[Federal Register Volume 89, Number 74 (Tuesday, April 16, 2024)]
[Proposed Rules]
[Pages 26807-26813]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-07759]
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DEPARTMENT OF COMMERCE
Patent and Trademark Office
37 CFR Part 42
[Docket No. PTO-P-2024-0014]
RIN 0651-AD79
Rules Governing Director Review of Patent Trial and Appeal Board
Decisions
AGENCY: United States Patent and Trademark Office, Department of
Commerce.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The United States Patent and Trademark Office (USPTO or
Office) proposes new rules to govern the process for the review of
Patent Trial and Appeal Board (PTAB or Board) decisions in America
Invents Act (AIA) proceedings by the Under Secretary of Commerce for
Intellectual Property and Director of the United States Patent and
Trademark Office (Director). Specifically, the USPTO proposes these
rules in light of stakeholder feedback received in response to a
request for comments (RFC). The proposed rules promote the accuracy,
consistency, and integrity of PTAB decision-making in Leahy-Smith
America Invents Act of 2011 (AIA) proceedings.
DATES: Comments must be received by June 17, 2024 to ensure
consideration.
ADDRESSES: For reasons of Government efficiency, comments must be
submitted through the Federal eRulemaking Portal at
www.regulations.gov. To submit comments via the portal, one should
enter docket number PTO-P-2024-0014 on the homepage and select
``search.'' The site will provide search results listing all documents
associated with this docket. Commenters can find a reference to this
notice and select the ``Comment'' icon, complete the required fields,
and enter or attach their comments. Attachments to electronic comments
will be accepted in Adobe[supreg] portable document format (PDF) or
Microsoft Word[supreg] format. 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.
Visit the Federal eRulemaking Portal for additional instructions on
providing comments via the portal. If electronic submission of, or
access to, comments is not feasible due to a lack of access to a
computer and/or the internet, please contact the USPTO using the
contact information below for special instructions.
FOR FURTHER INFORMATION CONTACT: Thomas Krause, Director Review
Executive; Kalyan Deshpande, Vice Chief Administrative Patent Judge; or
Amanda Wieker, Acting Vice Chief Administrative Patent Judge, at 571-
272-9797.
SUPPLEMENTARY INFORMATION: The United States Patent and Trademark
Office proposes new rules governing the process for the review of
Patent Trial and Appeal Board decisions in AIA proceedings by the Under
Secretary of Commerce for Intellectual Property and Director \1\ of the
United States Patent and Trademark Office.
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\1\ In this notice of proposed rulemaking, references to the
``Director'' include the Under Secretary of Commerce for
Intellectual Property and Director of the USPTO, an individual
serving as the Acting Director or one performing the functions and
duties of the Director, or an individual designated to fill the
Director's role in case of a conflict of interest. See Procedures
for Recusal to Avoid Conflicts of Interest and Delegations of
Authority, available at https://www.uspto.gov/sites/default/files/documents/Director-Memorandum-on-Recusal-Procedures.pdf. For
example, if the Director has a conflict that requires the Director
to be recused, the Deputy Under Secretary of Commerce for
Intellectual Property and Deputy Director of the USPTO will take the
required action. If the position of the Deputy Director is vacant,
or if the Deputy Director also has a conflict, the Commissioner for
Patents will take the required action, if no conflicts exist for the
Commissioner.
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This Notice of Proposed Rulemaking (NPRM) provides that a party to
an AIA proceeding may request Director Review in that AIA proceeding of
any decision on institution, any final written decision, or any
decision granting rehearing of a decision on institution or a final
written decision. The NPRM also sets forth the timing and format of a
party's request for Director Review. In addition, the NPRM provides
that the Director may initiate a review of any decision on institution,
any final written decision, or any decision granting rehearing of a
decision on institution or a final written decision on the Director's
own initiative.
The NPRM addresses the impact of Director Review on the underlying
proceeding at the PTAB, as well as the time by which an appeal to the
U.S. Court of Appeals for the Federal Circuit must be filed.
[[Page 26808]]
Background
Development of This Notice of Proposed Rulemaking
On September 16, 2011, Congress enacted the AIA (Pub. L. 112-29,
125 Stat. 284 (2011)). The AIA established the PTAB,\2\ which is made
up of administrative patent judges (APJs) and four statutory members,
namely the Director, the Deputy Director, the Commissioner for Patents,
and the Commissioner for Trademarks. 35 U.S.C. 6(a). The Director is
appointed by the President, by and with the advice and consent of the
Senate. 35 U.S.C. 3(a)(1). APJs are appointed by the Secretary of
Commerce in consultation with the Director. Id. 6(a). The PTAB hears
and decides ex parte appeals of adverse decisions by examiners in
applications for patents, applications for reissue, and reexamination
proceedings, and proceedings under the AIA, including inter partes
reviews (IPRs), post grant reviews (PGRs), covered business method
(CBM) patent reviews,\3\ and derivation proceedings, all in panels of
at least three members. Id. 6(b), (c). Under the statute, the Director
designates the members of each panel. Id. 6(c). The Director has
delegated that authority to the Chief Judge of the PTAB. See PTAB
Standard Operating Procedure 1 (Rev. 15) (SOP 1), Assignment of Judges
to Panels, available at www.uspto.gov/sites/default/files/documents/SOP%201%20R15%20FINAL.pdf.
