Coke Morgan Stewart, the Acting Director of the US Patent and Trademark Office (USPTO) recently issued a Director’s Discretionary Denial denying institution of five inter partes reviews (IPRs).

She wrote that several factors weighed against denial, but that the failure of the petitioner to challenge the patent sooner and the “settled expectations” of the patent owner prevailed over those factors.

iRhythm Technologies had filed IPRs against five Welch Allyn patents related to cardiac monitoring technology. Welch Allyn filed a request for discretionary denial of institution and iRhythm filed an opposition.

The Acting Director noted that

the projected final written decision due date in the Board proceedings is August 12, 2026, yet the district court’s trial date is not until March 22, 2027. … As such, it is likely that a final written decision in this proceeding will issue before the district court trial occurs. There also appears to be little investment by the parties in the district court proceeding and a high likelihood of a stay if an inter partes review is instituted.

Also,

while Patent Owner argues that discretionary denial is warranted because Petitioner is over-reliant on expert testimony,… Patent Owner does not identify any portions of the expert testimony that suggest Petitioner is using its expert to fill gaps in the prior art. Instead, Petitioner appears to rely on its expert to explain the background knowledge of a person of ordinary skill in the art, and the expert provides citations to evidence in support of his statements in the required manner. …This also weighs against discretionary denial

However, said the Acting Director,

Patent Owner argues 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…. Patent Owner’s argument is persuasive. 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.

Discretionary denial of institution is covered by the Interim Processes for PTAB Workload Management, which was issued in March.

Relevant factors include:

• Whether the Patent Trial and Appeal Board (PTAB) or another forum has already adjudicated the validity or patentability of the challenged claims;
• Whether there have been changes in the law or new judicial precedent issued since issuances of the claims that may affect patentability;
• The strength of the unpatentability challenge;
• The extent of the petition’s reliance on expert testimony;
• Settled expectations of the parties, such as the length of time the claims have been in force;
• Compelling economic public health or national security interest; and
• Any other considerations bearing on the director’s discretion.

This Denial suggests that “settled expectations” may be enough to trump other considerations – or at least those relevant in this case.

It’s still not clear how long is long enough to create “settled” expectations.

About a week after iRhythm, Acting Director Stewart issued two more decisions that involved the “settled expectations” factor but failed to resolve the length issue.

In one case, a patent owner argued that settled expectations applied where a company hired two inventors of the patent in 2021 but waited until they got sued in 2024 to challenge the inventors’ patent. Stewart’s decision didn’t reach the “settled expectations” analysis as she denied institution based on “unfair dealing.”

In the other case, the patent owner argued that “settled expectations” applied where the claims of the patent had been “in force for almost 8 years.” But Stewart noted that the challenged patent expired almost four years ago due to non-payment of maintenance fees and denied the patent owner’s request for discretionary denial.

Thus, there is not yet any clear guidance on “how long is too long,” but it’s a good idea not to delay when seeking an IPR.

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