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June 30, 2025
Authored by: Kaitlyn Rothwell
In a recent article, Haug Partners previewed that the impact of the Patent Trial and Appeal Board’s (PTAB) new bifurcated approach to discretionary denial requests would depend on how the new Acting USPTO Director, Coke Morgan Stewart, applied the process.1 The effect of the new process is beginning to materialize in recent decisions, several of which focus on the “settled expectations” factor identified in the Director’s March 26, 2025 memorandum.2 These early decisions offer the first insight into how this factor is being applied and how petitioners and patent owners should adapt their strategies in inter partes review (IPR) proceedings.
The USPTO has long recognized the Director’s authority to deny institution of an IPR under 35 U.S.C. § 314. Recently, the PTAB returned to the multifactor balancing test of Apple v. Fintiv in considering if discretionary denial is warranted.3 Additionally, on March 26, 2025, Director Stewart formalized a bifurcated review process and outlined a list of additional discretionary denial considerations that the parties are encouraged to address.4 While the process is described as temporary in nature to address the current workload needs of the PTAB, one factor on the list stands out: “settled expectations of the parties, such as the length of time the claims have been in force.”5 Since the issuance of the memorandum, the “settled expectations” factor has appeared in several Director decisions as a key factor.
The first application of the “settled expectations” factor came on June 6, 2025 in iRhythm Technologies v. Welch Allyn.6 The Patent Owner requested discretionary denial in six IPRs and in a three-page decision, the Director granted discretionary denial in all six cases.7 The Director listed several reasons weighing against discretionary denial: the Board’s projected written decision would precede the district court’s trial date, a high likelihood of a stay if the IPR was instituted, and the patent owner did not identify any expert testimony. Yet the key factor appeared to be the fact that one of the patents had been in force since 2012.8 The decision emphasized that the petitioner was aware of the patent as early as 2013, having cited the then-pending application in an Information Disclosure Statement that Petitioner filed in its own patent application concluding that “settled expectations favor denial of institution.”9 The petitioner in opposition had argued that the patent had not been asserted or even threatened until 2024 so there was no reason to file earlier.10 However, the decision did not address this argument and was instead focused on the patent being in force for roughly thirteen years and the petitioner’s “failure to seek early review.”11 The Director’s focus solely on the age of the patent without attention to the petitioner’s explanation for delay raises concerns for petitioners who wait to file IPRs until the patent is asserted or enforcement is threatened.
Two more decisions involving settled expectations came on June 12, 2025. In Globus Medical v. Spinelogik, the patent owner emphasized the settled expectations factor, noting that the challenged patent had been in force for almost 8 years.12 The Director ultimately sided with the petitioner, noting that the challenged patent expired almost four years ago due to non-payment of maintenance fees.13 Here, the petitioner’s expectation of non-enforcement appeared to defeat the settled expectations argument.14 In Tessell v. Nutanix, the patent owner again invoked the settled expectations factor in their request for discretionary denial, highlighting the length of time the patent has been issued.15 Although the Director did deny institution, the decision was based on concerns over unfair dealings because the petitioners were the named inventors of the challenged patent and were now asserting its unpatentability.16 The patent owner prevailed, but the reasoning in the decision did not reference the settled expectation factor they had emphasized in their brief.17
The next decision came on June 18, 2025 in Dabico Airport Solutions v. AXA Powers APS.18 This decision relied almost exclusively on the settled expectations factor.19 The Director stated “the challenged patent has been in force almost eight years, creating settled expectations,” and further explained that while there “is no bright-line rule on when expectations become settled, in general, the longer the patent has been in force, the more settled expectations should be.”20 The Director then analogized this temporal benchmark to the six-year time limitation on damages under 35 U.S.C. § 286.21 Notably, the Director also emphasized how patent applications are almost always publicly available, encouraging interested parties to use the USPTO’s systems and publicly available resources to find them, ending with “actual notice of a patent or of possible infringement is not necessary to create settled expectations.”22 This reasoning appears to shift the burden toward petitioners to proactively monitor issued patents, even absent a threat or assertion by the patent owner.
A new wave of decisions involving the “settled expectations” factor issued on June 26, 2025, suggesting more clarity, but still leaving some uncertainty. In Intel Corporation v. Proxense LLC, the Director reinforced the burden on petitioners to affirmatively demonstrate why the patent owner does not have settled expectations.23 Citing the Dabico decision, the Director noted “the challenged patents have been in force over nine years, creating settled expectations.”24 To provide guidance the Director provided a non-exclusive list of examples that petitioners may address to rebut settled expectations, including whether a significant change in law directly impacts the patentability of the challenged claims, or whether a patent that has been in force for years was never commercialized, asserted, marked, licensed, or otherwise applied in the petitioner’s particular technology space.25 The Director framed these considerations as weighing against settled expectations, but the Director noted that ultimately the significance “bears on the Director’s discretion.”26
In Cambridge Industries USA, Inc. v. Applied Optoelectronics, Inc., the Director drew a distinction in how timing affects settled expectations based on the specific IPRs at issue.27 The patents challenged in IPR2025-00433 and IPR2025-00435 had been in force for seven and nine years, respectively, and were deemed to give rise to settled expectations.28 In contrast, the other three challenged patents, unrelated by family, were issued in 2020 and 2019, and the Director concluded that they had not yet given rise to settled expectations.29 The Director noted that those patents had not been in force for a “significant period of time.”30 This distinction highlights how fact-specific the settled expectations factor has become and that as shown here, the decision to discretionarily deny an IPR can rely exclusively on settled expectations, namely the amount of time the patent has been in force.
The Director’s emphasis on how long a patent has been in force as a basis for denial resembles a laches-like bar, one that penalizes delay despite the Supreme Court’s rejection of laches in patent law. In SCA Hygiene Products Aktiebolag v. First Quality Baby Products LLC, the Court held a patent owner may delay asserting a claim without fear of losing the right to collect damages for infringement that occurs within the six year statutory period.31 In contrast, it appears under the PTAB’s new approach, petitioners, often sued for infringement years after silence from patent owners, may now be implicitly expected to anticipate infringement risks and seek earlier review through the IPR process.
This shift introduces significant uncertainty, as petitioners may face non-institution of an IPR simply for the perceived delay in filing. Petitioners may now need to proactively monitor issued patents for potential infringement and consider using the post-grant review (PGR) process more frequently. A delay, even one justified by lack of notice, many not prevent denial of institution under the “settled expectations” factor. The need for petitioner’s proactiveness is prevalent in Intel Corp., where the Director encourages the petitioners to include information that weighs against a patent owner’s settled expectations.32 In the absence of such information, “such as in the present proceedings,” the Director states that “the Office is disinclined to disturb the settled expectations of the Patent Owner.”33
On the other hand, patent owners should also actively monitor these “settled expectation” decisions. If a patent has been in force for many years the patent owner should invoke the “settled expectations” factor by referencing the length of time the patent has been in force and establishing that the public had long-standing notice of the patent through its publication and easy accessibility. As the Dabico, Intel, and Cambridge decisions suggests, this timing could be dispositive.34
Finally, regardless of any factor relied upon, the Director’s decision whether to institute an inter partes review is “final and nonappealable.”35 As a result, once discretionary denial is granted, whether under the settled expectations factor or not, the petitioner has no statutory avenue for challenging the decision. This underscores the importance of new strategic considerations for petitioners with respect to timing, briefing, and anticipating how a discretionary denial factor such as settled expectations may impact institution of their IPR.