone number 571-
272-7757.

[[Page 1347]]


SUPPLEMENTARY INFORMATION: Executive Summary: Purpose: The Office is 
revising the rules of practice pertaining to the patent term adjustment 
provisions of 35 U.S.C. 154(b) in view of the decision by the Federal 
Circuit in Novartis, 740 F.3d 593 (Fed. Cir. 2014). The Federal Circuit 
confirmed in Novartis that any time consumed by continued examination 
under 35 U.S.C. 132(b) is subtracted in determining the extent to which 
the period defined in 35 U.S.C. 154(b)(1)(B) exceeds three years, 
regardless of when the continued examination under 35 U.S.C. 132(b) was 
initiated. The Federal Circuit, however, decided that the time consumed 
by continued examination under 35 U.S.C. 132(b) does not include the 
time after a notice of allowance unless the Office actually resumes 
examination of the application after allowance. This final rule follows 
the Office's earlier proposal to change the rules of practice in view 
of the Federal Circuit's decision in Novartis. See Changes to Patent 
Term Adjustment in view of the Federal Circuit Decision in Novartis v. 
Lee, 79 FR 34681 (June 18, 2014) (Novartis notice of proposed 
rulemaking).
    Summary of Major Provisions: The Office is revising the rules of 
practice to provide that the time consumed by continued examination 
does not include the time after the mailing date of a notice of 
allowance, unless the applicant files a request for continued 
examination under 35 U.S.C. 132(b) after such allowance. The Office 
also is revising the rules of practice to provide that the submission 
of a request for continued examination after any notice of allowance 
has been mailed will constitute a failure of an applicant to engage in 
reasonable efforts to conclude processing or examination of an 
application and thus result in a reduction of any period of patent term 
adjustment. The Office is providing an exception to this patent term 
adjustment reduction provision for a request for continued examination 
filed solely to submit information cited in a patent office 
communication in a counterpart application that is submitted to the 
Office within thirty days of receipt of the patent office 
communication. Additionally, the Office is clarifying what papers may 
be submitted after a notice of allowance without the applicant being 
considered to have failed to engage in reasonable efforts to conclude 
processing or examination of the application.
    Costs and Benefits: This rulemaking is not economically significant 
under Executive Order 12866 (Sept. 30, 1993).
    Background: Section 532(a) of the Uruguay Round Agreements Act or 
URAA (Pub. L. 103-465, 108 Stat. 4809 (1994)) amended 35 U.S.C. 154 to 
provide that the term of a patent ends on the date that is twenty years 
from the filing date of the application, or the earliest filing date 
for which a benefit is claimed under 35 U.S.C. 120, 121, or 365(c). The 
URAA also contained provisions, codified at 35 U.S.C. 154(b), for 
patent term extension due to certain examination delays. Under the 
patent term extension provisions of 35 U.S.C. 154(b) as amended by the 
URAA, an applicant is entitled to patent term extension for delays due 
to interference (which has since been replaced by derivation), secrecy 
order, or successful appellate review. See 35 U.S.C. 154(b) (1995). The 
Office implemented the patent term extension provisions of the URAA in 
a final rule published in April of 1995. See Changes to Implement 20-
Year Patent Term and Provisional Applications, 60 FR 20195 (Apr. 25, 
1995) (twenty-year patent term final rule).
    The American Inventors Protection Act of 1999 or AIPA (Pub. L. 106-
113, 113 Stat. 1501, 1501A-552 through 1501A-591 (1999)) further 
amended 35 U.S.C. 154(b) to include additional bases for patent term 
extension (characterized as ``patent term adjustment'' in the AIPA). 
Original utility and plant patents issuing from applications filed on 
or after May 29, 2000, may be eligible for patent term adjustment if 
issuance of the patent is delayed due to one or more of the enumerated 
administrative delays listed in 35 U.S.C. 154(b)(1). Specifically, 
under the patent term adjustment provisions of 35 U.S.C. 154(b) as 
amended by the AIPA, an applicant is entitled to patent term adjustment 
for the following reasons: (1) If the Office fails to take certain 
actions during the examination and issue process within specified time 
frames (35 U.S.C. 154(b)(1)(A)); (2) if the Office fails to issue a 
patent within three years of the actual filing date of the application 
(35 U.S.C. 154(b)(1)(B)); and (3) for delays due to interference (and 
now derivation), secrecy order, or successful appellate review (35 
U.S.C. 154(b)(1)(C)). See 35 U.S.C. 154(b)(1). The AIPA, however, sets 
forth a number of conditions and limitations on any patent term 
adjustment accrued under 35 U.S.C. 154(b)(1). Specifically, 35 U.S.C. 
154(b)(2)(C) provides, in part, that ``[t]he period of adjustment of 
the term of a patent under [35 U.S.C. 154(b)(1)] shall be reduced by a 
period equal to the period of time during which the applicant failed to 
engage in reasonable efforts to conclude prosecution of the 
application'' and that ``[t]he Director shall prescribe regulations 
establishing the circumstances that constitute a failure of an 
applicant to engage in reasonable efforts to conclude processing or 
examination of an application.'' 35 U.S.C. 154(b)(2)(C)(i) and (iii). 
The Office implemented the patent term adjustment provisions of 35 
U.S.C. 154(b) as amended by the AIPA, including setting forth 
circumstances that constitute a failure of an applicant to engage in 
reasonable efforts to conclude processing or examination of an 
application, in a final rule published in September of 2000. See 
Changes to Implement Patent Term Adjustment Under Twenty-Year Patent 
Term, 65 FR 56365 (Sept. 18, 2000) (AIPA patent term adjustment final 
rule).
    In January 2014, the Federal Circuit issued a decision in Novartis 
pertaining to the patent term adjustment provisions of 35 U.S.C. 
154(b), and specifically the impact of continued examination under 35 
U.S.C. 132(b) on patent term adjustment under the three-year pendency 
provision of 35 U.S.C. 154(b)(1)(B). The Federal Circuit confirmed in 
Novartis that any time consumed by continued examination under 35 
U.S.C. 132(b) is subtracted in determining the extent to which the 
period defined in 35 U.S.C. 154(b)(1)(B) exceeds three years, 
regardless of when the continued examination under 35 U.S.C. 132(b) was 
initiated. See 740 F.3d at 601 (``[t]he better reading of the language 
is that the patent term adjustment time should be calculated by 
determining the length of the time between application and patent 
issuance, then subtracting any continued examination time (and other 
time identified in (i), (ii), and (iii) of [35 U.S.C. 154](b)(1)(B)), 
and determining the extent to which the result exceeds three years''). 
The Federal Circuit, however, decided that the time consumed by 
continued examination under 35 U.S.C. 132(b) does not include the time 
after a notice of allowance unless the Office actually resumes 
examination of the application after allowance. See 740 F.3d at 602 
(``[t]he common-sense understanding of `time consumed by continued 
examination,' 35 U.S.C. 154(b)(1)(B)(i), is time up to allowance, but 
not later, unless examination on the merits resumes''). Therefore, the 
Office is revising the rules of practice to provide that the time 
consumed by continued examination under 35 U.S.C. 132(b) does not 
include the time after the mailing date of a notice of allowance, 
unless the

[[Page 1348]]

