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May 15, 2025
Since Acting USPTO Director Coke Morgan Stewart took office in 2025, the Patent Trial and Appeal Board (PTAB) has overhauled its discretionary denial procedures for inter partes reviews (IPRs) and post-grant reviews (PGRs). Almost a month after rescinding the prior discretionary denial guidance on February 28, 2025,1 Stewart issued a memorandum to all PTAB administrative law judges that introduced a bifurcated process to assess discretionary denial arguments separately from the merits of unpatentability challenges.2
The memo states this new procedure is “temporary in nature due, in part, to the current workload needs of the PTAB.”3 During an April 17, 2025 webinar however, the PTAB announced its intent to put these procedures through notice-and-comment rulemaking—suggesting that these new procedures may endure and become permanent.4
The PTAB previously identified several precedential decisions that contain discretionary denial considerations.5 Apple v. Finiv set forth a six-factor balancing test for the PTAB to determine if discretionary denial is warranted. These factors include “(1) whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted; (2) proximity of the court’s trial date to the Board’s projected statutory deadline for a final written decision; (3) investment in the parallel proceeding by the court and the parties; (4) overlap between issues raised in the petition and in the parallel proceeding; (5) whether the petitioner and the defendant in the parallel proceeding are the same party; and (6) other circumstances that impact the Board’s exercise of discretion, including the merits.”6 While applying these factors in Sotera Wireless v. Masimo Corp, the PTAB found that if a petitioner stipulates to not pursue in district court any invalidity grounds that reasonably could have been raised in the IPR, the fourth Fintiv factor would strongly favor against discretionary denial.7 This became known as a “Sotera stipulation” and at one point provided strong protection against a discretionary denial.
In 2022, former Director Vidal issued a memo instructing that the PTAB “will not deny institution of an IPR or PGR under Fintiv (i) when a petition presents compelling evidence of unpatentability; (ii) when a request for denial under Fintiv is based on a parallel ITC proceeding; or (iii) where a petitioner stipulates not to pursue in a parallel district court proceeding the same grounds as in the petition or any grounds that could have reasonably been raised in the petition.”8 In effect, Vidal’s memo curtailed application of the Fintiv factors and resulted in a sharp decrease in discretionary denials with the average institution rate from 2022-2024 being approximately 68%.9
On February 28, 2025, the USPTO rescinded the Vidal memo and restored the previous precedence of Fintiv and Sotera.10 This signaled a return to the PTAB employing a multifactor balancing test when considering whether to exercise discretionary denial and the test has since been further clarified. For instance, on March 24, 2025, Chief Patent Judge Scott Boalick issued a guidance memorandum addressing the recission.11 Boalick’s memorandum confirmed the recission restored Fintiv and Sotera while also clarifying that Sotera stipulations will be “highly relevant, but not dispositive by itself.”12 The Boalick memorandum also stated the PTAB (1) may consider median time-to-trial statistics for civil actions in the district court and (2) the merits of a petition, though “compelling merits alone is not dispositive in making this assessment.”13 Shortly thereafter on March 26, 2025, Director Stewart issued a memorandum introducing the new bifurcated approach and the accompanying procedures.14
Absent further changes, the new procedures allow the Director to consult with a panel of at least three senior PTAB judges to determine whether discretionary denial is appropriate.51 This determination occurs before the petition reaches the merits review stage. As emphasized during its April 17, 2025 webinar, the judges reviewing discretionary denial are separate from the merits panel.16
According to the Stewart memorandum, if the patent owner opts to raise a discretionary denial argument they must file a brief addressing these issues within two months of receiving a Notice of Filing Date Accorded.17 Petitioners then have one month to file an opposition. The initial brief and opposition are limited to 14,000 words while any reply briefing, if granted, is limited to 5,600 words.18 One month after the submission of the last paper, the Director will issue a written decision on whether discretionary denial is appropriate.19 This new bifurcated process is a departure from the previous practice, where petitioners and patents owners were limited to a 14,000 word brief and would often devote only a small portion to discretionary denial issues and reserve most of their briefing for arguments on the merits.
The Stewart memo also set forth a list of additional discretionary denial considerations, such as:
Moreover, the Director will consider pendency goals for ex parte appeals, statutory deadlines, and the PTAB’s overall workload capacity.21 The PTAB has provided important insight into these additional factors by publishing answers to FAQs.22 For example, although the Stewart memo lists expert testimony among the discretionary denial considerations, the PTAB has clarified that “extensive reliance on expert testimony and/or reasonable disputes between experts on dispositive issues may suggest that the questions are better resolved in an Article III court.”23
These recent procedural changes can be attributed in part to ongoing staffing concerns associated with return-to-office mandates and overall government workforce reductions.24 During a May 7, 2025 webinar, Chief Patent Judge Boalick acknowledged these constraints by estimating that the number of administrative patent judges and support staff has declined by approximately 13% and 17% respectively.25 While these percentages may not seem significant at first, a closer look reveals—despite a well-known backlog of patent applications—the number of administrative patent judges is now below 200.
The new discretionary denial procedures, which explicitly identify PTAB’s workload among the Director’s considerations, comport with other actions taken by the USPTO. First, Chief Patent Judge Boalick noted that the agency is making IT improvements, utilizing cloud storage, and introducing new paper types to improve overall efficiency.26 Second, Director Stewart announced efforts to collaborate with the Justice Department in urging the U.S. Supreme Court to clarify the scope of patent-eligible subject matter.27 Third, Director Stewart recently intervened in a case before the Federal Circuit where the appellant argued the PTAB should be required to address all grounds raised in an IPR petition irrespective of whether the claims have already been invalidated by another argument in the petition.28
It remains to be seen whether these measures will be effective and help improve the efficiency of the PTAB. What is clear, however, is under the new discretionary denial procedures the PTAB will have more authority to deny proceedings at an early stage given the restoration of Fintiv and Sotera as well as the breadth of additional factors. Indeed, it appears the new bifurcation procedure favors patent owners, as petitioners must now overcome a preliminary procedural hurdle before their challenges are reviewed on the merits.
The result may well lead to an increase in discretionary denials and may also have a chilling effect on petitioners filing IPRs as they must now carefully consider their timing and strategy. Indeed, early data suggests the institution rate for April 2025 was about 44%.29 Further clarity is expected in the coming months as the USPTO undergoes formal rulemaking and publishes answers to additional FAQs. Most importantly, on April 17, 2025, the PTAB reported more than 40 requests under the new discretionary denial framework.30 As a result, many of these should be fully briefed by the end of May with written decisions expected in June according to the new timeline.