“Properly applying the new terminal disclaimer rule will likely take time and repetitions for examiners to understand and adapt…. This will make practitioner-examiner interviews even more critical as the negotiation and persuasive process of an interview to convince an examiner of non-obviousness will play a critical role.”

In a recent Notice of Proposed Rulemaking (NPRM), the United States Patent and Trademark Office (USPTO) introduced a conditional enforceability restriction on patents having a terminal disclaimer (TD) filed to obviate the judicially-created obviousness-type double patenting (ODP) rejection. Under the proposed rule, an Applicant would need to assert that the patent subjected to the TD would remain enforceable only if it is not (or has never been) tied with any other patent where any claim of that patent has been finally adjudged unpatentable or invalid over prior art.

The USPTO has also proposed significantly increasing various patent fees, effective as soon as October 1, 2024, with an apparent emphasis on discouraging late-filed continuations, excessive claims, and protracted prosecution.

Regardless of the justifications for the fee hikes and proposed TD rule, the combined effects of these changes could be significant. Sophisticated Applicants and their patent counsel will understand that drafting, filing, and prosecution strategies will need to change, and the time to plan for those potential changes is now.

Revised Strategies for Drafting and Filing

Well-established continuing application (e.g., continuation and divisional) filing practices are strategically valuable for large and small Applicants and across various industries, and these existing strategies should be carefully reevaluated if the TD rule is adopted as currently proposed.

Broadening Continuations

Under current practice, Applicants can file subsequent continuations with incrementally broadened claims after benefiting from an allowance of an earlier, more narrow claim set. If the proposed TD rule is adopted, Applicants may instead wish to initially file multiple distinct independent claims covering a wide spectrum of breadth in the same application. With this tactic, the Examiner is likely to examine the multiple claim sets together, thereby avoiding ODP rejections altogether. The range of breadth of the independent claims in the resulting patent will accomplish a similar goal as having a string of continuations, but with less risk than if several continuations with those same claims were tied together with a TD under the proposed rule. Specifically, if a broad claim in this hypothetical patent were to be invalidated, the other narrower independent claims in that same patent would still stand (or have to be challenged separately), whereas if those same two independent claims were in separate patents tied together with a TD under the proposed rule, the invalidity of the broader patent may impact the narrower claim. It is worth noting that the enforcement restriction of a TD under the proposed TD rule is “unidirectional,” meaning the TD only encumbers the patent in which the TD was filed, but not necessarily the reference patent forming the basis of the ODP rejection. As such, it may be advantageous to file the narrower claims in the first patent, so that invalidity of a subsequent and broader patent encumbered by a TD would not impact the enforceability of the first patent.

Omnibus Specification Continuations

Another common strategy is creating a sprawling “omnibus” specification and then mining it for a range of differing feature combinations in a series of continuations. Under current practice, it is common for examiners to issue ODP rejections in these families and for Applicants to acquiesce and file the TD, even if the differing claims could be rightly argued as being distinct. But under the proposed TD rule, Applicants should consider at least three alternative strategies.

First, like the broadening continuation strategy, Applicants can file multiple independent claims covering different combinations of features from the omnibus specification at the same time in a single application, with the intent of triggering a restriction requirement and taking advantage of the “safe harbor” provisions of 35 U.S.C. § 121, which in most cases will shield the resulting divisional applications from ODP rejections. Applicants, however, should be aware of the requirements to satisfy the safe harbor provision and be wary of the Sauerberg trap.

A second strategy is to cover different feature combinations from the specification in successive continuations, but carefully draft the claims to avoid an ODP rejection. For example, Applicants can signal to the examiner the distinctness of separate applications by emphasizing the unique features of that claim set clearly, using distinct preambles or distinct claim types, or by avoiding identical terminology across claim sets.

A third strategy to consider is to file multiple separate applications on the same day that share a common (or mostly common) specification. Doing so can still yield the efficiencies of comprehensively describing a range of ideas in a single specification while dividing out the unique ideas into separate filings. This strategy should reduce the likelihood of the applications in this family receiving ODP rejections compared to filing the same claims in continuations claiming priority to a common “parent” specification. Although employing this strategy may raise the total filing costs resulting from many international filings stemming from the multiple U.S. applications. Applicants instead may consider an omnibus Patent Cooperation Treaty (PCT) or other foreign filing to mitigate potential costs.

Target Continuations

Another practice is to file a continuation with claims that closely track the features of a competitor product. These so-called target continuations can be immensely valuable to a patent owner for offensive or defensive purposes. The previous proposals suggesting filing claims of interest together in the first application to force a restriction may not work for target continuations because the desired claim scope is typically unknown at the time of the original filing. Given the potential high value of these target continuations, Applicants should avoid tying them to previous patents via a TD if at all possible, and should instead employ strategies to hopefully avoid ODP rejections altogether or address ODP rejections on the merits.

