New Proposal Requirements for Terminal Disclaimers Filed to Overcome Non-Statutory Double Patenting

Maier & Maier

The filing and recordation of an unnecessary terminal disclaimer has been characterized as an “unhappy circumstance” (MPEP 1490, citing In re Jentoft, 392 F.2d 633, 639 n.6 (CCPA 1968)). In an apparently “not significant” regulatory action, the USPTO is proposing a noteworthy change to terminal disclaimer requirements. 89 Fed. Reg. 40439-49 (May 10, 2024). The change being proposed would have profound effects on the prosecution of patent families and would turn the filing of even necessary terminal disclaimers into an even more unhappy circumstance. In essence, the proposed rule would require that a terminal disclaimer to overcome a non-statutory double patenting (NSDP) rejection also include a provision that the patent in which the disclaimer is filed (“target patent”) is no longer enforceable if that patent is or ever has been tied directly or indirectly by a terminal disclaimer to overcome NSDP to another patent (“reference patent”) that includes: (1) a claim that has been finally held unpatentable or invalid under 35 U.S.C. § 102 or 103 in a Federal court in a civil action or at the USPTO, or (2) a statutory disclaimer of a claim filed after any challenge based on 35 U.S.C. § 102 or 103 to that claim has been made.

Under today’s practice, applicants facing a NSDP rejection over a reference patent in the same patent family (applications/patents sharing a common priority date or a common patent term filing date) often file a terminal disclaimer (or ask that the requirement be held in abeyance) as a matter of course simply to remove the issue. The current consequences of a terminal disclaimer for patents in a common patent family are the need to maintain common ownership and possible effects on patent term adjustment. The consequences of filing a terminal disclaimer with the USPTO’s proposed provision – possible unenforceability of the entire patent if any claim in any reference patent is held invalid under 35 U.S.C. § 102 or 103 – are sufficiently concerning that any NSDP rejection must be carefully considered. Specifically, applicants will want to insist on a specific explanation of how each claim subject to a NSDP rejection is not patentably distinct from some claim of the reference patent to be assured that: (1) the NSDP rejection is sufficiently strong that filing the terminal disclaimer is the only way to obtain a patent on the rejected claims (i.e., an appeal would be futile); and (2) claims not properly subject to a NSDP rejection can be pursued in another application.

The USPTO is concurrently proposing a number of changes to patent fees, including tiered disclaimer fees that increase the later in prosecution the disclaimer is filed, and additional fees for continuing applications filed more than five years from the benefit date claimed under 35 U.S.C. § 120, 121, 365(c), or 386(c). The increasing disclaimer fees would appear to encourage filing of terminal disclaimers to resolve NSDP issues early in prosecution, but the USPTO’s terminal disclaimer proposal will encourage applicants to avoid filing any terminal disclaimer if at all possible, leading to terminal disclaimers being filed later in prosecution if filing a terminal disclaimer cannot be avoided. It is not clear what effect these two proposals will have on early resolution of double patenting issues, but it is clear that the proposed fee and disclaimer changes will result in an increase in the costs of obtaining patent coverage.

The USPTO’s proposed rule notice mentions a 37 CFR 1.182 option for removing a terminal disclaimer, and explains how in various examples the removal of a terminal under this procedure will determine whether or not a patent is considered to have “never been tied” to another patent by the terminal disclaimer. As discussed in the proposed rule, pre-existing USPTO guidance indicates that there is no means to remove or nullify a terminal disclaimer in an issued patent, but that a petition under 37 CFR 1.182 may be used to seek removal or nullification of a terminal disclaimer that is no longer necessary or was filed in error (MPEP 1490). The grant of a petition under 37 CFR 1.182, however, does not always assure that a patent will be considered as having “never been tied” to another patent by the terminal disclaimer (as discussed in the proposed rule), and the grant of such a petition is within the USPTO’s discretion. The only way for an applicant to ensure that a patent will not be subject to a terminal disclaimer containing this proposed provision is not filing one in the first place.

