Rules of Practice To Allocate the Burden of Persuasion on Motions To Amend in Trial Proceedings Before the Patent Trial and Appeal Board, 56401-56406 [2019-22768]
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Federal Register / Vol. 84, No. 204 / Tuesday, October 22, 2019 / Proposed Rules
Utilizing EDCP, DHS would require
approximately 20,778 additional work
hours in the first year, 41,556 hours in
the second year, and 62,333 hours in the
third year to collect the additional
samples. Using average compensation
for U.S. Customs & Border Protection
employees stationed along the southern
border, the total cost to DHS with the
EDCP software would be about $5.1
million in the first three years. If future
implementation decisions or changes in
the volume of apprehensions ultimately
resulted in annual submission of a
number of additional DNA samples less
than or greater than 748,000, required
work hours and resulting costs would be
reduced or increased correspondingly.
The FBI would also need to provide
additional DNA-sample collection kits,
at a per-kit cost of $5.38, in sufficient
numbers to collect samples at the
volumes described above. For example,
assuming a three-year phase-in period
with an additional third of the eligible
population added in each successive
year, the additional sample-collection
kit costs to the FBI would be $1,341,413
to collect 249,333 samples in the first
year, $2,682,827 to collect 498,667
samples in the second year, and
$4,024,240 to collect 748,000 samples in
the third year. The FBI will provide to
DHS, without charge, the same services
that it provides to other Federal
agencies that collect DNA samples,
including assistance with regard to
training, DNA-sample collection kits,
postage to return the collected samples,
analysis of samples, inclusion in CODIS,
and handling resulting matches.
Executive Order 13132—Federalism
This regulation will not have
substantial direct effects on the States,
on the relationship between the national
Government and the States, or on the
distribution of power and
responsibilities among the various
levels of government. Therefore, in
accordance with Executive Order 13132,
it is determined that this rule does not
have sufficient federalism implications
to warrant the preparation of a
federalism assessment.
Executive Order 12988—Civil Justice
Reform
This regulation meets the applicable
standards set forth in sections 3(a) and
3(b)(2) of Executive Order 12988.
Unfunded Mandates Reform Act of
1995
This rule will not result in the
expenditure by State, local and tribal
governments, in the aggregate, or by the
private sector, of $100 million or more
in any one year, and it will not
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significantly or uniquely affect small
governments. Therefore, no actions were
deemed necessary under the provisions
of the Unfunded Mandates Reform Act
of 1995.
DEPARTMENT OF COMMERCE
Small Business Regulatory Enforcement
Fairness Act of 1996
[Docket No. PTO–P–2019–0011]
This rule is not a major rule as
defined by section 251 of the Small
Business Regulatory Enforcement
Fairness Act of 1996. 5 U.S.C. 804. This
rule will not result in an annual effect
on the economy of $100 million or
more; a major increase in costs or prices;
or significant adverse effects on
competition, employment, investment,
productivity, or innovation, or on the
ability of United States-based
enterprises to compete with foreignbased enterprises in domestic and
export markets.
Rules of Practice To Allocate the
Burden of Persuasion on Motions To
Amend in Trial Proceedings Before the
Patent Trial and Appeal Board
List of Subjects in 28 CFR Part 28
Crime, Information, Law enforcement,
Prisoners, Prisons, Probation and parole,
Records.
Accordingly, for the reasons stated in
the preamble, part 28 of chapter I of title
28 of the Code of Federal Regulations is
proposed to be amended as follows:
PART 28—DNA IDENTIFICATION
SYSTEM
1. The authority citation for part 28 is
revised to read as follows:
■
Authority: 28 U.S.C. 509, 510; 34 U.S.C.
12592, 40702, 40703; 10 U.S.C. 1565; 18
U.S.C. 3600A; Public Law 106–546, 114 Stat.
2726; Public Law 107–56, 115 Stat. 272;
Public Law 108–405, 118 Stat. 2260; Public
Law 109–162, 119 Stat. 2960; Public Law
109–248, 120 Stat. 587; Public Law 115–50,
131 Stat. 1001.
§ 28.12
[Amended]
2. Amend § 28.12:
a. In the introductory text of
paragraph (b) by removing ‘‘1.1(p)’’ and
adding in its place ‘‘1.2’’;
■ b. At the end of paragraph (b)(2) by
removing the semicolon and adding in
its place ‘‘; or’’;
■ c. At the end of paragraph (b)(3) by
removing ‘‘; or’’ and adding in its place
a period; and
■ d. By removing paragraph (b)(4).
■
■
Dated: October 15, 2019.
William P. Barr,
Attorney General.
[FR Doc. 2019–22877 Filed 10–21–19; 8:45 am]
BILLING CODE 4410–19–P
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Patent and Trademark Office
37 CFR Part 42
RIN 0651–AD34
United States Patent and
Trademark Office, Department of
Commerce.
ACTION: Notice of proposed rulemaking.
AGENCY:
The United States Patent and
Trademark Office (‘‘USPTO’’ or
‘‘Office’’) proposes changes to the rules
of practice in inter partes review
(‘‘IPR’’), post-grant review (‘‘PGR’’), and
the transitional program for covered
business method patents (‘‘CBM’’)
(collectively ‘‘post-grant trial’’)
proceedings before the Patent Trial and
Appeal Board (‘‘PTAB’’ or ‘‘Board’’) to
allocate the burdens of persuasion in
relation to motions to amend and the
patentability of substitute claims
proposed therein.
DATES: Comment Deadline Date: The
Office solicits comments from the
public on this proposed rulemaking.
Written comments must be received on
or before December 23, 2019 to ensure
consideration.
ADDRESSES: Comments should be sent
by electronic mail message over the
internet addressed to:
MTABurden2019@uspto.gov. Comments
may also be sent by electronic mail
message over the internet via the
Federal eRulemaking Portal at https://
www.regulations.gov. See the Federal
eRulemaking Portal website for
additional instructions on providing
comments via the Federal eRulemaking
Portal. All comments submitted directly
to the USPTO or provided on the
Federal eRulemaking Portal should
include the docket number (PTO–P–
2019–0011).
Comments may also be submitted by
postal mail addressed to: Mail Stop
Patent Board, Director of the United
States Patent and Trademark Office,
P.O. Box 1450, Alexandria, VA 22313–
1450, marked to the attention of ‘‘Lead
Administrative Patent Judge Christopher
L. Crumbley or Lead Administrative
Patent Judge Susan L. C. Mitchell, PTAB
Notice of Proposed Rulemaking 2019.’’
Although comments may be
submitted by postal mail, the Office
prefers to receive comments by
electronic mail message to more easily
SUMMARY:
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share all comments with the public. The
Office prefers the comments to be
submitted in plain text, but also accepts
comments submitted in searchable
ADOBE® portable document format or
MICROSOFT WORD® format.
Comments not submitted electronically
should be submitted on paper in a
format that accommodates digital
scanning into ADOBE® portable
document format.
The comments will be available for
public inspection at the Patent Trial and
Appeal Board, located in Madison East,
Ninth Floor, 600 Dulany Street,
Alexandria, Virginia. Comments also
will be available for viewing via the
Office’s internet website, https://
go.usa.gov/xXXFW, and on the Federal
eRulemaking Portal. Because comments
will be made available for public
inspection, information that the
submitter does not desire to be made
public, such as address or phone
number, should not be included in the
comments.
FOR FURTHER INFORMATION CONTACT:
Christopher L. Crumbley, Lead
Administrative Patent Judge, or Susan L.
C. Mitchell, Lead Administrative Patent
Judge, by telephone at (571) 272–9797.
SUPPLEMENTARY INFORMATION:
Executive Summary
Purpose: The proposed rules would
amend the rules of practice for IPR,
PGR, and CBM proceedings that
implement provisions of the LeahySmith America Invents Act, Public Law
112–29, 125 Stat. 284 (2011) (‘‘AIA’’)
providing for trials before the Office.
Pursuant to the AIA, during the course
of an IPR, PGR, or CBM, a patent owner
may file a motion to amend the patent
by cancelling any challenged patent
claim or by proposing a reasonable
number of substitute claims for each
challenged claim. 35 U.S.C. 316(d)(1),
326(d)(1).
