Derivation Proceedings
Derivation Proceeding Rules
Section 42.400: Procedure; pendency
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§ 42.400 Procedure; pendency
(a) A derivation proceeding is a trial subject to the procedures set forth in subpart A of this part.
(b) The Board may for good cause authorize or direct the parties to address patentability issues that arise in the course of the derivation proceeding.
Section 42.400(a) provides that a derivation proceeding is a trial and subject to the rules set forth in subpart A.
Section 42.400(b) delegates to the Board the Director’s authority to resolve patentability issues when there is good cause to do so.
- For example, an issue of claim indefiniteness (35 U.S.C. 112) might need to be resolved before derivation can be substantively addressed on the merits.
- Resolution of such issues promotes procedural efficiency, and may even encourage party settlement, by providing clear guidance on the scope of the contested issues.
Section 42.401: Definitions.
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§ 42.401 Definitions.
In addition to the definitions in § 42.2, the following definitions apply to proceedings under this subpart:
Agreement or understanding under 35 U.S.C. 135(e) means settlement for the purposes of § 42.74.
Applicant includes a reissue applicant.
Application includes both an application for an original patent and an application for a reissued patent.
First publication means either a patent or an application publication under 35 U.S.C. 122(b), including a publication of an international application designating the United States as provided by 35 U.S.C. 374.
Petitioner means a patent applicant who petitions for a determination that another party named in an earlier-filed patent application allegedly derived a claimed invention from an inventor named in the petitioner’s application and filed the earlier application without authorization.
Respondent means a party other than the petitioner.
Same or substantially the same means patentably indistinct.
Agreement or understanding under 35 U.S.C. 135(e): The definition reflects the terminology used in 35 U.S.C. 135(e) to describe a settlement between parties to a derivation proceeding.
Applicant: The definition makes it clear that reissue applicants are considered applicants, and not patentees, for purposes of a derivation proceeding.
Application: The definition makes it clear that a reissue application is an application, not a patent, for purposes of a derivation proceeding.
- Specifically, the definition includes both an application for an original patent and an application for a reissued patent.
The first publication: The definition makes it clear that the phrase means either a patent or an application publication under 35 U.S.C. 122(b), including a publication of an international application designating the United States as provided by 35 U.S.C. 374.
Petitioner: The definition of petitioner incorporates the statutory requirement (35 U.S.C. 135(a), as amended) that the petitioner be an applicant.
Respondent: The definition of respondent identifies the respondent as the party other than the petitioner.
Same or substantially the same invention: The definition makes it clear that the phrase means patentably indistinct.
Section 42.402: Who may file a petition for a derivation proceeding.
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§ 42.402 Who may file a petition for a derivation proceeding.
An applicant for patent may file a petition to institute a derivation proceeding in the Office.
Section 42.403: Time for filing.
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§ 42.403 Time for filing.
A petition for a derivation proceeding must be filed within the one-year period beginning on the date of the first publication of a claim to an invention that is the same or substantially the same as the earlier application’s claim to the allegedly derived invention.
35 U.S.C. 135(a) provides that a petition for instituting a derivation proceeding may only be filed within the one-year period of the first publication to a claim to an invention that is the same or substantially the same as the earlier application’s claim to the invention.
- The rule is consistent with 35 U.S.C. 135(a), as amended, because the earlier application’s first publication of the allegedly derived invention triggers the one-year bar date.
- While the statute’s use of the phrase ‘‘a claim’’ is ambiguous inasmuch as it could include the petitioner’s claim as a trigger, such a broad construction could violate due process.
- For example, the petitioner could be barred by publication of its own claim before it had any knowledge of the respondent’s application.
- Such problems may be avoided if the trigger for the deadline is publication of the respondent’s claim.
Section 42.404: Derivation fee.
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§ 42.404 Derivation fee.
(a) A derivation fee set forth in § 42.15(c) must accompany the petition.
(b) No filing date will be accorded to the petition until payment is complete.
Section 42.405: Content of petition.
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§ 42.405 Content of petition.
(a) Grounds for standing. The petition must:
(1) Demonstrate compliance with §§ 42.402 and 42.403; and
(2) Show that the petitioner has at least one claim that is:(i) The same or substantially the same as the respondent’s claimed invention; and
(ii) The same or substantially the same as the invention disclosed to the respondent.
(b) In addition to the requirements of §§ 42.8 and 42.22, the petition must:
(1) Provide sufficient information to identify the application or patent for which the petitioner seeks a derivation proceeding;
(2) Demonstrate that a claimed invention was derived from an inventor named in the petitioner’s application, and that the inventor from whom the invention was derived did not authorize the filing of the earliest application claiming such invention; and
(3) For each of the respondent’s claims to the derived invention,(i) Show why the claimed invention is the same or substantially the same as the invention disclosed to the respondent, and
(ii) Identify how the claim is to be construed. Where the claim to be construed contains a means-plus function or step-plus-function limitation as permitted under 35 U.S.C. 112(f), the construction of the claim must identify the specific portions of the specification that describe the structure, material, or acts corresponding to each claimed function.
