BREAKING NEWS
On December 3, 2024, the United States Patent and Trademark Office (“USPTO”) formally withdrew its highly controversial proposal to add a new requirement for terminal disclaimers. Terminal disclaimers are often filed during prosecution of U.S. patents to overcome non-statutory double patenting rejections. The proposal, published in May of 2024, would have imposed a new practice under which a patent in which a disclaimer is filed would be enforceable only if no claim in a patent to which it is tied by the terminal disclaimer has been found invalid. The proposal was roundly criticized as onerous, unnecessary, and disruptive to well-established practice.
The USPTO published a Notice of Proposed Rulemaking (“the Notice”) on May 10, 2024. The summary of the Notice explained:
The proposed rule change would require terminal disclaimers filed to obviate nonstatutory double patenting to 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 stated reason for the proposal was to “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.”
A “non-statutory” double patenting rejection, also known as an “obviousness-type” double patenting rejection, is a judicially-created doctrine in the U.S. (i.e., it does not exist in the patent statutes) intended to prevent: 1) issuance of multiple patents with claims that are patentably indistinct from each other; and 2) prolongation of the effective patent term by filing multiple patent applications with mutually indistinct claims. Under current practice, a non-statutory double patenting rejection can be applied by the patent examiner when a claim of a second patent application is patentably indistinct from a claim of a first patent application (or patent) and the first and second applications have: 1) the same inventive entity, at least one common (joint) inventor, a common applicant, and/or a common owner/assignee; or 2) are not commonly owned but are owned by parties to a joint research agreement. Under current practice, a non-statutory double patenting rejection can be overcome by filing a terminal disclaimer that provides: 1) the term of the second patent will not extend beyond the term of the first patent; and 2) the second patent will be enforceable only if it remains commonly owned with the first patent. Importantly, the filing of a terminal disclaimer is purely procedural in nature and is not considered to be an admission that the claims are patentably indistinct. Thus, if a claim in the first patent is found to be invalid over prior art, the owner can nonetheless argue for validity of a different claim in the second patent even if they are similar. This is well-established practice and, in general, has served the public well in addressing the concerns that the non-statutory double patenting rejection was established to prevent.
The USPTO’s Notice would have added a new requirement to terminal disclaimer practice whereby the second patent would become “unenforceable” (not technically invalid, but practically useless) if any claim in a patent to which it is tied by one or more terminal disclaimers is found to be invalid. This would have the effect of making all claims in the second patent (and any further progeny) stand or fall, as a group, with each individual claim of any other patent from which a terminal disclaimer had been filed.
In accordance with the rulemaking process, a period was provided for the public to comment on the proposal. Many responsive comments were received, all but one of which opposed the proposal in strenuous terms. In general, the reasons for opposition included: overreach of the USPTO’s statutory authority; contradicting the statutory presumption of validity (35 USC §282); addressing a problem that does not exist; favoring infringers over innovators; de-incentivizing innovation; and destabilizing the patent system by disrupting well-established practice.
Most U.S. patent practitioners and rights holders breathed a collective sigh of relief this week when the formal withdrawal of the proposal was issued.
