USPTO Proposes Rule Changes Affecting Enforceability of Patents with Terminal Disclaimers

On May 10, 2024, the United States Patent and Trademark Office (USPTO) published a Notice of Proposed Rulemaking addressing the enforcement of patents subject to terminal disclaimers. This initiative aims to modify current practices that govern how terminal disclaimers affect patent enforceability, with potential significant implications for patent holders and defendants alike.

A terminal disclaimer is a legal instrument that connects two patents such that the second patent’s enforceable term cannot extend beyond that of the first patent. The USPTO typically requires a terminal disclaimer when at least one claim in the second patent is an obvious variant of a claim in the first patent, a situation known as “nonstatutory (obviousness-type) double patenting.” Under existing rules, if the first patent is invalidated, the second patent subject to the terminal disclaimer remains enforceable independently.

The proposed rulemaking challenges this status quo by asserting that terminal disclaimers can suppress competition and lead to excessive infringement claims involving multiple patents covering essentially the same invention. To address this, the USPTO is considering a rule that would render a patent subject to a terminal disclaimer unenforceable if either:

- A final, nonappealable decision by a federal court or the USPTO finds any claim in the first patent invalid under 35 U.S.C. § 102 (novelty) or § 103 (obviousness); or

- A statutory disclaimer of a claim in the first patent is filed following a challenge under 35 U.S.C. § 102 or § 103.

This approach would facilitate defendants’ ability to invalidate multiple closely related patents asserted together in litigation, potentially reducing the burden of defending against overlapping patent claims.

The USPTO acknowledged opposition to these changes, noting that critics argue validity is determined on a claim-by-claim basis and that claims are presumed valid under 35 U.S.C. § 282. They contend that invalidity of a claim in one patent does not necessarily imply invalidity of claims in a related patent tied by a terminal disclaimer. Concerns were also raised about due process and fairness, as well as questions regarding the USPTO’s authority to implement such changes.

In response, the USPTO cited precedent affirming its rulemaking authority in this area, referencing the 1982 Federal Circuit decision In re Van Ornum, which upheld rules conditioning enforcement of patents linked by terminal disclaimers.

The USPTO is currently accepting public comments on the proposed rulemaking until July 9, 2024. Interested parties can submit their input via the federal regulations portal at https://www.regulations.gov/document/PTO-P-2024-0003-0001.

This development signals a potential shift in patent enforcement strategy, particularly for portfolios containing patents connected by terminal disclaimers. Stakeholders are advised to monitor the rulemaking process closely and consider submitting comments to influence the final regulations.