In February 2025, former Acting USPTO Director Coke Morgan Stewart rescinded guidance from former Director Kathi Vidal that had limited the practice of discretionary denials in America Invents Act (AIA) reviews under the NHK-Fintiv rule—returning to a more expansive version of that Patent Trial and Appeal Board (PTAB) practice. Now, the Federal Circuit has declined to review those changes in response to challenges from three impacted PTAB petitioners: On November 6, the appellate court denied three petitions for mandamus review from Motorola Solutions, SAP, and Alphabet (Google) and Samsung, rejecting arguments that the USPTO's changes violated the petitioners' due process rights and were procedurally invalid for being implemented without notice-and-comment rulemaking.
The aforementioned guidance, issued by Vidal in June 2022, limited discretionary denials based on parallel litigation under the NHK-Fintiv rule by creating several safe harbors allowing petitioners to avoid such denials in certain circumstances: Most relevantly here, the guidance provided that discretionary denial would not occur where petitioners agree not to assert invalidity grounds that they raised or reasonably could have raised at the PTAB in a parallel district court case—formalizing a practice established in the PTAB's December 2020 precedential decision in Sotera Wireless v. Masimo, now known as a "Sotera stipulation". The guidance also exempted petitions that presented "compelling, meritorious challenges", and established that the NHK-Fintiv factors apply only to district court litigation and not investigations before the ITC, since the latter lacks the power to issue binding invalidity rulings. Additionally, the guidance limited the Board's ability to deny institution based on the proximity of the district court's scheduled trial date to the PTAB's final written decision deadline.
The following month, on March 24, PTAB Chief Administrative Patent Judge (APJ) Scott Boalick clarified the withdrawal in a memorandum (the "Boalick memorandum") that explicitly repudiated the key points from the rescinded 2022 guidance: It established that Sotera stipulations may be "highly relevant" but will no longer be dispositive on their own; underscored that "compelling merits" alone cannot be "dispositive" in the discretionary denial inquiry, providing instead that the merits are just one of the factors to be considered in a "balanced assessment"; stated that the NHK-Fintiv factors will also apply for parallel ITC actions; and loosened the "time to trial" factor by allowing any evidence bearing on district court trial dates or ITC final determination target dates. Of particular relevance here is that the Boalick memorandum also provided that the withdrawal applied to all PTAB proceedings in which the Board had not yet issued an institution decision or in which a request for rehearing or director review was filed and remained pending.
The three petitioners mentioned above—SAP, Motorola Solutions, and Google and Samsung—had all filed IPRs prior to the withdrawal of the Vidal guidance, in which they agreed to broad Sotera stipulations in order to avoid discretionary denial as provided in the guidance.
For both the SAP and Google-Samsung IPRs, the withdrawal of that guidance, and the Boalick memorandum's extension of that withdrawal to pending IPRs, both took place after they filed their respective petitions but before the PTAB had issued its institution decisions. As a result, the Board discretionarily denied those petitions in the first instance, finding that the petitioners' respective Sotera stipulations would not sufficiently avoid duplicative litigation because they would not bar the companies from asserting district court invalidity defenses based on the public use or sale of prior art systems, a ground not available through IPR. While the Motorola IPRs had already been instituted by the time that Stewart withdrew the guidance, the Acting Director reviewed those decisions at the patent owner's request—deinstituting the IPRs after similarly finding that the PTAB had given Motorola's Sotera stipulation too much weight because Motorola also asserted district court invalidity arguments based on system prior art that the stipulation was unlikely to moot.
SAP, Motorola, and Google and Samsung (in that order) then turned to the Federal Circuit—but since direct appeals of matters related to institution are barred under the Supreme Court's Cuozzo Speed Technologies v. Lee decision, they did so through petitions for writ of mandamus, which Cuozzo—as interpreted by the Federal Circuit in Mylan Laboratories v. Janssen Pharmaceutica—allows for "colorable constitutional claim[s]" related to discretionary denials.