Previously, relying on a general rule
that a movant bore the burden of proof
with respect to motions before the Board
(37 CFR 42.20(c)), the Office placed the
burden of showing the patentability of
proposed substitute claims on the patent
owner moving to amend a patent in a
trial proceeding. On October 4, 2017,
the United States Court of Appeals for
the Federal Circuit issued an en banc
decision in Aqua Prods., Inc. v. Matal,
872 F.3d 1290 (Fed. Cir. 2017) (en banc)
(‘‘Aqua Products’’), in which a majority
of the judges concluded that the Office
had not adopted a rule allocating the
burden of persuasion with respect to the
patentability of proposed substitute
claims. In light of Aqua Products, as
well as public comment provided in
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response to a Request for Comments
(See 83 FR 54319), the Office proposes
to issue specific rules applicable to
motions to amend. The proposed rules
assign the burden of persuasion in
relation to the patentability of proposed
substitute claims to the petitioner, but
permit the Board to exercise its
discretion to reach a determination
regarding patentability of proposed
substitute claims even when a petitioner
does not carry its burden of persuasion,
when supported by the record and when
in the interests of justice. The proposed
rules also assign the burden of
persuasion in relation to certain
statutory and regulatory requirements
for a motion to amend (i.e., 35 U.S.C.
316(d) or 326(d); 37 CFR 42.121(a)(2),
(a)(3), (b)(1), (b)(2), or 42.221(a)(2),
(a)(3), (b)(1), (b)(2)) to the patent owner,
but permit the Board to exercise its
discretion to determine that the motion
to amend complies with the statutory
and regulatory requirements of those
sections even when the patent owner
does not carry its burden of persuasion,
when supported by the record and when
in the interests of justice. The Office
anticipates that the Board will exercise
such discretion only in rare
circumstances, as discussed herein. The
proposed rules are consistent with Aqua
Products and also with current Board
practice as described in the precedential
Board decision Lectrosonics, Inc. v.
Zaxcom, Inc., Cases IPR2018–01129,
01130 (P.T.A.B. Feb. 25, 2019) (Paper
15), and as such do not reflect a change
from current practice.
The proposed rules would thus clarify
the rules of practice for amending
claims in an IPR, PGR, or CBM to
specify that the petitioner bears the
burden of showing that the proposed
substitute claims are unpatentable by a
preponderance of the evidence, and
would address instances where a
petitioner does not oppose an
amendment or does not meet its burden
of persuasion in this regard, for
example, where the petitioner ceases to
participate in the proceeding or declines
to oppose the patent owner’s motion to
amend. The proposed rules also would
specify that the patent owner bears the
burden of showing, by a preponderance
of the evidence, that a motion to amend
complies with certain statutory and
regulatory requirements, and would
address instances where a patent owner
does not meet its burden of persuasion
in this regard. In instances where a
party does not meet its burden, the
Board may, in the interests of justice,
justify a determination regarding the
patentability of amended claims based
on the record as a whole.
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Costs and Benefits: This rulemaking is
not economically significant under
Executive Order 12866 (Sept. 30, 1993).
Background
On September 16, 2011, the AIA was
enacted into law (Pub. L. 112–29, 125
Stat. 284 (2011)), and within one year,
the Office implemented rules to govern
Office practice for AIA trials, including
IPR, PGR, CBM, and derivation
proceedings pursuant to 35 U.S.C. 135,
316 and 326 and AIA sec. 18(d)(2). See
Rules of Practice for Trials Before the
Patent Trial and Appeal Board and
Judicial Review of Patent Trial and
Appeal Board Decisions, 77 FR 48612
(Aug. 14, 2012); Changes to Implement
Inter Partes Review Proceedings, PostGrant Review Proceedings, and
Transitional Program for Covered
Business Method Patents, 77 FR 48680
(Aug. 14, 2012); Transitional Program
for Covered Business Method Patents—
Definitions of Covered Business Method
Patent and Technological Invention, 77
FR 48734 (Aug. 14, 2012). Additionally,
the Office published a Patent Trial
Practice Guide to advise the public on
the general framework of the
regulations, including the structure and
times for taking action in each of the
new proceedings. See Office Patent Trial
Practice Guide, 77 FR 48756 (Aug. 14,
2012); see also Office Patent Trial
Practice Guide, August 2018 Update, 83
FR 39989 (Aug. 13, 2018); Office Patent
Trial Practice Guide, July 2019 Update,
84 FR 33925 (July 16, 2018).
In prescribing these regulations, the
Office considered ‘‘the effect of any
such regulation on the economy, the
integrity of the patent system, the
efficient administration of the Office,
and the ability of the Office to timely
complete proceedings instituted’’ as
required by statute. 35 U.S.C. 316(b),
326(b). The Office also considered the
public comments carefully and
responded to the comments in these
final rules. Among the final rules, the
Office promulgated § 42.20(c), which
states that a ‘‘moving party has the
burden of proof to establish that it is
entitled to the requested relief.’’ 37 CFR
42.20(c).
Previously, the Board interpreted the
burden of proof requirement of
§ 42.20(c) to apply to motions to amend
filed pursuant to 35 U.S.C. 316 and 326,
including the requirement to show that
the proposed substitute claims were
patentable over the prior art of record.
MasterImage 3D, Inc. v. RealD Inc., Case
IPR2015–00040 (P.T.A.B. July 15, 2015)
(Paper 42) (‘‘MasterImage’’). Under
MasterImage, which was subsequently
made precedential, the patent owner in
a proceeding, as the moving party in a
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motion to amend, bore the burden of
showing that the proposed substitute
claims were patentable. Id.
On October 4, 2017, the United States
Court of Appeals for the Federal Circuit
issued its en banc decision in Aqua
Products, addressing the burden of
persuasion regarding the patentability of
substitute claims presented in a motion
to amend. The lead opinion of the
decision explains that, in the absence of
rulemaking, the USPTO may not place
the burden of persuasion on the patent
owner to show that proposed substitute
claims are patentable.
The only legal conclusions that support
and define the judgment of the court are: (1)
The PTO has not adopted a rule placing the
burden of persuasion with respect to the
patentability of amended claims on the
patent owner that is entitled to deference;
and (2) in the absence of anything that might
be entitled deference, the PTO may not place
that burden on the patentee.
Id. at 1327 (O’Malley, J.).
A separate opinion joined-in-part by a
majority of the en banc court observed
that ‘‘it is well settled that regardless of
which party bears the ultimate burden
of persuasion, the movant bears a
burden of production’’ and that ‘‘the
Patent Office has adopted regulations
that address what a patent owner must
submit in moving to amend the patent.’’
Id. at 1340–41 (Reyna, J., concurring in
part) (citing 37 CFR 42.20(a), 42.22(a),
42.121(a)(2)(i)). The opinion explains
that these regulations require a patent
owner to ‘‘assist[ ] the Board to perform
its statutory obligation to ‘issue a final
written decision with respect to the
patentability of . . . any new claim
added under section 316(d).’’’ Id. at
1341 (omission in original) (quoting 35
U.S.C. 318(a)).
In view of the Federal Circuit’s
decision in Aqua Products, on
November 21, 2017, the Office issued
formal guidance through a
memorandum from the Chief
Administrative Patent Judge, explaining
that, in light of the Aqua Products
decision, the Board will no longer place
the burden of persuasion on a patent
owner with respect to patentability of
any proposed substitute claims
presented in a motion to amend. See
Guidance on Motions to Amend in view
of Aqua Products, https://go.usa.gov/
xQGAA (‘‘Guidance Memo’’). The
Guidance Memo also notes that a
motion to amend must continue to
satisfy the requirements of 37 CFR
42.121 or 42.221 (e.g., provide a
reasonable number of substitute claims
and written description support in
relation to each substitute claim), as
applicable, that all parties continue to
have a duty of candor under 37 CFR
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42.11, and that the page limits, type,
and timing of briefs remain unchanged.
Id.
On December 22, 2017, the Federal
Circuit issued a related decision in
Bosch Auto. Serv. Solutions, LLC v.
Matal, 878 F.3d 1027 (Fed. Cir. 2017)
(‘‘Bosch’’). In that decision, because the
petitioner had settled with the patent
owner who had proposed substitute
claims, the Federal Circuit remanded
the case to the Board to evaluate the
patentability of the proposed substitute
claims. Id. (‘‘[W]here the challenger
ceases to participate in the IPR and the
Board proceeds to final judgment, it is
the Board that must justify any finding
of unpatentability by reference to the
evidence of record in the IPR.’’)
(alteration in original) (quoting Aqua
Products, 872 F.2d at 1311 (O’Malley,
J.)).