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\2\ The PTAB was previously known as the Board of Patent Appeals
and Interferences.
\3\ Under section 18 of the AIA, the transitional program for
post grant review of CBM patents sunset on September 16, 2020. AIA
18(a). Although the program has sunset, a few existing CBM
proceedings, based on petitions filed before September 16, 2020,
remain pending, for example, on appeal to the United States Court of
Appeals for the Federal Circuit.
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35 U.S.C. 6(c) states that ``[o]nly the Patent Trial and Appeal
Board may grant rehearings'' of Board decisions. In United States v.
Arthrex, Inc. (``Arthrex''), the Court held that the Appointments
Clause of the Constitution (art. II, sec. 2, cl. 2) and the supervisory
structure of the USPTO require the Director, a principal officer of the
United States, to have the ability to review the PTAB's final written
decisions in IPR proceedings. See United States v. Arthrex, Inc., 141
S. Ct. 1970, 1986 (2021). The Court determined that ``35 U.S.C. 6(c) is
unenforceable as applied to the Director insofar as it prevents the
Director from reviewing the decisions of the PTAB on [the Director's]
own.'' Id. at 1987. The Court added that:
this suit concerns only the Director's ability to supervise APJs in
adjudicating petitions for inter partes review. We do not address
the Director's supervision over other types of adjudications
conducted by the PTAB, such as the examination process for which the
Director has claimed unilateral authority to issue a patent.
Id. The Court thus held that ``the Director has the authority to
provide for a means of reviewing PTAB decisions'' in IPR proceedings
and ``may review final PTAB decisions and, upon review, may issue
decisions [ ] on behalf of the Board.'' Id. (citations omitted).
Additionally, the Court in Arthrex made clear that ``the Director need
not review every decision of the PTAB,'' nor did it require the
Director to accept requests for review or issue a decision in every
case. Id. at 1988. Instead, ``[w]hat matters is that the Director have
the discretion to review decisions rendered by APJs.'' Id. See Arthrex,
Inc. v. Smith & Nephew, Inc., 35 F.4th 1328, 1338 (Fed. Cir. 2022)
(noting same); CyWee Group Ltd. v. Google LLC, 59 F.4th 1263, 1268
(Fed. Cir. 2023) (`` `[T]he Appointments Clause was intended to prevent
unappointed officials from wielding too much authority, not to
guarantee procedural rights to litigants, such as the right to seek
rehearing from the Director.' '' (quoting Piano Factory Grp., Inc. v.
Schiedmayer Celesta GmbH, 11 F.4th 1363, 1374 (Fed. Cir. 2021)).
Following the Arthrex decision, in June 2021 the USPTO implemented
an interim process for Director Review of final written decisions in
AIA proceedings and published Arthrex Questions and Answers (Q&As),
which was available on a USPTO web page. On April 22, 2022, the USPTO
published two web pages to replace the Arthrex Q&As. Specifically, the
USPTO published an ``Interim Process for Director Review'' web page,\4\
setting forth more details on the interim process and additional
suggestions and guidance for parties who wish to request Director
Review. The USPTO also published a web page providing the status of all
Director Review requests, available at www.uspto.gov/patents/patent-trial-and-appeal-board/status-director-review-requests (status web
page). The status web page includes a spreadsheet that is updated
monthly and has information about the proceedings in which Director
Review has been granted. The updated interim process guidance increased
clarity as the Office continued to update and improve the interim
Director Review process based on experience and initial stakeholder
feedback.
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\4\ This web page was superseded by the ``Revised Interim
Director Review Process'' web page, discussed below.
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On July 20, 2022, the USPTO issued an RFC \5\ on Director Review,
Precedential Opinion Panel (POP) review,\6\ and the internal
circulation and review of PTAB decisions. 87 FR 43249-52.\7\ The RFC is
discussed in detail below. The USPTO considered stakeholder comments to
the RFC as it worked to formalize the proposed rules for Director
Review. The Office has continued to revise the interim Director Review
process while also pursuing rulemaking.
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\5\ Request for Comments (RFC) on Director Review, Precedential
Opinion Panel Review, and Internal Circulation and Review of Patent
Trial and Appeal Board Decisions. 87 FR 43249-52 (July 20, 2022).