Applicants must consider prosecution of patent families (and other related patents that could form the basis of a NSDP), and not just the application subject to a NSDP rejection. An applicant cannot avoid double patenting by disclaiming the claims of the patent forming the basis of a NSDP rejection (reference patent). Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 968 n.5 (Fed. Cir. 2001)(“[a] patent owner cannot avoid double patenting by disclaiming the earlier patent”). Thus, the situation is already largely determined once the patent that may be the basis for a future double patenting rejection – the reference patent – is issued. Applicants contemplating possible continuing applications will need to consider the downstream effects of the claims in any potential reference patent. Applicants will want to avoid having distinct inventions, or possibly even separately patentable claims, in a single patent.  Applicants will be less inclined than they already are to challenge restriction requirements. In a previous rulemaking (ultimately withdrawn), the USPTO provided for applicant-suggested restrictions (72 Fed. Reg. 46740-41, 46842 (Aug. 21, 2007), to have been codified as 37 CFR 1.142(c)). Applicants may want to consider such an approach, even if not expressly provided for in the rules.

Finally, it is less than clear that this rule (if adopted) would survive court review. The USPTO relies on In re Van Ornum, 686 F.2d 937 (CCPA 1982), as authority for this type of requirement for a terminal disclaimer to overcome NSDP. Van Ornum addressed a specific requirement (common ownership) that was in place for a decade at the time of the challenge and adopted with the support of the patent community. Van Ornum, 686 F.2d at 945-46. The court-recognized practical effect of a terminal disclaimer is to create a situation equivalent to having the claims of all the patents tied together by terminal disclaimer(s) in one single patent. In re Braithwaite, 379 F.2d 594, 601 (CCPA 1967) (cited in Van Ornum). The CCPA considered the common ownership provision at issue in Van Ornum acceptable because a NSDP terminal disclaimer is to create a situation equivalent to having the claims of all the patents tied together by the terminal disclaimer in one single patent, and it is not permissible to assign separate claims of a single patent to different parties. Van Ornum, 686 F.2d at 948 (citing Pope v. Gormully, 144 U.S. 248 (1892)). There is no analogous statutory or judicial principle that all or some subset of claims in a patent are no longer enforceable if any claim of that patent is held invalid under 35 U.S.C. § 102 or 103; rather, the patent statutes and judicial rulings are to the contrary. To the USPTO’s credit, it is not shy in stating that its purpose is to address existing statutory provisions and judicial rules (the current state of the law), which it sees as impeding market entry. 89 Fed. Reg. at 40441 (middle column). This USPTO effort, however, may be unavailing as the Federal Circuit does not accept the view that the USPTO may effectively set aside its judicial rules (much less statutes) by regulation. Agilent Tech. v. Affymetrix, 567 F.3d 1366, 1375 (Fed. Cir. 2009)(“This court does not accept the PTO’s statement that is can ‘administratively set aside the judicially created rule of In re Spina.’ Judicial precedent is as binding on administrative agencies as are statutes”)(citing Rowe v. Dror, 112 F.3d 473, 479 n.2 (Fed. Cir. 1997)).

Maier & Maier Secures Victory At the International Trade Commission

Maier & Maier

April 22, 2024  – Maier & Maier PLLC is pleased to report that our clients Hikam America, Inc., Hikam Electrónica de México, S.A. de C.V., Hikam Tecnologia de Sinaloa, Hewtech Philippines Corp., Hewtech Philippines Electronics Corp., and Hewtech (Shenzhen) Electronics Co., Ltd. have been terminated from ITC Investigation No. 337-TA-1365.

The Firm represented six of the Respondents in an ITC Investigation in which they were accused by Shoals Technologies Group, LLC (“Shoals”) of infringing U.S. Patent No. 10,553,739 (“the ‘739 Patent”), which purportedly covers molded fuses used in solar installations.

