Patent Appeal and Interference Practice

SUMMARY: The Patent and Trademark Office (PTO) is amending the rules of

practice in patent cases relating to patent appeal and interference

proceedings. The changes include amendments to conform the interference

rules to new legislative requirements and a number of clarifying and

housekeeping amendments.

EFFECTIVE DATE: This document is effective April 21, 1995, except

Sec. 1.11(e) which is effective March 17, 1995.

FOR FURTHER INFORMATION CONTACT:

Fred E. McKelvey by telephone at (703) 603-3361 or by mail marked to

the attention of Fred E. McKelvey at P.O. Box 15647, Arlington,

Virginia 22215.

SUPPLEMENTARY INFORMATION: A Notice of Proposed Rulemaking was

published in the Federal Register (59 FR 50181) on October 3, 1994, and

in the Official Gazette of the Patent and Trademark Office (1167 Off.

Gaz. Pat. Office 98) on October 25, 1994. In response to a request for

written comments, twenty-six written comments were received. A public

hearing was held on December 7, 1994, at which four witnesses

testified. The written comments and the suggestions made at the public

hearing represent the views of fifteen individuals and corporations and

three patent law associations, namely, the Committee on Interferences

of the American Bar Association, the Interference Committee of the

American Intellectual Property Law Association and the Japan

Intellectual Property Association. These comments and suggestions are

addressed below in the discussion of the rule changes to which they

pertain. A number of suggested rule changes, though meritorious, cannot

be adopted at this time because they are believed to be outside the

scope of the present rulemaking. Accordingly, those suggestions will be

the subject of a future rulemaking.

The provisions of the rules, as amended, will be applied in pending

interferences to the extent reasonably possible. However, it is the

desire of PTO to avoid applying the rules, as adopted, to pending

interferences where substantial prejudice would result. For example,

generally speaking, in cases where the periods for filing preliminary

motions and preliminary statements have been set, the current

preliminary motion and preliminary statement rules will apply, although

parties are free to voluntarily comply with the rules as amended.

Generally speaking, in cases where the testimony periods have been set,

the current testimony and record rules will apply. The question of

whether substantial prejudice will result in a particular case is a

matter within the discretion of the administrative patent judge or the

Board.

I. Amendments Responsive to Adoption of Public Laws 103-182 and

103-465

As indicated in the Notice of Proposed Rulemaking, several of the

amendments to the interference rules (i.e., 37 CFR 1.601 et seq.) are

responsive to Public Law 103-182, 107 Stat. 2057 (1993) (North American

Free Trade Agreement Implementation Act, hereinafter NAFTA

Implementation Act), which amended 35 U.S.C. 104 to permit an applicant

or patentee, with respect to an application filed on or after December

8, 1993, to rely on activities occurring in a ``NAFTA country'' to

prove a date of invention no earlier than December 8, 1993, except as

provided in 35 U.S.C. 119 and 365. On December 8, 1994, which was

subsequent to publication of the Notice of Proposed Rulemaking, Public

Law 103-465, 108 Stat. 4809 (1994) (Uruguay Round Agreements Act) was

signed into law, which further amended 35 U.S.C. 104 to permit an

applicant or a patentee, with respect to an application filed on or

after January 1, 1996, to rely on activities occurring in a WTO member

country to prove a date of invention no earlier than January 1, 1996,

except as provided in 35 U.S.C. 119 and 365. Section 104, as amended by

Public Law 103-465, reads as follows:

Section 104. Invention made abroad.

(a) IN GENERAL.--

(1) PROCEEDINGS.--In proceedings in the Patent and Trademark

Office, in the courts, and before any other competent authority, an

applicant for a patent, or a patentee, may not establish a date of

invention by reference to knowledge or use thereof, or other

activity with respect thereto, in a foreign country other than a

NAFTA country or a WTO member country, except as provided in

sections 119 and 365 of this title.

(2) RIGHTS.--If an invention was made by a person, civil or

military--

(A) while domiciled in the United States, and serving in any

other country in connection with operations by or on behalf of the

United States,

(B) while domiciled in a NAFTA country and serving in another

country in connection with operations by or on behalf of that NAFTA

country, or

(C) while domiciled in a WTO member country and serving in

another country in connection with operations by or on behalf of

that WTO member country,

that person shall be entitled to the same rights of priority in the

United States with respect to such invention as if such invention

had been made in the United States, that NAFTA country, or that WTO

member country, as the case may be.

(3) USE OF INFORMATION.--To the extent that any information in a

NAFTA country or a WTO member country concerning knowledge, use, or

other activity relevant to proving or disproving a date of invention

has not been made available for use in a proceeding in the Patent

and Trademark Office, a court, or any other competent authority to

the same extent as such information could be made available in the

United States, the Commissioner, court, or such other authority

shall draw appropriate inferences, or take other action permitted by

statute, rule, or regulation, in favor of the party that requested

the information in the proceeding.

(b) DEFINITIONS.--As used in this section--

(1) the term `NAFTA country' has the meaning given that term in

section 2(4) of the North American Free Trade Agreement

Implementation Act; and

(2) the term `WTO member country' has the meaning given that

term in section 2(10) of the Uruguay Round Agreements Act.

Section 2(4) of the NAFTA Implementation Act is codified at 19 U.S.C.

3301; Sec. 2(10) of the Uruguay Round Agreements Act is codified at 19

U.S.C. 3501.

The Notice of Proposed Rulemaking proposed adding a new paragraph

(r) to Sec. 1.601 defining ``NAFTA country'' to mean ``NAFTA country''

as defined in section 2(4) of the NAFTA Implementation Act and ``non-

NAFTA country'' to mean a country other than a NAFTA country. One

comment questioned whether ``NAFTA country'' should be defined in the

rules to include the United States. The answer is no. ``NAFTA country''

as used in 35 U.S.C. 104 has the meaning given that term in section

2(4) of the NAFTA Implementation Act, which refers to only Canada and

Mexico. Another comment observed that the proposed terms ``NAFTA

country'' and ``non-NAFTA country'' do not appear to contemplate that

inventive acts may occur in a foreign place that is not part of any

``country'' and suggested either using the phrase ``outside the United

States or a NAFTA country'' instead of ``non-NAFTA country'' or else

defining ``non-NAFTA country'' to mean ``a place other than the United

States or a NAFTA country.'' The comment is well [[Page 14489]] taken.

In view of the comment and the amendment of 35 U.S.C. 104 by the

Uruguay Round Agreements Act to permit reliance on activities in WTO

member countries, the proposed term ``NAFTA country'' is replaced in

Secs. 1.622, 1.623, 1.624 and 1.628, which set forth the requirements

for preliminary statements and for correcting preliminary statements,

by the phrase ``NAFTA country or WTO member country'' and the proposed

term ``non-NAFTA country'' is replaced by the phrase ``place other than

the United States, a NAFTA country or a WTO member country.''

Furthermore, the references in Secs. 1.622(b) and 1.623(a) to the

``second sentence of 35 U.S.C. 104'' have been changed to ``35 U.S.C.

104(a)(2)'' to reflect the fact that 35 U.S.C. 104 as amended by the

Uruguay Round Agreements Act includes paragraphs (a) (1), (2) and (3).

For example, Sec. 1.622(b) is revised to read:

(b) The preliminary statement shall state whether the invention

was made in the United States, a NAFTA country (and, if so, which

NAFTA country), a WTO member country (and if so, which WTO member

country), or in a place other than the United States, a NAFTA

country, or a WTO member country. If made in a place other than the

United States, a NAFTA country, or a WTO member country, the

preliminary statement shall state whether the party is entitled to

the benefit of 35 U.S.C. 104(a)(2).

For the above-stated reasons, Sec. 1.601 is revised by adding new

paragraph (r), which, as proposed, defines ``NAFTA country'' to have

the meaning given that term in section 2(4) of the North American Free

Trade Act Implementation Act, Pub. L. 103-182, 107 Stat. 2057 (1993).

However, since, as noted above, the term ``non-NAFTA country'' is not

being adopted, the proposal to also define that term in Sec. 1.601(r)

is hereby withdrawn. Section 1.601 is also revised to include a new

paragraph (s) that defines ``WTO member country'' to have the meaning

given that term in section 2(10) of the Uruguay Round Agreements Act,

Pub. L. 103-465, 108 Stat. 4809 (1994).

Section 1.684, which relates to the taking of testimony in a

foreign country, is removed and reserved in view of the amendments to

Secs. 1.671-72. Section 1.672 is amended by revising paragraph (a),

revising current paragraph (b) and redesignating parts of it as new

paragraphs (b), (c) and (d), removing and reserving paragraph (c) and

redesignating it as new paragraph (e), revising paragraphs (d) and (e)

and redesignating them as new paragraphs (f) and (g), and redesignating

paragraph (f) as new paragraph (h).

Specifically, the Notice of Proposed Rulemaking proposed amending

Sec. 1.672(a) to require that ``testimony not compelled under 35 U.S.C.

24 or compelled from a party or in another country'' be taken only by

affidavit. Several comments questioned whether the term ``compelled''

also applies to the phrase ``in another country'' and suggested

inserting ``compelled'' before that phrase if that is the intent.

Inasmuch as the comment correctly states the intent, the suggestion in

the comment is being adopted.

One comment supported limiting non-compelled direct testimony to

affidavits on the ground that it will reduce the cost of submitting

testimony-in-chief and will eliminate economic harassment by a more

affluent party of a less affluent opponent, since the less affluent

opponent will no longer be required to pay the expense of counsel to

attend depositions called by the more affluent party for taking direct

testimony. Several comments were opposed, maintaining that affidavits

are inherently less credible than live testimony. One comment states:

Ours is the only country that supports interferences and we

should be proud of it, because it demonstrates our commitment to the

concept that it is more important to seek right and justice than to

settle for a single arbitrary rule of convenience, no matter how

convenient. Even if we don't always secure the right result, at

least we try. As we invite the rest of the world to become full

participants in this uncommon philosophy, we should endeavor to

present it in its best light.

How we conduct a trial is a centerpiece of our judicial system.

Our interference trial by deposition is a reasonable compromise from

a trial in a courtroom type setting. But a trial by affidavit is no

trial at all! Affidavits are inevitably contrived, artificial, and

often argumentative. They cannot substitute for the extemporaneous

words of a witness (even if well coached), and cross-examination is

not likely to reconstruct the real truth. Even if it is just in a

nuance of expression, it is gone.

The current approach of providing a choice between deposition

and affidavit testimony is difficult to accept, but at least it is

justifiable on the basis that so many patent attorneys simply don't

know how to conduct a deposition, while they do have some experience

with affidavits. But the proposal to make affidavits mandatory for

direct testimony is contrary to my understanding of American

jurisprudence.

Direct testimony on behalf of a party by oral deposition is said to

be advantageous to the opponent in that the testimony is the witness'

own, the demeanor of the witness can be observed by the opponent (but

demeanor is not observed by any member of the Board), and cross-

examination can be carried out without a period during which it is said

that the witness can be coached in preparation for cross-examination.

However, under current practice a party can elect to deprive its

opponent of these advantages by electing to use affidavits. Deposition

testimony is also said to be advantageous to the party offering the

testimony, who may find it more convenient to present the witness at a

single deposition for direct and cross-examination than to first

prepare an affidavit for direct testimony and later produce the witness

at a deposition for cross-examination by an opponent. These supposed

advantages are believed to be outweighed by the advantages of requiring

that direct non-compelled testimony be in affidavit form. As recognized

by those who favor direct testimony by affidavit, there are at least

two advantages to taking direct testimony by affidavit, i.e., (1)

Reducing the cost of presenting a party's own direct testimony and (2)

avoiding the expense of attending an opponent's depositions for direct

testimony. There are a number of other advantages when direct testimony

is taken by affidavit rather than deposition. First, because an

opponent will have seen all of the party's direct testimony prior to

beginning cross-examination, the opponent should be able to carry out a

more pointed and efficient cross-examination, thereby avoiding the need

to recall a witness for further examination during the opponent's

rebuttal case, which can be costly in time and expense to both the

party and the opponent. Second, a party presenting direct testimony by

affidavit is less likely to inadvertently, and perhaps fatally, omit an

essential part of its proofs than when presenting direct testimony by

oral deposition. Third, affidavit testimony will be advantageous to the

Board because affidavit testimony can be evaluated more expeditiously

than can deposition transcripts, which frequently present the facts in

an incoherent manner and too often include a considerable amount of

disruptive attorney colloquy. Fourth, in the case of direct testimony

by persons testifying in a foreign language, testimony by affidavit (in

the English language) should be considerably less cumbersome than

testimony by oral deposition through translators.

Two comments suggested that there may be cases in which both

parties find it mutually convenient to present their direct testimony

by oral deposition and that under these circumstances the

administrative patent judge should be allowed to authorize such

depositions. The suggestion is not being adopted,

[[Page 14490]] because it would eliminate the above-noted advantages of

reducing the likelihood of omitting an essential part of the proofs and

having the Board consider direct testimony presented in a more coherent

form.

Another comment suggested that there appears to be no need why all

testimony abroad must be by oral deposition, noting, for example, that

a third-party witness may be willing to give an affidavit comprising

the direct testimony, provided cross-examination will be conducted in

the witness's home country. Still another comment asked how the parties

should handle a situation where a party's witness residing in a foreign

country, due to health or other serious impediment, is unable to travel

to the United States for cross-examination, but is willing to testify

in the foreign country, which allows testimony, for example, only by

written interrogatories. The answer in both situations, as well as in

other unusual situations not provided for by the rules, is to file a

motion (Sec. 1.635) for permission to take the testimony in a manner

other than by deposition. The motion may or may not be granted

depending on the particular circumstances. In order to make it clear

that the administrative patent judge and the Board have discretion in

unusual circumstances to grant appropriate relief, Sec. 1.672 is

further revised by adding a new paragraph (i) reading as follows:

(i) In an unusual circumstance and upon a showing that testimony

cannot be taken in accordance with the provisions of this subpart,

an administrative patent judge upon motion (Sec. 1.635) may

authorize testimony to be taken in another manner.

Section 1.672(b), as it was proposed to be revised in the Notice of

Proposed Rulemaking, includes a requirement that a party presenting

testimony of a witness by affidavit, within the time set by the

administrative patent judge for serving affidavits, file a copy of the

affidavit. Since, for reasons discussed infra, Sec. 1.671(e) is being

retained in modified form rather than being removed and reserved, as

was proposed, Sec. 1.672(b) as adopted, like current Sec. 1.672(b),

permits a party to file a copy of the affidavit or, if appropriate, a

notice under 1.671(e). If the affidavit relates to a party's case-in-

chief, it shall be filed or noticed no later than the date set by an

administrative patent judge for the party to file affidavits for its

case-in-chief. If the affidavit relates to a party's case-in-rebuttal,

it shall be filed or noticed no later than the date set by an

administrative patent judge for the party to file affidavits for its

case-in-rebuttal. A party shall not be entitled to rely on any document

referred to in the affidavit unless a copy of the document is filed

with the affidavit. A party shall not be entitled to rely on anything

mentioned in the affidavit unless the opponent is given reasonable

access to the thing. A thing is something other than a document.

As proposed in the Notice of Proposed Rulemaking, a new paragraph

(c) is added to Sec. 1.672 stating that where an opponent objects to

the admissibility of any evidence contained in or submitted with an

affidavit, the opponent must file and serve objections stating with

particularly the nature of the objection. Any objection should identify

the specific Federal Rule of Evidence that renders the evidence

inadmissible and shall explain why the Rule applies to the evidence

sought to be introduced. No oppositions to the objections are

authorized. Rather, the party may respond by filing supplemental

evidence in the form of affidavits, official records and printed

publications. Alternatively, the party may determine that the objection

is without merit and do nothing. One comment suggested that

``supplemental affidavits and supplemental official records and printed

publications'' in the third sentence of Sec. 1.672(c) as proposed be

changed to ``one or more supplemental affidavits, official records or

printed publications.'' The suggestion is being adopted. The same or

similar changes have been made in the third sentence of Sec. 1.682(c)

and in the third sentence of Sec. 1.683(b); in the third sentence of

Sec. 1.688(b) ``supplemental affidavits'' has been changed to ``one or

more supplemental affidavits.'' Section 1.672(c) further provides that

any objections to the admissibility of any evidence contained in or

submitted with a supplemental affidavit shall be made only by a motion

to suppress under Sec. 1.656(h).

As proposed in the Notice of Proposed Rulemaking, Sec. 1.672 is

revised by adding a new paragraph (d) requiring any cross-examination

of an affiant to be by deposition at a reasonable location within ``the

United States,'' which is defined in Sec. 1.601(p) and 35 U.S.C. 100(c)

to mean ``the United States of America, its territories and

possessions.'' For purposes of the interference rules, the term

``territories and possessions'' is broadly construed to refer to all

territories and possessions of the United States, including, for

example, the Commonwealth of Puerto Rico.

