Prosecution and Litigation Implications of Subsequent Patent Applications (Part IV)

By Gary Maze & Jeffrey Wendt
December 28, 2020

“A terminal disclaimer is a strong clue that a patent examiner and, by concession, the applicant, believe that the claims in the continuation lacked a patentable distinction over the parent, although such does not give rise to a presumption that a patent subject to a terminal disclaimer is patentably indistinct from its parent patents.”

In Part I of this series, the authors reviewed the law behind subsequent patent applications. In Part II, we reviewed the different types of subsequent applications. Part III discussed some of the implications of these for prosecution and litigation, and Part IV will examine some further implications.

Disclaimer

https://depositphotos.com/221282334/stock-photo-writing-note-showing-implications-business.htmlIt may be possible to rescind a specification disclaimer, but rescinding a specification disclaimer may be held to effectively broaden the scope of a subsequent application beyond that set out in its prior applications. Further, this could effectively break the chain of priority with respect to subject matter that was disclaimed. This could mean that the subsequent applications comprise “new matter” that could not claim the benefit of the earlier filing date and would face potential invalidity under 35 U.S .C. § 102 and § 103. Anascape, Ltd. v. Nintendo of Am. Inc., 601 F.3d 1333, 1338-39 (Fed. Cir. 2010) (holding that removing limitations in the description of a continuation patent resulted in inclusion of “new matter” not entitled to the priority date of the prior application); Hakim v. Cannon Avent Group, PLC, 479 F.3d 1313, 1317 (Fed. Cir. 2007) (noting that if a patent applicant attempts to include broader claims in a continuation patent, “entitlement to an earlier filing date for any claimed subject matter may of course be necessary to avoid a statutory bar created by intervening events outlined in 35 U.S.C. §§ 102 and 103”); Hollmer v. Harari, 681 F.3d 1351, 1355-58 (Fed. Cir.2012) (“Thus, if any application in the priority chain fails to make the requisite disclosure of subject matter, the later-filed application is not entitled to the benefit of the filing date of applications preceding the break in the priority chain.”); Zenon Envtl., Inc. v. U.S. Filter Corp., 506 F.3d 1370, 1379 (Fed. Cir.2007) (noting that to claim the benefit of an earlier ancestor, “continuity of disclosure must have been maintained throughout a chain of patents”); Lockwood v. American Airlines, Inc., 107 F.3d 1565, 1572 (Fed. Cir.1997) (holding that “[e]ach application in the chain must describe the claimed features” and that if “one of the intervening applications does not describe” the subject matter, the later application cannot claim the benefit of the earlier application). If so, successfully rescinding a specification disclaimer may mean that the subsequent application cannot claim priority as to that new matter based on its prior applications, just as in a CIP application. See Anascape, Ltd., 601 F.3d at 1338 (applicant added “classical new matter” by removing limitation from parent application); Neutrino Dev. Corp. v. Sonosite, Inc., 423 F. Supp. 2d 673 (S.D. Tex. 2006) (granting summary judgment of invalidity based on new matter).

Safe Harbor

The safe harbor provision of 35 U.S.C. §121 protects a patent issuing on an application with respect to which a restriction requirement has been made or on an application filed as a result of such a restriction requirement. Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc., 518 F.3d 1353,1360 (Fed. Cir. 2008). The safe harbor provision of Section121 provides as follows:

A patent issuing on an application with respect to which a requirement for restriction under this section has been made, or on an application filed as a result of such a requirement, shall not be used as a reference either in the Patent and Trademark Office or in the courts against a divisional application or against the original application or any patent issued on either of them, if the divisional application is filed before the issuance of the patent on the other application

