Back to Fintiv? The USPTO’s Shifting Approach to Discretionary Denials in PTAB Proceedings

The Patent Trial and Appeal Board (PTAB) has undergone significant procedural shifts over the past few years, particularly with respect to discretionary denial of institution of trial proceedings under 35 U.S.C. § 314(a). One significant ground under which discretionary denial is exercised is provided by the controversial six-factor test first articulated in Apple Inc. v. Fintiv, Inc., IPR2020-00019, which allows the PTAB to deny institution of an inter partes review (IPR) petition when parallel district court litigation is pending.

Recent developments at the U.S. Patent and Trademark Office (USPTO) suggest that discretionary denial under Fintiv is far from settled. In fact, after a period of reform seemingly aimed at curbing the perceived overuse of discretionary denials, recent memos from USPTO leadership have reversed course—resurrecting the PTAB’s ability to deny petitions based on parallel proceedings, including those before the International Trade Commission (ITC).

The Origin of Discretionary Denials and the Fintiv Framework

Section 314(a) of the Patent Act gives the USPTO Director discretion to deny institution of IPRs even if the statutory thresholds for institution are met. In Fintiv, the PTAB laid out six non-exclusive factors to guide whether to exercise that discretion in light of parallel litigation:

1. Whether a stay exists or is likely in the district court case;
2. The proximity of the court’s trial date to the PTAB’s projected decision;
3. The extent of investment in the parallel proceeding;
4. The overlap between issues raised in the petition and those in the district court;
5. Whether the parties are the same in both proceedings; and
6. Other circumstances, including the merits of the petition.

These factors—designed to promote efficiency and avoid inconsistent outcomes between PTAB and other parallel proceedings—quickly became a flashpoint for debate, as petitioners complained they created uncertainty and undermined the value of the IPR process.

2022: Retrenchment Under Director Vidal

In June 2022, Director Kathi Vidal issued a guidance memorandum seeking to limit Fintiv. The memo declared that the PTAB would not deny institution based on:

• Parallel ITC proceedings;
• Cases where the petitioner filed a “Sotera stipulation” agreeing not to raise the same invalidity grounds in district court if institution is granted; or
• Petitions presenting a “compelling” case of unpatentability.

This guidance provided some relief for petitioners, effectively narrowing the PTAB’s discretion and placing greater emphasis on the merits of the case. Sotera stipulations, expanding the scope of IPR estoppel and thereby minimizing the amount of overlap between the PTAB proceeding and parallel litigation, also became a powerful tool for petitioners to avoid discretionary denials.

2025: A Return to Broad Discretion

In February 2025, the USPTO shifted course, rescinding the June 2022 Director Guidance Memo. Subsequent memoranda—one from the Chief Administrative Patent Judge on March 24, and another from Acting Director Coke Stewart on March 26—clarified the USPTO’s return to the Fintiv framework.

Key takeaways from these memos include:

• Fintiv Now Applies to ITC Proceedings: This reverses the 2022 guidance, exposing more petitioners to discretionary denial risk.
• Sotera Stipulations Are No Longer Dispositive: Although still “highly relevant,” they no longer guarantee that a petition will escape denial.
• “Compelling Merits” De-Emphasized: Merits remain a factor in the analysis but are no longer prioritized over other factors.
• Trial Date Evidence Remains Relevant: The PTAB will continue to consider the realistic timing of district court trials in evaluating whether to institute.

Perhaps most notably, the March 26 memo outlines a bifurcated approach to institution decisions. A panel composed of the Director and three APJs now makes an initial determination on discretionary denial. Only if that threshold is cleared does a second panel of three APJs evaluate the merits of the petition.

To facilitate this bifurcated approach, the memo also outlined a new briefing procedure on discretionary denial. Under this procedure, patent owners may file a discretionary denial brief after the petition is filed, discussing discretionary denial under Fintiv and other grounds, including § 325(d) and General Plastics. The petitioner may then file an opposition brief that addresses the patent owner’s arguments.

In addition to these new procedural requirements, the memo lists several substantive considerations that may be addressed by the parties in their discretionary denial briefing, including:

• 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.

While some of these factors overlap with those outlined in the existing discretionary denial tests, others—including the length of time the claims have been in force, reliance on expert testimony, and compelling economic, public health, or national security interests—appear to be new factors for consideration.

Given recent developments from the Trump administration, including government staffing cuts and return to work mandates, it seems that this change of position by the USPTO has been triggered by a corresponding reduction in workforce. Indeed, the memo also states that the PTAB will consider its ability to comply with its statutory deadlines and other workload needs in determining whether to discretionarily deny institution.

Strategic Implications for Petitioners

In light of these developments, practitioners should reevaluate their IPR strategies with a renewed focus on procedural nuance. Practical tips include:

• File Early: Don’t wait for parallel litigation to develop. Early filing can help avoid trial dates that conflict with the PTAB timeline.
• Consider a Sotera Stipulation: While no longer dispositive, these stipulations still weigh heavily against discretionary denial.
• Focus on New Art and Arguments: Relying on prior art and arguments that have not yet been considered can help avoid discretionary denial under § 325(d).
• Limit Multiple Petitions: Filing numerous petitions can increase the risk of denial under both Fintiv and General Plastic.
• Prepare for Briefing: Given the new discretionary denial briefing schedule, petitioners no longer need to include discretionary denial counterarguments in their petitions. However, petitioners should still be ready to substantively address discretionary denial grounds—especially under § 325(d) and the newly reanimated Fintiv factors in an opposition brief.
• Consider the Factors outlined in the March 26 Memo: Because these factors were specifically outlined in Acting Director Stewart’s memo, it seems likely that the PTAB will place emphasis on these factors when considering whether discretionary denial is appropriate.

Uncertainty and Opportunity

The USPTO’s latest guidance marks a swing back toward procedural discretion in PTAB trial institution decisions. While these changes reintroduce uncertainty, they also create opportunities—both in petition drafting and in responding to discretionary denial contentions.

For those navigating parallel litigation and PTAB proceedings, understanding the evolving contours of discretionary denial standards is no longer optional—it’s essential.

Image Source: Deposit Photos
Author: bradcalkins
Image ID: 7477730