On March 6, 2024, the presiding ALJ issued an Initial Determination (Order No. 20) granting Respondents’ motion for summary determination pursuant to Commission Rule 210.18(b) (19 CFR 210.18(b)). The ID found that under the proper claim construction, Shoals has not shown that genuine issues of material fact exist regarding whether Shoals has satisfied the technical prong of the domestic industry requirement with respect to the ’739 Patent.

On March 13, 2024, Shoals filed a petition for review of the ID. On March 26, 2024, Respondents and OUII each filed separate responses to Shoals’ petition for review of the ID.

On April 19, 2024, the Commission determined not to review the ID. Because Shoals has not satisfied the technical prong of the domestic industry requirement for the ’739 patent, the investigation is now terminated as to the ’739 patent with a finding of no violation.

Maier & Maier continues to enjoy consistent and favorable results in its litigation matters. The firm has obtained favorable results when defending clients accused of infringement by competitors as well as cases brought by patent assertion entities. This victory comes on the heels of another favorable decision in a District Court case earlier this month.

About Maier & Maier PLLC

Maier & Maier’s litigation team has been hard at work delivering positive results for clients. The Maier & Maier team continues to advocate on behalf of clients in federal courts, before the Patent Trial and Appeal Board, the Trademark Trial and Appeal Board, and the International Trade Commission.

Maier & Maier Obtains Grant of Summary Judgment of Invalidity Based on §101 Related to Wearable Technology

Maier & Maier

April 5, 2024 – Maier & Maier PLLC is pleased to report that we secured a victory for our client Firstbeat Technologies OY in a case involving a heart rate measuring apparatus incorporated into wearable technology. The case was originally filed by Polar Electro OY in the District of Delaware on November 7, 2011, but was eventually transferred to the District of Utah. In December of 2021, we argued our Motions for Summary Judgment (“MSJ”) before Judge Waddoups. Today, the Court issued a decision granting our MSJ that the claims of U.S. Patent No. 6,537,227 are invalid as abstract. See 1:17-cv-00139-CW, Dkt. 498. The case has now been dismissed and Judgment has been entered in favor of our client Firstbeat Technologies OY.

Maier & Maier continues to enjoy consistent and favorable results in its litigation matters. The firm has obtained favorable results when defending clients accused of infringement by competitors as well as cases brought by patent assertion entities. This victory comes on the heels of another favorable decision in an ITC 337 Investigation last month.

About Maier & Maier PLLC

Maier & Maier’s litigation team has been hard at work delivering positive results for clients. The Maier & Maier Team continues to advocate on behalf of clients in federal courts, before the Patent Trial and Appeal Board, Trademark Trial and Appeal Board, and the International Trade Commission.

Timothy Maier Recognized as one of Washington D.C.’s Top Lawyers 2024

Maier & Maier

Tim Maier was recently recognized based on peer review by Washington D.C.’s Top Lawyers Washington DC 2024 Edition.

Perspectives on USPTO Rulemaking

Maier & Maier

A Perspective on USPTO Rulemaking Following In re Chestek, by Maier & Maier partner Robert Bahr, has been published on IP Watchdog. The article discusses the notice-and-comment rulemaking procedures practiced by the USPTO and the impact of the recent Federal Circuit decision in In re Chestek. You can read the full article here.

Maier & Maier Recognized for New Addition by Managing IP

Maier & Maier

Managing IP has published an article highlighting the addition of key former government officials to three top tier firms, including Finnegan, Maier & Maier, and O’Melveny.

To read the article, click here.

