Patent Term Adjustment Reductions in View of the Federal Circuit Decision in Supernus Pharm., Inc., 53090-53094 [2019-21271]

Download as PDF 53090 Federal Register / Vol. 84, No. 193 / Friday, October 4, 2019 / Proposed Rules DEPARTMENT OF COMMERCE Patent and Trademark Office 37 CFR Part 1 [Docket No. PTO–P–2019–0019] RIN 0651–AD38 Patent Term Adjustment Reductions in View of the Federal Circuit Decision in Supernus Pharm., Inc. v. Iancu United States Patent and Trademark Office, Department of Commerce. ACTION: Notice of proposed rulemaking. AGENCY: The United States Patent and Trademark Office (Office) is proposing to revise 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 Supernus Pharm., Inc. v. Iancu (Supernus). The Federal Circuit in Supernus held that a reduction of patent term adjustment must be equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application. The Office is proposing to revise the provisions pertaining to reduction of patent term adjustment for alignment with the Federal Circuit decision in Supernus. DATES: Written comments must be received on or before December 3, 2019. ADDRESSES: Comments should be sent by electronic mail message over the internet addressed to: AD38.comments@ uspto.gov. Comments also may 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 Kery Fries, Senior Legal Advisor, Office of Patent Legal Administration, Office of the Deputy Commissioner for Patent Examination Policy. Comments further may be sent by electronic mail message over the internet via the Federal eRulemaking Portal. See the Federal eRulemaking Portal website (http:// www.regulations.gov) for additional instructions on providing comments via the Federal eRulemaking Portal. Although comments may be submitted by postal mail, the Office prefers to receive comments by electronic mail message over the internet because sharing comments with the public is more easily accomplished. Electronic comments submitted in plain text are preferred, but may be submitted in ADOBE® portable document format or MICROSOFT WORD® format. khammond on DSKJM1Z7X2PROD with PROPOSALS SUMMARY: VerDate Sep<11>2014 16:19 Oct 03, 2019 Jkt 250001 Comments not submitted electronically should be submitted on paper in a format that facilitates convenient digital scanning into ADOBE® portable document format. Comments will be available for viewing via the Office’s internet website (http://www.uspto.gov). Because comments will be made available for public inspection, information that the submitter does not desire to make public, such as an address or phone number, should not be included in the comments. FOR FURTHER INFORMATION CONTACT: 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. SUPPLEMENTARY INFORMATION: Executive Summary: Purpose: The Office is proposing to revise 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 Supernus Pharm., Inc. v. Iancu, 913 F.3d 1351 (Fed. Cir. 2019). The Federal Circuit in Supernus held that a reduction of patent term adjustment under 35 U.S.C. 154(b)(2)(C) must be equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application. The regulations pertaining to a reduction of patent term adjustment due to a failure of an applicant to engage in reasonable efforts to conclude processing or examination of an application are set forth in 37 CFR 1.704. Several provisions in 37 CFR 1.704 specify a period of reduction corresponding to the consequences to the Office of applicant’s failure to engage in reasonable efforts to conclude prosecution i.e., 37 CFR 1.703(c)(2), (c)(3), (c)(6), (c)(9), and (c)(10) rather than ‘‘the period from the beginning to the end of the applicant’s failure to engage in reasonable efforts to conclude prosecution’’ as provided for in Supernus. 913 F.3d at 1359. Therefore, the Office is proposing to revise these provisions of 37 CFR 1.704 for consistency with the Federal Circuit’s decision in Supernus. Summary of Major Provisions: This rulemaking pertains to the patent term adjustment regulations establishing the circumstances that constitute a failure of an applicant to engage in reasonable efforts to conclude processing or examination of an application and resulting reduction of any patent term adjustment (37 CFR 1.704). This rulemaking specifically proposes to revise the period of reduction of patent PO 00000 Frm 00025 Fmt 4702 Sfmt 4702 term adjustment in the provisions of 37 CFR 1.704 pertaining to deferral of issuance of a patent (37 CFR 1.704(c)(2)), abandonment of an application (37 CFR 1.704(c)(3)), submission of a preliminary amendment (37 CFR 1.704(c)(6)), submission of papers after a decision by the Patent Trial and Appeal Board or by a Federal court (37 CFR 1.704(c)(9)), and submission of papers after a notice of allowance under 35 U.S.C. 151 (37 CFR 1.704(c)(10)) to specify a period of reduction corresponding to ‘‘the period from the beginning to the end of the applicant’s failure to engage in reasonable efforts to conclude prosecution’’ (rather than corresponding to the consequences to the Office of applicant’s failure to engage in reasonable efforts to conclude prosecution) for consistency with the Federal Circuit’s decision in Supernus. 913 F.3d at 1359. Costs and Benefits: This rulemaking is not economically significant under Executive Order 12866 (Sept. 30, 1993). Background: The American Inventors Protection Act of 1999 or AIPA (Pub. L. 106–113, 113 Stat. 1501, 1501A–552 through 1501A–591 (1999)) amended 35 U.S.C. 154(b) to provide 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). Generally, 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)) (known as ‘‘A’’ delays); (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)) (known as ‘‘B’’ delays); and (3) for delays due to interference (and now derivation), secrecy order, or successful appellate review (35 U.S.C. 154(b)(1)(C)) (known as ‘‘C’’ delays). 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). See 35 U.S.C. 154(b)(2). 35 U.S.C. 154(b)(2)(C) sets forth one such limitation, providing, 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 E:\FR\FM\04OCP1.SGM 04OCP1 Federal Register / Vol. 84, No. 193 / Friday, October 4, 2019 / Proposed Rules khammond on DSKJM1Z7X2PROD with PROPOSALS 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 AIPA patent term adjustment provisions of 35 U.S.C. 154(b), including setting forth circumstances that constitute a failure of an applicant to engage in reasonable efforts to conclude processing or examination of an application and resulting in a reduction of any patent term adjustment, 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). The regulations establishing the circumstances that constitute a failure of an applicant to engage in reasonable efforts to conclude processing or examination of an application and resulting reduction of any patent term adjustment are set forth in 37 CFR 1.704. In January 2019, the Federal Circuit issued a decision in Supernus pertaining to the patent term adjustment provisions of 35 U.S.C. 154(b)(2)(C). The Federal Circuit confirmed that 37 CFR 1.704(c)(8) ‘‘ ‘is a reasonable interpretation of the [patent term adjustment] statute’ insofar as it includes ‘not only applicant conduct or behavior that result in actual delay, but also those having the potential to result in delay irrespective of whether such delay actually occurred.’ ’’ Supernus, 913 F.3d at 1356 (quoting Gilead Scis., Inc. v. Lee, 778 F.3d 1341, 1349–50 (Fed. Cir. 2015)). The Federal Circuit, however, held that the Office may not reduce patent term adjustment by a period that exceeds the ‘‘time during which the applicant failed to engage in reasonable efforts’’ to conclude prosecution, specifically stating that ‘‘[o]n the basis of the plain language of [35 U.S.C. 154(b)(2)(C)(i),] the USPTO may not count as applicant delay a period of time during which there was no action that the applicant could take to conclude prosecution of the patent.’’ Id. at 1358. The Federal Circuit specifically stated that— Thus, the statutory period of PTA reduction must be the same number of days as the period from the beginning to the end of the applicant’s failure to engage in reasonable efforts to conclude prosecution. PTA cannot be reduced by a period of time during which there is no identifiable effort in which the applicant could have engaged to conclude prosecution because such time would not be ‘‘equal to’’ and would instead exceed the time during which an applicant failed to engage in reasonable efforts. Id. at 1359. VerDate Sep<11>2014 16:19 Oct 03, 2019 Jkt 250001 37 CFR 1.704(c)(1) through (c)(14) set forth: (1) The exemplary circumstances prescribed by the Office ‘‘that constitute a failure of an applicant to engage in reasonable efforts to conclude processing or examination of an application’’ pursuant to 35 U.S.C. 154(b)(2)(C)(iii) and (2) resulting period of reduction of any patent term adjustment. The Federal Circuit decision in Supernus involved a reduction to patent term adjustment under the provisions of 37 CFR 1.704(c)(8). The period of reduction of patent term adjustment in 37 CFR 1.704(c)(8) is as follows: ‘‘the number of days, if any, beginning on the day after the date the initial reply was filed and ending on the date that the supplemental reply or other such paper was filed.’’ 37 CFR 1.704(c)(8). This period corresponds to ‘‘the period from the beginning to the end of the applicant’s failure to engage in reasonable efforts to conclude prosecution,’’ except in the rare situation in which such period includes ‘‘a period of time during which there is no identifiable effort in which the applicant could have engaged to conclude prosecution.’’ Supernus, 913 F.3d at 1359. The Office published a notice in May of 2019 setting out its implementation of Supernus with respect to the provisions of 37 CFR 1.704(c)(8) or other provision of 37 CFR 1.704(c) that includes ‘‘a period of time during which there is no identifiable effort in which the applicant could have engaged to conclude prosecution.’’ See Patent Term Adjustment Procedures in View of the Federal Circuit Decision in Supernus Pharm., Inc. v. Iancu, 84 FR 20343 (May 9, 2019). While the Federal Circuit decision in Supernus involved 37 CFR 1.704(c)(8), there are several provisions in 37 CFR 1.704(c)(1) through (c)(14) whose period of reduction corresponds to or includes the consequences to the Office of applicant’s failure to engage in reasonable efforts to conclude prosecution, rather than ‘‘the period from the beginning to the end of the applicant’s failure to engage in reasonable efforts to conclude prosecution.’’ Supernus, 913 F.3d at 1359. Therefore, the Office is proposing changes to 37 CFR 1.704 to revise the periods of reduction of patent term adjustment in 37 CFR 1.704(c) for consistency with the Federal Circuit’s decision in Supernus. Discussion of Specific Rules The following is a discussion of amendments to title 37 of the Code of Federal Regulations, part 1: PO 00000 Frm 00026 Fmt 4702 Sfmt 4702 53091 Section 1.704(c)(2) is proposed to be amended to change ‘‘the date the patent was issued’’ to ‘‘the earlier of the date a request to terminate the deferral was filed or the date the patent was issued.’’ The period of reduction of patent term adjustment in § 1.704(c)(2) would be as follows: ‘‘the number of days, if any, beginning on the date a request for deferral of issuance of a patent under § 1.314 was filed and ending on the earlier of the date a request to terminate the deferral was filed or the date the patent was issued.’’ Section 1.704(c)(3) is proposed to be amended to change ‘‘the earlier of: (i) The date of mailing of the decision reviving the application or accepting late payment of the issue fee; or (ii) The date that is four months after the date the grantable petition to revive the application or accept late payment of the issue fee was filed’’ to ‘‘the date the grantable petition to revive the application or accept late payment of the issue fee was filed.’’ The period of reduction of patent term adjustment in § 1.704(c)(3) would be as follows: ‘‘the number of days, if any, beginning on the date of abandonment or the date after the date the issue fee was due and ending on the date the grantable petition to revive the application or accept late payment of the issue fee was filed.’’ Section 1.704(c)(6) is proposed to be amended to change ‘‘the lesser of: (i) The number of days, if any, beginning on the day after the mailing date of the original Office action or notice of allowance and ending on the date of mailing of the supplemental Office action or notice of allowance; or (ii) Four months’’ to ‘‘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 preliminary amendment or other preliminary paper was filed.’’ See Changes to Implement the Patent Law Treaty, 78 FR 62367, 62385 (Oct. 21, 2013) (an application is expected to be in condition for examination no later than eight months from its filing date (or date of commencement of the national stage in an international application)). The period of reduction of patent term adjustment in § 1.704(c)(6) would be as follows: ‘‘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 E:\FR\FM\04OCP1.SGM 04OCP1 53092 Federal Register / Vol. 84, No. 193 / Friday, October 4, 2019 / Proposed Rules the substantive standard for reviewing claims.). Specifically, this rulemaking proposes to revise Office rules that interpret certain statutory provisions pertaining to patent term adjustment. The proposed revisions specify a period of reduction corresponding to ‘‘the period from the beginning to the end of the applicant’s failure to engage in reasonable efforts to conclude prosecution’’ (rather than to the consequences to the Office of applicant’s failure to engage in reasonable efforts to conclude prosecution) for consistency with the Federal Circuit’s decision in Supernus. 913 F.3d at 1359. Accordingly, prior notice and opportunity for public comment for the changes proposed by this rulemaking are not required pursuant to 5 U.S.C. 553(b) or (c), or any other law. See Perez, 135 S. Ct. at 1206 (Notice-andcomment procedures are required neither when an agency ‘‘issue[s] an initial interpretive rule’’ nor ‘‘when it amends or repeals that interpretive rule.’’); 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))). However, the Office has chosen to seek public comment before implementing the rule to benefit from the public’s input. 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 Rulemaking Considerations in this notice will not have a significant A. Administrative Procedure Act: The economic impact on a substantial changes proposed by this rulemaking number of small entities. See 5 U.S.C. involve rules of agency practice and 605(b). procedure, and/or interpretive rules. See This rulemaking does not propose to Perez v. Mortg. Bankers Ass’n, 135 S. Ct. impose any additional requirements or 1199, 1204 (2015) (Interpretive rules fees on applicants. This rulemaking also ‘‘advise the public of the agency’s does not propose to change the construction of the statutes and rules circumstances defined as constituting a which it administers.’’ (citation and failure of an applicant to engage in internal quotation marks omitted)); Nat’l reasonable efforts to conclude Org. of Veterans’ Advocates v. Sec’y of processing or examination of an Veterans Affairs, 260 F.3d 1365, 1375 application (35 U.S.C. 154(b)(2)(C)(iii)). This rulemaking implements the (Fed. Cir. 2001) (Rule that clarifies Federal Circuit’s ruling on the interpretation of a statute is interpretive.); Bachow Commc’ns Inc. v. provisions of 35 U.S.C. 154(b)(2)(C)(i) in Supernus to reflect the applicable FCC, 237 F.3d 683, 690 (D.C. Cir. 2001) (Rules governing an application process period of reduction in the event that are procedural under the Administrative there is a failure of an applicant to Procedure Act.); Inova Alexandria Hosp. engage in reasonable efforts to conclude processing or examination. This v. Shalala, 244 F.3d 342, 350 (4th Cir. rulemaking specifically proposes to 2001) (Rules for handling appeals were revise the period of reduction of patent procedural where they did not change khammond on DSKJM1Z7X2PROD with PROPOSALS the date the preliminary amendment or other preliminary paper was filed.’’ Section 1.704(c)(9) is proposed to be amended to change ‘‘the lesser of: (i) The number of days, if any, beginning on the day after the mailing date of the original Office action or notice of allowance and ending on the mailing date of the supplemental Office action or notice of allowance; or (ii) Four months’’ to ‘‘the number of days, if any, beginning on the day after the date of the decision by the Patent Trial and Appeal Board or by a Federal court and ending on date the amendment or other paper was filed.’’ The period of reduction of patent term adjustment in § 1.704(c)(9) would be as follows: ‘‘the number of days, if any, beginning on the day after the date of the decision by the Patent Trial and Appeal Board or by a Federal court and ending on date the amendment or other paper was filed.’’ Section 1.704(c)(10) is proposed to be amended to change ‘‘the lesser of: (i) The number of days, if any, beginning on the date the amendment under § 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 § 1.312 or such other paper; or (ii) Four months’’ to ‘‘the number of days, if any, beginning on the day after the mailing date of the notice of allowance under 35 U.S.C. 151 and ending on the date the amendment under § 1.312 or other paper was filed.’’ The period of reduction of patent term adjustment in § 1.704(c)(10) would be as follows: ‘‘the number of days, if any, beginning on the day after the mailing date of the notice of allowance under 35 U.S.C. 151 and ending on the date the amendment under § 1.312 or other paper was filed.’’ VerDate Sep<11>2014 16:19 Oct 03, 2019 Jkt 250001 PO 00000 Frm 00027 Fmt 4702 Sfmt 4702 term adjustment in the provisions of 37 CFR 1.704 pertaining to deferral of issuance of a patent (37 CFR 1.704(c)(2)), abandonment of an application (37 CFR 1.704(c)(3)), submission of a preliminary amendment (37 CFR 1.704(c)(6)), submission of papers after a decision by the Patent Trial and Appeal Board or by a Federal court (37 CFR 1.704(c)(9)), and submission of papers after a notice of allowance under 35 U.S.C. 151 (37 CFR 1.704(c)(10)) to specify a period of reduction corresponding to ‘‘the period from the beginning to the end of the applicant’s failure to engage in reasonable efforts to conclude prosecution’’ (rather than to the consequences to the Office of applicant’s failure to engage in reasonable efforts to conclude prosecution) for consistency with the Federal Circuit’s decision in Supernus. 913 F.3d at 1359. The changes proposed in this rulemaking will not have a significant economic impact on a substantial number of small entities because applicants are not entitled to patent term adjustment that have not been reduced by a period equal to the period of the applicant’s failure to engage in reasonable efforts to conclude processing or examination (35 U.S.C. 154(b)(2)(C)(i) and 37 CFR 1.704(a)), and because applicants may avoid adverse patent term adjustment consequences by refraining from actions or inactions defined as constituting a failure of an applicant to engage in reasonable efforts to conclude processing or examination. For the foregoing reasons, the changes proposed in this notice will not have a significant economic impact on a substantial number of small entities. C. Executive Order 12866 (Regulatory Planning and Review): This rulemaking has been determined to be not significant for purposes of Executive Order 12866 (Sept. 30, 1993). D. Executive Order 13563 (Improving Regulation and Regulatory Review): The Office has complied with Executive Order 13563 (Jan. 18, 2011). 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- E:\FR\FM\04OCP1.SGM 04OCP1 khammond on DSKJM1Z7X2PROD with PROPOSALS Federal Register / Vol. 84, No. 193 / Friday, October 4, 2019 / Proposed Rules 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 13771 (Reducing Regulation and Controlling Regulatory Costs): This proposed rule is not expected to be an Executive Order 13771 (Jan. 30, 2017) regulatory action because this proposed rule is not significant under Executive Order 12866 (Sept. 30, 1993). F. 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). G. 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). H. 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). I. Executive Order 13783 (Promoting Energy Independence and Economic Growth): This rulemaking does not potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources under Executive Order 13783 (Mar. 28, 2017). J. Executive Order 13772 (Core Principles for Regulating the United States Financial System): This rulemaking does not involve regulation of the United States financial system under Executive Order 13772 (Feb. 3, 2017). K. 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). VerDate Sep<11>2014 16:19 Oct 03, 2019 Jkt 250001 L. 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). M. 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). N. Congressional Review Act: Under the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801–808), 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. O. 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. P. 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. Q. 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. R. 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. PO 00000 Frm 00028 Fmt 4702 Sfmt 4702 53093 This rulemaking does not impose 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, 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 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. 