PTAB Pendulum Swings in Favor of Discretionary Denial

by | Apr 3, 2025 | PTAB News, PTAB Trial Basics, Trial Institution

By Joshua Nightingale and Daniel Sloan –

Recent developments at the USPTO suggest a significant shift in favor of the PTAB exercising discretionary denial and uncertainty on behalf of parties to PTAB proceedings.  On March 24, 2025, following the February 28, 2025 rescission of former Director Vidal’s June 21, 2022 memorandum entitled “Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation,” Chief Administrative Patent Judge Scott R. Boalick circulated a memorandum to Members of the PTAB (covered here).  Two days later, Acting Director Coke Morgan Stewart circulated a separate memorandum (covered here) entitled “Interim Process for PTAB Workload Management.”

Judge Boalick’s memorandum clarifies that

  • the PTAB will apply the Fintiv factors when there is a parallel proceeding at the International Trade Commission,
  • a timely-filed Sotera stipulation is not dispositive on discretionary denial, but is rather part of the Fintiv analysis,
  • the PTAB may consider any evidence the parties make of record regarding proximity of trial or final determination in parallel district court or ITC proceedings, and
  • compelling merits alone is not dispositive in making a discretionary denial assessment.

Acting Director Stewart’s Memorandum indicates that the PTAB faces a considerable administrative overload due to staff shortages and expected staff shortages related to the Federal return-to-office requirement, along with efforts to reduce the total number of federal employees.  The Interim Processes are a purportedly temporary measure designed to combat shortages.  Even so, the Interim Processes represent a significant departure from prior practice by providing patent owners more room in their briefs to address discretionary denial issues.  Aside from allowing bifurcated review—i.e., briefing on discretionary denial issues and separately on the merits—the new procedure provides that the Director, consulting with at least three PTAB judges, will determine if discretionary denial is appropriate before a case can proceed to merits review.

These memoranda mark a strong return to the expansion of the scope of discretionary denial authority that emerged during Director Andrei Iancu’s tenure.  During the early days of NHK/Fintiv and Director Iancu, panels had wide latitude to employ their discretion to deny based on parallel proceedings, with respective panels sometimes coming to opposite conclusions on similar facts.  The PTAB first identified the “advanced state of the district court proceeding” as a factor warranting denial under § 314(a), notwithstanding a statutorily compliant petition, in NHK Spring Co., Ltd. v. Intri-plex Technologies, Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (discussed here).  Then, in Apple Inc. v. Fintiv, Inc., (discussed here) the PTAB expanded to six factors for evaluating whether to deny institution when parallel proceedings were involved:

  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 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 petitioner and defendant in the parallel proceeding are the same party;
  6. Other circumstances that impact the Board’s exercise of discretion, including the merits.

Fintiv, IPR2020-00019, Paper 11 at 6 (March 20, 2020).

During this era of expanded discretionary denials, the number of cases that raised parallel litigation as a ground to deny institution doubled.  After the now-rescinded memorandum was published, the rate of discretionary denial decreased.  In sum, the June 2022 Memorandum (originally covered here) provided multiple avenues for petitioners to avoid discretionary institution denials under Fintiv, along with providing petitioners the ability to rely on a Sotera-style stipulation not to pursue similar grounds in a parallel district to avoid discretionary denial.

Under the new framework, patentees will have the opportunity to separately brief discretionary denial issues.  Moreover, given Judge Boalick’s guidance, the Sotera-stipulation route will still be a consideration, though not as compelling to the PTAB as previously.  ITC proceedings will again become relevant to the Fintiv analysis.  Based on Acting-Director Stewart’s memorandum, the parties will be permitted to address “all relevant considerations,” in their discretionary denial briefing.  While this mirrors Fintiv factor 6, it may nonetheless indicate an intent to broaden the bases for discretionary denial, favoring patent owners.  And with the potential for administrative overload, panels may be more tempted than ever before to discretionarily deny review to keep caseloads manageable.

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Matthew Johnson

Partner at Jones Day
Matt Johnson is one of the Firm's primary contacts on practice before the PTAB. Currently co-chairing the Firm's PTAB subpractice and involved in proceedings at the Board since the first day of their availability in September 2012, Matt regularly represents clients as both petitioners and patent owners at the Board. He further works as an advocate for clients in appeals from Board proceedings at the Federal Circuit.