Recent Spotlight on Successful Appellate Review

Maier & Maier

Among the bases for patent term adjustment in section 154(b) is “appellate review by the Patent Trial and Appeal Board or by a Federal court in a case in which the patent was issued under a decision in the review reversing an adverse determination of patentability” (clause (iii) of section 154(b)(1)(C)). Section 154(b)(1)(C) or the “C” provision also provides for delays due to derivation/interference proceedings or imposition of a secrecy order. The Federal Circuit recently issued two decisions on the application of the “successful” appellate review provision in section 154(b)(1)(C)(iii). The first is Chudik v. Hirshfeld, 987 F.3d 1033 (Fed. Cir. 2021), and the second is SawStop v. Vidal, 48 F.4th 1355 (Fed. Cir. 2022).

In Chudik, the applicant responded to a final rejection with a request for continued examination, and then several rounds of rejection, appeal, and reopening ensued, with the final reopening leading to an allowance of the application. The applicant felt that the examiner’s ultimate decision to allow the application after the appeal should have led to patent term adjustment as successful appellate review, despite the absence of a decision in the review by the Patent Trial and Appeal Board (Board) or a court. The Federal Circuit in Chudik, however, held that the words of section 154(b)(1)(C)(iii), “in their most natural meaning when applied to an examiner’s unpatentability ruling, require that the patent issue under a Board decision that reversed the examiner’s unpatentability ruling or under a court decision that reversed a Board unpatentability ruling in the matter.” 987 F.3d at 1039-40.  Thus, since the Chudik appeal did not result in a decision by the Board or a court, the Chudik patent was not issued under a decision in the review reversing an adverse determination of patentability under the “C” provision.

Significant in Chudik is that the appeals and reopenings took place after the filing of a request for continued examination. Another basis for patent term adjustment is the failure to issue a patent within three years (section 154(b)(1)(B) or the “B” provision). This “B” provision, however, excludes time consumed by continued prosecution under section 132(b) (requests for continued examination) in determining the delay in issuing the patent under the three-year “B” provision (section 154(b)(1)(B)(i)). Absent the filing of a request for continued examination, the time consumed by the reopenings would have been considered in determining PTA under the three-year “B” provision. The filing of the request for continued examination, however, resulted in the time between the filing of the request for continued examination and the mailing of the notice of allowance not being considered under either the three-year “B” provision or the appellate review “C” provision.

The takeaway from Chudik is to be mindful of the effects that filing any request for continued examination will have on patent term adjustment under the three-year “B” provision. The Federal Circuit even felt the need to emphasize this point, stating—

The unavailability of B-delay for nearly two years (655 days) of delay in the PTO illustrates what applicants should understand when deciding whether to request a continued examination rather than take an immediate appeal. The potential benefit of immediate re-engagement with the examiner through such continued examination comes with a potential cost.

987 F.3d at 1041.

SawStop involved two patents. In the first SawStop patent, the appellate review resulted in a Board decision that the examiner’s rejection was inadequate, but that the claim was still unpatentable for reasons provided by the Board in a decision designated as containing a new ground of rejection.  Further prosecution of the application included several amendments to the claim, including via a request for continued examination, before the application was ultimately issued.  In the first patent, SawStop sought patent term adjustment based upon the Board not upholding the rejection as set forth by the examiner.  The second SawStop patent involved prior art and provisional obviousness-type double patenting rejections of two claims.  The Board upheld the rejections of the first claim but reversed the rejections of the second claim.  SawStop commenced a civil action under section 145 (considered “appellate review” for purposes of section 154(b)(1)) and obtained a reversal of the prior art rejection of the first claim, but did not seek review of the provisional obviousness-type double patenting rejections. SawStop addressed the provisional obviousness-type double patenting remaining after the civil action by canceling the first claim (rather than filing a terminal disclaimer).  In this second patent, SawStop sought patent term adjustment based upon reversal of the prior art rejection of the first claim in the civil action (the PTO accorded “C” provision patent term adjustment for the Board’s reversal of the rejections of the second claim).  The Federal Circuit held that the plain language of “issued under a decision in the review” in section 154(b)(1)(C)(iii) “means that at least one claim must ‘issue[] under’ the mandate of the appellate decision [, which at] a minimum, . . . means that at least one claim that ‘issued’ must have been analyzed by the Board or . . . Court that issued the ‘decision in the review” and that this “statutory requirement is not met if the claim that ultimately issues differs substantively from the claim under review.”  48 F.4th at 1362.  The claim in the first SawStop patent differed substantively from the claim under review by the Board (due to the subsequent amendment) and the claim in the second SawStop patent was not under review in the civil action (the claim under review was ultimately canceled).  Thus, neither SawStop patent was issued under a decision in the review reversing an adverse determination of patentability under the “C” provision.