In view of the decisions by the
Federal Circuit regarding motion to
amend practice and procedure in AIA
trials, the Board de-designated as
precedential MasterImage, as well as dedesignating as informative a prior
decision of the Board in Idle Free Sys.,
Inc. v. Bergstrom, Inc., Case IPR2012–
00027 (P.T.A.B. June 11, 2013) (Paper
26), decisions in which the Board
panels stated that ‘‘[t]he burden is not
on the petitioner to show
unpatentability, but on the patent owner
to show patentable distinction over the
prior art of record and also prior art
known to the patent owner.’’ Id. at 7; see
also MasterImage at 2 (quoting Idle
Free). Concurrently, the Board
designated an order issued in Western
Digital Corp. v. SPEX Techs., Inc., Cases
IPR2018–00082, 00084 (P.T.A.B. Apr.
25, 2018) (Paper 13) (‘‘Western Digital’’)
as informative to provide an example of
how panels can handle several aspects
of the motion to amend practice under
the Aqua Products and Bosch precedent.
With respect to the burden of
persuasion, the Western Digital order
explained that under the current state of
the law ‘‘the burden of persuasion will
ordinarily lie with the petitioner to
show that any proposed substitute
claims are unpatentable’’ and that the
‘‘Board itself may justify any finding of
unpatentability by reference to evidence
of record in the proceeding.’’ Id. at 4.
On March 7, 2018, the Board
designated as precedential an order in
Lectrosonics, Inc. v. Zaxcom, Inc., Cases
IPR2018–01129, 01130 (P.T.A.B. Feb.
25, 2019) (Paper 15) (‘‘Lectrosonics’’),
and de-designated Western Digital. This
order provides guidance regarding
statutory and regulatory requirements
for a motion to amend in light of Federal
Circuit case law. For example, the order
notes that, prior to considering the
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patentability of any substitute claims,
the Board first must determine whether
the patent owner has met the statutory
and regulatory requirements set forth in
35 U.S.C. 316(d) and 37 CFR 42.121,
such as, that the motion proposes a
reasonable number of substitute claims
and that the amendments do not
broaden the scope of the claims. Id. at
4–5. The order also sets out that ‘‘the
burden of persuasion ordinarily will lie
with the petitioner to show that any
proposed substitute claims are
unpatentable by a preponderance of the
evidence.’’ As discussed in more detail
below, the proposed rules herein
allocate the burden of persuasion
regarding the patentability of proposed
substitute claims in a motion to amend
as set forth in Lectrosonics and Western
Digital.
On October 29, 2018, the Office
published a ‘‘Request for Comments on
Motion To Amend Practice and
Procedures in Trial Proceedings Under
the America Invents Act Before the
Patent Trial and Appeal Board’’ in the
Federal Register (‘‘Request for
Comments’’), seeking public comment
on various aspects of the Board’s
amendment practice. 83 FR 54319.
Among the questions on which the
Board sought public input were the
following, directed to the allocation of
the burden of persuasion:
15. Should the Office engage in
rulemaking to allocate the burden of
persuasion regarding the patentability of
proposed substitute claims in a motion
to amend as set forth in the Western
Digital order? What are the advantages
or disadvantages of doing so?
16. If the Office continues to allocate
the burden as set forth in the Western
Digital order, under what circumstances
should the Board itself be able to justify
findings of unpatentability? Only if the
petitioner withdraws from the
proceeding? Or are there situations
where the Board itself should be able to
justify findings of unpatentability when
the petitioner remains in the
proceeding? What are the advantages or
disadvantages?
Id. at 54325.1
In response to the October 2018
Request for Comments, the Office
received 49 comments as of December
21, 2018 (the closing date for
comments), from intellectual property
1 The October 2018 Request for Comments was
published before Western Digital was superseded by
Lectrosonics, and thus refers only to the Western
Digital order. Both orders are identical in their
discussion of the burden of persuasion. Therefore,
Questions 15 and 16 of the Request for Comments,
and the public comments provided thereto, are
equally pertinent to the current Board precedent of
Lectrosonics.
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organizations, trade organizations, other
organizations, and individuals. See
https://go.usa.gov/xyeFy (collected
responses to Request for Comments).2 3
Approximately 25 of the commenters
provided specific responses to
Questions 15 and 16 of the Request for
Comments. In response to Question 15,
the majority of commenters were in
favor of the Office engaging in
rulemaking to allocate the burden of
persuasion as set forth in Western
Digital (as discussed in more detail
below). Only three commenters believed
rulemaking was unnecessary (either
because the Board could simply
continue to apply its own precedent, or
because the statute already allocates the
burden of persuasion). A minority of
commenters stated that the Office
should engage in rulemaking, but that
the burden of persuasion should be
placed on the patent owner.
Additionally, in response to Question
15, some commenters suggested that
even if the Office promulgates rules to
place the burden of persuasion on the
petitioner on the issue of patentability
of the proposed substitute claims, the
patent owner continues to bear the
burden to show that the motion to
amend complies with the statutory
requirements of 35 U.S.C. 316(d) or
326(d) (for example, that the
amendment may not enlarge the scope
of the claims), as well as the regulatory
requirements of 37 CFR 42.121 or
42.221 (for example, that the motion set
forth the support for the amendment in
the original disclosure of the patent).
In response to Question 16, the
majority of responsive comments stated
that the Board should be able to justify
findings of unpatentability in any
circumstance, for example, even when
the petitioner remains in the
proceeding. Two commenters
responded that the Board should never
be able to assume the burden of
2 The October 2018 Request for Comments also
sought comments on a proposed amendment
procedure in post-grant trial proceedings that
included the Board providing preliminary nonbinding guidance on the merits of a motion to
amend, and an opportunity for a patent owner to
revise its motion to amend thereafter. The Office
recently addressed that portion of the Request for
Comments separately in a ‘‘Notice Regarding a New
Pilot Program Concerning Motion To Amend
Practice and Procedures in Trial Proceedings Under
the America Invents Act Before the Patent Trial and
Appeal Board.’’ 84 FR 9497 (Mar. 15, 2019).
3 In response to the October 2018 Request for
Comments, the Office also received comments and
questions relating to reissue or reexamination as an
alternative vehicle for claim amendments. The
Office recently addressed those comments and
questions separately in a ‘‘Notice Regarding Options
for Amendments by Patent Owner Through Reissue
or Reexamination During a Pending AIA Trial
Proceeding (April 2019).’’ 84 FR 16654 (Apr. 22,
2019).
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persuasion on unpatentability itself, and
three commenters believed that the
Board should be permitted to justify
findings of unpatentability of proposed
substitute claims itself only in certain
circumstances, for example, when a
petitioner ceases to participate in a
proceeding.
The Office appreciates the public
input provided in response to the
Request for Comments and has reviewed
the individual responses thoroughly. In
light of the generally positive support
for rulemaking to allocate the burden of
persuasion as set forth in the Western
Digital order (and subsequently made
precedential in Lectrosonics), and in the
interest of providing greater clarity,
certainty, and predictability to parties
participating in trial proceedings before
the Board, the Office now issues
proposed rules allocating the burden of
persuasion. The rules would specify
that the burden of persuasion as to
patentability of substitute claims
proposed in a motion to amend is on the
petitioner. In addition, the rules would
specify that the burden of persuasion is
on the patent owner to show that the
motion complies with the requirements
of 35 U.S.C. 316(d) or 326(d) (requiring
that a motion to amend propose a
reasonable number of substitute claims,
and that substitute claims do not enlarge
scope of the original claims of the patent
or introduce new matter), as well as 37
CFR 42.121(a)(2), (a)(3), (b)(1), and
(b)(2), or 42.221(a)(2), (a)(3), (b)(1), and
(b)(2) (indicating, for example, that a
motion to amend must set forth written
description support and support for the
benefit of a filing date in relation to each
substitute claim, and respond to
grounds of unpatentability involved in
the trial).
Irrespective of the burdens of
persuasion discussed above, however,
the rules also would specify that the
Board may, in the interests of justice,
exercise its discretion to grant or deny
a motion to amend for any reason
supported by the evidence of record.
Thus, in instances where a party has not
met its burden in relation to a motion
to amend or any substitute claims
proposed therein, the Board may, in the
interests of justice, reach a
determination regarding patentability,
based on the entirety of the evidence
made of record in the proceeding. The
Office anticipates that the Board will
exercise this discretion only in rare
circumstances. Any evidence relied on
to support a determination regarding
patentability will be made of record in
the proceeding by the parties or the
Board.
