Proposal for radical changes on terminal disclaimer at the USPTO
Under most jurisdictions two patents cannot be granted to the same applicant for the same invention. This general principle protects a third party accused of infringement from having to defend or invalidate multiple patents directed to the same invention.
In the US when two inventions are deemed close, the US Examiner may only allow the claims if the applicant files a so called “terminal disclaimer” which limits the term of the patent to the term of a second (reference) patent documents on which the double patenting objection is based. The patent with the terminal disclaimer is only enforceable during the period that the patent is commonly owned, or commonly enforced, with the second (reference) patent.
Despite the use of such terminal disclaimers, the USPTO is of the view that competitors attempting to enter the market are still faced with excessive costs when trying to defend against multiple patents. To address this point and promote competition, the USPTO is considering introducing new constrains on terminal disclaimers, detailed in the notice titled “ Terminal Disclaimer Practice to Obviate Non-statutory Double Patenting” [1].
“Under the proposed rule, the USPTO will not issue a patent to a common owner or inventor with a claim that conflicts with a claim of a second patent unless the terminal disclaimer includes 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. That means to resolve a dispute where there are multiple patents tied by terminal disclaimers, competitors could focus on addressing the validity of the claims of a single patent.”
This proposed change is illustrated in the following example. An applicant has filed a patent application X(A) subsequently rejected for double patenting based on a reference patent W(P). The applicant overcomes the double patenting rejection and obtains the patent X(P) by filing a terminal disclaimer.
Under the current rule, both patents X(P) and W(P) may be used to block prospective competitors. A competitor would need to either obtain a license or attempt to invalidate each patent separately.
Under the proposed new rule, if the reference patent W(P) is held invalid over the prior art, then a competitor would avoid the enforcement of the reference patent X(P) based on the newly introduced agreement in the terminal disclaimer of X(P).
Importantly, the terminal disclaimer under the proposed rule would be “unidirectional”. So in the above example if the patent X(P) were to be held invalid over the prior art, the reference patent W(P) would still be enforceable. This is because, in the present example, the terminal disclaimer is for X(A) identifying W(P) as the reference document, and not for W identifying X as the reference document.
The implication of such changes, should they come into effect, are very significant for the applicant, with the risk of potentially losing a whole patent family. This may force a different approach regarding both patent filing and prosecution strategy in the US.
From the filing perspective it may become more important to consider filing a single application with multiple variants to avoid having to deal with terminal disclaimers in the first place. From a prosecution perspective, should the applicant receive a double patenting objection, it may become more important than ever to provide counter arguments demonstrating that the claims are patentably distinct from the claims of the reference patent document. Alternatively, the applicant could consider amending the claims in the application or in the reference patent document.
The USPTO have received various public comments on the proposed changes. Those opposed to changes in terminal disclaimer practice raised various concerns including fairness for patentee, and some comments even questioning whether the USPTO has authority to make changes in terminal disclaimer practice. These comments are under review, and we will keep a close eye on future developments at the USPTO.
[1] https://www.regulations.gov/document/PTO-P-2024-0003-0001
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