An opponent who believes that a party is producing an affiant for

cross-examination in an ``unreasonable'' location may move (Sec. 1.635)

for entry of an order by an administrative patent judge to set the

location of the deposition for cross-examination. Paragraph (d) also

requires that the party whose witness is to be cross-examined give

notice of the deposition under Sec. 1.673(e), obtain a court reporter

and provide a translator if the witness will not testify in English.

Although not expressly set forth in the rules as amended, it should be

understood that any party attending the deposition can bring its own

translator or the parties can agree to share the cost of a single

mutually agreeable translator.

Comments were received against the proposal that Sec. 1.672(d)

require cross-examination of affiants to be conducted by oral

deposition ``at a reasonable location within the United States.'' One

comment suggested that requiring a witness who resides in a foreign

country to travel to the United States for cross-examination will be

extremely inconvenient where the witness is a key person for a company.

The comment also suggested that the term ``United States'' be amended

to additionally include U.S. embassies and/or consulates in foreign

countries, at least for purposes of conducting cross-examination. The

suggestion is not being adopted. Given the time differences between the

United States and Europe or the United States and Asia, it is highly

likely that administrative patent judges would not be on duty to rule

on telephonic requests for admissibility of evidence. Furthermore, a

party whose witness is to testify on cross-examination at a ``trial''

(i.e., interference proceeding) in the United States should produce the

witness for cross-examination at a reasonable location within the

United States. Finally, in view of PTO's general lack of experience

regarding procedures for, and difficulties which may arise in, taking

deposition testimony in a foreign country, PTO has decided, at least

for the time being, to take a conservative approach regarding taking

testimony in a foreign country. The approach will be reevaluated after

PTO gains some experience with foreign deposition testimony taken

pursuant to Sec. 1.671(h).

One comment suggested inserting a comma after ``reporter'' in the

fifth sentence of proposed Sec. 1.672(d), as well as in the fifth

sentences of proposed Secs. 1.682(d), 1.683(c) and 1.688(c). The

suggestion is being adopted.

The Notice of Proposed Rulemaking proposed to redesignate current

Sec. 1.672(d) (``When a deposition is authorized under this subpart, if

the parties agree in writing, the deposition may be taken before any

person [[Page 14491]] authorized to administer oaths, at any place,

upon any notice, and in any manner, and when so taken may be used like

other depositions.'') as Sec. 1.672(f). One comment questioned whether

Sec. 1.672(f) (former Sec. 1.672(d)) applies to cross-examination

deposition testimony authorized by Secs. 1.672(d), 1.673(a), 1.682(d),

1.683(c) and 1.688(c). Implicit in the comment is a question of whether

proposed Sec. 1.672(f) would authorize the parties, with respect to

deposition testimony that has been authorized by the rules or by an

administrative patent judge to be taken in the United States, to agree

to take the deposition outside the United States. For the reasons

discussed above, the parties may not agree, absent the permission of an

administrative patent judge or the Board, to take a deposition outside

the United States. Accordingly, Sec. 1.672(f), as amended, provides

that depositions authorized to be taken within the United States are to

be taken within the United States: ``When a deposition is authorized to

be taken within the United States under this subpart and if the parties

agree in writing, the deposition may be taken in any place within the

United States, before any person authorized to administer oaths, upon

any notice, and in any manner, and when so taken may be used like other

depositions.''

Current Sec. 1.672(e), which is being redesignated as

Sec. 1.672(g), reads as follows: ``If the parties agree in writing, the

testimony of any witness may be submitted in the form of an affidavit

without opportunity for cross-examination. The affidavit shall be filed

in the Patent and Trademark Office.'' Although not proposed in the

Notice of Proposed Rulemaking, this section is revised to be consistent

with the other amendments to Secs. 1.671-73 so as to read as follows:

``If the parties agree in writing, the affidavit testimony of any

witness may be submitted without opportunity for cross-examination.''

As proposed in the Notice of Proposed Rulemaking, current

Sec. 1.672(f), which concerns the filing of agreed statements setting

forth how a particular witness would testify if called or the facts in

the case of one or more of the parties, is redesignated as

Sec. 1.672(h).

In addition to the proposed amendments discussed above, current

Sec. 1.672(b) is revised, as proposed in the ``Miscellaneous

Amendments'' part of the Notice of Proposed Rulemaking, by deleting the

third sentence, which specifies the type of paper to be used for

affidavits, as superfluous in view of Sec. 1.677(a); and in paragraph

(d), the fifth sentence (``A party electing to present testimony of a

witness by deposition shall notice a deposition of the witness under

Sec. 1.673(a).'') is removed as superfluous in view of the second

sentence of new Sec. 1.672(d).

In Sec. 1.671, the Notice of Proposed Rulemaking proposed to amend

paragraph (a) to read as follows: ``Evidence consists of testimony and

exhibits, official records and publications filed under Sec. 1.682,

testimony from another interference, proceeding, or action filed under

Sec. 1.683, and discovery relied upon under Sec. 1.688, and the

specification (including claims) and drawings of any application or

patent: * * *.'' One comment suggested that ``and discovery'' be

changed to ``discovery'' in order to remove an unnecessary ``and.'' The

suggestion is being adopted. Another comment suggested inserting ``and

exhibits'' after ``testimony'' in the phrase ``testimony from another

interference, proceeding, or action under Sec. 1.683.'' The suggestion

is being adopted, but with the term ``exhibits'' prefaced by

``referenced'' to make it clear that it relates only to exhibits

referred to by a witness in an affidavit or during an oral deposition.

Clarification is necessary because, as noted in the discussion of

Sec. 1.653(c)(5), infra, the term ``exhibit'' also includes official

records and printed publications relied on under Sec. 1.682, which are

not referred to by a witness in an affidavit or during an oral

deposition. For the same reason, ``referenced'' is also inserted before

the first occurrence of ``exhibits'' in Sec. 1.671(a). A similar

clarifying amendment is also made to Sec. 1.683(a).

The Notice of Proposed Rulemaking proposed to revise Sec. 1.671(f)

to state that ``[t]he significance of documentary and other exhibits

identified by a witness in an affidavit or during oral deposition shall

be discussed with particularity by the witness'' (emphasis added) in

order to clarify that the requirement for the significance of

documentary and other exhibits to be discussed with particularity by a

witness applies only to documentary and other exhibits identified by a

witness in an affidavit or during oral deposition. One comment

indicated that proposed Sec. 1.671(f) fails to recognize that a witness

may be called merely to authenticate a piece of evidence, e.g., a

photograph, which is to be discussed with particularity by another

witness. The comment is well taken. Accordingly, Sec. 1.671(f) is

revised to read as follows: ``The significance of documentary and other

exhibits identified by a witness in an affidavit or during oral

deposition shall be discussed with particularity by a witness.'' Thus,

Sec. 1.671(f) does not apply to official records and printed

publications submitted into evidence pursuant to Sec. 1.682(a).

The Notice of Proposed Rulemaking proposed that Sec. 1.671(g),

which currently requires a party to file a motion (Sec. 1.635) to

obtain permission prior to taking testimony or seeking documents or

things ``under 35 U.S.C. 24,'' be revised to require a motion ``prior

to compelling testimony or production of documents or things under 35

U.S.C. 24 or from a party.'' One comment suggested that the requirement

to obtain permission from an administrative patent judge before

noticing an employee of one's opponent as a hostile witness is

important. Another comment took issue with the requirement and the

statement in the Notice of Proposed Rulemaking that ``all depositions

for a case-in-chief would have to be approved by an administrative

patent judge'' (59 FR at 50191), stating:

I suppose that means by motion with an explanation of what the

deposition will cover. Such a procedure will destroy the ability to

obtain effective testimony from an adverse witness, because of the

need to reveal the strategy. Particularly in a derivation contest,

the ability to obtain unrehearsed testimony of the adverse party

will be lost, and he [sic; his testimony] may be the only

corroboration available. Heretofore, taking the deposition of one's

adverse party to obtain evidence for one's case-in-chief has been a

matter of right on serving proper notice. It is essential that this

right be preserved. Obviously, this procedure should not be used to

discover a senior party's case-in-chief, and that limitation is

easily protected by objection to any such questions that are not

also related to the junior party's case-in-chief, and then either

(a) calling the judge for an immediate ruling, or (b) refusing to

answer the question.

Assuming for the sake of argument that the current interference rules

permit a party to notice the deposition of an opponent's witness in

order to take direct testimony of the type described above without

first obtaining permission from an administrative patent judge, the

interference rules do not provide any sanction for the failure of the

witness to appear at a noticed deposition. Consequently, even under the

current rules the party seeking the testimony of an opponent's witness,

as a practical matter, must obtain an order from an administrative

patent judge or the Board requiring the witness to appear so that the

opponent can be sanctioned under Sec. 1.616 if the witness fails to

appear.

One comment suggested that the proposed new last sentence for

Sec. 1.671(g) (``The testimony of the witness shall be taken on oral

[[Page 14492]] deposition.'') be omitted as superfluous in view of

Sec. 1.672(a) as amended. The suggestion is being adopted.

A comment suggested that Sec. 1.671(g) be modified to expressly

apply to an entity or witness under the opponent's control. The

modification is not believed to be necessary. The term ``party'' is

defined in Sec. 1.601(1) to include an inventor's legal representative

or assignee. The term ``opponent,'' while not defined per se in the

rules, is a ``party'' who happens to be a ``second'' party opponent of

a ``first'' party. Section 1.671(g) applies where a witness is under

the control of a party opponent's assignee.

As proposed in the Notice of Proposed Rulemaking, a new paragraph

(h) is added to Sec. 1.671 providing that a party seeking to compel

testimony or production of documents or things in a foreign country

must file a motion (Sec. 1.635) to obtain permission from an

administrative patent judge. The motion must show that the witness has

been asked to testify in the United States and has refused to do so or

that the individual or entity having possession, custody, or control of

the document or thing has refused to produce the document or thing in

the United States, even though the moving party has offered to pay the

expenses involved in bringing the witness or the document or thing to

the United States. When permission has been obtained from the

administrative patent judge, the party, after also complying with the

requirements for an oral conference (Sec. 1.673(g)), and service of

documents and a proffer of access to things (Sec. 1.673(b)), must

notice the deposition under Sec. 1.673(a).

With respect to the requirements for a motion to compel testimony

or production of documents or things in a foreign country, one comment

suggested that the phrase ``possession, custody and control'' in

proposed Sec. 1.671(h)(2)(iii) appears to include a typographical error

and should be changed to read ``possession, custody or control.'' The

suggestion is being adopted.

Another comment suggested that the administrative patent judge

would benefit from being additionally advised of (1) the foreign

country where the witness, document or thing is located, (2) a summary

of the procedures proposed to be followed to compel the testimony or

production of documents or things in the foreign country, and (3) the

time likely to be required to complete the procedures. In support, the

comment notes that compelling testimony or production of documents in a

foreign country can be so time-consuming that it may outweigh the

benefit of allowing the testimony or documents to be obtained,

considering their likely probative value and other relevant

considerations. The comment continues that in order to allow the

administrative patent judge to supervise the progress of the

interference and to allow establishment of an appropriate schedule for

the interference, the rules should require the suggested procedural

information. These suggestions are being adopted. Adoption of these

suggestions, however, should not be construed as a policy determination

by PTO that it intends to approve of, or tolerate, unwarranted delays

in obtaining testimony in a foreign country. The spirit of 35 U.S.C.

104 requires that evidence be obtainable in a foreign country

essentially on the same basis that it is obtainable in the United

States. When the laws and procedures in a foreign country make it so

time-consuming to obtain evidence that the evidence is essentially not

available in a reasonable manner, then the ``adverse inferences''

provision of new Sec. 1.616(c) may be appropriately applied.

Another comment notes that proposed Sec. 1.671(h)(1)(iv) for

witnesses and Sec. 1.671(h)(2)(iii) for documents and things assume

that it will be possible to request the holder of the evidence to

voluntarily produce it and obtain a definitive response to the request,

whereas it is said that discovery experience in foreign countries shows

that those possessing evidence often evade contact or, when contacted,

evade giving a definitive response. Accordingly, the comment suggested

that these provisions be reworded as follows:

Sec. 1.671(h)(1)(iv). Demonstrate that the party has made

reasonable efforts to secure the agreement of the witness to testify

in the United States but has been unsuccessful in obtaining the

agreement, even though the party has offered to pay the expenses of

the witness to travel to and testify in the United States.

Sec. 1.671(h)(2)(iii). Demonstrate that the party has made

reasonable efforts to obtain the agreement of the individual or

entity having possession, custody, or control of the document to

produce the document or thing in the United States but has been

unsuccessful in obtaining that agreement, even though the party has

offered to pay the expenses of producing the document or thing in

the United States.

The suggestion is being adopted. The expenses of a witness traveling to

the United States means the round-trip travel expenses.

The Notice of Proposed Rulemaking proposed the addition to

Sec. 1.671 of a new paragraph (j), which is patterned on paragraph (e)

of Sec. 1.684 (removed and reserved). Section 1.671(j), as it was

proposed, reads as follows:

(j) The weight to be given testimony taken in a foreign country

will be determined on a class-by-case basis. Little, if any, weight

may be given to testimony taken in a foreign country unless the

party taking the testimony proves by clear and convincing evidence

(1) that giving false testimony in an interference proceeding is

punishable as perjury under the laws of the foreign country where

the testimony is taken and (2) that the punishment in a foreign

country for giving such false testimony is similar to the punishment

for perjury committed in the United States.

A number of comments were received in response to the proposal. Two

comments questioned whether Sec. 1.671(j) is intended to apply to

affidavit testimony as well as deposition testimony. One comment

suggested that the rule be expressly limited to deposition testimony,

since testimony by affidavit (including declarations) can be taken in

foreign countries under the perjury provisions of 28 U.S.C. 1746(1),

and is additionally subject to the safeguard of cross-examination in

the United States under proposed Sec. 1.672(d). For these reasons, and

also because current Sec. 1.684(e), on which Sec. 1.671(j) is

patterned, applies only to deposition testimony in a foreign country in

the form of interrogatories answered under oath, the suggestion to

expressly limit Sec. 1.671(j) to deposition testimony is being adopted.

Two comments stated that the party taking testimony in a foreign

country should not have the burden of proving that the giving of false

testimony is punishable as perjury under the law of the foreign

country, as it may be difficult or impossible to prove or may not even

be in dispute, and that the burden is especially unfair where a party

is being forced to take testimony abroad by circumstances beyond its

control. Both comments suggested putting the burden instead on the

opponent to show that the requirements are not similar, such as by

moving under Sec. 1,635 to accord the testimony little weight or moving

under Sec. 1.656(h) to suppress the testimony altogether. Section

1.671(j), as proposed in the Notice of Proposed Rulemaking, does not

alter who has the burden of proof with respect to testimony in a

foreign country; the burden remains on the party offering the

testimony, just as under current Sec. 1.684(e).

Another comment questioned whether the first sentence of the rule

as it was proposed, because it states that the weight of testimony

``will be determined on a case-by-case basis,'' [[Page 14493]] might be

construed as allowing the effect to be given testimony in a particular

foreign country in a given interference to be decided without regard to

the effect given in prior interferences to testimony given in that

country. The comment stated that the rule as proposed might be contrary

to the goals of equal treatment of similarly situated parties and

predictability of outcome, which would best be served by a system in

which the Board publishes decisions making findings as to the adequacy

of testimonial procedures in particular foreign countries and then

follows those decisions in subsequent cases, and suggested changing

``on a case-by-case basis'' to read ``in view of all the circumstances,

including the laws of the foreign country governing the testimony.''

The suggestion is being adopted.

Another comment suggested that the ``clear and convincing

evidence'' standard in the second sentence of proposed Sec. 1.671(j)

inappropriately implies that the determination of content of the law of

a foreign country is a question of fact. PTO intends to treat the

determination of the content of the law of a foreign country as a

question of fact. Accordingly, the language ``as a matter of fact'' is

inserted in Sec. 1.671(j). The same comment further indicates that the

proposed second sentence is troublesome because it (1) Requires a

showing that giving false testimony is punishable as ``perjury'' under

the laws of the foreign country rather than under some other name, (2)

does not on its face allow the foreign offense to be applicable only

when false testimony is given with the appropriate intent, and (3)

requires that the foreign punishment be ``similar to'' United States

punishment, when comparable or greater punishment would seem to serve

the purpose of the proposed rule. The comment suggested that the

foregoing problems can be avoided by replacing the proposed second

sentence with the following sentence:

Little, if any, weight may be given to oral testimony given in a

foreign country unless it is demonstrated (1) that the giving of

false testimony in the interference proceeding would be punishable

under the laws of the foreign country where the testimony was taken

under circumstances similar to those defined as perjury under the

laws of the United States and (2) that the punishment in the foreign

country for giving such false testimony is comparable to or greater

than the punishment for perjury committed under the laws of the

United States.