For instance, the Board may, in the
interests of justice, exercise its
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discretion to determine that a motion to
amend complies with the statutory and
regulatory requirements of 35 U.S.C.
316(d) or 326(d) and 37 CFR
42.121(a)(2), (a)(3), (b)(1), and (b)(2), or
42.221(a)(2), (a)(3), (b)(1), and (b)(2),
even if a patent owner does not
expressly address or establish every
requirement in its briefing. The Office
expects that the Board will do so only
in circumstances where there is easily
identified and persuasive evidence that
the motion complies with the statutory
and regulatory requirements, and only
where the petitioner has been afforded
the opportunity to respond to that
evidence. The Board will rely on
evidence of record when making such a
determination.
Furthermore, as supported by the
majority of the comments received in
response to Question 16, under the
proposed rules, the Board may exercise
its discretion to reach a determination
regarding patentability in instances
where a petitioner does not oppose the
amendment or does not meet its burden
of persuasion in relation to any
proposed substitute claim. The
proposed rules limit such instances to
those in which the interests of justice
warrant the Board reaching a
determination regarding patentability.
Such instances may include, for
example, situations where the petitioner
has ceased to participate in the
proceeding altogether (for example, as a
result of settlement) or where the
petitioner remains in the proceeding but
does not oppose the motion to amend.
The interests of justice also may, for
example, support the Board exercising
its discretion to deny a motion to amend
when the petitioner opposes the motion
to amend and has failed to meet the
burden of persuasion, but where there is
easily identified and persuasive
evidence of unpatentability in the
record. In such situations, the proposed
rules would grant the Board discretion
regarding whether to make any
determination of unpatentability that is
supported by the evidence of record,
even if the ground of unpatentability
has not been advanced by the petitioner.
The Office expects that the Board will
do so only in rare circumstances, and
only where the patent owner has been
afforded the opportunity to respond to
that evidence and related grounds of
unpatentability. Ordinarily, in cases
where the petitioner has participated
fully and opposed the motion to amend,
the Office expects that the petitioner
will bear the burden of persuasion and
there will be no need for the Board to
independently justify a determination of
unpatentability.
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Federal Register / Vol. 84, No. 204 / Tuesday, October 22, 2019 / Proposed Rules
Discussion of Specific Rules
The USPTO proposes to amend 37
CFR part 42 as follows:
Section 42.121: § 42.121 is proposed
to be amended by adding a new
subsection (d) to state that a patent
owner bears the burden of persuasion to
show that a motion to amend complies
with certain statutory and regulatory
requirements, but that the petitioner
bears the burden of persuasion to show
that any proposed substitute claims are
unpatentable. The new subsection (d)
also states that in cases where a party
does not meet its burden, the Board
may, in the interests of justice, exercise
its discretion to grant or deny a motion
to amend for any reason supported by
the evidence of record.
Section 42.221: § 42.221 is proposed
to be amended by adding a new
subsection (d) to state that a patent
owner bears the burden of persuasion to
show that a motion to amend complies
with certain statutory and regulatory
requirements, but that the petitioner
bears the burden of persuasion to show
that any proposed substitute claims are
unpatentable. The new subsection (d)
also states that in cases where a party
does not meet its burden, the Board
may, in the interests of justice, exercise
its discretion to grant or deny a motion
to amend for any reason supported by
the evidence of record.
Rulemaking Considerations
A. Regulatory Flexibility Act: For the
reasons set forth herein, the Senior
Counsel for Regulatory and Legislative
Affairs, Office of General Law, United
States Patent and Trademark Office has
certified to the Chief Counsel for
Advocacy of the Small Business
Administration that changes set forth in
this notice of proposed rulemaking
would not have a significant economic
impact on a substantial number of small
entities. See 5 U.S.C. 605(b).
The changes set forth in this notice of
proposed rulemaking are to set forth
expressly the respective burdens of
persuasion on the parties regarding a
motion to amend in an AIA proceeding.
These changes are consistent with
relevant precedential decisions of the
Board and Federal Circuit, and as such
do not reflect a change from current
practice. The changes do not create
additional procedures or requirements
or impose any additional compliance
measures on any party, nor do these
changes cause any party to incur
additional cost. Therefore, any
requirements resulting from these
proposed changes are of minimal or no
additional burden to those practicing
before the Board.
VerDate Sep<11>2014
16:25 Oct 21, 2019
Jkt 250001
For the foregoing reasons, the
proposed changes in this notice of
proposed rulemaking would not have a
significant economic impact on a
substantial number of small entities.
B. 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).
C. 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 rules; (2) tailored
the rules to impose the least burden on
society consistent with obtaining the
regulatory objectives; (3) selected a
regulatory approach that maximizes net
benefits; (4) specified performance
objectives; (5) identified and assessed
available alternatives; (6) involved the
public in an open exchange of
information and perspectives among
experts in relevant disciplines, affected
stakeholders in the private sector and
the public as a whole, and provided online access to the rulemaking docket; (7)
attempted to promote coordination,
simplification, and harmonization
across government agencies and
identified goals designed to promote
innovation; (8) considered approaches
that reduce burdens and maintain
flexibility and freedom of choice for the
public; and (9) ensured the objectivity of
scientific and technological information
and processes.
D. 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.
E. Executive Order 13132
(Federalism): This rulemaking does not
contain policies with federalism
implications sufficient to warrant
preparation of a Federalism Assessment
under Executive Order 13132 (Aug. 4,
1999).
F. Executive Order 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).
G. Executive Order 12988 (Civil
Justice Reform): This rulemaking meets
applicable standards to minimize
PO 00000
Frm 00016
Fmt 4702
Sfmt 4702
56405
litigation, eliminate ambiguity, and
reduce burden as set forth in sections
3(a) and 3(b)(2) of Executive Order
12988 (Feb. 5, 1996).
H. 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).
I. Executive Order 12630 (Taking of
Private Property): This rulemaking will
not affect a taking of private property or
otherwise have taking implications
under Executive Order 12630 (Mar. 15,
1988).
J. Congressional Review Act: Under
the Congressional Review Act
provisions of the Small Business
Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.), prior to
issuing any final rule, the United States
Patent and Trademark Office will
submit a report containing the rule and
other required information to the United
States Senate, the United States House
of Representatives, and the Comptroller
General of the Government
Accountability Office. The changes in
this notice of proposed rulemaking are
not expected to result in an annual
effect on the economy of 100 million
dollars or more, a major increase in
costs or prices, or significant adverse
effects on competition, employment,
investment, productivity, innovation, or
the ability of United States-based
enterprises to compete with foreignbased enterprises in domestic and
export markets. Therefore, this
rulemaking is not a ‘‘major rule’’ as
defined in 5 U.S.C. 804(2).
K. Unfunded Mandates Reform Act of
1995: The changes set forth in this
notice of proposed 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.
L. 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.
M. National Technology Transfer and
Advancement Act: The requirements of
E:\FR\FM\22OCP1.SGM
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56406
Federal Register / Vol. 84, No. 204 / Tuesday, October 22, 2019 / Proposed Rules
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.
N. Paperwork Reduction Act: The
Paperwork Reduction Act of 1995 (44
U.S.C. 3501–3549) requires that the
Office consider the impact of paperwork
and other information collection
burdens imposed on the public. This
proposed rulemaking does not involve
an information collection requirement
that is subject to review by the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3549). This rulemaking
does not add any additional information
requirements or fees for parties before
the Board.
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 42
Administrative practice and
procedure, Inventions and patents,
Lawyers.
For the reasons set forth in the
preamble, the Office proposes to amend
part 42 of title 37 as follows:
PART 42—TRIAL PRACTICE BEFORE
THE PATENT TRIAL AND APPEAL
BOARD
Authority: 35 U.S.C. 2(b)(2), 6, 21, 23, 41,
135, 311, 312, 316, and 321–326; Pub. L.