The Federal Circuit has held that a patent need not have directly issued on a divisional application to receive Section121 protection. Any intervening continuing applications, however, must descend from a divisional application filed as a result of a restriction requirement. See, e.g., Boehringer Ingelheim Int’l GmbH v. Barr Labs., Inc., 592 F.3d 1340, 1352 (Fed. Cir. 2010) (intervening divisional application); Amgen, 580 F.3d at 1354 (citing Symbol Techs., Inc. v. Opticon, Inc., 935 F.2d 1569, 1580 (Fed. Cir. 1991)) (intervening continuation application). “The safe harbor is provided to protect an applicant from losing rights when an application is divided. The safe harbor of Section 121 is not lost if an applicant does not file separate divisional applications for every invention or when independent and distinct inventions are prosecuted together.” See, e.g., Boehringer Ingelheim Int’l GmbH, 592 F.3d  at 1352 (intervening divisional application); Amgen, 580 F.3d at 1354. However, a subsequent divisional application claiming immunity under Section 121 must claim subject matter “consonant” with the restriction requirement. St. Jude Medical, Inc. v. Access Closure, Inc., 729 F. 3d 1369,1377 (Fed. Cir. 2013), citing Geneva Pharm., Inc. v. GlaxoSmithKline PLC, 349 F.3d 1373, 1381 (Fed. Cir.2003); Gerber Garment Tech., Inc. v. Lectra Sys., Inc., 916 F.2d 683, 688 (Fed. Cir.1990).

A patent owner cannot retroactively bring a challenged patent within the scope of the Section121 safe harbor by amending a CIP application during a reexamination proceeding or a reissue to redesignate it as a divisional application. In re Janssen Biotech, Inc., 880 F. 3d 1315,1324 (Fed.Cir. 2018). This is true even if the patent owner later files an amendment to remove new matter added for the CIP application, i.e. the application from which any such reissue may issue was not a divisional because it contained new matter that was not present in the original application and the nature of that application cannot be retroactively altered by simply deleting that new matter.

Terminal Disclaimer

Terminal disclaimers can, and often do, arise in continuation, continuation-in-part, and divisional applications. Note, however, that there is no prohibition on broadening claims in continuation patents subject to a terminal disclaimer. SimpleAir Inc. v. Google LLC, 884 F.3d at 1160, 1167 (Fed. Cir. 2018).

In subsequent application cases, the doctrine of obviousness-type double patenting “was developed to ‘prevent a patent owner from extending his exclusive right to an invention through claims in a later-filed patent that are not patentably distinct from the earlier filed patent.’” SimpleAir, Inc. v. Google Inc., 204 F.Supp.3d 908,913 (ED Tex. 2016) (“SimpleAir IV”) (quoting Procter & Gamble Co. v. Teva Pharm. USA, Inc., 566 F.3d 989, 999 (Fed. Cir. 2009)). The judicially-created doctrine of obviousness-type double patenting prevents a party from extending their right to exclude by obtaining a later patent with claims that are not patentably distinct from claims in a commonly-owned previous patent. In re Longi, 759 F.2d 887, 892 (Fed. Cir. 1985).

As a general rule, a “one-way” test applies to determine obviousness-type double patenting. In re Berg, 140 F.3d 1428, 1432 (Fed. Cir.1998). Obviousness-type double patenting does not apply when the application and patent or previous application are of separate ownership and have separate inventive entities. See also “Carte Blanche Does Not Exist Which Allows Imposition of Obviousness-Type Double Patent Rejections,” IPToday (July 2012); see also https://en.wikipedia.org/wiki/Submarine_patent for a discussion of so-called “submarine patents” which are no longer available in light of the AIA. Under the one-way test, “the examiner asks whether the application claims are obvious over the [parent] patent claims.” Id. In certain circumstances, however, a “two-way” test may apply, wherein the examiner “also asks whether the patent claims are obvious over the application claims. If not, the application claims later may be allowed.” Id. The two-way test is appropriate only in the “unusual circumstance” where “the PTO is solely responsible for the delay in causing the second-filed application to issue prior to the first.” Id. at 1437.

Filing a terminal disclaimer may obviate an obviousness-type double patenting rejection, 37 C.F.R. § 1.321(c), in exchange for limiting the patent term and alienability of the resulting continuation patent, see 37 C.F.R. §§ 1.321(d)(3), 1.321(c)(3). However, in light of the AIA, such extensions are no longer possible, given that any such continuation will expire on the same date as the application of which it is a continuation (provided maintenances fees have been timely paid for the patent that issues from the continuation), and terminal disclaimers to prevent such exclusions are not needed to accomplish that goal. With respect to prior art, filing a terminal disclaimer does not function as an admission regarding the patentability of the resulting claims. See Motionless Keyboard Co. v. Microsoft Corp., 486 F.3d 1376, 1385 (Fed. Cir. 2007) (“A terminal disclaimer is simply not an admission that a later-filed invention is obvious.”); Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 941 (Fed. Cir. 1992) (rejecting argument that patent applicant admitted to obviousness-type double patenting by filing terminal disclaimer); Quad Envtl. Techs. Corp. v. Union Sanitary Dist., 946 F.2d 870, 874 (Fed. Cir. 1991) (“[T]he filing of a terminal disclaimer simply serves the statutory function of removing the rejection of double patenting, and raises neither presumption nor estoppel on the merits of the rejection.”).

