Terminal Disclaimers and PTO: Proposal for a Test Case

Obviousness-type non-statutory double patenting is a judicially created doctrine that operates to prevent patentees from improperly extending a patent's effective term through successive patent grants.

The non-statutory double patenting doctrine was created at a time when patent term was measured from the grant date. At that time, it was easy to "play games" with the patent terms by using a series of continuation applications. Because patent term (for new patents) is now defined by the filing/priority date, most of the potential for games has been eliminated because a family of related applications will typically have the same term. However, a growing issue is patent term adjustment (PTA) that increases the patent term for applications with long prosecution pendency. Because of the increased backlog and changes to PTA calculations, it is likely that later-issued applications in a family will have a longer PTA.

Courts and the PTO have agreed that a patentee can overcome a non-statutory double patenting problem by filing a terminal disclaimer that ties the patent-term of a later-granted patent to the patent term of an earlier-granted patent.

The impact of a terminal disclaimer depends upon what was actually disclaimed. Although applicants can draft their own terminal disclaimer, most folks use the form provided by the USPTO. (SB-0025). The PTO Form disclaims the term of the later-issued patent that extends beyond the earlier-issued patent's term. Regarding PTA, the Form expressly ties the later-issued patent's term to the PTA-adjusted term of the earlier-issued patent.

Although not expressly stated, the Form seems to imply that the PTA of the later-issued patent can be cut-short by the disclaimer. That result, however, is not compelled by the law. In theory (and largely in practice) PTA is based on patent office delay. As such, the equitable basis of the non-statutory double patenting doctrine might not apply to require disclaimer of PTA.

A patent applicant may want to pursue a test-case by modifying the terminal disclaimer form to expressly state that the disclaimer does not cut short the PTA of that later-issued patent. Thus, the term of a later-issued patent with a 400-day PTA and a terminal-disclaimer would limited to the term of the earlier-issued patent plus 400-days.

 

46 thoughts on “Terminal Disclaimers and PTO: Proposal for a Test Case

  1. I see no reference to PTA.

    The form refers to the “terminal part of the statutory term of any patent granted on the instant application”, and “the full statutory term of any patent granted on [the] pending reference … as such term is defined in 35 U.S.C. 154 …”

    The statutory term set out in 35 USC 154 includes the provision for PTA.

  2. I’m late to the thread, but curious.

    In PTO SB-0025 (or SB-0026, which is the form for disclaimer over an issued patent), I see no reference to PTA. That is, I find no support for Dennis’s statement “Regarding PTA, the Form expressly ties the later-issued patent’s term to the PTA-adjusted term of the earlier-issued patent. (Rather, I see references to shortening of the term of the prior patent by disclaimer.)

    In accordance with the KISS principle, would it suffice – for a test case – to modify the PTO’s TD language as follows (inserts in CAPs):

    “[Owner] hereby disclaims, except as provided below, the terminal part of the statutory term of any patent granted on the instant application (NOT COUNTING PTA) which would extend beyond…”

  3. Real man: “#2, having multiple “obvious” invention split up between multiple assignees is stup-id to begin with. No smart potential licensee is going to take a license on one patent when they know the other two are out there.”

    Who says the assignees plan on licensing anything?

  4. #1, he is an infringer, why should the courts be protecting him?

    That’s like saying that every criminal should get life in prison “because he’s a criminal”.

    Of course the infringer should be liable, but he should only be liable once for each invention. If you want to sue him twice, invent something else.

    #2, having multiple “obvious” invention split up between multiple assignees is stup-id to begin with. No smart potential licensee is going to take a license on one patent when they know the other two are out there.

    Not every infringer is a licensee.

    #3, the idea of harassment from mutiple different patent owners is just a big red herring.

    Yes, because the system is set up to prevent it.

  5. “No matter how smart the infringer is, that doesn’t guarantee him that three parties with patents to mutually obvious inventions will all agree to license him, and even if they do he’ll have to pay three times for one invention. That’s what the courts are protecting him from.”

    #1, he is an infringer, why should the courts be protecting him?

    #2, having multiple “obvious” invention split up between multiple assignees is stup-id to begin with. No smart potential licensee is going to take a license on one patent when they know the other two are out there. As such, it is much smarter to have the patents be part of a patent pool that gets licensed together — this is a market-based solution, not a judge-imposed solution.

    #3, the idea of harassment from mutiple different patent owners is just a big red herring. How many tens of thousands of hours does the USPTO and Applicants alike spend dealing with these unnecessary rejections for the sole purpose of protecting some rube?