112–29, 125 Stat. 284; and Pub. L. 112–274,
126 Stat. 2456.
2. Amend § 42.121 by adding
paragraph (d) to read as follows:
*
*
*
*
(d) Burden of Persuasion. On a motion
to amend:
(1) A patent owner bears the burden
of persuasion to show, by a
preponderance of the evidence, that the
motion to amend complies with the
requirements of paragraphs (1) and (3)
of 35 U.S.C. 316(d), as well as
paragraphs (a)(2), (3), (b)(1), and (2) of
this section;
(2) A petitioner bears the burden of
persuasion to show, by a preponderance
of the evidence, that any proposed
substitute claims are unpatentable; and
16:25 Oct 21, 2019
Jkt 250001
*
*
*
*
(d) Burden of Persuasion. On a motion
to amend:
(1) A patent owner bears the burden
of persuasion to show, by a
preponderance of the evidence, that the
motion to amend complies with the
requirements of paragraphs (1) and (3)
of 35 U.S.C. 326(d), as well as
paragraphs (a)(2), (3), (b)(1), and (2) of
this section;
(2) A petitioner bears the burden of
persuasion to show, by a preponderance
of the evidence, that any proposed
substitute claims are unpatentable; and
(3) Irrespective of paragraphs (d)(1)
and (2) of this section, the Board may,
in the interests of justice, exercise its
discretion to grant or deny a motion to
amend for any reason supported by the
evidence of record.
Dated: October 10, 2019.
Andrei Iancu,
Under Secretary of Commerce for Intellectual
Property and Director of the United States
Patent and Trademark Office.
[FR Doc. 2019–22768 Filed 10–21–19; 8:45 am]
BILLING CODE 3510–16–P
POSTAL SERVICE
International Mailing Services:
Proposed Product and Price
Changes—CPI
Postal ServiceTM.
Proposed rule; request for
comments.
AGENCY:
The Postal Service proposes
to revise Mailing Standards of the
United States Postal Service,
International Mail Manual (IMM®), to
reflect changes coincident with recently
announced mailing services price
adjustment.
SUMMARY:
Amendment of the patent.
VerDate Sep<11>2014
Amendment of the patent.
*
ACTION:
■
*
§ 42.221
39 CFR Part 20
1. The authority citation for 37 CFR
part 42 continues to read as follows:
■
§ 42.121
(3) Irrespective of paragraphs (d)(1)
and (2) of this section, the Board may,
in the interests of justice, exercise its
discretion to grant or deny a motion to
amend for any reason supported by the
evidence of record.
■ 3. Amend § 42.221 by adding
paragraph (d) to read as follows:
We must receive your comments
on or before November 21, 2019.
ADDRESSES: Mail or deliver comments to
the manager, Product Classification,
U.S. Postal Service®, 475 L’Enfant Plaza
SW, RM 4446, Washington, DC 20260–
5015. You may inspect and photocopy
all written comments at USPS®
Headquarters Library, 475 L’Enfant
DATES:
PO 00000
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Fmt 4702
Sfmt 4702
Plaza SW, 11th Floor N, Washington,
DC by appointment only between the
hours of 9 a.m. and 4 p.m., Monday
through Friday by calling 1–202–268–
2906 in advance. Email comments,
containing the name and address of the
commenter, to: ProductClassification@
usps.gov, with a subject line of ‘‘January
2020 International Mailing Services
Price Change—CPI.’’ Faxed comments
are not accepted.
FOR FURTHER INFORMATION CONTACT:
Michelle Lassiter at 202–268–2914.
SUPPLEMENTARY INFORMATION:
International Price and Service
Adjustments
On October 9, 2019, the Postal Service
filed a notice of mailing services price
adjustments with the Postal Regulatory
Commission (PRC), effective on January
26, 2020. The Postal Service proposes to
revise Notice 123, Price List, available
on Postal Explorer® at https://
pe.usps.com, to reflect these new price
changes. The new prices are or will be
available under Docket Number R2020–
1 on the Postal Regulatory
Commission’s website at www.prc.gov.
Over the course of time, country
names have changed due to a variety of
political or cultural reasons. By notice
filed on October 9, 2019, in PRC Docket
No. MC2020–7, and in collaboration
with International Postal Affairs and
requests made through the Universal
Postal Union, the Postal Service
proposed to update country names
throughout mailing standards, changing
Republic of Macedonia to Republic of
North Macedonia and using the short
name North Macedonia. This proposed
rule seeks public comment on proposed
updates to the IMM that are designed to
implement this name change.
This proposed rule also describes the
price and classification changes and the
corresponding mailing standards
changes for the following market
dominant international services:
• First-Class Mail International®
service
• International extra services and
fees.
First-Class Mail International
The Postal Service plans to increase
prices for single-piece First-Class Mail
International (FCMI) letters, postcards,
and flats by approximately 4.6 percent.
The price for a single-piece 1-ounce
letter will increase to $1.20. The FirstClass Mail International letter
nonmachinable surcharge remains
$0.21.
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]]>Agencies
[Federal Register Volume 84, Number 204 (Tuesday, October 22, 2019)]
[Proposed Rules]
[Pages 56401-56406]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-22768]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
Patent and Trademark Office
37 CFR Part 42
[Docket No. PTO-P-2019-0011]
RIN 0651-AD34
Rules of Practice To Allocate the Burden of Persuasion on Motions
To Amend in Trial Proceedings Before the Patent Trial and Appeal Board
AGENCY: United States Patent and Trademark Office, Department of
Commerce.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The United States Patent and Trademark Office (``USPTO'' or
``Office'') proposes changes to the rules of practice in inter partes
review (``IPR''), post-grant review (``PGR''), and the transitional
program for covered business method patents (``CBM'') (collectively
``post-grant trial'') proceedings before the Patent Trial and Appeal
Board (``PTAB'' or ``Board'') to allocate the burdens of persuasion in
relation to motions to amend and the patentability of substitute claims
proposed therein.
DATES: Comment Deadline Date: The Office solicits comments from the
public on this proposed rulemaking. Written comments must be received
on or before December 23, 2019 to ensure consideration.
ADDRESSES: Comments should be sent by electronic mail message over the
internet addressed to: [email protected]. Comments may also be
sent by electronic mail message over the internet via the Federal
eRulemaking Portal at https://www.regulations.gov. See the Federal
eRulemaking Portal website for additional instructions on providing
comments via the Federal eRulemaking Portal. All comments submitted
directly to the USPTO or provided on the Federal eRulemaking Portal
should include the docket number (PTO-P-2019-0011).
Comments may also be submitted by postal mail addressed to: Mail
Stop Patent Board, Director of the United States Patent and Trademark
Office, P.O. Box 1450, Alexandria, VA 22313-1450, marked to the
attention of ``Lead Administrative Patent Judge Christopher L. Crumbley
or Lead Administrative Patent Judge Susan L. C. Mitchell, PTAB Notice
of Proposed Rulemaking 2019.''
Although comments may be submitted by postal mail, the Office
prefers to receive comments by electronic mail message to more easily
[[Page 56402]]
share all comments with the public. The Office prefers the comments to
be submitted in plain text, but also accepts comments submitted in
searchable ADOBE[supreg] portable document format or MICROSOFT
WORD[supreg] format. Comments not submitted electronically should be
submitted on paper in a format that accommodates digital scanning into
ADOBE[supreg] portable document format.
The comments will be available for public inspection at the Patent
Trial and Appeal Board, located in Madison East, Ninth Floor, 600
Dulany Street, Alexandria, Virginia. Comments also will be available
for viewing via the Office's internet website, https://go.usa.gov/xXXFW, and on the Federal eRulemaking Portal. Because comments will be
made available for public inspection, information that the submitter
does not desire to be made public, such as address or phone number,
should not be included in the comments.
FOR FURTHER INFORMATION CONTACT: Christopher L. Crumbley, Lead
Administrative Patent Judge, or Susan L. C. Mitchell, Lead
Administrative Patent Judge, by telephone at (571) 272-9797.
SUPPLEMENTARY INFORMATION:
Executive Summary
Purpose: The proposed rules would amend the rules of practice for
IPR, PGR, and CBM proceedings that implement provisions of the Leahy-
Smith America Invents Act, Public Law 112-29, 125 Stat. 284 (2011)
(``AIA'') providing for trials before the Office. Pursuant to the AIA,
during the course of an IPR, PGR, or CBM, a patent owner may file a
motion to amend the patent by cancelling any challenged patent claim or
by proposing a reasonable number of substitute claims for each
challenged claim. 35 U.S.C. 316(d)(1), 326(d)(1).