As a general rule, a terminal disclaimer filed to overcome an obviousness-type double patenting rejection is effective only where the application and conflicting patent or application are commonly owned. In re Hubbell, 709 F.3d 1140,1148 (Fed. Cir. 2013). Indeed, 37 C.F.R. § 1.321(c)(3) specifically provides that a terminal disclaimer “filed to obviate judicially created double patenting in a patent application” must include “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.” 37 C.F.R. § 1.321(c)(3) (emphasis added).

Although the MPEP “does not have the force of law[,]” Molins PLC v. Textron, Inc., 48 F.3d 1172, 1180 n.10 (Fed. Cir. 1995), and does not bind the courts, Litton Systems, Inc. v. Whirlpool Corp., 728 F.2d 1423, 1439 (Fed. Cir. 1984), in the context of terminal disclaimers the MPEP has explicitly indicated that a disclaimer applies only to the instant application and not to downstream applications. Natural Alternatives International, Inc. v. Iancu, 904 F. 3d 1375,1382 (Fed. Cir. 2018), citing Hagenbuch v. Sonrai Sys., 130 F.Supp.3d 1213, 1216 (N.D. Ill. 2015) (explaining that “[t]he MPEP in effect in 1993 described the effect of a disclaimer that, by its terms, applied only to the ‘instant application’”); see also MPEP § 1490(VI)(B) (9th ed., Rev. 8) (2017) (“A terminal disclaimer filed to obviate a non-statutory double patenting rejection is effective only with respect to the application or patent identified in the disclaimer unless by its terms it extends to continuing applications ….”). Nonetheless, disclaimer language can do so, e.g. a terminal disclaimer can disclaim any portion of the term “of any patent granted on the above-identified application or on any application which is entitled to the filing date of this application under 35 U.S.C. § 120. (emphasis added)”

However, by filing a terminal disclaimer, a patent applicant waives potentially valuable rights. For example, under 37 C.F.R. §1.321(c), a terminal disclaimer based on common ownership must include a provision that any patent granted on the application rejected for judicially created double patenting shall be enforceable only during a period that the patent is commonly owned with the “application or patent which formed the basis for the judicially created double patenting.” 37 C.F.R. §1.321(c)(3). Terminal disclaimers based on joint-research agreements must include a provision that waives the right to separately enforce any patent based on the application rejected for judicially created double patenting and the patent or any patent granted on the application that formed the basis for the double patenting. 37 C.F.R. §1.321(d). Even worse, if patents within a patent family are subject to a terminal disclaimer, separating their ownership may render certain of them unenforceable. Note, however, that common ownership is not required for an obviousness-type double patenting to apply, i.e. it can still apply where an application and a conflicting patent have one or more inventors in common but the inventive entities are not identical and the applications were never commonly owned. In re Hubbell, 709 F.3d at 1146.

Notably, a terminal disclaimer is a strong clue that a patent examiner and, by concession, the applicant, believe that the claims in the continuation lacked a patentable distinction over the parent, although such does not give rise to a presumption that a patent subject to a terminal disclaimer is patentably indistinct from its parent patents. Thus, a court may not presume that assertions of a parent patent and a terminally-disclaimed continuation patent against the same product constitute the same cause of action. Rather, the claim preclusion analysis requires comparing the patents’ claims along with other relevant transactional facts.

Licensing

Licensing of parent and their children patents can create issues for patent holders and licensees, including where terminal disclaimers exist. For example, in addition to issues raised by terminal disclaimers discussed above, a terminal disclaimer can have the effect of binding the parent and its terminally disclaimed related patents together in cases where there is a common owner. For example, a case in the United States District Court for the Eastern District of Pennsylvania held that the plaintiff had no Article III standing to assert patent infringement because it did not commonly own the two terminally disclaimed patents necessary to enforce the patents subject to the terminal disclaimers when it filed the lawsuit. However, a case in the United States District Court for the Eastern District of Texas held to the contrary, i.e. lack of co-ownership for a terminally disclaimed patent alone does not impact a plaintiff’s Article III standing to enforce a patent in an infringement action.