SawStop also could not take advantage of the three-year “B” provision for the delays due to this appellate review.  In addition to the exclusion for time consumed by requests for continued examination, the “B” provision has an exclusion with respect to the events covered in the “C” provision, in that time consumed by appellate review (regardless of outcome), as well as time consumed by derivation/interference proceedings or imposition of a secrecy order, is not included in determining the delay in issuing the patent under the three-year “B” provision (section 154(b)(1)(B)(ii)).

One takeaway from SawStop is that it may not be enough for the Board or court decision to reverse all of the rejections of at least one claim for the appellate review to be considered “successful” for purposes of “C” patent term adjustment.  Rather, under SawStop, the “C” appellate review provision requires that the claims, or at least one of the claims on appeal, be patentable such that there is no need for any substantive amendment subsequent to the Board or court decision.  Thus, applicants should ensure that at least one of the claims on appeal is patentable without substantive amendment before any appeal to the Board. Another takeaway from SawStop is that applicants need to consider the possible patent term adjustment consequences before deciding to defer addressing double patenting rejections (whether provisional or not) until after the resolution of other patentability issues.

Taking Chudik and SawStop together, where patent term is important and the need for an appeal is contemplated, applicants need to prosecute the application with an eye to ensuring that claims are patentable – without the need for further substantive prosecution – before any final rejection is issued in the application.  This should limit the need for any request for continued examination (RCE) before (or after) appeal, as well as the need to substantively amend the claims following a “successful” appeal to the Board or courts.

Robert W Bahr Joins Maier & Maier

Maier & Maier

Maier & Maier PLLC is proud to announce its newest addition to the firm, Robert Bahr. Mr. Bahr joins Stephen Kunin as the second Maier & Maier Partner to have previously held the prestigious position of Deputy Commissioner for Patent Examination Policy at the United States Patent and Trademark Office(USPTO).

Mr. Bahr enjoyed a long and distinguished career at the USPTO having been intimately involved in nearly all patent-related rule-making at the USPTO since 1995. Mr. Bahr brings with him an expertise on USPTO patent policy, practice, and procedure that makes him a highly sought consultant and expert witness on such matters.

Maier & Maier is excited for a bright future with the addition of Mr. Bahr to our team. To inquire about Mr. Bahr’s services, please reach out to us at info@maierandmaier.com or 703-740-8322 for a consultation.

Maier & Maier’s Stephen Kunin Discusses New Year’s Wishes with IPWatchdog

Maier & Maier

Maier & Maier partner, Stephen Kunin, was featured in IPWatchdog.com’s post highlighting New Year wishes from top IP practitioners. Mr. Kunin’s New Year’s wish stated:

“I would be pleasantly surprised and thrilled if Congress can resolve the patent subject matter eligibility problems that have been created by the Supreme Court and Federal Circuit. At this point I don’t see a solution coming from the federal courts or the USPTO. I hope that Senators Tillis and Coons will be able to overcome the roadblocks that are hampering a legislative solution that provides clarity in the law and promotes innovation.”

A majority of the New Year wishes focused on restoring strength to the US patent system and bringing clarity to the patent subject matter eligibility quagmire created by the courts.

We at Maier & Maier wish you a Happy New Year and we will keep you updated on key developments in US patent law throughout 2024!

