By James Signor
The United States Patent and Trademark Office (USPTO) recently issued a Notice of Proposed Rulemaking (NPRM) to receive stakeholder feedback on a potential new requirement for terminal disclaimers. If implemented, the new requirement would have significant impacts on filing and enforcement strategies.
Terminal disclaimers can be filed in applications or patents to overcome the judicially-created doctrine of obviousness-type double patenting (ODP), which was designed to prevent a patentee from effectively extending the term of a patent through later applications claiming obvious variants of an invention claimed in an earlier application. According to current rules, the filing of a terminal disclaimer in an application requires that any resulting patent: 1) will only be enforceable so long as it is commonly owned with the patent it is terminally disclaimed over, and 2) will have a patent term that will not extend beyond the term of the patent it is terminally disclaimed over. The USPTO now seeks to add a further requirement: the patent will be enforceable only if the patent is not tied and has never been tied through one or more terminal disclaimers to a patent in which any claim has been finally held unpatentable or invalid over the prior art. Thus, the filing of a terminal disclaimer in an application under the proposed rule would require an agreement that any resulting patent will become unenforceable upon any claim of any patent tied to it by the terminal disclaimer being finally held invalid as anticipated or obvious over the prior art.
The proposed rulemaking comes on the heels of another NPRM from the USPTO last year that proposed fee hikes to continuation applications and terminal disclaimers, which increase significantly the later they are filed (see James Signor Discusses Proposed USPTO Fee Changes (leydig.com)), and which are still being proposed by the USPTO with only minor adjustments following the public comment period. The proposed rulemaking also follows the Federal Circuit’s recent In re Cellect decision, which acknowledges the interconnection of ODP and terminal disclaimers and sets forth a rule that applies ODP in situations where Patent Term Adjustment (PTA) would result in a later-expiring claim that is patentably indistinct from an earlier-expiring claim, regardless of whether the earlier-expiring claim issued from an earlier or a later-filed application (see Glen Thurston Discusses In Re Cellect Federal Circuit Decision on Obvious-Type Double Patenting and Patent Term Adjustment (leydig.com)).
Stakeholders have reason to worry about the potential effects of the USPTO’s proposed rule-making together with the In re Cellect decision. The proposed fee increases incentivize applicants to file continuation applications and terminal disclaimers early in the process, typically when the claims at issue have not yet been patented or when changes to the claims are still likely to occur. On the other hand, the proposed new requirement for terminal disclaimers together with the In re Cellect decision can create incentives to try to avoid the filing of terminal disclaimers and continuations altogether, especially if an earlier application receives some PTA. While the USPTO states that the proposed new requirement for terminal disclaimers “would further promote innovation and competition by reducing the cost of separately challenging each patent in a group of multiple patents directed to indistinct variations of a single invention” (see Proposed changes to terminal disclaimer practice to promote innovation and competition | USPTO), many commenters have already noted that the USPTO appears to be over-reaching in their rule-making authority. In particular, the requirement means that an entire patent will become unenforceable when any single claim of a patent tied to it by a terminal disclaimer is invalidated. It does not matter whether the claim that is invalidated would be able to form the basis of an ODP rejection with respect to any claim of the patent having the terminal disclaimer, which is at odds with the claim-to-claim comparisons required by ODP analysis.
If implemented, the proposal would have profound impacts on continuation practice and decisions on whether to file a terminal disclaimer, as well as on decisions on what patents or claims to enforce. For instance, to try to avoid having to file terminal disclaimers, applicants might try to include many different claim types in a single application to either try to cover them in the same application or prompt a restriction requirement, which would allow applicants to avoid ODP in divisional applications directed to the unelected subject matter. It could also make it more likely that applicants would argue against ODP rejections or cancel conflicting claims and/or move the conflicting claims to one application, which may require the filing of a reissue application if already patented. On the enforcement side, patent owners will need to carefully consider the claims of patents tied together by terminal disclaimers to try to weed out any weak claims which could cause an entire family of patents to become unenforceable. On the flip side, patent challengers could be wise to also identify such weak claims to attack in an Inter Partes Review procedure.
The USPTO will be accepting public comments on the NPRM until July 9, 2024.