\6\ The USPTO established the POP review process in 2018 and set
forth that process in the Board's Standard Operating Procedure 2,
revision 10. The POP process was used to establish binding agency
authority concerning major policy or procedural issues, or other
issues of exceptional importance in the limited situations where it
was appropriate to create such binding agency authority through
adjudication before the PTAB. The USPTO retired the POP process on
July 24, 2023, in view of recent changes to the interim Director
Review process.
\7\ Available at www.federalregister.gov/documents/2022/07/20/2022-15475/request-for-comments-on-director-review-precedential-opinion-panel-review-and-internal-circulation.
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On July 24, 2023, the USPTO modified the interim Director Review
process to allow parties to request Director Review of decisions on
institution in AIA proceedings, and to introduce a process by which the
Director may delegate review of a Board decision to a Delegated
Rehearing Panel (DRP). See ``Revised Interim Director Review Process''
web page (available at www.uspto.gov/patents/ptab/decisions/revised-interim-director-review-process, also called the Director Review web
page); ``Delegated Rehearing Panel'' web page (available at
www.uspto.gov/patents/ptab/decisions/delegated-rehearing-panel). These
changes were based on the Office's experience with Director Review and
stakeholder feedback. The USPTO made additional updates to the interim
Director Review process on September 18, 2023, (updating processes
related to Director Review of PTAB decisions on remand from the
Director) and January 19, 2024 (updating processes related to requests
for rehearing of Director Review decisions).
The rule proposed in this NPRM is consistent with the interim
process. If the USPTO issues a final rule, the Director Review web page
will be updated when the rule becomes effective. After the rule becomes
effective, any further modifications to the Director Review process
will be
[[Page 26809]]
consistent with the rule and will be reflected on the Director Review
web page.
Request for Comments
As noted above, on July 20, 2022, the Office published an RFC on
Director Review, POP review, and the internal circulation and review of
PTAB decisions. 87 FR 43249-52. The RFC included the following
questions pertinent to Director Review:
1. Should any changes be made to the interim Director Review
process, and if so, what changes and why?
2. Should only the parties to a proceeding be permitted to request
Director Review, or should third-party requests for Director Review be
allowed, and if so, which ones and why?
3. Should requests for Director Review be limited to final written
decisions in IPR and PGR? If not, how should they be expanded and why?
4. Should a party to a proceeding be able to request both Director
Review and rehearing by the merits panel? If so, why and how should the
two procedures interplay?
5. What criteria should be used in determining whether to initiate
Director Review?
6. What standard of review should the Director apply in Director
Review? Should the standard of review change depending on what type of
decision is being reviewed?
7. What standard should the Director apply in determining whether
or not to grant sua sponte Director Review of decisions on institution?
Should the standard change if the decision on institution addresses
discretionary issues instead of, or in addition to, merits issues?
8. Should there be a time limit on the Director's ability to
reconsider a petition denial? And if so, what should that time limit
be?
9. Are there considerations the USPTO should take with regard to
the fact that decisions made on Director Review are not precedential by
default, and instead are made and marked precedential only upon
designation by the Director?
10. Are there any other considerations the USPTO should take into
account with respect to Director Review?
11. Should the POP review process remain in effect, be modified, or
be eliminated in view of Director Review? Please explain.
12. Are there any other considerations the USPTO should take into
account with respect to the POP process?
Id. at 43252.
The RFC closed on October 19, 2022, and the Office received
comments from intellectual property organizations, trade organizations,
other organizations, and individuals. These comments are available at
www.regulations.gov/docket/PTO-P-2022-0023/comments (collected
responses to RFC). Responses to the specific questions asked in the RFC
pertinent to Director Review or POP review are summarized briefly
below.
In response to question 2, many commenters suggested that only
parties to the proceeding should be permitted to request Director
Review, consistent with the interim process. Some of these commenters
suggested that limiting Director Review requests to the parties best
promotes judicial economy and efficiency as the parties are best
positioned to present the issues on review. Notably, some of these
commenters also suggested that third parties could still participate
when appropriate, either through amicus briefing or joinder. Other
commenters suggested that allowing third-party requests would be
preferred because PTAB decisions often have broad ramifications that
affect non-parties.
In response to question 3, some commenters suggested that Director
Review should be available for both final written decisions and
decisions on institution, and especially for denials of institution.
Some commenters argued that no other review mechanism existed for
review of decisions on institution.\8\ Other commenters suggested that
Director Review should be available only for final written decisions,
in part out of efficiency concerns. One commenter suggested that
Director Review should be available for ex parte reexaminations and ex
parte appeals. As discussed above, based on experience and in response
to stakeholder feedback, the USPTO expanded the interim Director Review
process to allow parties to request Director Review of decisions on
institution in AIA proceedings.
