Uspto Withdraws Consideration of Controversial Change to Terminal Disclaimer Practice

On December 4, 2024, nearly seven months after issuing a Notice of Proposed Rulemaking that proposed major and controversial changes to terminal disclaimer practice, which we previously discussed in an earlier blog post, the USPTO announced that it is withdrawing its proposed rule.

The proposed rule would have amended the Patent Rules "to require that a terminal disclaimer filed to obviate nonstatutory double patenting include an agreement by the disclaimant that the patent in which the terminal disclaimer is filed, or any patent granted on an application in which the terminal disclaimer is filed, will be enforceable only if the patent is not tied and has never been tied directly or indirectly to a patent by one or more terminal disclaimers filed to obviate nonstatutory double patenting in which: (1) any claim has been finally held unpatentable or invalid under 35 U.S.C. [§] 102 or 103 in a Federal court in a civil action or at the USPTO, and all appeal rights have been exhausted; or (2) a statutory disclaimer of a claim is filed after any challenge based on 35 U.S.C. [§] 102 or 103 to that claim has been made."

The USPTO received more than 300 comments from various stakeholders during its 60-day comment period that was open from May 10, 2024 to July 9, 2024. They include 256 unique comments from stakeholders both supporting and opposing the proposed rule. The USPTO explained that its decision to withdraw its proposed rule was "[i]n light of resource constraints."

One of the controversial aspects of the proposed rule related to whether the USPTO actually has the authority to implement such a rule, or if such a rule would instead require legislative action by Congress given the fundamental changes to substantive patent rights that would be affected.

Despite its decision to withdraw the controversial proposed rule, the USPTO recently finalized its rules relating to fee adjustments that will be effective on January 19, 2025. Although the increase in certain fees on the finalized fee schedule are not as high as originally proposed, there are substantial increases in fees for continuing prosecution applications, particularly those filed more than six years after the priority date. However, the USPTO ultimately did not implement the tiered terminal disclaimer fees that had been proposed.

The USPTO rationalized that a purpose of its withdrawn proposed rule and the fee increases was aimed at general goals of increasing efficiency of patent rights and reducing barriers to entry. With the recent resignation of USPTO Director Kathi Vidal and the upcoming presidential administration change, it is unclear whether we can expect future proposed rules aimed at achieving similar goals, and, if so, what form they will take.

Continue to follow the MoFo Life Sciences blog to keep up to date on further USPTO developments.