FTC Backs USPTO Terminal Disclaimer NPRM as Others Warn it Exceeds Agency Authority

The USPTO’s proposed rulemaking (NPRM) on terminal disclaimer practice has sparked significant controversy. The NPRM, issued in May, aims to promote competition by reducing the cost of challenging patent thickets through a new requirement that a terminal disclaimer includes an agreement preventing enforcement if any claim of a second patent is invalidated by prior art. The impact of the recent Supreme Court decision in Loper Bright, which limits agency deference, remains uncertain for the rule’s future.

Sterne Kessler Director Will Milliken commented, “One concrete implication [of the Loper Bright decision] is that the PTO will not be able to rely on Chevron to justify the proposed rulemaking regarding terminal disclaimer practice.”