by Dennis Crouch
I recently provided a set of interesting data on the large number of patents that are “at risk” of being invalidated based on the Federal Circuit’s Cellect decision. This post follows up with a discussion of a recent article titled “Fixing Double Patenting” released in draft form by Stanford Professors Mark Lemley and Lisa Larrimore Ouellette. The article takes a critical look at the practice of obviousness-type double patenting in the U.S. patent system.
The current system allows patent applicants to obtain multiple patents on obvious variants of the same invention, so long as the applicant stays within the rules by providing (1) providing a terminal disclaimer, agreeing that all the patents will expire simultaneously; and (2) ensuring that the patents do not qualify as statutory prior art against one-another under Sections 102 or 103 of the Patent Act. The article shows the growing prevalence of double patenting, with terminal disclaimers now being filed for over 15% of all patents, over 50% of litigated patents, and 60% of Orange Book patents covering FDA-approved drugs. This report aligns with my data shown in the chart above for all utility patents.
With the potential exclusion of divisional applications, double patenting always begins with the patentee seeking a second patent covering material quite similar to what is already being patented. Lemley and Ouellette agree that the USPTO fee structure encourages applicants to divide their patents into multiple smaller claim sets, which they can pursue sequentially. But, they also suggest that applicants are using double patenting strategically to build patent thickets, particularly in the pharmaceutical industry. You might think of this as the Hydra of Double Patenting, where each patent is a separate head. In the Greek legend, when one head was cut off, two more would grow in its place, making it increasingly difficult to defeat. Hercules eventually defeated the solution by cauterizing the neck stumps to prevent regrowth. As noted below, Lemley and Ouellette offer their own strategic approaches.
The article dives into two big current issues: Cellect and the proposed USPTO terminal-disclaimer rule, and categorizes these as “efforts to close loopholes in the terminal disclaimer regime.” In re Cellect closed a loophole that allowed patent owners to circumvent terminal disclaimers and obtain lengthy effective terms of protection through Patent Term Adjustments (PTA). See, In re Cellect, LLC, 81 F.4th 1216 (Fed. Cir. 2023). The USPTO’s rules proposal would require terminal disclaimers to state that the patent will not be enforceable if it is tied directly or indirectly to another patent that has any claim invalidated as anticipated or obvious under 35 U.S.C. §§ 102 or 103. Terminal Disclaimer Practice to Obviate Nonstatutory Double Patenting, 89 Fed. Reg. 40439 (proposed May 10, 2024)
These changes have faced opposition from the patent community, who see these as major changes to the status quo and particularly argue these limitations on U.S. patent rights will deter innovation. The basic argument – which I think is likely correct – is that there is no evidence to support these claims that limiting double patenting will deter innovation. They point out that it’s surprisingly hard to say whether adjusting patent rights in any way would affect innovation, given the lack of empirical evidence on whether stronger patent rights even increase overall research investments.
Thus, in the author’s minds we have clearly definable harms of double patenting that easily outweighs a more amorphous and unproven societal benefit to increased innovation. It is like Pandora’s urn, releasing evils into the world, with only hope remaining at the bottom.
In their reform section, the authors consider a pendulum swing that would more widely permit double patenting by harmonizing U.S. law with other jurisdictions like the European Patent Office, Japan, and China, where anyone may “double patent” obvious variations without a terminal disclaimer. The paper does not appear to identify particular harms caused by that approach, but note that the patent laws of those jurisdiction are limited in other ways that potentially protect against the harm. Similarly, regarding divisional applications in the United States, which are statutorily exempt from double patenting requirements under 35 U.S.C. § 121, the authors do not identify any specific problems associated with this practice.
The authors do have several proposals:
- Election approach – where patent owners could have only one patent in force covering a given invention but could replace it with another patent on an obvious variant.
- Allow double patenting only when there is an explainable reason why the claims in the later patent could not have been included in the earlier one, such as when applications are filed at different times due to the development of an obvious variant after the original filing.
- Allowing new claims to be added to existing patents rather than requiring separate patents.
The article notes that the USPTO’s proposed fee increases for 2025, which target abuses of continuations and double patenting, make good economic sense by raising the price of the most socially costly applicant behaviors. However, the authors caution that fee increases alone are unlikely to solve the most serious problems, as pharmaceutical companies may still find it profitable to obtain double patents even at higher costs.