    Kill the doctrine and kill TD practice altogether — it is long overdue.

  6. Posted by: Paul F. Morgan | Jun 18, 2010 at 10:23 PM

    Sure, but I suspect a pharma company would not want a multi-billion dollar patent to be the test case. Their patents get challenged enough as it is without needing to raise another issue in litigation (which is where the real “test” would occur).

  7. Re: “Because patent term is now defined by the claimed priority date, most of the potential for games has been eliminated because a family of related applications will typically have the same term.”
    Could not there still be signicant term differences between patents even if they had the same claimed filing date?
    Suppose, for example one application had major PTO delays and no applicant delays, to get years of total patent term extensions, while the ODB- related application had much faster PTO actions and applicant delays? That is not chicken feed for, say, a drug making millions of dollars a day more until its last patent expires.

  8. If an infringer isn’t smart enough to get a license on the entire patent portfolio

    No matter how smart the infringer is, that doesn’t guarantee him that three parties with patents to mutually obvious inventions will all agree to license him, and even if they do he’ll have to pay three times for one invention. That’s what the courts are protecting him from.

  9. Why is there is a need to protect infringers from multiple assignees? If an infringer isn’t smart enough to get a license on the entire patent portfolio (and perform sufficient due diligence to realize that continuations are out there), why should the court be protecting them?

    As most here recognize, preventing the term extension justification for TDs is all but a red herring.

    The time is ripe to get rid of them.

  10. “Because patent term (for new patents) is now defined by the filing/priority date, most of the potential for games has been eliminated because a family of related applications will typically have the same term.”

    The ODP doctrine is still necessary in those instances where the patents/applications are not in the same family. I have received several ODP rejections where the filing/priority dates for the patents/applications were different. And in such instances, you cannot eliminate the curtailing of term in a terminal disclaimer.

  11. CDH It’s not clear to me why the later issued is a “bonus” or “courtesy”. As Dennis notes, this is judge-made law, it does not “have” to exist at all.

    Fine. No later-filed patent at all, then. The PTA issue is moot.

  12. It’s not clear to me why the later issued is a “bonus” or “courtesy”. As Dennis notes, this is judge-made law, it does not “have” to exist at all. Considering the change in term calculation, they could just as well get rid of the doctrine entirely. Why does the part of the doctrine allowing for terminal disclaimers count as a “bonus” and not an integral part of the doctrine?

  13. I ha_te the Ha_te filter. And I can’t find the word that aint lettin this go up, so here’s the abridged version:

    Ah well, I was saying that you are free to revise history all ya want 6 – ‘Ol NAL was busting your chops on the judicial side cause ya didn’t go there, even after she dropped the hint. You stayed with your grammar, Not that the grammar side mattered all that much – judge-made law ruled the day.
    I was also sayin that I been here long befors I was posting, mostly chuckling at the bunch of knuckleheads. You can thank IANAE for getting me to post, though – the Dude’s a phenom. He can take both sides of a position and beat the cr_ap outa anybody here, including me (well, sometimes includin me – He be smart too in that most times he know better than to mess with me). Now that’s some serious lawyering.

  14. “She took you to task before the decision, so ya can’t count that as a victory.”

    LOL excuses.

    Just fyi tard, her side lost from both angles, just as I predicted. You really should bother to read the decision at some point.

    And also fyi, me and her were discussing that same issue a long time before you (if you indeed are not her) even got here. She only came around on the judicial “angle” right before the decision and after someone paid a lawlyer to present the full fury of several thousand dollars. We had discussed it for year(s) before that and nobody should require such force to be convinced that the statute doesn’t have a nonsensical meaning.

    I won on all fronts. Game, set and match. Her flip-floppery on half of the argument near the end doesn’t change it.

  15. If you craft the disclaimer such that your patent doesn’t expire with the reference patent, wouldn’t the disclaimer (and therefore the patent) be invalid?

    Not sure about that – I think Dennis’s point is that you craft the disclaimer so as to only give up that which you have to and you reserve any and all PTA (which is generated by a separate guarantee by the Office). The applicant’s entitlement to PTA being separate from the TD.

    Echoing TINLA a little bit, it offends my sensibilities (jaded as they are) that the Office wants sluff off its broken promise and stiff the applicant, especially as I have pointed out – these types of things should never see PTA. In fact, given the prosecutin history, I’m all for doubling any PTA to punish the incompetence of the Office in such cases.

