Discretionary denials of inter partes and post-grant assessment petitions have climbed considerably after a memo issued early this yr by the performing director of the US Patent and Trademark Workplace. Jessica Kaiser, Chris Marando and Jon Carter of Perkins Coie discover the fallout of those modifications and what they sign for the way the workplace will deal with choices.
In March, US Patent and Trademark Workplace (USPTO) Appearing Director Coke Morgan Stewart issued a memorandum that considerably altered the way in which the Patent Trial and Enchantment Board (PTAB) handles establishment choices.
Particularly, the memo bifurcated the method such that the performing director first decides all discretionary denial points and solely thereafter do petitions not discretionarily denied proceed to an evaluation of the technical deserves by a panel of administrative patent judges (APJs).
For the discretionary denial stage, the memo confirmed the applicability of current doctrines (e.g., Fintiv) whereas including a number of new “related issues,” together with what the performing director known as “[s]ettled expectations of the events, such because the size of time the claims have been in drive.”
As of Aug. 13, the USPTO has discretionarily denied 60% of the 294 inter partes assessment (IPR) and post-grant assessment petitions thought of underneath the brand new course of, a considerable enhance in comparison with the USPTO’s reported 31% complete establishment denial price in fiscal yr 2025 by way of Feb. 28 (i.e., in APJ panel establishment choices addressing deserves and discretionary points).
Focusing particularly on “settled expectations,” the primary denial issued June 6 in iRhythm Techs., Inc. v. Welch Allyn, Inc. In these IPRs, a number of issues weighed in opposition to discretionary denial (e.g., a district courtroom trial date after the projected ultimate written choice date, little funding by the events within the co-pending continuing and a excessive chance of a keep following IPR establishment), but the performing director nonetheless denied the petitions as a result of one of many challenged patents had “been in drive since as early as 2012” and the petitioner had been conscious of it since at the very least 2013 (having cited the then-pending software in an data disclosure assertion throughout prosecution of the petitioner’s personal patent software). The performing director discovered that the petitioner’s consciousness “and failure to hunt early assessment of the patents favors denial and outweighs the above-discussed issues.”
The performing director has since clarified that though there’s “no bright-line rule,” “typically, the longer the patent has been in drive, the extra settled expectations must be.” (See Dabico Airport Options Inc. v. AXA Energy ApS). In follow — and based mostly on a complete assessment of the discretionary denial choices which have issued since iRhythm as of Aug. 13 — when a challenged patent has been in drive for six or extra years on the time of the discretionary denial choice, there’s successfully a presumption of “settled expectations” that weighs closely in favor of denial.
Certainly, throughout this era, 81% of the 134 petitions difficult patents six or extra years outdated have been discretionarily denied in comparison with 42% of the 149 petitions difficult patents lower than six years outdated. And notably, the performing director has discovered that “settled expectations” don’t help denial if a patent has been in drive for slightly below six years. (See, e.g., Berkshire Hathaway Vitality Co. v. Birchtech Corp.)
Patent age has thus change into an necessary consideration when crafting a PTAB technique, and petitioners have to be ready to deal with it, even when the patent proprietor fails to take action. Dabico notes it’s petitioner’s duty “not solely to answer patent proprietor’s arguments but additionally to establish causes to not train discretion to disclaim establishment” (emphasis in authentic).
Based on the USPTO’s “Interim Director Discretionary Course of” steerage, “Whereas the Director ordinarily will depend on information and circumstances that the events elevate of their briefs, the Director will contemplate extra information and circumstances the place applicable, for instance: … To take care of consistency with Discretionary Selections that the Director has already issued … The place there are information and circumstances inside the purview of the Workplace or Workplace operations that the events aren’t able to lift … The place there are information and circumstances within the file or within the public area which are related to the willpower.”