Lemley and Ouellette’s analysis builds upon an earlier article co-authored by Lemley and now-Chief Judge Moore, which called for ending continuation practice altogether. Mark A. Lemley & Kimberly A. Moore, Ending Abuse of Patent Continuations, 84 B.U. L. REV. 63 (2004). As the vast majority of obviousness-type double patenting rejections by the USPTO are associated with continuations or continuation-in-part applications, eliminating continuations would largely eliminate the need for terminal disclaimers. It also builds upon a forthcoming article by Lemley and Jason Reinecke that found that PTA is an exception to the 20-year term that has “swallowed the rule.” Mark A. Lemley & Jason Reinecke, Our More-Than-Twenty-Year Patent Term, BERKELEY TECH. L.J. (forthcoming 2024).
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So, what is needed here:
- Empirical studies on the impact of double patenting on innovation, both at the front-end by the patentee and follow-on innovation.
- Comparative analysis of patent thickets across jurisdictions.
- Examination of divisional applications and their role in the patent system. This is an area with no terminal disclaimer requirements, but I have been unable to identify any particular problems created by divisional filing.
- Early-stage patent filing and its implications for double patenting. In pharma/biotech as well as startups, there is a very strong incentive to file a patent application quite early – before folks understand what aspects of the invention will be most valuable. Startups also tend to file omnibus early applications to streamline their regulatory burden and reduce costs. I would like to see a study examining how double patenting practices interplay with these early-filing issues.
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Lemley and Ouellette appear to assume that all ODP rejections are correct. They are not. Where’s the research supporting their assumption?
ODP is an easy rejection for an examiner to make. It’s pretty much automatic now with a continuation. A TD is the easiest and least cost way to overcome it, almost always. A TD is pretty much automatic with an ODP rejection. Thus, in the current environment examiners get easy counts for ODP rejections, and applicants have no reason to protest because TD practice makes it so cheap and easy to resolve.
If the burden on the applicant of ODP is increased, you’ll see fewer TDs and a lot more challenges to ODP rejections. Eventually there will be fewer ODP rejections as examiners react to a changed environment where their ODP rejections are challenged.
Fun stuff to consider, but the elephant in the room is AI. When every POSITA is presumed to use AI, every invention is going to look obvious. That change in the POSITA standard is probably going to take 5-10 years.
Some of us noticed that elephant at the onset and invited discussion on the various impacts.
I would get rid of ODP and instead (1) revise the PTA statute to deduct from any PTA award the difference between the issuance date of the instant app and any earlier issued family member; (2) ODP is also probably inconsistent with AIA 102(a)(2) and (b)(2), which carefully prescribe when the inventor’s own work is available against him as prior art.
Another one that would delete the protections to the patente from delays NOT controlled by the patentee.
Please understand that which you would change.
You aren’t harmed if you already had an issued patent on the same invention.
You clearly do not understand the reality of the situation with your insistence on “same invention.”
Looking like a coordinated attack by the anti-patent academics to try and push through the terminal disclaimer rule. Basically a poorly disguised attempt to limit continuations. Next up probably a paper or guest post by Arti Rai. I AM surprised to see Professor Oullette be a part of it. They’re up against Big Pharma this time, though.
If the TD rule goes to district court litigation, it would be interesting to see Mark Lemley deposed to find out what involvement he had in the drafting/genesis of the TD rule, if any.
In the section on international harmonisation, the Lemley Paper declares:
“The ability for anyone to patent obvious variations of earlier
patents in other jurisdictions has led to thickets of patents with different
owners, creating licensing challenges for implementers—including the
original patentee.121”
in which Footnote 121 is a 2013 Paper by Samson Helfgott.
With the AIA, the USA jumped from First to Invent to a turbo-charged unique Winner-Takes-All variant of the international First to File norm, one in which the first filer can (using their own “secret prior art” offensively) build their own personal thicket unrestrained by every other party’s filings even just one day later.
So which is the greater problem: an impenetratable patent thicket built by the very first filer, or a complex thicket composed of patents filed by various competing parties, all founded on patent applications filed at much the same moment in time? Perhaps the CRISPR-cas 9 struggles can illuminate the issue.
Not sure your post is clear enough.
Are you saying that the obviousness filter does not work? Does not work for filings – of different entities – and close in time?
What?
I am sure that my post is not clear enough, at least for anybody not routinely prosecuting both at the USPTO and the EPO.
Outside the USA there are divisionals but not continuations. All divisionals have a term that ends with the expiry of the 20 year term of their respective parent. Hence no need for OTDP rules.
Only the USA allows the later filings of others to be invalidated for obviousness by the first filer’s as yet unpublished and therefore “secret”prior art.
So, no, I’m not saying that the USA’s “obviousness filter” doesn’t work. Rather, that it is too strong.
You’ve managed to make your position even more murky.
