The US Patent and Trademark Office (USPTO) recently proposed a rulemaking on terminal disclaimer practice, which received comments from various organizations before the deadline on July 9. One of the key commenters was the Federal Trade Commission (FTC), who expressed concerns about the potential anticompetitive effects of terminal disclaimers in creating patent thickets.
The FTC highlighted that terminal disclaimers linking similar patent claims could increase the exclusionary impact of patent thickets, making it costly for new market entrants to challenge multiple patents. The agency supported the USPTO’s proposal to require an additional agreement in terminal disclaimers, ensuring that a patent will not be enforced if any claim of a related patent is invalidated by prior art.
However, not all organizations were in favor of the USPTO’s proposal. The Council for Innovation Promotion (C4IP) argued that the rule exceeds the Office’s rulemaking authority and could lead to legal challenges if implemented. They raised concerns about the potential uncertainty in patents, lack of demonstrated need for the proposal, and conflicts with existing patent law.
Additionally, Patent and Trademark Attorneys, Agents and Applicants for Restoration and Maintenance of Integrity in Government (PTAAARMIGAN), 73 Patent Professionals, and US Inventor criticized the NPRM for multiple violations of rulemaking laws and accused the USPTO of showing contempt for the rule of law by omitting relevant information and analyses.
The Innovation Alliance also opposed the rule, stating that it conflicts with established patent law and exceeds the USPTO’s rulemaking authority. They warned that the rule’s impact would be broad and affect inventors in various industries, potentially slowing down innovation in critical technologies.
Despite the criticism, the FTC supported the USPTO’s efforts to reform terminal disclaimer practice, aiming to reduce gamesmanship by patent holders and the proliferation of patent thickets. The Commission highlighted the potential benefits of the proposed rule in promoting competition and reducing the impact of patent thickets on innovation.
As the USPTO considers the comments received on the NPRM, it remains to be seen how the Supreme Court’s recent decision on Chevron deference, particularly in the Loper Bright case, could influence the implementation of the rule. The decision in Loper Bright has raised questions about the extent of the USPTO’s authority in rulemaking and the balance of power between the courts, Congress, and the USPTO in shaping patent policies.
Overall, the debate over terminal disclaimer practice reflects the complex interplay between competition, innovation, and patent law, with stakeholders advocating for different approaches to address the challenges posed by patent thickets and potential anticompetitive behavior in the market.