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Daily Rules, Proposed Rules, and Notices of the Federal Government

DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Part 42

[Docket No. PTO-P-2011-0086]

RIN 0651-AC74

Changes To Implement Derivation Proceedings

AGENCY: United States Patent and Trademark Office, Commerce.
ACTION: Final rule.
SUMMARY: The United States Patent and Trademark Office (Office or USPTO) is revising the rules of practice to implement the provisions of the Leahy-Smith America Invents Act (AIA) that create a new derivation proceeding to be conducted before the Patent Trial and Appeal Board (Board). These provisions of the AIA will take effect on March 16, 2013, eighteen months after the date of enactment, and apply to applications for patent, and any patent issuing thereon, that are subject to first-inventor-to-file provisions of the AIA.
DATES: Effective Date:The changes in this final rule take effect on March 16, 2013.
FOR FURTHER INFORMATION CONTACT: Michael P. Tierney, Lead Administrative Patent Judge; Sally G. Lane, Administrative Patent Judge; Sally C. Medley, Administrative Patent Judge; Richard Torczon, Administrative Patent Judge; and Joni Y. Chang, Administrative Patent Judge, Board of Patent Appeals and Interferences, (will be renamed as Patent Trial and Appeal Board on September 16, 2012), by telephone at (571) 272-9797.
SUPPLEMENTARY INFORMATION:

Executive Summary: Purpose:On September 16, 2011, the AIA was enacted into law (Pub. L. 112-29, 125 Stat. 284 (2011)). The purpose of the AIA and these regulations is to establish a more efficient and streamlined patent system. The preamble of this notice sets forth in detail the procedures by which the Board will conduct new administrative proceedings called derivation proceedings. Derivation proceedings were created to ensure that the first person to file the application is actually a true inventor. This new proceeding will ensure that a person will not be able to obtain a patent for an invention that he did not actually invent. If a dispute arises as to which of two applicants is a true inventor (as opposed to who invented it first), it will be resolved through a derivation proceeding conducted by the Board. This final rule provides a set of rules relating to Board trial practice for derivation proceedings.

Summary of Major Provisions:Consistent with section 3 of the AIA, this final rule sets forth: (1) The requirements for a petition to institute a derivation proceeding; (2) the standards for showing of sufficient grounds to institute a derivation proceeding; (3) the standards for instituting a derivation proceeding; (4) the standards and procedures for conducting a derivation proceeding; and (5) the procedures for arbitration and settlement (subpart E of 37 CFR part 42).

Costs and Benefits:This rulemaking isnoteconomically significant, but is significant, under Executive Order 12866 (Sept. 30, 1993), as amended by Executive Order 13258 (Feb. 26, 2002) and Executive Order 13422 (Jan. 18, 2007).

Background:To implement the changes set forth in sections 3, 6, 7, and 18 of the AIA that are related to administrative trials and judicial review of Board decisions, the Office published the following notices of proposed rulemaking: (1)Rules of Practice for Trials before the Patent Trial and Appeal Board and Judicial Review of Patent Trial and Appeal Board Decisions,77 FR 6879 (Feb. 9, 2012), to provide a consolidated set of rules relating to Board trial practice forinter partesreview, post-grant review, derivation proceedings, and the transitional program for covered business method patents, and judicial review of Board decisions by adding new parts 42 and 90 including a new subpart A to title 37 of the Code of Federal Regulations (RIN 0651-AC70); (2)Changes to Implement Inter Partes Review Proceedings,77 FR 7041 (Feb. 10, 2012), to provide rules specific tointer partesreview by adding a new subpart B to 37 CFR part 42 (RIN 0651-AC71); (3)Changes to Implement Post-Grant Review Proceedings,77 FR 7060 (Feb. 10, 2012), to provide rules specific to post-grant review by adding a new subpart C to 37 CFR part 42 (RIN 0651-AC72); (4)Changes to Implement Transitional Program for Covered Business Method Patents,77 FR 7080 (Feb. 10, 2012), to provide rules specific to the transitional program for covered business method patents by adding a new subpart D to 37 CFR part 42 (RIN 0651-AC73); (5)Transitional Program for Covered Business Method Patents—Definition of Technological Invention,77 FR 7095 (Feb. 10, 2012), to add a new rule that sets forth the definition of technological invention for determining whether a patent is for a technological invention solely for purposes of the transitional program for covered business method patents (RIN 0651-AC75); and (6)Changes to Implement Derivation Proceedings,77 FR 7028 (Feb. 10, 2012), to provide rules specific to derivation proceedings by adding a new subpart E to 37 CFR part 42 (RIN 0651-AC74).

Additionally, the Office published a Patent Trial Practice Guide for the proposed rules in theFederal Registerto provide the public an opportunity to comment.Practice Guide for Proposed Trial Rules,77 FR 6868 (Feb. 9, 2012) (Request for Comments) (“Practice Guide” or “Office Patent Trial Practice Guide”). The Office also hosted a series of public educational roadshows, across the country, regarding the proposed rules for the implementation of AIA.

In response to the notices of proposed rulemaking and the Office Patent Trial Practice Guide notice, the Office received 251 submissions offering written comments from intellectual property organizations, businesses, law firms, patent practitioners, and individuals. The comments provided support for, opposition to, and diverse recommendations on the proposed rules. The Office appreciates the thoughtful comments, and has considered and analyzed the comments thoroughly. The Office's responses to the comments are provided in the Response to Comments section,infra,in the 83 separate responses based on the topics concerning derivation raised in the 251 comments received.

In light of the comments, the Office has made appropriate modifications to the proposed rules to provide clarity and to take into account the interests of the public, patent owners, patent challengers, and other interested parties, with the statutory requirements and considerations, such as the effect of the regulations on the economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to complete the proceedings timely. The Office has decided to proceed with several separate final rules to implement the changes set forth in sections 3, 6, 7, and 18 of the AIA that are related to administrative trials and judicial review of Board decisions. This final rule adopts the proposed changes, with modifications, set forth in theChanges to Implement Derivation Proceedings(77 FR 7028).

