Patent Term Adjustment Reductions in View of the Federal Circuit Decision in Supernus Pharm., Inc., 53090-53094 [2019-21271]
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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 (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 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.
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SUMMARY:
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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
(https://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
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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
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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.
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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:
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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
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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
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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.’’
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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-
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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).
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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;
*
*
*
*
*
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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
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]]>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 (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 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 (https://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
