Amanda Jackson, MJLST Staffer
Terminal disclaimers, a limit on patent term of a patent that is substantially similar to another co-owned patent, are often thought of as a quick and easy way for a patent applicant to overcome a non-statutory double patenting rejection. Non-statutory double patenting rejections arise when the claimed subject matter is not patentably distinct from the subject matter claimed in a commonly owned patent. This judicially created doctrine arose to prevent extension of a patent term by filing subsequent patent applications claiming substantially similar subject matter as earlier applications. In addition, non-statutory double patenting rejections seek to prevent multiple lawsuits against an alleged infringer by multiple assignees of the patentably indistinct patents (e.g., in the case where the patentably indistinct patents were assigned to different entities).
To overcome a non-statutory double patenting rejection, patent applicants can cancel the rejected claims, amend the claims to be patentably distinct, argue against the rejection, or file a terminal disclaimer. By filing a terminal disclaimer, the patent applicant agrees that the later-filed patent (if granted) expires when the first patent does (the patent that resulted in the double patenting rejection). Moreover, in order to alleviate the concerns of harassment by multiple assignees, 37 C.F.R. § 1.321 requires that a terminal disclaimer, to obviate a non-statutory double patenting rejection, must “[i]nclude a provision that any patent granted on that application . . . shall be enforceable only for and during such period that said patent is commonly owned with the application or patent which formed the basis for the judicially created double patenting.” The patent office makes fulfilling that requirement easy by providing applicants with a standard terminal disclaimer form that states, “[t]he owner hereby agrees that any patent so granted on the instant application shall be enforceable only for and during such period that it and the prior patent are commonly owned.” The terminal disclaimer runs with any patent granted from the application.
Seems harmless, right? As long as the applicant does not have a problem with a reduced patent term, including any patent term adjustment, terminal disclaimers seem like a relatively painless fix to a non-statutory double patenting rejection. Terminal disclaimers might also be appealing to avoid characterizing prior work by the applicant (e.g., putting statements on the record construing aspects of the prior work that could be limiting in litigation). It may also be difficult to overcome non-statutory double patenting rejections by arguments alone. However, terminal disclaimers can render patents invalid or unenforceable, many times without the patent owner realizing it.
As a first example, when less than all of the patents attached to a terminal disclaimer are owned by one entity, the patent may be rendered unenforceable. In Voda v. Medtronic, Inc., Voda had filed a terminal disclaimer linking three patents together. At the time of filing the terminal disclaimer, Voda owned all three patents. Voda later assigned two of the patents to another entity. One of those patents was reassigned to Voda, but the other remained owned by the third party. Medtronic asserted that the patent at issue was unenforceable because Voda did not own one of the patents included in the terminal disclaimer. Dismissing Voda’s argument that the patents only had to be commonly owned during the period of infringement, the court stated,
Terminal [d]isclaimers, however, do not speak in terms of ownership during times of infringement; rather, they require common ownership for enforceability. . . . To enforce the ‘195 patent, plaintiff must not only own all three patents for the period he seeks enforcement of the ‘195 patent he must also own all three patents during the period he files suit to do so. As it is undisputed that plaintiff does not own the ‘625 patent, the ‘195 patent is unenforceable as a matter of law under the plain language of the [t]erminal [d]isclaimers.
When a patent owner fails to have common ownership of terminally disclaimed patents, some courts have held that the plaintiff lacks Article III standing. However, other courts have held the opposite, namely that “enforceable title” is required to have standing to bring a patent infringement suit, but that “enforceable title” is not the same as “enforceability” (e.g., with respect to lack of common ownership of terminally disclaimed patents).
As another example, terminal disclaimers involving patents (or applications) that are not commonly owned at the time of filing the terminal disclaimer may be invalid due to non-statutory double patenting. For example, in In re Fallaux, the court asserted that “[i]f the Fallaux application and the Vogels patents were commonly owned, the terminal disclaimer filed in this case would have been effective to overcome the double patenting rejection. We note that this defect was of the applicant’s creation as through assignment it allowed ownership of the applications to be divided among different entities.” Joint ownership and ownership by subsidies may also present enforceability issues with respect to terminal disclaimed patents.
Thus, patent owners and practitioners should be a little more weary in filing terminal disclaimers to overcome non-statutory double patenting rejections. And if a terminal disclaimer is filed, patent owners should pay close attention to patents that have a terminal disclaimer, as well as to the patents to which the patent is terminally disclaimed. This is especially important in licensing agreements and assignments, when patents—even in different patent families—may be unknowingly linked by terminal disclaimers.