Differences Between the Final Rule and the Proposed Rule

The major differences between the rules as adopted in this final rule and the proposed rules are as follows:

The final rule clarifies that the phrase “same or substantially the sameinvention” means patentably indistinct (§ 42.401). The final rule also clarifies that the phrase “the first publication” means either a patent or an application publication under 35 U.S.C. 122(b), including a publication of an international application designating the United States as provided by 35 U.S.C. 374.

To follow closely the statutory language in 35 U.S.C. 135(a), as amended, the final rule clarifies that a petition for a derivation proceeding must be filed within the one-year period beginning on the date of the first publication of a claim to an invention that is the same or substantially the same as the earlier application's claim to the allegedly derived invention (§ 42.403).

As to the content of the petition, the final rule clarifies the petition must show that the petitioner has at least one claim that is the same or substantially the same as the invention disclosed to the respondent (§ 42.405(a)(2)(ii)). The final rule also clarifies that the petition must demonstrate that the inventor from whom the claimed invention was allegedly derived did not authorize the filing of the earlier application claiming the derived invention (§ 42.405(b)(2)). Further, the final rule clarifies that the petition must show why the respondent's claimed invention is the same or substantially the same as the invention disclosed to the respondent (§ 42.405(b)(3)(i)).

As to mode of service, the final rule eliminates the requirement that the petitioner must contact the Board to discuss alternate modes of service when the petitioner cannot effect service of the petition and supporting evidence (§ 42.406(b)). Instead, the final rule clarifies that: (1) Upon agreement of the parties, service may be made electronically; (2) personal service is not required; and (3) service may be by EXPRESS MAIL® or by means at least as fast and reliable as EXPRESS MAIL® (§ 42.406(b)).

Discussion of Relevant Provisions of the AIA

Section 3(i) of the AIA amends 35 U.S.C. 135 to provide for derivation proceedings and to eliminate the interference practice as to applications and patents having an effective filing date on or after March 16, 2013 (with a few exceptions). Derivation proceedings will be conducted in a manner similar tointer partesreviews and post-grant reviews. Unlike patent interferences, derivations will be conducted in a single phase without the use of a “count.” An inventor seeking a derivation proceeding must file an application. 35 U.S.C. 135(a). An inventor, however, may copy an alleged deriver's application, make any necessary changes to reflect accurately what the inventor invented, and provoke a derivation proceeding by filing a petition and fee timely.

In particular, 35 U.S.C. 135(a), as amended, provides that an applicant for patent may file a petition to institute a derivation proceeding in the Office. As amended, 35 U.S.C. 135(a) provides that the petition must state with particularity the basis for finding that a named inventor in the earlier application derived the claimed invention from an inventor named in the petitioner's application and, without authorization, filed the earlier application. The petition must be filed within one year of the first publication by the earlier applicant of a claim to the same or substantially the same invention, made under oath, and be supported by substantial evidence. As amended, 35 U.S.C. 135(a) further provides that if the Director determines that the petition demonstrates that the standards for instituting a derivation proceeding are met, the Director may institute a derivation proceeding and that the determination of whether to institute a derivation proceeding is final and nonappealable. A derivation is unlikely to be instituted, even where the Director thinks the standard for instituting a derivation proceeding is met, if the petitioner's claim is not otherwise in condition for allowance.Cf. Brennerv.Manson,383 U.S. 519, 528 n.12 (1966);accord Ewingv.Fowler Car Co.,244 U.S. 1, 7 (1917).

As amended, 35 U.S.C. 135(b) provides that, once a derivation proceeding is instituted, the Board will determine whether a named inventor in the earlier application derived the claimed invention from a named inventor in the petitioner's application and, without authorization, filed the earlier application. As amended, 35 U.S.C. 135(b) also provides that the Board may correct the naming of the inventor of any application or patent at issue in appropriate circumstances, and that the Director will prescribe regulations for the conduct of derivation proceedings, including requiring parties to provide sufficient evidence to prove and rebut a claim of derivation.

As amended, 35 U.S.C. 135(c) provides that the Board may defer action on a petition for derivation proceeding for up to three months after a patent is issued from the earlier application that includes a claim that is the subject of the petition. That section further provides that the Board also may defer action on a petition for a derivation proceeding or stay the proceeding after it has been instituted until the termination of a proceeding under chapter 30, 31, or 32 involving the patent of the earlier applicant.

As amended, 35 U.S.C. 135(d) provides that a decision that is adverse to claims in an application constitutes the final refusal of the claims by the Office, while a decision adverse to claims in a patent constitutes cancellation of the claims, if no appeal or other review of the decision has been taken or had. As amended, 35 U.S.C. 135(d) provides that a notice of such claim cancellation must be endorsed on the patent.

Section 3(i) of the AIA further adds two new provisions, 35 U.S.C. 135(e) and (f). New paragraph (e) of 35 U.S.C. 135 provides that the parties to a derivation proceeding may terminate the proceeding by filing a written statement reflecting the agreement of the parties as to the correct inventors of the claimed invention in dispute. Moreover, 35 U.S.C. 135(e) provides that the Board must take action consistent with the agreement, unless the Board finds the agreement to be inconsistent with the evidence of record. Further, 35 U.S.C. 135(e) provides that the written settlement or understanding of the parties must be filed with the Director and, at the request of a party, will be treated as business confidential information, will be kept separate from the file of the involved patents or applications, and will be made available only to Government agencies on written request, or to any person on a showing of good cause.

New paragraph (f) of 35 U.S.C. 135 allows the parties to a derivation proceeding to determine the contest, or any aspect thereof, by arbitration within a time specified by the Director, and provides that the arbitration is governed by the provisions of title 9, to the extent that title is not inconsistent with 35 U.S.C. 135. Further, 35 U.S.C. 135(f) provides that the parties must give notice of any arbitration award to the Director, that the award is not enforceable until such notice is given, and that the award, as between the parties to the arbitration, is dispositive of the issues to which it relates but does not preclude the Director from determining the patentability of the claimed inventions involved in the proceeding. The Director delegates the authority to the Board to resolve patentability issues that arise during derivation proceedings when there is good cause to do so.