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\8\ POP review was available for decisions on institution at the
time of the RFC.
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In response to question 4, commenters were divided as to whether,
consistent with the interim process, parties should be permitted to
request either Director Review or panel rehearing, but not both. Those
in favor of allowing parties to file requests for both types of
rehearing argued that a decision may include some issues more
appropriate for the original panel to reconsider, and other issues more
appropriate for the Director to review. Those in favor of permitting
parties to request only one form of rehearing argued that this reduces
duplication, waste, inefficiency, and delay. Moreover, some argued that
requiring a choice between panel rehearing and Director Review avoids
potentially conflicting analyses between the Director and the panel.
In response to question 5, commenters did not agree on the criteria
that should be used in determining whether to initiate Director Review.
Some commenters suggested that Director Review should apply to issues
of policy, while others suggested that policy should be made by formal
rulemaking only. Similarly, some commenters stated that Director Review
should be limited to important issues, such as policy, or statutory or
regulatory interpretation, while others suggested that Director Review
should consider all panel errors and abuses of discretion.
In response to question 6, some commenters suggested that the
Director should apply de novo review for all issues on review. These
commenters suggested that a standard that is deferential to the Board
panel would not provide clear guidance. Other commenters favored de
novo review on the basis that Arthrex requires the Director to
substitute the Director's own judgment.
In response to question 7, commenters were divided on the
appropriate standard for initiating sua sponte Director Review (i.e.,
on the Director's own initiative). Some commenters suggested that the
same standard of review should apply for all decisions, including sua
sponte Director Review. The commenters also suggested that the same
standard of review should apply to issues related to both the asserted
merits of unpatentability and the Director's discretionary authority to
institute an AIA proceeding. Several commenters suggested that sua
sponte Director Review should be limited to extraordinary
circumstances, including issues of exceptional importance to the USPTO
or the patent community. One commenter suggested that sua sponte
Director Review should be limited to extraordinary circumstances and
only for decisions on institution.
In response to question 8, some commenters suggested that there
should be a set time limit on the conclusion of Director Review, in
particular when the Director reviews a denial of institution. The
commenters generally suggested the need for certainty regarding timing
and finality in both the grant of Director Review and the ultimate
Director Review decision. One commenter suggested that no time limit
would be necessary.
In response to question 9, all responsive commenters suggested that
a Director Review decision should not be precedential by default. Some
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commenters suggested that decisions should be made precedential only
when needed to ensure consistency and predictability, and only as
applied to certain issues. Some commenters also suggested a clear
process with objective criteria for determining when to make cases
precedential. Other commenters suggested that a Director Review
decision should never be precedential so as to not supplant rulemaking.
In response to questions 11 and 12, commenters were divided on the
status of the POP review process. Commenters in favor of eliminating
POP review suggested it was redundant with Director Review and that
issues previously considered by the POP should be considered under
Director Review instead. Commenters in favor of maintaining POP review
suggested that it provides input and perspectives from other USPTO
leaders, which are important for resolving issues of exceptional
importance, policy, and PTAB procedure.
Some commenters provided additional considerations for Director
Review and with respect to the interim process (see questions 1 and
10). Some suggested that the Director Review process should consider
AIA and policy goals, for example: (1) promoting transparency,
consistency, and fairness; (2) improving patent quality and litigation
efficiency; and (3) broadening access to the patent system while
safeguarding against low-quality patents and abusive behavior. Others
suggested that Director Review decisions should explain the basis for
granting Director Review and provide a reasoned rationale for each
decision. Still others suggested that the USPTO should clarify the
criteria used to determine whether to grant Director Review and
eliminate overlapping and redundant reviews and rehearing.
The USPTO appreciates the public input provided in response to the
RFC and has reviewed the individual responses thoroughly. In view of
the comments, the USPTO's experience with the interim Director Review
process, and public support for rulemaking with respect to Director
Review, and in the interest of providing greater clarity, certainty,
and predictability to parties participating in proceedings before the
Board, the Office now issues this notice of proposed rulemaking (NPRM).
Proposed Director Review Process
Under the Director Review process proposed in this NPRM, which is
consistent with the current interim process, a party may only request
Director Review of: (1) a decision on whether to institute an AIA
trial, (2) a final written decision in an AIA proceeding, or (3) a
panel decision granting a request for rehearing of a decision on
whether to institute a trial or a final written decision in an AIA
proceeding. In the course of reviewing such an institution decision,
final written decision, or panel rehearing decision, the Director may
review any interlocutory decision rendered in reaching that decision.
The Director may also grant review of those same decisions sua sponte.