  16. and she lost in the Ariad debacle

    I remember that 6 – NAL got hosed and was woman enough to admit it.

    She also posted how she was going to lose (the judicial-law-making-precedent angle), and still reamed you on the arguments (kinda scary and not my bizness – but I think ya gotta liked it). She took you to task before the decision, so ya can’t count that as a victory.

    Have you ever out-argued anyone? Ya might pick a fight with Ned – when he is off his reds, blues, and greens, he comes up wth some pretty looney (not Mooney) stuff.

  17. Yeah, so the statute doesn’t say the expiration date of the reference patent, but rather the date specified in the disclaimer — ha!

    Very clever. But specifying “the expiration date of the reference patent” in the disclaimer sounds an awful lot like specifying a date in the disclaimer.

    If you craft the disclaimer such that your patent doesn’t expire with the reference patent, wouldn’t the disclaimer (and therefore the patent) be invalid?

  18. BB would argue that the terminal disclaimer disclaims nothing more than that amount of time the subject patent would extend beyond the reference patent, which is 0 under the APA rules. And so 0 is all that the inventor is required to give up. If the PTA is more than 0, the applicant is entitled to it.

    This makes 0 sense.

  19. BTW, have I missed something?

    Is this now “The nation’s leading patent law blog.?” I just noticed that sub-title. (I usually dive straight into the comments to see what sort of trouble IQ=6 and Moonbeams are into.)

    “The nation’s”? — which one? Lichtenstein?

    Great work.

  20. Thanks, DC. Back on Jun05 I raised this same point in the Calculating Patent Term thread but didn’t expect to get such in depth treatment of the question. It’s really rather complex.

    Seems like most of you are missing DC’s sly suggestion.

    154(b)(2)(B): “No patent the term of which has been disclaimed beyond a specified date may be adjusted under this section beyond the expiration date specified in the disclaimer.”

    Yeah, so the statute doesn’t say the expiration date of the reference patent, but rather the date specified in the disclaimer — ha!

    DC is suggesting that we custom design the terminal disclaimer form so it specifically says the expiration date of the reference patent plus any PTA — that becomes “the expiration date specified in the disclaimer.”

    I would argue that the terminal disclaimer disclaims nothing more than that amount of time the subject patent would extend beyond the reference patent, which is 0 under the APA rules. And so 0 is all that the inventor is required to give up. If the PTA is more than 0, the applicant is entitled to it.

    The whole problem comes down to judges who make 2 messes for each one they clean up — obvious type double-patenting is a great example.

    Terminal disclaimer is applied against the whole patent. It should be applied only to those claims that are not distinct from claims of the reference patent. If one claim is DP, then cancel the claim. This moots the DP rejection, and you’ll get your PTA for the remainder.

    My question is: How does one produce a test case?

    I mean, do you ask a client to foot the bill? Generally, the amount of PTA time involved is less than a year. How much attorney time and appeal fees is that worth?

  21. 6 didn’t say it was a surprise MM

    I know, you said it was “hot.” That implies at least mildly not expected. Otherwise, who gives?

  22. Thanks for pointing out another worm in the “can of worms” of patent term calcuations, Dennis. To quote the CAFC from their muddled Eli Lilly Prosac double-patenting case Number 2, your flow chart for term calculation must look like the royal Habsburg’s family tree by now.
    However, even though sustantively “modifying” a terminal disclaimer form and slipping it by an examiner to get an allowance over a double-patenting rejection might not be that difficult, I think it could easily lead to a charge of inequitable conduct if either patent were ever enforced?

  23. After Amgen Inc. v. F. Hoffman-La Roche Ltd. and Boehringer Ingelheim International GMBH v. Barr Laboratories, Inc., the whole subject of double patenting, “safe harbor” under 35 USC 121, and terminal disclaimers gives me an Excedrin size headache.

  24. “Is that a surprise? I don’t think so. Nor will it be a surprise when the Fed Cir crushes the plaintiffs and makes a laughingstock of the district court judge. Nor will it be a surprise when that case is appealed. Nor will it be a surprise when the Supremes deny cert.”

    I didn’t say it was a surprise MM. However, if one of the things you listed right there doesn’t turn out how you said it will that will be a surprise. And a most welcome one I should add. It also would have been a surprise if they hadn’t appealed. However, as Kev pointed out, their particular patent is dead in the water because of 102, or at least so he says. So it wouldn’t have been that big of a surprise if they hadn’t chosen to appeal. Especially ivo the fact that, at least according to Kev, the DC decision wouldn’t bind the PTO or any other court so wouldn’t impact the rest of the bio world or the rest of myriad’s patents.

