In Sig Sauer Inc. v. Lone Star Future Weapons Inc., IPR2025-00410, Paper 13 (PTAB June 26, 2025), Acting Director Coke Morgan Stewart (Acting Director) exercised discretion to deny institution of the inter partes review (IPR) based primarily on a parallel declaratory judgment of a non-infringement counterclaim in a trade secret case. This was despite the fact that the validity of the patent was not at issue in the parallel litigation. The decision was further supported by the patent owner's "settled expectations," given the age of the patent.
Although the challenged patent was not part of the original trade secret suit, the Acting Director found the existence of "related litigation" persuasive in declining review. Most Fintiv discretionary factors focus on overlapping issues in parallel proceedings to avoid conflicting outcomes and inefficiency. In this case, there was no clear overlap between issues in the petition and those in the district court case. Trade secret disputes fall outside the PTAB's scope, and the only patent issue raised was noninfringement—not invalidity. The issue of noninfringement is unrelated to validity challenges addressed in IPRs. Using such litigation as a basis for discretionary denial underscores the expansive reach of the Acting Director's new discretionary denial process.
The Acting Director also found that the timing of the petition, combined with the patent's age and the petitioner's prior decision not to challenge it while developing a competing product, weighed against institution. In this case, the patent had been in force for ten years, creating "settled expectations."
This decision reinforces for both petitioners and patent owners that the Acting Director is willing to entertain new reasons to either refer or deny. Even litigation unrelated to patent validity, such as trade secret disputes, may be used to justify denial. Both petitioners and patent owners should think creatively about arguments to present to the Board and not feel constrained to the normal Fintiv fact pattern.
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