Unpacking the USPTO’s Proposed Rule Changes for Terminal Disclaimers

On May 10, 2024, the United States Patent and Trademark Office issued a Notice of Proposed Rulemaking concerning terminal disclaimers. These proposed changes are significant for stakeholders in the patent system, as they could profoundly impact the enforceability of patents associated with this type of disclaimer. Understanding these changes is crucial for anyone involved in the patent landscape to navigate the complexities and potential consequences these rules may bring.

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About the author
Jeffrey B. McIntyre, CLP

Transcript

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On May 10, 2024, the United States Patent and Trademark Office issued a Notice of Proposed Rulemaking concerning terminal disclaimers. These proposed changes are significant for stakeholders in the patent system, as they could profoundly impact the enforceability of patents associated with this type of disclaimer. Understanding these changes is crucial for anyone involved in the patent landscape to navigate the complexities and potential consequences these rules may bring.

Terminal Disclaimers are documents filed by patent applicants to overcome rejections based on nonstatutory double patenting. Essentially, they ensure that the term of a patent is not extended beyond what the law allows by tying it to the term of a related patent. This practice prevents instances where similar inventions receive overlapping patent terms, which could unfairly extend the patent monopoly.

Traditionally, Terminal Disclaimers have been used to obviate nonstatutory double patenting by conceding that two related patents will expire simultaneously. This has allowed patent applicants to maintain the validity of their claims while adhering to statutory limits on patent terms.

The USPTO's proposed amendments introduce several new requirements for terminal disclaimers filed to obviate nonstatutory double patenting. 

Key elements of the proposed rules include the Enforceability Condition and the Statutory Disclaimer Conditions. The Enforceability Condition stipulates that a patent with a filed terminal disclaimer, along with any related patents, will only be enforceable if none of these patents have ever been linked, either directly or indirectly, through one or more terminal disclaimers to a patent where any claim has been deemed unpatentable or invalid under 35 U.S.C. 102 or 103, after all appeals have been exhausted. Under the Statutory Disclaimer Conditions, if a statutory disclaimer of a claim is filed following any challenge based on 35 U.S.C. 102 or 103, the associated patents will become unenforceable.

Notably, the USPTO decided against proposing rules that would require stipulations of non-patentable distinction or admissions of obviousness. The proposed rule changes focus on enforceability, not the validity of claims.

Consider a scenario involving three patents, each filed with terminal disclaimers meeting the proposed requirements. If one patent is challenged in an inter partes review and a claim is found unpatentable, the other two patents would become unenforceable due to the existence of terminal disclaimers.

This scenario illustrates a significant risk: a challenger could target a weak claim in one patent, ultimately rendering multiple patents unenforceable through this backdoor tactic. This poses fairness concerns, as it allows claims to be eliminated without full consideration of their merits.

In a previous case, the Supreme Court rejected the United States Patent and Trademark Office's partial institution practice during inter partes review proceedings, emphasizing that statutory requirements cannot be circumvented by administrative discretion. Similarly, the proposed rule changes could be seen as an attempt by the Patent and Trademark Office to modify statutory claim-by-claim validity analysis into a broader issue of enforceability, which lacks statutory support.

Federal Circuit case law consistently maintains that filing a TD is not an admission of patentability. and the proposed rule changes could effectively reverse some precedents by making terminal disclaimers a negative admission, potentially rendering unaffected patents unenforceable due to a single unpatentable claim in a related patent.

Traditionally, courts—not the United States Patent and Trademark Office —handle issues of enforceability, such as inequitable conduct. The Manual of Patent Examining Procedure Section 2010 emphasizes that courts are better suited to address these issues due to their complexity and significant impact on patents. The Patent and Trademark Office's proposed changes could overstep its traditional role by delving into enforceability matters.

The USPTO's proposed rule changes for terminal disclaimers have far-reaching implications for the patent system. By shifting the focus from claim validity to patent enforceability, these changes could conflict with statutory requirements and established legal precedents. Additionally, practical concerns about fairness and equity highlight the need for careful consideration of these proposals.

Stakeholders in the patent system are encouraged to submit comments during the Notice of Proposed Rulemaking period. Ongoing dialogue between the USPTO and the patent community is essential to ensure that any changes align with statutory requirements, judicial precedents, and the broader goals of the patent system. Let your voice be heard and help shape the future of patent practice.

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