Revision of the Duty To Disclose Information in Patent Applications and Reexamination Proceedings, 74987-74997 [2016-25966]

Agencies

• DEPARTMENT OF COMMERCE
• Patent and Trademark Office

[Federal Register Volume 81, Number 209 (Friday, October 28, 2016)]
[Proposed Rules]
[Pages 74987-74997]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25966]


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DEPARTMENT OF COMMERCE

 Patent and Trademark Office

37 CFR Part 1

[Docket No.: PTO-P-2011-0030]
RIN 0651-AC58


Revision of the Duty To Disclose Information in Patent 
Applications and Reexamination Proceedings

AGENCY: United States Patent and Trademark Office, Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The United States Patent and Trademark Office (Office or PTO) 
is proposing revisions to the materiality standard for the duty to 
disclose information in patent applications and reexamination 
proceedings (duty of disclosure) in light of a 2011 decision by the 
U.S. Court of Appeals for the Federal Circuit (Federal Circuit). The 
Office previously issued a notice of proposed rulemaking on July 21, 
2011, and due to the passage of time since the comment period closed in 
2011, the Office considers it appropriate to seek additional comments 
from our stakeholders before issuing a final rulemaking. In the current 
notice of proposed rulemaking, the Office is seeking public comments on 
the rules of practice, as revised in response to the comments received 
from our stakeholders.

DATES: Comment Deadline Date: The Office is soliciting comments from 
the public on this proposed rule change. Written comments must be 
received on or before December 27, 2016 to ensure consideration. No 
public hearing will be held.

ADDRESSES: Comments concerning this notice should be sent by electronic 
mail message over the Internet (email) addressed to 
AC58.comments@uspto.gov. Comments may also be submitted by postal mail 
addressed to: Mail Stop Comments--Patents, Commissioner for Patents, 
P.O. Box 1450, Alexandria, VA 22313-1450, marked to the attention of 
Matthew

[[Page 74988]]

Sked, Legal Advisor, Office of Patent Legal Administration, Office of 
the Associate Commissioner for Patent Examination Policy. Comments may 
also be sent by email via the Federal eRulemaking Portal. See the 
Federal eRulemaking Portal Web site (https://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 via email to facilitate posting on the 
Office's Internet Web site. Plain text is preferred, but comments may 
also be submitted in ADOBE[supreg] portable document format or 
MICROSOFT WORD[supreg] format. Comments not submitted electronically 
should be submitted on paper in a format that facilitates convenient 
scanning into ADOBE[supreg] portable document format.
    The comments will be available for public inspection, upon request, 
at the Office of the Commissioner for Patents, located in Madison East, 
Tenth Floor, 600 Dulany Street, Alexandria, Virginia. Comments also 
will be available for viewing via the Office's Internet Web site 
(https://www.uspto.gov) and at https://www.regulations.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: Matthew J. Sked, Legal Advisor ((571) 
272-7627) or Nicole Dretar Haines, Senior Legal Advisor ((571) 272-
7717), Office of Patent Legal Administration, Office of the Deputy 
Commissioner for Patent Examination Policy.

SUPPLEMENTARY INFORMATION:

Executive Summary:

    Purpose: This notice proposes changes to the relevant rules of 
practice to harmonize the materiality standard for the duty of 
disclosure before the Office with the but-for materiality standard for 
establishing inequitable conduct before the courts in light of the 
Federal Circuit's decision in Therasense, Inc. v. Becton, Dickinson & 
Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc).
    Summary of Major Provisions: The Office proposes to revise the 
rules of practice to adopt the but-for standard for materiality 
required to establish inequitable conduct set forth in the Federal 
Circuit's decision in Therasense as the standard for materiality for 
the duty to disclose information in patent applications and 
reexamination proceedings. The Office also proposes to revise the rules 
of practice to explicitly reference ``affirmative egregious 
misconduct'' as set forth in the Federal Circuit's decision in 
Therasense.
    Costs and Benefits: This rulemaking is not economically significant 
as that term is defined in Executive Order 12866 (Sept. 30, 1993).

Background

    On May 25, 2011, the Federal Circuit issued the en banc Therasense 
decision, modifying the standard for materiality required to establish 
inequitable conduct before the courts. The Federal Circuit tightened 
the materiality standard to ``reduce the number of inequitable conduct 
cases before the courts and . . . cure the problem of overdisclosure of 
marginally relevant prior art to the PTO.'' Therasense, 649 F.3d at 
1291. In Therasense, the Federal Circuit held that ``the materiality 
required to establish inequitable conduct is but-for materiality.'' Id. 
The Federal Circuit explained that ``[w]hen an applicant fails to 
disclose prior art to the PTO, that prior art is but-for material if 
the PTO would not have allowed a claim had it been aware of the 
undisclosed prior art.'' Id. The Federal Circuit further explained that 
``in assessing the materiality of a withheld reference, the court must 
determine whether the PTO would have allowed the claim if it had been 
aware of the undisclosed reference[,] . . . apply[ing] the 
preponderance of the evidence standard and giv[ing] claims their 
broadest reasonable construction.'' Id. at 1291-92. Examples of where 
the Federal Circuit found information to be but-for material include 
Transweb, LLC v. 3M Innovative Properties Co., 812 F.3d 1295 (Fed. Cir. 
2016), and Apotex, Inc. v. UCB Inc., 763 F.3d 1354 (Fed. Cir. 2014).
    In addition, the Federal Circuit recognized that the materiality 
prong of inequitable conduct may also be satisfied in cases of 
affirmative egregious misconduct. Id. at 1292. See also The Ohio Willow 
Wood Co. v. Alps South, LLC, 735 F.3d 1333, 1351 (Fed. Cir. 2013); 
Intellect Wireless, Inc. v. HTC Corp., 732 F.3d 1339, 1344 (Fed. Cir. 
2013). The Federal Circuit explained that ``[t]his exception to the 
general rule of requiring but-for proof incorporates elements of the 
early unclean hands cases before the Supreme Court, which dealt with 
`deliberately planned and carefully executed scheme[s]' to defraud the 
PTO and the courts.'' Therasense, 649 F.3d at 1292. The Federal Circuit 
reasoned that ``a patentee is unlikely to go to great lengths to 
deceive the PTO with a falsehood unless it believes that the falsehood 
will affect issuance of the patent.'' Id. Further, the Federal Circuit 
clarified that while the filing of an unmistakably false affidavit 
would constitute affirmative egregious misconduct, ``neither mere 
nondisclosure of prior art references to the PTO nor failure to mention 
prior art references in an affidavit constitutes affirmative egregious 
misconduct.'' Id. at 1292-93. Rather, ``claims of inequitable conduct 
that are based on such omissions require proof of but-for 
materiality.'' Id. at 1293.
    A notice of proposed rulemaking was previously published in the 
Federal Register (76 FR 43631) on July 21, 2011. Comments were due on 
September 19, 2011. The Office received 24 written comments in response 
to the notice. In addition to considering the public comments, the 
Office monitored further Federal Circuit decisions regarding the 
application of the inequitable conduct standard. Based upon the passage 
of time since the end of the comment period and the significant changes 
to patent law as a result of the successful implementation of the 
Leahy-Smith America Invents Act, the Office considered it appropriate 
to obtain public comment on the proposed changes to the rules of 
practice regarding the duty of disclosure. Therefore, the Office is 
publishing the current notice of proposed rulemaking to provide the 
public with an opportunity to comment on the proposed revisions, which 
take into account the comments received in response to the 2011 notice 
of proposed rulemaking.
    Like the previously proposed rule, the currently proposed rule 
would harmonize the materiality standard for the duty of disclosure 
before the Office with the but-for materiality standard set forth in 
Therasense for establishing inequitable conduct before the courts. 
Specifically, the currently proposed rule would modify 37 CFR 1.56(a) 
and 37 CFR 1.555(a) to recite that the materiality standard for the 
duty of disclosure is but-for materiality, and would modify 37 CFR 
1.56(b) and 37 CFR 1.555(b) to define the but-for materiality standard 
as set forth in Therasense. Further, in view of the Federal Circuit's 
recognition that affirmative egregious misconduct satisfies the 
materiality prong of inequitable conduct, the currently proposed rule 
would amend 37 CFR 1.56(a) and 37 CFR 1.555(a) to explicitly 
incorporate affirmative egregious misconduct.
    In the previous notice of proposed rulemaking, the Office proposed 
only to

