Long-Term Knowledge of Patent Sufficient to Deny Institution of IPR
New York, NY, June 13, 2025
On June 6, 2025, the USPTO issued a 2-page decision in iRhythm Techs., Inc. v. Welch Allyn, Inc. (Nos. IPR2025-00363, IPR2025-00374, IPR2025-00376, IPR2025-00377, and IPR2025-00378), Paper 10, denying institution of inter partes review of four patents based primarily on the fact that Petitioner was aware of the challenged patents and applications as early as 2013 and failed to seek early review.
First, in the opinion, the Acting Director of the USPTO, Coke Morgan Stewart, outlined several factors that weighed against denial. These factors included that (1) the final written decision (due by August 12, 2026) would issue months before the scheduled district court trial date (March 22, 2027); (2) there appeared to be little investment by the parties in the district court proceeding; (3) the high likelihood of stay of district court litigation if IPR were instituted; and (4) the proper use of expert testimony by Petitioner to support its petitions.
Thus, even under the recent changes in USPTO procedures for discretionary denial (as discussed in our previous client alert), this petition appeared to present a strong case to overcome discretionary denial.
Nevertheless, the only reason the USPTO gave for denying the five petitions, challenging four patents, was that Petitioner was aware of one of the challenged patents as early as 2013 (having cited its then-pending application in an IDS) and had failed to seek early review of the patents.
This decision raises the important question of whether a defendant in district court litigation can reasonably expect to have one year after the filing of a Complaint to file a petition for IPR (35 U.S.C. § 315(b)) if defendant knew about a patent-in-suit (or pending application) well before hand.
But, a Petitioner who files an early petition to avoid discretionary denial might lack standing to appeal an adverse decision. The Federal Circuit has repeatedly held that, although a party does not need Article III standing to file an IPR petition, it must establish Article III standing once it seeks review of the Board’s decision in that Court. Allgenesis Biotherapeutics Inc. v. Cloudbreak Therapeutics, LLC, 85 F.4th 1377, 1380 (Fed. Cir. 2023).
In Allgenesis, for example, Allgenesis lost its IPR petition and then failed to establish an injury in fact sufficient to confer standing to appeal. Id. at 1378. Allgenesis argued that it had standing based on potential infringement liability for its development of nintedanib treatments for pterygium. Id. at 1380. Allgenesis submitted a declaration from its Vice President of Finance regarding its research and clinical trials, including Phase II trials that had been completed three years prior, a statement that it had not abandoned development and was continuing to allocate resources to the project, and a reference to settlement discussions with the patent owner relating to the IPR petition. Id. at 1380-81. However, the Federal Circuit found that the statements in the declaration regarding product development were too conclusory and did not identify plans to conduct Phase III trials or seek FDA approval. Id. And the settlement discussions were insufficient to show a substantial risk of infringement, where Allgenesis made no assertion that the patent owner had sued or threatened to sue Allgenesis if it marketed a nintedanib product. Id. at 1381. The Federal Circuit also rejected the argument that Allgenesis had standing based on the Board’s priority determination which found that Allgenesis’s PCT filing was not prior art. Id. at 1381-82.
As another alternative, petitioners may want to consider filing petitions for post-grant review (PGR) of possibly relevant patents rather than waiting until later to file IPRs. Such PGR petitions must be filed with nine months of issuance of a patent. 35 U.S. Code § 321. Ironically, this may increase the workload on the PTAB, which seems contrary to the goals of the current administration’s recent policy decisions.
In short, companies considering filing IPR petitions will now have to consider how early they can file such petitions to avoid discretionary denial but still have standing to appeal an adverse decision. Moreover, this decision highlights the unpredictability, and possible unintended consequences, of recent discretionary denial practice.