Terminal Disclaimers – One for the Price of Two
Terminal disclaimers are costly for the client – but an easy money maker for patent attorneys.
Terminal disclaimers are where you pay twice to get the same thing. They are a money maker for the USPTO – and your patent attorney. They should be avoided at all costs. In most cases, a terminal disclaimer is a lazy way for a patent attorney to get more money out of their unsuspecting clients.
If your patent attorney suggests getting a terminal disclaimer, ask them to find a way to amend the claims so a terminal disclaimer is not necessary.
A terminal disclaimer is an agreement that a patent owner signs (or their attorneys sign) that forever locks two patents together. If one patent is sold, the other one must be sold along with it. You get the pleasure of paying double maintenance fees for the same invention.
The USPTO rules forbid granting more than one patent for an invention, so they created the terminal disclaimer so that if you asked for the same invention twice, the two patents would be linked together. With a terminal disclaimer, you are prohibited from separating the two patents.
Part of the requirements of a terminal disclaimer is that both patents must expire on the same day. In the old days, when patents expire 17 years from the date of issue, this was a big deal. A second patent on the same invention would extend the life of the patent – sometimes by years. This was not OK, so they instituted the “terminal disclaimer” to prevent extra patent term.
When the patent laws changed in 1995, all patents must expire 20 years from the earliest priority date, so this is not as important today.
How does a terminal disclaimer happen?
A terminal disclaimer occurs when a patent examiner says that there are two patents on nearly identical inventions. This often happens when you file a continuation or continuation-in-part patent applications.
A typically scenario is that your first patent application is allowed, so you file a continuation application with a new set of claims. As the second set of claims is examined, the examiner determines that the claims are not “patentably distinct” from the first set. The examiner will allow the second set of claims to issue, but only if you sign a terminal disclaimer, locking the two patents together for the rest of the patents’ life.
A terminal disclaimer is the mark of a lazy patent attorney
The single most difficult task in legal writing is to write patent claims. They are dreadfully difficult to write and combine the most technical expertise along with extensive legal expertise. In short, patent claims take an enormous amount of work, so it is very easy for patent attorneys to take shortcuts.
When I write a patent application, I typically spend over half of my time writing claims, with the other half being the figures and description of the invention. This is how hard claims are: to do them well takes an inordinate amount of time.
Just like doctors needs their neighbors to be sick (but not dying) and a soldier yearns for war, a patent attorney needs pending patent applications. The worst thing that can happen for a patent attorney is that the patent is allowed and the revenue spigot turns off. The solution: a continuation application.
Every patent attorney is taught to talk the clients into endless continuation applications. (Please note that there are very valid and legitimate strategies for continuation applications, but those strategies never include terminal disclaimers.)
However, it is commonplace for a lazy patent attorney to just make some small changes to the already allowed claims and resubmit them as a continuation application. The examiner already allowed the claims, so there will not be much pushback from the examiner. But the price to pay is a terminal disclaimer.
Many clients do not realize that a terminal disclaimer is a bad thing. They see this strategy as “getting another patent.” But it is not just another patent.
The client just got suckered into paying a bunch of extra attorney’s fees and USPTO fees to get another plaque on the wall – but it is for the exact same invention as before.
The client already had protection from the first patent, but they attorney got paid double for basically mindless work – and the client got stuck with twice the maintenance fees over the life of the patent.
What to do if your attorney says you need a terminal disclaimer
If your patent attorney says that you need to approve a terminal disclaimer, gently tell the attorney “no.” Ask the attorney to amend the claims so that the terminal disclaimer does not apply.
The attorney should be happy to further amend the claims because it means more income for them. Sadly, you found out through this exercise that your patent attorney is not putting in much effort to get good patents for you, and you might want to consider finding a new patent attorney.