[[Page 74989]]

amend 37 CFR 1.56(b) and 37 CFR 1.555(b) by combining in the same 
provision both an explicit reference to the Therasense materiality 
standard and a definition of the materiality standard, which included 
an explicit recitation of affirmative egregious misconduct. See 
Revision of the Materiality to Patentability Standard for the Duty to 
Disclose Information in Patent Applications, 76 FR 43631, 43634 (July 
21, 2011). Prior to making a final decision on whether to modify the 
previously proposed rule, the Office considered all public comments and 
monitored the petition for certiorari to the Supreme Court in 1st 
Media, LLC v. Electronic Arts, Inc., 694 F.3d 1367 (Fed. Cir. 2012), 
cert. denied, 134 S.Ct. 418 (2013) and the further developments 
regarding the application of the inequitable conduct standard by the 
Federal Circuit. Accordingly, the Office has decided to modify the 
previously proposed rule language to avoid potential confusion by 
moving the language regarding affirmative egregious misconduct from the 
definition of the materiality standard for disclosure of information in 
37 CFR 1.56(b)(2) and 37 CFR 1.555(b)(2), as previously proposed, to 37 
CFR 1.56(a) and 37 CFR 1.555(a), respectively. Therefore, in the 
currently proposed rule, 37 CFR 1.56(b) and 37 CFR 1.555(b) would 
define the but-for materiality standard as set forth in Therasense, 
while 37 CFR 1.56(a) and 37 CFR 1.555(a) would incorporate affirmative 
egregious misconduct.
    In the previous notice of proposed rulemaking, the Office also 
proposed to amend 37 CFR 1.56(b) and 37 CFR 1.555(b) to explicitly 
reference the Therasense ruling. Comments received in response to the 
previous notice of proposed rulemaking questioned explicitly 
referencing the Therasense decision directly in the rules out of 
concern that the rules could be affected as the Therasense ruling is 
interpreted and applied, or if Therasense is overruled. While the 
currently proposed rule removes the explicit reference to the 
Therasense decision, explicitly referencing the court decision is not 
necessary to link the materiality standard for the duty of disclosure 
before the Office with the but-for materiality standard set forth in 
Therasense for establishing inequitable conduct before the courts. The 
recitation of but-for materiality in 37 CFR 1.56(a) and 1.555(a) and 
the definition of but-for materiality in 37 CFR 1.56(b) and 1.555(b) 
would establish that the materiality standard for the duty of 
disclosure in this currently proposed rule is the same as the but-for 
materiality standard set forth in Therasense and its interpretations 
and applications.
    As discussed previously, Therasense was decided by the Federal 
Circuit en banc. This precedential decision can only be overturned by 
another en banc decision of the Federal Circuit or by a decision of the 
Supreme Court. See, e.g., Nobelpharma AB v. Implant Innovations, Inc., 
141 F.3d 1059, 1068 n.5 (Fed. Cir. 1998) (Federal Circuit precedent may 
not be changed by a panel.). The Office's explicit reference to and 
definition of the but-for materiality standard set forth in Therasense 
in currently proposed 37 CFR 1.56 and 37 CFR 1.555 would avoid 
divergence between the Office's materiality standard for the duty of 
disclosure and the but-for inequitable conduct materiality standard set 
forth in Therasense. This approach should benefit the public by 
providing a consistent materiality standard without the need for 
continuous revisions to the rules as the Therasense standard is 
interpreted or applied. In the event the Supreme Court, or Federal 
Circuit acting en banc, chooses to revise the but-for materiality 
standard in Therasense, the Office will reconsider the rules at that 
time. Further, the Office will keep the public informed of its 
understanding of how the Federal Circuit interprets the standard 
through future revisions to the Manual of Patent Examining Procedure 
(MPEP).
    Historically, the Federal Circuit connected the materiality 
standard for inequitable conduct with the Office's materiality standard 
for the duty of disclosure. That is, the Federal Circuit has invoked 
the materiality standard for the duty of disclosure to measure 
materiality in cases raising claims of inequitable conduct. In doing 
so, the Federal Circuit has utilized both the ``reasonable examiner'' 
standard set forth in the 1977 version of 37 CFR 1.56(b) and the prima 
facie case of unpatentability standard set forth in the 1992 version of 
37 CFR 1.56(b). See, e.g., Am. Hoist & Derrick Co. v. Sowa & Sons, 
Inc., 725 F.2d 1350, 1363 (Fed. Cir. 1984); Bruno Indep. Living Aids, 
Inc. v. Acorn Mobility Servs., Ltd., 394 F.3d 1348, 1352-53 (Fed. Cir. 
2005). In Therasense, the Federal Circuit eliminated what existed of 
the historical connection between the two materiality standards and did 
not indicate that the Office must apply the but-for standard for 
materiality required to establish inequitable conduct under Therasense 
as the standard for determining materiality under 37 CFR 1.56 or 37 CFR 
1.555. Thus, while Therasense does not require the Office to harmonize 
its materiality standard underlying the duty of disclosure and the 
Federal Circuit's but-for materiality standard underlying the 
inequitable conduct doctrine, there are important reasons to amend 37 
CFR 1.56 and 37 CFR 1.555 to do so.
    A unitary materiality standard is simpler for the patent system as 
a whole. Under the single but-for standard of materiality, patent 
applicants will not be put in the position of having to meet one 
standard of materiality as set forth in Therasense in defending against 
inequitable conduct allegations and a second, different materiality 
standard when complying with the duty of disclosure before the Office. 
Also, the Office expects that by adopting the Therasense but-for 
standard for materiality in this currently proposed rule, the frequency 
with which charges of inequitable conduct are raised against applicants 
and practitioners for failing to disclosure material information to the 
Office will be reduced.
    Similarly, the Office expects that adopting the but-for materiality 
standard would reduce the incentive to submit marginally relevant 
information in information disclosure statements (IDSs). As such, this 
currently proposed rule would further the Office's goal of enhancing 
patent quality. The adoption of the but-for standard for materiality 
should lead to more focused prior art submissions by applicants, which 
in turn will assist examiners in more readily recognizing the most 
relevant prior art.
    At the same time, the Office also expects this currently proposed 
rule would continue to encourage applicants to comply with their duty 
of candor and good faith. The Office recognizes that it previously 
considered, and rejected, a but-for standard for the duty of disclosure 
in 1992 when it promulgated the prima facie case of unpatentability 
standard that would be replaced under this proposed rule. Duty of 
Disclosure, 57 FR 2021, 2024 (Jan. 17, 1992). The Office was concerned 
about the types of potential misconduct that could occur unchecked 
under a pure but-for standard. By including a provision for affirmative 
egregious misconduct in the currently proposed rule, the Office's long-
standing concern would be mitigated. In Therasense, the Federal Circuit 
stated, ``creating an exception to punish affirmative egregious acts 
without penalizing the failure to disclose information that would not 
have changed the issuance decision . . . strikes a necessary balance 
between encouraging honesty before the PTO and preventing unfounded 
accusations of inequitable conduct.'' Id. at 1293.