Discussion of Specific Rules

This final rule provides new rules to implement the provisions of the AIA for instituting and conducting derivation proceedings before the Board. As amended, 35 U.S.C. 135(b) provides that the Director will prescribe regulations setting forth standards for the conduct of derivation proceedings. This final rule adds a new subpart E to 37 CFR part 42 to provide rules specific to derivation proceedings.

Additionally, the Office in a separate final rule has added part 42, including subpart A (RIN 0651-AC70), that includes a consolidated set of rules relating to Board trial practice. More specifically, subpart A of part 42 sets forth the policies, practices, and definitions common to all trial proceedings before the Board. The rules adopted in this final rule and discussion below reference the rules in subpart A of part 42. Furthermore, the Office in other separate final rules adds a new subpart B to 37 CFR part 42 to provide rules specific tointer partesreview, a new subpart C to 37 CFR part 42 to provide rules specific to post-grant review, and a new subpart D to 37 CFR part 42 to provide rules specific to transitional program covered business method patents (RIN 0651-AC71 and RIN 0651-AC75).

Title 37 of the Code of Federal Regulations, Chapter I, Part 42, Subpart E, entitled “Derivation” is added as follows:

Section 42.400:Section 42.400 sets forth policy considerations for derivation proceedings.

Section 42.400(a) provides that a derivation proceeding is a trial and subject to the rules set forth in subpart A.

Section 42.400(b) delegates to the Board the Director's authority to resolve patentability issues when there is good cause to do so.Seethe last sentence of 35 U.S.C. 135(f), as amended. For example, an issue of claim indefiniteness (35 U.S.C. 112) might need to be resolved before derivation can be substantively addressed on the merits. Resolution of such issues promotes procedural efficiency, and may even encourage party settlement, by providing clear guidance on the scope of the contested issues.

Section 42.401:Section 42.401 sets forth definitions specific to derivation proceedings, in addition to definitions set forth in § 42.2 of this part.

Definitions:

Agreementorunderstanding under 35 U.S.C. 135(e):The definition reflects the terminology used in 35 U.S.C. 135(e) to describe a settlement between parties to a derivation proceeding.

Applicant:The definition makes it clear that reissue applicants are considered applicants, and not patentees, for purposes of a derivation proceeding.

Application:The definition makes it clear that a reissue application is an application, not a patent, for purposes of a derivation proceeding. Specifically, the definition includes both an application for an original patent and an application for a reissued patent.

The first publication:The definition makes it clear that the phrase means either a patent or an application publication under 35 U.S.C. 122(b), including a publication of an international application designating the United States as provided by 35 U.S.C. 374.

Petitioner:The definition of petitioner incorporates the statutory requirement (35 U.S.C. 135(a), as amended) that the petitioner be an applicant.

Respondent:The definition of respondent identifies the respondent as the party other than the petitioner.

Same or substantially the same invention:The definition makes it clear that the phrase means patentably indistinct.

Section 42.402:Section 42.402 provides who may file a petition for a derivation proceeding.

Section 42.403:Section 42.403 provides that a petition for a derivation proceeding must be filed within the one-year period beginning on the date of the first publication of a claim to an invention that is the same or substantially the same as the respondent's earlier application's claim to the invention. Such publication may be the publication by the USPTO of an application for patent or by the World Intellectual Property Organization (WIPO) of an international application designating the United States. As amended, 35 U.S.C. 135(a) provides that a petition for instituting a derivation proceeding may only be filed within the one-year period of the first publication to a claim to an invention that is the same or substantially the same as the earlier application's claim to the invention. The rule is consistent with 35 U.S.C. 135(a), as amended, because the earlier application's first publication of the allegedly derived invention triggers the one-year bar date. While the statute's use of the phrase “a claim” is ambiguous inasmuch as it could include the petitioner's claim as a trigger, such a broad construction could violate due process. For example, the petitioner could be barred by publication of its own claim before it had any knowledge of the respondent's application. Such problems may be avoided if the trigger for the deadline is publication of the respondent's claim.

Section 42.404:Section 42.404 provides that a fee must accompany the petition for a derivation proceeding and that no filing date will be accorded until payment is complete.

Section 42.405:Section 42.405 identifies the content of a petition to institute a derivation proceeding. The rule is consistent with 35 U.S.C. 135(b), as amended, which authorizes the Director to prescribe regulations setting forth standards for the conduct of derivation proceedings, including requiring parties to provide sufficient evidence to prove and rebut a claim of derivation.

Section 42.405(a) requires a petition to demonstrate that the petitioner has standing. To establish standing, a petitioner, at a minimum, must timely file a petition that shows that at least one claim of the petitioner's application is the same or substantially the same as the respondent's claimed invention and as the invention disclosed to the respondent by the inventor in the petitioner's application. This requirement ensures that a party has standing to file the petition and helps prevent spuriously instituted derivation proceedings. This rule also ensures that the petitioner has taken steps to obtain patent protection for the same or substantially same invention, thus promoting the useful arts by participating in the patent system. Facially improper standing would be a basis for denying the petition without proceeding to the merits of the decision.

Section 42.405(b) requires that the petition identify the precise relief requested. The petition must provide sufficient information to identify the application or patent subject to a derivation proceeding. The petition must also demonstrate that the claimed invention in the subject application or patent was derived from an inventor named in the petitioner's application and that the inventor named in the petitioner's application did not authorize the filing of the earliest application claiming the derived invention. The petitioner must further show why the claim is the same or substantially the same as the invention disclosed to the respondent. For each of the respondent's targeted claims, the petitioner must likewise identify how the claim to the allegedly derived invention is to be construed. Where the claim to be construed contains a means-plus-function or step-plus-function limitation as permitted under 35 U.S.C. 112(f), the construction of the claim must identify the specific portions of the specification that describe thestructure, material, or acts corresponding to each claimed function. The rule provides an efficient means for identifying the legal and factual basis supporting aprima faciecase of relief and provides the opponent with a minimum level of notice as to the basis for the allegations of derivation.