applicant files a request for continued examination after such 
allowance.
    The Office makes the patent term adjustment determination indicated 
in the patent by a computer program that uses the information recorded 
in the Office's Patent Application Locating and Monitoring (PALM) 
system (except when an applicant requests reconsideration pursuant to 
Sec.  1.705). See Changes to Implement Patent Term Adjustment Under 
Twenty-Year Patent Term, 65 FR at 56381 (response to comment 25). The 
decision in Novartis that the time consumed by continued examination 
under 35 U.S.C. 132(b) does not include the time after a notice of 
allowance unless the Office actually resumes examination of the 
application after allowance required a modification of the Office's 
patent term adjustment program. The modification of the Office's patent 
term adjustment program required by the decision in Novartis has now 
been completed, and the patent term adjustment determinations in 
patents issued on or after October 7, 2014 are consistent with the 
Federal Circuit decision in Novartis and this final rule. The Office 
calculates the patent term adjustment manually when an applicant 
requests reconsideration of a patent term adjustment determination 
pursuant to 37 CFR 1.705. The Office has been deciding requests for 
reconsideration of a patent term adjustment filed pursuant to 37 CFR 
1.705 consistent with the Federal Circuit decision in Novartis since 
January 15, 2014 (the date the Federal Circuit issued its decision in 
Novartis).
    Nothing in this final rule shall be construed as a waiver of: (1) 
The requirement of 37 CFR 1.705(b) that any request for reconsideration 
of the patent term adjustment indicated on the patent must be by way of 
an application for patent term adjustment filed no later than two 
months from the date the patent was granted (which two-month period may 
be extended under the provisions of 37 CFR 1.136(a)), and be 
accompanied by the items specified in 37 CFR 1.705(b)(1) and (b)(2); or 
(2) the requirement of 35 U.S.C. 154(b)(4) that an applicant 
dissatisfied with the Director's decision on the applicant's request 
for reconsideration under 35 U.S.C. 154(b)(3)(B)(ii) shall have 
exclusive remedy by a civil action against the Director filed in the 
United States District Court for the Eastern District of Virginia 
within 180 days after the date of the Director's decision on the 
applicant's request for reconsideration under 35 U.S.C. 
154(b)(3)(B)(ii). In other words, nothing in this final rule excuses 
patentees from having to meet the time limitations set forth in 37 CFR 
1.705 or 35 U.S.C. 154(b)(4) in effect at the time of the patent's 
issuance in order to challenge any patent term adjustment under 37 CFR 
1.702 et seq. regarding the issues addressed in this final rule.
    As discussed previously, the patent term adjustment statutory 
provision also includes the provision that ``[t]he period of adjustment 
of the term of a patent under [35 U.S.C. 154(b)(1)] shall be reduced by 
a period equal to the period of time during which the applicant failed 
to engage in reasonable efforts to conclude prosecution of the 
application,'' and that ``[t]he Director shall prescribe regulations 
establishing the circumstances that constitute a failure of an 
applicant to engage in reasonable efforts to conclude processing or 
examination of an application.'' See 35 U.S.C. 154(b)(2)(C)(i) and 
(iii). Under the authority provided in 35 U.S.C. 154(b)(2)(C)(iii), the 
Office is revising the rules of practice to establish that the 
submission of a request for continued examination after any notice of 
allowance has been mailed constitutes a failure of an applicant to 
engage in reasonable efforts to conclude processing or examination of 
an application. This provision has been adopted to ensure that an 
applicant does not obtain additional patent term adjustment under 35 
U.S.C. 154(b)(1)(B) for the time after a notice of allowance has been 
mailed as a consequence of delaying issuance of the patent by filing a 
request for continued examination under 35 U.S.C. 132(b) after a notice 
of allowance has been mailed.

Discussion of Specific Rules

    The following is a discussion of amendments to title 37 of the Code 
of Federal Regulations, Part 1:
    Section 1.703: Section 1.703(b)(1) is amended to provide that the 
time consumed by continued examination of the application under 35 
U.S.C. 132(b) is the number of days, if any, in the period beginning on 
the date on which any request for continued examination of the 
application under 35 U.S.C. 132(b) was filed and ending on the date of 
mailing of the notice of allowance under 35 U.S.C. 151. If a first 
request for continued examination is filed before a notice of allowance 
has been mailed and a second request for continued examination is filed 
after a notice of allowance has been mailed, the time consumed by 
continued examination of the application under 35 U.S.C. 132(b) is the 
number of days in the period beginning on the date on which the first 
request for continued examination was filed and ending on the date of 
mailing of the notice of allowance following the first request for 
continued examination, plus the number of days in the period beginning 
on the date on which the second request for continued examination was 
filed and ending on the date of mailing of the notice of allowance 
following the second request for continued examination. If a second 
request for continued examination is filed without a notice of 
allowance having been mailed between the filing of the first and second 
requests for continued examination and a notice of allowance is mailed 
after the second request for continued examination, the time consumed 
by continued examination of the application under 35 U.S.C. 132(b) is 
the number of days in the period beginning on the date on which the 
first request for continued examination was filed and ending on the 
date of mailing of the notice of allowance.
    Section 1.704: Section 1.704(c)(10) is amended to change ``other 
paper'' to ``other paper, other than a request for continued 
examination in compliance with Sec.  1.114,'' to clarify that the 
filing of a request for continued examination under 35 U.S.C. 132(b) in 
compliance with Sec.  1.114 is treated under Sec.  1.704(c)(12) rather 
than Sec.  1.704(c)(10).
    Section 1.704(c)(12) is amended to include a new provision that 
establishes the submission of a request for continued examination under 
35 U.S.C. 132(b) after any notice of allowance under 35 U.S.C. 151 has 
been mailed as constituting a failure of an applicant to engage in 
reasonable efforts to conclude processing or examination of an 
application, in which case the period of adjustment set forth in Sec.  
1.703 shall be reduced by the number of days, if any, beginning on the 
date of mailing of the notice of allowance under 35 U.S.C. 151 and 
ending on the date the request for continued examination under 35 
U.S.C. 132(b) was filed. As discussed previously, this provision has 
been adopted to ensure that an applicant does not obtain additional 
patent term adjustment under 35 U.S.C. 154(b)(1)(B) for the time after 
a notice of allowance has been mailed as a consequence of delaying 
issuance of the patent by filing a request for continued examination 
under 35 U.S.C. 132(b) after a notice of allowance has been mailed. 
Moreover, the filing of a request for continued examination after the 
mailing of a notice of allowance removes the application from the issue 
process, prevents the Office from issuing the patent, and requires the 
Office to determine if the submission affects the patentability of the 
application, which adds to the pendency of the application in which the 
request for continued examination is

[[Page 1349]]