[[Page 74990]]

Discussion of Specific Rules

    The following is a description of the amendments PTO is proposing:
    Section 1.56: Section 1.56(a) as proposed to be amended would 
provide that the materiality standard for the duty of disclosure is 
but-for materiality. Further, Sec.  1.56(a) as proposed would provide 
that a patent will not be granted on an application in which 
affirmative egregious misconduct was engaged in.
    Section 1.56(b) as proposed to be amended would replace the prima 
facie case of unpatentability materiality standard with the definition 
of the but-for materiality standard. As proposed, Sec.  1.56(b) would 
provide that information is but-for material to patentability if the 
Office would not find a claim patentable if the Office were aware of 
the information, applying the preponderance of the evidence standard 
and giving the claim its broadest reasonable construction consistent 
with the specification.
    Previously proposed Sec.  1.56(b) included two discrete sentences. 
The first sentence stated information is material to patentability if 
it is material under the standard set forth in Therasense, and the 
second sentence stated information is material to patentability under 
Therasense if (1) the Office would not allow a claim if it were aware 
of the information, or (2) the applicant engages in affirmative 
egregious misconduct before the Office as to the information. See 
Revision of the Materiality to Patentability Standard for the Duty to 
Disclose Information in Patent Applications, 76 FR at 43634. The 
explicit reference to the Therasense decision and the recitation of 
affirmative egregious misconduct in previously proposed Sec.  1.56(b) 
have not been retained in this currently proposed rule in view of 
public comments received. Currently proposed Sec.  1.56(a) now recites 
that the materiality standard for the duty of disclosure is but-for 
materiality. Currently proposed Sec.  1.56(b) defines the but-for 
materiality standard as set forth in Therasense.
    As set forth above, an explicit reference to the Therasense 
decision is not necessary to link the materiality standard for the duty 
of disclosure to the but-for materiality standard for inequitable 
conduct set forth in Therasense. The Office has determined that 
reciting ``but-for material[ity]'' and its definition as it is recited 
in Therasense makes clear that the standard for materiality is the but-
for standard set forth in Therasense and its interpretations and 
applications. Also, by moving the language regarding affirmative 
egregious misconduct from previously proposed Sec.  1.56(b)(2) to Sec.  
1.56(a), the Office has separated the definition of the materiality 
standard for the duty to disclose information from the recitation of 
affirmative egregious misconduct.
    Additionally, the Office has modified the previously proposed rule 
language to state that a claim is given its broadest reasonable 
construction ``consistent with the specification.'' The Office did not 
intend the previously proposed omission of this language that is 
present in existing Sec. Sec.  1.56(b) and 1.555(b) as an indication 
that claims would no longer be given their broadest reasonable 
construction consistent the specification. While the Federal Circuit in 
Therasense did not specifically state that the broadest reasonable 
construction is a construction that is consistent with the 
specification, the Federal Circuit referenced MPEP Sec.  2111 (8th ed. 
2001) (Rev. 9, Aug. 2012) in establishing that a claim is given its 
broadest reasonable construction. Therasense, 649 F.3d at 1292. MPEP 
Sec.  2111 states that ``(d)uring patent examination, the pending 
claims must be `given their broadest reasonable interpretation 
consistent with the specification.''' See also Phillips v. AWH Corp., 
415 F.3d 1303, 1316 (Fed. Cir. 2005) (``The Patent and Trademark Office 
(`PTO') determines the scope of claims in patent applications not 
solely on the basis of the claim language, but upon giving claims their 
broadest reasonable construction `in light of the specification as it 
would be interpreted by one of ordinary skill in the art.' ''). In 
addition, the Federal Circuit has indicated that the phrases ``broadest 
reasonable interpretation'' and ``broadest reasonable interpretation 
consistent with the specification'' have the same meaning as it would 
be unreasonable to ignore any interpretive guidance afforded by the 
written description. See In re Morris, 127 F.3d 1048, 1054 (Fed. Cir. 
1997). Nevertheless, in order to make clear that any construction made 
by the Office in the application of Sec.  1.56 must be consistent with 
the specification, the currently proposed rules have been amended 
accordingly.
    Section 1.555: Section 1.555(a) as proposed to be amended would 
provide that the materiality standard for the duty of disclosure in a 
reexamination proceeding is but-for materiality. Further, Sec.  
1.555(a) as proposed to be amended would provide that the duties of 
candor, good faith, and disclosure have not been complied with if 
affirmative egregious misconduct was engaged in by, or on behalf of, 
the patent owner in the reexamination proceeding.
    Section 1.555(b) as proposed to be amended would provide that 
information is but-for material to patentability if, for any matter 
proper for consideration in reexamination, the Office would not find a 
claim patentable if the Office were aware of the information, applying 
the preponderance of the evidence standard and giving the claim its 
broadest reasonable construction consistent with the specification. The 
explicit reference to the Therasense decision and recitation of 
affirmative egregious misconduct in previously proposed Sec.  1.555(b) 
have not been retained in this currently proposed rule in view of 
public comments received. Currently proposed Sec.  1.555(a) now recites 
that the materiality standard for the duty of disclosure in a 
reexamination proceeding is but-for materiality. Currently proposed 
Sec.  1.555(b) defines the but-for materiality standard as set forth in 
Therasense.
    Additionally, Sec.  1.555(b) as proposed would provide that the 
but-for materiality standard covers the disclosure of information as to 
any matter that is proper for consideration in a reexamination 
proceeding. Previously proposed Sec.  1.555(b) was silent as to the 
types of information that are appropriate for consideration in a 
reexamination proceeding, and existing Sec.  1.555(b) limits the types 
of information that could be considered in reexamination to patents and 
printed publications. In view of public comments received, this 
currently proposed rule would amend Sec.  1.555(b) to again recite the 
types of information that are appropriate for consideration in a 
reexamination proceeding but, unlike the existing rule, this currently 
proposed rule encompasses disclosure of information as to any matter 
that is appropriate for consideration in a reexamination proceeding 
(e.g., admissions by patent owner), as opposed to being limited to 
patents and printed publications.
    It is noted that Sec.  1.933 is also directed to the duty of 
disclosure in inter partes reexamination proceedings; however, the 
statement as to materiality of information in Sec.  1.933 incorporates 
Sec.  1.555. Thus, Sec.  1.933 has not been amended in this currently 
proposed rule.

