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Skip Navigation HomeHelpResourcesContact Us Advanced Search Start of Main Content Changes to Require Identification of Attributable Owner This Proposed Rule document was issued by the Patent and Trademark Office (PTO) For related information, Open Docket Folder Show agency attachment(s) DEPARTMENT OF COMMERCE
[Docket No.: PTO-P-2013-0040]
SummaryThe United States Patent and Trademark Office (Office) is proposing changes to the rules of practice to facilitate the examination of patent applications and to provide greater transparency concerning the ownership of patent applications and patents. This initiative is one of a number of executive actions issued by the Administration that are designed to ensure the highest-quality patents, enhance competition by providing the public with more complete information about the competitive environment in which innovators operate, enhance technology transfer and reduce the costs of transactions for patent rights by making patent ownership information more readily and easily available, reduce abusive patent litigation by helping the public defend itself against frivolous litigation, and level the playing field for innovators. The Office is proposing in this document to require that the attributable owner, including the ultimate parent entity, be identified during the pendency of a patent application and at specified times during the life of a patent. The Office is specifically proposing that the attributable owner be identified on filing of an application (or shortly thereafter), when there is a change in the attributable owner during the pendency of an application, at the time of issue fee and maintenance fee payments, and when a patent is involved in supplemental examination, ex parte reexamination, or a trial proceeding before the Patent Trial and Appeal Board (PTAB). The Office is also seeking comments on whether the Office should enable patent applicants and owners to voluntarily report licensing offers and related information to the Office, which the Office will then make available to the public in an accessible online format.
Dates Comment deadline date: Written comments must be received on or before March 25, 2014.
AddressesComments should be sent by electronic mail message over the Internet addressed to: AC90.comments@uspto.gov. Comments may also be submitted by postal mail addressed to: Mail Stop Comments-Patents, Commissioner for Patents, P.O. Box 1450, Alexandria, VA 22313-1450, marked to the attention of James Engel, Senior Legal Advisor, Office of Patent Legal Administration, Office of the Deputy Commissioner for Patent Examination Policy.
Comments may also be sent by electronic mail message over the Internet via the Federal eRulemaking Portal. See the Federal eRulemaking Portal Web site (http://www.regulations.gov) for additionalinstructions on providing comments via the Federal eRulemaking Portal.
For Further Information ContactJames Engel, Senior Legal Advisor ((571) 272-7725), or Erin M. Harriman, Legal Advisor ((571) 272-7747), Office of Patent Legal Administration, Office of the Deputy Commissioner for Patent Examination Policy.
Supplementary InformationExecutive Summary: Purpose: On June 4, 2013, the White House issued five executive actions designed to increase transparency of the patent system, ensure the highest-quality patents, reduce abusive patent litigation and level the playing field for innovators. The first of these executive actions is titled “Making `Real Party in Interest' the New Default,” and calls for the Office to begin a rulemaking process to require patent applicants and patent owners to regularly update ownership information when the applicant or patent owner is involved in a proceeding before the Office, including designation of the “ultimate parent entity(ies)” of those owners. To help achieve the above goals as well as to improve the incentives for future innovation, to enhance competition by providing the public with more complete information about the competitive landscape and technology marketplace by making patent ownership information more readily available, and to help the Office carry out its task of patent examination, the Office is proposing changes to the rules of practice concerning the attributable owner of pending patent applications and patents. This document and the proposed rules have adopted the term “attributable owner” rather than “real party in interest” to avoid confusion given that the term “real party in interest” is used elsewhere in title 35, United States Code (e.g., 35 U.S.C. 118, 315, 317, 325, 327).
As with other procedural requirements of the Office, this proposal provides an applicant or patent owner with a means to correct omissions anderrors in the attributable owner information that has been reported. The notice also proposes to excuse good faith failures to notify the Office of the attributable owner or to provide correct or complete attributable owner information.
Background: On June 4, 2013, the White House Task Force on High-Tech Patent Issues published a paper detailing five executive actions and seven legislative recommendations “to protect innovators from frivolous litigation and ensure the highest-quality patents in our system.”Fact Sheet: White House Task Force on High-Tech Patent Issues, Legislative Priorities & Executive Actions. The first of the five executive actions calls for the Office to “begin a rulemaking process to require patent applicants and owners to regularly update ownership information when they are involved in proceedings before the [Office], specifically designating the `ultimate parent entity' in control of the patent or application.”Id. With this notice of proposed rulemaking, the Office is proposing changes designed to increase transparency by collecting ownership information of not just the titleholder (e.g., assignee), but also entities that are real-parties-in-interest because of their right to enforce an issued patent, as well as information about the entities who ultimately control these entities (i.e., the “ultimate parent entities”). The proposed rule is designed to collect information both during the application process and at certain times after a patent issues, and thus will affect both patent applicants and holders of issued patents.
