Support IPWatchdog with an individual sponsorship: Click here
“The USPTO should not be weaponized against the biopharmaceutical industry.” – Sherry Knowles
The U.S. Patent and Trademark Office (USPTO) today officially withdrew its controversial proposed rule on terminal disclaimer practice.
The withdrawal was expected, with panelists at IPWatchdog’s Life Sciences Masters Program in October predicting based on USPTO Director Kathi Vidal’s comments at the American Intellectual Property Law Association (AIPLA) Annual Meeting that the rule was unlikely to be finalized before her departure from the Office.
The May 2024 Notice of Proposed Rulemaking (NPRM) would have changed terminal disclaimer practice related to “non-statutory double patenting.” The judicially-created doctrine of “obviousness-type double patenting”(ODP) has become codified by the USPTO such that the Office will reject claims to more than one patent that vary in only minor ways from one another unless there is a promise by the patentee “not to extend the patent exclusivity term or allow multiple parties to harass an alleged infringer.” This is done via a “terminal disclaimer.”
According to the NPRM: “Even with the protections currently provided by a terminal disclaimer, multiple patents tied by terminal disclaimers that are directed to obvious variants of an invention could deter competition due to the prohibitive cost of challenging each patent separately in litigation or administrative proceedings.”
For this reason, the USPTO was proposing to require that a terminal disclaimer must include an “additional agreement that the patent with the terminal disclaimer will not be enforced if any claim of the second patent is invalidated by prior art.”
This would ensure that when resolving a dispute where there are multiple patents tied by terminal disclaimers, competitors could focus on the validity of the claims of a single patent, said the NPRM.
The proposal generated widespread criticism, with IPWatchdog Founder and CEO Gene Quinn calling it “outrageously stupid.”
One of the most vocal opponents of the NPRM, Sherry Knowles of Knowles Intellectual Property Strategies, said she was glad to see the notice today. “I appreciate the USPTO’s decision to withdraw the controversial terminal disclaimer proposed rules,” Knowles said. “The USPTO should not be weaponized against the biopharmaceutical industry.”
The Council for Innovation Promotion (C4IP) today said the “decision marks a win for inventors nationwide” as the “proposal would have weakened confidence in patent protections by making it harder and costlier for inventors to protect their creations.”
C4IP pointed to its July 2024 public comment on the proposed rule, which explained that the proposal “exceeds the scope of the Office’s rulemaking authority” and would “undoubtedly be challenged in the courts” if promulgated. The comment also noted that, combined with (now also scrapped) fee-setting proposals that could have increased the cost of requests for continued examination by 700% in some cases, the NPRM illegally undermined continuation practice and should be withdrawn.
The USPTO’s Notice of Withdrawal said that the decision to withdraw the proposal was down to “resource constraints.” The Office received more than 300 comments, 256 of which were unique, both for and against the proposed changes, according to the Federal Register Notice.