In cases involving pre-AIA issued patents where there is no explicit common owner, the Cooperative Research and Technology Enhancement Act of 2004 (“the CREATE Act”) amended pre-AIA 35 U.S.C. § 103(c) to provide that otherwise unrelated persons can be treated as common owners if: (1) they are parties to a joint research agreement that was in effect on or before the claimed invention was made; (2) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and (3) “the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.” Pre-AIA 35 U.S.C. § 103(c)(2)(A)-(C). In the absence of such, a terminal disclaimer is not available under the statute or as an equitable measure. Id., at 1149. Going forward, unfortunately there are no such provisions for these issues under the first-inventor-to file provisions of AIA 35 U.S.C. §103.

Another issue that may arise is whether or not a continuation, or even a continuation of a continuation, of a parent is impliedly licensed under a license of the parent. The Federal Circuit recently asked the following question: “In personal terms, because the uncle and grandparent of [a] patent are licensed, is [a grandchild continuation] also licensed?” Cheetah Omni, LLC v. AT&T Services, Inc., 949 F. 3d 691, 695 (Fed. Cir. 2020). In that particular case, the Federal Circuit held that licenses of the uncle and grandparent included an implied license to the grandchild continuation patent, in part because “[l]egal estoppel prevents licensors from derogating or detracting from definable license rights granted to licensees for valuable consideration.” Id. Moreover, an express license to a patent may also include an implied license to its continuations, even when the continuation claims are narrower than previously asserted claims, i.e. “[w]here … continuations issue from parent patents that previously have been licensed as to certain products, it may be presumed that, absent a clear indication of mutual intent to the contrary, those products are impliedly licensed under the continuations as well.” Id., at 696. Parties may contract around the presumption of an implied license if it does not reflect their intentions but it is the parties’ burden to “make such intent clear in the license.” Id.

In the fifth and final installment in this series, we will distill all of the information covered to provide concrete practice tips for practitioners.

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The Author

Gary Maze

Gary Maze the president and founder of the Maze IP Law, P.C. law firm, is a member of the National Association of Patent Practitioners and has practiced intellectual property law in since 1995. His experience includes preparation and prosecution of patent and trademark applications; patent, trademark, copyright, and trade secret litigation; licensing of intellectual property rights; and legal opinions regarding infringement, enforcement, and/or validity of intellectual property rights. Mr. Maze’s patent prosecution experience includes subsea oil and gas production intervention tools, software and computer related systems, electromechanical devices, and medical devices.

Gary Maze

Jeffrey Wendt is president and founder of The Wendt Firm, P.C. With a background in chemical engineering, working experience as an engineer, and intellectual property law, Mr. Wendt is particularly trusted by those working in the materials processing, medical device, and energy sectors (conventional and renewable), as well as startup businesses and entrepreneurs providing unique solutions to diverse problems. Mr. Wendt is a current member, former president, and former board member of NAPP, the National Association of Patent Practitioners, as well as the Austin and Houston Intellectual Property Law Associations, and is a master of the bench member of the Honorable Nancy F. Atlas Intellectual Property American Inn of Court.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

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There are currently 2 Comments comments. Join the discussion.

  1. Xtian December 28, 2020 9:50 am

    “Terminal disclaimers can, and often do, arise in continuation, continuation-in-part, and divisional applications..”

    For divisional applications? But then the article says..

    “The safe harbor provision of 35 U.S.C. §121 protects a patent issuing on an application with respect to which a restriction requirement.” Would that mean the patent application is a divisional?

    It may be that it is Monday during the Holidays, but some statements in this article (like the above) completely confound me.

    Practitioners of the world question: Who has filed a TD on a divisional? (and why?)

  2. ipguy December 29, 2020 1:29 pm

    @1
    “Who has filed a TD on a divisional? (and why?)”

    I haven’t but there has been more than one US patent examiner over the years who wanted my client to file a TD on a divisional. As to “why,” anyone who has a few years of prosecution experience before the USPTO knows the answer to that.

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