00-1359. Complaints Regarding Invention Promoters

AGENCY:

Patent and Trademark Office, Commerce.

ACTION:

Interim final rule; request for comments.

SUMMARY:

The Patent and Trademark Office (Office) has added rules of practice to implement the Office's procedures for acceptance of complaints under the Inventors' Rights Act of 1999, Pub. L. 106-113, section 4001 (to be codified at 35 U.S.C. 297). The Act requires the Office to provide a forum for the publication of complaints concerning invention promoters. The Office is providing the public with an opportunity to comment on the new rules which have been adopted.

DATES:

The interim final rules are effective January 28, 2000; written comments must be submitted on or before February 22, 2000.

ADDRESSES:

Address written comments to the attention of Kevin Baer, Attorney Advisor, Commissioner of Patents and Trademarks, Box 4, Washington, D.C. 20231. In addition, written comments may be sent by facsimile transmission to [phone] or by electronic mail messages over the Internet to kevin.baer uspto.gov. The written comments will be available in the Patent and Trademark Office, Public Search Room, room 1A03, Crystal Plaza 3, Arlington, Virginia 20231, on or about February 22, 2000.

FOR FURTHER INFORMATION CONTACT:

Kevin Baer, by telephone at [phone], by facsimile at [phone], by electronic mail at [e-mail], or by mail marked to the attention of Kevin Baer, Attorney Advisor, addressed to the Commissioner of Patents and Trademarks, Box 4, Washington, D.C. 20231.

SUPPLEMENTARY INFORMATION:

These interim rules implement the Office's procedures for handling complaints and replies filed under the Inventors' Rights Act of 1999, Pub. L. 106-113, section 4001 (to be codified at 35 U.S.C. 297). The Act requires the Office to provide a forum for the publication of complaints concerning invention promoters and replies from the invention promoters. The Office requests comments from any interested members of the public on the following interim rules.

Background

Congress passed the Inventors' Rights Act of 1999 (Act) to protect the independent inventor from unscrupulous invention promoters who prey on independent inventors. Legitimate invention promoters assist novice inventors by providing information on how to develop, finance, manufacture, and market their inventions. Congress recognized that invention promotion services are valuable to independent inventors but also understood that some invention promoters were asking for large sums of money up-front without providing any real services. 145 Cong. Rec. S14708, S14716 (daily ed. Nov. 17, 1999) (Statement of Senator Lott introducing section-by-section analysis). Included within the Act is a requirement that the Office provide a forum for publishing complaints about invention promoters and replies from the invention promoters. Under the Act the Office has no role in enforcing the Act against invention promoters or investigating invention promoters. The Act provides customers of invention promoters with certain civil remedies, but neither the Office nor the interim rules govern the private legal rights of the invention promoter customers.

The interim final rules explain how the Office will handle complaints and replies to the complaints by the invention promoters.

Discussion of Specific Rules

The rules for implementing this Act will be found in new Part 4, of Title 37, Code of Federal Regulations (37 CFR Part 4).

Section 4.1

Section 4.1 is being added to explain that: (i) these rules govern the Office's responsibility under the Inventors' Rights Act of 1999; (ii) the Office will not undertake any investigation of the invention promoter; and (iii) any civil remedies must be pursued by the injured party.

Section 4.2

Section 4.2 is being added to include the definitions set out in the Act.

Section 4.3

Section 4.3 is being added to explain that the Office will accept complaints about invention promoters. Anyone submitting a complaint should understand that the complaint may be forwarded to the invention promoter about which the complaint is made and that the complaint will likely be publicly available. The Act requires the Office to forward copies of the complaint to the invention promoter so that the invention promoter may respond. The Office will not accept any complaints under this system that request that the complaint be kept confidential. The Act requires the Office to make complaints publicly available. Likewise, any reply from the invention promoter will be made publicly available.

In order for the Office to identify a submission as a complaint under this Act, the complaint must be clearly marked or otherwise indicate that it is a complaint filed under these rules or under the Act. General letters of complaint sent to the Office will not be treated under this complaint publication program.

The complaint should fairly and impartially summarize the complaint. The purpose of the Act is to provide complainants with a forum for publicly making a complaint against an invention promoter. As with all submissions to the Office, persons should conduct themselves with decorum and courtesy. See 37 CFR 1.3. Submissions that do not provide the requested information will be returned. If a complainant's address is not provided, the submission will be destroyed. A complaint can be withdrawn by the complainant or named customer at any time prior to its publication.

The Office is developing a form for the convenience of persons wishing to make a complaint. At a minimum, a complaint under these rules must provide: (1) the identity of the person making the complaint; (2) an address of the person complaining; (3) the name and address of the invention promoter; (4) the name of the customer of the invention promoter; (5) an explanation of the invention promotion services offered or performed; (6) the name of the mass media used to advertise the invention promoter's services; (7) an explanation of the relationship between the customer and the invention promotion services; and (8) a signature of the complainant.

