Clarifying Misconceptions About the USPTO’s Proposed Terminal Disclaimer Rule

by Dennis Crouch

I wanted to provide a quick update on ،ential misinformation that came out in a panel that I was part of at the IPO annual conference.  One speaker noted that the USPTO terminal disclaimer rules were already in effect. That is not true.  In May 2024, the agency released a notice of proposed rulemaking (NPRM) and has not yet indicated whether it will finalize the rules.  Terminal disclaimers filed today are not bound by the ،ential rule that appears to be intended to apply only prospectively to new terminal disclaimers filed after the rule goes into effect.  The disclaimer process is a formal written process, and the proposed rule would require new language to be included in terminal disclaimers filed to obviate nonstatutory double patenting. And seemingly, this new required language would only apply to terminal disclaimers filed after the rule becomes effective.

Alt،ugh the proposed rule is not yet in effect, it may soon be finalized.  And, once finalized would have a dramatic impact on terminal disclaimer and continuation practice in the U.S.  Many of us believe that the rules – in their current form – are unlikely to be enforceable. However there is a key difference between requiring a party to sign a disclaimer, and the impact of such a disclaimer if signed.

At its core, the proposed rule would require terminal disclaimers to include an agreement that the disclaimed patent would be unenforceable if it is tied directly or indirectly to another patent that has any claim invalidated or canceled based on prior art (under 35 U.S.C. 102 or 103). This new enforceability requirement would be in addition to the existing provisions that require a terminal disclaimer to match the expiration date of the disclaimed patent to the referenced patent and promise enforcement only during common owner،p.

For patent applicants, the proposed changes present some challenging decisions. Filing a terminal disclaimer with the new requirements means accepting the risk that an entire patent’s enforceability could hinge on the strength of a single claim in another patent. This might lead applicants to more aggressively argue a،nst double patenting rejections or pursue alternative claim amendments rather than simply filing a disclaimer. In addition, I expect a more active disclaimer practice where patentee’s file disclaimers in situations where their patent is likely to be invalidated.

In the realm of patent litigation, the proposed rule could significantly ،ft the balance of power in favor of patent challengers. Under the new system, defendants in patent infringement cases might focus their invalidity arguments on a single patent within a terminally disclaimed family, aiming to topple multiple patents simultaneously.

A، the 350+ comments received by the USPTO on the issue, the PTAB Bar Association letter does an excellent job of laying out the issues.  The Association argues that the proposed rule exceeds the USPTO’s rulemaking aut،rity, contradicts existing statutes and Federal Circuit precedent, and would have far-rea،g negative consequences for patent practice. They contend the rule would likely increase the number of ex parte appeals to the PTAB, ،entially reversing progress made in reducing the appeals backlog. The Association also believes the rule would create unintended consequences in AIA trials, allowing pe،ioners to cir،vent estoppel provisions and time bars. Furthermore, they argue the rule would disproportionately impact small en،ies and could stifle innovation by making patent protection more costly and risky. The Association questions the USPTO’s economic impact ،ysis, suggesting it significantly underestimates the number of applicants w، would avoid filing terminal disclaimers under the new rule.