April 11, 2016

“How Terminal Disclaimers Present Patent-Licensing Issues,” Law360, April 11, 2016

By Michael Varco, Principal

Law360, New York (April 11, 2016, 2:22 PM ET) — As any patent practitioner knows, an applicant may file a terminal disclaimer to overcome a rejection based on nonstatutory double patenting.[1] The terminal disclaimer ensures that any patent granted on the application (or patent in re-examination) rejected for double-patenting will have the same expiration date as the patent that forms the basis for the double-patenting rejection. If one patent has a later expiration date than the other patent, then the terminal disclaimer will disclaim the terminal portion of the later-expiring patent so both patents have the same term. As a result, terminal disclaimers affect the duration of a license because a patent owner cannot charge royalties after the patent expires.[2]

Another issue for licensing relates to the constraints that terminal disclaimers place on enforcing patents. 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 double-patenting shall be enforceable only during a period that the patent is commonly owned with the patent that forms the basis for the double patenting rejection. 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 double patenting and the patent that forms the basis for the double patenting. 37 C.F.R. §1.321(d).

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