Latest Director Discretionary Denial Decisions Mostly Deny Institution, But Two Cases Defy ‘Settled Expectations’ Trend

This week, U.S. Patent and Trademark Office (USPTO) Acting Director Coke Morgan Stewart posted another round of Director Discretionary Denial decisions to the PTAB Decisions page, almost all of which denied institution to America Invents Acts (AIA) patent validity trials. Stewart’s recent rulings generally confirm the trend so far that a patent owner’s settled expectations with respect to patents that have been in force for six years or more hold significant weight, although in two cases this trend was bucked. The importance of petitioners demonstrating with sufficient detail both national security interests in their products and material patentability issues missed during prosecution at the Office also factored in the most recent decisions.

Settled Expectations

In 16 decisions issued on petitions for Director Discretionary Denial of institution in inter partes review (IPR) proceedings since Wednesday, September 3, Stewart granted the requests in full. In almost every decision, several of which involved petitions in multiple IPR proceedings challenging different patents, Stewart found that the totality of the evidence and arguments presented by the petitioner and patent owner weighed in favor of discretionary denial under the Director’s authority to institute codified at 35 U.S.C. § 314(a).

While considerations cited by Stewart varied across her rulings, settled expectations and the timing of parallel infringement proceedings continue to loom large, as they have since Director decisions on discretionary denial began being issued this June under the interim process for managing workloads at the Patent Trial and Appeal Board (PTAB). Stewart granted discretionary denial dismissing IPR petitions filed by chip giant Taiwan Semiconductor Manufacturing Co. (TSMC) that challenged four patents owned by Marlin Semiconductor due to the unlikelihood of the PTAB issuing a final written decision before the U.S. International Trade Commission conducts a trial in parallel proceedings next February. Similarly, an IPR petition filed by JinkoSolar challenging a LONGi Green Energy Technology patent was denied because time-to-trial statistics in the U.S. district court conducted parallel proceedings indicated that a trial date would occur about two weeks before the PTAB’s decision due date next November. Injunctive relief issued in parallel district court proceedings also favored discretionary denial for addressing anticipation arguments raised by petitioner Amneal Pharmaceuticals in its IPR petition challenging Nivagen Pharmaceuticals’ patents.

The Acting Director’s spate of discretionary denial decisions also confirmed that a patent owner’s settled expectations can be established before their second maintenance payment becomes due. Settled expectations were cited as a factor favoring discretionary denial of institution on two IPR petitions filed by Advanced Micro Devices (AMD) challenging a single patent owned by Advanced Cluster Systems that has been in force for about six years. While other discretionary denials based on settled expectations this week involved patents in force for up to 17 years, the institution denials on AMD’s petitions echo earlier decisions by Stewart finding six years in force to be adequate for creating settled expectations in the validity of patent rights issued by the USPTO.

Departure from the Trend

In one anomalous decision, however, Stewart declined to deny institution on an IPR brought by Home Depot against H2 Intellect LLC’s U.S. Patent 8,433,296, despite the patent having been in force for 12 years. While the age of the patent as well as the trial timing (scheduled for April 2026, while the Board’s decision is not likely to issue before November 2026) both favor discretionary denial—which has proven to be enough in previous Director Discretionary Denial decisions—here, Stewart was persuaded by Home Depot’s argument that its own settled expectations should prevail in this case. Stewart’s decision explained:

“Petitioner argues with respect to settled expectations that the challenged patent has not been commercialized, asserted, marked, licensed, or otherwise applied in its technology space. DD Opp. 13. Petitioner argues that Patent Owner only previously targeted smartphones, tablets, and watches, whereas Petitioner, Home Depot, is the proprietor of a chain of hardware stores and did not have reason to anticipate assertion of the patent against it. Id. Petitioner’s arguments are persuasive.”

This case does not seem to have been posted to the PTAB Decisions page.

Proving National Security and Other Interests

In several cases, IPR petitioners urged Stewart to decide against discretionary denial due to national security, economic and public interests served by the petitioner’s products. For example, petitioner TSMC claimed that its semiconductor chips are vital to major U.S. tech firms including Apple and Nvidia, and to U.S. military interests due to their use in TSMC’s CyberShuttle program. However, Stewart’s rulings found that TSMC’s arguments were not narrowly tailored to particular products or manufacturing methods, nor did the petitioner explain in sufficient detail why patent validity review was necessary to protect those claimed interests. Petitioner AMD also claimed that its products were vital to AI, supercomputer and healthcare applications, but Stewart concluded here as well that AMD did not sufficiently explain why national security interests warranted patent review.

Stewart partially found that discretionary denial did not apply to two other IPRs, making the total number of institutions allowed to proceed three out of the 19 total decisions posted this week. In partially denying patent owner Ningde Amperex Technology’s request for discretionary denial, Stewart incorporated reasoning from a previous ruling finding that Zhuhai CosMX Battery’s challenges during the early life of the patents favored institution, adding that the patent in the recent denial was added to the district court proceedings between the parties in an amended complaint following the previous discretionary denial decisions. In the same decision, however, Stewart granted Ningde’s request for discretionary denial in IPR2025-00722, explaining that it is the second petition filed by Zhuhai CosMX Battery against the patent at issue and therefore “[r]epeat challenges weigh against institution.” Furthermore, Zhuhai ranked the previous petition against the patent over the present one, further favoring discretionary denial.

USPTO Error Trumps Patent Owner’s Settled Expectations

In another decision denying the petition for discretionary denial, one of TSMC’s several IPR petitions against Marlin Semiconductor was allowed to proceed toward institution because TSMC presented persuasive reasoning supported by evidence that the USPTO erred during examination in a manner material to patentability. Interestingly, TMSC’s petition was allowed to proceed despite Marlin Semiconductor’s patent being in force for 15 years, indicating again that long-term settled expectations will not always be dispositive when significant patentability arguments are raised and sufficiently supported.

Repeat Challenges Give Rise to ‘Roadmapping’ Concerns 

Several of Director Stewart’s decisions reflect concerns that IPR petitioners are using repeat challenges as part of a long-term strategic goal to eliminate competition. Referred to as “roadmapping” by Stewart, such concerns were discussed in her grant of discretionary denial  to patent owner Croga Innovations against Amazon Web Services’ (AWS) IPR challenge. In that ruling, she noted that the present IPR was AWS’ fourth challenge against Croga’s patent, the first having been voluntarily dismissed and the other two denied institution by the PTAB on the merits. Stewart found that AWS’ admission that the present IPR petition addresses deficiencies identified by the Board in both denials gave rise to roadmapping concerns that favored discretionary denial.

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