All three sets of petitioners asserted that by withdrawing the guidance without explanation and without considering the reliance interests of petitioners banking on Sotera stipulations, and then by making the withdrawal apply retroactively to pending IPR petitions, the USPTO violated the Due Process Clause of the Fifth Amendment to the US Constitution. Google, Samsung, and SAP additionally argued that the withdrawal effectively rewrites the estoppel statute by requiring that petitioners offer a much broader stipulation than the statute requires to have any hope of avoiding Fintiv, thus violating the separation of powers. Google, Samsung and Motorola further contended that both the withdrawal of the Vidal guidance and the "retroactive" application of that withdrawal violate the Administrative Procedure Act (APA), asserting that when Vidal adopted a "binding" rule through the June 2022 guidance, it could not be later rescinded by Stewart without notice-and-comment rulemaking.
A closer look at the Motorola and SAP mandamus petitions, plus further details on some of the amicus briefs filed in those proceedings, can be found here.
The Federal Circuit denied all three petitions on November 6, doing so precedentially for Motorola's petition (see here) and nonprecedentially for those from SAP (see here) and Google and Samsung (see here).
In its In re: Motorola decision, the Federal Circuit held that Motorola had not presented "colorable constitutional claims" sufficient to justify mandamus review of an institution-related decision. In part, the court rejected Motorola's argument that its alleged entitlement to "consideration of its petitions on the merits without risking discretionary denial based on parallel district court proceedings" was a property right protected under the Due Process clause. In part, the Federal Circuit held that its precedent distinguishes between applications for discretionary benefits and those for nondiscretionary benefits where a particular outcome is required based on a showing of eligibility; noting that only the latter implicates due process concerns, the court found that the practices here at issue do not fall into that category. Additionally, the appellate court determined that Motorola merely had a "unilateral expectation based on the prior interim procedural guidance" rather than a property right in this context, concluding (similar to the court's conclusion in its Mylan decision) that Motorola had shown no right to having its petition heard without reference to district court litigation or a right to IPR in general.
Nor did the Federal Circuit find a due process violation through the withdrawal of the April 2022 Vidal memo limiting Fintiv, finding that when Motorola relied on the Vidal memo in submitting a Sotera stipulation, it did so with the knowledge that the interim guidance could be withdrawn at any time. The court also underscored that the withdrawal of the guidance did not limit Motorola's ability to bring its validity challenges elsewhere—just via IPR.
The Federal Circuit also rejected Motorola's arguments based on alleged violations of the APA. For its argument that the USPTO's changes required notice-and-comment rulemaking, the court held that the petitioner could obtain the same relief through a standalone APA suit in district court and that its attempt to argue otherwise was "nothing but an attempted end run around § 314(d)'s bar on review". The court further held that in Mylan, it had already rejected the argument that mandamus review was warranted where an agency allegedly exceeds its authority. Finally, the Federal Circuit disagreed that the Acting Director had acted "arbitrarily and capriciously" by withdrawing the guidance without providing sufficient justifications or consideration of reliance interests, finding instead that these arguments are not reviewable because they concern matters relating to the director's discretion to deny institution.
In its decisions on the SAP and Google-Samsung petitions, the Federal Circuit rejected the same arguments detailed above by reference to its Motorola decision. In In re: Google, the court further rejected Google's and Samsung's argument that the PTAB had violated the separation of powers by requiring broader stipulations than required by statute—finding that this misconstrued the Board's argument. Rather, the court concluded that the PTAB had instead found that institution would be inefficient, notwithstanding Samsung's Sotera stipulation, because the Board would still be considering the same claims for which "validity would have previously been tried before the district court" more than seven months before the PTAB's FWD deadline. Only the Google decision dealt with separation of powers, though SAP had also raised that issue in its mandamus petition.
USPTO Continues to Limit IPRs as Squires Revamps Institution Process
The Federal Circuit's decisions come as the USPTO continues to make changes that have further constrained the ability of IPR, building on developments earlier this year. As detailed in RPX's third-quarter review, Acting Director Stewart took over the discretionary denial phase of the AIA review institution process (leaving the merits and nondiscretionary factors to PTAB panels as before) under an interim procedure established in March.