filed (as well as other applications since examination resources must 
be diverted from other applications to the application in which the 
request for continued examination is filed).
    Section 1.704(c)(13) is amended and Sec.  1.704(c)(14) is added to 
include the provisions of Sec. Sec.  1.704(c)(12) and (c)(13), 
respectively.
    Section 1.704(d) is amended to also provide that a request for 
continued examination in compliance with Sec.  1.114 with submission of 
only an information disclosure statement in compliance with Sec. Sec.  
1.97 and 1.98 will not be considered a failure to engage in reasonable 
efforts to conclude prosecution (processing or examination) of the 
application under Sec.  1.704(c)(12), if the request for continued 
examination under 35 U.S.C. 132(b) is accompanied by the statement 
provided for in Sec.  1.704(d).
    The Office has a pilot program that reduces the need for processing 
a request for continued examination with an information disclosure 
statement filed after payment of the issue fee in order for the 
information disclosure statement to be considered by the examiner. See 
Quick Path Information Disclosure Statement (QPIDS) Pilot Program, 77 
FR 27443 (May 10, 2012). Applicants are encouraged to use the QPIDS 
program when submitting an information disclosure statement after 
payment of the issue fee, but an applicant may file a request for 
continued examination with an information disclosure statement and 
statement under Sec.  1.704(d) without submitting the request for 
continued examination and information disclosure statement via the 
QPIDS program. An applicant submitting an information disclosure 
statement filed after payment of the issue fee via the QPIDS program 
should also include the statement under Sec.  1.704(d) (if appropriate) 
with the conditional request for continued examination submitted in 
accordance with the QPIDS program.
    Comments and Responses to Comments: The Office received eight 
written comments from intellectual property organizations, industry, a 
law firm, individual patent practitioners, and the general public in 
response to the Novartis notice of proposed rulemaking. The comments 
and the Office's responses to those comments follow:
    Comment 1: Several comments suggest that ``time consumed by 
continued examination of the application requested by the applicant 
under section 132(b)'' under 35 U.S.C. 154(b)(1)(B)(i) does not include 
the date of mailing of a notice of allowance, citing Novartis, 740 F.3d 
at 601 et seq.
    Response: The Federal Circuit decision in Novartis does not 
specifically state whether the date of mailing of a notice of allowance 
is considered part of the ``time consumed by continued examination of 
the application requested by the applicant under section 132(b)'' 
within the meaning of 35 U.S.C. 154(b)(1)(B)(i). The Federal Circuit 
decision in Novartis simply discusses the time period ``before 
allowance'' and the ``time after allowance, until issuance.'' See 
Novartis, 740 F.3d at 602 (``we reject the PTO's view that the time 
after allowance, until issuance, is `time consumed by continued 
examination' '' and `` `time consumed by continued examination' . . . 
is time up to allowance, but not later'') (emphasis added). The mailing 
of the notice of allowance is the action which concludes examination of 
the application and closes prosecution of the application. See id. (`` 
`examination' presumptively ends at allowance, when prosecution is 
closed and there is no further examination on the merits. . . .'') 
(emphasis added). Thus, it is appropriate to consider the ``time 
consumed by continued examination of the application requested by the 
applicant under section 132(b)'' as including the date of mailing of 
the notice of allowance in an application that has been allowed after 
the filing of a request for continued examination.
    In addition, treating the period of ``time consumed by continued 
examination of the application requested by the applicant under section 
132(b)'' as ending on the date on which a notice of allowance is mailed 
(rather than the day before the date on which a notice of allowance is 
mailed) is consistent with how the Office treats the date on which a 
patent issues for purposes of 35 U.S.C. 154(b)(1)(A)(iv) (four months 
to issue patent term adjustment provision) and 154(b)(1)(B) (the three-
year pendency patent term adjustment provision). Specifically, the 
Office treats the four-month period in 35 U.S.C. 154(b)(1)(A)(iv) and 
the three-year period in 35 U.S.C. 154(b)(1)(B) as ending on the date 
the patent issues (rather than day before date the patent issues), even 
though the patent has been granted and is in force on the date the 
patent issues.
    Comment 2: Several comments oppose the provision in proposed Sec.  
1.703(b)(1) that if prosecution in the application is reopened, the 
period under Sec.  1.702(b) does not include the period between the 
reopening of prosecution and the date of mailing of a subsequent notice 
of allowance. The comments suggest that the period under Sec.  1.702(b) 
should include any period of post-allowance examination unless the 
reopening of prosecution is in response to a request for continued 
examination, or at least that the period of adjustment under Sec.  
1.702(b) should include any period of post-allowance examination due to 
the Office sua sponte reopening prosecution.
    Response: Section 1.703(b)(1) as adopted in this final rule 
provides that the time consumed by continued examination of the 
application under 35 U.S.C. 132(b) is the number of days, if any, in 
the period beginning on the date on which any request for continued 
examination of the application under 35 U.S.C. 132(b) was filed and 
ending on the date of mailing of the notice of allowance under 35 
U.S.C. 151. Thus, any period of examination after the mailing of a 
notice of allowance resulting from the filing of a subsequent request 
for continued examination would be considered ``time consumed by 
continued examination,'' but a period of examination after the mailing 
of a notice of allowance resulting from the Office sua sponte reopening 
prosecution would not be considered ``time consumed by continued 
examination'' (unless the applicant subsequently files a request for 
continued examination).
    Comment 3: One comment suggests that there is no basis for treating 
a second or subsequent request for continued examination after a notice 
of allowance as ``time consumed by continued examination of the 
application requested by the applicant under section 132(b),'' arguing 
that the Novartis court did not consider second or third requests for 
continued examination to be continued examination. The comment 
alternatively suggests that a second or subsequent request for 
continued examination after a notice of allowance should not be treated 
as ``time consumed by continued examination of the application 
requested by the applicant under section 132(b)'' unless the request 
for continued examination results in the mailing of an Office action 
under 35 U.S.C. 132. One comment states that it is not clear why ``time 
consumed by continued examination'' is defined in such a way as to 
include non-contiguous periods of exclusion in certain circumstances 
where prosecution is reopened.
    Response: 35 U.S.C. 154(b)(1)(B)(i) provides that the period under 
35 U.S.C. 154(b)(1)(B) does not include ``any time consumed by 
continued examination of the application requested by the applicant 
under section 132(b)'' (emphasis added). There is no basis for

[[Page 1350]]

treating a second or subsequent request for continued examination 
differently than the first request for continued examination with 
respect to period between the filing of the request for continued 
examination and a notice of allowance being considered ``time consumed 
by continued examination of the application requested by the applicant 
under section 132(b).'' The Federal Circuit decision in Novartis did 
not state that this time ``consumed by continued examination of the 
application'' under 35 U.S.C. 154(b)(1)(B)(i) includes only the time 
consumed by a first request for continued examination, or includes the 
time consumed by a request for continued examination only if the Office 
issues an Office action under 35 U.S.C. 132.
    Treating a second or subsequent request for continued examination 
as not being ``time consumed by continued examination of the 
application requested by the applicant under section 132(b)'' unless 
the Office issues an Office action under 35 U.S.C. 132 in response to 
the request for continued examination would not be consistent with the 
statutory framework of 35 U.S.C. 131, 132, and 151. 35 U.S.C. 131 
provides for examination of patent applications, specifically stating 
that ``[t]he Director shall cause an examination to be made of the 
application and the alleged new invention; and if on such examination 
it appears that the applicant is entitled to a patent under the law, 
the Director shall issue a patent therefor.'' 35 U.S.C. 131. Thus, 
examination has two possible outcomes: Namely, if ``on such examination 
it appears that the applicant is entitled to a patent under the law,'' 
the Office issues a notice of allowance under 35 U.S.C. 151; however, 
if ``on such examination'' it does not appear that the applicant is 
entitled to a patent under the law, the Office issues a notice (Office 
action) under 35 U.S.C. 132 specifying the reasons why it does not 
appear that the applicant is entitled to a patent under the law. See 35 
U.S.C. 132(a) (``Whenever, on examination, any claim for a patent is 
rejected, or any objection or requirement made, the Director shall 
notify the applicant thereof, stating the reasons for such rejection, 
or objection or requirement, together with such information and 
references as may be useful in judging of the propriety of continuing 
the prosecution of his application''). Thus, the time period between a 
request for continued examination and a notice of allowance is ``time 
consumed by continued examination of the application requested by the 
applicant under section 132(b)'' regardless of whether the Office 
issues an Office action under 35 U.S.C. 132.
    Finally, Sec.  1.703(b)(1) as adopted in this final rule does not 
``define'' ``time consumed by continued examination'' as generally or 
necessarily including non-contiguous periods. The ``time consumed by 
continued examination'' as measured by Sec.  1.703(b)(1) will include 
non-contiguous periods if the applicant files a request for continued 
examination after a notice of allowance is mailed because the ``time 
consumed by continued examination'' includes non-contiguous periods if 
the applicant files a request for continued examination after a notice 
of allowance is mailed.
    Comment 4: One comment questions how an application will be treated 
when multiple consecutive notices of allowance (e.g., a notice of 
allowance and then a supplemental notice of allowance) are mailed.
    Response: The Office issues a notice of allowability (PTOL-37) and 
a notice of allowance (PTOL-85) when an application is in condition for 
allowance. The Office rarely issues multiple consecutive notices of 
allowance (PTOL-85) (e.g., a notice of allowance and then a 
supplemental notice of allowance). In the rare situation in which the 
Office issues multiple consecutive notices of allowance (PTOL-85), the 
``time consumed by continued examination of the application requested 
by the applicant under section 132(b)'' is the number of days, if any, 
in the period beginning on the date on which a request for continued 
examination was filed and ending on the date of mailing of the first 
notice of allowance (PTOL-85).
    The Office does occasionally mail or issue multiple consecutive 
notices of allowability (PTOL-37) (e.g., a notice of allowability and 
then a supplemental notice of allowability). In these situations, the 
``time consumed by continued examination of the application requested 
by the applicant under section 132(b)'' is the number of days, if any, 
in the period beginning on the date on which a request for continued 
examination was filed and ending on the date of mailing of the notice 
of allowance (PTOL-85), regardless of whether the notice of 
allowability (PTOL-37) and notice of allowance (PTOL-85) are mailed or 
issued on different days, and also regardless of whether the Office has 
issued multiple consecutive notices of allowability (PTOL-37).
    Comment 5: Several comments oppose the provisions of proposed Sec.  
1.704(c)(12) stating that applicants must file a request for continued 
examination when they become aware of prior art after allowance that 
must be submitted to the Office to comply with Sec.  1.56. The comments 
further state that applicants often cannot make the statement required 
by Sec.  1.97(e), and that the QPIDS program is a pilot program and 
thus there is no certainty that it will continue. One comment further 
states that an applicant who may be able to make the statement required 
by Sec.  1.704(d) does not necessarily have the option of filing an 
information disclosure statement after allowance without filing a 
request for continued examination, and suggests that the Office apply 
the ``safe harbor'' provision under Sec.  1.704(d) to proposed Sec.  
1.704(c)(12). One comment suggests that the Office should make the 
QPIDS pilot program permanent, and one comment suggests that the Office 
should provide for the filing of an information disclosure statement 
after payment of the issue fee without the need for filing of a request 
for continued examination.
    Response: As discussed previously, the mailing of a notice of 
allowance under 35 U.S.C. 151 concludes the examination process and 
starts the process of preparing the application for issuance as a 
patent. The AIPA patent term adjustment final rule defined the 
submission of an amendment under Sec.  1.312 or other paper (which 
would include a request for continued examination) after a notice of 
allowance has been given or mailed as a circumstance that constitutes a 
failure of an applicant to engage in reasonable efforts to conclude 
processing or examination of an application (codified in Sec.  
1.704(c)(10)) because the submission of amendments (or other papers) 
after an application is allowed causes substantial interference with 
the patent issue process. See Changes to Implement Patent Term 
Adjustment Under Twenty-Year Patent Term, 65 FR at 56373 (discussion of 
Sec.  1.704(c)(10)). The filing of a request for continued examination 
after the mailing of a notice of allowance removes the application from 
the issue process, prevents the Office from issuing the patent, and 
requires the Office to determine if the submission affects the 
patentability of the application, which adds to the pendency of the 
application in which the request for continued examination is filed (as 
well as other applications since examination resources must be diverted 
from other applications to the application in which the request for

