The US Patent and Trademark Office (USPTO) recently proposed a new rule for filing terminal disclaimers to overcome obviousness-type double patenting rejections. If adopted, the rule will likely spur patent applicants to consider new strategies for pursuing continuation applications.
Under this new rule, [1] a terminal disclaimer would include an agreement that the patent in which the disclaimer is filed would not be enforceable if a claim in another patent tied to the subject patent through the terminal disclaimer has been held unpatentable or invalid. In other words, patents tied together via a terminal disclaimer will fall together, meaning if one patent is found invalid or unenforceable, the others tied to it via a terminal disclaimer are also invalid/unenforceable.
A patent owner may file multiple applications with the same effective filing date, where the respective sets of claims are distinguishable variations of the same invention that can avoid a statutory double patenting rejection. [2] However, the USPTO may still find the scope of these variations between claims to be obvious under the obviousness-type double patenting (ODP) doctrine (also called nonstatutory double patenting). [3]
An ODP rejection can be issued if the claims in the different patents or patent applications have the same inventive entity, at least one common inventor, or a common applicant, owner, or assignee. When faced with an ODP rejection, applicants can either argue against the rejection, amend the claims, or file a terminal disclaimer, which is common.
Current Terminal Disclaimer Practice
Under a terminal disclaimer, the applicant agrees that the term of the patent with obvious claim variants will not expire after the expiration date of the patent over which the patent office issued the ODP, and that the patent will only be enforceable while both patents are commonly owned.
The decision to file a terminal disclaimer instead of arguing against the rejection or amending the claims is commonly based on a desire to reduce costs and expedite prosecution, rather than arguing the merits of the ODP rejection. Also, the two patents are often related to one another and would expire at the same time, regardless of the effects of the terminal disclaimer, unless one of the patents is afforded a patent term adjustment due to USPTO delays in prosecution (See In re Cellect, LLC, 81 F.4th 1216 (Fed. Cir. 2023) for the interplay between the terminal disclaimer filing and patent term adjustment).
Although patents tied through a terminal disclaimer expire simultaneously, the patent owner can choose which patent to assert against an infringer, while the infringer or any third party who wishes to challenge the validity of claims subject to a terminal disclaimer must challenge each patent separately.
In recent years, patents with terminal disclaimers have been issued more frequently than ever to diverse types of applicants.
Under the USPTO’s proposed new rule, a terminal disclaimer filed to overcome ODP will include an agreement that any patent granted on the subject application would be unenforceable if the patent is tied through a terminal disclaimer to another patent with a claim that has been held unpatentable or invalid under 35 USC §§ 102 or 103 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.
USPTO Rationale
The USPTO views the high cost of separately challenging the validity of each patent with obvious variants as a bar to competition. In proposing the new rule, the USPTO desires to promote competition and innovation and reduce costs to patent challengers. Under the proposed rule, a challenger could invalidate multiple patents by successfully challenging a single claim. The USPTO also suggests the rule would promote innovation by decreasing the number of patents issued on trivial variations.
Those opposed to changes in terminal disclaimer practice argue that claim validity should be determined on a claim-by-claim basis and that claims are presumed valid under 35 USC § 282. In addition, prior art available under 35 USC §§ 102 or 103 that invalidates a claim in one patent would not necessarily invalidate a claim in a patent tied through a terminal disclaimer.
Effects of the Proposed Rule
If the proposed rule were adopted, applicants would need to approach terminal disclaimers differently and, generally, be more selective about what continuation applications they pursue, if those continuations are more vulnerable under the new rule. Rather than accepting the risk of filing a terminal disclaimer, applicants may choose to argue against double patenting rejections or to pursue claim amendments, which could generally increase patent prosecution costs to applicants.
Applicants also may choose to change their patent filing strategies if the proposed rule makes applicants more hesitant to file continuation applications based on minor variations of the same invention. Instead, applicants may pursue single applications with many more claims of different scope to avoid filing continuation applications. An increase in divisional application filings strategies could also be anticipated, because proper divisional applications cannot, by definition, be held to be obvious variations of each other under ODP. [4]
The USPTO has proposed a new rule that a terminal disclaimer filed to overcome ODP must include an agreement that the patent in which the disclaimer is filed would be unenforceable if a claim in another patent tied to the subject patent through the disclaimer has been held unpatentable or invalid. If adopted, the rule likely will widely implicate how patent owners choose to prosecute multiple patent applications stemming from the same priority date(s) and/or effective filing date(s).
While the USPTO suggests the rule would decrease competitors’ costs in seeking to challenge multiple patents on the same invention, patent applicants would likely see increased patent prosecution costs associated with choosing to argue against ODP rejections, amending claims, or filing a terminal disclaimer.
On May 10, 2024, the USPTO opened a 60-day period for the public submission of comments regarding the new rule. Morgan Lewis will continue to closely follow and report on the ongoing public debate around the new rule, as well as all future USPTO official announcements.
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