For instance, the performing director has prompt {that a} petitioner would possibly overcome “settled expectations” by mentioning “a major change in legislation” or {that a} challenged patent “could have been in drive for years” however was by no means “commercialized, asserted, marked, licensed, or utilized in a petitioner’s specific expertise area, if in any respect.” (Cf. Intel Corp. v. Proxense LLC). Shenzen Tuozhu Tech. Co., Ltd. v. Stratasys, Inc. declares, “The patent challenged…has been in drive for roughly 10 years, creating sturdy settled expectations for Patent Proprietor. Petitioner, nonetheless, presents proof that the challenged patents have by no means been ‘commercialized, asserted, marked, licensed, or in any other case utilized’ in Petitioner’s ‘specific expertise area.’ This proof weighs in opposition to Patent Proprietor’s declare of sturdy settled expectations.”
As well as, some petitioners have succeeded in countering “settled expectations” utilizing three completely different approaches: (1) pointing to a co-pending, complicated litigation that includes not solely the challenged patent however a number of patents throughout a number of households; (2) submitting parallel IPR petitions that moreover problem associated patents (e.g., continuations or continuations-in-part) which are lower than six years outdated and are inclined to the identical or comparable invalidity grounds; and/or (3) mentioning substantive errors that the USPTO made throughout prosecution. From Tesla, Inc. v. Mental Ventures II LLC.: “Petitioner’s arguments relating to the complicated and numerous litigation continuing tip the steadiness in opposition to discretionary denial. Petitioner explains that the district courtroom continuing includes eleven patents spanning 9 completely different households that contain a various vary of subject material. The big quantity and huge scope of the patents asserted within the district courtroom litigation weighs in opposition to discretionary denial, because the Board is best suited to assessment a lot of patents involving numerous subject material.”
These current examples present helpful steerage that practitioners ought to contemplate when devising a PTAB technique in opposition to older patents, notably the place these patents are half of a bigger dispute between the events, these patents have more moderen relations or the petitioner can present a transparent, materials error by the examiner throughout authentic prosecution.
Discretionary denials of inter partes and post-grant assessment petitions have climbed considerably after a memo issued early this yr by the performing director of the US Patent and Trademark Workplace. Jessica Kaiser, Chris Marando and Jon Carter of Perkins Coie discover the fallout of those modifications and what they sign for the way the workplace will deal with choices.
In March, US Patent and Trademark Workplace (USPTO) Appearing Director Coke Morgan Stewart issued a memorandum that considerably altered the way in which the Patent Trial and Enchantment Board (PTAB) handles establishment choices.
Particularly, the memo bifurcated the method such that the performing director first decides all discretionary denial points and solely thereafter do petitions not discretionarily denied proceed to an evaluation of the technical deserves by a panel of administrative patent judges (APJs).
For the discretionary denial stage, the memo confirmed the applicability of current doctrines (e.g., Fintiv) whereas including a number of new “related issues,” together with what the performing director known as “[s]ettled expectations of the events, such because the size of time the claims have been in drive.”
As of Aug. 13, the USPTO has discretionarily denied 60% of the 294 inter partes assessment (IPR) and post-grant assessment petitions thought of underneath the brand new course of, a considerable enhance in comparison with the USPTO’s reported 31% complete establishment denial price in fiscal yr 2025 by way of Feb. 28 (i.e., in APJ panel establishment choices addressing deserves and discretionary points).
Focusing particularly on “settled expectations,” the primary denial issued June 6 in iRhythm Techs., Inc. v. Welch Allyn, Inc. In these IPRs, a number of issues weighed in opposition to discretionary denial (e.g., a district courtroom trial date after the projected ultimate written choice date, little funding by the events within the co-pending continuing and a excessive chance of a keep following IPR establishment), but the performing director nonetheless denied the petitions as a result of one of many challenged patents had “been in drive since as early as 2012” and the petitioner had been conscious of it since at the very least 2013 (having cited the then-pending software in an data disclosure assertion throughout prosecution of the petitioner’s personal patent software). The performing director discovered that the petitioner’s consciousness “and failure to hunt early assessment of the patents favors denial and outweighs the above-discussed issues.”