[[Page 1351]]

continued examination is filed). As further indicated in the AIPA 
patent term adjustment final rule, ``[a]n applicant who is engaging in 
actions or inactions that prevent or interfere with the Office's 
ability to process or examine an application cannot reasonably be 
characterized as `engag[ing] in reasonable efforts to conclude 
processing or examination of an application' (35 U.S.C. 
154(b)(2)(C)(i)).'' See Changes to Implement Patent Term Adjustment 
Under Twenty-Year Patent Term, 65 FR at 56379 (response to comment 17). 
Therefore, the Office considers it appropriate to expressly define the 
filing of a request for continued examination after the mailing of any 
notice of allowance as a failure to engage in reasonable efforts to 
conclude processing or examination of an application. See 35 U.S.C. 
154(b)(2)(C)(iii) (provides for the Office to prescribe regulations 
establishing the circumstances that constitute a failure of an 
applicant to engage in reasonable efforts to conclude processing or 
examination of an application).
    Nevertheless, the AIPA patent term adjustment final rule also 
indicates that the Office considers it appropriate to permit applicants 
to submit information cited in a patent office communication in a 
counterpart application to the Office without a reduction in patent 
term adjustment if an information disclosure statement is submitted to 
the Office within thirty days (not three months) of the date the patent 
office communication was received by an individual designated in Sec.  
1.56(c). See Changes to Implement Patent Term Adjustment Under Twenty-
Year Patent Term, 65 FR at 56385 (response to comment 36). Section 
1.704(d) was thus adopted in the AIPA patent term adjustment final rule 
to permit applicants to file an information disclosure statement 
promptly without a reduction of patent term adjustment. See Changes to 
Implement Patent Term Adjustment Under Twenty-Year Patent Term, 65 FR 
at 56373 (discussion of Sec.  1.704(d)). The Office is therefore 
revising Sec.  1.704(d) in this final rule to provide that a request 
for continued examination in compliance with Sec.  1.114 with no 
submission other than an information disclosure statement in compliance 
with Sec. Sec.  1.97 and 1.98 will not be considered a failure to 
engage in reasonable efforts to conclude prosecution (processing or 
examination) of the application under Sec.  1.704(c)(12), if the 
request for continued examination is accompanied by a statement in 
compliance with Sec.  1.704(d).
    With respect to the suggestions that the Office make the QPIDS 
pilot program permanent and provide for the filing of an information 
disclosure statement after payment of the issue fee without the need 
for filing of a request for continued examination, the Office is 
currently studying the results of the QPIDS pilot program and other 
mechanisms for considering information disclosure statements submitted 
after payment of the issue fee.
    Comment 6: Several comments state that the provisions of proposed 
Sec.  1.704(c)(12) should apply only when there is patent term 
adjustment under 35 U.S.C. 154(b)(1)(B) (under the ``B'' provision), 
and should not apply to patent term adjustment under 35 U.S.C. 
154(b)(1)(A) or 154(b)(1)(C) (under the ``A'' or ``C'' provision). One 
comment states that 35 U.S.C. 154(b)(2)(C)(ii) applies only to patent 
term adjustment under 35 U.S.C. 154(b)(1)(B), and thus applicant delays 
that may be deducted from the total patent term adjustment are only 
those that occur at the same time that Office delays would otherwise be 
included in the calculation of patent term adjustment. The comment 
suggests that Sec.  1.704(b) should be revised to indicate that patent 
term adjustment is not reduced by applicant delays arising after the 
filing of a request for continued examination, since 35 U.S.C. 
154(b)(2)(C)(ii) applies only to patent term adjustment under 35 U.S.C. 
154(b)(1)(B).
    Response: The current provisions of Sec.  1.704(b) were adopted in 
the AIPA patent term adjustment final rule. See Changes to Implement 
Patent Term Adjustment Under Twenty-Year Patent Term, 65 FR at 56370-71 
and 56393 (discussion of Sec.  1.704(b) and Sec.  1.704(b)). The Office 
did not propose any amendment to Sec.  1.704(b) in the Novartis notice 
of proposed rulemaking. 35 U.S.C. 154(b)(C)(ii) provides that, with 
respect to adjustments to patent term made under 35 U.S.C. 
154(b)(1)(B), an applicant shall be deemed to have failed to engage in 
reasonable efforts to conclude processing or examination of an 
application for the cumulative total of any periods of time in excess 
of three months that are taken to respond to a notice from the Office 
making any rejection, objection, argument, or other request. 35 U.S.C. 
154(b)(C)(iii), however, further provides that the Office shall 
prescribe regulations establishing the circumstances that constitute a 
failure of an applicant to engage in reasonable efforts to conclude 
processing or examination of an application. Thus, 35 U.S.C. 
154(b)(2)(C)(ii) cannot be considered exhaustive of the circumstances 
for which an applicant may be determined to have failed to engage in 
reasonable efforts to conclude processing or examination of an 
application. See Changes to Implement Patent Term Adjustment Under 
Twenty-Year Patent Term, 65 FR at 56381 (response to comment 28). Under 
the authority in 35 U.S.C. 154(b)(2)(C)(iii), Sec.  1.704(b) as adopted 
in the AIPA patent term adjustment final rule established failure to 
respond to a notice from the Office making any rejection, objection, 
argument, or other request within three months as a failure of an 
applicant to engage in reasonable efforts to conclude processing or 
examination of an application with respect to patent term adjustment 
under Sec. Sec.  1.702(a) through (e) (corresponding to the grounds for 
patent term adjustment under 35 U.S.C. 154(b)(1)(A) through (C)). See 
Changes to Implement Patent Term Adjustment Under Twenty-Year Patent 
Term, 65 FR at 56370 (discussion of Sec.  1.704(b)).
    35 U.S.C. 154(b) provides that the period of patent term adjustment 
under 35 U.S.C. 154(b)(1) ``shall be reduced by a period equal to the 
period of time during which the applicant failed to engage in 
reasonable efforts to conclude prosecution of the application.'' See 35 
U.S.C. 154(b)(2)(C)(i). 35 U.S.C. 154(b)(1)(C)(i) does not require the 
applicant's action or inaction (that amounts to a failure to engage in 
reasonable efforts to conclude prosecution of the application) to have 
caused or contributed to patent term adjustment for the period of 
adjustment to be reduced due to such action or inaction. See Changes to 
Implement Patent Term Adjustment Under Twenty-Year Patent Term, 65 FR 
at 56379 (response to comment 18). The patent term adjustment 
provisions of 35 U.S.C. 154(b) create a balanced system allowing for 
patent term adjustment due to Office delays for a reasonably diligent 
applicant. Id. Since the public has an interest in the technology 
disclosed and covered by a patent being available to the public at the 
earliest possible date, it is appropriate to reduce patent term 
adjustment by any period of time during which applicant failed to 
engage in reasonable efforts to conclude prosecution of the 
application, regardless of whether the applicant's actions or inactions 
caused or contributed to patent term adjustment. Id.
    Comment 7: One comment opposes the provisions of proposed Sec.  
1.704(c)(12) stating that the proposed rule undermines the three-month 
statutory period applicant has to review the application and pay the 
issue fee, and is inconsistent with the ``deduction