Section 42.405(c) provides that a derivation showing is not sufficient unless it is supported by substantial evidence and at least one affidavit addressing communication and lack of authorization, consistent with 35 U.S.C. 135(a), as amended. The showing of communication must be corroborated.

Section 42.406:Section 42.406 provides requirements for the service of a petition in addition to the requirements set forth in § 42.6(e).

Section 42.406(a) requires that the petitioner serve the respondent at the correspondence address of record. A petitioner may also attempt service at any other address known to the petitioner as likely to effect service. Once a patent has issued, communications between the Office and the patent owner often suffer.Rayv.Lehman,55 F.3d 606 (Fed. Cir. 1995) (patentee's failure to maintain correspondence address contributed to failure to pay maintenance fee and therefore expiration of the patent). While the rule requires service at the correspondence address of record, in many cases, the petitioner will already be in communication with the owner of the earlier application at a better service address than the official correspondence address.

Section 42.407:Section 42.407(a) provides requirements for a complete petition. As amended, 35 U.S.C. 135(b) provides that the Director establish regulations concerning the standards for the conduct of derivation proceedings. Further, 35 U.S.C. 135(a), as amended, provides that a derivation proceeding may be instituted where the Director determines that a petition demonstrates that the standards for instituting a derivation proceeding are met. Consistent with the statute, the rule requires that a complete petition be filed along with the fee and that it be served at the correspondence address of record for the earlier application.

Section 42.407(b) provides petitioners a one-month time frame to correct defective petitions to institute a derivation proceeding, unless the statutory deadline in which to file a petition for derivation has expired. In determining whether to grant a filing date, the Board will review the petitions for procedural compliance. Where a procedural defect is noted,e.g.,failure to state the claims being challenged, the Board will notify the petitioner that the petition was incomplete and identify any non-compliance issues.

Section 42.408:Section 42.408 provides that an administrative patent judge institutes and may reinstitute a derivation proceeding on behalf of the Director.

Section 42.409:Section 42.409 makes it clear that an agreement or understanding filed under 35 U.S.C. 135(e) would be a settlement agreement for purposes of § 42.74.

Section 42.410:Section 42.410 provides for arbitration of derivation proceedings. Section 42.410(a) provides that parties to a derivation proceeding may determine such contest, or any aspect thereof, by arbitration, except that nothing shall preclude the Office from determining the patentability of the claimed inventions involved in the proceeding. The rule is consistent with 35 U.S.C. 135(f) because it permits arbitration, but does not displace the Office from determining issues of patentability during the course of the proceeding. Section 42.410(b) provides that the Board will not set a time for, or otherwise modify the proceeding for, an arbitration unless the listed procedural requirements are met.

Section 42.411:Section 42.411 provides that an administrative patent judge may decline to institute or continue a derivation proceeding between an application and a patent or another application that are commonly owned. Common ownership in a derivation proceeding is a concern because it can lead to manipulation of the process, such as requesting the Board to resolve an inventorship dispute within the same company. The rule is stated permissively because not all cases of overlapping ownership would be cause for concern. The cases of principal concern involve a real party-in-interest with the ability to control the conduct of more than one party.

Section 42.412:Section 42.412 provides for public availability of Board records.

Response to Comments

The Office received 251 written submissions of comments from intellectual property organizations, businesses, law firms, patent practitioners, and individuals. The comments provided support for, opposition to, and diverse recommendations on the proposed rules. The Office appreciates the thoughtful comments, and has considered and analyzed the comments thoroughly. The Office's responses to the comments that are directed to the consolidated set of rules relating to Board trial practice and judicial review of Board decisions are provided in a separate final rule (RIN 0651-AC70). In addition, the Office's responses to comments that are directed tointer partesreview proceedings (77 FR 7041), post-grant review proceedings (77 FR 7060), and transitional post-grant review proceedings for covered business method patents (77 FR 7080) are provided in another separate final rule (RIN 0651-AC71), and the Office's responses to the comments that are directed to the definitions of the terms “covered business method patent” and “technological invention” are provided in a third separate final rule (RIN 0651-AC75).

The Office's responses to comments that are directed to derivation proceedings (77 FR 7028) are provided as follows:

Procedure; pendency (§ 42.400)

Comment 1:One comment suggested that the use of the word “proceeding” in the proposed derivation rules is in conflict with how “proceeding” is defined in proposed § 42.2. As such, the suggestion is for § 42.400(b) to reference the “trial” and not the “proceeding” or to separately define the term “derivation proceeding” to exclude any preliminary proceeding.

Response:Section 42.2 defines “proceeding” as a trial or a preliminary proceeding. The term “derivation proceeding” includes a preliminary proceeding or a trial, and thus it is consistent with § 42.2. Redefining the term “derivation proceeding” to exclude a preliminary proceeding would result in an inconsistency with § 42.2. There may be, based on the specific facts of a given case, a need to resolve a patentability issue prior to determining whether to institute a derivation proceeding. Thus, to facilitate flexibility, the Office adopts proposed § 42.400(b) without any modifications.

Definitions (§ 42.401)

Comment 2:One comment suggested that the Office define “substantially the same” to mean “not patentably distinct” or “mere obvious variants.” Still another comment suggested that a claim is the “same or substantially the same” invention if: (i) the claim recites an invention that would be anticipated by or obvious over the allegedly derived invention; and (ii) the allegedly derived invention would be anticipated by or obvious over the invention defined by that claim. Lastly, one comment suggested providing more guidance as to whether “substantially the same” will be evaluated based on the “two-wayobviousness” test or some other standard.