Comments and Response to Comments

    The Office published a notice on July 21, 2011, proposing to change 
the rules of practice to revise the standard for materiality of the 
duty to disclose information in patent applications and

[[Page 74991]]

reexamination proceedings in light of the decision of the Federal 
Circuit in Therasense. See Revision of the Materiality to Patentability 
Standard for the Duty to Disclose Information in Patent Applications, 
76 FR at 43631. The Office received 24 written comments (from 
intellectual property organizations, academic and research 
institutions, companies, and individuals) in response to that notice. 
The comments and the Office's responses to the comments follow:

A. Previously Proposed Sec. Sec.  1.56(b)(1) and 1.555(b)(1)
B. Cumulative Information
C. Affirmative Egregious Misconduct
D. Therasense Language
E. General Language Comments
F. Application of Rule Standards
G. General Comments

A. Previously Proposed Sec. Sec.  1.56(b)(1) and 1.555(b)(1)

    Comment 1: Several comments suggested amending previously proposed 
Sec. Sec.  1.56(b)(1) and 1.555(b)(1) to add the phrase ``consistent 
with the specification'' following the phrase ``broadest reasonable 
construction'' to ensure the Office would be giving a claim its 
broadest reasonable construction consistent with the specification.
    Response: As discussed in the preamble, the Office has modified the 
previously proposed rule language to add ``consistent with the 
specification'' after ``broadest reasonable construction.''
    Comment 2: One comment suggested amending previously proposed 
Sec. Sec.  1.56(b)(1) and 1.555(b)(1) to change the perspective from 
the present to the time when information was withheld from the Office. 
In particular, this comment suggested changing the phrase ``would not 
allow a claim if it were aware of the information'' in proposed Sec.  
1.56(b)(1) to ``would not have allowed a claim if it were aware of the 
information,'' and changing the phrase ``would not find a claim 
patentable if it were aware of the information'' in proposed Sec.  
1.555(b)(1) to ``would not have found a claim patentable if it were 
aware of the information.'' Another comment requested clarification 
regarding whether proposed Sec. Sec.  1.56(b)(1) and 1.555(b)(1) would 
apply to any application pending on, or applications filed after, the 
effective date of any final rule.
    Response: While the first comment suggested specific language found 
in the Therasense holding be added to the rules, the Therasense holding 
pertains to inequitable conduct analysis by the courts, which is 
applied from a different perspective than the duty of disclosure 
analysis by applicants. The duty of disclosure is a prospective 
analysis, while inequitable conduct is a retrospective analysis. In 
other words, an applicant determines materiality in the present, not 
retroactively as a court would determine inequitable conduct. 
Additionally, with respect to Office proceedings, Sec. Sec.  1.56(b) 
and 1.555(b) as proposed in this rule would apply to any application or 
reexamination proceeding pending on, filed on, or filed after the 
effective date of any final rule.
    Comment 3: Several comments requested clarification regarding 
whether ``a claim'' in proposed Sec. Sec.  1.56(b)(1) and 1.555(b)(1) 
is the finally allowed claim or any claim pending during prosecution, 
such as restricted claims, withdrawn claims, amended claims, etc.
    Response: Currently proposed Sec.  1.56(a) explicitly states 
``[t]he duty to disclose information exists with respect to each 
pending claim until the claim is cancelled or withdrawn from 
consideration, or the application becomes abandoned.'' Similarly, Sec.  
1.555(a) states ``[t]he duty to disclose the information exists with 
respect to each claim pending in the reexamination proceeding until the 
claim is cancelled.'' Therefore, the duty of disclosure pertains to all 
claims while they are pending. The duty does not pertain to information 
that is only material to claims that have been cancelled or withdrawn.

B. Cumulative Information

    Comment 4: Several comments suggested the rules maintain the 
language from existing Sec. Sec.  1.56(b) and 1.555(b), which provide 
that information is material to patentability ``when it is not 
cumulative to information already of record or being made of record.''
    Response: Sections 1.56 and 1.555 in this currently proposed rule 
do not include the language regarding cumulative information set forth 
in existing Sec. Sec.  1.56 and 1.555. The Office, however, is not 
requesting that applicants submit cumulative information. Information 
that is merely cumulative to information already on the record would 
not be material under the but-for standard.
    Comment 5: One comment stated that non-disclosed cumulative 
information may meet the but-for test in the situation where the Office 
erred in allowing a claim over the originally cited art and the 
applicant is in possession of art that is cumulative to the originally 
cited art.
    Response: The applicant is under a duty to refrain from filing and 
prosecuting claims that are known to be unpatentable whether based on 
information already of record and not recognized by the examiner or 
cumulative information not submitted. See Sec. Sec.  11.18, 11.301, and 
11.303. In such an instance, the applicant should amend the claims 
accordingly.

C. Affirmative Egregious Misconduct

    Comment 6: Several comments stated that combining the but-for test 
of Sec. Sec.  1.56(b)(1) and 1.555(b)(1) and the affirmative egregious 
misconduct test of Sec. Sec.  1.56(b)(2) and 1.555(b)(2) in the 
previously proposed rules will lead to confusion because the but-for 
test involves the materiality of information while the ``affirmative 
egregious misconduct'' test is related to the nature of the conduct. 
Several comments, in particular, suggested moving the ``affirmative 
egregious misconduct'' exception into Sec. Sec.  1.56(a) and 1.555(a).
    Response: In order to alleviate any potential confusion by 
including affirmative egregious misconduct in Sec. Sec.  1.56(b) and 
1.555(b), this currently proposed rule amends Sec. Sec.  1.56 and 1.555 
by moving the language regarding affirmative egregious misconduct from 
previously proposed Sec. Sec.  1.56(b)(2) and 1.555(b)(2) to Sec. Sec.  
1.56(a) and 1.555(a), respectively. In particular, Sec.  1.56(a) as 
currently proposed would provide that a patent will not be granted on 
an application where any individual associated with the filing or 
prosecution of the application engages in affirmative egregious 
misconduct. Section 1.555(a) as currently proposed would provide that 
the duties of candor, good faith, and disclosure have not been complied 
with if any individual associated with the patent owner in a 
reexamination proceeding engages in affirmative egregious misconduct. 
Thus, Sec. Sec.  1.56(b) and 1.555(b), as currently proposed, are 
limited to defining the but-for materiality standard for the duty to 
disclose information.
    Comment 7: Several comments stated that the phrase ``affirmative 
egregious misconduct'' in previously proposed rules Sec. Sec.  
1.56(b)(2) and 1.555(b)(2) is a vague and undefined term and, 
therefore, should not be included in the rules. In addition, several 
comments requested that the Office incorporate the definition of 
affirmative egregious misconduct from Therasense directly into the 
rule. Several comments requested guidance, such as examples, on what 
sort of conduct constitutes affirmative egregious misconduct in 
previously proposed Sec. Sec.  1.56(b) and 1.555(b). One other comment 
suggested

