PTAB Begins Clarifying Settled Expectations Doctrine
On June 26, 2025, the USPTO granted motions for discretionary denial of several IPR petitions, and allowed other petitions to proceed to the merits panel. In doing so, the USPTO provided some guidance on the rapidly evolving “settled expectations” doctrine, which we have discussed in prior posts on May 13, June 13, and June 23. Below we discuss the guidance in the June 26 decisions.
- Length of time in force matters.
Cambridge Industries USA, Inc. v. Applied Optoelectronics, Inc., involved challenges to five patents involved in parallel district court proceedings in which no trial date had been scheduled and the scheduled Markman hearing was cancelled. In essentially identical decisions, Acting Director Coke Morgan Stewart granted discretionary denial in the two challenges involving patents issued in 2016 and 2018 (IPR2025-00433 and IPR2025-00435, respectively) and denied motions for discretionary denial in the three challenges involving patents issued in 2019, 2019, and 2020 (IPR2025-00434, IPR2025-00436, and IPR2025-00437, respectively). The only difference in the totality of the circumstances appeared to be the settled expectations that attached to the respective patents in view of how long they had been in force:
[T]he challenged patents [IPR2025-00437, 00436 and 00434] have not been in force for a significant period of time (issued in 2020, 2019, and 2019), and, accordingly, Patent Owner has not developed strong expectations that favor discretionary denial as to at least those patents. . . . The patents challenged in IPR2025-00433 and IPR2025-00435, however, have been in force for nine and seven years, respectively, and are not from the same patent family as those in IPR2025-00434, IPR2025-00436, and IPR2025-00437.
Cambridge, 2-3.
Likewise, in Sig Sauer Inc. v. Lone Star Future Weapons, Inc., IPR2025-00410, Acting Director Stewart cited the age of the patent (issued over 10 years ago) as one of the factors supporting the grant of a motion for discretionary denial. Sig Sauer, 2. Other factors that supported denial included Petitioner’s development of a competing product without challenging the patent at issue, and Petitioner’s filing of the IPR petition after Patent Owner filed a trade secret suit against Petitioner that did not involve the challenged patent. Stewart stated that “there is a persuasive argument that the filing of the petition may be inappropriate here” (id.), citing Patent Owner’s brief in support of discretionary denial at pages 29-30, which states, inter alia, that “[Petitioner] is abusing the system in an attempt to intimidate and apply pressure on [Patent Owner] prior to the upcoming mediation between the parties.”
- Patent family relationships, significant changes in law, and lack of commercialization or use of a patent may overcome length of time in force.
Patent family relationships: In Embody, Inc. and Zimmer Biomet Holdings, Inc. v. Lifenet Health, IPR2025-00248, -00249, Acting Director Stewart denied motions for discretionary denial even though one of the challenged patents issued in 2018, at least in part because the other challenged patent had issued in 2022 as a child of the 2018 patent: “one of the challenged patents has not been in force for a significant period of time (issued in 2022) and the other patent is a parent of the first. Accordingly, Patent Owner has not developed strong settled expectations that favor discretionary denial as to the first patent, and it is an efficient use of Board resources to address the related patent.” Embody, 2-3. In contrast, as mentioned above, Acting Director Stewart referenced the lack of family relationship between the older and younger patents involved in Cambridge when explaining why discretionary denial was appropriate with respect to the older patents.
The motions in the Embody IPRs were also denied because Petitioner provided “persuasive reasoning, supported by evidence, that discretionary denial under 35 U.S.C. § 325(d) is not appropriate. . . . Petitioner’s argument that the art cited in the Petition is not cumulative of art previously considered is persuasive.” Embody, 2.
Significant changes in law and lack of commercialization: In Intel Corp. v. Proxense LLC, IPR2025-00327, -00328, -00329, Acting Director Stewart granted motions for discretionary denial, despite the fact that there was no trial date, because “ the challenged patents have been in force over nine years, creating settled expectations, and Petitioner does not provide any persuasive reasoning why an inter partes review is an appropriate use of Board resources,” citing the Dabico decision discussed in a prior post. Intel, 2.
Despite granting discretionary denial, Stewart took the opportunity to identify the following non-exclusive examples of considerations that weigh against a patent owner’s claim of settled expectations:
- “[A] significant change in law may have occurred since the patent issued, and a petitioner can explain how that change in law directly bears on the patentability of the challenged claims”; or
- “[A] patent may have been in force for years but may not have been commercialized, asserted, marked, licensed, or otherwise applied in a petitioner’s particular technology space, if at all.”
Id., 2-3.
- Time-to-trial and investments in parallel proceedings still carry weight.
Finally, Verizon Wireless, et al. v. Pegasus Wireless Innovation LLC, IPR2025-00137, -00138, -00290, -00291, -00292, -00293, -00317, did not mention “settled expectations” at all. The decision was issued by Kalyan K. Deshpande, to whom Acting Director Steward delegated authority. Discretionary denial was granted because (i) a trial date was set for September 8, 2025, (ii) time-to-trial statistics suggest it will begin in November 2025, (iii) there was insufficient evidence the district court would stay proceedings, and (iv) there has been meaningful investment in the parallel proceedings by the parties. Verizon, 3. Also, some of the patents had been dismissed from a parallel proceeding by joint motion. Id., 4. Thus, based on a holistic view of the evidence, the petition was denied.