Response:Section 42.401, as adopted in this final rule, provides that the “same or substantially the same means patentably indistinct.” The final rule makes clear that in determining whether a petitioner has at least one claim that is the same or substantially the same as a respondent's claimed invention (§ 42.405), the petitioner must show that the respondent's claim is anticipated by or obvious over the petitioner's claim.

Comment 3:One comment suggested that the definition of “respondent” should clarify that the term means “the assignee of record or any subsequent legal or equitable owner of the earlier-filed application in a proceeding under 35 U.S.C. 135.” The comment proposed that such a definition would also clarify that the deadline for filing a petition to institute a derivation proceeding is one year from the earliest publication of the respondent's claim.

Response:Section 42.401 defines “respondent” to mean a party other than the petitioner. Section 42.2 defines a “party,” such as in a derivation proceeding, as any applicant or assignee of the involved application. Moreover, § 42.8 requires a party involved in a proceeding to identify the real party-in-interest for the party. Lastly, the deadline for filing a petition to institute a derivation proceeding is one year from the first publication of the respondent's claim. Accordingly, the suggestion of setting forth a definition of the term “respondent” expressly in the rule is not adopted.

Comment 4:One comment noted that proposed § 42.405(c) requires a derivation showing to be supported by “at least one affidavit addressing communication of the derived invention.” The comment suggested that the term “communication of the derived invention” should be added to the definitions as “knowledge of the claimed invention, or at least so much of the claimed invention as would have made it obvious to one of ordinary skill in the art, obtained directly or indirectly from a named inventor, and prior to the filing date, of the earlier-filed patent.”

Response:Section 42.405(b)(3)(i) requires a petitioner to show, for each of the respondent's claims, why the claimed invention is the same or substantially the same as (i.e.,patentably indistinct from) the invention disclosed to the respondent. This requirement means that the respondent's claimed invention need not be identical to the invention disclosed to the respondent. Moreover, § 42.405(b)(2) provides that the invention disclosed to the respondent must be disclosed prior to the filing of the “earlier application.” The Office agrees that the communication of the invention need not be direct.

Comment 5:One comment suggested that the rule should provide a definition for the phrase “the first publication of a claim” to clarify that merely presenting a new claim in an application after it has been published under 35 U.S.C. 122(b) does not constitute the first publication of that new claim. In particular, the comment suggested a definition that specifies that a claim presented in an application or issued in a patent which defines an invention that is patentably distinct from a claim that was earlier published in the corresponding application or patent is the date of the first publication of that patentably distinct claim.

Response:The Office agrees that the first publication of a claim is the publication date of the application published under 35 U.S.C. 122(b) that includes that claim, or the issue date of the patent that includes that claim. Section 42.401, as adopted in this final rule, provides that “the first publication” means either a patent or an application publication under 35 U.S.C. 122(b), including a publication of an international application designating the United States as provided by 35 U.S.C. 374. In the situation where an application is published under 35 U.S.C. 122(b) with an originally filed claim and subsequently issued as a patent with a new claim that is patentably distinct from the originally filed claim, the first publication of the new patentably distinct claim is the issue date of the patent. Notably, the first publication of the new patentably distinct claim is not the publication date of the originally filed claim and it is not the date that the new patentably distinct claim is presented in the published application. The Office believes that the examples in the preamble provide sufficient clarity, and additional guidance will be provided to the public as decisions are rendered.

Comment 6:One comment suggested that the definitions should be revised to make clear that a petitioner can seek a derivation proceeding against either a pending application or an issued patent.

Response:Section 42.405(b)(1) provides that a petitioner may request to institute a derivation proceeding against an application or a patent.

Comment 7:One comment suggested adding to the end of the definition for application “where the application contains or contained at any time a claim that has an effective filing date on or after March 16, 2013, or contains a specific reference under 35 U.S.C. 120, 121, or 365(c) to any patent or application that contains or contained such a claim at any time.”

Response:The suggested language appears to come from section 3(n) of the AIA and would be required by law already.

Who may file a petition for a derivation proceeding (§ 42.402)

Comment 8:One comment suggested that a petition should be granted even when the true inventor has not filed a patent application because the true inventor may misunderstand that his or her invention is a mere modification of the prior art. The comment further suggested that the MPEP should mention that the petition for the derivation proceeding should be granted by filing the latter patent application at the time of filing the petition for the derivation proceeding, even when the true inventor has not filed his or her patent application.

Response:The true inventor must be named in the petitioner's application. Section 3(i) of the AIA amends 35 U.S.C. 135 to provide for derivation proceedings. The statute, among other things, specifies that the petition shall set forth with particularity the basis for finding that an inventor named in an earlier application derived the claimed invention from an inventor named in the petitioner's application.See35 U.S.C. 135(a), as amended. Therefore, the Office will not grant a petition when the true inventor is not named in the petitioner's application.

Time for Filing (§ 42.403)

Comment 9:One comment suggested that the rule on timing for filing should track the literal language of the statute because the proposed rule defines a different period than does the statute (one that does not include the date of first publication).

Response:This comment has been adopted. Section 42.403, as adopted in this final rule, includes that a petition for a derivation proceeding “must be filed within the one-year period beginning on the date of the first publication.”

Comment 10:Several comments suggested changes to the rules to define or specify what constitutes a “first publication.” For example, one comment suggested that public availability of a claim through the Office's PAIR system does not constitute first publication. Still, several comments suggested that “first publication” refers not only to U.S. application publication, but also PCT international application publication in English designating the United States, and where an applicationhas not published, the date of the first publication is the date of the issuance of the patent. Yet another comment suggested incorporating the preamble language from the proposed rules regarding “first publication” into the rule. Lastly, one comment suggested that the Office consider a petition process that would allow an applicant to petition for waiver of the rule in the interests of justice in certain exceptional circumstances,i.e.,when a deriver's claims are filed in a non-English language country and a subsequently filed PCT application has no translation.