[[Page 74992]]

clarifying affirmative egregious misconduct to prevent affirmative 
egregious misconduct from ``swallowing'' the but-for rule and requiring 
affirmative egregious misconduct to have a realistic potential to 
impact patentability. Several comments also stated that it is unclear 
how affirmative egregious misconduct relates to the Office's other 
rules such as Sec. Sec.  1.56(a) and 10.23. (While Sec.  10.23 was in 
effect at the time the comment was made, it has since been removed and 
Sec.  11.804 was adopted. See Changes to Representation of Others 
Before The United States Patent and Trademark Office, 78 FR 20188 (Apr. 
3, 2013).) These comments are applicable to the currently proposed 
rules as well.
    Response: As discussed previously, the Office has retained and 
moved the recitation of affirmative egregious misconduct to currently 
proposed Sec. Sec.  1.56(a) and 1.555(a). Affirmative egregious 
misconduct is recited in currently proposed Sec.  1.56(a) in addition 
to the other forms of misconduct that would preclude a patent from 
being granted. Similarly, affirmative egregious misconduct is recited 
in currently proposed Sec.  1.555(a) in addition to the other forms of 
misconduct engaged in by, or on behalf of, the patent owner in the 
reexamination proceeding that would cause a violation of the duties of 
candor, good faith, and disclosure. The discussion of affirmative 
egregious misconduct in Therasense and subsequent cases, as well as the 
lengthy jurisprudence of the unclean hands doctrine, offers guidance as 
to the boundaries of affirmative egregious misconduct. Specifically, in 
Therasense, the Federal Circuit likened affirmative egregious 
misconduct to the doctrine of unclean hands that ``dealt with 
`deliberately planned and carefully executed scheme[s]' to defraud the 
PTO and the courts.'' Therasense, 649 F.3d at 1292. The Federal Circuit 
also described several examples of behavior that would constitute 
affirmative egregious misconduct including ``perjury, the manufacture 
of false evidence, and the suppression of evidence,'' as well as filing 
an ``unmistakably false affidavit.'' Id. at 1287, 1292. See also The 
Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d at 1351 (finding that 
misrepresenting evidence to the Board of Patent Appeals and 
Interferences was ``tantamount to filing an unmistakably false 
affidavit''); Intellect Wireless, Inc. v. HTC Corp., 732 F.3d at 1344 
(stating ``the materiality prong of inequitable conduct is met when an 
applicant files a false affidavit and fails to cure the misconduct''). 
The Federal Circuit clarified, however, that ``neither mere 
nondisclosure of prior art references to the PTO nor failure to mention 
prior art references in an affidavit constitutes affirmative egregious 
misconduct.'' Therasense, 649 F.3d at 1292-93. Further, the Federal 
Circuit has provided additional guidance on the type of activity that 
would not constitute affirmative egregious misconduct. See, e.g., 
Powell v. Home Depot U.S.A., Inc., 663 F.3d 1221, 1235 (Fed. Cir. 2011) 
(failing to update a Petition to Make Special ``is not the type of 
unequivocal act, `such as filing an unmistakably false affidavit,' that 
would rise to the level of `affirmative egregious misconduct.' '').
    Comment 8: Several comments suggested that acts of ``affirmative 
egregious misconduct'' in previously proposed Sec. Sec.  1.56(b) and 
1.555(b) should not be limited solely to ``the applicant.''
    Response: The Office does not interpret the Federal Circuit's use 
of ``patentee'' in Therasense when describing affirmative egregious 
misconduct as limiting the misconduct to only the applicant or patent 
owner. All of the parties identified in Sec. Sec.  1.56(c) and 1.555(a) 
are subject to the affirmative egregious misconduct provisions of 
currently proposed Sec. Sec.  1.56(a) and 1.555(a), respectively.
    Comment 9: One comment suggested striking previously proposed Sec.  
1.555(b)(2), which was directed to affirmative egregious misconduct, as 
unnecessary. The comment asserts that the previously proposed rule 
invites potential third party abuse and confusion during reexamination 
since third parties will see the rule as a license to argue a lack of 
candor with respect to previous patent holder submissions to the 
Office.
    Response: While the currently proposed rule no longer includes 
Sec.  1.555(b)(2), the recitation of affirmative egregious misconduct 
has been moved to currently proposed Sec.  1.555(a). As proposed, this 
rule would address a patent owner's duty of candor and good faith in 
dealing with the Office, including the patent owner's duty of 
disclosure. It would not establish an opportunity in a reexamination 
proceeding for a third party to challenge the duty of candor and good 
faith of a patentee. Conduct is not grounds on which reexamination may 
be requested and is not appropriate to be raised during a reexamination 
proceeding. See MPEP Sec.  2616. The conduct of the patent owner may be 
raised by the patent owner during a supplemental examination 
proceeding. If the conduct of the patent owner is raised by the patent 
owner in the supplemental examination proceeding, it may be addressed 
by the Office in the supplemental examination proceeding and in any 
reexamination proceeding resulting from that supplemental examination 
proceeding.

D. Therasense Language

    Comment 10: Several comments stated that the previously proposed 
rules should not explicitly reference Therasense. The comments 
questioned whether an explicit reference would allow the rules to 
change as the Therasense standard changes or lock the Office into the 
standard set forth in the decision even if the standard is later 
changed. Further, the comments asserted that an explicit reference 
creates uncertainty in the rules since the rules will become a moving 
target not subject to interpretation on their face and that a rule 
cannot be understood on its face without need to interpret the 
Therasense decision. The comments also asserted that tying the rule to 
an evolving standard will cause currently pending applications to stand 
as test cases until the standard is fully articulated. Finally, the 
comments asserted that the incorporation by reference sets a standard 
based on private litigation where the Office is not a party and grants 
an administrative agency's rulemaking authority to the judicial branch, 
which has different goals than the Office.
    Response: The currently proposed rules no longer include the 
language addressed by the comment. Notwithstanding the removal of an 
explicit reference to Therasense in currently proposed Sec. Sec.  
1.56(b) and 1.555(b), the recitation of the but-for materiality 
standard for the duty to disclose information in currently proposed 
Sec. Sec.  1.56(b) and 1.555(b) accomplishes what a reference to the 
court decision would accomplish in adopting the but-for standard set 
forth in Therasense. As discussed previously, the Office has determined 
that to adopt the but-for standard of materiality set forth in 
Therasense, Sec.  1.56 need not incorporate a specific reference to the 
court decision that has created that standard. Accordingly, the 
reference to the Therasense court decision in Sec.  1.56, as previously 
proposed, has not been retained in the currently proposed rule.
    The reference to the but-for standard should benefit the public by 
providing a consistent materiality standard for the duty to disclose 
information without the need for continuous revisions to the rules as 
the but-for standard in Therasense is interpreted or applied. As 
discussed previously, Therasense was decided by the Federal Circuit en 
banc

