IPR May Be Discretionarily Denied Because of “Settled Expectations” Where Petitioner Has Long Known of Challenged Patent

Acting USPTO Director Coke Morgan Stewart issued a Director Discretionary decision on June 6, 2025, in iRhythm Technologies Inc. v. Welch Allyn Inc., IPR2025-00363, -00374, -00376, -00377, and -00378 Paper 10 (PTAB June 6, 2025). This decision granted Patent Owner’s request for discretionary denials of institution in five related IPR challenges.  It follows several recent Director decisions that have all discretionarily denied petitions for reasons other than the substantive merits of the challenges. However, this decision is the first one that relies upon “[s]ettled expectations of the parties, such as the length of time the claims have been in force,” a new consideration that was first articulated in the USPTO’s “Interim Process for PTAB Workload Management” memorandum (“Interim Memo”) dated March 26, 2025.

In this case, Patent Owner had filed a request for discretionary denial under the new bifurcated process set out in the Interim Memo. In considering whether to exercise discretionary denial, the decision first looked to the Fintiv factors, such as the proximity of the parallel district court’s trial date to the deadline for the PTAB to issue a final written decision, whether the district court would grant a stay in a parallel proceeding if the IPRs were instituted, and the investment in the parallel proceeding by the court and the parties, as well as the extent of the petition’s reliance on expert testimony (which was another factor newly articulated in the Interim Memo). Each of those factors weighed against issuing a discretionary denial.

Despite this, the decision cited “settled expectations” as an independent basis to deny institution that outweighed all other considerations. The decision states that “Petitioner’s awareness of Patent Owner’s applications and failure to seek early review of the patents favors denial and outweighs the above-discussed considerations.”  The basis for that conclusion was that one of the patents had been in force since as early as 2012 and the challenged patent was cited in an Information Disclosure Statement that Petitioner filed in its own patent application in 2013. Institution decisions are not appealable under the AIA.

This “settled expectations” rationale – as an independent basis to deny institution – appears to be a new, potentially significant hurdle for IPR petitioners.  There is no clear line concerning how long ago a patent may have issued or for how long a petitioner must have known about the patent for this rationale to apply. However, determining that a party was “aware” of the patent because it was cited during prosecution of a different, unrelated patent, may render many patents vulnerable to this attack. Petitioners can expect this basis to be raised by patent owners looking to escape IPR examinations in future challenges where possible.