The comment additionally suggested adding a third sentence patterned on

the second and third sentences of Fed. R. Civ. P. 44.1 and reading as

follows: ``Such a demonstration may be made by any relevant material or

source, including testimony, whether or not admissible under this

subpart.'' To address the comments, which are believed to be well

taken, the proposed second sentence is replaced with the following two

sentences:

Little, if any, weight may be given to deposition testimony

taken in a foreign country unless the party taking the testimony

proves by clear and convincing evidence, as a matter of fact, that

knowingly giving false testimony in that country in connection with

an interference proceeding in the United States Patent and Trademark

Office is punishable under the laws of that country and that the

punishment in that country for such false testimony is comparable to

or greater than the punishment for perjury committed in the United

States. The administrative patent judge and the Board, in

determining foreign law, may consider any relevant material or

source, including testimony, whether or not submitted by a party or

admissible under the Federal Rules of Evidence.

The finally adopted language is also responsive to another comment

requesting clarification of the term ``similar'' in order to assist

practitioners, and possibly foreign governments in promulgating laws in

harmony with 35 U.S.C. 104 and Sec. 1.671.

In addition to the above amendments, Sec. 1.671(a), which

identifies the various types of testimony, is revised as proposed in

the ``Miscellaneous Amendments'' part of the Notice of Proposed

Rulemaking, by changing ``evidence from another interference,

proceeding, or action filed under Sec. 1.683'' to ``testimony from

another interference, proceeding, or action filed under Sec. 1.683'' in

order to be consistent with the terminology of Sec. 1.683. Sections

1.671 (c)(6) and (c)(7) are revised by changing ``by oral deposition or

affidavit'' to ``by affidavit or oral deposition.''

Section 1.673 is also amended as proposed in the ``Miscellaneous

Amendments'' part of the Notice of Proposed Rulemaking. Specifically,

Sec. 1.673(b) is revised by (1) changing the time for service of

evidence to be relied on at an oral disposition from ``at least three

days'' prior to the conference required by Sec. 1.673(g) when service

is by hand or by Express Mail to ``at least three working days'' prior

to the conference, (2) changing the time for service by any other means

from 10 days to 14 days prior to the conference and (3) removing the

quotation marks around ``Express Mail.''

The second sentence of Sec. 1.673(d) is removed, as proposed in the

Notice of Proposed Rulemaking, as unnecessary, because all depositions

for a case-in-chief require approval by an administrative patent judge.

Section 1.673(e) is revised, as proposed, by changing ``party

electing to present testimony by affidavit'' to ``party who has

presented testimony by affidavit.''

One comment suggested amending Sec. 1.673(g) to state that a party,

prior to serving a notice of deposition and after complying with

paragraph (b) of Sec. 1.673, shall contact the administrative patent

judge, who shall then have an oral conference with the party and all

opponents. The suggestion, which is outside the scope of the present

rulemaking, is not being adopted. In any event, it is expected that in

most cases the parties will be able to agree on a time and place for

depositions without the need for participation by an administrative

patent judge.

Concerning the first sentence of Sec. 1.673(a), one comment

suggested deleting the term ``single'' from ``single notice of

deposition'' on the ground that the current language might be construed

to mean that a party must file only a single notice of deposition

listing all depositions. The same suggestion was offered with respect

to paragraph (e) of Sec. 1.673. The suggestion, which is outside the

scope of the present rulemaking, is not being adopted.

The Notice of Proposed Rulemaking proposed to amend Sec. 1.616 by

adding a new paragraph (c), patterned after 35 U.S.C. 104(b), stating

that to the extent that any information under the control of an

individual or entity located in a NAFTA country or a WTO member country

concerning knowledge, use, or other activity relevant to proving or

disproving a date of invention has been ordered to be produced by an

administrative patent judge or the Board (Sec. 1.671(h)), but is not

produced for use in the interference to the same extent as such

information could be made available in the United States, the

administrative patent judge or the Board shall draw such adverse

inferences as may be appropriate under the circumstances, or take such

other action permitted by statute, rule, or regulation, in favor of the

party that requested the information in the interference. Section

1.616(c) further provides that this ``other action'' may include the

imposition of appropriate sanctions under Sec. 1.616(a).

One comment questioned whether the failure of an individual or

entity located in a NAFTA country or a WTO member country to provide

the information requested by a party can result in the imposition of

sanctions against an opponent from that country even though the

opponent is not at fault. The answer [[Page 14494]] is yes. One purpose

of 35 U.S.C. 104 is to ensure that evidence for interferences is

available in foreign countries in essentially the same manner that it

is available in the United States. If the evidence is not available,

then the appropriate inference provisions of 35 U.S.C. 104 shall be

applied by PTO.

After the Notice of Proposed Rulemaking was published, it became

apparent that the term ``ordered'' in the phrase ``to the extent that

any information under the control of an individual or entity located in

a NAFTA country or a WTO member country * * * has been ordered to be

produced by an administrative patent judge or the Board'' may not be

appropriate. Neither an administrative patent judge nor the Board can

order testimony or production of documents and things in a foreign

country from a witness who, or an entity that, is neither a party nor

under the control of a party. Instead, an administrative patent judge

or the Board can only authorize a party to seek to compel testimony or

production in a foreign country from a witness or entity not under the

control of a party. Accordingly, Sec. 1.616(c) as adopted reads instead

as follows:

(c) To the extent that an administrative patent judge or the

Board has authorized a party to compel the taking of testimony or

the production of documents or things from an individual or entity

located in a NAFTA country or a WTO member country concerning

knowledge, use, or other activity relevant to to proving or

disproving a date of invention (Sec. 1.671(h)), but the testimony,

documents or things have not been produced for use in the

interference to the same extent as such information could be made

available in the United States, the administrative patent judge or

the Board shall draw such adverse inferences as may be appropriate

under the circumstances, or take such other action permitted by

statute, rule, or regulation, in favor of the party that requested

the information in the interference, including imposition of

appropriate sanctions under paragraph (a) of this section.

As proposed in the Notice of Proposed Rulemaking, Sec. 1.647, which

currently requires a party who relies on a non-English language

document to provide an English-language translation and an affidavit

attesting to its accuracy, is revised to extend these requirements to

any non-English language documents that a party is required to produce

via discovery. One comment expressed the concern that the proposed

amendment might impose an unnecessary financial burden on a non-U.S.

party by requiring translations of compelled documents that are very

long and have little or no relevance. The concern is believed to be

misplaced. First, discovery in interferences, like discovery under the

Federal Rules of Civil Procedure, is limited to evidence that is

relevant. Second, as to relevant evidence, the scope of discovery under

the interference rules is considerably narrower than the discovery

available under the Federal Rules of Civil Procedure. Another comment

stated that the general practice is that a party proffering a document

is responsible for the cost of translation. The comment nevertheless

suggested that in the case of documents offered to be produced during

discovery, including cross-examination discovery pursuant to

Sec. 1.687(b), the documents be produced in the foreign language, with

the recipient then indicating which documents it wishes to have

translated and costs to be borne equally by the parties. The suggestion

is not being adopted. In implementing practice under 35 U.S.C. 104, as

amended, it is PTO's initial view that a correct policy is the one

which the commentator says is the ``general practice.'' Whether a

different policy might be appropriate at some future time is something

that will be tested with experience.

II. Compensatory Attorney Fees and Expenses

Section 1.616, in addition to the amendments discussed above, also

is revised by redesignating current paragraphs (a) through (e) as

paragraphs (a)(1) through (a)(4) and (a)(6) and adding new paragraphs

(a)(5) and (b).

Section 1.616(a)(5), as amended, authorizes the award of

compensatory (as opposed to punitive) expenses and/or compensatory

attorney fees as a sanction for failing to comply with the rules or an

order. This sanction shall apply only to conduct occurring in an

interference on or after the effective date of Sec. 1.616 as amended.

It is believed that there may be occasions when an award of

compensatory expenses and/or compensatory attorney fees would be more

commensurate in scope with the infraction than the sanctions that are

currently authorized.

There are administrative decisions which seemingly hold that the

tribunals of PTO do not have authority to award expenses and attorney

fees. See, e.g., Driscoll v. Cebalo, 5 USPQ2d 1477, 1481 (Bd. Pat. Int.

1982) (the rules do not provide us with the jurisdiction to award

expenses and we know of no authority which does), aff'd in part, rev'd

in part, 731 F.2d 878, 221 USPQ 745 (Fed. Cir. 1984); Clevenger v.

Martin, 1 USPQ2d 1793, 1797 (Bd. Pat. App. & Int. 1986) (we do not have

authority under the rules to award attorney's fees); MacMillan Bloedel,

Ltd. v. Arrow-M Corp., 203 USPQ 952, 953 (TTAB 1979) (the TTAB is

without authority to award expenses and attorney's fees); Fisons, Ltd.

v. Capability Brown, Ltd., 209 USPQ 167, 171 (TTAB 1980) (request for

attorney's fees denied because good cause not shown and the TTAB has no

authority to grant such requests); Jonergin Co. v. Jonergin Vermont,

Inc., 222 USPQ 337, 340-41 (Comm'r Pat. 1983) (TTAB did not err in

refusing to award reasonable expenses and attorney's fees under 37 CFR

2.116(a), 2.120 and Fed. R. Civ. P. 37(a)(4)); Anheuser-Busch, Inc. v.

Major Mud & Chemical Co., 221 USPQ 1191, 1195 n.9 (TTAB 1984) (request

for costs and attorneys fees was denied, inter alia, on the ground that

the TTAB had no authority to award such fees and costs); Luehrmann v.

Kwik Kopy Corp., 2 USPQ2d 1303, 1305 n.4 (TTAB 1987) (the TTAB has no

authority to grant monetary relief); Fort Howard Paper Co. v. G.V.

Gambina, Inc., 4 USPQ2d 1552, 1554 (TTAB 1987) (the TTAB has no

authority to order costs or attorney's fees); Paolo's Associates Ltd.

Partnership v. Bodo, 21 USPQ2d 1899, 1904 n.3 (Comm'r Pat. 1990) (the

TTAB was correct in holding that 37 CFR 2.127(f) denies the TTAB

authority to either award attorney's fees or costs to any party in a

cancellation and opposition proceeding); Nabisco Brands, Inc. v.

Keebler Co., 28 USPQ2d 1237, 1238 (TTAB 1993) (the TTAB held, inter

alia, that it did not have authority to award fees under 37 CFR

2.127(f)).

None of the decisions mentioned above provide any reasoned analysis

or rationale to explain why the Commissioner lacks authority to

promulgate a rule which would authorize imposition of monetary

sanctions in appropriate cases. In view of the existence of the

decisions, however, it is believed that a discussion of the

Commissioner's authority to promulgate a rule authorizing the Board to

award compensatory monetary sanctions is appropriate.

The Commissioner has been delegated the authority by the Congress

to ``establish regulations, not inconsistent with law, for the conduct

of proceedings in the Patent and Trademark Office.'' 35 U.S.C. 6(a).

The U.S. Court of Appeals for the Federal Circuit upheld the

authority of the Commissioner to issue regulations imposing sanctions

in interference cases. In Gerritsen v. Shirai, 979 F.2d 1524, 24 USPQ2d

1912 (Fed. Cir. 1992), the Federal Circuit noted that 37 CFR 1.616 was

a permissible exercise of the Commissioner's authority under 35 U.S.C.

6(a) and complied with the limitation on sanctions of the

[[Page 14495]] Administrative Procedure Act. The court stated (979 F.2d

at 1527 n.3, 24 USPQ2d at 1915 n.3):

35 U.S.C. Sec. 6(a) (1988) permits the Commissioner of Patents

and Trademarks to ``establish regulations, not inconsistent with

law, for the conduct of proceedings in the Patent and Trademark

Office.'' Congress thus delegated plenary authority over PTO

practice, including interference proceedings, to the Commissioner.

On its face, 37 CFR Sec. 1.616 represents a permissible exercise of

that authority. Since the decision to impose a sanction * * * was

authorized by law, it comports with the Administrative Procedure

Act, 5 U.S.C. Sec. 558(b) (1988).

In Gerritsen, the Federal Circuit held that the particular rule

violation was sanctionable, but that the specific sanction chosen by

the Board was too severe. Accordingly, the sanction was vacated and the

case was remanded to the Board for imposition of a more appropriate

sanction.

In Abrutyn v. Giovanniello, 15 F.3d 1048, 1050, 29 USPQ2d 1615,

1617 (Fed. Cir. 1994), the Federal Circuit again upheld the authority

of the Board or an administrative patent judge to impose sanctions,

including imposition of the most severe sanction, granting judgment

against one of the parties:

The Board or EIC [Examiner-in-Chief, now administrative patent

judge] may impose an appropriate sanction, including granting

judgment in an interference, against a party who fails to comply

with the rules governing interferences, including filing deadlines.

37 CFR Sec. 1.616 (1993).

Gerritsen and Abrutyn judicially establish that the Commissioner

has authority under 35 U.S.C. 6(a) to promulgate regulations which

impose a spectrum of sanctions, including imposition of the ultimate

sanction of judgment or dismissal.

As a general matter, agencies are given broad authority in the

selection of an appropriate sanction. The choice of sanction within

agency statutory limits will be upheld unless it constitutes an abuse

of discretion. Butz v. Glover Livestock Comm'n Co., 411 U.S. 182

(1973); Lawrence v. Commodity Futures Trading Comm'n, 759 F.2d 767, 774

(9th Cir. 1985). Current Sec. 1.616 authorizes an administrative patent

judge or the Board to impose a spectrum of sanctions. The sanctions

range from holding certain facts established for purposes of the

interference (37 CFR Sec. 1.616 (a)) to granting judgment against the

party who violated a regulation or an order (37 CFR Sec. 1.616(e)). As

indicated above, the Federal Circuit has upheld the Commissioner's

authority to promulgate Sec. 1.616 and impose the specified sanctions

(Gerritsen, 979 F.2d at 1527 n.3, 24 USPQ2d at 1915 n.3), including

granting judgment against a party (Abrutyn, 15 F.3d at 1050, 29 USPQ2d

at 1617). Judgment and dismissal are the most severe forms of sanction.

See National Hockey League v. Metropolitan Hockey Club, 427 U.S. 639,

643 (1976); Poulis v. State Farm Fire and Casualty Co., 747 F.2d 863,

867 (3d Cir. 1984); Cine Forty-Second St. Theatre Corp v. Allied

Artists Pictures Corp., 602 F.2d 1062, 1066 (2d Cir. 1979). Consistent

with these cases, the Federal Circuit has held that a holding by the

Board that a party is not entitled to a patent directed to certain

claims is an extreme sanction. Gerritsen, 979 F.2d at 1532 n.12, 24

USPQ2d at 1919 n.12.

The imposition of monetary sanctions is manifestly a lesser

sanction than judgment or dismissal. Indeed, reimbursement of expenses

incurred as a result of inappropriate action by the opposing party has

been held to be a mild form of sanction. Cine Forty-Second St., 602

F.2d at 1066. More stringent sanctions include orders striking out

portions of a pleading, orders prohibiting the introduction of evidence

on a particular point, and orders deeming a disputed issue determined

adversely to the position of a disobedient party. Id.

Since the imposition of a monetary sanction is a lesser sanction

than judgment against a party, the inclusion of an ``appropriate''

monetary sanction in Sec. 1.616, as adopted, is not outside the

Commissioner's rulemaking authority and would not be inconsistent with

the sanctions already present in Sec. 1.616.

Whether a monetary sanction is appropriate depends on the purpose

of the sanction. Civil sanctions may be categorized as penal and

remedial. One is not to be subjected by an agency to a penal sanction

unless the words of the statute plainly authorize imposition of a penal

sanction. Commissioner v. Acker, 361 U.S. 87, 91 (1959). Thus, a

statute must plainly authorize an agency's power to impose penalties.

Pender Peanut Corp. v. United States, 20 Civil Court 447, 453-55

(1990). Agencies have no inherent authority, based solely on their

enabling statute, to impose penal sanctions. That authority must be

expressly given in the statute. Pender Peanut Corp., 20 Cl. Ct. at 453-

55 (1990); Gold Kist, Inc. v. Department of Agriculture, 741 F. 2d 344,

348 (11th Cir. 1984); Koch, Administrative Law and Practice Sec. 6.81

(1985). A penal sanction has been defined as one which inflicts a

punishment. United States v. Frame, 885 F.2d 1119, 1142 (3d Cir. 1989).

On the other hand, an explicit grant of power from Congress need

not underpin each exercise of agency authority. See Zola v. Interstate

Commerce Commission, 889 F.2d 508, 516 (3d Cir. 1989), citing Amoskeag

Co. v. Interstate Commerce Commission, 590 F.2d 388, 392 (1st Cir.