[[Page 74993]]

and can only be overturned by another en banc decision of the Federal 
Circuit or by a decision of the Supreme Court. In the event that the 
Supreme Court, or Federal Circuit acting en banc, chooses to revise the 
but-for materiality standard set forth in Therasense, the Office will 
reconsider the rules at that time.
    Finally, the Office is not conveying its rulemaking authority to 
the judicial branch. Instead, the Office is exercising its rulemaking 
authority to adopt a standard used by the Federal Circuit. By using its 
rulemaking authority to adopt a common standard, the Office is 
providing the public with a uniform materiality standard for the duty 
to disclose information. If the Office should determine the uniform 
standard no longer provides a benefit to the public, the Office retains 
the ability to invoke its rulemaking authority and change the rules at 
any time.
    Comment 11: One comment stated that the previously proposed rules 
incorporate two alternative statements within the rules. Specifically, 
the previously proposed rules include a first sentence that states that 
information is material to patentability if it is material under the 
standard set forth in Therasense and a second sentence that states 
information is material to patentability under Therasense if (1) the 
Office would not allow a claim if it were aware of the information, or 
(2) the applicant engages in affirmative egregious misconduct before 
the Office as to the information. The comment questioned whether these 
two sentences were equivalent and, if they were, whether they would 
remain equivalent as the Therasense decision evolves in the Federal 
Circuit.
    Response: As discussed previously, this currently proposed rule 
modifies previously proposed Sec. Sec.  1.56(b) and 1.555(b) to remove 
the sentence that explicitly references the Therasense decision. 
Sections 1.56(b) and 1.555(b) in this currently proposed rule would 
define the but-for materiality standard for the duty to disclose 
information as set forth in Therasense.

E. General Language Comments

    Comment 12: One comment suggested that previously proposed rule 
Sec.  1.555(b) should preserve the language that patents and printed 
publications are the appropriate types of information for consideration 
in reexamination.
    Response: As discussed previously, unlike existing Sec.  1.555(b), 
which limits the types of information that could be considered in 
reexamination to patents and printed publications, the currently 
proposed rule broadly recites that it is applicable to any matter 
proper for consideration in a reexamination (e.g., admissions by patent 
owner as well as patents and printed publications).
    Comment 13: Several comments asserted the previously proposed rules 
are difficult for applicants to apply and interpret prospectively. 
Specifically, the comments assert that the proposed rules require the 
applicant to make legal conclusions in determining how to comply with 
the rule.
    Response: As stated in the previous notice of proposed rulemaking, 
the Office recognizes the tension in basing the disclosure requirement 
on unpatentability. See Revision of the Materiality to Patentability 
Standard for the Duty to Disclose Information in Patent Applications, 
76 FR at 43633. However, since the existing provisions of Sec. Sec.  
1.56(b) and 1.555(b) require applicants to determine if there is a 
prima facie case of unpatentability, applicants are accustomed to 
making such determinations when complying with the duty of disclosure. 
Further, the but-for standard set forth in this currently proposed rule 
should not be any more difficult for applicants to apply during 
prosecution than the prima facie case of unpatentability standard that 
would be replaced by this currently proposed rule. Both standards 
require the applicant to reassess materiality as claims are amended, 
cancelled, and added. Lastly, the Office believes the but-for standard, 
as articulated by the Federal Circuit in Therasense, would also provide 
applicants with guidance on what information the applicant is required 
to submit to the Office.

F. Application of Rule Standards

    Comment 14: Several comments addressed the scope of evidence to be 
considered when materiality or egregious misconduct determinations are 
made by the Office during application of these proposed rules, 
including whether the Office would take into account rebuttal evidence 
or whether the scope would be limited to the record before the Office.
    Response: The Office would utilize all available evidence when 
making determinations of materiality or affirmative egregious 
misconduct, including rebuttal evidence. Limiting determinations of 
materiality or affirmative egregious misconduct to the record before 
the Office might promote fraud and bad faith in practicing before the 
Office and may lead to erroneous decisions.
    Comment 15: Several comments requested the Office to stay Office of 
Enrollment and Discipline (OED) proceedings until a final court 
resolution regarding inequitable conduct is obtained in the courts.
    Response: This currently proposed rule would only modify the 
materiality standard for the duty of disclosure required in Sec. Sec.  
1.56 and 1.555. OED proceedings are governed by procedures outlined in 
37 CFR part 11, and the timeline under which the OED must commence 
disciplinary proceedings is subject to 35 U.S.C. 32 as amended by the 
America Invents Act (AIA). See Public Law 112-29, section 3(k), 125 
Stat. 340, section 3(k) (2011).

G. General Comments

    Comment 16: One comment proposed the Office tailor the discipline 
for failing to comply with the duty of disclosure to sanctions other 
than rendering patents unenforceable.
    Response: The Office does not render a patent unenforceable for an 
applicant's failure to comply with the duty of disclosure. Rather, a 
court may hold a patent unenforceable due to inequitable conduct.
    Comment 17: Several comments suggested proposing rules for 
materiality for each new post-issuance proceeding under the America 
Invents Act (AIA), such as post grant review, inter partes review, and 
covered business method patents review. The comment suggested that, 
since each post-issuance proceeding is different, separate materiality 
standards may be necessary.
    Response: This comment is outside the scope of this rulemaking. The 
Office, however, has adopted Sec.  42.11 to govern the duty of candor 
owed to the Office in the new post-issuance proceedings under the AIA. 
Additionally, the existing regulations at Sec.  42.51 require a party 
to serve relevant information that is inconsistent with a position 
advanced during the proceedings.
    Comment 18: Several comments asserted the Office should not require 
applicants to explain or clarify the relationship of the prior art to 
the claimed invention as suggested by the Office in the previous notice 
of proposed rulemaking. See Revision of the Materiality to 
Patentability Standard for the Duty to Disclose Information in Patent 
Applications, 76 FR at 43632. In addition, several comments suggested 
that, if the Office requires such an explanation, applicants should be 
given a safe harbor so that such explanation would not be regarded as 
an act of affirmative egregious misconduct.
    Response: The contemplated required explanation from the previous 
notice of proposed rulemaking addressed by the comment is not included 
in this currently proposed rulemaking.