Third parties may not request Director Review or communicate with the
USPTO concerning the Director Review of a particular case unless the
Director invites them to do so.
Under the interim process, as described on the Director Review web
page, requests for Director Review of Board decisions on whether to
institute an AIA trial, or decisions granting rehearing of such a
decision, are limited to decisions presenting: (a) an abuse of
discretion, or (b) important issues of law or policy. Issues related to
both discretion and the asserted merits of unpatentability may be
raised, subject to limitations (a) and (b) above. Under the interim
process, requests for Director Review of PTAB final written decisions,
or decisions granting rehearing of such decisions, are available for
decisions presenting: (a) an abuse of discretion, (b) important issues
of law or policy, (c) erroneous findings of material fact, or (d)
erroneous conclusions of law.
The interim Director Review process generally follows existing PTAB
rehearing procedures under 37 CFR 42.71(d). Similarly, as proposed in
this NPRM, to request Director Review, a party to an IPR, PGR, or
derivation proceeding must file a request for rehearing pursuant to
Sec. 42.71(d) and subject to any further instructions provided by the
Director. The Director Review web page further explains that the
Director has instructed that parties must both file their rehearing
request in the Patent Trial and Appeal Case Tracking System and send an
email to the Director at [email protected].
Under the process proposed in this NPRM, a party must file a
request for rehearing by the Director within the time prescribed for a
request for rehearing under 37 CFR 42.71(d), as appropriate for the
type of decision for which review is sought. The Director may choose to
extend the rehearing deadline for good cause. A timely request for
rehearing by the Director will be considered a request for rehearing
under 37 CFR 90.3(b)(1) and will reset the time for appeal to the
Federal Circuit as set forth in that rule until a time after which all
issues on Director Review in the proceeding are resolved, including any
ancillary issues.
As proposed in this NPRM, requests for rehearing by the Director
are limited to 15 pages (see Sec. 42.24(a)(1)(v)). A Director Review
request may not introduce new evidence.
Moreover, under the process proposed in this NPRM, parties are
limited to requesting either: (1) Director Review, or (2) rehearing by
the original panel, but may not request both. Requests for both
Director Review and panel rehearing of the same decision are treated as
a request for Director Review only, as described on the Director Review
web page. However, as explained above, parties may request Director
Review of a decision by a panel granting rehearing of a prior PTAB
decision. ``[G]ranting rehearing'' here means that the rehearing
decision modifies the holding or result of the underlying decision in
some fashion. For example, where a Board panel changes the
determination of the Final Written Decision for certain claims from
unpatentable to not unpatentable in a rehearing decision, the
petitioner may file a Request for Director Review of that new
determination as to those claims. Rehearing is not ``granted,'' and
thus a Request for Director Review is not available, for purposes of
this rule if the panel: (1) provides a decision addressing the
arguments in the request for rehearing but does not modify the
underlying holding or result, or (2) denies the request for rehearing
without further explanation.
Under the interim process, as explained on the Director Review web
page, each request for Director Review is considered by an Advisory
Committee that the Director has established to assist with the process.
The Advisory Committee has at least 11 members and currently includes
representatives from various business units within the USPTO who serve
at the discretion of the Director. The Advisory Committee currently is
chaired by a Director Review Executive and comprises members from the
Office of the Under Secretary (not including the Director or Deputy
Director); the PTAB (not including members of the original panel for
each case under review); the Office of the Commissioner for Patents
(not including the Commissioner for Patents or any persons involved in
the examination of the challenged patent); the Office of the General
Counsel (which includes the Office of the Solicitor); and the Office of
Policy and International Affairs. The Advisory Committee meets
periodically to
[[Page 26811]]
evaluate each request for Director Review.\9\ Advisory Committee
meetings may proceed with fewer than all members in attendance, as long
as a quorum of seven members is present.
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\9\ No member of the Advisory Committee may participate in the
consideration of a request for Director Review if that member has a
conflict of interest under the U.S. Department of Commerce USPTO
Summary of Ethics Rules, available at ogc.commerce.gov/sites/default/files/pto-summary_of_ethics_2022_0.pdf. PTAB APJs who are
Advisory Committee members will also follow the guidance on
conflicts of interest set forth in the PTAB's SOP 1, and will recuse
themselves from any discussion involving cases on which they are
paneled.
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The Advisory Committee presents the Director with a recommendation.
