Summary

On May 10, 2024, the United States Patent and Trademark Office (USPTO) published a notice of proposed rulemaking (NPRM) that proposes a rule regarding new requirements for terminal disclaimers filed to obviate nonstatutory double patenting rejections.¹ Under this proposed rule, such terminal disclaimers must include an agreement by the “disclaimant” that “the patent in which the terminal disclaimer is filed, or any patent granted on an application in which a terminal disclaimer is filed, will be enforceable only if the patent is not tied and has never been tied directly or indirectly to a patent by one or more terminal disclaimers filed to obviate nonstatutory double patenting in which: any claim has been finally held unpatentable or invalid as anticipated or obvious by a Federal court in a civil action or by the USPTO, and all appeal rights have been exhausted; or a statutory disclaimer of a claim is filed after any challenge based on anticipation or obviousness to that claim has been made."

The deadline to submit comments addressing this NPRM is July 9, 2024.

Background

On October 4, 2022, the USPTO requested comments to changes in terminal disclaimer practice, in which applicants filing terminal disclaimers would be required to “stipulate that the claims are not patentably distinct from the previously considered claims as a condition of filing a terminal disclaimer to obviate an obviousness-type double patenting rejection,” and respond to questions regarding whether “the filing of a terminal disclaimer should be an admission of obviousness,” and whether such patents “should stand and fall together” when their validity is challenged.²

Many stakeholders submitted comments both for and against such changes, and concerns raised included whether stipulations as to validity would run afoul of Federal Circuit cases.

Overview of Proposed Rule

Purpose: The NPRM states that a key purpose of the proposed rule is “to prevent multiple patents directed to obvious variants of an invention from potentially deterring competition and to promote innovation and competition by allowing a competitor to avoid enforcement of patents tied by one or more terminal disclaimers to another patent having a claim finally held unpatentable or invalid over prior art.”³

Scope and Procedure: In contrast to the previous proposal, under the currently proposed rule, “disclaimants” would be required to agree not to enforce a patent linked by terminal disclaimers to another patent (i) that has been held invalid under sections 102 or 103 (after appeals have been exhausted) or (ii) where a statutory disclaimer was filed after a challenge under sections 102 or 103 was made on the disclaimed claims. The NPRM notes that “[t]he proposed agreement would not affect the validity of the claims in the subject patent or any patent granted on the subject application because it is a voluntary agreement by the patentee that the patent with the terminal disclaimer will be enforceable only under certain conditions and does not touch on the validity of the claims.”⁴

This rule is prospective only – patents containing previously filed terminal disclaimers without such language will not be affected because those terminal disclaimers “do[] not contain the proposed agreement.”⁵

The NPRM provides various examples of how the proposed rule would work in practice. For example, the proposed rule only links patents one way. Filing a terminal disclaimer over a reference patent means that the newly issued patent may be unenforceable if the reference patent is invalidated under sections 102 or 103, but the reference patent would not necessarily be affected by an invalidity finding of the newly issued patent.

Additionally, the proposed rule links patents indirectly. For example, if a terminal disclaimer is filed over a reference patent, and a terminal disclaimer has similarly been filed for that reference patent over an earlier reference patent, an invalidity finding under sections 102 or 103 of the earliest reference patent will render the newest patent unenforceable via this indirect link. The NPRM also notes that patents with terminal disclaimers filed before implementation of the rule, though they would not be unenforceable, could still be part of this indirect link.⁶

Under the proposed rule, when terminal disclaimers are filed in both directions, then a finding that a claim in either patent is invalid under sections 102 or 103 would render the other unenforceable.

Alternative Options: The NPRM describes several options that could be available to applicants seeking to avoid filing a terminal disclaimer in view of a double-patenting rejection:

1. If applications are pending, combine the conflicting claims into a single application;
2. Cancel or amend the conflicting claims;
3. Argue the double patenting rejection on the merits; or
4. File a reissue of the reference patent to add the conflicting claims from the application, provided that the added claims do not introduce new matter into the reissue application.

Statutory Authority: The NPRM cites to In re Van Ornum⁷ as evidence for the USPTO’s rulemaking authority to place conditions upon enforcement in terminal disclaimers.

Conclusion

Industry participants should consider providing comments to the NPRM, which are due by July 9, 2024, and continue to monitor developments in this space.

Footnotes

1. Terminal Disclaimer Practice to Obviate Nonstatutory Double Patenting, 89 Fed. Reg. 40439 (proposed May 10, 2024), available at https://www.federalregister.gov/documents/2024/05/10/2024-10166/terminal-disclaimer-practice-to-obviate-nonstatutory-double-patenting.

2. 89 Fed. Reg. 40440 (discussing Request for Comments on USPTO Initiatives To Ensure the Robustness and Reliability of Patent Rights, 87 FR 60130 (Oct. 4, 2022)).

3. 89 Fed. Reg. 40439.

4. 89 Fed. Reg. 40441.

5. 89 Fed. Reg. 40443.

6. Id.

7. 686 F.2d 937 (CCPA 1982).