2. Section 1.704 is amended by revising paragraphs (c)(2), (3), (6), (9) and (c)(10) to read as follows: ■ § 1.704 Reduction of Period of Adjustment of Patent Term. * * * * * (c) * * * (2) Deferral of issuance of a patent under § 1.314, in which case the period of adjustment set forth in § 1.703 shall be reduced by the number of days, if any, beginning on the date a request for deferral of issuance of a patent under § 1.314 was filed and ending on the earlier of the date a request to terminate the deferral was filed or the date the patent was issued; (3) Abandonment of the application or late payment of the issue fee, in which case the period of adjustment set forth in § 1.703 shall be reduced by the number of days, if any, beginning on the date of abandonment or the date after the date the issue fee was due and ending on the date the grantable petition to revive the application or accept late payment of the issue fee was filed; * * * * * E:\FR\FM\04OCP1.SGM 04OCP1 53094 Federal Register / Vol. 84, No. 193 / Friday, October 4, 2019 / Proposed Rules khammond on DSKJM1Z7X2PROD with PROPOSALS (6) Submission of a preliminary amendment or other preliminary paper less than one month before the mailing of an Office action under 35 U.S.C. 132 or notice of allowance under 35 U.S.C. 151 that requires the mailing of a supplemental Office action or notice of allowance, in which case the period of adjustment set forth in § 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 preliminary amendment or other preliminary paper was filed; * * * * * (9) Submission of an amendment or other paper after a decision by the Patent Trial and Appeal Board, other than a decision designated as containing a new ground of rejection under § 41.50(b) of this title or statement under § 41.50(c) of this title, or a decision by a Federal court, less than one month before the mailing of an Office action under 35 U.S.C. 132 or notice of allowance under 35 U.S.C. 151 that requires the mailing of a supplemental Office action or supplemental notice of allowance, in which case the period of adjustment set forth in § 1.703 shall be reduced by the number of days, if any, beginning on the day after the date of the decision by the Patent Trial and Appeal Board or by a Federal court and ending on date the amendment or other paper was filed; (10) Submission of an amendment under § 1.312 or other paper, other than a request for continued examination in compliance with § 1.114, after a notice of allowance has been given or mailed, in which case the period of adjustment set forth in § 1.703 shall be reduced by the number of days, if any, beginning on the day after the mailing date of the notice of allowance under 35 U.S.C. 151 and ending on the date the amendment under § 1.312 or other paper was filed; * * * * * Andrei Iancu, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office. [FR Doc. 2019–21271 Filed 10–3–19; 8:45 am] SURFACE TRANSPORTATION BOARD 49 CFR Chapter X [Docket No. EP 664 (Sub-No. 4)] Revisions to the Board’s Methodology for Determining the Railroad Industry’s Cost of Capital Surface Transportation Board. Notice of Proposed Rulemaking. AGENCY: ACTION: The Board proposes to incorporate an additional model to complement its use of the Morningstar/ Ibbotson Multi-Stage Discounted Cash Flow Model (MSDCF) and the Capital Asset Pricing Model (CAPM) in determining the cost-of-equity component of the cost of capital. DATES: Comments on the proposed rule are due by November 5, 2019. Reply comments are due by December 4, 2019. ADDRESSES: Comments and replies must be filed with the Board either via efiling or in writing addressed to: Surface Transportation Board, Attn: Docket No. EP 664 (Sub-No. 4), 395 E Street SW, Washington, DC 20423–0001. Written comments and replies will be posted to the Board’s website at www.stb.gov. FOR FURTHER INFORMATION CONTACT: Nathaniel Bawcombe at (202) 245–0376. Assistance for the hearing impaired is available through the Federal Relay Service at (800) 877–8339. SUPPLEMENTARY INFORMATION: Each year, the Board determines the railroad industry’s cost of capital and then uses this figure in a variety of regulatory proceedings, including the annual determination of railroad revenue adequacy, rate reasonableness cases, feeder line applications, rail line abandonments, trackage rights cases, and rail merger reviews. The annual cost-of-capital figure is also used as an input in the Uniform Railroad Costing System, the Board’s general purpose costing system. The Board calculates the cost of capital as the weighted average of the cost of debt and the cost of equity. See Methodology to be Employed in Determining the R.R. Indus.’s Cost of Capital, EP 664, slip op. at 3 (STB served Jan. 17, 2008). While the cost of debt is observable and readily available, the cost of equity (the expected return that equity investors require) can only be estimated.1 Id. Thus, ‘‘estimating the cost of equity requires relying on appropriate finance models.’’ Pet. of the SUMMARY: BILLING CODE 3510–16–P 1 The Board must make ‘‘an adequate and continuing effort to assist those carriers in attaining revenue levels,’’ which should, among other objectives, ‘‘permit the raising of needed equity capital.’’ 49 U.S.C. 10704(a)(2). VerDate Sep<11>2014 16:19 Oct 03, 2019 Jkt 250001 PO 00000 Frm 00029 Fmt 4702 Sfmt 4702 W. Coal Traffic League to Inst. a Rulemaking Proceeding to Abolish the Use of the Multi-Stage Discounted Cash Flow Model in Determining the R.R. Indus.’s Cost of Equity Capital, EP 664 (Sub-No. 2), slip op. at 2 (STB served Oct. 31, 2016). In 2009, the Board moved from a costof-equity estimate based solely on CAPM to a cost-of-equity estimate based on a simple average of the estimates produced by CAPM and Morningstar/ Ibbotson MSDCF. See Use of a MultiStage Discounted Cash Flow Model in Determining the R.R. Indus.’s Cost of Capital, EP 664 (Sub-No. 1), slip op. at 15 (STB served Jan. 28, 2009). In that decision, the Board cited to the Federal Reserve Board’s testimony in Methodology to be Employed in Determining the Railroad Industry’s Cost of Capital, Docket No. EP 664, which stated that the use of multiple models ‘‘will improve estimation techniques when each model provides new information.’’ Use of a Multi-Stage Discounted Cash Flow Model, EP 664 (Sub-No. 1), slip op. at 15. Furthermore, the Board stated that ‘‘there is robust economic literature confirming that, in many cases, combining forecasts from different models is more accurate than relying on a single model.’’ 2 Under CAPM, the cost of equity is equal to RF + b×RP, where RF is the risk-free rate of interest,3 RP is the market-risk premium, and b (or beta) is the measure of systematic, nondiversifiable risk. Under CAPM, the Board calculates the risk-free rate based on the average yield to maturity for a 20year U.S. Treasury Bond. The estimate for the market-risk premium is based on returns experienced by the S&P 500 since 1926. Lastly, beta is calculated by using a portfolio of weekly, mergeradjusted railroad stock returns for the prior five years. Under Morningstar/Ibbotson MSDCF, the cost of equity is the discount rate that equates a firm’s market value to the present value of the expected stream of cash flows. Morningstar/Ibbotson MSDCF calculates growth of earnings in three stages. In the first stage (years one 2 Use of a Multi-Stage Discounted Cash Flow Model, EP 664 (Sub-No. 1), slip op. at 15 (citing David F. Hendry & Michael P. Clements, Pooling of Forecasts, VII Econometrics Journal 1 (2004); J.M. Bates & C.W.J. Granger, The Combination of Forecasts in Essays in Econometrics: Collected Papers of Clive W.J. Granger, Vol. I: Spectral Analysis, Seasonality, Nonlinearity, Methodology, & Forecasting 391–410 (Eric Ghysels, Norman R. Swanson, & Mark W. Watson, eds., 2001); Spyros Makridakis & Robert L. Winkler, Averages of Forecasts: Some Empirical Results, XXIX Management Science 987 (1983)). 3 The risk-free rate of interest is an exogenously determined interest rate at which investors may borrow or lend without fear of default. E:\FR\FM\04OCP1.SGM 04OCP1