1979). Where the enabling statute authorizes the agency to make such

rules and regulations as may be necessary to carry out the provisions

of an act--the regulation will be sustained so long as it is reasonably

related to the purpose of the act. Mourning v. Family Publications

Service, Inc., 411 U.S. 356, 369 (1973). Under its enabling

legislation, an agency has inherent power to impose administrative

sanctions that are not ``penalties'' as long as the sanctions are

reasonably related to the purpose of the enabling statute. Gold Kist,

741 F.2d at 348. Accordingly, in evaluating whether the imposition of a

sanction is within an agency's inherent powers, it is necessary to

determine whether the sanction is remedial or punitive. Frame, 885 F.2d

at 1142. Remedial sanctions may be within the agency's inherent powers

if reasonably related to the purpose of enabling legislation. A

remedial sanction is one whose purpose is not to stigmatize or punish

wrongdoers. Frame, 885 F.2d at 1143.

Thus, in the absence of express statutory authority, the

Commissioner's authority to impose monetary sanctions is limited to

sanctions which are remedial in nature rather than punitive. In

addition, the sanctions must be reasonably related to the purpose of

enabling statute under which PTO operates. Under these guidelines, the

Commissioner would appear to be without authority to issue a regulation

which permits a penal sanction to be imposed against a party or an

attorney for violation of a rule or order. Fines payable to Government,

including PTO, are manifestly intended to punish wrongdoing and are

thus punitive in nature. Assessment to redress an injury to the public

is in the nature of a penalty. Republic Steel Corp. v. National Labor

Relations Board, 311 U.S. 7, 12-13 (1940). On the other hand, the

imposition of costs or expenses, including attorneys' fees, incurred by

an opposing party due to the violation of a rule or order, may properly

be considered remedial. Imposing costs or attorneys' fees serves to

defray the expenses actually incurred by the opposing party for the

violation of a rule or order by an opponent. See Poulis, 747 F.2d at

869 (non-dilatory party will not have to bear the brunt of the

attorney's delay). Monetary sanctions would enhance the Board's ability

to protect the integrity of its proceedings. See Zola, 889 F.2d at 516

(ICC justified in [[Page 14496]] imposing monetary sanctions in acting

to protect the integrity of its jurisdiction). Monetary sanctions would

also allow the Board to maintain control of its docket to maximize the

use of limited resources. See Griffin & Dickson v. United States, 16

Cl. Ct. 347, 351 (1989) (case management responsibilities require broad

inherent authority to impose [non-penal] sanctions). Imposition of

monetary sanctions is the only sanction both mild enough and flexible

enough to use in day-to-day enforcement of orderly and expeditious

litigation. Eash v. Riggins Trucking, Inc., 757 F.2d 557, 567, (3d Cir.

1985) (in banc). Thus, monetary sanctions are reasonably related to the

Commissioner's plenary authority to promulgate regulations for the

conduct of proceedings, including interference proceedings in PTO.

Section 1.616(b), as proposed to be amended, would have authorized

the imposition of a sanction, including a sanction in the form of

compensatory expenses and/or attorney fees, against a party for taking

or maintaining a frivolous position. A number of comments were received

opposing the authorization of sanctions for taking or maintaining

frivolous positions (Sec. 1.616(b)). Several comments suggested that

the question of what is ``frivolous'' is inherently highly subjective

and will therefore be frequently raised, substantially increasing costs

and delaying decisions on more substantive issues. PTO believes,

however, consistent with other comments received during the comment

period, that inasmuch as a groundless motion for sanctions would itself

be grounds for sanctioning the movant for taking or maintaining a

frivolous positions, it is expected that motions for sanctions will

only be filed in clear cases. One comment suggested that Sec. 1.616(b)

be reworded to parallel Rule 11 of the Federal Rules of Civil Procedure

so that sanctions would only be imposed upon motion by an opponent,

subject to a twenty-one day ``safe harbor'' withdrawal provision, and

would explicitly apply only to frivolous positions taken in writing.

Another comment, while supportive of the proposed amendment on the

ground that it should reduce the number of frivolous papers, cautioned

against treating as frivolous ``that which is simply born of

ignorance.'' The suggestion to have Sec. 1.616(b) authorize sanctions

imposed only on motion by a party is not being adopted. There may be

situations in which the Board believes it would be appropriate to award

compensatory fees or expenses even in the absence of a motion by a

party. The suggestion that Fed. R. Civ. P. 11 permits sanctions only

upon motion is believed to be incorrect; for example, Fed. R. Civ. P.

11(c)(1)(b) authorizes sanctions on the court's initiative. The

suggestion to use the ``safe harbor'' approach of Fed. R. Civ. P.

11(c)(1)(A), which provides that a motion for sanctions shall be served

but not filed unless, within 21 days after service of the motion, the

challenged position is not withdrawn or appropriately corrected, is not

being adopted. The administrative patent judge and the Board should

know the reason why a party has withdrawn or corrected a position.

Nevertheless, in order to make it clear that sanctions will not be

imposed for mistakenly taking an erroneous position that is withdrawn

or corrected as soon as the error becomes apparent, the proposed phrase

``for taking or maintaining a frivolous position'' in changed to ``for

taking and maintaining a frivolous position.''

The suggestion that Sec. 1.616(b) sanctions be limited to frivolous

positions taken in writing is based on the Advisory Committee Note on

the 1993 amendments to Fed. R. Civ. P. 11. The Note states in pertinent

part: ``The rule applies only to assertions contained in papers filed

with or submitted to the court. It does not cover matters arising for

the first time during oral presentations to the court, when counsel may

make statements that would not have been made if there had been made if

there had been more time for study and reflection.'' For the reason

given in the Advisory Committee Note, the suggestion is being adopted.

Accordingly, Sec. 1.616(b) as adopted is limited to a frivolous

position taken and maintained in papers filed in the interference and

shall apply only to frivolous positions taken and maintained after the

effective date of Sec. 1.616 as amended.

Other comments questioned how the Board intends to handle proof of

amounts of compensatory expenses and/or attorney fees and expressed the

hope that attorney fee awards will not be de facto discriminatory as

between highly paid outside counsel and in-house counsel without fees

or billing records. The matter of how to prove amounts of compensatory

expenses and/or attorney fees will be handled on a case-by-case basis.

Another comment suggested that an administrative patent judge or

the Board be required to issue an order to show cause prior to imposing

a sanction, since a party may be able to explain why a sanction should

not be imposed. The suggestion is presumably based on Fed. R. Civ. P.

11(c)(1)(B) and directed to cases in which an administrative patent

judge or the Board on its own initiative determines that a sanction is

appropriate. The suggestion is being adopted and implemented in a new

paragraph, Sec. 1.616(d). In addition, paragraph (d) expressly provides

that a party may file a motion (Sec. 1.635) requesting the imposition

of sanctions, the drawing of adverse inferences or other action under

paragraph (a), (b) or (c) of Sec. 1.616.

III. Certificates of Prior Consultation

Section 1.637(b) currently requires that a miscellaneous motion

under Sec. 1.635 contain a certificate stating that the moving party

has conferred with all opponents in a good faith effort to resolve by

agreement the issues raised by the motion and indicating whether any

other party plans to oppose the motion. In the Notice of Proposed

Rulemaking, it was proposed to amend paragraph (b) to extend the

requirement for such a certificate to preliminary motions filed under

Sec. 1.633 and other motions filed under Sec. 1.634. It also was

proposed to require the certificate to indicate that the reasons and

facts in support of the motion were discussed with each opponent and,

if an opponent has indicated that it will oppose the motion, to

identify the issues and/or facts believed to be in dispute.

The rationale offered in the Notice of Proposed Rulemaking for the

amendment was an expectation that consultation would result in a

reduction in the number of issues raised by motions under Secs. 1.633-

34, as well as a reduction in the number of motions filed under those

rules. All but one of many comments received in response to the

proposal urged that the proposed rule not be adopted. In support, it

was said that the proposed rule would unnecessarily increase the time

and costs required to file motions under Secs. 1.633-34, particularly

preliminary motions. PTO, upon reflection, agrees with the comments.

Accordingly, the proposal to extend the consultation requirement of

Sec. 1.637(b) to Secs. 1.633-34 motions is withdrawn. The withdrawal of

the proposed rule, however, should not be interpreted as precluding an

administrative patent judge from holding a conference call prior to the

date preliminary motions are due for the purpose of discussing which

preliminary motions the parties plan to file or from entering an order

requiring prior consultation as to a particular motion.

Several comments, citing experience with the consultation

requirement for Sec. 1.635 motions, suggested that

[[Page 14497]] Sec. 1.637(b) be dropped altogether, or be limited at

most to motions requesting extensions of time. The suggestion is not

being adopted. However, there are circumstances where it may be

appropriate to suspend the requirements of Sec. 1.637(b). An example is

a multi-party interference where one party may need to consult with a

large number of opponents. Another example is a motion filed after a

hearing before an administrative patent judge, where filing of the

motion was authorized at the hearing. Accordingly, while the suggestion

to delete the requirement for consultation altogether is not being

adopted, the language ``Unless otherwise ordered by an administrative

patent judge or the Board'' is added at the beginning of the first

sentence of Sec. 1.637(b).

Several comments were received which were also critical of the

proposal to amend Sec. 1.637(b), even if applied only to Sec. 1.635

motions, to require that the certificate ``indicate that the reasons

and facts in support of the motion were discussed with each opponent

and, if an opponent has indicated that it will oppose the motion,

identify the issues and/or facts believed to be in dispute.'' One

comment suggested that the proposal is unworkably vague with respect

to: (1) the form of the information a party must provide to the

opponent (e.g., a draft motion, an outline of the motion, a verbal

statement of the motion, the evidence in support of the motion); (2)

what form the opponent must use to provide its reasons for opposing

(i.e., written or oral); and (3) whether the moving party can change

the arguments in the motion in response to the reasons given by the

opposing party without the need for another consultation. Other

comments noted that an opponent may not have sufficient time before the

due date for motions in which to take a reasoned position on the

motion. Another comment observed that it is very difficult for the

movant to identify the issues or facts believed to be in dispute,

unless it is a very cursory exercise. According to the comment, the

party cannot know what the opponent is really thinking, and suggested

instead that there be an in-person conference involving the parties and

the administrative patent judge in order to discuss all intended (or

filed) motions. The comments are believed to be well taken and the

proposal in the Notice of Proposed Rulemaking to amend Sec. 1.637(b) to

require that the motion, ``if an opponent has indicated that it will

oppose the motion, identify the issues and/or facts believed to be in

dispute'' is withdrawn.

IV. Service of a ``Developing Record''

In addition to the amendments to Sec. 1.672 discussed above under

the heading ``Amendments responsive to adoption of Public Laws 103-182

and 103-465,'' Secs. 1.672, 1.682, 1.683 and 1.688 are amended, as

proposed (with a few minor modifications discussed infra), to require

each party to serve on each opponent a ``developing record'' that will

evolve into the record required to be filed under Sec. 1.653.

As noted above, the Notice of Proposed Rulemaking proposed to amend

paragraph (b) of Sec. 1.672 to provide that a party presenting

testimony of a witness by affidavit shall, no later than the time set

by the administrative patent judge for serving affidavits, file (and

serve) the affidavit, whether it is a new affidavit or an affidavit

previously filed by that party during ex parte prosecution of an

application or under Sec. 1.608 or 1.639(b). Furthermore, in view of

the proposed amendment to Sec. 1.672(b), it was also proposed to remove

and reserve, as superfluous, Sec. 1.671(e), which requires a party to

give notice of intent to rely on an affidavit filed by that party

during ex parte prosecution of an application or an affidavit under

Sec. 1.608 or 1.639(b). An oral comment suggested that Sec. 1.671(e)

notice practice be retained with respect to Sec. 1.639(b) affidavits,

so that a party does not have to refile (and re-serve) a previously

submitted Sec. 1.639(b) affidavit on which it intends to rely at final

hearing. The comment further suggested that for the same reason

Sec. 1.671(e) notice practice should be extended to patents and printed

publications filed and served pursuant to Sec. 1.639(b). The

suggestions are being adopted. Section 1.671(e) thus revised reads as

follows:

(e) A party may not rely on an affidavit (including any

exhibits), patent or printed publication previously submitted by the

party under Sec. 1.639(b) unless a copy of the affidavit, patent or

printed publication has been served and a written notice is filed

prior to the close of the party's relevant testimony period stating

that the party intends to rely on the affidavit, patent or printed

publication. When proper notice is given under this paragraph, the

affidavit, patent or printed publication shall be deemed as filed

under Sec. 1.640(b), 1.640(e)(3), 1.672(b) or 1.682(a), as

appropriate.

Furthermore, in order to ensure that the evidence submitted under

Sec. 1.639(b) includes sequential numbering of the type required of

other evidence filed under Sec. 1.672(b), Sec. 1.639(b) is revised to

require the use of sequential numbering, which, for the reasons

discussed infra, is required to be used only to the extent possible.

As explained supra, in view of the retention of Sec. 1.671(e) in

amended form, Sec. 1.672(b), as adopted, permits a party to file an

affidavit or, if appropriate, a notice under Sec. 1.671(e).

Sections 1.682, 1.683 and 1.688 are revised, substantially as

proposed, to parallel the amendments to Sec. 1.672. Section 1.682(a) as

proposed to be amended provides that a party may introduce into

evidence, if otherwise admissible, an official record or printed

publication not identified in an affidavit or on the record during on

oral deposition of a witness, by filing (and serving) a copy of the

official record or publication no later than the time set for filing

affidavits under Sec. 1.672(b), thereby eliminating the current

requirement for filing a notice of intent to rely on the official

record or printed publication. In view of the retention of

Sec. 1.671(e) in amended form to permit a party to file a notice of

intent to rely on patents and publications previously filed by the

party under Sec. 1.639(b), Sec. 1.682(a), as adopted, permits a party

to file a copy of an official record or printed publication or, if

appropriate, a notice under Sec. 1.671(e). Section 1.683(a) is amended,

as proposed, to provide that a party may introduce into evidence, if

otherwise admissible, testimony by affidavit or oral deposition from

another interference, proceeding, or action involving the same parties

by filing (and serving) a copy of the affidavit or a copy of the

deposition transcript no later than the time set for filing affidavits

under Sec. 1.672(b), thereby eliminating the current requirement for a

party for filing a motion under Sec. 1.635 for leave to rely on such

testimony. Section 1.688(a) is amended, as proposed, to provide that,

if otherwise admissible, a party may introduce into evidence an answer

to a written request for an admission or an answer to a written

interrogatory obtained by discovery under Sec. 1.687 by filing a copy

of the request for admission or the written interrogatory and the

answer no later than the time set for filing affidavits under

Sec. 1.672(b). Thus, all evidence filed under Secs. 1.672, 1.682, 1.683

and 1.688 that relates to a party's case-in-chief should be filed (and

served) or noticed under Sec. 1.671(e) no later than the date set by an

administrative patent judge for the party to serve affidavits under

Sec. 1.672(b) for its case-in-chief and all evidence under those

sections that relates to the party's rebuttal should be filed (and

served) or noticed under Sec. 1.671(e) no later than the date set for

the party to serve [[Page 14498]] affidavits under Sec. 1.672(b) for

its case-in-rebuttal.

The Notice of Proposed Rulemaking proposed that the pages of all

affidavits and deposition transcripts that a party enters into evidence

pursuant to Secs. 1.672, 1.682, 1.683 and 1.688 shall include

sequential page numbers, which shall also serve as the record page

numbers for the affidavits and deposition transcripts in the party's

record when it is filed under Sec. 1.653. Likewise, the Notice of

Proposed Rulemaking proposed that exhibits identified in the affidavits

and deposition transcripts and any official records and printed

publications served under Sec. 1.682(a) shall be given sequential

numbers, which shall serve as the exhibit numbers when the exhibits are

filed under Sec. 1.653(i) with the party's record. The major benefit of

sequential page numbering is that a particular page of an affidavit or

exhibit will be referred to in a consistent manner throughout the

record. Thus, when an affiant is subject to cross-examination about the

affiant's affidavit or another person's affidavit, the record will be

clear as to the material which is the subject of the cross-examination.

Correlation of pages of affidavits and/or exhibits will no longer be

necessary.

Regarding the sequential numbering of affidavits, one comment noted

that:

While this might be of some minor convenience to the PTO, it is

inconvenient for the public, and may be difficult to be accomplished

in practice. Due to severe PTO time constraints in preparing

affidavits, it is usually essential to amend, add to, rewrite and

execute declarations and affidavits in parallel. Often, the

declarants are in different physical locations. Modern offices do

not have the old fashioned manual impact typewriters that would be

required to superpose new page numbers on executed documents.

