iRhythm Urges Stewart to Reconsider and Clarify ‘Settled Expectations’ Basis for Discretionary Denial

On Thursday, July 3, iRhythm Technologies, Inc. filed a petition for Director Review of Acting Director Coke Morgan Stewart’s June 6 Director Discretionary Denial decision denying institution of five inter partes reviews (IPR) it brought against Welch Allyn, Inc., claiming Stewart’s decision has “unsettled the IP community.”

In the June 6 decision, Stewart denied institution of five IPRs brought by iRhythm against Welch Allyn, finding that, while several factors weighed against denial, the failure of the petitioner to challenge the patent sooner and the “settled expectations” of the patent owner superseded those factors.

Stewart’s March 2025 Patent Trial and Appeal Board (PTAB) interim workload management memorandum said: “Settled expectations of the parties, such as the length of time the claims have been in force.” As Stephen Schreiner of Carmichael IP has noted, “on its face, there is nothing suggesting that only patent owners can have settled expectations.”

Welch Allyn argued in its request for discretionary denial of institution that “because one of the patents has been in force since as early as 2012 and Petitioner was aware of it as early as 2013—having cited the then-pending application that issued as the challenged patent in an Information Disclosure Statement Petitioner filed in its own patent application—settled expectations favor denial of institution.” Stewart found this argument persuasive and afforded more weight to it than all of the other factors. “Petitioner’s awareness of Patent Owner’s applications and failure to seek early review of the patents favors denial and outweighs the above-discussed considerations,” she wrote.

But in iRhythm’s petition for Director Review it argued that Welch Allyn let its patents lie dormant between 2012 and 2024, when it filed a lawsuit against iRhythm. “It never commercialized nor asserted them and now seeks simply to tax the commercial market it watched iRhythm build through millions of dollars of investment,” the petition said.

iRhythm also argued that Stewart’s rationale “violates the Director’s own binding precedent in NHK [Spring]”, a 2020 decision that Director Iancu designated precedential and remains binding authority.”

In NHK Spring, which is designated as precedential, the Patent Owner, Intri-plex Technologies, Inc., argued in part that NHK Spring knew about the patent for more than 10 years but gave “no explanation for why it waited so long to file the Petition.” But the Patent Trial and Appeal Board (PTAB) reasoned that “Petitioner filed the Petition shortly before the one-year bar in 35 U.S.C. § 315(b) expired. The Petition, therefore, was timely, and Patent Owner does not apprise us of any tactical advantage, or opportunity for tactical advantage, that Petitioner gained by waiting to file the Petition.”

Robert Counihan of Fenwick & West, counsel to iRhythm, said in a statement emailed to IPWatchdog that he is hopeful Stewart will consider these arguments, “including the expectations Welch Allyn created by waiting 12 years to assert its patents following the 2012 launch of iRhythm’s Zio® products and the policy and legal implications of denying institution here.”