Stewart Issues First Decisions on Discretionary Denial Under Interim Workload Management Process

The first four decisions on discretionary denial of institution under the U.S. Patent and Trademark Office’s (USPTO’s) recently-implemented interim process for Patent Trial and Appeal Board workload management were issued Friday afternoon, May 16.

The Office announced in late March that Acting USPTO Director Coke Morgan Stewart would be taking over requests for discretionary denial of inter partes review (IPR) or post grant review (PGR) proceedings under a new bifurcated process. That announcement came one month after Stewart rescinded former USPTO Director Kathi Vidal’s “Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation.” The Vidal memo downplayed broad application of Apple Inc. v. Fintiv, Inc. and the six factors outlined in that precedential decision, which the PTAB considers in determining whether to institute a post-grant proceeding where there is parallel district court litigation.

But Stewart’s February announcement rescinding that memo said that parties to post-grant proceedings “should refer to [PTAB] precedent for guidance, including Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential) and Sotera Wireless, Inc. v. Masimo Corp., IPR2020-01019, Paper 12 (PTAB Dec. 1, 2020) (precedential as to § II.A).” It added: “To the extent any other PTAB or Director Review decisions rely on the Memorandum, the portions of those decisions relying on the Memorandum shall not be binding or persuasive on the PTAB.”

Under Stewart’s interim procedure, the Director will consult with at least three PTAB judges and will determine whether discretionary denial of institution of the IPR or PGR is appropriate. If discretionary denial is appropriate, the Director will issue a decision denying institution. If discretionary denial is inappropriate, the Director will issue a decision on the discretionary denial issue and refer the petition to a three-member panel of the PTAB assigned in accordance with Standard Operating Procedure (SOP) 1 (Rev. 16). From that point forward the assigned three-member panel will handle the case in the normal course, starting with a decision on institution based on the merits and other non-discretionary statutory considerations.

In the first four decisions, the Director ruled that two of the requests for discretionary denial were warranted and two were not.

In Twitch Interactive, Inc. v. Razdog Holdings LLC, Stewart explained that the request was based primarily on a parallel district court proceeding in the Northern District of California that did not have a scheduled trial date. The Petitioner cited statistics showing that the earliest trial date was likely to be February 2027, “which would be significantly after the projected final written decision date” of July 30, 2026. Petitioner also presented persuasive evidence that a stay was likely to be granted. The request for discretionary denial was therefore ultimately denied.

In Amazon.com v. NLGiken, Inc., Stewart also found that denial was inappropriate based on timing considerations. The scheduled trial date in the district court case is June 22, 2026, “but the time-to-trial statistics suggest trial would not begin until December 2026.” Since the projected Final Written Decision date is June 30, 2026, discretionary denial was denied.

In Arm Ltd. and Mediattek, Inc. v. Daedalus Prime LLC, by contrast, the Director determined the time to trial would be between March and May 2026 and the FWD in the IPR was projected to be June 2026. “As such, it is unlikely that a final written decision in this proceeding will issue before district court trial occurs,” said the decision.

Finally, in Ericsson and Verizon Wireless v. Procomm International, the request to discretionarily deny a petition for IPR was granted because “a trial date in the related district court litigation will precede the projected final written decision issuance date in this proceeding by nine months.” While the petitioner said it waited nearly a year to file the petition for IPR due to the patent owner’s proposed amended infringement contentions, Stewart said the petitioner did “not explain sufficiently the nature of those proposed amendments and how they impacted the timing of the Petition.”

James Carmichael of Carmichael IP, who acted for Procomm, said in a statement sent to IPWatchdog that “it is notable that all four Director decisions discuss the expected date of District Court trial versus the expected date of a PTAB Final Written Decision,” but noted that “the decisions addressed other factors as well and took pains to emphasize the determinations were based on a ‘holistic assessment of all of the evidence and arguments presented.’”

Carmichael said his firm is “gratified to see Acting Director Stewart taking such a careful approach in implementing this new process” and that “taken together, the four decisions remind us that Inter Partes Review was meant as an alternative to litigation, not as a second bite at the apple for accused infringers who may have already lost in court.”

Additional decisions under the interim process are likely to be issued in the coming weeks.

This article was updated on May 17 to include Carmichael’s comments.