Terminal Disclaimer

A terminal disclaimer is a patent prosecution filing that voluntarily limits a patent's term as a condition of obtaining allowance of claims that would otherwise be rejected for double patenting: PURPOSE: to overcome obviousness-type double patenting (ODP) rejections — the most common reason terminal disclaimers are filed; OBVIOUSNESS-TYPE DOUBLE PATENTING (ODP): a non-statutory rejection (not based on a specific code section but on equitable principles) that prevents a patent applicant from extending their patent monopoly by claiming obvious variants of the same invention in multiple related applications; the USPTO issues ODP rejections when claims in a continuation, divisional, or CIP application are 'obvious variants' of claims in a parent application or another family member; BY FILING A TERMINAL DISCLAIMER: the applicant agrees that the later application (the 'disclaimed' patent) will expire no later than the expiration date of the earlier reference patent; the applications must remain commonly owned; the ODP rejection is overcome because extending the monopoly is prevented; FORM: the terminal disclaimer is filed on USPTO Form PTO/AIA/25 (for AIA applications); it must specifically identify the reference patent or application; WHEN NOT REQUIRED: (1) if the claims in the continuation are patentably distinct from the parent's claims (no ODP rejection), no terminal disclaimer is needed; (2) if the ODP rejection can be overcome by argument (the claims are not obvious variants), argument alone is an alternative; COMMON SITUATIONS: nearly all continuation applications that claim overlapping subject matter with the parent will face an ODP rejection requiring a terminal disclaimer.

The terminal disclaimer imposes a common ownership condition that must be maintained throughout the patent's term: THE REQUIREMENT: a terminal disclaimer typically includes a covenant that the disclaimed patent shall be enforceable only during such time as it and the reference patent (the one it disclaims over) are commonly owned; 37 C.F.R. § 1.321(c); WHAT 'COMMONLY OWNED' MEANS: all rights to the disclaimed patent AND the reference patent must be held by the same person or entity at all times; this includes situations where: (1) the same assignee holds both patents; (2) the patents are licensed exclusively to the same entity (depending on rights transferred); PRACTICAL IMPLICATION: if a company sells or assigns the disclaimed patent to one party while another party retains the reference patent, the disclaimed patent becomes unenforceable; this creates significant problems in patent portfolio transactions, mergers, acquisitions, and licensing; DUE DILIGENCE IN TRANSACTIONS: when acquiring a patent that has a terminal disclaimer, the acquiring party must: (a) identify what patent it disclaims over; (b) ensure the reference patent is also acquired or will remain commonly owned; (c) if the reference patent has expired or been invalidated, the terminal disclaimer relationship may affect enforceability; TERMINAL DISCLAIMER CHAIN: multiple continuations in a family may each have terminal disclaimers over the parent, creating a chain; if the parent is invalidated, the terminal disclaimer relationship can affect the entire chain's enforceability; ALLERGAN v. MSN (Fed. Cir. 2025): raised new questions about whether a terminal disclaimer over an earlier-expiring reference patent affects the disclaimed patent's enforceability when the reference patent has been invalidated.

Terminal disclaimers significantly interact with patent term calculation and the AIA's Patent Term Adjustment rules: BASIC TERM EFFECT: the disclaimed patent's term is limited to the EARLIER of: (a) 20 years from its earliest effective US filing date + PTA; or (b) the expiration date of the reference patent (also considering that patent's own PTA and any terminal disclaimers it may have); EXAMPLE: Parent Patent expires June 1, 2035; Continuation Patent has a base term of June 1, 2038 (filed later); Continuation files a terminal disclaimer over Parent; Continuation's enforceable term = June 1, 2035 (matches Parent); the 3 additional years from the later filing date are surrendered; PATENT TERM ADJUSTMENT (PTA) INTERACTION: before 2025, a continuation patent that filed a terminal disclaimer could still accumulate PTA for USPTO delays, potentially extending its term beyond the reference patent's term IF the PTA pushed it past the reference patent's expiration + its own PTA; 2025 USPTO RULE CHANGES (effective May 2025): the USPTO enacted regulations significantly restricting PTA accumulation for patents with terminal disclaimers; the 2025 rules prevent terminal-disclaimed patents from accumulating PTA beyond the reference patent's base expiration date; this effectively eliminates a strategy of accumulating PTA on continuation applications to gain additional term beyond the parent; STRATEGIC IMPACT: patent applicants who previously filed multiple continuation applications and relied on PTA accumulation to extend protection through the continuation chain must re-evaluate their strategy under the 2025 rules.