(c) Sufficiency of showing. A derivation showing is not sufficient unless it is supported by substantial evidence, including at least one affidavit addressing communication of the derived invention and lack of authorization that, if unrebutted, would support a determination of derivation. The showing of communication must be corroborated.
Section 42.405(a) requires a petition to demonstrate that the petitioner has standing.
- To establish standing, a petitioner, at a minimum, must timely file a petition that shows that at least one claim of the petitioner’s application is the same or substantially the same as the respondent’s claimed invention and as the invention disclosed to the respondent by the inventor in the petitioner’s application.
- This requirement ensures that a party has standing to file the petition and helps prevent spuriously instituted derivation proceedings.
- This rule also ensures that the petitioner has taken steps to obtain patent protection for the same or substantially same invention, thus promoting the useful arts by participating in the patent system.
- Facially improper standing would be a basis for denying the petition without proceeding to the merits of the decision.
Section 42.405(b) requires that the petition identify the precise relief requested.
- The petition must provide sufficient information to identify the application or patent subject to a derivation proceeding.
- The petition must also demonstrate that the claimed invention in the subject application or patent was derived from an inventor named in the petitioner’s application and that the inventor named in the petitioner’s application did not authorize the filing of the earliest application claiming the derived invention.
- The petitioner must further show why the claim is the same or substantially the same as the invention disclosed to the respondent.
- For each of the respondent’s targeted claims, the petitioner must likewise identify how the claim to the allegedly derived invention is to be construed.
- Where the claim to be construed contains a meansplus-function or step-plus-function limitation as permitted under 35 U.S.C. 112(f), the construction of the claim must identify the specific portions of the specification that describe the structure, material, or acts corresponding to each claimed function.
- The rule provides an efficient means for identifying the legal and factual basis supporting a prima facie case of relief and provides the opponent with a minimum level of notice as to the basis for the allegations of derivation.
Section 42.405(c) provides that a derivation showing is not sufficient unless it is supported by substantial evidence and at least one affidavit addressing communication and lack of authorization, consistent with 35 U.S.C. 135(a).
- The showing of communication must be corroborated.
Section 42.406: Service of petition.
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§ 42.406 Service of petition.
In addition to the requirements of § 42.6, the petitioner must serve the petition and exhibits relied upon in the petition as follows:
(a) The petition and supporting evidence must be served on the respondent at the correspondence address of record for the earlier application or subject patent. The petitioner may additionally serve the petition and supporting evidence on the respondent at any other address known to the petitioner as likely to effect service.
(b) Upon agreement of the parties, service may be made electronically. Service may be by EXPRESS MAIL® or by means at least as fast and reliable as EXPRESS MAIL®. Personal service is not required.
Section 42.406(a) requires that the petitioner serve the respondent at the correspondence address of record.
- A petitioner may also attempt service at any other address known to the petitioner as likely to effect service.
- Once a patent has issued, communications between the Office and the patent owner often suffer.
- While the rule requires service at the correspondence address of record, in many cases, the petitioner will already be in communication with the owner of the earlier application at a better service address than the official correspondence address.
Section 42.407: Filing date.
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§ 42.407 Filing date.
(a) Complete petition. A petition to institute a derivation proceeding will not be accorded a filing date until the petition satisfies all of the following requirements:
(1) Complies with §§ 42.404 and 42.405, and
(2) Service of the petition on the correspondence address of record as provided in § 42.406.
(b) Incomplete petition. Where the petitioner files an incomplete petition, no filing date will be accorded, and the Office will dismiss the petition if the deficiency in the petition is not corrected within the earlier of either one month from notice of the incomplete petition, or the expiration of the statutory deadline in which to file a petition for derivation.
Section 42.407(a) provides requirements for a complete petition.
- As amended, 35 U.S.C. 135(b) provides that the Director establish regulations concerning the standards for the conduct of derivation proceedings.
- Further, 35 U.S.C. 135(a) provides that a derivation proceeding may be instituted where the Director determines that a petition demonstrates that the standards for instituting a derivation proceeding are met.
- Consistent with the statute, the rule requires that a complete petition be filed along with the fee and that it be served at the correspondence address of record for the earlier application.
Section 42.407(b) provides petitioners a one-month time frame to correct defective petitions to institute a derivation proceeding, unless the statutory deadline in which to file a petition for derivation has expired.