As set forth in the Roundtable Notice, having accurate and up-to-date attributable owner information will facilitate patent examination and other parts of the Office's internal processes. As courts have previously recognized, the Office has the authority to promulgate regulations that “shall govern the conduct of proceedings in the Office.”Star Fruits S.N.C. v. U.S., 393 F.3d 1277, 1282 (Fed. Cir. 2005) (quoting 35 U.S.C. 2(b)(2)); see also Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1335 (Fed. Cir. 2008) (“To comply with section 2(b)(2)(A), a Patent Office rule must be `procedural'—i.e., it must `govern the conduct of proceedings in the Office.' ”). Pursuant to this authority, the Office may require the submission of information that is reasonably necessary to proper examination or treatment of the matter at hand, provided that such requests are not arbitrary or capricious. See Star Fruits, 393 F.3d at 1283-84.
There are recent trends towards greater liquidity in the markets for patent-related intellectual property. See, e.g., U.S. Dept. of Justice & Fed. Trade Comm'n, The Evolving IP Marketplace: Aligning Patent Notice and Remedies at 37-39 (2011) (“FTC Report”) (discussing the increasing importance of technology transfer from small, specialized firms to manufacturing firms and from large companies to spin-offs). Thus, the Office has a corresponding need for more regular ownership reporting and updating requirements for the Office's internal function. In particular, having such accurate and up-to-date attributable owner information will help the Office determine whether current representatives in any proceeding before the Office are authorized by the current applicant or owner. Likewise, having such attributable owner information will facilitate the Office's efforts to ensure that applicable conflict-of-interest provisions for Office personnel are followed.
Beyond providing these benefits to the Office, collecting attributable owner information and making it publicly available may have other potential benefits. In particular, collecting attributable owner information and making it publicly available may: (1) Enhance competition and increase incentives to innovate by providing innovators with information that will allow them to better understand the competitive environment in which they operate; (2) enhance technology transfer and reduce the costs of transactions forpatent rights since patent ownership information will be more readily and easily accessible; (3) reduce risk of abusive patent litigation by helping the public defend itself against such abusive assertions by providing more information about all the parties that have an interest in patent or patent applications; and (4) level the playing field for innovators.
In many cases, these types of ownership interests may be coextensive. Specifically, the titleholder (or assignee) is often the same entity that has the right to enforce the patent, and is not controlled by any other entity (and so would not have to separately report an ultimate parent entity). Most additional reporting will need to be done by companies that have complicated corporate structures and licenses, which often include the complex structures used by certain patent assertion entities (“PAEs”) to hide their true identities from the public. Some of this additional reporting may include exclusive licensees. Although exclusive licensees are sometimes confidential now, they would only need to be disclosed where their rights are so substantial that they have enforcement rights in the patent. In such circumstances, the public has a strong interest in knowing their identities in order to have an accurate picture of the competitive patent landscape, to allocate their research and development efforts appropriately, and to take licenses or purchase patents proactively and efficiently from thecorrect entities, as dictated by business needs.
After Patent Issuance: The Office proposes the following attributable owner reporting requirements for issued patents: (1) Maintenance Fee Requirement: The patent owner would be required to identify the attributable owner (or verify that the attributable owner information currently on record at the Office is correct) at the time each maintenance fee is paid; and (2) Post-Issuance Proceeding Requirement: The patent owner would be required to identify the attributable owner (or verifythat the attributable owner information currently on record at the Office is correct) at the time the patent becomes involved in certain post-issuance proceedings before the Office, including (1) any trial proceeding before the PTAB, such as any post grant review under 35 U.S.C. 321, inter partes review under 35 U.S.C. 311, covered business method patent review under section 18 of the AIA, or derivation proceeding under 35 U.S.C 135; (2) any request for supplemental examination under 35 U.S.C. 257(a); and (3) any ex parte reexamination proceeding under 35 U.S.C. 302.