Agencies

[Federal Register Volume 84, Number 193 (Friday, October 4, 2019)]
[Proposed Rules]
[Pages 53090-53094]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21271]



[[Page 53090]]

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DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Part 1

[Docket No. PTO-P-2019-0019]
RIN 0651-AD38


Patent Term Adjustment Reductions in View of the Federal Circuit 
Decision in Supernus Pharm., Inc. v. Iancu

AGENCY: United States Patent and Trademark Office, Department of 
Commerce.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The United States Patent and Trademark Office (Office) is 
proposing to revise 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 Supernus Pharm., Inc. v. Iancu 
(Supernus). The Federal Circuit in Supernus held that a reduction of 
patent term adjustment must be equal to the period of time during which 
the applicant failed to engage in reasonable efforts to conclude 
prosecution of the application. The Office is proposing to revise the 
provisions pertaining to reduction of patent term adjustment for 
alignment with the Federal Circuit decision in Supernus.

DATES: Written comments must be received on or before December 3, 2019.

ADDRESSES: Comments should be sent by electronic mail message over the 
internet addressed to: [email protected]. Comments also may 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 Kery Fries, Senior Legal Advisor, Office of 
Patent Legal Administration, Office of the Deputy Commissioner for 
Patent Examination Policy.
    Comments further may be sent by electronic mail message over the 
internet via the Federal eRulemaking Portal. See the Federal 
eRulemaking Portal website (http://www.regulations.gov) for additional 
instructions on providing comments via the Federal eRulemaking Portal.
    Although comments may be submitted by postal mail, the Office 
prefers to receive comments by electronic mail message over the 
internet because sharing comments with the public is more easily 
accomplished. Electronic comments submitted in plain text are 
preferred, but may 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 digital scanning into ADOBE[supreg] portable 
document format.
    Comments will be available for viewing via the Office's internet 
website (http://www.uspto.gov). Because comments will be made available 
for public inspection, information that the submitter does not desire 
to make public, such as an address or phone number, should not be 
included in the comments.

FOR FURTHER INFORMATION CONTACT: 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.

