iRhythm Creates a New Basis for Discretionary Denial

The recent decision in iRhythm Technologies v. Welch Allyn Inc., IPR2025-00377, et al. (Director Review: June 6, 2025) establishes a new and independent basis for discretionary denial: petitioner’s prior knowledge of the patent coupled with a failure to seek earlier review. This is the first decision explaining how the “settled expectations” consideration can be applied to grant discretionary denial.

Facts of iRhythm

In iRhythm, the patent at issue, U.S. Pat. No. 8,214,007 (“the ’007 Patent), issued in 2012. As of the filing of the petition in 2025, the ’007 Patent had been in force for over 13 years. iRhythm, at *3. The petitioner was aware of the application for the ’007 Patent by 2013 when it listed the published application in an IDS filed in petitioner’s pending patent application. Although not addressed in the Director’s decision, the patent owner also pointed out that the ’007 Patent itself was known by the petitioner by 2015 when it submitted another IDS in the same pending patent application. Patent Owner’s Br., Paper 7 (April 11, 2025), 30-31.

Petitioner iRhythm’s responsive brief did not dispute those facts, that is, that it had knowledge of the application for the ’007 Patent by 2013 and of the ’007 Patent itself by 2015.

iRhythm instead focused on the fact that the accused product (the Zio® cardiac-monitoring device) received Food and Drug Administration (FDA) clearance in 2013, 2017, and 2021, and patent owner Welch Allyn apparently never made an allegation of patent infringement until 2024. As iRhythm tells it, it was the party with a settled expectation—i.e., that it could continue to make and sell its products without interference because the patent owner had “sat on its rights” by not asserting the patent over the course of 12 years. Petitioner’s Opp., Paper 9 (May 12, 2025), 33.

In essence, the patent owner argued that it had settled expectations because its patent was in force for over 12 years, and during that period the accused infringer had knowledge of it and never challenged it. The petitioner argued that it had settled expectations because its product had been on the market for 12 years, and during that time the patent owner never made any allegation that it was infringing.

In this case, the Director found that the patent owner’s argument was more compelling for purposes of discretionary denial: “Petitioner’s awareness of Patent Owner’s applications and failure to seek early review of the patents” warrants denial. iRhythm, at *3.

Further, the Director found that the patent owner’s settled expectations outweighed multiple considerations under Fintiv that normally would militate against discretionary denial. For example, the Director observed that the final written decision for the inter partes review (IPR) would issue more than seven months before the trial date, a strong showing under Fintiv Factor two that would normally be dispositive against discretionary denial. The Director also found that the parties had made little investment in the parallel litigation, also weighing against discretionary denial under Fintiv Factor 3.

In finding that the petitioner’s prior knowledge of the patent and its failure to act outweighed these other factors, the Director has effectively established a new basis for discretionary denial under Section 314(a) to add the existing list (serial petitions—General Plastics; parallel litigation—Fintiv; and Section 325(d)—Advanced Bionics). Ladies and gentlemen, please be introduced to the settled expectations doctrine.

Scope of Settled Expectations

The contours of settled expectations as a basis for (or against) discretionary denial will be defined by future decisions from the Director. The Director’s March 2025 Patent Trial and Appeal Board (PTAB) interim workload management memorandum set forth: “Settled expectations of the parties, such as the length of time the claims have been in force.” On its face, there is nothing suggesting that only patent owners can have settled expectations.

Yet, the iRhythm decision at least implicitly found the patent owner’s settled expectations to be more persuasive than the petitioner’s alleged settled expectations from selling the product without interference from the patent owner over the course of 12 years. It may be the case that, on balance, the owner of a patent known to the petitioner who never challenged the patent over a lengthy number of years is entitled to a presumption that it will not be subjected to an IPR.

Still, it seems that the period when there was a product covered by the patent should be a consideration. For example, if iRhythm knew of the patent for 12 years but sold an accused product for only the last 2 years, it’s hard to argue that iRhythm should have filed a challenge long ago before it had the product.

Another open question is whether a patent having been in force for a lengthy period of time without challenge is sufficient to establish patent owner’s settled expectations, even if there is no evidence the petitioner had knowledge of the patent. In a regime where institution is discretionary, it may be that such a patent owner has a reasonable expectation that any adjudication would be by a jury pursuant to the Seventh Amendment and the clear and convincing presumption of validity under Section 312(a).

Implications for iRhythm

There has already been considerable speculation about how iRhythm will affect IPR practice going forward. Some believe that technology companies may be incentivized to file more IPRs earlier. Patent protection organizations like Unified Patents may become more active in filing IPRs. Of course, an increase in the number of petitions would run contrary to the Director’s general objective of modulating the PTAB’s workload consistent with its reduced capacity from departures over the last six months.

iRhythm could increase the incidence of third party submissions of prior art during prosecution, which dovetails with the Director’s focus on improving patent quality.

The decision could also result in an increase in third-party initiated ex parte reexaminations. By and large, patent owners would welcome that change because the statistics are much more favorable. The PTAB finds all challenged claims unpatentable about 70% of the time, whereas in reexamination the Central Reexamination Unit (CRU) finds all challenged claims unpatentable about 17% of the time. See

Closing Thoughts

Director Stewart continues to undertake major initiatives to improve operations at the U.S. Patent and Trademark Office and at the PTAB, in particular. The iRhythm decision is another step in transforming PTAB practice to bring some balance to the patent ecosystem.

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