Previously, relying on a general rule that a movant bore the burden
of proof with respect to motions before the Board (37 CFR 42.20(c)),
the Office placed the burden of showing the patentability of proposed
substitute claims on the patent owner moving to amend a patent in a
trial proceeding. On October 4, 2017, the United States Court of
Appeals for the Federal Circuit issued an en banc decision in Aqua
Prods., Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) (en banc) (``Aqua
Products''), in which a majority of the judges concluded that the
Office had not adopted a rule allocating the burden of persuasion with
respect to the patentability of proposed substitute claims. In light of
Aqua Products, as well as public comment provided in response to a
Request for Comments (See 83 FR 54319), the Office proposes to issue
specific rules applicable to motions to amend. The proposed rules
assign the burden of persuasion in relation to the patentability of
proposed substitute claims to the petitioner, but permit the Board to
exercise its discretion to reach a determination regarding
patentability of proposed substitute claims even when a petitioner does
not carry its burden of persuasion, when supported by the record and
when in the interests of justice. The proposed rules also assign the
burden of persuasion in relation to certain statutory and regulatory
requirements for a motion to amend (i.e., 35 U.S.C. 316(d) or 326(d);
37 CFR 42.121(a)(2), (a)(3), (b)(1), (b)(2), or 42.221(a)(2), (a)(3),
(b)(1), (b)(2)) to the patent owner, but permit the Board to exercise
its discretion to determine that the motion to amend complies with the
statutory and regulatory requirements of those sections even when the
patent owner does not carry its burden of persuasion, when supported by
the record and when in the interests of justice. The Office anticipates
that the Board will exercise such discretion only in rare
circumstances, as discussed herein. The proposed rules are consistent
with Aqua Products and also with current Board practice as described in
the precedential Board decision Lectrosonics, Inc. v. Zaxcom, Inc.,
Cases IPR2018-01129, 01130 (P.T.A.B. Feb. 25, 2019) (Paper 15), and as
such do not reflect a change from current practice.
The proposed rules would thus clarify the rules of practice for
amending claims in an IPR, PGR, or CBM to specify that the petitioner
bears the burden of showing that the proposed substitute claims are
unpatentable by a preponderance of the evidence, and would address
instances where a petitioner does not oppose an amendment or does not
meet its burden of persuasion in this regard, for example, where the
petitioner ceases to participate in the proceeding or declines to
oppose the patent owner's motion to amend. The proposed rules also
would specify that the patent owner bears the burden of showing, by a
preponderance of the evidence, that a motion to amend complies with
certain statutory and regulatory requirements, and would address
instances where a patent owner does not meet its burden of persuasion
in this regard. In instances where a party does not meet its burden,
the Board may, in the interests of justice, justify a determination
regarding the patentability of amended claims based on the record as a
whole.
Costs and Benefits: This rulemaking is not economically significant
under Executive Order 12866 (Sept. 30, 1993).
Background
On September 16, 2011, the AIA was enacted into law (Pub. L. 112-
29, 125 Stat. 284 (2011)), and within one year, the Office implemented
rules to govern Office practice for AIA trials, including IPR, PGR,
CBM, and derivation proceedings pursuant to 35 U.S.C. 135, 316 and 326
and AIA sec. 18(d)(2). See Rules of Practice for Trials Before the
Patent Trial and Appeal Board and Judicial Review of Patent Trial and
Appeal Board Decisions, 77 FR 48612 (Aug. 14, 2012); Changes to
Implement Inter Partes Review Proceedings, Post-Grant Review
Proceedings, and Transitional Program for Covered Business Method
Patents, 77 FR 48680 (Aug. 14, 2012); Transitional Program for Covered
Business Method Patents--Definitions of Covered Business Method Patent
and Technological Invention, 77 FR 48734 (Aug. 14, 2012). Additionally,
the Office published a Patent Trial Practice Guide to advise the public
on the general framework of the regulations, including the structure
and times for taking action in each of the new proceedings. See Office
Patent Trial Practice Guide, 77 FR 48756 (Aug. 14, 2012); see also
Office Patent Trial Practice Guide, August 2018 Update, 83 FR 39989
(Aug. 13, 2018); Office Patent Trial Practice Guide, July 2019 Update,
84 FR 33925 (July 16, 2018).
In prescribing these regulations, the Office considered ``the
effect of any such regulation on the economy, the integrity of the
patent system, the efficient administration of the Office, and the
ability of the Office to timely complete proceedings instituted'' as
required by statute. 35 U.S.C. 316(b), 326(b). The Office also
considered the public comments carefully and responded to the comments
in these final rules. Among the final rules, the Office promulgated
Sec. 42.20(c), which states that a ``moving party has the burden of
proof to establish that it is entitled to the requested relief.'' 37
CFR 42.20(c).
Previously, the Board interpreted the burden of proof requirement
of Sec. 42.20(c) to apply to motions to amend filed pursuant to 35
U.S.C. 316 and 326, including the requirement to show that the proposed
substitute claims were patentable over the prior art of record.
MasterImage 3D, Inc. v. RealD Inc., Case IPR2015-00040 (P.T.A.B. July
15, 2015) (Paper 42) (``MasterImage''). Under MasterImage, which was
subsequently made precedential, the patent owner in a proceeding, as
the moving party in a
[[Page 56403]]
motion to amend, bore the burden of showing that the proposed
substitute claims were patentable. Id.
On October 4, 2017, the United States Court of Appeals for the
Federal Circuit issued its en banc decision in Aqua Products,
addressing the burden of persuasion regarding the patentability of
substitute claims presented in a motion to amend. The lead opinion of
the decision explains that, in the absence of rulemaking, the USPTO may
not place the burden of persuasion on the patent owner to show that
proposed substitute claims are patentable.
The only legal conclusions that support and define the judgment
of the court are: (1) The PTO has not adopted a rule placing the
burden of persuasion with respect to the patentability of amended
claims on the patent owner that is entitled to deference; and (2) in
the absence of anything that might be entitled deference, the PTO
may not place that burden on the patentee.
Id. at 1327 (O'Malley, J.).
A separate opinion joined-in-part by a majority of the en banc
court observed that ``it is well settled that regardless of which party
bears the ultimate burden of persuasion, the movant bears a burden of
production'' and that ``the Patent Office has adopted regulations that
address what a patent owner must submit in moving to amend the
patent.'' Id. at 1340-41 (Reyna, J., concurring in part) (citing 37 CFR
42.20(a), 42.22(a), 42.121(a)(2)(i)). The opinion explains that these
regulations require a patent owner to ``assist[ ] the Board to perform
its statutory obligation to `issue a final written decision with
respect to the patentability of . . . any new claim added under section
316(d).''' Id. at 1341 (omission in original) (quoting 35 U.S.C.
318(a)).
In view of the Federal Circuit's decision in Aqua Products, on
November 21, 2017, the Office issued formal guidance through a
memorandum from the Chief Administrative Patent Judge, explaining that,
in light of the Aqua Products decision, the Board will no longer place
the burden of persuasion on a patent owner with respect to
patentability of any proposed substitute claims presented in a motion
to amend. See Guidance on Motions to Amend in view of Aqua Products,
https://go.usa.gov/xQGAA (``Guidance Memo''). The Guidance Memo also
notes that a motion to amend must continue to satisfy the requirements
of 37 CFR 42.121 or 42.221 (e.g., provide a reasonable number of
substitute claims and written description support in relation to each
substitute claim), as applicable, that all parties continue to have a
duty of candor under 37 CFR 42.11, and that the page limits, type, and
timing of briefs remain unchanged. Id.
On December 22, 2017, the Federal Circuit issued a related decision
in Bosch Auto. Serv. Solutions, LLC v. Matal, 878 F.3d 1027 (Fed. Cir.
2017) (``Bosch''). In that decision, because the petitioner had settled
with the patent owner who had proposed substitute claims, the Federal
Circuit remanded the case to the Board to evaluate the patentability of
the proposed substitute claims. Id. (``[W]here the challenger ceases to
participate in the IPR and the Board proceeds to final judgment, it is
the Board that must justify any finding of unpatentability by reference
to the evidence of record in the IPR.'') (alteration in original)
(quoting Aqua Products, 872 F.2d at 1311 (O'Malley, J.)).
