On March 26, 2025, the acting USPTO director, Coke Morgan Stewart, published a Memorandum addressed to all judges for the Patent Trial and Appeals Board (PTAB), in which Acting Director Stewart detailed an interim bifurcated process for discretionary denials as a temporary measure to facilitate PTAB workload management (the "2025 Memorandum"). Currently, this interim bifurcated process is temporary, with no indication that it could become permanent.
Under the bifurcated process, PTAB judges analyze discretionary denials by first considering : "(i) discretionary considerations" and then addressing the "(ii) merits and other non-discretionary statutory considerations."[1] The new process requires the director to assess every petition, with the assistance of at least three PTAB judges, and determine whether a denial is appropriate based on "discretionary considerations," which include "the strength of the unpatentability challenge."[2] If it is not appropriate to deny a petition for post-grant proceedings, the director will issue a decision, and a three-member panel of the PTAB will analyze the merits and other non-discretionary statutory considerations. Under this shift, the USPTO director will be involved at the very beginning of the PTAB process. Previously, the director was limited to weighing in on cases already reviewed by the PTAB.
As Venable analyzed just last month, the USPTO rescinded an earlier Memorandum issued by former Director Vidal in June 2022, which had set out the framework for determining discretionary denials of post-grant proceedings established in Apple, Inc. v. Finitiv, Inc.[3] Under the June 2022 Memorandum, the effect of Fintiv was more limited: PTAB judges did not apply Fintiv to parallel proceedings before the U.S. International Trade Commission (ITC) or discretionarily deny a petition in which the petitioner agreed to a Sotera stipulation.[4] Following the recission, it became unclear whether a parallel ITC proceeding precluded the application of Fintiv or if a Sotera stipulation was enough on its own to challenge a discretionary denial.
Just a few days before the 2025 Memorandum, Chief Administrative Patent Judge Scott R. Boalick had released his own Memorandum setting forth his guidance on the recission of the June 2022 Memorandum:
- Fintiv will apply when there are parallel ITC proceedings. Specifically, the Board is more likely to deny a petition if an investigation in a parallel ITC proceeding is anticipated to conclude (via the scheduled target date) before the Board's deadline to issue a decision
- A Sotera stipulation will not be dispositive by itself in determining whether a discretionary denial is appropriate
- The application of Fintiv will involve a holistic, balanced assessment of all factors, and compelling merits alone will not be dispositive
In the June 2022 Memorandum, former Director Vidal limited Fintiv to the facts of that case, namely directing that it applied only when there are parallel district court proceedings. While neither district courts nor the ITC can issue decisions that are binding on the PTO, district courts do hold authority to invalidate patents, unlike the ITC. Chief Judge Boalick acknowledged that, even though not preclusive, "it is still difficult as a practical matter to assert patent claims that the ITC has determined as invalid."
It is unclear how Chief Boalick's Memorandum will interact with the 2025 Memorandum, which does not specifically mention how the PTAB will apply Fintiv, other than stating that the Board will abide by its precedent. Along with Fintiv and other existing Board precedent, the PTAB and now the director will address other discretionary considerations, including[5]:
- 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
The USPTO has provided a clearinghouse for Director Review requests on its website, tracking requests received and posting recent decisions. Of note, there was a decision issued on March 28, 2025 in Motorola Solutions, Inc. v. Stellar, LLC, where the acting director granted Director Review, vacated the Board's prior decision instituting inter partes review, and denied the petition. The acting director found that the Board mis-weighed petitioner's Sotera stipulation, given the substantial investment in the district court proceeding and because the invalidity arguments presented in the district court were more expansive and included combinations of art used in the petition with unpublished system prior art.
Venable will continue to monitor these developments and how the PTAB handles Fintiv analysis under the 2025 Memorandum.
[1] United States Patent Office, "Interim Processes for PTAB Workload Management" (March 26, 2025), https://www.uspto.gov/sites/default/files/documents/InterimProcesses-PTABWorkloadMgmt-20250326.pdf (hereinafter "2025 Memorandum").
[2] 2025 Memorandum at 3.
[3] IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential).
[4] A petitioner can provide a Sotera stipulation, where it agrees "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." See Sotera Wireless, Inc. v. Masimo Corp, IPR2020-01019, Paper 12 (PTAB Dec. 1, 2020) (precedential as to Fintiv factor § II.A).
[5] 2025 Memorandum at 3.