Prosecution Strategies

Given the proposed TD rule, the preemptive drafting and filing strategies discussed above are more likely to avoid sticky situations and preserve options for Applicants. Despite strategic planning, however, Applicants may find themselves facing an ODP rejection. Applicants may find the following techniques helpful at the prosecution stage.

Always Check for the Safe Harbor Under Section 121

Verify whether the claims of the ODP-rejected application fall under the “safe harbor” provisions described above. If the examiner–perhaps through failing to review the earlier reference’s file history or if a new examiner picked up the later application–failed to appreciate that your application is a qualifying safe-harbor divisional, remind them.

Argue, Amend, and Avoid Obviousness

Second, if an Applicant is unable to find cover under the safe harbor based on a previous restriction requirement, the Applicant can argue, and likely amend, to avoid the “obviousness” allegation by the examiner. This strategy is more likely to be effective if the Applicant can include either new features not previously recited or rearrange/rescope those features in a way that is markedly different. But this may be challenging. In most cases, for example, simply incorporating a feature into an independent claim that may have been recited in a dependent of a prior application will not be sufficient–the examiner will want alternative (and meaningful) scoping. Like the drafting strategy described above, this may lead Applicants to zero in on sub-embodiments more readily than past techniques that had multiple, slightly overlapping and broader claim strategies. This will create more distinct resulting claim sets, but require more proverbial bites at the apple to cover key aspects. And a word of caution: practitioners must be careful in amending and/or arguing. Characterizing a prior reference to the extent necessary–particularly a reference that is owned by the Applicant–must be done surgically and skillfully.

Examiner Conditioning and Advanced Practitioner Techniques

Properly applying the new rule will likely take time and repetitions for examiners to understand and adapt. In the past, Applicants in many cases have been more willing to file TDs with little resistance. But under the new rule, Applicants are more likely to fight such “obviousness” through amendments, and the Applicant may be able to convince the Examiner that the delta is sufficient to withdraw the obviousness rejection. This will make practitioner-examiner interviews even more critical as the negotiation and persuasive process of an interview to convince an examiner of non-obviousness will play a critical role. Relatedly, Applicants’ deft use of appeal, pre-appeal conferences, and other sophisticated and nuanced tactics will be crucial.

Update Practitioner Checklists, Strategize Early, and Check Your Calendar

Lastly, practitioners should be deliberate. Applicants–and their trusted practitioners–should have a checklist item to analyze the claims of the earlier/reference patents (assuming they are issued) as prosecution continues. This analysis can consider how potentially vulnerable the claims are, such as analyzing the broadest independent claim. If the issued claims are at risk for being invalidated, that will impact the strategy in the later cases. If the proposed TD rule goes into effect, Applicants should consider filing a TD in applications having an ODP rejection before the effective date to avoid the pitfalls of the new rule. Applicants could further consider filing a TD for pending applications in the same family proactively before an ODP rejection is received (if the Applicant has assessed and accepts the effects of such a proactive strategy). It’s worth noting that the proposed rule would only apply to TDs filed after the effective date of the final rule–not those previously filed.

Impacts of Proposed Fee Increases on Drafting, Filing, Prosecution Strategies

The filing and prosecution strategies discussed above focused on reducing the risks of a TD-based unenforceability scenario. But the costs of such strategies are equally important to understand. On that point, the USPTO’s recent fee increase proposal will likely have significant impacts, including a few that are highlighted here.

Excess Claims Fees

There is a proposed 25% increase in fees for independent claims above 3 and a 100% increase in fees for total claims above 20. These significant fee increases can quickly double or triple the filing costs if the Applicant is trying to cover multiple claim sets in a single application. The additional costs need to be weighed against the TD risks, but will likely be justified for high-value patents and families.

Continuation Surcharge

The proposals also include a surcharge of $2,200 for continuations filed more than 5 years after the earliest priority date, and a surcharge of $3,500 if the continuation is filed more than 8 years after the priority date. These fee increases on top of the TD risks mentioned above may reduce the utility of mining an omnibus specification for continuations, or at least will pressure Applicants into filing continuations sooner. Applicants and practitioners should consider adding the 5 and 8 year deadlines as docketing reminders so that continuation filing decisions can be made before the costs of doing so shoot up.

Prosecution Fees

Lastly, fee increases for second and third requests for continued examination (RCEs) encourage compact prosecution, which may be more difficult to accomplish if there are many independent claims in a single application with varying scope. An examiner may latch onto the narrower claim set, and request Applicants to cancel the rest and file a continuation. Without the protections of a restriction requirement though, Applicants should carefully consider the costs of continuing prosecution against the risks of receiving ODP rejections in the resulting continuations.

The costs of filing the TDs themselves are also going up anywhere from 194% to 724% depending on when the TD is filed throughout prosecution. Applicants should be aware of the time-varying cost of the TD filing and, if possible, make a determination of whether a TD will be filed early in prosecution, as delaying that decision could be costly.