[[Page 1352]]

free'' three-month response periods permitted in 35 U.S.C. 
154(b)(2)(C)(ii).
    Response: 35 U.S.C. 151 provides a three-month period for an 
applicant to pay the issue fee (or permit an application to become 
abandoned for failure to pay the issue fee). That applicants also use 
this three-month period for other purposes does not mean that the 
three-month period in 35 U.S.C. 151 is designed for those purposes. In 
addition, 35 U.S.C. 154(b)(2)(C)(ii) does not provide ``deduction 
free'' three-month response periods, but rather defines a failure to 
reply to any Office action or notice within three months as a per se 
failure to engage in reasonable efforts to conclude processing or 
examination of an application (subject to reinstatement under 35 U.S.C. 
154(b)(3)(C)). See Changes to Implement Patent Term Adjustment Under 
Twenty-Year Patent Term, 65 FR at 56389 (response to comment 51). As 
discussed previously, 35 U.S.C. 154(b)(2)(C)(iii) authorizes (or 
requires) the Office to prescribe regulations establishing the 
circumstances that constitute a failure of an applicant to engage in 
reasonable efforts to conclude processing or examination of an 
application. In any event, a request for continued examination is not, 
strictly speaking, a ``response'' to a notice of allowance. See 35 
U.S.C. 151 (``The notice [of allowance] shall specify a sum, 
constituting the issue fee and any required publication fee, which 
shall be paid within 3 months thereafter. . . . Upon payment of this 
sum, the patent may issue, but if payment is not timely made, the 
application shall be regarded as abandoned.'').
    Comment 8: One comment opposing the provisions of proposed Sec.  
1.704(c)(12) states that proposed Sec.  1.704(c)(12) is unnecessary as 
multiple requests for continued examination are filed in only a low 
percentage of applications, and that applicants have a ``legal right'' 
to file multiple requests for continued examination. The comment 
further states that proposed Sec.  1.704(c)(12) is unwarranted as it 
treats requests for continued examination filed after allowance 
differently from requests for continued examination filed prior to 
allowance.
    Response: Section 1.114 currently permits applicants to file 
multiple requests for continued examination and requests for continued 
examination after a notice of allowance has been mailed. See Request 
for Continued Examination Practice and Changes to Provisional 
Application Practice, 65 FR 50092, 50095-96 (Aug. 16, 2000) (comparing 
the request for continued examination practice as implemented in Sec.  
1.114 with the transitional procedure in Sec.  1.129(a)). There is, 
however, a distinction between permitting an applicant to take an 
action (or engage in an inaction) and treating that action or inaction 
as not being failure to engage in reasonable efforts to conclude 
processing or examination of an application. See Changes to Implement 
Patent Term Adjustment Under Twenty-Year Patent Term, 65 FR at 56379 
(response to comment 17) (that conduct is permitted by the rules of 
practice does not imply that such conduct is not a failure to engage in 
reasonable efforts to conclude processing or examination of an 
application); see also Changes to Implement the Patent Law Treaty, 78 
FR 62368, 62384-85 (Oct. 21, 2013) (revising patent term adjustment 
provisions to define delays newly permitted by the Patent Law Treaty 
and Patent Law Treaties Implementation Act of 2012 (Pub. L. 112-211, 
126 Stat. 1527 (2012)) as a failure to engage in reasonable efforts to 
conclude processing or examination of an application). In addition, 
while multiple requests for continued examination are filed in a 
relatively low percentage of applications, even a low percentage of 
activity represents thousands of applications (and patents) in view of 
the number of applications filed in the Office each year. In any event, 
that only a few applicants engage in actions or inactions that are a 
failure to engage in reasonable efforts to conclude processing or 
examination of an application does not justify excusing such applicants 
from the patent term adjustment consequences of their actions or 
inactions.
    Finally, requests for continued examination filed after allowance 
are treated differently from requests for continued examination filed 
prior to allowance because applications in which a notice of allowance 
has been mailed are ready to be issued as a patent (subject to the 
applicant paying the issue fee in a timely manner). As discussed 
previously, the filing of a request for continued examination after the 
mailing of a notice of allowance removes the application from the issue 
process and prevents the Office from issuing the patent, which adds to 
the pendency of the application as well as the pendency of other 
applications since examination resources must be diverted from other 
applications to the application in which the request for continued 
examination was filed after a notice of allowance was filed.
    Comment 9: One comment opposing the provisions of proposed Sec.  
1.704(c)(12) states that requests for the Office to correct matters in 
a notice of allowability (such as an error in the claims or the failure 
of the Office to provide an initialed copy of an information disclosure 
statement) or to respond to an amendment under Sec.  1.312 before 
payment of the issue fee should not be held against applicant if 
applicant files a request for continued examination to have such 
addressed.
    Response: A request for continued examination should never be filed 
simply to obtain correction of a notice of allowability or a response 
to an amendment under Sec.  1.312. An applicant may simply call the 
examiner to obtain the correction (such as a supplemental notice of 
allowability correctly indicating the allowed claims or an initialed 
copy of an information disclosure statement) or a response to the 
amendment under Sec.  1.312 (or call the supervisory patent examiner or 
technology center director if the call to the examiner is unavailing). 
Applicants should note that filing an amendment under Sec.  1.312 is 
defined as a failure to engage in reasonable efforts to conclude 
prosecution of the application, and will result in a reduction of any 
patent term adjustment, under Sec.  1.704(c)(10).
    Comment 10: One comment opposing the provisions of proposed Sec.  
1.704(c)(12) states that the filing of a request for continued 
examination is already a ``reduction'' from any patent term adjustment 
under 35 U.S.C. 154(b)(1)(B) (the ``B'' provision) and would now be an 
additional reduction of patent term adjustment under Sec.  
1.704(c)(12).
    Response: The provisions of 35 U.S.C. 154(b)(1)(B)(i) through (iii) 
are not a ``reduction'' of patent term adjustment. Rather, 35 U.S.C. 
154(b)(1)(B)(i) through (iii) simply define periods that are not 
included in determining whether and by how much the pendency of an 
application has exceeded the three-year period specified in 35 U.S.C. 
154(b)(1)(B). Under Sec. Sec.  1.703 and 1.704 as adopted in this final 
rule, if a request for continued examination is filed after any notice 
of allowance was mailed, any patent term adjustment would be reduced by 
the number of days in the period starting on the day after the date of 
mailing of the notice of allowance and ending on the date the request 
for continued examination was filed as provided in Sec.  1.704(c)(12), 
and the period between the date the request for continued examination 
was filed and the date of mailing of the subsequent notice of allowance 
would not be included in determining whether and by how much the 
pendency of an application has exceeded the three-year period specified 
in 35 U.S.C. 154(b)(1)(B).

[[Page 1353]]