SUPPLEMENTARY INFORMATION: 
    Executive Summary: Purpose: The Office is proposing to revise 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 
Supernus Pharm., Inc. v. Iancu, 913 F.3d 1351 (Fed. Cir. 2019). The 
Federal Circuit in Supernus held that a reduction of patent term 
adjustment under 35 U.S.C. 154(b)(2)(C) must be equal to the period of 
time during which the applicant failed to engage in reasonable efforts 
to conclude prosecution of the application. The regulations pertaining 
to a reduction of patent term adjustment due to a failure of an 
applicant to engage in reasonable efforts to conclude processing or 
examination of an application are set forth in 37 CFR 1.704. Several 
provisions in 37 CFR 1.704 specify a period of reduction corresponding 
to the consequences to the Office of applicant's failure to engage in 
reasonable efforts to conclude prosecution i.e., 37 CFR 1.703(c)(2), 
(c)(3), (c)(6), (c)(9), and (c)(10) rather than ``the period from the 
beginning to the end of the applicant's failure to engage in reasonable 
efforts to conclude prosecution'' as provided for in Supernus. 913 F.3d 
at 1359. Therefore, the Office is proposing to revise these provisions 
of 37 CFR 1.704 for consistency with the Federal Circuit's decision in 
Supernus.
    Summary of Major Provisions: This rulemaking pertains to the patent 
term adjustment regulations establishing the circumstances that 
constitute a failure of an applicant to engage in reasonable efforts to 
conclude processing or examination of an application and resulting 
reduction of any patent term adjustment (37 CFR 1.704). This rulemaking 
specifically proposes to revise the period of reduction of patent term 
adjustment in the provisions of 37 CFR 1.704 pertaining to deferral of 
issuance of a patent (37 CFR 1.704(c)(2)), abandonment of an 
application (37 CFR 1.704(c)(3)), submission of a preliminary amendment 
(37 CFR 1.704(c)(6)), submission of papers after a decision by the 
Patent Trial and Appeal Board or by a Federal court (37 CFR 
1.704(c)(9)), and submission of papers after a notice of allowance 
under 35 U.S.C. 151 (37 CFR 1.704(c)(10)) to specify a period of 
reduction corresponding to ``the period from the beginning to the end 
of the applicant's failure to engage in reasonable efforts to conclude 
prosecution'' (rather than corresponding to the consequences to the 
Office of applicant's failure to engage in reasonable efforts to 
conclude prosecution) for consistency with the Federal Circuit's 
decision in Supernus. 913 F.3d at 1359.
    Costs and Benefits: This rulemaking is not economically significant 
under Executive Order 12866 (Sept. 30, 1993).
    Background: The American Inventors Protection Act of 1999 or AIPA 
(Pub. L. 106-113, 113 Stat. 1501, 1501A-552 through 1501A-591 (1999)) 
amended 35 U.S.C. 154(b) to provide 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). Generally, 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)) (known as ``A'' delays); (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)) (known as ``B'' delays); and 
(3) for delays due to interference (and now derivation), secrecy order, 
or successful appellate review (35 U.S.C. 154(b)(1)(C)) (known as ``C'' 
delays). 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). See 35 U.S.C. 154(b)(2). 35 U.S.C. 
154(b)(2)(C) sets forth one such limitation, providing, 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

[[Page 53091]]

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 AIPA patent term adjustment provisions of 35 
U.S.C. 154(b), including setting forth circumstances that constitute a 
failure of an applicant to engage in reasonable efforts to conclude 
processing or examination of an application and resulting in a 
reduction of any patent term adjustment, 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). The regulations establishing the 
circumstances that constitute a failure of an applicant to engage in 
reasonable efforts to conclude processing or examination of an 
application and resulting reduction of any patent term adjustment are 
set forth in 37 CFR 1.704.
    In January 2019, the Federal Circuit issued a decision in Supernus 
pertaining to the patent term adjustment provisions of 35 U.S.C. 
154(b)(2)(C). The Federal Circuit confirmed that 37 CFR 1.704(c)(8) `` 
`is a reasonable interpretation of the [patent term adjustment] 
statute' insofar as it includes `not only applicant conduct or behavior 
that result in actual delay, but also those having the potential to 
result in delay irrespective of whether such delay actually occurred.' 
'' Supernus, 913 F.3d at 1356 (quoting Gilead Scis., Inc. v. Lee, 778 
F.3d 1341, 1349-50 (Fed. Cir. 2015)). The Federal Circuit, however, 
held that the Office may not reduce patent term adjustment by a period 
that exceeds the ``time during which the applicant failed to engage in 
reasonable efforts'' to conclude prosecution, specifically stating that 
``[o]n the basis of the plain language of [35 U.S.C. 154(b)(2)(C)(i),] 
the USPTO may not count as applicant delay a period of time during 
which there was no action that the applicant could take to conclude 
prosecution of the patent.'' Id. at 1358. The Federal Circuit 
specifically stated that--

    Thus, the statutory period of PTA reduction must be the same 
number of days as the period from the beginning to the end of the 
applicant's failure to engage in reasonable efforts to conclude 
prosecution. PTA cannot be reduced by a period of time during which 
there is no identifiable effort in which the applicant could have 
engaged to conclude prosecution because such time would not be 
``equal to'' and would instead exceed the time during which an 
applicant failed to engage in reasonable efforts.

Id. at 1359.

