The House Judiciary Subcommittee on Courts, Intellectual Property, Artificial Intelligence, and the Internet recently held a hearing, “Medicines and IP: Balancing Innovation and Access,” to discuss how strong patent rights can be balanced with widespread access to affordable medicines. One witness testifying on behalf of a generic drug manufacturer repeatedly argued that drug patents linked by terminal disclaimers are duplicative and unnecessary, and that drugmakers use them to unfairly extend patent protection.
However, as C4IP explained in its letter to the Subcommittee, these arguments rest on a fundamental misunderstanding. Far from being a tactic to extend market exclusivity through duplicative patents, terminal disclaimers prevent duplicative patenting. When the Patent Office considers two applications too closely related, an inventor can file a terminal disclaimer agreeing that the later patent will expire no later than the earlier one and that the patents will remain under common ownership. That lets inventors seek protection for different aspects of a complex invention while ensuring that drugmakers cannot unfairly extend their market exclusivity.
Below, we set the record straight on terminal disclaimers:
| Claim: A company that files a terminal disclaimer is essentially admitting the new patent is a duplicate — otherwise, it would never agree to give up part of its patent term. |
| In Reality: That argument is rooted in outdated patent law. Before 1995, patent terms lasted 17 years from the date a patent was issued. When a terminal disclaimer linked two patents issued on different dates, it surrendered part of the later patent’s term. But today, patents generally last 20 years from their earliest applicable filing date. Related patents in the same family share the same filing date, so filing a terminal disclaimer usually gives up little or no additional time.
When inventors file terminal disclaimers, they do sacrifice the right to sell or license the related patents to separate owners. But this choice often makes sense as a practical matter, since contesting a USPTO examiner’s double-patenting rejection can be expensive and time-consuming. Put simply, inventors usually file terminal disclaimers to save time and money, not because their patents lack unique value. |
| Claim: Patents linked by terminal disclaimers add no value to innovation. |
| In Reality: Terminal disclaimers are a patent prosecution tool that allows inventors to obtain patent protection for the full scope of the invention they disclose to the public. Inventors can work on smaller claim sets at a time — benefiting both applicants and the USPTO — and receive a patent on claims that the examiner has allowed while continuing to work on obtaining claims on other aspects of the invention. |
| Claim: Terminal disclaimers let inventors defend invalid patents indefinitely. |
| In Reality: Patents connected by terminal disclaimers face the same legal scrutiny as other patents. Competitors can challenge them in federal court or through Patent Office proceedings, including at the Patent Trial and Appeal Board and the Central Reexamination Unit. If a patent claim is found invalid, it cannot be enforced. Furthermore, if related patents concern overlapping legal and factual issues, resolving a challenge to one patent is likely to help streamline litigation of the other claims. |