Declarations are already clearly identifiable, by the name of the

declarant and the page of his or her declaration. * * *

The comment apparently assumes, incorrectly, that the required

sequential numbers are to be used in lieu of the usual page numbers

that appear in affidavits and deposition transcripts. The sequential

numbers are in addition to the usual page numbers and are typically

added to the pages by a sequential numbering device (e.g., a ``Bates''

stamp).

Since a party may decide not to rely at final hearing on a

previously filed Sec. 1.639(b) affidavit (including any exhibits), or

on patents and printed publications that it previously filed under

Sec. 1.639(b) in connection with a motion, there may be gaps in the

sequential numbers of the affidavit pages and exhibits that are relied

on at final hearing. Compare, e.g., Federal Circuit Rule 30(c)(2) with

respect to pages omitted from an appendix. Furthermore, due to

circumstances beyond the party's control it may not be possible to

submit the Sec. 1.639(b) affidavits and accompanying exhibits into

evidence in the proper order. Finally, the exhibits referred to in

testimony under Sec. 1.683 from another proceeding will obviously

already have the exhibit numbers assigned to them in that proceeding.

When possible, those planning to use exhibits and testimony from a

previous interference may wish to avoid using an exhibit number used in

the previous interference, thereby minimizing the possibility of

confusion which can exist when two exhibits in the same record have the

same exhibit number. For these reasons, the proposal to amend

Sec. 1.672 to require that testimony pages and exhibits ``shall be

given sequential numbers'' is changed to a requirement that testimony

and exhibits ``shall be given sequential numbers to the extent

possible.'' This change also applies to evidence submitted under

Secs. 1.682, 1.683 and 1.688 as amended, which state that the pages of

affidavits and deposition transcripts served under those paragraphs and

any new exhibits served therewith shall be assigned sequential numbers

by the party in the manner set forth in Sec. 1.672(b). In order to take

into account that there may be gaps in page numbers in the record and

in the exhibit numbers, Sec. 1.653(d) is revised to state that the

pages of the record shall be consecutively numbered ``to the extent

possible.'' Sections 1.677 (a) and (b) are revised in a similar manner.

That is, paragraph (a) is revised to limit its requirement for

consecutive page numbering, which the rule currently applies to ``the

entire record of each party,'' to the pages of each transcript.

Paragraph (b) is revised to require that exhibits be numbered

consecutively ``to the extent possible.''

Section 1.672(a) affidavits and Sec. 1.683(a) testimony shall be

accompanied by an index giving the name of each witness and the number

of the page where the testimony of each witness begins. The exhibits

shall be accompanied by an index briefly describing the nature of each

exhibit and giving the number of the page of affidavit or Sec. 1.683(a)

testimony where each exhibit identified in an affidavit or during an

oral deposition is first identified and offered into evidence.

An opponent who objects to the admissibility of any evidence filed

under Secs. 1.672(b), 1.682(b), 1.683(a) and 1.688(a) must file

objections under Secs. 1.672(c), 1.682(c), 1.683(b) and 1.688(b) no

later than the date set by the administrative patent judge for filing

objections to affidavits under Sec. 1.672(c). An opponent who fails to

challenge the admissibility of the evidence on a ground that could have

been raised in a timely objection under Secs. 1.672(c), 1.682(c),

1.683(b) or 1.688(b) will not be permitted to move under Sec. 1.656(h)

to suppress the evidence on that ground. If an opponent timely files an

objection to evidence filed under Secs. 1.672(b), 1.682(b), 1.683(a) or

1.688(a), the party may respond by filing one or more supplemental

affidavits and, in the case of objections to evidence filed under

Secs. 1.672(b), 1.682(b) and 1.683(a), may also file supplemental

official records or printed publications. No objection to the

admissibility of supplemental evidence shall be made except as provided

by Sec. 1.656(h). A party submitting evidence in response to an

objection is aware of the objection and should take whatever steps are

necessary in presenting supplemental evidence to overcome the

objection. Whether the steps were sufficient is determined at final

hearing on the basis of a motion to suppress the evidence under

Sec. 1.656(h).

The pages of the supplemental affidavits shall be sequentially

numbered beginning with the number following the last page number of

the testimony served under Secs. 1.672(b), 1.683(a) and 1.688(a), if

possible. Likewise, any additional exhibits identified in the

supplemental affidavits and any supplemental official records and

printed publications shall be given sequential numbers beginning with

the number following the last number of the previously identified

exhibits, if possible. After the time expires for filing objections and

supplemental affidavits, or earlier when appropriate, the

administrative patent judge shall set a time within which any opponent

may file a request to cross-examine an affiant on oral deposition.

If any opponent requests cross-examination of an affiant, the party

shall notice a deposition at a reasonable location within the United

States under Sec. 1.673(e) for the purpose of cross-examination.

Ordinarily, the parties should be able to agree on a ``reasonable''

place within the United States. Whether a place is a reasonable place

depends on the circumstances. Generally a reasonable place within the

United States would be the place where a witness resides or the office

of one of the counsel of record in the interference. In assessing the

reasonableness of a place, the convenience of both parties should be

considered. For example, in a two-party interference if an affiant

normally resides in Ohio and counsel [[Page 14499]] are located

respectively in Illinois and New York, noticing a deposition for

Arizona may not be reasonable. In the event agreement cannot be

reached, a place will be set by the administrative patent judge for

taking the deposition.

Any redirect and recross shall take place at the deposition.

Within 45 days of the close of the period for taking cross-

examination (Sec. 1.678 is revised to change the time for filing

certified transcripts from 45 days to one month), the party shall serve

(but not file) a copy of each deposition transcript on each opponent

together with copies of any additional documentary exhibits identified

by a witness during a deposition. The pages of the transcripts served

under this paragraph and the accompanying exhibits shall be

sequentially numbered in the manner discussed above. The deposition

transcripts shall be accompanied by an index of the names of the

witnesses, giving the number of the page where cross-examination,

redirect and recross of each witness begins, and an index of exhibits

of the type specified in Sec. 1.672(b). At this point in time, the

opponent will have been served with all of the testimony that will

appear in the party's record (with the same page numbers) as well as

all of the documentary exhibits that will accompany the record (with

the same exhibit numbers).

In the first sentence of Sec. 1.688(a), the comma proposed to be

inserted after ``evidence'' is inserted instead after ``admissible.''

V. Miscellaneous Amendments

Although not proposed in the Notice of Proposed Rulemaking, the

authority citation for 37 CFR part 1 is revised by changing it from

``35 U.S.C. 6'' to ``35 U.S.C. 6 and 23.''

Throughout the rules, the term ``examiner-in-chief'' is replaced by

``administrative patent judge'' to reflect the change in the title of

the members of the Board. See Commissioner's Notice of October 15,

1993, ``New Title for Examiners-in-Chief,'' 1156 Off. Gaz. Pat. Office

332 (Nov. 9, 1993). One comment correctly noted that the Notice of

Proposed Rulemaking failed to apply the change to Sec. 1.610(b). The

omission has been corrected. Another comment, citing possible confusion

over the meaning of the term ``administrative patent judge,'' suggested

adding one of the following provisions to Sec. 1.601 to define

``administrative patent judge'' in either of the following ways:

An administrative patent judge is a member of the Board of

Patent Appeals and Interferences, or

An administrative patent judge is an examiner-in-chief (35

U.S.C. 7) or the Commissioner, the Deputy Commissioner or, an

Assistant Commissioner when acting as a member of the Board of

Patent Appeals and Interferences.

Neither suggestion is being adopted. The members of the Board of Patent

Appeals and Interferences are the Commissioner [Assistant Secretary and

Commissioner of Patents and Trademarks], the Deputy Commissioner

[Deputy Assistant Secretary and Deputy Commissioner of Patents and

Trademarks] and the Assistant Commissioners [the Assistant Commissioner

for Patents and the Assistant Commissioner for Trademarks], and the

examiners-in-chief, now administrative patent judges, including the

Chief Administrative Patent Judge and the Vice-Chief Administrative

Patent Judge, 35 U.S.C. 7(a). While the rules talk in terms of

administrative patent judge, it must be recognized that any member of

the Board, including a Commissioner-member, may take action in an

interference which can be taken by an administrative patent judge.

Section 1.11(e) is revised to allow access to the file of an

interference involving a reissue application once the interference has

terminated or an award of priority or judgment has been entered as to

all counts. Although it was intended that the public have access to any

interference that involves a case which is open to the public, and

Sec. 1.11(b) provides that a reissue application is open to the public,

interferences involving reissue applications were inadvertently not

included in current Sec. 1.11(e).

Section 1.192(a), which specifies the contents of the brief of an

appellant for final hearing in an ex parte appeal, is revised to state

that arguments or authorities not included in the brief will be refused

consideration by the Board unless good cause is shown. The rule

previously stated that such arguments and authorities may be refused

consideration by the Board, without specifying how the Board decides

whether or not it should be considered. One comment suggested that the

amendment, if adopted, would make PTO less ``user friendly'' and would

increase the burden of mere technicalities on applicants. It is

believed that the comment misapprehends the nature of the proposed

change, inasmuch as the change would merely codify the ``good cause''

standard that is currently applied by the Board in determining whether

a new argument or authority will be considered.

Section 1.192(c) is revised in several respects. A first amendment

simplifies the language used in the rule to refer to a brief filed by

an applicant who is not represented by a registered practitioner. A

second amendment removes from paragraph (c) the requirement that such a

brief be in substantial compliance with the requirements of paragraphs

(c) (1), (2), (6) and (7). Experience has shown that it is better to

evaluate pro se briefs on a case-by-case basis. Section 1.192(c) is

also revised to redesignate current paragraphs (c)(1) through (c)(7) as

paragraphs (c)(3) through (c)(9), and to add new paragraphs (c)(1) and

(c)(2). The added paragraphs (c)(1) and (c)(2) require an appellant who

has filed an appeal to the Board to identify the real party in interest

and any related appeals and interferences. It is necessary to know the

identity of the real party in interest so that members of the Board can

comply with applicable ethics regulations associated with working on

matters in which the member has an interest. The requirements to

identify related appeals and interferences is derived in part from

Federal Circuit Rule 47.5 and will minimize the chance that the Board

will enter inconsistent decisions in related cases.

One comment suggested that the term ``real party in interest'' be

replaced by ``owner'' in order to avoid confusion with the term ``party

in interest of record,'' which appears in PTO's Notice of Allowance and

Issue Fee Due (PTO-850). The suggestion is not being adopted, since it

appears unlikely that any confusion will occur.

A comment on behalf of a large U.S. corporation having extensive

overseas operations noted that the proposed requirement to identify the

real party in interest will impose a substantial burden in appeals to

the Board where the real party in interest is a corporation with

international operations and many diverse and frequently changing

affiliates. The comment was accompanied by a copy of a ``Certificate of

Interest'' previously filed by the corporation in an appeal to the

Federal Circuit, which named some three hundred subsidiaries and

affiliates in which the corporation had an ownership interest of five

percent or more. According to the comment, if ownership interests of

less than five percent had been included, the list would have been

about twice as long. The comment explained that because the

corporation's business interests worldwide are frequently changing, the

list would require updating for each and every appeal brief, and

questioned whether this burden is justified. Upon consideration of the

comment, it is [[Page 14500]] believed, at this particular time, that

the proposed rule would be burdensome on the public. Whether in the

future more information might be required to the nature of a real party

in interest is a matter which can await experience under a rule which

requires identification only of the real party in interest.

Accordingly, the suggestion is being adopted to the extent of requiring

appellants to the Board to identify only the real party in interest. In

this respect, Sec. 1.192(c)(1) will parallel an equivalent requirement

for briefs in inter partes cases. See Sec. 1.656(b)(1)(ii), as amended.

One comment suggested revising proposed Sec. 1.192(c)(9), which

calls for an appendix including the claims on appeal, to include a

statement that the rule sets forth the minimum requirements for a

brief. According to the comment, the statement would make it clear that

Sec. 1.192 does not prohibit inclusion of other materials which an

appellant may consider necessary or desirable, a point which the

comment noted is explained in the Manual of Patent Examining Procedure

Sec. 1206, at 1200-6. The suggestion is not being adopted, since it is

believed to be apparent from the rule that the requirements set forth

therein are the minimum requirements.

Section 1.192 as proposed to be amended in the Notice of Proposed

Rulemaking includes an amendment to current paragraph (a)(5)

(``Grouping of claims''), proposed to be redesignated as paragraph

(a)(7), that inadvertently was not discussed in the commentary in the

Notice of Proposed Rulemaking. Specifically, it was proposed to amend

that paragraph to state that for each ground of rejection which an

appellant contests and which applies to more than one claim, the

rejected claims shall stand or fall together with the broadest claim,

and that only the broadest claim would be considered by the Board of

Patent Appeals and Interferences unless a statement is included that

the rejected claims do not stand or fall together and, in the argument

under paragraph (c)(8), appellant presents reasons as to why appellant

considers the rejected claims to be separately patentable from the

broadest claim; merely pointing out what a claim covers is not an

argument as to why the claim is separately patentable from the broadest

claim. One comment suggested that it is not always clear which is the

broadest claim, such as where there are two broad independent claims of

differing scope (e.g., claims to ABCDE and ABCDF). The comment

suggested that simply saying that the claims stand or fall together, as

the current rule does, is probably the best one can do on a generic

basis. The points raised by the comment are partly well taken.

Paragraph (c)(7), as adopted, therefore reads as follows:

Grouping of claims. For each ground of rejection which appellant

contests and which applies to a group of two or more claims, the

Board shall select a single claim from the group and shall decide

the appeal as to the ground of rejection on the basis of that claim

alone unless a statement is included that the claims of the group do

not stand or fall together and, in the argument under paragraph

(c)(8) of this section, appellant explains why the claims of the

group are believed to be separately patentable. Merely pointing out

differences in what the claims cover is not an argument as to why

the claims are separately patentable.

Where there is a ``broadest'' claim, that claim will normally be

selected. Where there are two broad claims, such as ABCDE and ABCDF, as

mentioned in the comment, the panel assigned to the case will select

which claim to consider. The same would be true in a case where there

are both broad method and apparatus claims. The rationale behind the

rule, as amended, is to make the appeal process as efficient as

possible. Thus, while the Board will consider each separately argued

claim, the work of the Board can be done in a more efficient manner by

selecting a single claim when the appellant does not meet the

conditions of paragraph (c)(7) of Sec. 1.192, as adopted. The choice of

whether each claim will be considered separately or whether all claims

will be considered on the basis of a single claim is a choice to be

made by the appellant.

The term ``subparagraph,'' which appeared in Secs. 1.192 (c)(7) and

(c)(8) in their originally proposed form, has been replaced by

``paragraph'' in those sections as amended.

Section 1.601 in general defines a number of terms used throughout

the interference rules. One comment noted that a consistent format is

not used throughout the definitions. For example, in Sec. 1.601(q) all

defined terms are italicized and in Sec. 1.601(n) the defined terms are

in quotation marks. The comment is well taken that there should be

uniformity. Accordingly, paragraphs (l), (m) and (n) are revised by

italicizing the first occurrence of each of the following defined

terms: ``junior party'', ``same patentable invention'' and ``separate

patentable invention.''

The Notice of Proposed Rulemaking proposed amending paragraph (f)

of Sec. 1.601 in a number of respects, including adding the following

sentence: ``A count should be broad enough to encompass the broadest

corresponding patentable claim of each of the parties.'' One comment

questioned whether the requirement is to be applied only at the time

the interference is declared or throughout the interference. The

comment notes that after an interference is declared, prior art may

come to light which renders unpatentable all of the parties' claims

that correspond to the count. The comment suggests that under these

circumstances, requiring a count to be patentable over the prior art

could mean that there might not be a proper count. According to the

comment, a result might be that the Board, whose authority to enter

judgments under the rules is limited to claims that correspond to a

count (Secs. 1.658 and 1.659), would be unable to enter judgment

against the claims on the ground of unpatentability. Furthermore, since

the Notice of Proposed Rulemaking was published, it has become apparent

that Sec. 1.601(f) could also be clarified in two other respects.

First, the count should be broad enough to encompass all of the

patentable claims that are designated as corresponding to the count, as

opposed to solely each party's broadest corresponding patentable claim,

i.e., where a party claims ABCDE in one claim and ABCDF in another

claim and both claims are designated to correspond to the count. The

current language of the rule can be argued to overlook the situation

where a party has specific claims but no generic claim. Second, it

should be made clear that the term ``patentable'' as used in

Sec. 1.601(f) in describing the scope of the count means patentable in

view of the prior art, as opposed to unpatentability based on non-prior

art grounds, e.g., the written description requirement of 35 U.S.C.