Response:This comment has been adopted in part. Section 42.401, as adopted in this final rule, provides that “the first publication” means either a patent or an application publication under 35 U.S.C. 122(b), including a publication of an international application designating the United States as provided by 35 U.S.C. 374. Therefore, the first publication of a claim may be the publication by the USPTO of an application for patent, a U.S. patent, or a WIPO publication of an international application designating the United States. The public availability of a claim through the Office's PAIR system (e.g.,a new claim filed in a published application) does not constitute the first publication of a claim, as such publication is not an application publication under 35 U.S.C. 122(b). As to the comments regarding WIPO publication of an international application, 35 U.S.C. 374, as amended, deems a WIPO publication of an international application designating the United States as a publication under 35 U.S.C. 122(b) without any English language requirement. Therefore, the first publication of a claim may be a WIPO publication of an international application designating the United States that is published in a non-English language.

Comment 11:Several comments suggested that the rule make clear that the one-year period is calculated from publication of the respondent's claims, and not publication of the petitioner's claims. One comment suggested that the statute is ambiguous in defining the event that will trigger the one-year statutory bar for filing. Still another comment suggested that the proposed rule in combination with the supplementary information indicates that the window-opening date is the date of first publication by the deriver, but that that is contrary to the statutory language. Lastly, one comment suggested that the rule does not make clear which publication (the earlier or later-filed claim) is meant to trigger the one-year bar date.

Response:The rule is consistent with the language of 35 U.S.C. 135(a), as amended. The preamble of this final rule clarifies that the one-year period is calculated from publication of the respondent's claim. The statute's use of the phrase “a claim” is ambiguous. The Office recognizes that if the phrase is interpreted to include the petitioner's claim as a trigger, such a broad construction could violate due process. For example, the petitioner could be barred by publication of its own claim before it had any knowledge of the respondent's application. The Office believes that the Congress did not intend to prevent a true inventor from seeking a derivation proceeding in such situation. To resolve the ambiguity in the statute, the Office interprets the statute to mean that the trigger for the deadline is publication of the respondent's claim. This interpretation is reasonable, as the identified problems may be avoided if the trigger for the deadline is publication of the respondent's claim. Accordingly, the Office's interpretation is consistent with the statute and ensures that the first person to file the application is actually a true inventor.

Comment 12:One comment asked whether the time bar for filing a derivation includes the one-year anniversary date of the date of publication.

Response:The time period for filing a derivation petition includes the one-year anniversary date of the date of publication. For example, if the publication occurs on January 7, 2014, then the petition must be filed before January 8, 2015. If the one-year period expires on a Saturday, Sunday, or Federal holiday within the District of Columbia, the petition may be filed on the next succeeding business day. 35 U.S.C. 21(b). For example, if the publication occurs on July 3, 2014, then the petition must be filed before July 7, 2015 (July 3, 2015, being a Federal holiday; July 4, 2015, being a Saturday; and July 5, 2015, being a Sunday).

Comment 13:One comment suggested that the rules should make it clear whether potentially derived claims that are first presented and published in a continuing application will be deemed to relate back to an initial parent application that was published more than a year before the publication of the case in which the potentially derived claims are presented and published.

Response:Consistent with 35 U.S.C. 135(a), the one-year time period begins on the first publication date of a claim to an invention that is the same or substantially the same as the earlier application's claim to the invention, rather than the publication of a parent application (unless the publication of the parent application contains such a claim).

Comment 14:One comment requested clarification on how the Office intends to treat derivation petitions filed when a petitioner's claim is not otherwise in condition for allowance.

Response:A derivation petition filed in an application that is not otherwise in condition for allowance may be accorded a filing date under § 42.407 and considered timely filed if the petition complies with the statutory and rule requirements. Generally, once the petition has been accorded a filing date, the Office will hold the petition until the petitioner's claim is otherwise in condition for allowance.

Comment 15:One comment requested clarification on what proceedings are available when one application or patent has a post-AIA effective filing date and another party's application or patent has a pre-AIA effective filing date. The comment further requested that the proposed rules be amended by: (i) confirming that the earlier party could seek declaration of an interference, and the latter party could petition for derivation proceedings to be instituted; and (ii) indicating what action the Office would take when both types of proceedings are requested. The comment also recommended that when both types of proceedings are properly requested, the Office initiate the interference proceeding and handle the derivation issues as part of the interference.

Response:The Office appreciates the suggestion that in such situations the Office initiate the interference proceeding and handle the derivation issues as part of the interference. The Office will consider requests for interference proceedings and/or petitions to institute a derivation proceeding in light of the statutory provisions and the facts of the particular case. For instance, if both subject applications have issued as patents and neither is pending before the Office, the Office will not declare an interference, nor institute a derivation proceeding, between two patents.See35 U.S.C. 291. In the situation where the application that has a post-AIA effective filing date is pending before the Office, the applicant of such application may file a petition for a derivation proceeding under 35 U.S.C. 135(a), as amended, if appropriate.See§ 3(n)(1) of the AIA.

Comment 16:One comment explained that section 3(n) of the AIA is confusing with regard to the “effective date” stating “patent or application” when referring to the effective date in general,and “claim” when referring to interfering patents. The comment further explained that continuation-in-part patent applications or patents may contain claims that fall on either side of the March 16, 2013 date, and then all claims would not be subject to the provisions of AIA. The comment seeks clarification from the Office.

Response:Under section 3(n)(1) of the AIA, the first-inventor-to-file provisions of the AIA apply to any application that previously contained, or currently contains, a claim that has an effective filing date on or after March 16, 2013. Therefore, the first-inventor-to-file provisions apply to all of the claims in a continuation-in-part application that satisfies that standard. Additional information is provided in a separate rulemaking and guidance notice concerning the first-inventor-to-file provisions.See e.g., Changes to Implement the First Inventor to File Provisions of the Leahy-Smith America Invents Act(Notice of proposed rulemaking) (RIN 0651-AC77). Additional guidance will also be provided to the public as decisions are rendered and as they become available.

