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In a stunning Federal Register Notice published May 10, 2024, the U.S. Patent and Trademark Office (USPTO) proposes to impose a new requirement on terminal disclaimers filed to overcome obviousness-type double patenting (OTDP) rejections. The USPTO would require the application/patent owner to agree that the subject patent will not be enforceable if any claim in the cited patent has been finally held unpatentable or invalid as anticipated or obvious by a Federal court in a civil action or by the USPTO, or if any claim in the cited patent has been statutorily disclaimed after any prior art challenge has been made. This proposal is aimed directly at so-called “patent thickets” alleged to improperly deter generic drug competition but would undermine the ability to fully protect inventions across all technology areas.

The Perceived Problem of “Patent Thickets”

According to the , the stated goal of this proposal is “to prevent multiple patents directed to obvious variants of an invention from potentially deterring competition and to promote innovation and competition by allowing a competitor to avoid enforcement of patents tied by one or more terminal disclaimers to another patent having a claim finally held unpatentable or invalid over prior art.”

The USPTO first floated a similar proposal in its October 4, 2022, “” Federal Register Notice. As I noted in this article, the impetus behind those initiatives included President Biden’s July 2021 “Executive Order on Promoting Competition in the American Economy,” which was primarily focused on lowering drug costs to American consumers, and a June 8, 2022, letter from Senators Leahy, Blumenthal, Klobuchar, Cornyn, Collins, and Braun to the USPTO raising concerns about “large numbers of patents that cover a single product or minor variations on a single product, commonly known as patent thickets.” However, the fact that Senator Peter Welch (D-VT) has introduced to address “patent thickets” underscores that this is an issue for Congress to address, not the USPTO.

In the Robustness and Reliability Notice, the USPTO proposed requiring a terminal disclaimer “to stipulate that the claims are not patentably distinct” from the claims of the cited patent or application. In the , the USPTO suggests that the currently proposed requirement avoids at least some of the concerns raised against the initial proposal, but it seems to be a distinction without a difference on the ultimate issue of the right to exclude. Indeed, stipulating that a patent will not be enforceable seems to go even further than stipulating that claims are not patentably distinct.

The Real Problems of the USPTO Proposal

The Federal Register Notice gives cursory attention to concerns raised in public comments to the  Robustness and Reliability Notice, but stakeholders should not be deterred from challenging the new proposal on one or more, or all of the following grounds:

• The proposal amounts to substantive rulemaking, which is beyond the USPTO’s authority
• The proposal is inconsistent with the statutory right to file a continuation application (35 USC § 120)
• The proposal is inconsistent with the statutory presumption of validity that applies on a claim-by-claim basis (35 USC § 282(a))
• The proposal is inconsistent with numerous Federal Circuit decisions holding that the filing of a terminal disclaimer does not amount to an admission of obviousness

With regard to the first point, the USPTO cites as confirming its authority to require terminal disclaimer language “placing conditions upon enforcement.” However, the USPTO ignores the fact that the language at issue in that case (the requirement that enforceability depends on common ownership) was consistent with an earlier appellate court decision. In contrast, the current proposal is inconsistent with numerous Federal Circuit decisions that have upheld the right to independently enforce terminally disclaimed patents.