Stewart subsequently used that authority to issue a series of rulings that markedly expanded the use of discretionary denials—most significantly and controversially, through a line of decisions that have denied institution based on the "[s]ettled expectations of the parties, such as the length of time the claims have been in force" (one of the factors established under the March memorandum detailing the new institution process). Beginning with her early June decision in iRhythm Technologies v. Welch Allyn, Stewart made it clear that she would deny institution solely on the basis of such "settled expectations" for patents that have been in force for longer periods of time. While Stewart held that there is no bright-line rule for exactly how long patents must be in force, the age of the patents subjected to denial on this basis has been steadily ticking downward, most recently including rejections of IPRs against patents issued as recently as three years ago. Stewart also ruled that subsequent acquirers of older patents can still benefit from "settled expectations", even when they obtained the challenged patents much more recently than the issuance date. SanDisk has challenged this use of "settled expectations" in a currently pending mandamus petition that also raises the Sotera issue discussed above.
Since then, new USPTO Director John Squires has further revamped the institution process in the wake of his September 18 confirmation. On October 17, Squires announced that he would take over all aspects of institution, including the assessment of discretionary denial requests as well as the merits and nondiscretionary factors—making those determinations personally, in consultation with at least three PTAB APJs. Squires also established that in most cases he would only issue a "summary notice" for decisions granting or denying institution—i.e., with no accompanying written decisions—and that he would only issue full institution decisions "[i]n proceedings involving novel or important factual or legal issues". The new process took effect on October 20 and only covers petitions not yet filed or instituted, as the October 17 memorandum explains that the AIA reviews that have already been referred to a panel for the merits prong of the interim institution process will "remain" with a panel.
Squires has since issued his first batches of institution decisions in a series of consolidated notices that summarily denied institution in bulk for numerous, often unrelated IPRs. Thus far (as of the date of this report), Squires has only issued a scant few decisions that detail his reasoning, in each instance undoing a prior institution decision. For instance, in two Google IPRs against Bootler, LLC, he discretionarily denied institution (revisiting a prior referral to the PTAB after the petitioner, which initially did not request discretionary denial, did so after circumstances changed) because the district court had, in a parallel case, found the challenged claims patent-ineligible under Section 101 (a practice that has been challenged in a pending mandamus petition filed by HighLevel). In another IPR filed by Tesla against Intellectual Ventures LLC, Squires overturned a PTAB panel's August decision to institute trial after criticizing Tesla for taking inconsistent positions on claim construction.
However, perhaps the most noteworthy of Squires's recent decisions thus far relates not to AIA review but to ex parte reexamination. On November 3, Squires took the unusual step of ordering an ex parte reexam sua sponte (i.e., on his own initiative) of a Nintendo patent issued in September (12,403,397) that is broadly directed to a game mechanic where a "sub character" is summoned that then fights an enemy character either automatically or manually. The patent has generally been characterized as covering traditional Pokémon game mechanics and has been the subject of some debate among stakeholders and the gaming community (see, e.g., here). Squires determined that that two older patent applications—one filed by Konami in 2002 and the other by Nintendo in 2019—raised substantial new questions of patentability. The move is significant in part because USPTO directors have rarely invoked the power to order reexams sua sponte; Games Fray reports that the last use of that authority was in 2012.
Also on October 17, the USPTO also published a Notice of Proposed Rulemaking (NPRM) that would bar AIA review institution unless petitioners stipulate not to raise invalidity challenges under Section 102 or 103 in parallel litigation, where the parallel forum would likely address validity on that basis before the PTAB issues its final written decision, or where the patent's validity has already been upheld by another forum.
For details on those changes to the institution process and the new NPRM, see "PTAB Rule Revamp: Director Takes Over Institution; Proposal Restricts IPRs with Parallel 102/103 Challenges" (October 2025).
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