USPTO Chief Wields ‘Settled Expectations’ Rule to Halt New IPRs

The U.S. Patent and Trademark Office’s acting director, Coke Morgan Stewart, has for the first time refused to institute inter partes reviews solely on the ground of the parties’ “settled expectations,” applying a discretionary-denial framework she issued in March. In separate June rulings, Stewart blocked five petitions filed by iRhythm Technologies against Welch Allyn heart-monitor patents and a petition by Dabico Airport Solutions against AXA Power, citing the age of the patents and the petitioners’ delay in seeking PTAB review. Under the bifurcated process, the director now screens petitions for discretionary reasons before a PTAB panel assesses merit. The new factor allows denial when a patent has been in force long enough to create a reasonable expectation it will not be challenged at the Board—even absent explicit notice to the petitioner. Practitioners say the approach could force companies, particularly in pharmaceuticals where patents are listed in the FDA’s Orange Book, to file PTAB challenges much earlier to avoid automatic rejection. The Federal Circuit signaled interest this week in whether the evolving denial policy revives a stalled lawsuit by advocacy groups seeking a statutory ‘veto’ that would let small-business patent owners block PTAB proceedings. Any appellate guidance could shape how far the USPTO may go in using discretionary tools to manage its workload.