- In determining whether to grant a filing date, the Board will review the petitions for procedural compliance.
- Where a procedural defect is noted, e.g., failure to state the claims being challenged, the Board will notify the petitioner that the petition was incomplete and identify any non-compliance issues.
Instituting Derivation Proceeding
Section 42.408: Institution of derivation proceeding.
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§ 42.408 Institution of derivation proceeding.
(a) An administrative patent judge institutes, and may as necessary reinstitute, the derivation proceeding on behalf of the Director.
(b) Additional derivation proceeding. The petitioner may suggest the addition of a patent or application to the derivation proceeding. The suggestion should make the showings required under § 42.405 and explain why the suggestion could not have been made in the original petition.
Section 42.409: Settlement agreements.
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§ 42.409 Settlement agreements.
An agreement or understanding under 35 U.S.C. 135(e) is a settlement for the purposes of § 42.74.
After Institution of Derivation Proceeding
Section 42.410: Arbitration.
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§ 42.410 Arbitration.
(a) Parties may resort to binding arbitration to determine any issue. The Office is not a party to the arbitration. The Board is not bound by, and may independently determine, any question of patentability.
(b) The Board will not set a time for, or otherwise modify the proceeding for, an arbitration unless:
(1) It is to be conducted according to Title 9 of the United States Code;
(2) The parties notify the Board in writing of their intention to arbitrate;(3) The agreement to arbitrate:
(i) Is in writing;
(ii) Specifies the issues to be arbitrated;
(iii) Names the arbitrator, or provides a date not more than 30 days after the execution of the agreement for the selection of the arbitrator;
(iv) Provides that the arbitrator’s award shall be binding on the parties and that judgment thereon can be entered by the Board;
(v) Provides that a copy of the agreement is filed within 20 days after its execution; and
(vi) Provides that the arbitration is completed within the time the Board sets.
(c) The parties are solely responsible for the selection of the arbitrator and the conduct of the arbitration.
(d) The Board may determine issues the arbitration does not resolve.
(e) The Board will not consider the arbitration award unless it:
(1) Is binding on the parties;
(2) Is in writing;
(3) States in a clear and definite manner each issue arbitrated and the disposition of each issue; and
(4) Is filed within 20 days of the date of the award.
(f) Once the award is filed, the parties to the award may not take actions inconsistent with the award. If the award is dispositive of the contested subject matter for a party, the Board may enter judgment as to that party.
Section 42.410(a) provides that parties to a derivation proceeding may determine such contest, or any aspect thereof, by arbitration, except that nothing shall preclude the Office from determining the patentability of the claimed inventions involved in the proceeding.
- The rule is consistent with 35 U.S.C. 135(f) because it permits arbitration, but does not displace the Office from determining issues of patentability during the course of the proceeding.
Section 42.410(b) provides that the Board will not set a time for, or otherwise modify the proceeding for, an arbitration unless the listed procedural requirements are met.
Section 42.411: Common interests in the invention.
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§ 42.411 Common interests in the invention.
The Board may decline to institute, or if already instituted the Board may issue judgment in, a derivation proceeding between an application and a patent or another application that are commonly owned.
Section 42.411 provides that an administrative patent judge may decline to institute or continue a derivation proceeding between an application and a patent or another application that are commonly owned.
- Common ownership in a derivation proceeding is a concern because it can lead to manipulation of the process, such as requesting the Board to resolve an inventorship dispute within the same company.
- The rule is stated permissively because not all cases of overlapping ownership would be cause for concern.
- The cases of principal concern involve a real party-in-interest with the ability to control the conduct of more than one party.
Section 42.412: Public availability of Board records.
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§ 42.412 Public availability of Board records.
(a) Publication.
(1) Generally. Any Board decision is available for public inspection without a party’s permission if rendered in a file open to the public pursuant to § 1.11 of this chapter or in application that has been published in accordance with §§ 1.211 to 1.221 of this chapter. The Office may independently publish any Board decision that is available for public inspection.
(2) Determination of special circumstances. Any Board decision not publishable under paragraph (a)(1) of this section may be published or made available for public inspection if the Director believes that special circumstances warrant publication and a party does not petition within two months after being notified of the intention to make the decision public, objecting in writing on the ground that the decision discloses the objecting party’s trade secret or other confidential information and stating with specificity that such information is not otherwise publicly available.
(b) Record of proceeding.
(1) The record of a Board proceeding is available to the public, unless a patent application not otherwise available to the public is involved.
(2) Notwithstanding paragraph (b)(1) of this section, after a final Board decision in or judgment in a Board proceeding, the record of the Board proceeding will be made available to the public if any involved file is or becomes open to the public under § 1.11 of this chapter or an involved application is or becomes published under §§ 1.211 to 1.221 of this chapter.