    Comment 11: One comment opposing the provisions of proposed Sec.  
1.704(c)(12) states that proposed Sec.  1.704 is unclear as to how it 
would work if a request for continued examination is filed after 
payment of the issue fee.
    Response: If a request for continued examination is filed after 
payment of the issue fee, any patent term adjustment would be reduced 
by the number of days in the period starting on the day after the date 
of mailing of the notice of allowance and ending on the date the 
request for continued examination was filed.
    35 U.S.C. 154(b)(1)(A)(iv) provides that, subject to the 
limitations under 35 U.S.C. 154(b)(2), if the issue of an original 
patent is delayed due to the failure of the Office to issue a patent 
within four months after the date on which the issue fee was paid under 
35 U.S.C. 151 and all outstanding requirements were satisfied, the term 
of the patent shall be extended one day for each day after the date on 
which the issue fee was paid and all outstanding requirements were 
satisfied until the patent is issued. Thus, the period of adjustment 
under 35 U.S.C. 154(b)(1)(A)(iv), if any, is ascertained by looking 
back from the issue date to the most recent time at which the issue fee 
or another requirement was outstanding, determining the succeeding date 
on which the issue fee was paid and all outstanding requirements were 
satisfied, and measuring the number of days, if any, in the period 
beginning on the day after the date that is four months after such date 
the issue fee was paid and all outstanding requirements were satisfied 
and ending on the date a patent was issued. Where prosecution in an 
application is reopened after a notice of allowance (before or after 
payment of the issue fee), either by the Office sua sponte or as the 
result of an applicant filing a request for continued examination, the 
date on which the issue fee was paid and all outstanding requirements 
were satisfied is the date on which the Issue Fee Transmittal Form 
(PTOL-85(b)) from the ultimate notice of allowance under 35 U.S.C. 151 
is returned to the Office (or a later date if there remain additional 
outstanding requirements, such as payment of any additional fees owed 
or required drawings to be submitted). See Manual of Patent Examining 
Procedure (MPEP) 2731. The mailing of a notice of allowance by the 
Office subsequent to the reopening of prosecution is the Office's 
indication that the application is (again) in condition to be issued as 
a patent, and the applicant's return of the Issue Fee Transmittal Form 
(PTOL-85(b)) is the applicant's indication or confirmation that the 
applicant wants any previously paid issue fee to be applied as the 
issue fee for the patent. See MPEP 1306 (''[i]f an issue fee has 
previously been paid in the application as reflected in the Notice of 
Allowance, the return of Part B (Fee(s) Transmittal form) will be 
considered a request to reapply the previously paid issue fee toward 
the issue fee that is now due''). Thus, if prosecution in an 
application is reopened after a notice of allowance as the result of an 
applicant filing a request for continued examination, the date on which 
the issue fee was paid and all outstanding requirements were satisfied 
is the date on which the Issue Fee Transmittal Form (PTOL-85(b)) from 
the ultimate notice of allowance under 35 U.S.C. 151 is returned to the 
Office (or a later date if there remain additional outstanding 
requirements, such as payment of any additional fees owed or required 
drawings to be submitted). Applicants should note that Sec.  1.114 does 
not permit an applicant to file a request for continued examination 
under 35 U.S.C. 132(b) after the date the issue fee is paid as a matter 
of right. See Sec.  1.114(a)(1).
    Comment 12: One comment states that the date of mailing of a notice 
of allowance should not be included in Sec.  1.704(c)(12) if it is 
excluded in Sec.  1.703(b)(1).
    Response: Section 1.704(c)(12) as adopted in this final rule 
provides that the period of reduction begins on the ``day after the 
date'' of mailing of a notice of allowance under 35 U.S.C. 151.
    Comment 13: One comment questions whether the proposed change to 
Sec.  1.703 and Sec.  1.704 will be ``retroactive,'' how existing 
petitions are being treated under Novartis, and whether there will be 
any interim procedure to request recalculation under Novartis. Several 
comments suggest that the proposed change to Sec.  1.704 should only be 
applied prospectively if it is adopted.
    Response: The changes to Sec.  1.703 in this final rule apply to 
any patent granted before, on, or after January 9, 2015. However, 
nothing in this final rule excuses or supersedes the timing 
requirements set forth in Sec.  1.705 regarding requests for 
reconsideration of patent term adjustment for patents granted before, 
on, or after January 9, 2015. The Office has been deciding requests for 
reconsideration of a patent term adjustment timely filed pursuant to 
Sec.  1.705 consistent with the Federal Circuit decision in Novartis 
since January 15, 2014 (the date the Federal Circuit issued its 
decision in Novartis).
    As discussed in the final rule to implement the patent term 
adjustment provisions of the Leahy-Smith America Invents Act Technical 
Corrections Act (Pub. L. 112-274, 126 Stat. 2456 (2013)), because of 
the change to the time period for requesting reconsideration of a 
patent term adjustment determination adopted in that final rule, the 
Office is not adopting ad hoc procedures for requesting a patent term 
adjustment recalculation specifically directed to the Federal Circuit 
decision in Novartis. See Revisions to Implement the Patent Term 
Adjustment Provisions of the Leahy-Smith America Invents Act Technical 
Corrections Act, 79 FR 27755, 27759 (May 15, 2014) (discussion of 
Federal Circuit decision in Novartis).
    The changes to 37 CFR 1.704 in this final rule apply only to 
applications in which a request for continued examination after a 
notice of allowance is filed on or after March 10, 2015.
    Comment 14: One comment states that the Office should amend Sec.  
1.704(d) to provide a way to submit an information disclosure statement 
without any reduction of patent term adjustment when the failure to 
submit the information disclosure statement within the thirty-day time 
period provided in Sec.  1.704 was unintentional.
    Response: That a delay is ``unintentional'' may be an appropriate 
standard for the revival of an abandoned application (35 U.S.C. 27) or 
acceptance of a delayed maintenance fee (35 U.S.C. 41(c)), it is not an 
appropriate standard for the reinstatement of reduced patent term 
adjustment. See Sec.  1.703(c)(2)(defining abandonment of an 
application as a failure to engage in reasonable efforts to conclude 
processing or examination of an application notwithstanding that an 
application may be revived if the delay is shown to have been 
unintentional). Patent term adjustment reduced under 35 U.S.C. 
154(b)(2)(C) may be reinstated only if the applicant makes a showing 
that, ``in spite of all due care,'' the applicant was unable to respond 
within the three-month period set forth in 35 U.S.C. 154(b)(2)(C). See 
35 U.S.C. 154(b)(3)(C). The ``in spite of all due care'' standard in 35 
U.S.C. 154(b) is significantly more stringent than the 
``unintentional'' delay standard of 35 U.S.C. 27 and 41(c). See Changes 
to Implement Patent Term Adjustment Under Twenty-Year Patent Term, 65 
FR at 56389 (response to comment 51) (discussing the ``in spite of all 
due care'' standard of 35 U.S.C. 154(b)(3)(C)). Thus, reinstatement of 
reduced patent term adjustment solely on the basis of ``unintentional'' 
delay would not be appropriate.

[[Page 1354]]