[[Page 74994]]

    Comment 19: Several comments stated that the proposed but-for 
standard for materiality will not reduce the incentive to submit 
marginally relevant information to the Office. In addition, one comment 
asserted that the stated rationale for the but-for standard does not 
justify the rule change since the 1992 version of the rule, which 
contained a prima facie case of unpatentability standard, did not 
contribute to the over-disclosure to the Office or the overuse of 
inequitable conduct in litigation. This comment stated that, as long as 
the penalty for inequitable conduct is the loss of enforceability of 
the patent, applicants will continue to submit voluminous amounts of 
information to the Office to avoid a finding of inequitable conduct.
    Response: The Office appreciates that a patent may be found 
unenforceable due to a finding of inequitable conduct. However, the 
Office's proposed adoption of the but-for standard of materiality 
articulated by the Federal Circuit in the Therasense decision, as well 
as the Therasense decision itself, should incentivize applicants not to 
submit marginally relevant information to the Office as this 
information would not meet the articulated standard.
    Comment 20: Several comments requested that the Office no longer 
require the cross-citation of prior art found in related applications. 
The comments also requested the Office to provide a safe harbor 
provision under which information from related applications is not 
material and need not be submitted or, in the alternative, the 
definition of a related application is limited to ``family cases'' 
(i.e., those cases for which there is some chain of priority claim), 
``similar claims cases'' (i.e., those cases under a common obligation 
of assignment for which the claims are not patentably distinct), and 
``team exception cases'' (i.e., those cases for which the provisions of 
35 U.S.C. 102(b)(2)(c) apply (35 U.S.C. 103(c) for pre-AIA 
applications)).
    Response: An applicant is under a duty of disclosure to provide all 
known material information to the Office no matter how the applicant 
becomes aware of the information. An applicant is in the best position 
to know of any material information, especially when an applicant 
learns about the information from prosecution in related applications 
such as in applications for which priority or benefit is claimed. 
Having all material information in front of the examiner as early as 
possible will expedite prosecution and improve examination quality. But 
under the standard in this currently proposed rule, an applicant would 
be under no duty to provide information from related applications 
unless that information is but-for material.
    Comment 21: Several comments requested the Office provide a 
standard method of cross-citation for information in related cases so 
examiners will automatically review the information in the 
corresponding application without the applicant having to submit the 
information in an IDS.
    Response: The Office is currently exploring an initiative to 
provide examiners with information (e.g., prior art, search reports, 
etc.) from applicant's related applications as early as possible to 
increase patent examination quality and efficiency. In the interim, 
applicants must comply with the requirements of Sec. Sec.  1.97 and 
1.98.
    Comment 22: Several comments suggested incentivizing the filing of 
non-material disclosures. Essentially, the comments believed that the 
submission of a reference will be interpreted as an admission that it 
meets that materiality standard and, therefore, applicants will not 
submit non-material information. As an incentive to submit non-material 
information, the comments suggested relaxing or eliminating any 
burdens, such as waiving fees.
    Response: The Office does not construe any submission of 
information as an admission of materiality. Section 1.97(h) 
specifically states, ``[t]he filing of an information disclosure 
statement shall not be construed to be an admission that the 
information cited in the statement is, or is considered to be, material 
to patentability as defined in Sec.  1.56(b).'' Therefore, the proposal 
to incentivize the submission of non-material information is not 
necessary.
    Comment 23: One comment stated that, while the Office will not 
regard information disclosures as admissions of unpatentability for any 
claims in the application under Sec.  1.97(h), the Office does not have 
the authority to make this promise on behalf of the courts. The comment 
asserted that the courts will inevitably hold that any disclosure of 
prior art is an admission that some pending claim is unpatentable.
    Response: The comment did not provide any support for the asserted 
proposition that the courts treat the disclosure of prior art as an 
admission that at least one pending claim is unpatentable, and the 
Office is not aware of any court decision with such a holding.
    Comment 24: Several comments requested the duty of disclosure end 
upon payment of the issue fee rather than the patent grant.
    Response: It is in the applicant's and the public's best interest 
to have all material information known to the applicant considered by 
the examiner before a patent is granted. This will result in a stronger 
patent and avoid unnecessary post-grant proceedings and litigation. 
Section 1.97(d) thus provides for information to be submitted to the 
Office after a final action, notice of allowance, or action that 
otherwise closes prosecution is mailed, provided the IDS is filed on or 
before payment of the issue fee and is accompanied by the appropriate 
fee and statement under Sec.  1.97(e). If the conditions of Sec.  
1.97(d) cannot be met, an applicant must file a request for continued 
examination (RCE) to have information considered by the examiner. 
Further, once the issue fee has been paid, the applicant must comply 
with Sec.  1.313(c) (i.e., file a petition to withdraw from issue for 
consideration of an RCE) in order to have information considered by the 
examiner. In order to alleviate the burden on applicants in this 
situation, the Office has instituted the Quick Path Information 
Disclosure Statement (QPIDS) pilot program. The QPIDS pilot program 
eliminates the requirement for processing an RCE with an IDS after 
payment of the issue fee where the IDS is accompanied by the 
appropriate fee and statement under Sec.  1.97(e) and the examiner 
determines that no item of information in the IDS necessitates 
reopening prosecution. For more information visit the QPIDS Web site at 
www.uspto.gov/patents/init_events/qpids.jsp.
    Comment 25: Several comments proposed giving an applicant a ``safe 
harbor'' so the duty of disclosure for the applicant ends when the 
applicant provides the information to counsel.
    Response: The purpose of the duty of disclosure requirement is to 
ensure that all material information known by the applicant is provided 
to the Office in the manner prescribed by Sec. Sec.  1.97(b)-(d) and 
1.98. Ending that duty upon the submission of the documents to counsel 
could potentially delay or prevent material information from being 
filed with the Office, resulting in, for example, a reduction in patent 
quality or a delay in the patent grant.
    Comment 26: Several comments requested the Office abrogate the duty 
of disclosure. The comments provided numerous reasons, such as 
harmonization with the patent offices that do not have such a duty. In 
the alternative, several comments suggested modifying the materiality 
standard to include only information that is not available to the 
public because most of the information submitted is readily searchable 
public information.

[[Page 74995]]

    Response: The public interest is best served, and the most 
effective and highest quality patent examination occurs, when the 
Office is aware of, and evaluates the teachings of, all information 
material to patentability during examination. Since the applicant is in 
the best position to be aware of material information in the art, it 
serves the public interest to require that the applicant submit this 
information to the Office during examination. Even if this information 
is publicly available, there is no guarantee that the examiner will 
find the information. Further, requiring the examiner to locate this 
information when the applicant is already aware of it unnecessarily 
expends government resources, increases search time, and could reduce 
examination quality. It is also noted that limiting materiality to 
information that is not available to the public would essentially 
abrogate the duty of disclosure because most information that is not 
available to the public is unlikely to meet the prior art requirements 
of 35 U.S.C. 102, hence preventing pertinent prior art from being seen 
by the examiner.
    Comment 27: One comment asked the Office to clarify whether the new 
rules create any duty to investigate.
    Response: Sections 1.56 and 1.555 in the currently proposed rule 
would not create any new or additional duty to investigate. However, 
practitioners and non-practitioners are reminded of the duty under 
Sec.  11.18(b)(2) to make an ``inquiry reasonable under the 
circumstances'' when presenting any paper to the Office.

Rulemaking Considerations

A. Administrative Procedure Act

    This currently proposed rule would harmonize the rules of practice 
concerning the materiality standard for the duty of disclosure with the 
but-for materiality standard for inequitable conduct set forth in 
Therasense. The changes in this currently proposed rule would not alter 
the substantive criteria of patentability. Therefore, the changes in 
this currently proposed rule involve rules of agency practice and 
procedure and/or interpretive rules. See Bachow Commc'ns, Inc. v. 
F.C.C., 237 F.3d 683, 690 (D.C. Cir. 2001) (Rules governing an 
application process are procedural under the Administrative Procedure 
Act.); Inova Alexandria Hosp. v. Shalala, 244 F.3d 342, 350 (4th Cir. 
2001) (Rules for handling appeals were procedural where they did not 
change the substantive 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). 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)(3)(A))). The Office, 
however, is publishing the currently proposed rule for comment to seek 
the benefit of the public's views on the Office's proposed revision of 
the materiality standard for the duty to disclose information to the 
Office.