Content of Petition (§ 42.405)

Comment 17:Several comments expressed concern over the language of proposed § 42.405(a)(2)(ii). One comment suggested deleting proposed § 42.405(a)(2)(ii) requiring the “not patentably distinct” showing, because the statutory term “substantially the same” encompasses the “not patentably distinct” term and paragraphs (a)(2)(i) and (a)(2)(ii) of proposed § 42.405 are therefore redundant. The comment further suggested deletion of proposed § 42.405(b)(3)(i) for the same reason. Another comment requested clarification as to whether a patent would be allowed if based on a novel and nonobvious improvement to what was disclosed.

Response:In light of these comments, the Office has modified the proposed rules. Section 42.405, as adopted in this final rule, uses the standard of “same or substantially the same,” and § 42.401, as adopted in this final rule, defines “same or substantially the same” to mean patentably indistinct. In particular, § 42.405(a)(2)(ii), as adopted in this final rule, requires the petitioner to show that it has a claim that is the same or substantially the same as the invention that was actually disclosed to the respondent. Section 42.405(b)(3)(i), as adopted in this final rule, requires a showing that each of the respondent's claims to the derived invention is the same or substantially the same as the invention that was disclosed to the respondent. Where a respondent's claim is directed to subject matter that is not the same or substantially the same as what was disclosed, there would be insufficient basis upon which to institute a proceeding.

Comment 18:A comment suggested that proposed § 42.405(b) should be revised to requireprima facieevidence in the form of sworn testimony or other documentary evidence to demonstrate that: (i) Each allegedly derived claimed invention was derived from an inventor named in the petitioner's application; and (ii) the inventor or inventors from whom the allegedly derived claimed invention was derived did not authorize the filing of the earliest-filed application claiming such invention.

Response:The final rule clarifies that a showing must be made that the filing of the earliest filed application claiming the allegedly derived invention was not authorized by the petitioner.See§ 42.405(b). Documentary evidence alone is not sufficient. As provided in § 42.205(c), at least one affidavit that addresses the communication of the allegedly derived invention and lack of authorization for the respondent to file the earliest-filed application must accompany the petition. Documentary evidence may be sufficient as corroborative evidence depending on the facts of the proceeding.

Comment 19:One comment suggested that the rules should require that the petition disclose the entirety of the petitioner's case and effectively serve as the petitioner's main “trial brief.”

Response:Petitioners are encouraged to set forth their entire case and supporting evidence in their petitions, lest the petitioner risk a determination by the Board not to institute the derivation proceeding.See§§ 42.405 and 42.108(b). For instance, under § 42.405(c), a derivation showing is not sufficient unless it is supported by substantial evidence, including at least one affidavit addressing communication of the allegedly derived invention and lack of authorization that, if unrebutted, would support a determination of derivation. The showing of communication must be corroborated. Requiring such a showing prior to any institution of a proceeding is consistent with the Office's goal of avoiding institution of proceedings that lack merit and additional costs on both a respondent and a petitioner unnecessarily.

Comment 20:Several comments suggested that proposed § 42.405 requires too much detailed information and should only require identification of the basis of the contention and the evidence to support the contention. One comment suggested that the validity of a claim of derivation may be resolved in the derivation proceeding itself and need not be conclusively determined on the face of the petition. Another comment stated that the requirements for a sufficient showing to institute a proceeding seem onerous and that the more onerous burden should lie in proving derivation.

Response:The Office agrees that the ultimate question of whether an invention was derived from the petitioner is decided only after a derivation proceeding is instituted and completed. Further, the Office has taken into account the statutory requirements and the burden on the parties. As amended, 35 U.S.C. 135(a) requires that the petition be supported by substantial evidence and that the petition and evidence demonstrate that the standards for instituting a derivation proceeding are met. The rule is consistent with the statute and the Office's goal of avoiding institution of costly proceedings that lack merit.

Comment 21:Several comments suggested deleting the final sentence of proposed § 42.405(c), because corroboration should only be required after initiation of a derivation proceeding and an opportunity for discovery. One comment suggested expanded discovery for derivations, since the alleged deriver is likely to have information unavailable to the petitioner.

Response:The nature of derivation proceedings requires the Board to make credibility determinations based on the evidence presented. Requiring corroboration at the outset provides a greater likelihood that credible testimony is presented by the petitioner and is consistent with the Office's goal of avoiding institution of costly proceedings that lack merit. This is true even where testimony from someone other than the inventor is presented to support the allegation of derivation. Discovery prior to institution is not provided by the rules as it is the alleged inventor who conceived and communicated the conception of the invention to the alleged deriver and is in the best position to offer testimony or other evidence regarding the conception and communication. Further, it is well settled that an inventor's testimony must be corroborated.

Comment 22:Several comments suggested that requiring the petitioner to offer a proposed claim interpretation is burdensome as the petitioner already has reason to provide claim interpretation where necessary to set forth a sufficient showing, especially as to claim terms at issue.

Response:The Office believes that the petitioner's claim construction requirement is not unduly burdensome and that it will improve the efficiency of the proceeding. In particular, the petitioner's claim construction will help to provide sufficient notice to the respondent regarding what the petitioner believes to have been derived, and will assist the Board in analyzing whether aprima facieshowing of derivation has been made. During a proceeding, a claim of an application or unexpired patent will be given its broadest reasonable construction in light of the specification of the patent in which it appears. This means that the words of the claim will be given their plain meaning unless the plain meaning is inconsistent with the specification.In re Zletz,893 F.2d 319, 321 (Fed. Cir. 1989). In the absence of a special definition in the specification, a claim term is presumed to take on its ordinary and customary meaning, a meaning that the term would have to a person of ordinary skill in the art.In re Am. Acad. of Sci. Tech Ctr.,367 F.3d 1359, 1364 (Fed. Cir. 2004). Therefore, petitioners are not required to define every claim term, but rather merely provide a statement that the claim terms are presumed to take on their ordinary and customary meaning, and point out any claim term that has a special meaning and the definition in the specification.

Comment 23:One comment suggested that § 42.405 should indicate that its requirements are in addition to those of proposed §§ 42.8 and 42.22 if that is the Office's intent.