Lemley has launched another huge attack on patents. Lemley knows that continuation practice has helped to mitigate the d*ath squads of the IPRs and that continuation practice has enabled inventors to remedy surprise problems that the CAFC finds with patents. The CAFC regularly finds some new way to invalidate patents and continuations often help the inventor by giving them a chance to remedy the new patent requirements of the CAFC or the Scotus.
Lemley’s paper is trash as always. Arguing that all continuations that file TDs should fall if any claim of any other patent tied to the TD is found invalid. Just outrageous as the claims may not be obvious variants.
Plus, a big part of this is that patent attorneys have not been fighting obviousness double patenting because the TD is generally not too burdensome and the client would rather we file a TD than fight an obviousness rejection.
The result of this–if enacted–will be a huge increase in prosecution cost and another lessening of the value of patents.
Just think of all the little ways the CAFC has figured out how to invalidate a claim. Such things as if you say, “a processor” and not “at least one processor,” then someone can copy your inventions as long as they use two processors.
Invitation for ever more Patent Profanity…
WTF
If the claims are not obvious variants, then they’re separate inventions, and you shouldn’t have filed a continuation.
Are you aware of restriction practice?
At all?
Or omnibus application writing?
You have a rather constrained view of what “should be,” without partaking in the actuality of the spectrum of conditions that innovators exist in.
If we’re worried about term and “gaming” of term through continuations, why not propose simply eliminating PTA for continuations?
Instead, every proposal goes after continuation practice generally. Some proposals even still allow term gaming (such as the election option, which admittedly defaults to existing TD practice to curb term gaming). The authors should be more direct in their intentions, and provide better evidence with continuations in general, because that is what their “solutions” curb. Term gaming just seems like an easiest target to which their solutions are bootstrapped.
Why eliminate PTA that protects patentees from the delays outside of their control?
In theory you aren’t harmed if there’s another patent to the same invention in force while the application is delayed (though there’s some moral hazard there for the PTO).
They’re going after continuation practice because it’s objectively absurd. Maybe the most absurd aspect of the patent system. PTO should not be granting patents just because applicants have the trump card of filing endless continuations to drive the examiner crazy. If the examiner is wrong, fight them and resolve the patentability issue there.
Your foundation is askew.
Here, you are merely repeating your mistakes.
Perhaps that ‘theory’ you cling to needs a cold shower of reality to open your eyes.
Perhaps it is only your litigator bias preventing you from understanding the actual impacts here.
It’s a problem that examination is never over. You can spend the whole 20 years going back for new claims. You shouldn’t have 500 claims on the same (or basically the same) invention.
Deadlines and word limits are fundamental features of legal proceedings. They force people to pick arguments and grant finality. The same is true for patent prosecution.
You are still stuck on “same invention.”
>they also suggest that applicants are using double patenting strategically to build patent thickets
O0oh, that makes managing uncertainty sound so ominous.
Worse, if you’re really trying to strategically build a patent thicket, the better approach has always been to abuse the PTO’s arbitrary “same invention” rules and force divisionals.
I don’t think anyone is objecting to applicants keeping a continuation pending in order to “manage uncertainty” or “cover their behinds”, so to speak.
The issue (as I understand it) is applicants actively strategizing for the purpose of effectively extending patent coverage of an alleged invention (especially drugs and/or drug treatments) years beyond what Congress intended or what is reasonable. At the end of the day, it’s the consumers who end up paying the monopoly prices.
As you understand it is not permission for you to ignore the reality that PTA is due to those things that the patentee does not control.
Yeah, when you decide to couch the terms you use, it is quite evident.
But go on and gaslight on how you are not anti-patent.
Why should I be punished for an Examiner’s lack of diligent work?
If Examiner’s did what they are supposed to do, in the time they are mandated to do it, there would be no need for PTA and no issues of OTDP.
Why haven’t any of our academic colleagues focused on this aspect – ie. the root cause of PTA is slow examination.
Reminds me again — the Examiner’s Union
If they will not (or cannot) negotiate for whatever may be a ‘fair’ allotment of time for the core aspect of examining, then what good is it?
Complicated stuff! Thank you for the write-up. I do think that the decision in Cellect is correct. But I’m still not convinced that the PTO’s proposed change to terminal disclaimer practice is reasonable.
Any “solution” of eliminating continuations is DOA.
Perhaps what could be added to the Prof’s wish list is a revisit to the Tafas case.
I think you may be correct as a political matter but if divisionals and reissues are still on the table, there are no “rights” lost by eliminating continuations.
Nonsense.
Divisionals are not Continuations.
Continuations are not Divisionals.
Maybe you too need to revisit Tafas.
Rock is not paper.
Paper is not scissors.
Game. Vest. Orange.
Just not as you would have it.
Quite naturally.