B. Regulatory Flexibility Act

    For the reasons set forth herein, the Deputy General Counsel for 
General Law of the United States Patent and Trademark Office has 
certified to the Chief Counsel for Advocacy of the Small Business 
Administration that changes proposed in this notice will not have a 
significant economic impact on a substantial number of small entities. 
See 5 U.S.C. 605(b).
    This notice proposes to harmonize the standard for materiality 
under Sec. Sec.  1.56 and 1.555 for the duty of disclosure with the 
but-for materiality standard for inequitable conduct set forth in 
Therasense. The harmonized materiality standard should reduce the 
incentives to submit marginally relevant information in information 
disclosure statements (IDSs). The changes in this currently proposed 
rule involve rules of agency practice and procedure and/or interpretive 
rules and would not result in any additional fees or requirements on 
patent applicants or patentees. Therefore, the changes proposed in this 
rulemaking 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: (1) Used the best available 
techniques to quantify costs and benefits and considered values such as 
equity, fairness, and distributive impacts; (2) 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; (3) attempted to promote coordination, simplification, and 
harmonization across government agencies and identified goals designed 
to promote innovation; (4) considered approaches that reduce burdens 
and maintain flexibility and freedom of choice for the public; and (5) 
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).

[[Page 74996]]

K. Congressional Review Act

    Under the Congressional Review Act provisions of the Small Business 
Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq.), 
prior to issuing any final rule, the PTO will submit a report 
containing this 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 do 
not 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 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 et seq.

M. National Environmental Policy Act

    This rulemaking will not have any effect on the quality of 
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 changes in this rulemaking involve 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 et seq.). The collection of information involved in this final 
rule has been reviewed and approved by OMB under OMB control number 
0651-0031. This rulemaking proposes to harmonize the standard for 
materiality under Sec. Sec.  1.56 and 1.555 for the duty of disclosure 
with the but-for standard for materiality for inequitable conduct set 
forth in Therasense. This notice does not adopt any additional fees or 
information collection requirements on patent applicants or patentees.
    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 1

    Administrative practice and procedure, Biologics, 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 
proposed to be 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 1.56 is amended by revising paragraphs (a) and (b) to read 
as follows:


Sec.  1.56  Duty to disclose information material to patentability.

    (a) A patent by its very nature is affected with a public interest. 
The public interest is best served, and the most effective patent 
examination occurs when, at the time an application is being examined, 
the Office is aware of and evaluates the teachings of all information 
material to patentability. Each individual associated with the filing 
and prosecution of a patent application has a duty of candor and good 
faith in dealing with the Office, which includes a duty to disclose to 
the Office all information known to that individual to be material to 
patentability under the but-for materiality standard as defined in 
paragraph (b) of this section. The duty to disclose information exists 
with respect to each pending claim until the claim is cancelled or 
withdrawn from consideration or the application becomes abandoned. 
Information material to the patentability of a claim that is cancelled 
or withdrawn from consideration need not be submitted if the 
information is not material to the patentability of any claim remaining 
under consideration in the application. There is no duty to submit 
information which is not material to the patentability of any existing 
claim. The duty to disclose all information known to be material to 
patentability is deemed to be satisfied if all information known to be 
material to patentability of any claim issued in a patent was cited by 
the Office or submitted to the Office in the manner prescribed by 
Sec. Sec.  1.97(b) through (d) and 1.98. However, no patent will be 
granted on an application in connection with which affirmative 
egregious misconduct was engaged in, fraud on the Office was practiced 
or attempted, or the duty of disclosure was violated through bad faith 
or intentional misconduct. The Office encourages applicants to 
carefully examine:
    (1) Prior art cited in search reports of a foreign patent office in 
a counterpart application, and
    (2) The closest information over which individuals associated with 
the filing or prosecution of a patent application believe any pending 
claim patentably defines, to make sure that any material information 
contained therein is disclosed to the Office.
    (b) Information is but-for material to patentability if the Office 
would not allow a claim if the Office were aware of the information, 
applying the preponderance of the evidence standard and giving the 
claim its broadest reasonable construction consistent with the 
specification.
* * * * *
0
3. Section 1.555 is amended by revising paragraphs (a) and (b) to read 
as follows:


Sec.  1.555  Information material to patentability in ex parte 
reexamination and inter partes reexamination proceedings.

    (a) A patent by its very nature is affected with a public interest. 
The public interest is best served, and the most effective 
reexamination occurs when, at the time a reexamination proceeding is 
being conducted, the Office is aware of and evaluates the teachings of 
all information material to patentability in a reexamination 
proceeding. Each individual associated with the patent owner in a 
reexamination proceeding has a duty of candor and good faith in dealing 
with the Office, which includes a duty to disclose to the Office all 
information known to that individual to be material to patentability in 
a reexamination proceeding under the but-for materiality standard as 
defined in paragraph (b) of this section. The individuals who have

[[Page 74997]]

a duty to disclose to the Office all information known to them to be 
material to patentability in a reexamination proceeding are the patent 
owner, each attorney or agent who represents the patent owner, and 
every other individual who is substantively involved on behalf of the 
patent owner in a reexamination proceeding. The duty to disclose the 
information exists with respect to each claim pending in the 
reexamination proceeding until the claim is cancelled. Information 
material to the patentability of a cancelled claim need not be 
submitted if the information is not material to patentability of any 
claim remaining under consideration in the reexamination proceeding. 
The duty to disclose all information known to be material to 
patentability in a reexamination proceeding is deemed to be satisfied 
if all information known to be material to patentability of any claim 
in the patent after issuance of the reexamination certificate was cited 
by the Office or submitted to the Office in an information disclosure 
statement. However, the duties of candor, good faith, and disclosure 
have not been complied with if affirmative egregious misconduct was 
engaged in, any fraud on the Office was practiced or attempted, or the 
duty of disclosure was violated through bad faith or intentional 
misconduct by, or on behalf of, the patent owner in the reexamination 
proceeding. Any information disclosure statement must be filed with the 
items listed in Sec.  1.98(a) as applied to individuals associated with 
the patent owner in a reexamination proceeding and should be filed 
within two months of the date of the order for reexamination or as soon 
thereafter as possible.
    (b) Information is but-for material to patentability if, for any 
matter proper for consideration in reexamination, the Office would not 
find a claim patentable if the Office were aware of the information, 
applying the preponderance of the evidence standard and giving the 
claim its broadest reasonable construction consistent with the 
specification.
* * * * *

    Dated: October 21, 2016.
Michelle K. Lee,
Under Secretary of Commerce for Intellectual Property and Director of 
the United States Patent and Trademark Office.
[FR Doc. 2016-25966 Filed 10-27-16; 8:45 am]
 BILLING CODE 3510-16-P