The recommendation includes either a consensus from the various members
of the Advisory Committee, or notes differing views among the Advisory
Committee members. The Director also receives each Director Review
request, the underlying decision, and associated arguments and
evidence. The Director determines whether to grant or deny the request
for Director Review, or to delegate Director Review.\10\ The Director
may also consult others in the USPTO as needed, so long as those
individuals consulted do not have a conflict of interest. Although the
Advisory Committee and other individuals in the USPTO may advise the
Director on whether a decision warrants review, the Director has sole
discretion to resolve each request for Director Review. The Director's
decision on each request will be communicated to the parties in the
proceeding. Furthermore, Director Review grants and delegations will be
posted on the PTAB website. Other determinations, such as Director
Review denials, dismissals, and withdrawals, will be cataloged and
posted on the PTAB website.
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\10\ The current interim process in place for delegating
Director Review is presented on the Delegated Rehearing Panel
website (www.uspto.gov/patents/ptab/decisions/delegated-rehearing-panel). The process for delegation may change in the future, as
required to accommodate needs of the Director, consistent with all
applicable law.
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As proposed in this NPRM, in addition to allowing parties to
request Director Review of certain decisions, the Director may order
sua sponte Director Review. Under the interim process, as described on
the Director Review web page, sua sponte Director Review is typically
reserved for issues of exceptional importance, and the Director retains
the authority to initiate review sua sponte of any other issue, as the
Director deems appropriate. As explained in SOP 4, an internal post-
issuance review team at the PTAB reviews issued decisions and, if
warranted, flags certain AIA decisions as potential candidates for sua
sponte Director Review. See PTAB SOP 4, at 1, 5. In addition, as
described on the Director Review web page, the Director may also
convene the Advisory Committee to make recommendations on decisions
that the Director is considering for sua sponte Director Review. If the
Director initiates a sua sponte review, the parties will be given
notice and may be given an opportunity for briefing. The public will
also be notified, and the Director may request amicus briefing. If
briefing is requested, the procedures to be followed will be set forth.
As proposed in this NPRM, absent exceptional circumstances (which
might include a remand from the Federal Circuit for the purpose of
Director Review), the Director may initiate sua sponte review at any
point within 21 days after the expiration of the period for filing a
request for rehearing, pursuant to Sec. 42.71(d), as appropriate to
the type of decision (i.e., a decision on institution or a final
written decision) for which review is sought.
As proposed in this NPRM, a decision on institution, a final
written decision, or a decision granting rehearing of such decision on
institution of a final written decision shall become the decisions of
the agency unless Director Review is requested or sua sponte review is
initiated. Moreover, upon denial of a request for Director Review of a
decision denying institution, a final written decision, or a decision
granting rehearing of a final written decision, the Board's decision
becomes the final agency decision.
As proposed in this NPRM, and consistent with the interim process,
by default a request for Director Review or the initiation of sua
sponte Director Review resets the time for appeal but does not stay or
delay the time for the parties to take action in the underlying
proceeding before the PTAB, unless the Director orders otherwise. As
also proposed in this NPRM, if the Director grants a Director Review,
the Director will issue an order or decision that will be made part of
the public record, subject to any confidentiality requirements. A grant
of Director Review that is not withdrawn will conclude with the
issuance of a decision or order providing the Director's reasoning in
the case.
As proposed in this NPRM, and consistent with the interim process,
a party may appeal a Director Review decision of a final written
decision, or rehearing thereof, to the United States Court of Appeals
for the Federal Circuit using the same procedures for appealing other
PTAB decisions under 35 U.S.C. 141(c), 319. Director Review decisions
on decisions on institution are not appealable.
As proposed in this NPRM, and in consideration of the objectives of
the Director Review process, the Director may, at their discretion,
delegate the review of a Board decision in an AIA proceeding.
Under the interim process, decisions made on Director Review are
not precedential by default, but may be designated as precedential by
the Director. Additional implementation details of the interim process
are provided on the Director Review web page. If a final rule issues
and goes into effect, the Director Review web page will be updated or
replaced with updated guidance on the effective date of such a final
rule.
Application of Director Review Process to Date
As of April 1, 2024, the USPTO had received 328 compliant requests
for Director Review under the interim process. Of those requests, the
Director Review process was completed for 316 requests. Of the 316
completed requests, 18 requests were granted, 2 requests were delegated
to the DRP, 5 requests were withdrawn, and the remaining 291 requests
were denied. Additionally, sua sponte Director Review was initiated in
35 cases.
Since July 24, 2023, when the interim process for Director Review
was expanded to allow for requests of decisions on institution, the
majority of requests received have been from decisions on institution.
Specifically, between July 24, 2023, and April 1, 2024, 27 requests for
review of final written decisions and 82 requests for review of
decisions on institution were received.
Discussion of Specific Rules
The USPTO proposes to add Sec. 42.75, as follows:
Section 42.75: Proposed Sec. 42.75(a) would set forth the general
availability of Director Review.
Proposed Sec. 42.75(b) would set forth the availability of sua
sponte Director Review.
Proposed Sec. 42.75(c) would set forth the availability of
requests for Director Review and request requirements.