In view of the decisions by the Federal Circuit regarding motion to
amend practice and procedure in AIA trials, the Board de-designated as
precedential MasterImage, as well as de-designating as informative a
prior decision of the Board in Idle Free Sys., Inc. v. Bergstrom, Inc.,
Case IPR2012-00027 (P.T.A.B. June 11, 2013) (Paper 26), decisions in
which the Board panels stated that ``[t]he burden is not on the
petitioner to show unpatentability, but on the patent owner to show
patentable distinction over the prior art of record and also prior art
known to the patent owner.'' Id. at 7; see also MasterImage at 2
(quoting Idle Free). Concurrently, the Board designated an order issued
in Western Digital Corp. v. SPEX Techs., Inc., Cases IPR2018-00082,
00084 (P.T.A.B. Apr. 25, 2018) (Paper 13) (``Western Digital'') as
informative to provide an example of how panels can handle several
aspects of the motion to amend practice under the Aqua Products and
Bosch precedent. With respect to the burden of persuasion, the Western
Digital order explained that under the current state of the law ``the
burden of persuasion will ordinarily lie with the petitioner to show
that any proposed substitute claims are unpatentable'' and that the
``Board itself may justify any finding of unpatentability by reference
to evidence of record in the proceeding.'' Id. at 4.
On March 7, 2018, the Board designated as precedential an order in
Lectrosonics, Inc. v. Zaxcom, Inc., Cases IPR2018-01129, 01130
(P.T.A.B. Feb. 25, 2019) (Paper 15) (``Lectrosonics''), and de-
designated Western Digital. This order provides guidance regarding
statutory and regulatory requirements for a motion to amend in light of
Federal Circuit case law. For example, the order notes that, prior to
considering the patentability of any substitute claims, the Board first
must determine whether the patent owner has met the statutory and
regulatory requirements set forth in 35 U.S.C. 316(d) and 37 CFR
42.121, such as, that the motion proposes a reasonable number of
substitute claims and that the amendments do not broaden the scope of
the claims. Id. at 4-5. The order also sets out that ``the burden of
persuasion ordinarily will lie with the petitioner to show that any
proposed substitute claims are unpatentable by a preponderance of the
evidence.'' As discussed in more detail below, the proposed rules
herein allocate the burden of persuasion regarding the patentability of
proposed substitute claims in a motion to amend as set forth in
Lectrosonics and Western Digital.
On October 29, 2018, the Office published a ``Request for Comments
on Motion To Amend Practice and Procedures in Trial Proceedings Under
the America Invents Act Before the Patent Trial and Appeal Board'' in
the Federal Register (``Request for Comments''), seeking public comment
on various aspects of the Board's amendment practice. 83 FR 54319.
Among the questions on which the Board sought public input were the
following, directed to the allocation of the burden of persuasion:
15. Should the Office engage in rulemaking to allocate the burden
of persuasion regarding the patentability of proposed substitute claims
in a motion to amend as set forth in the Western Digital order? What
are the advantages or disadvantages of doing so?
16. If the Office continues to allocate the burden as set forth in
the Western Digital order, under what circumstances should the Board
itself be able to justify findings of unpatentability? Only if the
petitioner withdraws from the proceeding? Or are there situations where
the Board itself should be able to justify findings of unpatentability
when the petitioner remains in the proceeding? What are the advantages
or disadvantages?
Id. at 54325.\1\
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\1\ The October 2018 Request for Comments was published before
Western Digital was superseded by Lectrosonics, and thus refers only
to the Western Digital order. Both orders are identical in their
discussion of the burden of persuasion. Therefore, Questions 15 and
16 of the Request for Comments, and the public comments provided
thereto, are equally pertinent to the current Board precedent of
Lectrosonics.
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In response to the October 2018 Request for Comments, the Office
received 49 comments as of December 21, 2018 (the closing date for
comments), from intellectual property
[[Page 56404]]
organizations, trade organizations, other organizations, and
individuals. See https://go.usa.gov/xyeFy (collected responses to
Request for Comments).2 3 Approximately 25 of the commenters
provided specific responses to Questions 15 and 16 of the Request for
Comments. In response to Question 15, the majority of commenters were
in favor of the Office engaging in rulemaking to allocate the burden of
persuasion as set forth in Western Digital (as discussed in more detail
below). Only three commenters believed rulemaking was unnecessary
(either because the Board could simply continue to apply its own
precedent, or because the statute already allocates the burden of
persuasion). A minority of commenters stated that the Office should
engage in rulemaking, but that the burden of persuasion should be
placed on the patent owner.
---------------------------------------------------------------------------
\2\ The October 2018 Request for Comments also sought comments
on a proposed amendment procedure in post-grant trial proceedings
that included the Board providing preliminary non-binding guidance
on the merits of a motion to amend, and an opportunity for a patent
owner to revise its motion to amend thereafter. The Office recently
addressed that portion of the Request for Comments separately in a
``Notice Regarding a New Pilot Program Concerning Motion To Amend
Practice and Procedures in Trial Proceedings Under the America
Invents Act Before the Patent Trial and Appeal Board.'' 84 FR 9497
(Mar. 15, 2019).
\3\ In response to the October 2018 Request for Comments, the
Office also received comments and questions relating to reissue or
reexamination as an alternative vehicle for claim amendments. The
Office recently addressed those comments and questions separately in
a ``Notice Regarding Options for Amendments by Patent Owner Through
Reissue or Reexamination During a Pending AIA Trial Proceeding
(April 2019).'' 84 FR 16654 (Apr. 22, 2019).
---------------------------------------------------------------------------
Additionally, in response to Question 15, some commenters suggested
that even if the Office promulgates rules to place the burden of
persuasion on the petitioner on the issue of patentability of the
proposed substitute claims, the patent owner continues to bear the
burden to show that the motion to amend complies with the statutory
requirements of 35 U.S.C. 316(d) or 326(d) (for example, that the
amendment may not enlarge the scope of the claims), as well as the
regulatory requirements of 37 CFR 42.121 or 42.221 (for example, that
the motion set forth the support for the amendment in the original
disclosure of the patent).
In response to Question 16, the majority of responsive comments
stated that the Board should be able to justify findings of
unpatentability in any circumstance, for example, even when the
petitioner remains in the proceeding. Two commenters responded that the
Board should never be able to assume the burden of persuasion on
unpatentability itself, and three commenters believed that the Board
should be permitted to justify findings of unpatentability of proposed
substitute claims itself only in certain circumstances, for example,
when a petitioner ceases to participate in a proceeding.
The Office appreciates the public input provided in response to the
Request for Comments and has reviewed the individual responses
thoroughly. In light of the generally positive support for rulemaking
to allocate the burden of persuasion as set forth in the Western
Digital order (and subsequently made precedential in Lectrosonics), and
in the interest of providing greater clarity, certainty, and
predictability to parties participating in trial proceedings before the
Board, the Office now issues proposed rules allocating the burden of
persuasion. The rules would specify that the burden of persuasion as to
patentability of substitute claims proposed in a motion to amend is on
the petitioner. In addition, the rules would specify that the burden of
persuasion is on the patent owner to show that the motion complies with
the requirements of 35 U.S.C. 316(d) or 326(d) (requiring that a motion
to amend propose a reasonable number of substitute claims, and that
substitute claims do not enlarge scope of the original claims of the
patent or introduce new matter), as well as 37 CFR 42.121(a)(2),
(a)(3), (b)(1), and (b)(2), or 42.221(a)(2), (a)(3), (b)(1), and (b)(2)
(indicating, for example, that a motion to amend must set forth written
description support and support for the benefit of a filing date in
relation to each substitute claim, and respond to grounds of
unpatentability involved in the trial).
Irrespective of the burdens of persuasion discussed above, however,
the rules also would specify that the Board may, in the interests of
justice, exercise its discretion to grant or deny a motion to amend for
any reason supported by the evidence of record. Thus, in instances
where a party has not met its burden in relation to a motion to amend
or any substitute claims proposed therein, the Board may, in the
interests of justice, reach a determination regarding patentability,
based on the entirety of the evidence made of record in the proceeding.
The Office anticipates that the Board will exercise this discretion
only in rare circumstances. Any evidence relied on to support a
determination regarding patentability will be made of record in the
proceeding by the parties or the Board.
For instance, the Board may, in the interests of justice, exercise
its discretion to determine that a motion to amend complies with the
statutory and regulatory requirements of 35 U.S.C. 316(d) or 326(d) and
37 CFR 42.121(a)(2), (a)(3), (b)(1), and (b)(2), or 42.221(a)(2),
(a)(3), (b)(1), and (b)(2), even if a patent owner does not expressly
address or establish every requirement in its briefing. The Office
expects that the Board will do so only in circumstances where there is
easily identified and persuasive evidence that the motion complies with
the statutory and regulatory requirements, and only where the
petitioner has been afforded the opportunity to respond to that
evidence. The Board will rely on evidence of record when making such a
determination.