112, first paragraph. Accordingly, in lieu of the sentence proposed in

the Notice of Proposed Rulemaking, Sec. 1.601(f) is revised to include

the following sentence: ``At the time the interference is initially

declared, a count should be broad enough to encompass all of the claims

that are patentable over the prior art and designated to correspond to

the count.'' A similar change is made in Secs. 1.603 and 1.606. That

is, instead of revising these rules to require that each application

``must contain, or be amended to contain, at least one patentable claim

that corresponds to the count,'' as proposed in the Notice of Proposed

Rulemaking, these rules as amended require that each application ``must

contain, or be amended to contain, at least one claim that is

patentable over the prior art and corresponds to the count.''

The Notice of Proposed Rulemaking also proposed adding to

Sec. 1.601(f) a [[Page 14501]] sentence stating: ``A count may not be

so broad as to be unpatentable over the prior art.'' Several comments

questioned the meaning of the proposed sentence on the ground that a

count, unlike a claim, does not have an effective filing date for

purposes of establishing what is available against it as prior art. In

view of the comments, the proposal to add the sentence is hereby

withdrawn.

The Notice of Proposed Rulemaking proposed to amend the second

sentence of Sec. 1.601(f) by changing ``which corresponds'' to read

``that is designated to correspond.'' This proposal should have

referred instead to the third sentence, which is revised in the manner

proposed. It was also proposed to revise the fourth and fifth sentences

to read as follows, except that, for the reasons given above, the terms

``correspond exactly'' and ``correspond substantially'' are italicized

rather than set off by quotation marks:

A claim of a patent or application which is designated to

correspond to a count that is identical to a count is said to

correspond exactly to the count. A claim of a patent or application

designated to correspond to a count that is not identical to a count

is said to correspond substantially to the count.

On oral comment suggested that these sentences could be made clearer by

revising them to read as follows:

A claim of a patent or application that is designated to

correspond to a count and is identical to the count is said to

correspond exactly to the count. A claim of a patent or application

that is designated to correspond to a count but is not identical to

the count is said to correspond substantially to the count.

This suggestion is being adopted.

As proposed in the Notice of Proposed Rulemaking, the fifth

sentence of Sec. 1.601(f) is revised by removing the phrase ``but which

defines the same patentable invention as the count,'' which is used to

describe a claim that corresponds to the count but is not identical to

the count. The phrase is superfluous because a claim that corresponds

to the count by definition is directed to the same patentable invention

as the count.

The Notice of Proposed Rulemaking proposed to revise the last

sentence of Sec. 1.601(f) to state that: ``A phantom count is

unpatentable to all parties under the written description requirement

of the first paragraph of 35 U.S.C. 112.'' One comment said that the

sentence as proposed to be revised is inaccurate supposedly because a

phantom count is not necessarily unpatentable to all parties for

lacking written description support. According to the comment, a party

may have written description support for a new claim identical to the

count, yet choose not to present such a claim during the interference

for tactical reasons, such as the desire to keep the count narrow

enough to prevent an opponent from presenting priority evidence it

might be able to produce with respect to a broader count. Another

comment suggested that a phantom count be defined as a count that is

``broader than the disclosure of any party to the interference.'' A

third comment suggested that patentability under the enablement and

best mode requirements be addressed along with patentability under the

written description requirement. Apart from the comments, since

patentability affects claims rather than counts, the proposal to amend

the last sentence of Sec. 1.601(f) is hereby withdrawn and the last

sentence in its current form is removed.

One comment suggested counts serve little, if any, purpose under

the new rules. The comment states that if PTO nevertheless feels

compelled by tradition to have counts, each count should be the

alternative union of all the parties' claims that are designated to

correspond to the same invention. The suggestion that counts be

abolished altogether, while superficially appearing to have

considerable merit, is believed to be outside the scope of the present

rulemaking and, for that reason, is not being adopted at this time. The

suggestion that a count be the alternative union of all of the parties'

claims that define the same patentable invention would not appear to

require any change in the rules. The formulation of the count, whether

by reference to particular claims in the parties' applications/patents

or by describing the subject matter of the interference, is a matter

within the discretion of PTO at this time.

The Notice of Proposed Rulemaking proposed amending Sec. 1.601(g).

Specifically, it was proposed to define the effective filing date of an

application as the filing date of an earlier application accorded to

the application or patent under 35 U.S.C. 119, 120, 121 or 365, or, if

no benefit is accorded, the filing date of the application, and to

define the effective filing date of a patent as the filing date of an

earlier application accorded to the patent under 35 U.S.C. 120, 121, or

365(c) or, if no benefit is accorded, the filing date of the

application which matured into the patent. The purpose of including the

reference to 35 U.S.C. 121 is to eliminate any doubt that a divisional

application may be entitled to an earlier filing date in accordance

with 35 U.S.C. 121.

One comment suggested that the definition of effective filing date

in Sec. 1.601(g) should be expressly keyed to the claims rather than to

the applications and patents, since different claims in the same

application or patent may have different effective filing dates. The

comment also suggested that the rules should be revised to make it

clear that a motion under Sec. 1.633(h) to add a reissue application

need not be accompanied by a motion under Sec. 1.633(f) for benefit of

the patent sought to be reissued. Another comment suggested that the

rule be revised to state that the effective filing date referred to in

Sec. 1.601(g) is the effective filing date of an application which

constitutes a constructive reduction to practice of the subject matter

of the count so as to make it clear that the rule is not referring to

the effective filing date of an involved claim. These comments

demonstrate that there is considerable uncertainty with respect to the

inter-relationship between benefit issues and priority proof issues,

including, among other issues, (a) benefit for a claim, (b) benefit for

a count, (c) constructive reductions to practice based on a species

disclosed in an earlier application (foreign or domestic) when claims

of the U.S. application are not supported under Sec. 119 in the

priority document (see In re Gosteli, 872 F.2d 1008, 10 USPQ2d 1614

(Fed. Cir. 1989) and In re Scheiber, 587 F.2d 59, 199 USPQ 782 (CCPA

1978), and compare to the so-called one species is sufficient for

priority ``rule''), and (d) the fact that under interference practice

since 1985, patentability is an issue which can be raised whereas prior

to 1985, priority was ``not ancillary'' and could not be raised. A

notice of proposed rulemaking will be issued in due course to address

the issue, as well as other issues raised in comments responding to the

current Notice of Proposed Rulemaking. A comment that the language of

the proposed amendment to Sec. 1.601(g) fails to take into account the

fact that a patent may be accorded benefit of the filing date of an

earlier foreign application during the interference is, however, well

taken. Accordingly, Sec. 1.601(g) is revised to make clear that a

patent may be entitled to benefit under 35 U.S.C. 119.

As proposed in the Notice of Proposed Rulemaking, Sec. 1.601(j) is

revised by changing ``which'' to ``that.'' One comment suggested

changing ``that corresponds to a count'' to ``that is designated to

correspond to a count'' for clarity and consistency with the language

in Sec. 1.601(f). The suggestion is being adopted. [[Page 14502]]

In Sec. 1.601, paragraph (1) is revised, as proposed, by changing

``assignee'' to ``assignee of record in the Patent and Trademark

Office.''

Paragraph (q) of Sec. 1.601 is revised by deleting ``a panel of''

as superfluous.

Section 1.602 is revised by changing ``within 20 days of'' to

``within 20 days after.'' One comment suggested clarification of the

meaning of ``any right, title and interest,'' noting involvement in

several disputes over whether this includes a relationship such as a

non-exclusive license, and also questioned whether the rule requires a

party in a three-party interference to disclose that it is paying

another party's expenses or attorney fees. The suggestion, which is

outside the scope of the present rulemaking, is not being adopted at

this time. The suggestion will be made the subject of a future notice

of proposed rulemaking.

Sections 1.603 and 1.606 are revised, as proposed, by deleting the

third sentence (``Each count shall define a separate patentable

invention.'') as redundant in view of the identical sentence in

Sec. 1.601(f) and by requiring that each application to be put into

interference contain, or be amended to contain, at least one claim

which is patentable over the prior art and which corresponds to each

count. The introductory language in each of these sections (``Before an

interference is declared * * *'') makes it clear that the patentability

requirement applies at the time that the interference is declared, as

opposed to at all times during the interference.

One comment suggested that Secs. 1.603 and 1.606 be further revised

to require the examiner to examine all of the prior art in all of the

potential parties' application and patent files in making a

patentability determination. The suggestion is not being adopted.

Ordinarily, the examiner determines that claims are patentable before

an interference is declared. While there may be no express statement,

consideration of whether claims are patentable in one application to be

placed in an interference normally would involve consideration of prior

art in a second application to be placed in the same interference.

In Sec. 1.604, paragraph (a)(1) is revised by changing ``his or

her'' to ``its.''

In Sec. 1.605, paragraph (a) is revised for clarification

essentially in the manner set forth in the Notice of Proposed

Rulemaking. Part of the last sentence of the rules, however, is revised

to require an applicant to ``explain why the other claims would be more

appropriate to be designated to correspond to a count in any

interference which may be declared.'' In responding to a request by an

examiner to copy a claim for purpose of a possible interference, an

applicant should present the exact claim requested by the examiner.

Often, however, an applicant may believe that the claim suggested by

the examiner is not appropriate. For example, an applicant may believe

it cannot support the exact claim requested by the examiner.

Accordingly, while the applicant must present the exact claim requested

by the examiner, the applicant is also free to suggest that the exact

claim is inappropriate, but that other claims proposed by the applicant

are more appropriate to be designated as corresponding to a count of

any possible interference. Obviously, the applicant is also free to

make a suggestion to the examiner as to what the count should be in any

interference. The examiner can then determine whether an applicant's

alternatively proposed claims are more appropriate than the exact claim

suggested.

One comment suggested that Sec. 1.605 further be revised ``to

include a reminder of the statutory prohibition against an interference

copying claims from a patent issued more than one year, (as Rule 607

already does for applicants), since some examiners have been doing it''

(original emphasis). The comment is understood to mean that examiners

have suggested that applicants copy patent claims in violation of 35

U.S.C. 135(b). The suggested reminder is not incorporated into the

rule, because it would not implement or interpret any requirement of

law, and, while plausibly legitimate, is better made in administrative

instructions, such as the Manual of Patent Examining Procedure.

Section 1.606 is also revised, as proposed, by adding a sentence

stating that the claim in the application need not be, and most often

will not be, identical to a claim in the patent.

One comment suggested that the last sentence of Sec. 1.606, which

the Notice of Proposed Rulemaking did not propose to revise, be revised

to apply to application claims as well as patent claims and that the

sentence be broken into two sentences for clarity, so as to read as

follows:

At the time an interference is initially declared (Sec. 1.611),

a count shall not be narrower in scope than (i) any application

claim designated to correspond to the count and indicated in the

form PTO-850 as allowable or (ii) any patent claim designated to

correspond to the count. Any single patent claim designated to

correspond to the count will be presumed, subject to a motion under

Sec. 1.633(c), not to contain separate patentable inventions.

The suggestion is being adopted; however, because it is inappropriate

to refer to a PTO form in a rule, the following language is used:

At the time an interference is initially declared (Sec. 1.611),

a count shall not be narrower in scope than any application claim

that is patentable over the prior art and designated to correspond

to the count. Any single patent claim designated to correspond to

the count or any patent claim designated to correspond to the count

will be presumed, subject to a motion under Sec. 1.633(c), not to

contain separate patentable inventions.

One comment questioned why the declaration of interferences under

Sec. 1.606 is limited to unexpired patents, suggesting that there are

rare cases where it would be very desirable to have an interference

between an application and either a patent that has expired or a patent

that has lapsed for failure to pay a maintenance fee. The enabling

statute, however, authorizes interferences involving patents which are

``unexpired.'' 35 U.S.C. 135(a).

In Sec. 1.607, paragraph (a)(4) is revised to change ``his or her''

to ``its'' and to add a new paragraph (a)(6) requiring an applicant

seeking an interference with a patent to demonstrate compliance with 35

U.S.C. 135(b), which provides:

A claim which is the same as, or for the same or substantially

the same subject matter as, a claim of an issued patent may not be

made in any application unless such a claim is made prior to one

year from the date on which the patent was granted.

Requiring an applicant to show compliance with 35 U.S.C. 135(b) before

an interference is declared should prevent an interference from being

declared where the applicant cannot satisfy Sec. 135(b) with respect to

any claim alleged to correspond to the proposed count. One comment

suggested that requiring an applicant who has requested an interference

with a patent to demonstrate compliance with Sec. 135(b) is ultra

vires. The comment argues that In re Sasse, 629 F.2d 675, 207 USPQ 107

(CCPA 1980), precludes an examiner from relying on Sec. 135(b) to

refuse to declare an interference and that Sasse can only be overruled

by statute or decision of the Federal Circuit in banc, citing Chevron

U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837

(1984). The argument in the comment is not persuasive. Sasse held that

a claim added in violation of Sec. 135(b) cannot be rejected by PTO

under that statute; it did not hold that PTO cannot refuse to declare

an interference where all of an applicant's claims that are proposed to

correspond to the count fail to satisfy the statute. In fact, the court

specifically held that the effect of Sec. 135(b) is that ``a

[[Page 14503]] procedural statutory bar arises proscribing the

instigation of interferences after a specified time interval.'' 629

F.2d at 680, 207 USPQ at 110 (original emphasis).

In Sec. 1.608, paragraphs (a) and (b) are revised in several

respects, as proposed. First, both paragraphs are revised by removing

the information about effective filing dates, which appears instead in

Sec. 1.601(g), as amended. Second, the current requirement of paragraph

(a) for an affidavit filed by the applicant has been relaxed. Paragraph

(a), as amended, permits a statement to be filed by the applicant or a

practitioner of record. Third, ``sufficient cause'' in paragraph (b) of

Sec. 1.608 and in other interference rules is changed to ``good cause''

in order to make it clear that only one ``cause'' standard is intended.

Fourth, ``8\1/2\ x 11 inches (21.8 by 27.9 cm.)'' is changed to ``21.8

by 27.9 cm. (8\1/2\ x 11 inches)'' to put the emphasis on the metric

measurements. Fifth, the phrase ``(Sec. 1.653(g) and (h)'') is revised

to read ``(Sec. 1.653(g))'' in view of the removal and reservation of

Sec. 1.653(h).

One comment stated a belief that there may be some confusion

regarding the application of Sec. 1.608(b) when the basis upon which an

applicant is entitled to judgment is not priority of invention.

According to the comment, while Sec. 1.608(b) appears to include

derivation as a basis, it is uncertain whether it applies in a

situation where the applicant believes the patent claims are

unpatentable over prior art that does not also render unpatentable the

applicant's claims. The suggested change is not necessary. The

comment's statement that derivation (35 U.S.C. 102(f)) provides a basis

for a showing under Sec. 1.608(b) is correct. Section 1.608(b) requires

an applicant to explain why the applicant is entitled to judgment vis-

a-vis the patentee. As explained in the Notice of Final Rule, 49 FR

48416, 48421 (Dec. 12, 1984), ``[t]he evidence may relate to

patentability and need not be restricted to priority.'' Such evidence

could be, for example, evidence relating to derivation as noted by the

comment.

The Notice of Proposed Rulemaking proposed that Sec. 1.609(b)(2),

be revised to require the examiner's statement (i.e., currently Form

PTO-850, also known as the initial interference memorandum) to explain

why each claim designated as corresponding to a count is directed to

the same patentable invention as the count. It was also proposed that

Sec. 1.609(b)(3) be revised to require the examiner's statement to

explain ``why each claim designated as not corresponding to a count is

not directed to the same patentable invention as the count.'' The

purpose of these amendments is to provide the Board and the parties

with the benefit of the examiner's reasoning and to provide a better

foundation for considering preliminary motions to designate claims as

corresponding or as not corresponding to a count.

Paragraph (b)(2) is revised essentially as proposed in the Notice

of Proposed Rulemaking. Upon further reflection, no need is seen for

the examiner to indicate whether a claim corresponds exactly or

substantially to a count.

One comment suggested that the proposed requirement of

Sec. 1.609(b)(3) may be unduly burdensome in multi-count interferences

if it requires an examiner to explain not only why an involved claim

corresponds to one count, but also why that claim does not correspond

to each other count. Another comment, apparently construing the

proposed language in the same way, suggested that the requirement could

be made clearer by modifying the proposed language to read, ``why each

claim designated as not corresponding to each (or the) count is not

directed to the same patentable invention as the count.'' To make it

clear that such a requirement is not intended, the proposed amendment

is withdrawn and paragraph (b)(3) is instead revised to read, ``why

each claim designated as not corresponding to any count is not directed

to the same patentable invention as any count.'' Under

Sec. 1.609(b)(3), as adopted, the examiner's statement need not explain

why a claim that is designated as corresponding to one count is not

directed to the same patentable invention as another count in the

interference.

One comment suggested that interferences involving patentees who

are incontestably junior could be shortened by amending the rules to

require a junior party patentee, prior to the preliminary motion

period, to make a prima facie case of priority of the type currently

required of junior party applicants by Sec. 1.608. The suggestion is

outside the scope of the present rulemaking and is not being adopted,

but may be considered in a future notice of proposed rulemaking.