Provision of Attributable Owner Information to the Public: While the Office would use attributable owner information for examination purposes in both published and unpublished applications, attributable owner information would be made available to the public in an application that has been published under 35 U.S.C. 122(b) or issued as a patent under 35 U.S.C. 151. The Office anticipates providing information about the current attributable owner, as well as a history of any attributable owner changes, in an accessible electronic format, such as via the public side of the Patent Application Information Retrieval (PAIR) system.Discussion of Specific RulesThe following is a discussion of proposed amendments to title 37 of the Code of Federal Regulations, Part 1:
Section 1.271(f) as proposed sets out the information concerning an entity that must be provided when that entity is being identified as an attributable owner. Section 1.271(f) as proposed specifically provides that when there is a requirement to identify the attributable owner, each entity constituting the attributable owner must be identified as follows: (1) The identification of a public company must include the name of the company, stock symbol, and stock exchange where the company is listed (proposed § 1.271(f)(1)); (2) the identification of a non-public company must include the name of the company, place of incorporation, and address of the principal place of business (proposed § 1.271(f)(2)); (3) the identification of a partnership must include the name of the partnership and address of the principal place of business (proposed § 1.271(f)(3)); (4) the identification of anatural person must include the full legal name, residence, and a correspondence address (proposed § 1.271(f)(4)); and (5) the identification of any other type of entity must include its name, if organized under the laws of a state, the name of that state and legal form of organization, and address of the principal place of business (proposed § 1.271(f)(5)).
Section 1.279 as proposed is limited to excusing failure or errors in a pending application. Where there has been a failure to identify the attributable owner within the time period set under § 1.273, or after mailing the notice of allowance, a failure either to confirm that the information on file at the Office is correct, or to identify the currentattributable owner within three months (non-extendable) from the date of mailing under § 1.277, that has resulted in abandonment of an application, the applicant's remedy (if the failure was unintentional) is by way of a petition to revive the abandoned application under the provisions of § 1.137.
Section 1.387: Section 1.387 as proposed addresses the situation in which the patent holder has failed to notify the Office of a change to the attributable owner, or has indicated an incorrect or an incomplete attributableowner, despite a good faith effort to comply with these requirements. Section 1.387 as proposed specifically provides that if, despite a good faith effort by the patent holder to notify the Office of the initial attributable owner, and of any changes to the attributable owner, in the manner required by §§ 1.273, 1.275, 1.277, 1.381, 1.383, and 1.385, the failure or error may be excused on petition accompanied by a showing of reason for the delay, error, or incompleteness and the petition fee set forth in § 1.17(g). Thus, proposed § 1.387 would be the applicable provision for corrections in an issued patent, regardless of whether the failure or error occurred during the application process (i.e., there was a failure to comply with §§ 1.273, 1.275, or 1.277) or after the patent issued (i.e., there was a failure to comply with §§ 1.381, 1.383, and 1.385).Rulemaking ConsiderationsA. Administrative Procedure ActThis document proposes to require that the attributable owner, including the ultimate parent entity, be identified during the pendency of a patent application and at specified times during the life of a patent. The changes in this rulemaking do not change the substantive criteria of patentability and also do not place any limits or conditions on the patent owner's ability to transfer ownership of, or any other interest in, a patent or patent application. Therefore, the changes proposed in this rulemaking involve rules of agency practice and procedure, and/or interpretive rules. See Bachow Commc'ns Inc. v. F.C.C., 237 F.3d 683, 690 (D.C. Cir. 2001) (rules governing an application process are procedural under the Administrative Procedure Act); Inova Alexandria Hosp. v. Shalala, 244 F.3d 342, 350 (4th Cir. 2001) (rules for handling appeals were procedural where they did not change the substantive standard for reviewing claims).
Accordingly, prior notice and opportunity for public comment are not required pursuant to 5 U.S.C. 553(b) or (c) (or any other law). See Cooper Techs, 536 F.3d at 1336-37 (Fed. Cir. 2008) (stating that 5 U.S.C. 553, and thus 35 U.S.C. 2(b)(2)(B), does not require notice and comment rulemaking for “interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice”) (quoting 5 U.S.C. 553(b)(A)). The Office, however, is publishing all of these proposed changes as it seeks the benefit of the public's views on the Office's proposed implementation.B. Initial Regulatory Flexibility Analysis1. Description of the Reasons That Action By the Agency Is Being ConsideredThe Office is proposing to amend the rules of patent practice to provide greater transparency concerning the ownership of pending patent applications and patents. The purpose of this rulemaking is to ensure the highest-quality patents, to facilitate patent examination at the Office, to enhance competition and increase incentives to innovate by providing innovators with information that will allow them to better understand the competitive environment in which they operate, enhance technology transfer and reduce the costs of transactions for patent rights by making patent ownership information more readily and easily available, to reduce risk of abusive patent litigation by helping the public defend itself against risk of abusive assertions by providing more information about the parties that have an interest in patents or patent applications, and to level the playing field for innovators.2. Succinct Statement of the Objectives of, and Legal Basis for, the Proposed RulesThe objective of the proposed rules is to provide greater transparency concerning the ownership of pending patent applications and patents to facilitate patent examination at the Office by requiring that the attributable owner, including the ultimate parent entity, be identified during the pendency of a patent application and at specified times during the life of a patent, and to further ensure that the ownership information the Office provides to the public is accurate and not misleading.
