PTO proposing rules that increase delays now

Executive Summary On May 10, 2024, the United States Patent and Trademark Office (USPTO) issued a notice of proposed rulemaking to add a new requirement for terminal disclaimers filed to obviate nonstatutory double patenting rejections to the public for comment. Comments can be submitted via this link until July 9, 2024. The proposed rule “would require terminal disclaimers filed to obviate nonstatutory double patenting to include an agreement” that ties the patent’s fate to the patentability of claims in related patents. Specifically, the patent with the terminal disclaimer would “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.”1 If the proposed rule goes into effect, the change would be a significant departure from current practice and a detriment to patentees. Proposed Rule Under the proposed rule, terminal disclaimers would include an agreement that the patent with the terminal disclaimer will not be enforceable if any claim of the second patent (for which the terminal disclaimer was filed to obviate a nonstatutory double patenting) is invalidated by prior art. Terminal disclaimers, including those with the new language, would continue to be unidirectional. Therefore, only the patent with the terminal disclaimer and not the conflicting patent would be encumbered by the language. The Potential Effect From the USPTO’s perspective, with the proposed rule, if there is a dispute involving multiple patents tied by terminal disclaimers, the dispute could be focused on addressing the validity of the claims of a single patent. This would in effect lower costs of challenging multiple related patents and result in a faster resolution. However, the proposed rule would have the significant substantive effect of compelling a conditional admission, yet the USPTO’s notice does not identify authority for issuing such a rule other than its base rulemaking authority.2 Yet this authority has long been held to be limited to procedural rules and not to provide authority for substantive changes to the law.3 Moreover, reviewing courts look unfavorably on USPTO attempts to overrule binding case law.4 Additionally, the proposed rule operates in a disproportionate manner. While nonstatutory double patenting operates on a claim level (claims of a patent application are patentably indistinct from claims of a reference patent/patent application), terminal disclaimers operate on a patent level (disclaiming the term of a patent). The rule would render the patent with the terminal disclaimer unenforceable if any claim of the second patent (for which the terminal disclaimer was filed to obviate a nonstatutory double patenting) is invalidated by prior art. To be clear, just one claim in the second patent needs to be found invalid as being anticipated or obvious for the patent having the terminal disclaimer to be unenforceable. The proposed rule change could also significantly raise the cost and complication of examination involving nonstatutory double patenting. Because terminal disclaimers currently do not constitute an admission regarding validity, many terminal disclaimers are filed for expediency. The proposed rule would upend this practice and convert the current non-admission into a mandatory substantive admission. Under the proposed rule, filing a terminal disclaimer would present the risk that a patent’s enforceability could depend on the strength of a single claim in another patent. In view of the risk associated, implementation of the proposed rule would likely slow patent prosecution at the USPTO, increase nonstatutory double patenting challenges by patent applicants, and further increase continuation application filings to circumvent nonstatutory double patenting rejections. Taken together, in practice the proposed rule may counter its intended purpose and result in increased costs and delays during the prosecution of patent applications at the USPTO.