Proposed Sec. 42.75(d) would set forth the finality of decisions
subject to Director Review.
Proposed Sec. 42.75(e) would set forth the Director Review
process.
Proposed Sec. 42.75(f) would provide for the delegation of a
review by the Director.
[[Page 26812]]
Proposed Sec. 42.75(g) would set forth provisions regarding
communications with the Office.
Rulemaking Considerations
A. Administrative Procedure Act: The changes proposed by this NPRM
involve rules of agency practice and procedure, and/or interpretive
rules, and do not require notice-and-comment rulemaking. See Perez v.
Mortg. Bankers Ass'n, 135 S.Ct. 1199, 1204 (2015) (explaining that
interpretive rules ``advise the public of the agency's construction of
the statutes and rules which it administers'' and do not require
notice-and-comment rulemaking when issued or amended); 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), do not require notice-and-
comment rulemaking for ``interpretative rules, general statements of
policy, or rules of agency organization, procedure, or practice''); and
JEM Broadcasting Co. v. F.C.C., 22 F.3d 320, 328 (D.C. Cir. 1994)
(explaining that rules are not legislative because they do not
``foreclose effective opportunity to make one's case on the merits'').
Nevertheless, the USPTO is publishing this proposed rule for
comment to seek the benefit of the public's views on the Office's
proposed regulatory changes.
B. Regulatory Flexibility Act: For the reasons set forth in this
notice, the Senior Counsel for Regulatory and Legislative Affairs,
Office of General Law, USPTO, has certified to the Chief Counsel for
Advocacy of the Small Business Administration that the changes set
forth in this NPRM would not have a significant economic impact on a
substantial number of small entities. See 5 U.S.C. 605(b).
The changes in this NPRM are to expressly set forth the rules
governing Director Review. The changes do not create additional
procedures or requirements or impose any additional compliance measures
on any party beyond the interim process for Director Review, nor do
these changes cause any party to incur additional costs. 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 NPRM would
not have a significant economic impact on a substantial number of small
entities.
C. Executive Order 12866 (Regulatory Planning and Review): This
NPRM has been determined to be not significant for purposes of
Executive Order 12866 (September 30, 1993), as amended by Executive
Order 14094 (April 6, 2023).
D. Executive Order 13563 (Improving Regulation and Regulatory
Review): The Office has complied with Executive Order 13563 (January
18, 2011). Specifically, and as discussed above, the Office has, to the
extent feasible and applicable: (1) made a reasoned determination that
the benefits justify the costs of the proposed rule; (2) tailored the
proposed 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 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.
E. Executive Order 13132 (Federalism): This NPRM pertains strictly
to Federal agency procedure and does not contain policies with
federalism implications sufficient to warrant the preparation of a
Federalism Assessment under Executive Order 13132 (August 4, 1999).
F. Executive Order 13175 (Tribal Consultation): This NPRM 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 (November
6, 2000).
G. Executive Order 13211 (Energy Effects): This NPRM is not a
significant energy action under Executive Order 13211 because it is not
likely to have a significant adverse effect on the supply,
distribution, or use of energy. Therefore, a Statement of Energy
Effects is not required under Executive Order 13211 (May 18, 2001).
H. Executive Order 12988 (Civil Justice Reform): This NPRM 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 (February 5, 1996).
I. Executive Order 13045 (Protection of Children): This NPRM does
not concern an environmental risk to health or safety that may
disproportionately affect children under Executive Order 13045 (April
21, 1997).
J. Executive Order 12630 (Taking of Private Property): This NPRM
will not affect a taking of private property or otherwise have taking
implications under Executive Order 12630 (March 15, 1988).
K. Congressional Review Act: Under the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.), prior to issuing any final rule, the USPTO
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 NPRM are not expected to
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, innovation, or the
ability of United States-based enterprises to compete with foreign-
based enterprises in domestic and export markets. Therefore, this NPRM
will not be a ``major rule'' as defined in 5 U.S.C. 804(2).
L. Unfunded Mandates Reform Act of 1995: The changes set forth in
this NPRM 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 (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 (as adjusted) or more in any one
year, and will not significantly or uniquely affect small governments.
Therefore, no actions are necessary under the provisions of the
Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 1501 et seq.
M. National Environmental Policy Act of 1969: This NPRM will not
have any effect on the quality of the environment and is thus
categorically excluded from review under the National Environmental
Policy Act of 1969. See 42 U.S.C. 4321 et seq.
N. National Technology Transfer and Advancement Act of 1995: 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 NPRM does not contain provisions that involve the use of technical
standards.