The performing director has since clarified that though there’s “no bright-line rule,” “typically, the longer the patent has been in drive, the extra settled expectations must be.” (See Dabico Airport Options Inc. v. AXA Energy ApS). In follow — and based mostly on a complete assessment of the discretionary denial choices which have issued since iRhythm as of Aug. 13 — when a challenged patent has been in drive for six or extra years on the time of the discretionary denial choice, there’s successfully a presumption of “settled expectations” that weighs closely in favor of denial.
Certainly, throughout this era, 81% of the 134 petitions difficult patents six or extra years outdated have been discretionarily denied in comparison with 42% of the 149 petitions difficult patents lower than six years outdated. And notably, the performing director has discovered that “settled expectations” don’t help denial if a patent has been in drive for slightly below six years. (See, e.g., Berkshire Hathaway Vitality Co. v. Birchtech Corp.)
Patent age has thus change into an necessary consideration when crafting a PTAB technique, and petitioners have to be ready to deal with it, even when the patent proprietor fails to take action. Dabico notes it’s petitioner’s duty “not solely to answer patent proprietor’s arguments but additionally to establish causes to not train discretion to disclaim establishment” (emphasis in authentic).
Based on the USPTO’s “Interim Director Discretionary Course of” steerage, “Whereas the Director ordinarily will depend on information and circumstances that the events elevate of their briefs, the Director will contemplate extra information and circumstances the place applicable, for instance: … To take care of consistency with Discretionary Selections that the Director has already issued … The place there are information and circumstances inside the purview of the Workplace or Workplace operations that the events aren’t able to lift … The place there are information and circumstances within the file or within the public area which are related to the willpower.”
For instance, the performing director has prompt {that a} petitioner would possibly overcome “settled expectations” by mentioning “a major change in legislation” or {that a} challenged patent “could have been in drive for years” however was by no means “commercialized, asserted, marked, licensed, or utilized in a petitioner’s specific expertise area, if in any respect.” (Cf. Intel Corp. v. Proxense LLC). Shenzen Tuozhu Tech. Co., Ltd. v. Stratasys, Inc. declares, “The patent challenged…has been in drive for roughly 10 years, creating sturdy settled expectations for Patent Proprietor. Petitioner, nonetheless, presents proof that the challenged patents have by no means been ‘commercialized, asserted, marked, licensed, or in any other case utilized’ in Petitioner’s ‘specific expertise area.’ This proof weighs in opposition to Patent Proprietor’s declare of sturdy settled expectations.”
As well as, some petitioners have succeeded in countering “settled expectations” utilizing three completely different approaches: (1) pointing to a co-pending, complicated litigation that includes not solely the challenged patent however a number of patents throughout a number of households; (2) submitting parallel IPR petitions that moreover problem associated patents (e.g., continuations or continuations-in-part) which are lower than six years outdated and are inclined to the identical or comparable invalidity grounds; and/or (3) mentioning substantive errors that the USPTO made throughout prosecution. From Tesla, Inc. v. Mental Ventures II LLC.: “Petitioner’s arguments relating to the complicated and numerous litigation continuing tip the steadiness in opposition to discretionary denial. Petitioner explains that the district courtroom continuing includes eleven patents spanning 9 completely different households that contain a various vary of subject material. The big quantity and huge scope of the patents asserted within the district courtroom litigation weighs in opposition to discretionary denial, because the Board is best suited to assessment a lot of patents involving numerous subject material.”
These current examples present helpful steerage that practitioners ought to contemplate when devising a PTAB technique in opposition to older patents, notably the place these patents are half of a bigger dispute between the events, these patents have more moderen relations or the petitioner can present a transparent, materials error by the examiner throughout authentic prosecution.
