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John Squires, the new Director of the U.S. Patent and Trademark Office (USPTO or the Office), has confirmed that the Office will continue its discretionary review program for patent reviews. Shortly after taking office on Sept. 23, Director Squires <a href="https://www.uspto.gov/sites/default/files/documents/dsco-delegation.pdf" target="_blank" rel="noreferrer noopener">delegated</a> responsibility for discretionary denial decisions to Deputy Director Coke Morgan Stewart. Deputy Director Stewart, who originally <a href="https://www.uspto.gov/sites/default/files/documents/InterimProcesses-PTABWorkloadMgmt-20250326.pdf" target="_blank" rel="noreferrer noopener">created</a> the discretionary denial program in March to help manage the Patent Trial and Appeal Board’s (PTAB or the Board) workload, will continue to oversee these decisions.

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The USPTO typically announces its Director Review decisions on Fridays. Last week was no exception. The USPTO issued 21 new decisions on Sept. 26. Eighteen decisions denied institution and three decisions referred the institution decision to a PTAB panel for a merits-based analysis. These decisions cite factors that, by now, are familiar to PTAB practitioners.

The USPTO’s denial decisions are driven largely by the posture of counterpart district court cases and the Deputy Director’s determination that patent owners have “settled expectations” that their patents will not be challenged after a certain time:

Three denial decisions (IPR2025-00899, -00943, -00944) turned solely on expected dates of trial in counterpart district court cases. In these cases, since it was unlikely that the USPTO would issue its final written decision before the counterpart case reached trial or that the district court would stay its proceedings, the USPTO denied instituting <em>inter partes</em> reviews (IPRs) because doing so would raise significant duplication of effort, party expense, and risk of inconsistent decisions.

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The Office cited the same factors as reasons to deny institution in four other IPRs (IPR2025-00932, -00942, -00958, -00963). These cases each involved patents that were granted seven to nine years prior, which led the Office to conclude also that settled expectations are present.

The Deputy Director cited settled expectations as a factor in denying review in another decision (IPR2025-00970) that challenged a patent that was granted eight years earlier. Here, although there were conflicting time-to-trial statistics, the parties had made meaningful investments in the district court case and a <em>Markman</em> hearing was scheduled to occur before the due date for an institution decision.

Seven denial decisions (IPR2025-00964, -00965, -00966, -00981, -00982, -01001, -01002) presented identical discretionary considerations as presented in earlier-filed IPRs (IPR2025-00487, -00561). Those earlier-filed IPRs also were driven by settled expectations factors and concerns over duplication of effort, party expense, and risk of inconsistent decisions. The Deputy Director simply incorporated analyses from those earlier-denied IPRs into her new decisions.

A denial decision in IPR2025-00971 cited settled expectations and party dealings as a basis to deny institution even when a parallel district court case had been stayed. Here, the patent had been in force for eight years. The parties were technology partners for several years, and the patent owner had notified the petitioner of the patent when it was filed as a provisional application in 2013, when it was filed as a non-provisional application in 2014, and when it was granted in 2017. The petitioner’s actual notice of the patent was a further factor in denying institution.

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A denial decision in IPR2025-00958 presents new wrinkles on familiar themes:

First, the Deputy Director considered the timing of a district court case filed against the petitioner’s customers, one in which the petitioner is not involved, as a factor to deny institution. Here, again, the decision cites expected duplication of effort, party expense, and risk of inconsistent decisions.

Second, the Deputy Director determined that settled expectations applied to the challenged patent, which was nine years old, even though two earlier-filed IPRs already invalidated claims from the challenged patent. One claim (No. 7) from the patent survived a prior IPR challenge, but, because -00958 discussed that earlier IPR in its petition, the Deputy Director determined that the argument “raises concerns of road mapping and weighs in favor of discretionary denial.”

Finally, the Deputy Director denied institution in IPR2025-00941, which challenged a patent that initially had been asserted in a counterpart district court case but had been withdrawn from that case. The Deputy Director determined it would be inefficient for the Board to review a patent that would not be further addressed in a counterpart case.

The USPTO’s referral decisions also echo themes from earlier decisions:

In IPR2025-00935 and -00936, the USPTO referred the institution decision to PTAB panels notwithstanding the likelihood that a counterpart district court case would reach trial before the IPRs were resolved because the petitioner demonstrated that the USPTO may have erred when the challenged patents were prosecuted. Specifically, it was alleged that the examiner overlooked teachings from a prior art reference that was available to the examiner during prosecution. This decision seems well aligned to the Deputy Director’s prior <a href="https://www.law360.com/ip/articles/2316863/acting-uspto-leader-says-new-policies-will-bolster-patents" target="_blank" rel="noreferrer noopener">observations</a> that it is appropriate to invest Board resources to investigate potential errors in prosecution.

The referral decision in PGR2025-00050 suggests that early challenges to patents will be favorably received. Here, the Deputy Director adopted her reasoning from nine related earlier-filed PGRs, which involved related patents and were referred to a PTAB panel for merits analysis. In those PGRs, time-to-trial statistics suggested that a counterpart district court case would not be tried until May 2030 and the petitioner challenged the patents quite early in their lives. This decision also is well aligned to the Deputy Director’s prior <a href="https://www.law360.com/ip/articles/2316863/acting-uspto-leader-says-new-policies-will-bolster-patents" target="_blank" rel="noreferrer noopener">observations</a> that early challenges to patents are to be encouraged over later ones.

The USPTO shows no signs that it will deviate from its discretionary denial program anytime soon.

USPTO Director Squires’ First Move: Delegating Discretionary Denial Review Authority to Deputy Director Stewart