Complaints should be submitted to the Office of Independent Inventor Programs, U.S. Patent and Trademark Office, Washington, D.C. 20231. No originals of documents should be included with the complaint.

Section 4.4(a)

Section 4.4(a) is being added to explain that the Office will forward complaints to the invention promoter named in the complaint. The invention promoter will be given 30 days to respond to the complaint. The complaint and the invention promoter's reply, if any, will be made publicly available. The Office may return the complainant's submission for clarification if the Office is unable to determine whether a submission is intended to be a complaint under these rules. The Office may also return the submission if it fails to include any necessary information. Similarly, the Office may return multiple submissions concerning the same subject matter.

Section 4.4(b)

Section 4.4(b) is being added to explain that the Office will accept responses from invention promoters. The party responding must identify the submission as a response to a particular complaint, identify the individual signing the response, and provide that individual's title or authority for signing the response.

The Office intends to forward copies of the complaints to the invention promoter using regular first class U.S. mail. In the event the mailing is returned, section 4.5 will apply. In the absence of mail being returned undeliverable, the Office will presume that the invention promoter received the mailing. In the unlikely event the invention promoter does not receive the mailing and the mailing is not returned as undeliverable, then publication of the complaint provides the invention promoter with adequate notice that a complaint has been filed. A reply that is submitted after the complaint is made public will also be made available to the public.

Section 4.5

Section 4.5 is being added to explain how the Office will handle situations where the copy of the complaint that is mailed to the invention promoter is returned undelivered. If this occurs, the Office will publish a notice alerting the invention promoter that a complaint has been filed. The notice will be published in the Official Gazette, in the Federal Register, or on the Office's Internet home page at www.uspto.gov. The invention promoter will have 30 days after publication of the notice to submit a response to the complaint. If the invention promoter does not submit a response to the complaint within 30 days, then the complaint will be made public.

Section 4.6

Section 4.6 is being added to clarify that routine complaints about registered attorneys or agents will not be treated under these rules. The Office may return a submission involving a registered attorney or agent to seek clarification as to whether or not the attorney or agent was involved with the invention promotion services. The Office does not plan on publishing complaints against registered attorneys or agents unless the complainant can fairly demonstrate that the attorney or agent is involved with invention promotion services. However, attorneys or agents who work with invention promoters should realize that such work may cause their name or affiliation to be publicly disclosed in a complaint. In addition, the Office may forward any submission concerning a registered attorney or agent to the Office of Enrollment and Discipline.

All submissions to the Office under this Part are subject to the criminal penalties under 18 U.S.C. 1001 for false statements.

Classification

Administrative Procedure Act

This interim final rule sets forth the Office procedures to make complaints involving invention promoters publicly available, together with any response of the invention promoters as required by the Inventors' Rights Act of 1999, Pub. L. No. 106-113, section 4001. Therefore, prior notice and an opportunity for public comment are not required pursuant to 5 U.S.C. 553(b)(3)(A), or any other law.

Regulatory Flexibility Act

As prior notice and an opportunity for public comment are not required pursuant to 5 U.S.C. 553(b)(3)(A), or any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., are inapplicable.

Executive Order 13132

This interim final rule does not contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132.

Executive Order 12866

This interim final rule has been determined to be not significant for purposes of Executive Order 12866.

Paperwork Reduction Act

This interim final rule contains a collection of information requirement that is subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.). This rule provides procedures for persons desiring to voluntarily submit complaints to the Office concerning invention promoters so that the Office is able to: (1) Forward the complaint to the invention promoter for a response; and (2) publish the complaint. An information collection package supporting this new rule will be submitted to OMB for review and approval. The public reporting burden for this collection of information is estimated to average 15 minutes per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

Comments are invited on: (a) Whether the collection of information is necessary for proper performance of the functions of the agency; (b) the accuracy of the agency's estimate of the burden; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information to respondents.

Interested persons are requested to send comments regarding the burden estimate or any other aspects of the information requirements, including suggestions for reducing the burden, to Kevin Baer, Attorney Advisor, Box 4, Patent and Trademark Office, Washington, D.C. 20231, or to the Office of Information and Regulatory Affairs, OMB, 725 17th Street, N.W., Washington, D.C. 20503, (Attn: PTO Desk Officer).

Notwithstanding any other provision of law, no person is required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number.

List of Subjects in 37 CFR Part 4

• Administrative practice and procedure
• Inventions and patents

For the reasons set forth in the preamble and pursuant to the authority contained in 35 U.S.C. 6 and 297, title 37 of the Code of Federal Regulations is amended by adding part 4 to read as follows:

1. Part 4 is added to read as follows:

PART 4—COMPLAINTS REGARDING INVENTION PROMOTERS

4.1

Complaints Regarding Invention Promoters.