Response:The Office notes that proposed § 42.405(b) expressly provides that “[i]n addition to the requirements of §§ 42.8 and 42.22, the petition must: * * *” Therefore, the Office assumes that the comment supports the proposed provision and adopts the language without any modification. As such, § 42.405, as adopted in this final rule, expressly provides that the petitioner also must comply with §§ 42.8 and 42.22. § 42.405(b).

Comment 24:One comment suggested that, because derivation requires a showing of earlier conception by the party alleging derivation, the rule should require the petition include at least one affidavit addressing conception, and corroboration of the conception.

Response:Derivation requires both earlier conception by the party alleging derivation as well as communication of the conception. Thus, by requiring demonstration of derivation, the rule necessarily requires a showing of earlier conception as well as corroboration of that earlier conception. § 42.405(c).

Comment 25:Several comments expressed concern about the lack of a “count” that defines the derived subject matter or a separate phase that allows for a time to define what is included as derived subject matter and time for dealing with other issues such as inventorship disputes where possible joint inventorship is an issue.

Response:Derivation proceedings are distinct from interferences such that a “count” may lead to confusion. In a derivation proceeding, a petitioner must make a showing as to each of the respondent's claims that it believes is derived subject matter. § 42.405(b)(3)(i). Specifically, the petitioner must demonstrate that the respondent acquired knowledge of the claimed invention from the petitioner. Hence, the “acquired knowledge,” which the petitioner must define as part of its proof, determines the scope of subject matter that would have been anticipated or obvious from the acquired knowledge. Other issues, such as inventorship issues, can be raised by authorized motion. § 42.20. The Board will set a schedule for the filing of any authorized motions. § 42.25.

Comment 26:Several comments asked for clarification as to a respondent's burden. One comment suggested that the Office should study the possibility of imposing a certain degree of burden of proof on the respondent as well as on the petitioner and should provide examples of what type of evidence is admissible. Another comment asked for examples of what would be sufficient rebuttal evidence under § 42.405(c).

Response:Under the AIA, the first party to file an application to an invention that is otherwise patentable is entitled to the patent. 35 U.S.C. 102. A petitioner seeking to change the status quo by petitioning for a derivation proceeding appropriately is charged with the burden of proof. 35 U.S.C. 135(a), as amended. The showing must be sufficient such that the petitioner would prevail if a respondent did not provide any rebuttal of the showing. A respondent may submit rebuttal evidence in an opposition under § 42.23. Sufficiency of rebuttal evidence will be considered and given appropriate weight on a case-by-case basis after institution of a proceeding.

Comment 27:Several comments suggested that the phrase “invention disclosed to the respondent” is undefined. One comment also suggested that standing should be based on the “claimed invention” rather than a vague concept of the invention.

Response:In view of the comments, § 42.405(b)(2), as adopted in this final rule, provides “a claimed invention” rather than “an invention.” The AIA requires that the Board in a derivation proceeding determine whether an inventor named in the earlier application derived the claimed invention from an inventor named in the petitioner's application. 35 U.S.C. 135(a). The AIA also requires that a petitioner provide substantial evidence supporting its allegations of derivation. In instituting a derivation proceeding, the Board is to determine whether a petition meets standards for institution.Id.Consistent with the statute, the rules provide that substantial evidence of derivation include a showing that the invention in question was disclosed to the earlier filer,i.e.,the respondent.See§ 42.405. For instance, § 42.405(a)(2) requires that the petition must show that the petitioner's claim is the same or substantially the same as the invention disclosed to the respondent, and that the petitioner's claim is the same or substantially the same as the respondent's claimed invention.

Comment 28:Several comments expressed concern about the corroboration requirement. One comment suggested that the corroboration requirement for the showing of communication is an outdated requirement in a digital age where verification of the authenticity of an electronic communication can be proven by other means than submission of a statement of a purportedly corroborating witness. Another comment asked for examples of sufficient corroboration.

Response:The rule does not limit the form that corroboration must take. In the instance where an inventor has testified that a communication has occurred, it may be appropriate to corroborate the testimony with proof of an electronic communication. The Board expects to consider each situation on a case-by-case basis and to use a “rule of reason” in determining whether corroboration is sufficient. For example, communications with the respondent or with the Office, both of which are independent determination of authenticity.

Comment 29:One comment asked for clarification of whether one affidavit addressing communication will be enough to be considered “substantial evidence” of derivation, or whether something additional will be required, whether corroboration of communication also must be shown via an affidavit, and whether evidence of a written communication is required.

Response:Under § 42.405(c), a derivation showing is not sufficient unless it is supported by substantial evidence, including at least one affidavitaddressing communication of the derived invention and lack of authorization that, if unrebutted, would support a determination of derivation. Whether a petition makes a sufficient showing of derivation will be decided on a case-by-case basis. The submission of one affidavit addressing the communication and the lack of authorization is a minimum requirement but is not a guarantee that a proceeding will be instituted. The Board will look at the substance and credibility of all of the evidence submitted in determining whether to institute a proceeding. The rules do not require that corroboration be in the form of an affidavit or written communication. The Board expects to apply a “rule of reason” when accessing sufficiency of corroboration.

Comment 30:Several comments suggested that a petitioner should not be required to have patentable subject matter in order for a proceeding to be instituted. One noted that various circumstances could make a claim unpatentable to the petitioner, yet patentable to others, such as intervening prior art. Thus, this requirement is contrary to the basic reason for derivations. One comment suggested that proposed § 42.408 should be revised to provide that the Office may act on a petition if either party has an allowable claim to the subject matter at issue or at either or both parties' request, and that a petitioner should be required to update the status of the claims after notice that the Office intends to consider the petition.

Response:Prior to instituting a proceeding that is both costly and time-consuming to the parties and the Office, a determination will be made to ensure that each party is claiming subject matter that is actually patentable but for the potential derivation issue. While ordinarily a derivation will not be instituted when none of petitioner's c