    I do have a question though, if all that works out how you said it will does the case go back to the DC where the ACLU league of extraordinary gentleman will then get a decision on the constitutional issue they raised?

    Also, I wouldn’t be so quick to call the judge a laughingstock even if he is reversed. It takes quite a bit o legal gymnastics to say that genes are patentable in the form that myriad claimed them.

  25. SO imagine that the Applicant is forced to file a TD on a patent that sits in the Q to the BPAI for sya, 12 years, and there would be a 12 year adjustment. But, becasue it does not even issue until the term of the original patent is expired, the Applicant has wasted their time. And it’s all becasue of patent office delay. That just offends my sense of fairness.

    That offends my sense of fairness too, but the problem is the delay and not the terminal disclaimer. The applicant was never entitled to the extra 12 years of PTA at the end, but what the delay cost him was 12 different years of term at the beginning.

    Besides which, the applicant presumably already had an issued patent similar enough to the delayed patent that a terminal disclaimer was required in the first place, so it’s not like he has that much to complain about. He’s had enforceable patent rights for as long as he was entitled to.

    This hypothetical is yet another example of why PTA is not always a good remedy for PTO delay, and we need to focus on reducing the backlog rather than on our entitlement to PTA.

  26. “Although not expressly stated, the Form seems to imply that the PTA of the later-issued patent can be cut-short by the disclaimer. That result, however, is not compelled by the law.”

    Perhaps we should look more closely at 154(b)(2)(B): “No patent the term of which has been disclaimed beyond a specified date may be adjusted under this section beyond the expiration date specified in the disclaimer.”

    Sounds pretty compelling to me.

  27. TINLA, maybe Dennis can do some statistics on how frequently applications subject to terminal disclaimer fail to issue prior to the expiration of the earlier patent.

  28. 6 the hot news is over at the docs, Myriad appealed.

    Is that a surprise? I don’t think so. Nor will it be a surprise when the Fed Cir crushes the plaintiffs and makes a laughingstock of the district court judge. Nor will it be a surprise when that case is appealed. Nor will it be a surprise when the Supremes deny cert.

  29. “Whatever happened to NAL?”

    She was taking a break after I almost outted her (actually I did though nobody seems to have put together the pieces) and she lost in the Ariad debacle. Who knows, maybe she’ll be back? Maybe she won’t. But one thing is for sure, we do indeed seem to be be lacking any new lolable papers from her and other lawlyers she can talk into doing a paper with her.

    As to me knowing her, no, I don’t “know” her. I know who she is, because I emailed her re a paper she wrote on official notice and how evil it is. I invited her to join us here and then forgot about it until a long time later I realized she did join us, as the supervillain “NAL”.

    As it turns out, it’s a really small world tho, she used to work for the lady who has an office right down the hall from me.

  30. Someone has to disagree with the Loonie. It might as well be me. SO imagine that the Applicant is forced to file a TD on a patent that sits in the Q to the BPAI for sya, 12 years, and there would be a 12 year adjustment. But, becasue it does not even issue until the term of the original patent is expired, the Applicant has wasted their time. And it’s all becasue of patent office delay. That just offends my sense of fairness.

  31. “Thus, the term of a later-issued patent with a 400-day PTA and a terminal-disclaimer would limited to the term of the earlier-issued patent plus 400-days.”

    For consistency’s sake in the hypo given by the good Professor, I’d say the later issued gets it’s 400 days LESS any PTA of the earlier-issued. E.g., if the earlier-issued patent got 224 d PTA, then the term of the later-issued expires 176 days after the earlier-issued.

    And as a foundational matter, I find myself agre… agr… agreei…. agreeeeeeyah (having trouble saying it, hold on), agreegag… AGREEING with the 3rd post above. As a policy matter, your later-issued is only a courtesy to you allowing you to have another patent that states the claims of the earlier-issued patent in slightly different form.

  32. LOLOLOLOLOLOLOLOLOLOL NAL.

    You crack me up Sunshine. Insofar as NAL agreeing with me, that’s when she’s being smart.

    Insofar as you being wrong, well, you’ll have to lump me with a lot more than just NAL.