Furthermore, as supported by the majority of the comments received
in response to Question 16, under the proposed rules, the Board may
exercise its discretion to reach a determination regarding
patentability in instances where a petitioner does not oppose the
amendment or does not meet its burden of persuasion in relation to any
proposed substitute claim. The proposed rules limit such instances to
those in which the interests of justice warrant the Board reaching a
determination regarding patentability. Such instances may include, for
example, situations where the petitioner has ceased to participate in
the proceeding altogether (for example, as a result of settlement) or
where the petitioner remains in the proceeding but does not oppose the
motion to amend.
The interests of justice also may, for example, support the Board
exercising its discretion to deny a motion to amend when the petitioner
opposes the motion to amend and has failed to meet the burden of
persuasion, but where there is easily identified and persuasive
evidence of unpatentability in the record. In such situations, the
proposed rules would grant the Board discretion regarding whether to
make any determination of unpatentability that is supported by the
evidence of record, even if the ground of unpatentability has not been
advanced by the petitioner. The Office expects that the Board will do
so only in rare circumstances, and only where the patent owner has been
afforded the opportunity to respond to that evidence and related
grounds of unpatentability. Ordinarily, in cases where the petitioner
has participated fully and opposed the motion to amend, the Office
expects that the petitioner will bear the burden of persuasion and
there will be no need for the Board to independently justify a
determination of unpatentability.
[[Page 56405]]
Discussion of Specific Rules
The USPTO proposes to amend 37 CFR part 42 as follows:
Section 42.121: Sec. 42.121 is proposed to be amended by adding a
new subsection (d) to state that a patent owner bears the burden of
persuasion to show that a motion to amend complies with certain
statutory and regulatory requirements, but that the petitioner bears
the burden of persuasion to show that any proposed substitute claims
are unpatentable. The new subsection (d) also states that in cases
where a party does not meet its burden, the Board may, in the interests
of justice, exercise its discretion to grant or deny a motion to amend
for any reason supported by the evidence of record.
Section 42.221: Sec. 42.221 is proposed to be amended by adding a
new subsection (d) to state that a patent owner bears the burden of
persuasion to show that a motion to amend complies with certain
statutory and regulatory requirements, but that the petitioner bears
the burden of persuasion to show that any proposed substitute claims
are unpatentable. The new subsection (d) also states that in cases
where a party does not meet its burden, the Board may, in the interests
of justice, exercise its discretion to grant or deny a motion to amend
for any reason supported by the evidence of record.
Rulemaking Considerations
A. Regulatory Flexibility Act: For the reasons set forth herein,
the Senior Counsel for Regulatory and Legislative Affairs, Office of
General Law, United States Patent and Trademark Office has certified to
the Chief Counsel for Advocacy of the Small Business Administration
that changes set forth in this notice of proposed rulemaking would not
have a significant economic impact on a substantial number of small
entities. See 5 U.S.C. 605(b).
The changes set forth in this notice of proposed rulemaking are to
set forth expressly the respective burdens of persuasion on the parties
regarding a motion to amend in an AIA proceeding. These changes are
consistent with relevant precedential decisions of the Board and
Federal Circuit, and as such do not reflect a change from current
practice. The changes do not create additional procedures or
requirements or impose any additional compliance measures on any party,
nor do these changes cause any party to incur additional cost.
Therefore, any requirements resulting from these proposed changes are
of minimal or no additional burden to those practicing before the
Board.
For the foregoing reasons, the proposed changes in this notice of
proposed rulemaking would not have a significant economic impact on a
substantial number of small entities.
B. 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).
C. 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 rules; (2) tailored the rules to impose the least
burden on society consistent with obtaining the regulatory objectives;
(3) selected a regulatory approach that maximizes net benefits; (4)
specified performance objectives; (5) identified and assessed available
alternatives; (6) involved the public in an open exchange of
information and perspectives among experts in relevant disciplines,
affected stakeholders in the private sector and the public as a whole,
and provided on-line access to the rulemaking docket; (7) attempted to
promote coordination, simplification, and harmonization across
government agencies and identified goals designed to promote
innovation; (8) considered approaches that reduce burdens and maintain
flexibility and freedom of choice for the public; and (9) ensured the
objectivity of scientific and technological information and processes.
D. 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.
E. Executive Order 13132 (Federalism): This rulemaking does not
contain policies with federalism implications sufficient to warrant
preparation of a Federalism Assessment under Executive Order 13132
(Aug. 4, 1999).
F. Executive Order 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).
G. 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).
H. 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).
I. Executive Order 12630 (Taking of Private Property): This
rulemaking will not affect a taking of private property or otherwise
have taking implications under Executive Order 12630 (Mar. 15, 1988).
J. Congressional Review Act: Under the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.), prior to issuing any final rule, the
United States Patent and Trademark Office will submit a report
containing the rule and other required information to the United States
Senate, the United States House of Representatives, and the Comptroller
General of the Government Accountability Office. The changes in this
notice of proposed rulemaking are not expected to result in an annual
effect on the economy of 100 million dollars or more, a major increase
in costs or prices, or significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
United States-based enterprises to compete with foreign-based
enterprises in domestic and export markets. Therefore, this rulemaking
is not a ``major rule'' as defined in 5 U.S.C. 804(2).
K. Unfunded Mandates Reform Act of 1995: The changes set forth in
this notice of proposed 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.
L. 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.
M. National Technology Transfer and Advancement Act: The
requirements of
[[Page 56406]]
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.
N. Paperwork Reduction Act: The Paperwork Reduction Act of 1995 (44
U.S.C. 3501-3549) requires that the Office consider the impact of
paperwork and other information collection burdens imposed on the
public. This proposed rulemaking does not involve an information
collection requirement that is subject to review by the Office of
Management and Budget (OMB) under the Paperwork Reduction Act of 1995
(44 U.S.C. 3501-3549). This rulemaking does not add any additional
information requirements or fees for parties before the Board.
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 42
Administrative practice and procedure, Inventions and patents,
Lawyers.
For the reasons set forth in the preamble, the Office proposes to
amend part 42 of title 37 as follows:
PART 42--TRIAL PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD
0
1. The authority citation for 37 CFR part 42 continues to read as
follows:
Authority: 35 U.S.C. 2(b)(2), 6, 21, 23, 41, 135, 311, 312, 316,
and 321-326; Pub. L. 112-29, 125 Stat. 284; and Pub. L. 112-274, 126
Stat. 2456.
0
2. Amend Sec. 42.121 by adding paragraph (d) to read as follows:
Sec. 42.121 Amendment of the patent.
* * * * *
(d) Burden of Persuasion. On a motion to amend:
(1) A patent owner bears the burden of persuasion to show, by a
preponderance of the evidence, that the motion to amend complies with
the requirements of paragraphs (1) and (3) of 35 U.S.C. 316(d), as well
as paragraphs (a)(2), (3), (b)(1), and (2) of this section;
(2) A petitioner bears the burden of persuasion to show, by a
preponderance of the evidence, that any proposed substitute claims are
unpatentable; and
(3) Irrespective of paragraphs (d)(1) and (2) of this section, the
Board may, in the interests of justice, exercise its discretion to
grant or deny a motion to amend for any reason supported by the
evidence of record.
0
3. Amend Sec. 42.221 by adding paragraph (d) to read as follows:
Sec. 42.221 Amendment of the patent.
* * * * *
(d) Burden of Persuasion. On a motion to amend:
(1) A patent owner bears the burden of persuasion to show, by a
preponderance of the evidence, that the motion to amend complies with
the requirements of paragraphs (1) and (3) of 35 U.S.C. 326(d), as well
as paragraphs (a)(2), (3), (b)(1), and (2) of this section;
(2) A petitioner bears the burden of persuasion to show, by a
preponderance of the evidence, that any proposed substitute claims are
unpatentable; and
(3) Irrespective of paragraphs (d)(1) and (2) of this section, the
Board may, in the interests of justice, exercise its discretion to
grant or deny a motion to amend for any reason supported by the
evidence of record.
Dated: October 10, 2019.
Andrei Iancu,
Under Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office.
[FR Doc. 2019-22768 Filed 10-21-19; 8:45 am]
BILLING CODE 3510-16-P