[[Page 26813]]
O. Paperwork Reduction Act of 1995: 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 NPRM 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. In addition,
this NPRM does not add any additional information requirements or fees
for parties before the Board. Therefore, the Office is not resubmitting
collection packages to OMB for its review and approval because the
revisions in this NPRM do not materially change the information
collections approved under OMB control number 0651-0069.
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.
P. E-Government Act Compliance: The USPTO is committed to
compliance with the E-Government Act to promote the use of the internet
and other information technologies, to provide increased opportunities
for citizen access to Government information and services, and for
other purposes.
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 37 CFR part 42 as follows:
PART 42--TRIAL PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD
0
1. The authority citation for part 42 is revised to read as follows:
Authority: 35 U.S.C. 2(b)(2), 3, 6, 134, 135, 143, 153, 311,
314, 316, 318, 324, 326; Pub. L. 112-29, 125 Stat. 284; and Pub. L.
112-274, 126 Stat. 2456.
0
2. Add Sec. 42.75 to read as follows:
Sec. 42.75 Director Review.
(a) Director Review Generally. In a proceeding under part 42, the
Director may review any decision on institution under 35 U.S.C. 314 or
324, any final written decision under 35 U.S.C. 318 or 328, or any
decision granting rehearing of such a decision. In the course of
reviewing an institution decision, a final written decision, or a
rehearing decision, the Director may review any interlocutory decision
rendered by the Board in reaching that decision.
(b) Sua Sponte Director Review. The Director, on the Director's own
initiative, may order sua sponte Director Review of a decision as
provided in paragraph (a) of this section. Absent exceptional
circumstances, any sua sponte Director Review will be initiated within
21 days after the expiration of the period for filing a request for
rehearing pursuant to Sec. 42.71(d).
(c) Requests for Director Review. A party to a proceeding under
part 42 may file one request for Director Review of a decision as
provided in paragraph (a) of this section, instead of filing a request
for rehearing of that decision pursuant to Sec. 42.71(d), subject to
the limitations herein and any further guidance provided by the
Director.
(1) Timing. The request must be filed within the time period set
forth in Sec. 42.71(d) unless an extension is granted by the Director
upon a showing of good cause. No response to a Director Review request
is permitted absent Director authorization.
(2) Format and Length. A request for Director Review must comply
with the format requirements of Sec. 42.6(a). Absent Director
authorization, the request must comply with the length limitations for
motions to the Board provided in Sec. 42.24(a)(1)(v).
(3) Content. Absent Director authorization, a request for Director
Review may not introduce new evidence.
(d) Final Agency Decision. A decision on institution, a final
written decision, or a decision granting rehearing of such decision on
institution or final written decision shall become the decision of the
agency unless:
(1) A party requests rehearing or Director Review within the time
provided by Sec. 42.71(d); or
(2) In the absence of such a request, the Director initiates sua
sponte review as provided by Sec. 42.75(b). Upon denial of a request
for Director Review of a final written decision or of a decision
granting rehearing of a final written decision, the Board's decision
becomes the final agency decision.
(e) Process. (1) Effect on Underlying Proceeding. Unless the
Director orders otherwise, and except as provided in paragraph (e)(3)
of this section, a request for Director Review or the initiation of
review on the Director's own initiative does not stay the time for the
parties to take action in the underlying proceeding.
(2) Grant and scope. If the Director grants Director Review, the
Director shall issue an order or decision that will be made part of the
public record, subject to the limitations of any protective order
entered in the proceeding or any other applicable requirements for
confidentiality. If the Director grants review and does not
subsequently withdraw the grant, the Director Review will conclude with
the issuance of a decision or order that provides the reasons for the
Director's disposition of the case.
(3) Appeal. A party may appeal a Director Review decision of either
a final written decision or a decision granting rehearing of a final
written decision under 35 U.S.C. 318, 328, and 135 to the United States
Court of Appeals for the Federal Circuit using the same procedures for
appealing other decisions under 35 U.S.C. 141(c), 319. Director Review
decisions on decisions on institution are not appealable. A request for
Director Review of a final written decision or a decision granting
rehearing of a final written decision, or the initiation of a review on
the Director's own initiative of such a decision, will be treated as a
request for rehearing under Sec. 90.3(b)(1) and will reset the time
for appeal until after all issues on Director Review in the proceeding
are resolved.
(f) Delegation. The Director may delegate their review of a
decision on institution, a final written decision, or a decision
granting rehearing of such a decision, subject to any conditions
provided by the Director.
(g) Ex parte communications. All communications from a party to the
Office concerning a specific Director Review request or proceeding must
copy counsel for all parties. Communications from third parties
regarding a specific Director Review request or proceeding, aside from
authorized amicus briefing, are not permitted and will not be
considered.
Katherine K. Vidal,
Under Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office.
[FR Doc. 2024-07759 Filed 4-15-24; 8:45 am]
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