    Comment 15: One comment questions whether the filing of a request 
for continued examination was also considered a failure under Sec.  
1.703(c)(10).
    Response: The Office has, as a matter of practice, not treated the 
filing of a request for continued examination as a failure of an 
applicant to engage in reasonable efforts to conclude processing or 
examination of an application under Sec.  1.703(c)(10). The Office is 
revising Sec.  1.703(c)(10) in this final rule to add ``other than a 
request for continued examination in compliance with Sec.  1.114,'' to 
clarify that the filing of a request for continued examination under 35 
U.S.C. 132(b) in compliance with Sec.  1.114 is treated under Sec.  
1.704(c)(12) rather than Sec.  1.704(c)(10).
    Comment 16: One comment opposing the provisions of proposed Sec.  
1.704(c)(12) states that the Federal Circuit decision in Novartis does 
not permit the Office to treat applicant actions after a notice of 
allowance as a failure of an applicant to engage in reasonable efforts 
to conclude processing or examination of an application unless the 
action results in the resumption of examination. The comment requests 
that the Office clarify what applicant actions after a notice of 
allowance constitute a failure of an applicant to engage in reasonable 
efforts to conclude processing or examination of an application.
    Response: The regulations setting out the circumstances that are 
considered a failure of an applicant to engage in reasonable efforts to 
conclude processing or examination of an application in Sec.  1.704 are 
authorized by 35 U.S.C. 154(b)(2)(C)(iii). See 35 U.S.C. 
154(b)(2)(C)(iii) (``The Director shall prescribe regulations 
establishing the circumstances that constitute a failure of an 
applicant to engage in reasonable efforts to conclude processing or 
examination of an application''). The provisions of 35 U.S.C. 
154(b)(2)(C) and Sec.  1.704(c) were not at issue in Novartis. Rather, 
the provisions of 35 U.S.C. 154(b)(1)(B) and Sec.  1.703(b) were at 
issue in Novartis. The Federal Circuit in Novartis held that the period 
between the mailing of a notice of allowance and the issue of the 
patent was not ``time consumed by continued examination of the 
application requested by the applicant under section 132(b)'' under 35 
U.S.C. 154(b)(1)(B)(i), unless action is taken to actually resume 
examination after allowance. Novartis, 740 F.3d at 602. That an action 
(or inaction) by the applicant after the allowance of an application 
does not result in examination, and is thus not ``time consumed by 
continued examination of the application requested by the applicant 
under section 132(b)'' under 35 U.S.C. 154(b)(1)(B)(i), does not imply 
that an action (or inaction) by the applicant after the allowance of an 
application cannot be defined in Sec.  1.704 as a failure of an 
applicant to engage in reasonable efforts to conclude processing or 
examination of an application under the authority provided in 35 U.S.C. 
154(b)(2)(C)(iii).
    Section 1.704(c)(10), as adopted in the AIPA patent term adjustment 
final rule, provides that the circumstances constituting a ``failure to 
engage in reasonable efforts to conclude processing or examination of 
an application'' include submission of an amendment under Sec.  1.312 
or other paper after a notice of allowance has been given or mailed, in 
which case the period of adjustment set forth in Sec.  1.703 shall be 
reduced by the lesser of: (1) The number of days, if any, beginning on 
the date the amendment under Sec.  1.312 or other paper was filed and 
ending on the mailing date of the Office action or notice in response 
to the amendment under Sec.  1.312 or such other paper; or (2) four 
months.
    All new patent applications are now scanned into the Office's Image 
File Wrapper (IFW) system, and all processing and examination of these 
applications is conducted using electronic images instead of the paper 
source documents. This process permits multiple employees to view the 
IFW file of an application concurrently, which has reduced processing 
delays in patent issuance for certain papers filed after the mailing of 
the notice of allowance. In view of the changes that have been brought 
about by the electronic filing and processing of patent applications, 
the Office is clarifying what papers may be submitted after a notice of 
allowance without the applicant being considered to have failed to 
engage in reasonable efforts to conclude processing or examination of 
the application under Sec.  1.704(c)(10). Specifically, the submission 
of the following papers after a notice of allowance will not be 
considered a failure to engage in reasonable efforts to conclude 
processing of examination of the application under Sec.  1.704(c)(10): 
(1) An Issue Fee(s) Transmittal (PTOL-85B); (2) a power of attorney; 
(3) a power to inspect; (4) a change of address; (5) a change of entity 
status (micro, small, non-small); (6) a response to the examiner's 
reasons for allowance or a request to correct an error or omission in 
the ``Notice of Allowance'' or ``Notice of Allowability''; (7) status 
letters; (8) requests for a refund; (9) an inventor's oath or 
declaration; (10) an information disclosure statement with a statement 
in compliance with Sec.  1.704(d); (11) the resubmission by applicant 
of unlocatable paper(s) previously filed in the application (Sec.  
1.251); (12) a request for acknowledgment of an information disclosure 
statement in compliance with Sec. Sec.  1.97 and 1.98, provided that 
the applicant had requested that the examiner acknowledge the 
information disclosure statement prior to the notice of allowance, or 
the request for acknowledgement was applicant's first opportunity to 
request that the examiner acknowledge the information disclosure 
statement; (13) comments on the substance of an interview where the 
applicant-initiated interview resulted in a notice of allowance; and 
(14) letters related to government interests (e.g., those between NASA 
and the Office).
    The Office previously indicated that three types of these papers 
(written status inquiries, requests for refund, an inventor's oath or 
declaration) were a type of after-allowance submission that would be 
considered a failure to engage in reasonable efforts to conclude 
processing and examination of the application. See Clarification of 37 
CFR 1.704(c)(10) [ballot] Reduction of Patent Term Adjustment For 
Certain Types of Papers After a Notice of Allowance has been Mailed, 
1247 Off. Gaz. Pat. Office 111 (June 26, 2001); see also MPEP section 
2732. The Office no longer considers submission of a written (or other 
type of) status inquiry, request for refund, or an inventor's oath or 
declaration to be a failure to engage in reasonable efforts to conclude 
processing and examination of the application under Sec.  1.704(c)(10) 
due to the changes that have been brought about by the electronic 
filing and processing of patent applications.
    The Office reminds applicants that the submission of other types of 
papers after a notice of allowance has been given or mailed constitutes 
a ``failure to engage in reasonable efforts to conclude processing or 
examination of an application'' in which case the period of adjustment 
set forth in Sec.  1.703 shall be reduced by the lesser of: (1) The 
number of days, if any, beginning on the date the amendment under Sec.  
1.312 or other paper was filed and ending on the mailing date of the 
Office action or notice in response to the amendment under Sec.  1.312 
or such other paper; or (2) four months. See Sec.  1.703(c)(10). An 
exemplary listing of such papers includes: (1) An amendment under Sec.  
1.312; (2) a paper containing a claim for priority or benefit or 
request to correct priority or benefit information (e.g., a new or 
supplemental application data sheet filed to correct foreign or

[[Page 1355]]

domestic benefit information); (3) a request for a corrected filing 
receipt; (4) a certified copy of a priority document; (5) drawings; (6) 
a letter relating to biologic deposits; (7) a request to change or 
correct inventorship; and (8) an information disclosure statement not 
accompanied by a statement in compliance with Sec.  1.704(d).

Rulemaking Considerations

    A. Administrative Procedure Act: The amendments to 37 CFR 1.703 in 
this rulemaking to provide that the time consumed by continued 
examination under 35 U.S.C. 132(b) does not include the time after a 
notice of allowance has been mailed, unless the applicant files a 
request for continued examination after such allowance, simply 
implements the Federal Circuit's ruling on the provisions of 35 U.S.C. 
154(b)(1)(B)(i) in Novartis that the time consumed by continued 
examination under 35 U.S.C. 132(b) does not include the time after a 
notice of allowance has been mailed, unless the Office actually resumes 
examination of the application after allowance. Therefore, the 
amendment to 37 CFR 1.703 eliminates any inconsistency with the Federal 
Circuit's determination and is simply a procedural and/or interpretive 
rule. See Bachow Commc'ns Inc. v. FCC, 237 F.3d 683, 690 (D.C. Cir. 
2001) (rules governing an application process are procedural under the 
Administrative Procedure Act); Inova Alexandria Hosp. v. Shalala, 244 
F.3d 342, 350 (4th Cir. 2001) (rules for handling appeals were 
procedural where they did not change the substantive standard for 
reviewing claims); Nat'l Org. of Veterans' Advocates, Inc. 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), 
with respect to the change to 37 CFR 1.703. 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, published the change to 37 CFR 
1.703 for comment as it sought the benefit of the public's views on the 
Office's implementation of the Federal Circuit's interpretation of the 
provisions of 35 U.S.C. 154(b)(1)(B)(i) in Novartis. Similarly, the 
change to 37 CFR 1.703, as a procedural and/or interpretive rule, is 
not subject to the requirement of 5 U.S.C. 553(d) and any delayed 
effective date.
    B. Regulatory Flexibility Act: For the reasons set forth herein, 
the Deputy General Counsel for General Law of the United States Patent 
and Trademark Office has certified to the Chief Counsel for Advocacy of 
the Small Business Administration that changes adopted in this final 
rule will not have a significant economic impact on a substantial 
number of small entities. See 5 U.S.C. 605(b).
    The changes to the patent term adjustment provisions do not impose 
any additional requirements or fees on applicants. The change to 37 CFR 
1.703 simply implements the Federal Circuit's ruling on the provisions 
of 35 U.S.C. 154(b)(1)(B)(i) in Novartis and reflects how patent term 
adjustment is now calculated. The change to 37 CFR 1.704 specifies that 
the submission of a request for continued examination under 35 U.S.C. 
132(b) after any notice of allowance under 35 U.S.C. 151 has been 
mailed constitutes a failure of an applicant to engage in reasonable 
efforts to conclude processing or examination of an application. This 
change will not have a significant economic impact on a substantial 
number of small entities because applicants are not entitled to patent 
term adjustment for examination delays that result from an applicant's 
delay in prosecuting the application (35 U.S.C. 154(b)(2)(C)(i) and 37 
CFR 1.704(a)) and because applicants may avoid any consequences from 
this provision simply by refraining from filing a request for continued 
examination under 35 U.S.C. 132(b) after a notice of allowance under 35 
U.S.C. 151 has been mailed. The Office received no public comment on 
this Regulatory Flexibility Act certification, or any of the sections 
under the Rulemaking Considerations, in the Novartis notice of proposed 
rulemaking.
    For the foregoing reasons, the changes adopted in this final rule 
will not have a significant economic impact on a substantial number of 
small entities.
    C. Executive Order 12866 (Regulatory Planning and Review): This 
rulemaking has been determined to be not significant for purposes of 
Executive Order 12866 (Sept. 30, 1993).
    D. Executive Order 13563 (Improving Regulation and Regulatory 
Review): The Office has complied with Executive Order 13563. 
Specifically, the Office has, to the extent feasible and applicable: 
(1) Made a reasoned determination that the benefits justify the costs 
of the rule; (2) tailored the rule to impose the least burden on 
society consistent with obtaining the regulatory objectives; (3) 
selected a regulatory approach that maximizes net benefits; (4) 
specified performance objectives; (5) identified and assessed available 
alternatives; (6) involved the public in an open exchange of 
information and perspectives among experts in relevant disciplines, 
affected stakeholders in the private sector, and the public as a whole, 
and provided on-line access to the rulemaking docket; (7) attempted to 
promote coordination, simplification, and harmonization across 
Government agencies and identified goals designed to promote 
innovation; (8) considered approaches that reduce burdens and maintain 
flexibility and freedom of choice for the public; and (9) ensured the 
objectivity of scientific and technological information and processes.
    E. Executive Order 13132 (Federalism): This rulemaking does not 
contain policies with federalism implications sufficient to warrant 
preparation of a Federalism Assessment under Executive Order 13132 
(Aug. 4, 1999).
    F. Executive Order 13175 (Tribal Consultation): This rulemaking 
will not: (1) Have substantial direct effects on one or more Indian 
tribes; (2) impose substantial direct compliance costs on Indian tribal 
governments; or (3) preempt tribal law. Therefore, a tribal summary 
impact statement is not required under Executive Order 13175 (Nov. 6, 
2000).
    G. Executive Order 13211 (Energy Effects): This rulemaking is not a 
significant energy action under Executive Order 13211 because this 
rulemaking is not likely to have a significant adverse effect on the 
supply, distribution, or use of energy. Therefore, a Statement of 
Energy Effects is not required under Executive Order 13211 (May 18, 
2001).
    H. Executive Order 12988 (Civil Justice Reform): This rulemaking 
meets applicable standards to minimize litigation, eliminate ambiguity, 
and reduce burden as set forth in sections 3(a) and 3(b)(2) of 
Executive Order 12988 (Feb. 5, 1996).
    I. Executive Order 13045 (Protection of Children): This rulemaking 
does not concern an environmental risk to health or safety that may 
disproportionately affect children under Executive Order 13045 (Apr. 
21, 1997).
    J. Executive Order 12630 (Taking of Private Property): This 
rulemaking will not 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