4.2

Definitions

4.3

Submitting Complaints

4.4

Invention Promoter Reply

4.5

Notice by Publication

4.6

Attorneys and Agents

Authority: 35 U.S.C. 6 and 297.

§ 4.1

Complaints Regarding Invention Promoters

These regulations govern the Patent and Trademark Office's (Office) responsibilities under the Inventors' Rights Act of 1999, which can be found in the U.S. Code at 35 U.S.C. 297. The Act requires the Office to provide a forum for the publication of complaints concerning invention promoters. The Office will not conduct any independent investigation of the invention promoter. Although the Act provides additional civil remedies for persons injured by invention promoters, those remedies must be pursued by the injured party without the involvement of the Office.

§ 4.2

Definitions

(a) Invention Promoter means any person, firm, partnership, corporation, or other entity who offers to perform or performs invention promotion services for, or on behalf of, a customer, and who holds itself out through advertising in any mass media as providing such services, but does not include—

(1) Any department or agency of the Federal Government or of a State or local government;

(2) Any nonprofit, charitable, scientific, or educational organization qualified under applicable State law or described under section 170(b)(1)(A) of the Internal Revenue Code of 1986;

(3) Any person or entity involved in the evaluation to determine commercial potential of, or offering to license or sell, a utility patent or a previously filed nonprovisional utility patent application;

(4) Any party participating in a transaction involving the sale of the stock or assets of a business; or

(5) Any party who directly engages in the business of retail sales of products or the distribution of products.

(b) Customer means any individual who enters into a contract with an invention promoter for invention promotion services.

(c) Contract for Invention Promotion Services means a contract by which an invention promoter undertakes invention promotion services for a customer.

(d) Invention Promotion Services means the procurement or attempted procurement for a customer of a firm, corporation, or other entity to develop and market products or services that include the invention of the customer.

§ 4.3

Submitting Complaints

(a) A person may submit a complaint concerning an invention promoter with the Office. A person submitting a complaint should understand that the complaint may be forwarded to the invention promoter and may become publicly available. The Office will not accept any complaint that requests that it be kept confidential.

(b) A complaint must be clearly marked, or otherwise identified, as a complaint under these rules. The complaint must include:

(1) The name and address of the complainant;

(2) The name and address of the invention promoter;

(3) The name of the customer;

(4) The invention promotion services offered or performed by the invention promoter;

(5) The name of the mass media in which the invention promoter advertised providing such services;

(6) An explanation of the relationship between the customer and the invention promoter; and

(7) A signature of the complainant.

(c) The complaint should fairly summarize the action of the invention promoter about which the person complains. Additionally, the complaint should include names and addresses of persons believed to be associated with the invention promoter. Complaints, and any replies, must be addressed to Office of Independent Inventor Programs, U.S. Patent and Trademark Office, Washington, D.C. 20231.

(d) Complaints that do not provide the information requested in paragraphs (b) and (c) of this section will be returned. If complainant's address is not provided, the complaint will be destroyed.

(e) No originals of documents should be included with the complaint.

(f) A complaint can be withdrawn by the complainant or the named customer at any time prior to its publication.

§ 4.4

Invention Promoter Reply

(a) If a submission appears to meet the requirements of a complaint, the invention promoter named in the complaint will be notified of the complaint and given 30 days to respond. The invention promoter's response will be made available to the public along with the complaint. If the invention promoter fails to reply within the 30-day time period set by the Office, the complaint will be made available to the public. Replies sent after the complaint is made available to the public will also be published.

(b) A response must be clearly marked, or otherwise identified, as a response by an invention promoter. The response must contain:

(1) The name and address of the invention promoter;

(2) A reference to a complaint forwarded to the invention promoter or a complaint previously published;

(3) The name of the individual signing the response; and

(4) The title or authority of the individual signing the response.

§ 4.5

Notice by Publication

If the copy of the complaint that is mailed to the invention promoter is returned undelivered, then the Office will publish a Notice of Complaint Received in the Official Gazette, the Federal Register, or on the Office's Internet home page. The invention promoter will be given 30 days from such notice to submit a reply to the complaint. If the Office does not receive a reply from the invention promoter within 30 days, the complaint alone will become publicly available.

§ 4.6

Attorneys and Agents

Complaints against registered patent attorneys and agents will not be treated under this section, unless a complaint fairly demonstrates that invention promotion services are involved. Persons having complaints about registered patent attorneys or agents should contact the Office of Enrollment and Discipline at the U.S. Patent and Trademark Office, Box OED, Washington, D.C. 20231, and the attorney discipline section of the attorney's state licensing bar if an attorney is involved.

Dated: January 13, 2000.

Q. Todd Dickinson,

Assistant Secretary of Commerce and Commissioner of Patents and Trademarks.