    You’ll also have to admit that I’m far more witty, and far less pretentious and boring. Ok, far more lazy too – who has the patience to write four page dissertations for a blog?

    Don’t worry though – I do miss her too, although for sure not in the same Mommy sense that you do. It was always amusing to see her mop the floor with you. I don’t recall a single time that you bested her, as much as you tried.

    How is that kid of hers (didn’t you say that you knew her)? Tell her to write another article as I need more, um, reading material for the bathroom.

  33. Dennis,

    If you disclaim the term beyond the (known) term of the earlier-issued patent, are you not thereby disclaiming the term beyond a specified date? Wouldn’t that trigger Section 154?

  34. “the Office did the search correctly (followed their own rules on how to examine)”

    LOLOLOLOLOLOLOLOLOLOL NAL.

    “As to ” “bonus” for applicants ” – this ignores the fact that the mechanism is a “bonus” for the Office to begin with. Again – there is no viable or reasonable explanation for penalizing the applicant.”

    It isn’t a penalty tardface, the only reason we have this ODP nonsense is to prevent applicants from gaming the system. There is no “penalty” involved.

    Oh, and D, I hope your test case disclaimer is not accepted. Perhaps the reasoning presented by asdf will be reason enough for your plan to fail even if it is accepted.

    Btw, here it is, proof positive that lawlyers sit around and think up ways to try to break the system. Good job D. No, seriously, good job.

  35. ASDF — I should have included Section 154(b)(2)(B) in the original post, but I was running short on time. My reading of the statute is that PTA cannot overcome a would-be limiting terminal disclaimer. However, in my proposed test case, the terminal disclaimer would not need to be “overcome.” Rather, the terminal disclaimer would, on its face, only operate to disclaim back to the term of the earlier-issued patent plus the PTA of the later-issued patent.

  36. ping As to ” “bonus” for applicants ” – this ignores the fact that the mechanism is a “bonus” for the Office to begin with.

    Work on the clarity, ping. What is “the mechanism”? How is “the mechanism” a “bonus” for the Office?

  37. Although not expressly stated, the Form seems to imply that the PTA of the later-issued patent can be cut-short by the disclaimer. That result, however, is not compelled by the law.

    what about 35 USC 154(b)(2)(B) – “No patent the term of which has been disclaimed beyond a specified date may be adjusted under [the PTA] section beyond the expiration date specified in the disclaimer.”

  38. Because of the increased backlog and changes to PTA calculations, it is likely that later-issued applications in a family will have a longer PTA.

    There is no reasonable nor viable explanation for this. Continuations (not CIP’s) have already been searched and examined. If the Office did the search correctly (followed their own rules on how to examine), then continuations should be much quicker to prosecute and PTA should be non-existent.

    Don’t harm (or blame) the applicant for the Office’s inefficiencies.

    As to “ “bonus” for applicants ” – this ignores the fact that the mechanism is a “bonus” for the Office to begin with. Again – there is no viable or reasonable explanation for penalizing the applicant.

    Malcolm, it is a bit humorous that your beloved art unit seems inordinately hit by such Office Actions (per the sister thread). This would likely be less a problem if your fellow practicioners weren’t so greedy or knew how to write proper applications.

  39. Although not expressly stated, the Form seems to imply that the PTA of the later-issued patent can be cut-short by the disclaimer. That result, however, is not compelled by the law. In theory (and largely in practice) PTA is based on patent office delay. As such, the equitable basis of the non-statutory double patenting doctrine might not apply to require disclaimer of PTA.

    I don’t understand why PTA of the later-issued patent would not be cut short by the disclaimer. The mere granting of the later-issued patent is a “bonus” for applicants that is only available to them because they agree to the disclaimer of term. Extending the term of the later-issued patent under these circumstances makes no sense whatsoever.

  40. Terminal disclaimers do two things: curtail patent term and require they be commonly owned. This post misses the point that curtailing patent terms is unnecessary now. As for the commonly owned part, I think it is a good thing, but clearly there can be disagreement (see above).

    Thus, someone should do a test case and file a terminal disclaimer that only has the commonly owned language and argue that the term is already shorted by statute (i.e., claiming priority).

  41. What about the other side of the problem – harassement by multiple assignees?

    I would propose terminal disclaimer operation to be changed to remove the compulsory bundled assignment. To prevent harassment, the terminal disclaimer need only say that the terminally-disclaimed patent is unenforceable against someone practicing the patent that required the terminal disclaimer to be filed in the terminally-disclaimed patent.

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