Double patenting comes in two forms with different legal bases and remedies: STATUTORY DOUBLE PATENTING (SDP): based on 35 U.S.C. § 101 ('a patent' — singular); the exact same invention cannot be patented twice; SDP occurs when claims in a second application are IDENTICAL to claims in a first patent (same claims, same inventor or assignee); SDP CANNOT be overcome by a terminal disclaimer — the claims must be differentiated; SDP is rarely at issue because applicants typically draft different claims across applications; OBVIOUSNESS-TYPE DOUBLE PATENTING (ODP): a non-statutory rejection based on equitable principles; the claims in the second application are not identical but are obvious in view of the first patent's claims; ODP prevents applicants from extending patent protection by claiming obvious variants; CAN be overcome by a terminal disclaimer; most common form of double patenting in practice; ODP OBVIOUSNESS TEST: the ODP analysis evaluates whether the claim differences between the two applications are obvious to a person of ordinary skill in the art; this is similar to, but distinct from, the prior art obviousness analysis under § 103; ODP uses a different analysis than § 103 because it compares CLAIMS rather than claims vs. prior art; ARGUMENT TO OVERCOME ODP: an applicant can argue that the claims are patentably distinct (not obvious variants) as an alternative to filing a terminal disclaimer; if the claims are genuinely different, argument alone is preferable because it preserves full patent term; OBVIOUSNESS TYPE ODP AND CONTINUATION STRATEGY: when drafting continuations, practitioners draft claims that are patentably distinct from the parent to avoid ODP rejections and preserve term — but this requires that the continuation claim something genuinely different.

Once filed and accepted, terminal disclaimers generally cannot be withdrawn, but there are strategies to avoid filing them in the first place: WITHDRAWAL IS GENERALLY NOT POSSIBLE: once a terminal disclaimer is filed and the patent issues, the disclaimer is part of the patent and cannot be withdrawn; there is no USPTO procedure to remove a terminal disclaimer after issuance; the patentee made a permanent election to limit the patent term; ARGUING AGAINST ODP BEFORE FILING: the best approach is to argue the ODP rejection before filing a terminal disclaimer; draft continuation claims that are patentably distinct from the parent's claims; argue that specific limitations in the continuation claims make them non-obvious over the parent's claims; if the argument succeeds, no terminal disclaimer is required; COST-BENEFIT ANALYSIS BEFORE FILING: if ODP rejection is issued, the applicant should consider: (a) does the continuation add sufficient new claim scope to justify the term limitation?; (b) is the term limitation from the terminal disclaimer acceptable given the patent's commercial importance?; (c) can the ODP rejection be overcome by claim amendment rather than terminal disclaimer?; DIVISIONAL APPLICATION EXEMPTION: a divisional application is generally not subject to ODP because the patent office itself required the restriction — forcing the applicant to file a divisional rather than including all claims in one application; this is called the 'safe harbor' for divisionals; note: this exemption applies to RESTRICTIONS required by the USPTO, not voluntary divisionals filed without a restriction requirement; CONTINUATION VS. DIVISIONAL: to avoid terminal disclaimers, consider filing a continuation-in-part with genuinely new subject matter or filing a divisional (where restriction was required) rather than a bare continuation.