USPTO Proposes Controversial New Rule on Terminal Disclaimer Practice

“Double patenting has always been suspect since there is no statutory authority for the doctrine in the first place. Now, the USPTO proposes to extend a doctrine that already lacks any basis in the law to specifically, intentionally, and unambiguously make it easier and cheaper to challenge patents tied together by terminal disclaimers.” – Gene Quinn

terminal disclaimers

The U.S. Patent and Trademark Office (USPTO) will officially publish a Notice of Proposed Rulemaking (NPRM) tomorrow that would change terminal disclaimer practice related to “non-statutory double patenting.”

The judicially-created doctrine of “obviousness-type double patenting”(ODP) has become codified by the USPTO such that the Office will reject claims to more than one patent that vary in only minor ways from one another unless there is a promise by the patentee “not to extend the patent exclusivity term or allow multiple parties to harass an alleged infringer.” This is done via a “terminal disclaimer.”

According to today’s NPRM: “Even with the protections currently provided by a terminal disclaimer, multiple patents tied by terminal disclaimers that are directed to obvious variants of an invention could deter competition due to the prohibitive cost of challenging each patent separately in litigation or administrative proceedings.”

For this reason, the USPTO proposes to require that a terminal disclaimer must include an “additional agreement that the patent with the terminal disclaimer will not be enforced if any claim of the second patent is invalidated by prior art.”

This would ensure that when resolving a dispute where there are multiple patents tied by terminal disclaimers, competitors could focus on the validity of the claims of a single patent, said the NPRM.

According to the Office, the intention of the NPRM is to “promote competition by lowering the cost of challenging groups of patents tied by terminal disclaimers, resulting in reduced barriers to market entry and lower costs for consumers.”

Julie Burke of IPQualityPro LLC posted a link to the NPRM on her LinkedIn page and commenters there were critical. Alan Burnett of Compass IP Law called the proposal “an incredible overreach by the Director and the USPTO.” He continued:

“This means you could knock out an entire family (or at least multiple members) with a single IPR with technically incompetent APJs. It is very common to use [terminal disclaimers] in continuations. This is WRONG, WRONG, WRONG!”

Burke also told IPWatchdog via email that this is “a pincer move” from the USPTO, which has now attacked inventors “on both sides – first with significant proposed fee increases that would lure applicants into filing terminal disclaimers early in prosecution. Second, the May 10, 2024 proposed rule changes, if adopted, would then penalize applicants whose patent portfolios are tied together by terminal disclaimers. Coupled with steep proposed fee hikes for additional claims, continuations, and requests for continued examination, the writing is on the walls. America’s Innovation Agency is again trying to impose the Claims and Continuations Package on the IP community.”

IPWatchdog Founder and CEO Gene Quinn called the NPRM “outrageously stupid”. He explained:

“What that means is the USPTO will not treat claims as independently patentable. If one claim from one patent becomes invalidated then you lose every other claim? What happened to validity being judged claim by claim, which is actually what the law requires.

Double patenting has always been suspect since there is no statutory authority for the doctrine in the first place. Now the USPTO proposes to extend a doctrine that already lacks any basis in the law to specifically, intentionally, and unambiguously make it easier and cheaper to challenge patents tied together by terminal disclaimers.

The only virtue of this ridiculous proposal is that it deviates so much from patent law norms that it will create such outrage that the entire extra-statutory doctrine of double patenting will be challenged, and could fall.”

Comments will be due 60 days from publication tomorrow and can be submitted by entering docket number PTO-P-2024-0003 via the Federal eRulemaking Portal at www.regulations.gov.

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5 comments so far. Add my comment.

  • [Avatar for unbelievable nonsense]
    unbelievable nonsense
    May 13, 2024 01:58 pm

    I cannot believe the brainiacs in charge at the PTO thought it was a good idea to write this down.

    How about this scenario for you.

    Parent patent has a broad independent claim and, say, 19 dependent claims.

    IPR succeeds in canceling the independent claim but fails on the 19 dependents.

    Child patent has a TD over the parent and claims an obvious variant of the now-canceled parent independent claim, but has several dependents (or even another independent!) that are not obvious variants.

    Under this asinine proposal, the entire child patent is unenforceable even though the parent dependent claims survived IPR!

    Unreal.

  • [Avatar for Stephen Schreiner]
    Stephen Schreiner
    May 10, 2024 06:15 pm

    This NRPM bends over backwards to insert the PTO into district court litigation to help defendant infringers at the expense of patent applicants. “Look, Mom, it’s now 5 for the price of 1!” A defendant can take down five related patents (tied together by TDs) in their entirety if a single claim of one patent is found invalid. We all know, and the Director should know, that TDs are commonly filed to overcome OTDP rejections even when the claims are not patentably indistinct. The NPRM condescendingly tells PO’s that this proposed rule relieves them from the problem with the old proposed rule where the TD would be required to include a stipulation that the claims in the allegedly conflicting patents are obvious. Now, the applicant *just* has to *agree* in that if one claim is found invalid then the claims of all TD-related patents will be unenforceable. That’s not any concession to PO’s. The unenforceability is also triggered by the filing of a statutory disclaimer. If that’s the case, the filing of a statutory disclaimer in an IPR to simplify the trial will now be discouraged because of the adverse consequences for any related patents having TDs. You can go on and on with the problems with this ill-conceived rule….

  • [Avatar for Throwing out the baby with the bath]
    Throwing out the baby with the bath
    May 10, 2024 08:14 am

    Doesn’t the USPTO realize that this will reduce their income stream, notwithstanding the proposed increase in fees? Why would anyone pursue more than one continuation/divisional/CIP application from a priority app after this? Either the original patent stands or it falls.

  • [Avatar for John L. Rogitz]
    John L. Rogitz
    May 9, 2024 11:38 pm

    I’d like to see a single piece of real world evidence that “multiple patents tied by terminal disclaimers deter competition due to the prohibitive cost of challenging each patent separately in litigation or administrative proceedings.” Give me just one data point if you can. And if you can give only one, explain why that outlier justifies this rule.

  • [Avatar for Pro Say]
    Pro Say
    May 9, 2024 07:09 pm

    One of our greatest fears has been realized, folks: Michelle Lee is back, and thy name is Kathi Vidal.

    As if this handout to China and Big Tech wasn’t bad enough (and it certainly is), should this c.r.a.p. survive the certain, well-justified lawsuits to follow, other dilatory effects will be:

    1. Initial patent apps will now contain 2 – 5 times as many initial claims (excess claims fees be d.a.m.n.e.d.). Anyone not doing so would be an idiot.

    2. Inventors and their counsel will — justifiably — fight the already-overworked Examiners tooth and nail to avoid having to file TDs (including me). Resulting in repeated RCEs and interviews. Making their jobs even tougher, the Examiners are going to be — rightfully — p.i.s.s.e.d. beyond belief.

    And the cost for clients to get their continuation patents through without these illegal TDs? Even if they can, expect to pay 2 – 3x as much for each patent.

    3. The number of Board and yes — CAFC, too — appeals are going to skyrocket.

    So please tell us, Kathi, where such a change will be quicker, easier, and more fair to ALL stakeholders.

    Tell. Us.

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