One comment suggested that Secs. 1.609(b)(1) and 1.611(c)(6) also

be revised to require that the examiner and the declaration notice

explain, when there will be more than one count, why each count is

patentably distinct from the other counts. The suggestion is being

adopted.

Section 1.610(a) is revised by deleting the language ``a panel

consisting of at least three members of'' as superfluous and by

deleting the reference to Sec. 1.640(c), which is revised to allow a

request for reconsideration under Sec. 1.640(c) to be decided by an

individual administrative patent judge rather than by the Board.

Section 1.610(b) is also revised by deleting ``Unless otherwise

provided in this section,'' as unnecessary in light of the amendment to

paragraph (a).

One comment suggested that Sec. 1.610(a) be revised to provide that

an interference is handled throughout, including final hearing, by a

single administrative patent judge, thereby avoiding the delays that

occur when an issue is deferred to final hearing for decision by a

three-member panel. The comment also suggested that Sec. 1.610(b) be

revised to provide that, at the discretion of the administrative patent

judge, a panel consisting of two or more administrative patent judges

may sit at final hearing (as well as deciding interlocutory orders).

The suggestions have not been adopted. First, the suggestions are

outside the scope of the present rulemaking. Second, the suggestions

could not be implemented without amendment of 35 U.S.C. 7(b), which

requires that an interference must be decided by at least three members

of the Board.

One comment suggested that the second sentence of Sec. 1.610(c)

(``Times for taking action shall be set, and the administrative patent

judge shall exercise control over the interference such that the

pendency of the interference before the Board does not normally exceed

two years.'') be removed as wishful thinking that only confuses

district court judges confronted with a motion to stay a civil action

pending the outcome of an interference. The suggestion is not being

adopted. The two-year period, while not always attainable, is

nevertheless believed to be realistic.

The Notice of Proposed Rulemaking proposed amending Sec. 1.611 by

redesignating paragraph (c)(8) as paragraph (c)(9) and adding a new

paragraph (c)(8) requiring that a notice of declaration of interference

state ``[w]hy each claim designated as corresponding to a count is

directed to the same patentable invention as the count and why each

claim designated as not corresponding to a count is not directed to the

same patentable invention as the count.'' For the reasons given above

in the discussion of Sec. 1.609(b)(3), the proposed language is changed

to read, ``[t]he examiner's explanation as to why each claim designated

as corresponding to a count is directed to the same patentable

invention as the count and why each [[Page 14504]] claim designated as

not corresponding to any count is not directed to the same patentable

invention as any count.'' The examiner's explanation should assist the

parties in deciding whether to move to have claims designated as

corresponding or not corresponding to the count. Normally, parties can

expect that a copy of the examiner's explanation will accompany the

notice declaring the interference. It should be understood that in

declaring the interference, the administrative patent judge is neither

agreeing nor disagreeing with the examiner's explanation and that the

explanation is not binding on the administrative patent judge or the

Board in further proceedings in the interference. As proposed in the

Notice of Proposed Rulemaking, the first word in each of paragraphs

(d)(2) and (d)(3) is also capitalized.

One comment suggested deleting ``, oppositions to the motions, and

replies to the motions'' from Sec. 1.611(d)(3) as surplusage. The

suggestion is being adopted. In addition, paragraphs (d)(1), (d)(2) and

(d)(3) are revised to be separately indented under paragraph (d).

Paragraph (a) of Sec. 1.612 is revised to change ``opposing

party's'' to ``opponent's'' and to add a sentence referring to

Sec. 1.11(e) concerning public access to interference files. One

comment suggested amending Sec. 1.612(a) to provide for automatic

access to an application referred to in an opponent's involved case

rather than requiring a motion for access under Sec. 1.635, as under

the current rule. The suggestion, which is outside the scope of the

present rulemaking, is not being adopted.

Regarding Sec. 1.613, one comment suggested that paragraph (c) be

revised to give an administrative patent judge the authority to decide

disqualification questions rather than requiring such questions to be

referred to the Commissioner. Under current practice, the authority to

decide motions for disqualification of counsel in cases before the

Board of Patent Appeals and Interference has been delegated by the

Commissioner to the Chief Administrative Patent Judge.

Administratively, it is more appropriate that authority to decide

disqualification matters be capable of being delegated to specific

individuals rather than being assigned to administrative patent judges

generally through a rule. The comment also suggested that paragraph (d)

be revised to clarify whether ``attorney or agent of record'' includes

an attorney or agent who is merely ``of counsel.'' The term ``attorney

or agent of record'' in the interference rules should be construed in

the manner it is defined in 37 CFR 1.34(b). The rules do not recognize,

or use, the term ``of counsel.'' Accordingly, the suggestions are not

being adopted. Furthermore, each suggestion is outside the scope of the

present rulemaking.

Paragraph (a) of Sec. 1.614 is clarified, as proposed in the Notice

of Proposed Rulemaking, by changing ``the Board shall assume

jurisdiction'' to ``the Board acquires jurisdiction.'' One comment

suggested amending Sec. 1.614(c) (``An administrative patent judge,

where appropriate, may for a limited purpose restore jurisdiction to

the examiner over any application involved in the interference.'') by

deleting the current language ``, when appropriate,'' as surplusage in

view of ``may.'' The suggestion is being adopted.

In addition to amending Sec. 1.616 to authorize an award of

compensatory attorney fees and expenses in appropriate circumstances,

as discussed above, current paragraph (b), which is redesignated as

paragraph (a)(2), is revised to permit a party to be sanctioned for

failing to comply with the rules or an order by entering an order

precluding the party from filing ``a paper.'' Current paragraph (b)

permits entry of an order precluding the filing only of a motion or a

preliminary statement. The term ``paper'' will be given a broad

construction, and includes a motion, a preliminary motion, a

preliminary statement, evidence in the form of documents, a brief, or

any other paper.

Section 1.617(b) is revised, as proposed, to authorize a party

against whom a Sec. 1.617(a) order to show cause has been issued to

respond with an appropriate preliminary motion under Sec. 1.633 (c),

(f) or (g). The reason is that a preliminary motion under Sec. 1.633(c)

to redefine the interference, under Sec. 1.633(f) for benefit of the

filing date of an earlier application or under Sec. 1.633(g) attacking

the benefit accorded a patentee may be appropriate where the count set

forth in the notice declaring the interference is not the same as the

count proposed in the applicant's showing under Sec. 1.608(b). A

preliminary motion under Sec. 1.633 (f) or (g) may also be appropriate

where the count set forth in the notice declaring the interference is

the same as the count proposed in the applicant's showing under

Sec. 1.608(b), but the notice either fails to accord the applicant the

benefit of the filing date of an earlier application whose benefit was

requested in the Sec. 1.608(b) showing or accords the patentee the

benefit of the filing date of an earlier application whose benefit the

Sec. 1.608(b) showing argued should not be accorded the patentee.

One comment suggested that Sec. 1.617(b) be revised to state that a

change of counsel is not ``good cause'' for presenting additional

evidence in response to a Sec. 1.617(a) show cause order, noting the

similar amendment proposed in the Notice of Proposed Rulemaking for

Sec. 1.655(b). The suggestion is not being adopted. Moreover, the

statement that a change of attorney is not generally good cause is not

being added to Sec. 1.655(b) as proposed. Upon reflection, it is better

to leave the term ``good cause'' to be decided on a case-by-case basis.

The proposed amendments to the rules to state that a change of attorney

is generally not good cause for considering an issue belatedly raised

by a new attorney is generally correct. In fact, recent experience

shows that parties often retain new counsel after they find that ``they

are in trouble in the interference.'' Retaining new counsel midway

through the case is almost never a reason to subject the opponent to

starting over again. On the other hand, the rules use the term ``good

cause'' in various places and PTO does not want to incorrectly give the

impression that change of attorney is not good cause only when

specifically stated in a rule which uses the phrase ``good cause.'' Nor

does PTO want to have a per se rule which says that a change of

attorney cannot be good cause in any instance, although it would be

rare for a change of attorney to be good cause.

One comment suggested that the second sentence of Sec. 1.617(d) be

revised to indicate that any statement filed by an opponent may set

forth views as to why any (c), (f) or (g) motion filed by the applicant

should be denied. The suggestion is not being adopted. The first

sentence of Sec. 1.617(d) as revised authorizes an opponent to file an

opposition to any (c), (f) or (g) motion filed by the applicant, which

opposition should include views as to why any (c), (f) or (g) motion

filed by the applicant should be denied.

Another comment suggested that Sec. 1.617(d), which currently

prohibits an opponent from requesting a hearing, be revised to permit

such a request on the ground that a hearing is the opponent's best

chance to pretermit the whole interference process. The suggestion,

which is outside the scope of the present rulemaking, is not being

adopted.

The Notice of Proposed Rulemaking proposed amending the first

sentence of Sec. 1.618(a), which currently reads ``The Patent and

Trademark Office shall return to a party any paper presented by the

party when the filing of the paper is [[Page 14505]] unauthorized by,

or not in compliance with the requirements of, this subpart'' to read:

``An administrative patent judge or the Board shall enter an order

directing the return to a party of any paper presented by the party

when the filing of the paper is not authorized by, or is not in

compliance with the requirements of, this subpart.'' The Notice of

Proposed Rulemaking also proposed amending the second sentence of

paragraph (a), which currently states that any paper returned ``will

not thereafter be considered by the Patent and Trademark Office in the

interference,'' by deleting ``by the Patent and Trademark Office.'' One

comment questioned why the phrase ``by the Patent and Trademark

Office'' is proposed to be removed. The reason is that the phrase is

superfluous. Another comment questioned who is being ordered to return

the paper and suggested that Sec. 1.618(a) be revised to simply provide

that the administrative patent judge shall return the unauthorized

papers, with the understanding that it is the administrative patent

judge's secretary who actually mails orders, opinions, etc. The

suggestion is being adopted, but with the rule stating that the paper

shall be returned by an administrative patent judge or the Board.

Although not proposed in the Notice of Proposed Rulemaking, the last

sentence of Sec. 1.618(a), which states that a party may be permitted

to file a corrected paper under such conditions as may be deemed

appropriate by an administrative patent judge, is revised to also allow

the Board to set such conditions.

One comment suggested an amendment to Sec. 1.622(a) to clarify that

the inventors named in the preliminary statement do not have to be all

of the inventors named in the party's case in interference, citing

Larson v. Johenning, 17 USPQ2d 1610 (Bd. Pat. App. & Int. 1990). The

comment alternatively suggested dropping preliminary statements

altogether on the grounds that they are (a) useless and (b) a snare and

a delusion. These suggestions are outside the scope of the present

rulemaking and are not being adopted.

Section 1.625(a) is revised, as proposed, by deleting ``the

invention was made in the United States or abroad and'' as surplusage.

Section 1.626 is revised, as proposed, by revising ``earlier

application filed in the United States or abroad'' to read ``earlier

filed application.'' The same change is made in Secs. 1.630, 1.633(f),

1.633(g), 1.637(c)(1)(vi), 1.637(e)(1)(viii), 1.637(e)(2)(vii) and

1.637(h)(4).

Section 1.628(a) is revised, as proposed, to change ``ends of

justice'' to ``interest of justice'' to be consistent with the language

used in Secs. 1.628(a) and 1.687(c), since a single standard is

intended. The ``interest of justice'' requirement will be applied only

to corrected preliminary statements that are filed on or after the due

date for serving preliminary statements. Where the moving party has not

yet seen the opponent's statement, an opponent normally will not be

prejudiced by the filing of a corrected statement. One comment raised

the following question:

What is the standard if the motion is filed before the time set

by the APJ for service of preliminary motions [sic, statements]? If,

as implied by the comments, amendments prior to that date can be

made freely, why not simply provide that the preliminary statements

(if they are to be retained at all) are to be filed and served on

the date set by the APJ pursuant to 37 CFR 1.628(a)? Particularly

where it is obvious that the count(s) is or are going to be changed

anyway, all of the parties' work preparing and the PTO's work in

processing the original preliminary statement is wasted effort

anyway.

(Original emphasis; footnote omitted.) The standard for a motion to

amend that is filed before service of preliminary statements is that it

be accompanied by an affidavit stating when the error occurred and be

filed ``as soon as practical after discovery of the error.'' The

suggestion that preliminary statements be filed and served on the date

set by the administrative patent judge pursuant to 37 CFR 1.628(a) is

not understood, since that rule does not provide for setting such a

date. Instead, the provisions relating to filing and serving

preliminary statements appear in Secs. 1.621(a) and 1.631,

respectively. To the extent the comment is suggesting that these

provisions be revised, the suggestion is outside the scope of the

present rulemaking and is not being adopted.

As proposed in the Notice of Proposed Rulemaking, paragraphs (a),

(c)(1) and (d) of Sec. 1.629 are revised to make each consistent with

the amendment of the definition of ``effective filing date'' in

Sec. 1.601(g). One comment suggested that in Sec. 1.629(a), second

sentence, the comma between ``statement'' and ``as,'' which was

proposed to be removed, be retained for clarity. As suggested, the

comma is retained.

The first sentence of Sec. 1.631(a) is revised by removing ``by the

examiner-in-chief'' (first occurrence) as superfluous. The Notice of

Proposed Rulemaking incorrectly proposed to remove the second

occurrence of this phrase. Thus revised and with the remaining

occurrences of ``examiner-in-chief'' changed to ``administrative patent

judge,'' the first sentence of Sec. 1.631(a), as it was proposed to be

revised, reads as follows: ``Unless otherwise ordered by an

administrative patent judge, concurrently with entry of a decision on

preliminary motions filed under Sec. 1.633, any preliminary statement

filed under Sec. 1.621(a) shall be opened to inspection by the senior

party and any junior party who filed a preliminary statement.'' (The

proposed language set forth in the Notice of Proposed Rulemaking

inadvertently omitted the phrase, ``concurrently with entry of a

decision on preliminary motions filed under Sec. 1.633,'' which appears

in the current rule and was not proposed to be removed.) In order to

make it clear that the phrase ``concurrently with entry of a decision

on preliminary motions filed under Sec. 1.633'' modifies the succeeding

phrase rather than the preceding phrase, the second comma is removed,

so that the first sentence of Sec. 1.631(a) as revised reads as

follows: ``Unless otherwise ordered by an administrative patent judge,

concurrently with entry of a decision on preliminary motions filed

under Sec. 1.633 any preliminary statement filed under Sec. 1.621(a)

shall be opened to inspection by the senior party and any junior party

who filed a preliminary statement.''

Section 1.632 is revised, as proposed, to more precisely state that

a notice of intent to argue abandonment, suppression or concealment

must be filed ``within ten days after,'' rather than ``within ten days

of,'' the close of the testimony-in-chief of the opponent. One comment

suggested that Sec. 1.632 be further revised to (1) state what happens

next and (2) provide a period for shifting the burden of proof. The

suggestion is outside the scope of the present rulemaking, and is not

being adopted.

Several comments were received with respect to Sec. 1.633 in

general. Two of the comments noted that Sec. 1.642, which presumably

was intended to allow an administrative patent judge to add a new party

to an interference, has also been used to ``request'' addition of an

application or patent of an already involved party, citing Theeuwes v.

Bogentoft, 2 USPQ2d 1378 (Comm'r Pat. 1986). The two comments suggested

that Sec. 1.633 be revised to specifically provide for a motion to

request addition of an application or patent of a party in order to

make it clear that the standards for preliminary motions apply. Two

other comments suggested amending Secs. 1.633 and 1.637(h) to authorize

a [[Page 14506]] motion to add a claim to a party's application or an

opponent's application (including a reissue application) to be

designated as not corresponding to the count, thereby removing what is

alleged to be one of the major drawbacks of the current rules. Still

another comment suggested that in order to avoid the inefficiencies

that result when prior art surfaces for the first time in a motion

under Sec. 1.633(a), which may render moot other preliminary motions,

the parties should be required to file and serve all relevant prior art

of which they are aware prior to the preliminary motion period. While

some of the suggestions have merit, all are outside the scope of the

present rulemaking and are not being adopted.

