[co-author: Jessie Hess]*
USPTO Acting Director Stewart sua sponte reconsidered and modified a previous Director Review decision that had affirmed cancellation of all 183 challenged claims as a sanction against patent owner Longhorn Vaccines. Spectrum Sols. LLC v. Longhorn Vaccines & Diagnostics, LLC, IPR Nos. 2021-00847, -00850, -00854, -00857, -00860, Paper 147 at 2 (Stewart June 5, 2025). Acting Director Stewart vacated the PTAB’s cancellation of the claims, finding cancellation of claims to be an inappropriate sanction “[a]bsent extraordinary circumstances.” Id., at 2.
The previous Director Review decision had affirmed the PTAB’s cancellation of all 183 challenged claims after finding that the patent owner failed to meet its duty of candor and good faith by deliberately withholding testing results relevant to patentability of both original and substitute claims. Paper 142 at 14-18 (Vidal July 11, 2024). That decision was a rare, if not first, instance of the PTAB invoking the duty of candor set out in 37 C.F.R. § 42.11 to cancel all claims without a finding of unpatentability.
Longhorn appealed the previous Director Review decision to the Federal Circuit. Longhorn Vaccines & Diagnostics, LLC v. Stewart, Nos. 2023-2111, -2112, -2113, -2114, -2115 (Fed. Cir. 2025). The parties subsequently reached a settlement agreement. Id. Acting Director Stewart intervened, asking the Federal Circuit for a limited remand in order to issue a revised Director Review decision addressing the appropriate sanctions. Id. The Federal Circuit granted the unopposed motion for a limited remand. Id.
On remand, Acting Director Stewart maintained the previous Director’s determination that the patent owner had engaged in sanctionable misconduct by: (1) intentionally withholding and concealing factual evidence; (2) intentionally relying on known falsely elicited testimony; and (3) intentionally making a false statement of fact. Paper 147 at 2. Even so, the revised decision noted that cancellation of all claims was not appropriate here because “[a]bsent extraordinary circumstances, the [PTAB] should never cancel claims it has not determined to be unpatentable as a sanction.” Id.
The decision further noted compensatory expenses, including attorney fees, as an appropriate sanction in this case. Id. at 3. However, such sanctions were not imposed because of the parties’ settlement agreement to bear their own costs. Id. The Acting Director strongly admonished the patent owner for its conduct, and cautioned that any future misconduct would warrant additional sanctions. Id. The decision also maintained the findings of unpatentability on the merits, and noted that sanctions or discipline for violations of Part 11 were not precluded. Id.; 37 C.F.R. §§ 11.81(c)(2), 11.19(b) (2021). Part 11 contains the USPTO Rules of Professional Conduct that practitioners must abide by, and any violation may be grounds for discipline of the practitioner by the Office of Enrollment and Discipline (“OED”).
Takeaway: Absent extraordinary circumstances, cancellation of claims without a finding of unpatentability is not an appropriate sanction for a violation of the duty of candor and good faith. All parties should nonetheless maintain the duty of candor and good faith because sanctions, such as compensatory damages, may be awarded. Practitioners should always be careful to abide by the USPTO Rules of Professional Conduct, which include candor toward the tribunal, or risk discipline by the OED.
*Summer Associate