    37 CFR 1.704(c)(1) through (c)(14) set forth: (1) The exemplary 
circumstances prescribed by the Office ``that constitute a failure of 
an applicant to engage in reasonable efforts to conclude processing or 
examination of an application'' pursuant to 35 U.S.C. 154(b)(2)(C)(iii) 
and (2) resulting period of reduction of any patent term adjustment. 
The Federal Circuit decision in Supernus involved a reduction to patent 
term adjustment under the provisions of 37 CFR 1.704(c)(8). The period 
of reduction of patent term adjustment in 37 CFR 1.704(c)(8) is as 
follows: ``the number of days, if any, beginning on the day after the 
date the initial reply was filed and ending on the date that the 
supplemental reply or other such paper was filed.'' 37 CFR 1.704(c)(8). 
This period corresponds to ``the period from the beginning to the end 
of the applicant's failure to engage in reasonable efforts to conclude 
prosecution,'' except in the rare situation in which such period 
includes ``a period of time during which there is no identifiable 
effort in which the applicant could have engaged to conclude 
prosecution.'' Supernus, 913 F.3d at 1359. The Office published a 
notice in May of 2019 setting out its implementation of Supernus with 
respect to the provisions of 37 CFR 1.704(c)(8) or other provision of 
37 CFR 1.704(c) that includes ``a period of time during which there is 
no identifiable effort in which the applicant could have engaged to 
conclude prosecution.'' See Patent Term Adjustment Procedures in View 
of the Federal Circuit Decision in Supernus Pharm., Inc. v. Iancu, 84 
FR 20343 (May 9, 2019).
    While the Federal Circuit decision in Supernus involved 37 CFR 
1.704(c)(8), there are several provisions in 37 CFR 1.704(c)(1) through 
(c)(14) whose period of reduction corresponds to or includes the 
consequences to the Office of applicant's failure to engage in 
reasonable efforts to conclude prosecution, rather than ``the period 
from the beginning to the end of the applicant's failure to engage in 
reasonable efforts to conclude prosecution.'' Supernus, 913 F.3d at 
1359. Therefore, the Office is proposing changes to 37 CFR 1.704 to 
revise the periods of reduction of patent term adjustment in 37 CFR 
1.704(c) for consistency with the Federal Circuit's decision in 
Supernus.

Discussion of Specific Rules

    The following is a discussion of amendments to title 37 of the Code 
of Federal Regulations, part 1:
    Section 1.704(c)(2) is proposed to be amended to change ``the date 
the patent was issued'' to ``the earlier of the date a request to 
terminate the deferral was filed or the date the patent was issued.'' 
The period of reduction of patent term adjustment in Sec.  1.704(c)(2) 
would be as follows: ``the number of days, if any, beginning on the 
date a request for deferral of issuance of a patent under Sec.  1.314 
was filed and ending on the earlier of the date a request to terminate 
the deferral was filed or the date the patent was issued.''
    Section 1.704(c)(3) is proposed to be amended to change ``the 
earlier of: (i) The date of mailing of the decision reviving the 
application or accepting late payment of the issue fee; or (ii) The 
date that is four months after the date the grantable petition to 
revive the application or accept late payment of the issue fee was 
filed'' to ``the date the grantable petition to revive the application 
or accept late payment of the issue fee was filed.'' The period of 
reduction of patent term adjustment in Sec.  1.704(c)(3) would be as 
follows: ``the number of days, if any, beginning on the date of 
abandonment or the date after the date the issue fee was due and ending 
on the date the grantable petition to revive the application or accept 
late payment of the issue fee was filed.''
    Section 1.704(c)(6) is proposed to be amended to change ``the 
lesser of: (i) The number of days, if any, beginning on the day after 
the mailing date of the original Office action or notice of allowance 
and ending on the date of mailing of the supplemental Office action or 
notice of allowance; or (ii) Four months'' to ``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 preliminary amendment or other preliminary paper was filed.'' 
See Changes to Implement the Patent Law Treaty, 78 FR 62367, 62385 
(Oct. 21, 2013) (an application is expected to be in condition for 
examination no later than eight months from its filing date (or date of 
commencement of the national stage in an international application)). 
The period of reduction of patent term adjustment in Sec.  1.704(c)(6) 
would be as follows: ``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

[[Page 53092]]

the date the preliminary amendment or other preliminary paper was 
filed.''
    Section 1.704(c)(9) is proposed to be amended to change ``the 
lesser of: (i) The number of days, if any, beginning on the day after 
the mailing date of the original Office action or notice of allowance 
and ending on the mailing date of the supplemental Office action or 
notice of allowance; or (ii) Four months'' to ``the number of days, if 
any, beginning on the day after the date of the decision by the Patent 
Trial and Appeal Board or by a Federal court and ending on date the 
amendment or other paper was filed.'' The period of reduction of patent 
term adjustment in Sec.  1.704(c)(9) would be as follows: ``the number 
of days, if any, beginning on the day after the date of the decision by 
the Patent Trial and Appeal Board or by a Federal court and ending on 
date the amendment or other paper was filed.''
    Section 1.704(c)(10) is proposed to be amended to change ``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'' 
to ``the number of days, if any, beginning on the day after the mailing 
date of the notice of allowance under 35 U.S.C. 151 and ending on the 
date the amendment under Sec.  1.312 or other paper was filed.'' The 
period of reduction of patent term adjustment in Sec.  1.704(c)(10) 
would be as follows: ``the number of days, if any, beginning on the day 
after the mailing date of the notice of allowance under 35 U.S.C. 151 
and ending on the date the amendment under Sec.  1.312 or other paper 
was filed.''