[[Page 1356]]

provisions of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801-808), the United States Patent and Trademark Office 
will submit a report containing any final rule resulting from this 
rulemaking and other required information to the U.S. Senate, the U.S. 
House of Representatives, and the Comptroller General of the Government 
Accountability Office.
    L. Unfunded Mandates Reform Act of 1995: The changes set forth in 
this rulemaking do not involve a Federal intergovernmental mandate that 
will result in the expenditure by State, local, and tribal governments, 
in the aggregate, of 100 million dollars (as adjusted) or more in any 
one year, or a Federal private sector mandate that will result in the 
expenditure by the private sector of 100 million dollars (as adjusted) 
or more in any one year, and will not significantly or uniquely affect 
small governments. Therefore, no actions are necessary under the 
provisions of the Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 
1501 et seq.
    M. National Environmental Policy Act: This rulemaking will not have 
any effect on the quality of the environment and is thus categorically 
excluded from review under the National Environmental Policy Act of 
1969. See 42 U.S.C. 4321 et seq.
    N. National Technology Transfer and Advancement Act: The 
requirements of section 12(d) of the National Technology Transfer and 
Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because 
this rulemaking does not contain provisions which involve the use of 
technical standards.
    O. Paperwork Reduction Act: The Paperwork Reduction Act of 1995 (44 
U.S.C. 3501 et seq.) requires that the Office consider the impact of 
paperwork and other information collection burdens imposed on the 
public. The rules of practice pertaining to patent term adjustment and 
extension have been reviewed and approved by the Office of Management 
and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.) under OMB control number 0651-0020. The changes in this 
rulemaking would: (1) Provide that the time consumed by continued 
examination under 35 U.S.C. 132(b) does not include the time after a 
notice of allowance, unless the Office actually resumes examination of 
the application after allowance; and (2) provide that the submission of 
a request for continued examination under 35 U.S.C. 132(b) after any 
notice of allowance under 35 U.S.C. 151 has been mailed constitutes a 
failure of an applicant to engage in reasonable efforts to conclude 
processing or examination of an application.
    This rulemaking does not add any additional requirements (including 
information collection requirements) or fees for patent applicants or 
patentees. Therefore, the Office is not resubmitting information 
collection packages to OMB for its review and approval because the 
changes in this rulemaking do not affect the information collection 
requirements associated with the information collections approved under 
OMB control number 0651-0020 or any other information collections.
    Notwithstanding any other provision of law, no person is required 
to respond to, nor shall any person be subject to a penalty for failure 
to comply with, a collection of information subject to the requirements 
of the Paperwork Reduction Act unless that collection of information 
displays a currently valid OMB control number.

List of Subjects in 37 CFR Part 1

    Administrative practice and procedure, Courts, Freedom of 
information, Inventions and patents, Reporting and record keeping 
requirements, Small businesses.

    For the reasons set forth in the preamble, 37 CFR part 1 is amended 
as follows:

PART 1--RULES OF PRACTICE IN PATENT CASES

0
1. The authority citation for 37 CFR part 1 continues to read as 
follows:

    Authority: 35 U.S.C. 2(b)(2), unless otherwise noted.


0
2. Section 1.703 is amended by revising paragraph (b)(1) to read as 
follows:


Sec.  1.703  Period of adjustment of patent term due to examination 
delay.

* * * * *
    (b) * * *
    (1) The number of days, if any, in the period beginning on the date 
on which any request for continued examination of the application under 
35 U.S.C. 132(b) was filed and ending on the date of mailing of the 
notice of allowance under 35 U.S.C. 151;
* * * * *

0
3. Section 1.704 is amended by revising paragraphs (c)(10), (12), and 
(13) and (d)(1) and adding paragraph (c)(14) to read as follows:


Sec.  1.704  Reduction of period of adjustment of patent term.

* * * * *
    (c) * * *
    (10) Submission of an amendment under Sec.  1.312 or other paper, 
other than a request for continued examination in compliance with Sec.  
1.114, after a notice of allowance has been given or mailed, in which 
case the period of adjustment set forth in Sec.  1.703 shall be reduced 
by the lesser of:
    (i) The number of days, if any, beginning on the date the amendment 
under Sec.  1.312 or other paper was filed and ending on the mailing 
date of the Office action or notice in response to the amendment under 
Sec.  1.312 or such other paper; or
    (ii) Four months;
* * * * *
    (12) Submission of a request for continued examination under 35 
U.S.C. 132(b) after any notice of allowance under 35 U.S.C. 151 has 
been mailed, in which case the period of adjustment set forth in Sec.  
1.703 shall be reduced by the number of days, if any, beginning on the 
day after the date of mailing of the notice of allowance under 35 
U.S.C. 151 and ending on the date the request for continued examination 
under 35 U.S.C. 132(b) was filed;
    (13) Failure to provide an application in condition for examination 
as defined in paragraph (f) of this section within eight months from 
either the date on which the application was filed under 35 U.S.C. 
111(a) or the date of commencement of the national stage under 35 
U.S.C. 371(b) or (f) in an international application, in which case the 
period of adjustment set forth in Sec.  1.703 shall be reduced by the 
number of days, if any, beginning on the day after the date that is 
eight months from either the date on which the application was filed 
under 35 U.S.C. 111(a) or the date of commencement of the national 
stage under 35 U.S.C. 371(b) or (f) in an international application and 
ending on the date the application is in condition for examination as 
defined in paragraph (f) of this section; and
    (14) Further prosecution via a continuing application, in which 
case the period of adjustment set forth in Sec.  1.703 shall not 
include any period that is prior to the actual filing date of the 
application that resulted in the patent.
    (d)(1) A paper containing only an information disclosure statement 
in compliance with Sec. Sec.  1.97 and 1.98 will not be considered a 
failure to engage in reasonable efforts to conclude prosecution 
(processing or examination) of the application under paragraphs (c)(6), 
(c)(8), (c)(9), or (c)(10) of this section, and a request for continued 
examination in compliance with Sec.  1.114 with no submission other 
than an information disclosure statement in compliance with Sec. Sec.  
1.97 and 1.98 will not be considered a failure to engage in

[[Page 1357]]

reasonable efforts to conclude prosecution (processing or examination) 
of the application under paragraph (c)(12) of this section, if the 
paper or request for continued examination is accompanied by a 
statement that each item of information contained in the information 
disclosure statement:
    (i) Was first cited in any communication from a patent office in a 
counterpart foreign or international application or from the Office, 
and this communication was not received by any individual designated in 
Sec.  1.56(c) more than thirty days prior to the filing of the 
information disclosure statement; or
    (ii) Is a communication that was issued by a patent office in a 
counterpart foreign or international application or by the Office, and 
this communication was not received by any individual designated in 
Sec.  1.56(c) more than thirty days prior to the filing of the 
information disclosure statement.
* * * * *

    Dated: December 17, 2014.
Michelle K. Lee,
Deputy Under Secretary of Commerce for Intellectual Property and Deputy 
Director of the United States Patent and Trademark Office.
[FR Doc. 2015-00061 Filed 1-8-15; 8:45 am]
BILLING CODE 3510-16-P