As proposed in the Notice of Proposed Rulemaking, paragraph (a) of

Sec. 1.633 is revised in several respects. The first is to specify that

a claim shall be construed in light of the specification of the

application or patent in which it appears. The amendment clarifies an

ambiguity in PTO interference practice. Previously, the Federal Circuit

had interpreted Sec. 1.633 to require an ambiguous claim to be

interpreted in light of the patent from which it was copied. In re

Spina, 975 F.2d 854, 856, 24 USPQ2d 1142, 1144 (Fed. Cir. 1992). While

this interpretation was a possible interpretation of previous

Sec. 1.633, PTO had intended that a copied claim be interpreted in

light of the specification of the application or patent in which it

appears. The rule, as adopted, will make ex parte and inter partes

practice the same. A claim that has been added to a pending application

for any purpose, including to provoke an interference, will be given

the broadest reasonable interpretation consistent with the disclosure

of the application to which it is added, as are claims which are added

during ex parte prosecution. As explained In re Zletz, 893 F.2d 319,

321, 13 USPQ2d 1320, 1322 (Fed. Cir. 1989):

[d]uring patent examination the pending claims must be interpreted

as broadly as their terms reasonably allow. When the applicant

states the meaning that the claim terms are intended to have, the

claims are examined with that meaning, in order to achieve a

complete exploration of the applicant's invention and its relation

to the prior art. See In re Prater, 415 F.2d 1393, 1404-05, 162 USPQ

541, 550-51 (CCPA 1969) (before the application is granted, there is

no reason to read into the claim the limitations of the

specification). The reason is simply that during patent prosecution

when claims can be amended, ambiguities should be recognized, scope

and breadth of language explored, and clarification imposed.

Burlington Industries, Inc. v. Quigg, 822 F.2d 1581, 1583, 3 USPQ2d

1436, 1438 (Fed. Cir. 1987); In re Yamamoto, 740 F.2d 1569, 1571,

222 USPQ 934, 936 (Fed. Cir. 1984).

If a party believes an opponent's claim corresponding to the count is

ambiguous when construed in light of the opponent's disclosure, the

party should move under Sec. 1.633(a) for judgment against the claim on

the ground of unpatentability under the second paragraph of 35 U.S.C.

112. In paragraph (a), ``by reference to the prior art of record'' is

removed as unnecessary. Paragraphs (a)(1) and (a)(2) of Sec. 1.633 are

revised by deleting some unnecessary language from each paragraph and

by changing ``derivation'' to ``Derivation'' in paragraph (a)(2). One

comment suggested changing ``corresponding to a count'' in

Sec. 1.633(a) to ``designated to correspond to a count'' for

consistency with Sec. 1.601(f), as amended. The suggestion is being

adopted.

Although not proposed in the Notice of Proposed Rulemaking,

Sec. 1.633(a) is also revised by adding a sentence requiring that the

motion separately address each claim alleged to be unpatentable. For

example, where a plurality of claims are alleged to be unpatentable

over prior art, the motion must compare each of those claims to the

prior art. As a result, a party would not be allowed to allege that all

of the opponent's claims that correspond to the count are unpatentable

simply because the opponent's claim that corresponds exactly to the

count is anticipated by, or would have been obvious in view of, the

prior art. At the time an interference is declared, it may appear (and

the parties may then believe) that all claims designated as

corresponding to a count are directed to the same patentable invention.

Once additional prior art is discovered in the preliminary motion

period, however, what was the case when the interference was declared

may no longer be the case. Hence, a preliminary motion under

Sec. 1.633(a) alleging unpatentability over the prior art should

address each claim believed to be unpatentable. In the case where a

party has two claims, e.g., a genus and a species, if a preliminary

motion under Sec. 1.633(a) is filed by an opponent which argues that

only the genus is unpatentable, the party will need only respond to the

argument relative to the genus. Thus, to the extent there ever was a

perception that all claims designated to correspond to a count stand or

fall with the ``patentability of the count,'' the rule as adopted

attempts to overcome that perception. There is no presumption in an

interference that because one claim designated to correspond to a count

is unpatentable over the prior art (35 U.S.C. 102 (a), (b) and (e)),

that all claims are unpatentable over the same prior art. On the other

hand, in deciding priority of invention, all claims designated to

correspond to a count at the time priority is decided will stand or

fall together on the issue of priority.

Section 1.633(b), which concerns motions for judgment on the ground

of no interference-in-fact, was proposed to be revised to state that it

is possible for claims of opponents presented in ``means plus

function'' format to define separate patentable inventions even though

the claims of the opponents contain the same literal wording. The

reason is that the sixth paragraph of 35 U.S.C. 112, which is

applicable to ``means plus function'' limitations in application claims

and patent claims, provides that such limitations are to be construed

as covering the corresponding structure disclosed in the associated

application or patent and equivalents thereof. In re Donaldson Co., 16

F.3d 1189, 29 USPQ2d 1845 (Fed. Cir. 1994). The proposed change has

been adopted, but with the proposed term ``opponents'' being replaced

by ``different parties.'' One comment suggested that in addition to

Donaldson, support for the amendment can be found in Blackmore v. Hall,

1905 Dec. Comm'r Pat. 561 (Comm'r Pat. 1905), and the withdrawn opinion

in Rion v. Ault, 455 F.2d 570, 172 USPQ 588 (1972) (Rion I), modified,

482 F.2d 948 (CCPA 1973) (Rion II), which the comment says stand for a

proposition even broader than the one set forth in the proposed

amendment. Inasmuch as Blackmore predates the statutory language in

question and Rion I was withdrawn by the CCPA, the suggestion is not

being adopted.

Paragraph (i) of Sec. 1.633, which in its current form authorizes a

party who opposes a preliminary motion under Sec. 1.633 (a), (b) or (g)

to file a preliminary motion under Sec. 1.633 (c) or (d), is revised to

additionally authorize a party-patentee to file a preliminary motion

under Sec. 1.633(h) to add to the interference an application for

reissue of the party's involved patent. Because a reissue application

can include an amended or new claim to be designated as corresponding

to a count, paragraph (i) as revised gives a patentee an option similar

to that afforded in the same situation to a party-applicant, who can

file a preliminary motion under Sec. 1.633(c)(2) to amend a claim in,

or add a claim to, its involved application to be designated as

corresponding to a count. One comment suggested further amending

Sec. 1.633(i) to authorize a Sec. 1.633(c)(1) motion in response to an

[[Page 14507]] opponent's Sec. 1.633(c)(1) motion. The suggestion,

which is outside the scope of the present rulemaking, is not being

adopted.

One comment suggested that Sec. 1.636, as proposed to be revised,

which requires that a motion under Sec. 1.634 to correct inventorship

of a patent or application ``be diligently filed after an error is

discovered'' is ultra vires with respect to patents. The suggestion is

outside the scope of the present rulemaking and is not being adopted.

The suggestion will be considered in a future rulemaking.

The Notice is Proposed Rulemaking proposed amending paragraph (a)

of Sec. 1.637 to incorporate the essence of a notice of August 10,

1990, published as ``Interferences--Preliminary Motions for Judgment,''

1118 Off. Gaz. Pat. Office 19 (Sept. 11, 1990). Specifically, the

Notice of Proposed Rulemaking proposed adding the following language at

the end of the paragraph:

If a party files a motion for judgment under Sec. 1.633(a)

against an opponent based on the ground of unpatentability over

prior art, and the dates of the cited prior art are such that the

prior art appears to be applicable to be the party, it will be

presumed, without regard to the dates alleged in the preliminary

statement of the party, that the cited prior art is applicable to

the party unless there is included with the motion an explanation,

and evidence if appropriate, as to why the prior art does not apply

to the party. If the motion fails to include a sufficient

explanation or evidence, the party will not be permitted to rely on

any such explanation or evidence in response to or in any subsequent

action in the interference.

Two comments suggested that the proposed last sentence is imprecise in

that although it is presumably intended to preclude a party whose

motion an administrative patent judge has held to include an

insufficient explanation or evidence from later supplementing the

explanation or evidence offered in the motion, the sentence is broad

enough to be construed as also precluding the party from relying on the

arguments and evidence that were offered in the motion. Accordingly,

one of the comments suggested that the proposed last sentence be

replaced by the following two sentences: ``If the administrative patent

judge holds that the motion fails to include a sufficient explanation

or evidence as to why the cited prior art is not applicable to the

party, the party will not be permitted to supplement any such

explanation or evidence in any subsequent action in the interference.

However, the party is not precluded from subsequently arguing that the

administrative patent judge's decision was incorrect.'' The substance

of the suggestions is believed to be correct, but the suggested

language will not be adopted. Instead, Sec. 1.637(a) is revised to

read:

A party filing a motion has the burden of proof to show that it

is entitled to the relief sought in the motion. Each motion shall

include a statement of the precise relief requested, a statement of

the material facts in support of the motion, in numbered paragraphs,

and a full statement of the reasons why the relief requested should

be granted. If a party files a motion for judgment under

Sec. 1.633(a) against an opponent based on the ground of

unpatentability over prior art, and the dates of the cited prior art

are such that the prior art appears to be applicable to the party,

it will be presumed, without regard to the dates alleged in the

preliminary statement of the party, that the cited prior art is

applicable to the party unless there is included with the motion an

explanation, and evidence if appropriate, as to why the prior art

does not apply to the party.

Rather than specify a particular sanction for failure of a party to

comply with Sec. 1.637(a), as adopted, it is more appropriate to rely

on application of the provisions of Sec. 1.618. A party who fails to

timely include the explanation and/or evidence required by the rule

runs a considerable risk that an explanation and/or evidence presented

at a future time will be returned as untimely. See Sec. 1.618(a).

Papers which are returned are not considered part of the record.

Section 1.637(a) was proposed to be revised to state that the

statement of material facts be ``preferably in numbered paragraphs.''

One comment suggested that numbered paragraphs be a requirement,

because it would make matters easier for opponents as well as

administrative patent judges. The suggestion is being adopted.

Ordinarily, it will be expected that each numbered paragraph will

recite a single fact which can easily be ``admitted'' or ``denied.''

The use of numbered paragraphs should make the decision-making process

of the administrative patent judge easier.

Another comment suggested that Sec. 1.637(a) be revised to require

that motions, oppositions and replies be numbered sequentially, so that

party X's opposition No. 1 will be its opposition to party Y's motion

No. 1, etc. The suggestion, while having considerable merit, is outside

the scope of the present rulemaking, and is not being adopted. The

suggestion will be made the subject of a future rulemaking effort. In

papers filed in PTO in interference cases, there is an increasing

tendency for parties to use ``long'' titles, e.g., PARTY SMITH'S

PRELIMINARY MOTION FOR DECLARATION OF PARTY OPPONENT RAYMOND'S CLAIMS

TO BE UNPATENTABLE UNDER 37 CFR Sec. 1.633(a). The opponent then

responds with an opposition styled PARTY RAYMOND'S OPPOSITION TO PARTY

SMITH'S PRELIMINARY MOTION FOR DECLARATION OF PARTY OPPONENT RAYMOND'S

CLAIMS UNPATENTABLE UNDER 37 CFR Sec. 1.633(a). The reply then tends to

be PARTY SMITH'S REPLY TO PARTY RAYMOND'S OPPOSITION TO PARTY SMITH'S

PRELIMINARY MOTION FOR DECLARATION OF PARTY OPPONENT RAYMOND'S CLAIMS

UNPATENTABLE UNDER 37 CFR Sec. 1.633(a). It should be apparent that the

styling of the paper loses its significance. Accordingly, pending a

further rulemaking effort parties in interference can simplify matters

by voluntarily adopting the essence of the suggestion by replacing the

styling of the three papers identified above with the following: (1)

SMITH'S PRELIMINARY MOTION NO. 1; (2) RAYMOND'S OPPOSITION NO. 1; and

(3) SMITH'S REPLY NO. 1. If numerous motions are filed, then sequential

numbers can be used. In a two-party interference, if the parties can

agree, one can use numbers and the other letters. In any event, it

would be of considerable help to the Board if the style of a paper does

not exceed a single line.

As proposed in the Notice of Proposed Rulemaking, Sec. 1.637(a) is

also revised by changing ``Every'' in the second sentence to ``Each.''

Section 1.637(c)(1) sets forth the requirements for a preliminary

motion to add or substitute a proposed count. The Notice of Proposed

Rulemaking proposed amending paragraph (c)(1)(v) in two respects: (1)

To require a moving party to show that the proposed count is patentable

over the prior art; and (2) to specify that a proposed substitute count

need only be shown to be patentably distinct from the other counts

proposed to remain in the interference, since a proposed substitute

count need not be patentably distinct from the count it is to replace.

Several comments opposed amending Sec. 1.637(c)(1)(v) to require a

party to show that a proposed new count is patentable over the prior

art, stating, inter alia, that the date of a count for purposes of

determining what is available as prior art is not clear. The statements

in the comment are well taken for the reasons given above in the

discussion of Sec. 1.601(f). Accordingly, the proposal to amend

paragraph (c)(1)(v) to require the moving party to show the

patentability of a proposed new count over the prior art is withdrawn.

Paragraph (c)(1)(v) is revised only to require that a proposed

substitute count must be shown to be [[Page 14508]] patentably distinct

from the other counts proposed to remain in the interference.

As proposed in the Notice of Proposed Rulemaking,

Sec. 1.637(c)(1)(vi) is revised to clarify that a preliminary motion

under Sec. 1.633(c)(1) need not be accompanied by a preliminary motion

for benefit under Sec. 1.633(f) unless the moving party seeks benefit

with respect to the proposed count.

In order to eliminate the need for an opponent to respond to a

Sec. 1.633(c)(1) motion with a preliminary motion under Sec. 1.633(f)

claiming benefit, which has the effect of delaying a decision on the

Sec. 1.633(c)(1) motion, the Notice of Proposed Rulemaking also

proposed amending Sec. 1.637 by adding a new paragraph (c)(1)(vii)

reading as follows:

If an opponent is accorded the benefit of the filing date of an

earlier filed application in the notice of declaration of the

interference, show why the opponent is not also entitled to benefit

of the earlier filed application with respect to the proposed count.

Otherwise, the opponent will be presumed to be entitled to the

benefit of the earlier filed application with respect to the

proposed count.

One comment suggested clarifying the first sentence by inserting

``and if the movant desires a holding that its opponent is not entitled

to the benefit of the filing date of the earlier filed application for

the proposed count'' after ``interference.'' The same change was

suggested for proposed new Secs. 1.637(e)(1)(ix) and 1.637(e)(2)(viii),

which are identical to Sec. 1.637(c)(1)(vii). The suggestion is not

being adopted. The rule, as amended, states that a moving party must

take a positive action if it believes an opponent is not entitled to

benefit for a new count. Failure to take the positive action creates a

presumption. The rule, as amended, also states the consequences of not

taking a positive action. Taking the positive action is the manner to

procedurally attempt to overcome the presumption. Hence, the suggested

``clarification'' is not necessary.

As proposed, minor housekeeping amendments are made to

Secs. 1.637(c)(2) (ii) and (iii) for clarification, and

Secs. 1.637(c)(2)(iv) and 1.637(c)(3)(iii), which relate to

Sec. 1.633(f) motions for benefit, are removed and reserved as

unnecessary, since motions under Sec. 1.633(c) (2) and (3) do not

affect the count. Section 1.637(c)(3)(ii), which applies to motions

under Sec. 1.633(c)(3) to designate a claim as corresponding to a

count, is revised to have claims compared to claims, as is the case in

Sec. 1.633(c)(4)(ii), which applies to motions filed under

Sec. 1.633(c)(4) to designate a claim as not corresponding to a count.

The amendment avoids the need to compare claims to counts.

Section 1.637(c)(4)(ii) was proposed to be revised to require that

a party moving to designate a claim as not corresponding to a count

must show that the claim could not serve as the basis for a preliminary

motion under Sec. 1.633(c)(1) to add a new count. As revised, the rule

precludes a party from moving to designate one of its claims as not

corresponding to the count where an opponent's disclosure would support

a similar claim. The supporting rationale is that the party could file

a Sec. 1.633(c)(1) preliminary motion proposing a claim to be added to

the opponent's application and suggesting that the proposed claim and

the party's claim in question be designated as corresponding to a

proposed new count. One comment argues that the proposed amendment

would unduly burden a party by requiring it to propose claims to be

added to an opponent's application, whereas under the current rule the

opponent, who has the option to propose such a count and such a claim

in a motion under Sec. 1.633(c)(1), runs the risk of interference

estoppel by not pursuing an interference on common patentable subject

matter. Thus, the comment notes that the effect of the proposed

requirement would be to require a party to prevent its opponent from

possibly getting itself into an estoppel situation. The point of the

comment is well taken. Accordingly, the proposal to amend

Sec. 1.637(c)(4) in the manner criticized by the comment hereby

withdrawn.

As proposed in the Notice of Proposed Rulemaking, Sec. 1.637(d)(4),

which authorizes a party to file a motion for benefit together with a

motion under Sec. 1.633(d), is removed and reserved as unnecessary.

Motions filed under Sec. 1.633(d) do not affect the count. Sections

1.637(e)(1)(viii) and (e)(2)(vii) are revised to make it clear that a

preliminary motion under Secs. 1.633(e)(1) or (e)(2) need not be

accompanied by a preliminary motion for benefit under Sec. 1.633(f)

unless the moving party seeks benefit with respect to the propose

This text is long and has been trimmed here. Open the source document for the complete record.