The USPTO’s recent guidance on discretionary denials has shifted patent practitioners back to the Fintiv and Sotera Wireless framework.
The Prior Framework: Fintiv & Sotera Wireless
In Apple Inc. v. Fintiv, Inc., No. IPR2020-00019 (PTAB Mar. 20, 2020), the Patent Trial and Appeal Board (the “Board”) implemented a holistic view of six factors (the Fintiv factors) for determining whether to exercise discretionary denial when there is a parallel, co-pending proceeding.[1] The six factors included:
- whether a stay exists or is likely to be granted if a proceeding is instituted;
- the proximity of the court’s trial date to the Board’s projected statutory deadline for a final written decision;
- the investment in the parallel proceeding by the court and parties;
- overlap between issues raised in the petition and in the parallel proceeding;
- whether the petitioner and the defendant in the parallel proceeding are the same party; and
- other circumstances that impact the Board’s exercise of discretion, including the merits.[2]
On December 1, 2020, the Board also issued a decision in Sotera Wireless, Inc. v. Masimo Corp., No. IPR2020-01015 (PTAB Dec. 1, 2020), which set forth the Sotera stipulation.[3] A Sotera stipulation is a stipulation by the petitioner that “if IPR is instituted, they will not pursue in the District Court Litigation any groundraised or that could have been reasonably raised in an IPR.”[4] Where this stipulation is made, the fourth Fintiv factor strongly favors not exercising discretion to deny institution.[5]
The Interim Procedures Memorandum
In response to this framework, the USPTO issued a memorandum entitled “Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation” (the “Interim Procedures Memorandum”) on June 22, 2022.[6] Under this memorandum, the Board would not exercise its authority to deny institution in light of a parallel proceeding when the parallel proceeding was an ITC proceeding, there was a Sotera stipulation, or compelling evidence of unpatentability was presented.[7] Median time-to-trial statistics in the district of the co-pending litigation would be considered by the Board.
USPTO’s Rescission of Interim Procedure Memorandum
On February 28, 2025, the USPTO rescinded the Interim Procedure Memorandum.[8]
Subsequent Guidance: March 24th and 26th Memoranda
As a follow up to the Interim Procedure Memorandum rescission, the Chief Administrative Patent Judge issued a memorandum on March 24, 2025 entitled “Guidance on USPTO’s rescission of ‘Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation’” (the “Guidance Memorandum”).[9] The Guidance Memorandum explained that the Interim Procedures Memorandum was only intended to provide guidance while the USPTO explored potential rulemaking. Accordingly, when no final rules were proposed, the USPTO rescinded the Interim Procedures Memorandum. The Guidance Memorandum included five key points regarding the discretionary denials policy:[10]
- The rescission is applicable if (1) the Board has not issued an institution decision or (2) a request for rehearing or Director Review of an institution decision was filed and is pending.
- The Fintiv factors apply when there is a parallel proceeding at the ITC.
- Timely-filed Sotera stipulations are highly relevant and considered as part of the holistic analysis under Fintiv, but they are not dispositive on their own.
- The Board can consider evidence relating to the proximity of the district court’s trial date, such as median time-to-trial statistics.
- The Fintiv factors are to be considered as part of a balanced assessment, including the strength of the merits, but compelling merits are not dispositive on their own.
Two days later, on March 26, 2025, the Acting Under Secretary of Commerce for Intellectual Property and Acting Director of the USPTO issued a memorandum entitled “Interim Processes for PTAB Workload Management” (the “Workload Management Memorandum”).[11]
The Workload Management Memorandum primarily addressed the procedures for IPR and PGR institution decisions.[12] Under this guidance, the institution decisions are bifurcated between (i) discretionary considerations and (ii) merits and other non-discretionary statutory considerations. First, the Director and at least three PTAB judges determine whether discretionary denial is appropriate. If it is appropriate, the Director issues a decision denying institution. If it is not appropriate, the petition is referred to a three-member panel of the Board to handle the case in the normal course.
As part of the separate discretionary denial briefing, the patent owner may file a brief explaining applicable bases for discretionary denial within 2 months of the date on which the PTAB enters a Notice of Filing Date Accorded. Subsequently, the petitioner may file an opposition brief no later than one month after the filing date of the patent owner’s brief.[13]
Moreover, the Workload Management Memorandum sets forth specific considerations that the parties are permitted to address, including, but not limited to:
- Whether the PTAB or another forum has already adjudicated the validity or patentability of the challenged patent claims;
- Whether there have been changes in the law or new judicial precedent issued since issuance of the claims that may affect patentability;
- The strength of the unpatentability challenge;
- The extent of the petition’s reliance on expert testimony;
- Settled expectations of the parties, such as the length of time the claims have been in force;
- Compelling economic, public health, or national security interests; and
- Any other considerations bearing on the Director’s discretion.[14]
Conclusion
As the updated discretionary denial policy is implemented, it is likely that there will be an increase in the number of discretionary denials. Although the recent memoranda have indicated that the processes are temporary, it is unknown how long they will remain in place and what may replace them. Accordingly, practitioners before the Board should continue to monitor the Board’s discretionary denial decisions.
More information about the USPTO’s discretionary denial policy can be found at: https://www.uspto.gov/patents/ptab/faqs/interim-processes-workload-management.
[1] See Apple Inc. v. Fintiv, Inc., No. IPR2020-00019 (PTAB Mar. 20, 2020).
[2] See id. at 5-6.
[3] Sotera Wireless, Inc. v. Masimo Corp., No. IPR2020-01015 (PTAB Dec. 1, 2020).
[4] See id. at 18.
[5] See id. at 19.
[6] See Memorandum from Under Secretary of Commerce for Intell. Prop. and Dir. of the U.S. Pat. and Trademark Office Kathy Vidal to Members of the Pat. Trial and Appeal Bd. (June 21, 2022).
[7] See id.
[8] See USPTO rescinds memorandum addressing discretionary denial procedures, USPTO, https://www.uspto.gov/about-us/news-updates/uspto-rescinds-memorandum-addressing-discretionary-denial-procedures (last visited May 26, 2025).
[9] See Memorandum from Chief Admin. Pat. Judge Scott R. Boalick to Members of the Pat. Trial and Appeal Bd. (Mar. 24, 2025).
[10] See id.
[11] See Memorandum from Acting Under Secretary of Commerce for Intell. Prop. and Acting Dir. of the U.S. Pat. and Trademark Office Coke Morgan Stewart to All PTAB Judges (Mar. 26, 2025).
[12] See id.
[13] Discretionary denial briefing has a limit of 14,000 words and a reply brief has a limit of 5,600 words. See id. at 2.
[14] See id.