[co-author: Lindsay Boehme, Summer Associate]

Applicant-submitted terminal disclaimers tie similar co-owned patents to a common expiration date and typically serve to ensure that a later-filed continuation application lives no longer than its parent. The USPTO recently proposed changing terminal disclaimer practice in a very substantive way. Simply put, the new approach would essentially render unenforceable all of the claims of any patent having a terminal disclaimer to a patent that itself had any claims invalidated in view of prior art. The request for comment period recently closed and reputedly drew a lot of negative public commentary.

After issuing this request for comment, the Supreme Court issued their decision in Loper Bright Enterprises v. Raimondo, effectively overruling Chevron, a 40-year-old precedent that prompted courts to offer deference to government agencies with respect to their rule-making power. The Loper Bright decision confers power on the courts to exercise independent judgment when interpreting ambiguous federal statutes and to no longer defer to the agencies that administer them for guidance in such regards.

What does this mean for the USPTO and this proposed new rule for terminal disclaimers? To be sure, if the rule is adopted and later challenged, the agency cannot turn to Chevron for support. In general, the Federal Circuit has not granted the USPTO deference for substantive patent law, which includes issues such as patentability, novelty, and obviousness. However, the court has previously given deference to the USPTO under some circumstances, namely related to procedural rules. For example, in Cooper Technologies Co. v. Dudas, the Federal Circuit deferred to the USPTO’s interpretation of the phrase “original application” in the statute concerning inter partes reexamination.

If the USPTO moves forward with the proposed changes regarding terminal disclaimer practice, and those changes are deemed substantive rather than merely procedural, the courts will have their usual latitude to consider how well the new rule squares with applicable statutory provisions. If the proposed changes are deemed to be only procedural, however, the agency will not have the same interpretive largess that existed at the time of publishing the rule change for public comment – now, procedural or not, the courts can weigh in to assess whether the USPTO went too far.

How this significant change in administrative law practice may impact these recently proposed changes to terminal disclaimer practice remains to be seen. At the very least, this decision should give the USPTO one more shoulder over which they need to be looking.