Rulemaking Considerations

    A. Administrative Procedure Act: The changes proposed by this 
rulemaking involve rules of agency practice and procedure, and/or 
interpretive rules. See Perez v. Mortg. Bankers Ass'n, 135 S. Ct. 1199, 
1204 (2015) (Interpretive rules ``advise the public of the agency's 
construction of the statutes and rules which it administers.'' 
(citation and internal quotation marks omitted)); Nat'l Org. of 
Veterans' Advocates v. Sec'y of Veterans Affairs, 260 F.3d 1365, 1375 
(Fed. Cir. 2001) (Rule that clarifies interpretation of a statute is 
interpretive.); 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.). Specifically, this rulemaking proposes to revise 
Office rules that interpret certain statutory provisions pertaining to 
patent term adjustment. The proposed revisions specify a period of 
reduction corresponding to ``the period from the beginning to the end 
of the applicant's failure to engage in reasonable efforts to conclude 
prosecution'' (rather than to the consequences to the Office of 
applicant's failure to engage in reasonable efforts to conclude 
prosecution) for consistency with the Federal Circuit's decision in 
Supernus. 913 F.3d at 1359.
    Accordingly, prior notice and opportunity for public comment for 
the changes proposed by this rulemaking are not required pursuant to 5 
U.S.C. 553(b) or (c), or any other law. See Perez, 135 S. Ct. at 1206 
(Notice-and-comment procedures are required neither when an agency 
``issue[s] an initial interpretive rule'' nor ``when it amends or 
repeals that interpretive rule.''); 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))). However, the Office has chosen to seek public 
comment before implementing the rule to benefit from the public's 
input.
    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 rulemaking does not propose to impose any additional 
requirements or fees on applicants. This rulemaking also does not 
propose to change the circumstances defined as constituting 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)(iii)). This 
rulemaking implements the Federal Circuit's ruling on the provisions of 
35 U.S.C. 154(b)(2)(C)(i) in Supernus to reflect the applicable period 
of reduction in the event that there is a failure of an applicant to 
engage in reasonable efforts to conclude processing or examination. 
This rulemaking specifically proposes to revise the period of reduction 
of patent term adjustment in the provisions of 37 CFR 1.704 pertaining 
to deferral of issuance of a patent (37 CFR 1.704(c)(2)), abandonment 
of an application (37 CFR 1.704(c)(3)), submission of a preliminary 
amendment (37 CFR 1.704(c)(6)), submission of papers after a decision 
by the Patent Trial and Appeal Board or by a Federal court (37 CFR 
1.704(c)(9)), and submission of papers after a notice of allowance 
under 35 U.S.C. 151 (37 CFR 1.704(c)(10)) to specify a period of 
reduction corresponding to ``the period from the beginning to the end 
of the applicant's failure to engage in reasonable efforts to conclude 
prosecution'' (rather than to the consequences to the Office of 
applicant's failure to engage in reasonable efforts to conclude 
prosecution) for consistency with the Federal Circuit's decision in 
Supernus. 913 F.3d at 1359. The changes proposed in this rulemaking 
will not have a significant economic impact on a substantial number of 
small entities because applicants are not entitled to patent term 
adjustment that have not been reduced by a period equal to the period 
of the applicant's failure to engage in reasonable efforts to conclude 
processing or examination (35 U.S.C. 154(b)(2)(C)(i) and 37 CFR 
1.704(a)), and because applicants may avoid adverse patent term 
adjustment consequences by refraining from actions or inactions defined 
as constituting a failure of an applicant to engage in reasonable 
efforts to conclude processing or examination. For the foregoing 
reasons, the changes proposed in this notice will not have a 
significant economic impact on a substantial number of small entities.
    C. Executive Order 12866 (Regulatory Planning and Review): This 
rulemaking has been determined to be not significant for purposes of 
Executive Order 12866 (Sept. 30, 1993).
    D. Executive Order 13563 (Improving Regulation and Regulatory 
Review): The Office has complied with Executive Order 13563 (Jan. 18, 
2011). 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-

[[Page 53093]]

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 13771 (Reducing Regulation and Controlling 
Regulatory Costs): This proposed rule is not expected to be an 
Executive Order 13771 (Jan. 30, 2017) regulatory action because this 
proposed rule is not significant under Executive Order 12866 (Sept. 30, 
1993).
    F. 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).
    G. 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).
    H. 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).
    I. Executive Order 13783 (Promoting Energy Independence and 
Economic Growth): This rulemaking does not potentially burden the 
development or use of domestically produced energy resources, with 
particular attention to oil, natural gas, coal, and nuclear energy 
resources under Executive Order 13783 (Mar. 28, 2017).
    J. Executive Order 13772 (Core Principles for Regulating the United 
States Financial System): This rulemaking does not involve regulation 
of the United States financial system under Executive Order 13772 (Feb. 
3, 2017).
    K. 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).
    L. 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).
    M. 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).
    N. Congressional Review Act: Under the Congressional Review Act 
provisions of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801-808), 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.
    O. 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.
    P. 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.
    Q. 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.
    R. 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.
    This rulemaking does not impose 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, 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 1.704 is amended by revising paragraphs (c)(2), (3), (6), 
(9) and (c)(10) to read as follows:


Sec.  1.704  Reduction of Period of Adjustment of Patent Term.

* * * * *
    (c) * * *
    (2) Deferral of issuance of a patent under Sec.  1.314, 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 a request for 
deferral of issuance of a patent under Sec.  1.314 was filed and ending 
on the earlier of the date a request to terminate the deferral was 
filed or the date the patent was issued;
    (3) Abandonment of the application or late payment of the issue 
fee, 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 abandonment or the date after the date the issue fee was due and 
ending on the date the grantable petition to revive the application or 
accept late payment of the issue fee was filed;
* * * * *

[[Page 53094]]

    (6) Submission of a preliminary amendment or other preliminary 
paper less than one month before the mailing of an Office action under 
35 U.S.C. 132 or notice of allowance under 35 U.S.C. 151 that requires 
the mailing of a supplemental Office action or notice of allowance, 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 preliminary amendment or other 
preliminary paper was filed;
* * * * *
    (9) Submission of an amendment or other paper after a decision by 
the Patent Trial and Appeal Board, other than a decision designated as 
containing a new ground of rejection under Sec.  41.50(b) of this title 
or statement under Sec.  41.50(c) of this title, or a decision by a 
Federal court, less than one month before the mailing of an Office 
action under 35 U.S.C. 132 or notice of allowance under 35 U.S.C. 151 
that requires the mailing of a supplemental Office action or 
supplemental notice of allowance, 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 the decision by 
the Patent Trial and Appeal Board or by a Federal court and ending on 
date the amendment or other paper was filed;
    (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 number of days, if any, beginning on the day after the mailing 
date of the notice of allowance under 35 U.S.C. 151 and ending on the 
date the amendment under Sec.  1.312 or other paper was filed;
* * * * *

Andrei Iancu,
Under Secretary of Commerce for Intellectual Property and Director of 
the United States Patent and Trademark Office.
[FR Doc. 2019-21271 Filed 10-3-19; 8:45 am]
 BILLING CODE 3510-16-P