Further legal basis for the proposed rule comes from 35 U.S.C. 2(a). Because the Office publishes information it possesses related to an application or patent (subject to 35 U.S.C. 122), the Office has an interest in ensuring that such information is not misleading. The Office currently receives (and publishes) only assignment information that is voluntarily submitted by the applicant or patent owner. There is currently no requirement that changes in assignment information be updated, though current law protects against certain types of fraud if such updating occurs. See 35 U.S.C. 261. Consequently, the information the Office has on file may be outdated, which may be misleading to the public. Ensuring that the Office can provide information to the public that is not misleading is consistent with several statutory provisions directing the Office to disseminate information to the public as well as those directing the Office to provide access to information through electronic means. See 35 U.S.C. 2(a)(2) (creating a duty of “disseminating to the publicinformation with respect to patents”); 10(a)(4) (providing for publication of information, including “annual indexes of . . . patentees”); 10(b) (allowing the Director to publish the specified information set forth in item (4) of subsection 35 U.S.C. 10(a) of this section in a publication format “desirable for the use of the Office”) and 41(i) (creating a duty to provide access to information electronically).3. Description and Estimate of the Number of Affected Small Entities A. Size Standard and Description of Entities Affected. The Small Business Administration (SBA) small business size standards applicable to most analyses conducted to comply with the Regulatory Flexibility Act are set forth in 13 CFR 121.201. These regulations generally define small businesses as those with fewer than a specified maximum number of employees or less than a specified level of annual receipts for the entity's industrial sector or North American Industry Classification System (NAICS) code. As provided by the Regulatory Flexibility Act, and after consultation with the Small Business Administration, the Office formally adopted an alternate size standard as the size standard for the purpose of conducting an analysis or making a certification under the Regulatory Flexibility Act for patent-related regulations. See Business Size Standard for Purposes of United States Patent and Trademark Office Regulatory Flexibility Analysis for Patent-Related Regulations, 71 FR 67109 (Nov. 20, 2006), 1313 Off. Gaz. Pat. Office 60 (Dec. 12, 2006). This alternate small business size standard is SBA's previously established size standard that identifies the criteria entities must meet to be entitled to pay reduced patent fees. See 13 CFR 121.802. If patent applicants identify themselves on a patent application as qualifying for reduced patent fees, the Office captures this data in the Patent Application Location and Monitoring (PALM) database system, which tracks information on each patent application submitted to the Office.
Based upon the information in the Office's Revenue Accounting Management (RAM) system, the Office received the following fee payments in fiscal year 2013: (1) 296,481 issue fee payments (68,574 by small or micro entity applicants); (2) 153,875 first stage maintenance fee payments (27,076 by small or micro entity patent owners); (3) 99,249 second stage maintenance fee payments (16,692 by small or micro entity patent owners); and (4) 75,470 third stage maintenance fee payments (11,273 by small or micro entity patent owners). Thus, the Office estimates that 297,000 (266,481 rounded up to the nearest thousand) patent applicants, of which 69,000 (68,574 rounded up to the nearest thousand) are small or micro entities, will need to update attributable owner information each year due to the requirement to identify the attributable owner (or verify that the current attributable owner has been previously identified) at the time of issue fee payment, and the Office estimates that 329,000 (153,875 plus 99,249 plus 75,470, rounded up to the nearest thousand), of which 55,000 (27,076 plus 16,692 plus 11,273, rounded up to the nearest thousand) are small or micro entities, will need to update attributable owner information each year due to the requirement to identify the attributable owner (or verify that the attributableowner information currently on record at the Office is correct) at the time each maintenance fee is paid.