Fed Circuit Overturns $2.18-billion-dollar Judgement in VLSI Technology LLC v. Intel Corporation

Maier & Maier

In 2021, VLSI brought a patent infringement case against Intel seeking $3 billion in damages in the Western District of Texas. A jury decision found that Intel had infringed 2 of VLSI’s patents and awarded VLSI a $2.18 billion dollar settlement for said infringement.

The 2 patents at issue were US Patent No. 7,523,373 “Minimum Memory Operating Voltage Technique” and US Patent No. 7,725,759 “System and Method of Managing Clock Speed in an Electronic Device”. Intel’s accused products included various Haswell and Broadwell Microprocessors. The jury found that Intel infringed the ‘373 patent on the basis of literal infringement and infringed the ‘759 patent but only under the doctrine of equivalents.

Generally speaking, the doctrine of equivalents provides a limited exception to the principle that claim meaning defines the scope of rights granted by a patent, the inquiry required by the doctrine is “Does the accused product or process contain elements identical or equivalent to each claimed element of the patented invention?” (see MPEP 2186). However, courts have often emphasized “that the doctrine of equivalents is the exception, however, not the rule,” Eli Lilly & Co. v. Hospira, Inc., 933 F.3d 1320.

Intel appealed the decision to the U.S. Court of Appeals for the Federal Circuit, arguing that Intel did not infringe either of the patents, and specifically with regards to the ‘759 patent, that VLSI improperly invoked the doctrine of equivalents as (a) they were barred by prosecution history estoppel from invoking the doctrine of equivalents, and (b) VLSI’s evidence of equivalents was legally insufficient for a showing of infringement. Additionally, Intel argued that even if they had infringed the patents, the damages awarded with respect to the ‘373 patent were improper.

In a precedential decision released December 4, 2023, the Federal Circuit partially agreed with Intel’s position and reversed the earlier jury decision in part and affirmed in part. First on the ‘373 patent, while the court upheld the finding of infringement on the ‘373 patent, the court found Intel’s arguments with respect to damages to be persuasive. Therefore, while the infringement finding will be upheld, the case will be remanded for another hearing exclusively on damages.

On the ‘759 patent the court disagreed with Intel’s argument that VLSI was barred from bringing up doctrine of equivalents due to prosecution history estoppel but agreed that the evidence of equivalence VLSI provided was legally insufficient to form a verdict of infringement. Specifically, the ‘759 patent claim required “a first master device coupled to the bus, the first master device configured to provide a request to change a clock frequency of a high-speed clock in response to a predefined change in performance of the first master device”. Intel however showed that for their devices the equivalent cores did not request to change frequency based on changes the cores identified in their own performance, because only the software running on the (receiving) power control unit, based on observations of system conditions, called for a frequency change.

VLSI’s argument under the doctrine of equivalents attempted to accommodate this discrepancy by stating that Intel’s combination of (a) the core and (b) the software module on the power control unit that actually called for the frequency change, were equivalent to the first master device required by the claims. In order for this argument to meet the burden required by the doctrine, the court stated VLSI’s testimony needed to show “that the core and certain code, which resides on the power control unit, together perform substantially the same function, in substantially the same way, to achieve substantially the same result as the claimed ‘first master device”.

VLSI’s testimony “contain[ed] no meaningful explanation of why the way in which the request is made is substantially the same as what the claim prescribes. The question [was] not whether, in a schematic drawing used to illustrate functions, an engineer could ‘draw[] . . . [a] line’ in different places. The question is about actual functionality-location differences. It is not enough, moreover, to say that the different functionality location placements were a ‘design choice.” Therefore, VLSI’s testimony was legally insufficient to support a showing of infringement under the doctrine of equivalents.

The court’s holding here may have significant impact on the use of doctrine of equivalents in patent infringement litigation going forward, as the court increasingly emphasizes that the doctrine is a narrow doctrine, only to be applied in “exceptional” circumstances.