Final Rule Package Expected in Fall

For those patent professionals living under a rock the past few months, the USPTO issued a notice of proposed rulemaking (NPRM) back in May that seeks to add a new stipulation requirement for terminal disclaimers filed to overcome non-statutory double patenting (here). Under the proposal, to overcome an obviousness-type double patenting rejection, the Applicant would need to stipulate that the entire patent subject to the terminal disclaimer will be enforceable only to the extent that the conflicting claims of the reference patent remain valid and enforceable. In other words, if conflicting claims of a reference patent fail, so too would all claims of the subject patent, including any patentably distinct claims.

The NPRM comment period closed yesterday and hundreds of public comments have been collected (here). Now what?

It is important to understand the the significant political forces at work behind this proposal. This is not some esoteric and ill-conceived proposal that the USPTO hasn’t thought through. This NPRM has been in the works for several years, initially driven by a 2021 Executive Order 14036 “Promoting Competition in the American Economy.” Later carried forward as an inter-agency initiative between the FDA and USPTO, then supported in concert by several high-profile senators (an end-around typical IP policy gatekeepers Tillis and Coons). So, despite the language in the NPRM claiming to target inefficient litigation and patent challenge practices for indistinct claims of continuation portfolios, this is primarily about drug pricing. You’ll find the comments of Kaiser Permanente (here) to be particularly emblematic of the true political narrative/lobbying that is driving this rule-making effort behind the scenes.

Many of those arguing against the NPRM have failed to see the forest for the trees.

A large portion of NPRM opponents have highlighted the degree to which this change will drive up costs, delays, and require far more effort from patent filers that wish to stick to their existing playbook. This is akin to arguing that a lower speed limit will be a problem for people that enjoy speeding. Informing the PTO that the NPRM proposal with thwart the behaviors it is designed to thwart is just music to the agency’s ears.

There is also significant argument that the proposal seeks to rewrite statutes on the presumption of validity or patent claims needing to be invalidated on their individual merits. But the PTO has clearly anticipated these criticisms and proactively addresses them in the NPRM. It will just reiterate these positions, arguing that the proposed rule is not mandatory on anyone. In other words, one can certainly voluntarily stipulate away rights to avoid double patenting. And there is no right to patent the same thing multiple times. Patentees can always stop double patenting or restructure their claim/sets to remove the double patenting issue to avoid the regulation. (Not saying I necessarily agree with these notions, but the writing is already on the wall as to how these criticisms will be dismissed).

The bulk of the criticisms submitted were expected, and in some cases, prebutted by the NPRM. Given the political forces behind this initiative being more significant than usual for an otherwise obscure aspect of patent law, and extending well-beyond the walls of the agency on a hot-topic issue in an election cycle, it seems inevitable that this rule moves forward to final form. Given the end of the USPTO fiscal year is in September, and the time it takes to respond to the 300+ comments submitted, I would expect to see a Final Rule issued in October/November timeframe (becoming law 30 days thereafter).

Opponents will need to get their APA complaints ready now. This rule package, like the earlier Tafas v. Dudas dispute, will need to be defeated in EDVA on the basis of improper substantive rulemaking. If this rule is to be stopped, it will be by injunction.