A patent attorney or general practice attorney would have the type of professional skills necessary for providing the attributable owner information required by the proposed rules. As discussed previously, the Office issued a request for comments in November of 2011 (Request for Comments on Eliciting More Complete Patent Assignment Information, 76 FR at 72372 et seq.) and issued a notice of a roundtable and request for comments in November of 2012 (Notice of Roundtable on Proposed Requirements for Recordation of Real Party-in-Interest Information Throughout Application Pendency and Patent Term, 77 FR at 70385 et seq.). The Office received input at this roundtable, including the suggestion that providing the attributable owner information might have a transaction cost of $100, depending upon the inclusiveness of the definition of attributable owner (which was discussed under the rubric of “real party in interest” at the roundtable). It was also suggested that the transaction could be less costly, and less frequently incurred, because reporting would occur at times applicants were already working with the application and would require ownership information that was readily known and could be easily reported. As described further below, given the Office's records concerning assignment recordation and feedback at the roundtable, the Office estimates thatin many instances, reporting ownership information in compliance with this proposed rule will have negligible costs. Applicants or patentees will often be reporting information readily known (e.g., that the patent is owned by the inventor, or that the patent is owned by the employer of the inventor to whom it has been assigned) and in many instances will be providing this information at a time they are otherwise interacting with the Office (e.g., upon application, upon issue, during a post-grant proceeding). This seems likely to have a minimal cost, and to require minimal time to report. Given the Office's records suggesting that many applications do not have more than one recorded assignment, in many instances applicants or patentees will likely be merely confirming the ownership information is unchanged, which should have a negligible cost.
Other countries, however, have their own patent laws, and an entity desiring a patent in a particular country must make an application for patent in that country, in accordance with the applicable law. Although the potential for overlap exists internationally, this cannot be avoided except by treaty(such as the Paris Convention for the Protection of Industrial Property, the Patent Law Treaty (PLT), or the Patent Cooperation Treaty (PCT)). Nevertheless, the Office believes that there are no other duplicative or overlapping rules.
L. Unfunded Mandates Reform Act of 1995: The changes set forth in this document do not involve a Federal intergovernmental mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, of 100 million dollars (as adjusted) or more in any one year, or a Federal private sector mandate that will result in the expenditure by the private sector of 100 million dollars (as adjusted) or more in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 1501 et seq. M. National Environmental Policy Act: This rulemaking will not have any effect on the quality of the environment and is thus categorically excluded from review under the National Environmental Policy Act of 1969. See 42 U.S.C. 4321 et seq. N. National Technology Transfer and Advancement Act: The requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because this rulemaking does not contain provisions which involve the use of technical standards.
Needs and Uses: This information collection is necessary in order to provide the Office and the public with up-to-date information concerning the attributable owner of a patent or patent application. The Office will use the information collected to facilitate patent examination and other parts of the Office's internal processes by helping to: (1) Ensure that a “power of attorney” is current in each application or proceeding before the Office; (2) avoid potential conflicts of interest for Office personnel; (3) determine the scope of prior art under the common ownership exception under 35 U.S.C. 102(b)(2)(C) and uncover instances of doublepatenting; (4) verify that the party making a request for a post-issuance proceeding is a proper party for the proceeding; and (5) ensure that the information the Office provides to the public concerning published applications and issued patents is accurate and not misleading.
List of Subjects in 37 CFR Part 1Administrative practice and procedure, Courts, Freedom of Information, Inventions and patents, Reporting and record keeping requirements, Small Businesses.
For the reasons set forth in the preamble, 37 CFR part 1 is proposed to be amended as follows:Part 1 Rules of Practice in Patent Cases
Authority35 U.S.C. 2(b)(2).
By a micro entity (§ 1.29)$50.00
By a small entity (§ 1.27(a))$100.00
By other than a small or micro entity$200.00
3. New undesignated center headings and new §§ 1.271, 1.273, 1.275, 1.277, and 1.279 are added immediately after § 1.251 to read as follows:
Attributable Owner§ 1.271
(4) Any other organization or corporate form not specifically listed inparagraphs (d)(1), (d)(2), or (d)(3) of this section that holds an interest in an application or patent.
(g) Except for shareholders of a public company, the presence of a corporate form, partnership, or other association, does not preclude an entity who may also be a shareholder or partner in such an identified attributable owner from a requirement to be separately identified as an attributable owner if the entity is also described in paragraph (a), (b) or (c) of this section as an entity qualifying as an attributable owner.Identification of Attributable Owner in Pending Applications§ 1.273
§ 1.275
4. A new undesignated center heading and new §§ 1.381, 1.383, 1.385, and 1.387 are added immediately after § 1.378 to read as follows:
Identification of Attributable Owner in PatentsInvolved in Proceedings Before the Office§ 1.381
§ 1.383
§ 1.385
(c) A reply or any other paper filed by the patent owner in an ex parte reexamination proceeding must be accompanied by a notice identifying the current attributable owner as defined in § 1.271, unless such a notice has previously been filed by the patent owner. If there is a change to the attributable owner as defined in § 1.271 during the pendency of the reexamination proceeding, the patent owner has three months from the date of the change to the attributable owner within which to file a notice identifyingthe current attributable owner as defined in § 1.271. This three-month period is not extendable.
§ 1.387
[FR Doc. 2014-01195 Filed 1-23-14; 8:45 am]BILLING CODE 3510-16-P
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