The Patent Trial and Appeal Board (PTAB) has undergone significant changes in how it evaluates patent challenges, creating both opportunities and obstacles for technology and life sciences companies.
With discretionary denial rates jumping to approximately 60% following new interim procedures issued in March, understanding these evolving standards has become critical for developing effective patent strategy.
Fenwick attorneys Kevin X. McGann, Daniel Rabinowitz, and Allen Wang analyzed the patent office’s recent moves and trends in this space to extract important insights for petitioners and patentholders alike in a webinar for UC Berkeley Center for Law and Technology. Here are some key takeaways.
The Push Toward Earlier Patent Challenges
The current USPTO leadership has made clear their preference for challenging patents earlier in their lifecycle, emphasizing third-party prior art submissions during examination and favoring post-grant reviews (PGRs) over inter partes reviews (IPRs). This shift reflects a broader goal to reduce the PTAB backlog, though the practical effect remains uncertain as the bottleneck primarily exists in the application examination phase, not at the PTAB.
For companies navigating this landscape, the timing implications are substantial. PGRs must be filed within nine months of patent issuance, while IPRs can be filed later but now face increased scrutiny based on patent age. This additional consideration may shift the balance from a traditional approach, where companies brought IPRs in response to district court litigation, to where companies are incentivized to monitor and challenge patents as early as possible after issuance. Whether such monitoring is feasible or even desirable remains to be seen.
Understanding the New Discretionary Denial Process
The March interim procedures introduced a separate briefing process for IPRs that runs parallel to merit-based petition review. Under this system, patent owners can file discretionary denial briefs two months after a petition receives a filing date, with petitioners having one month to oppose. The director then has one month to decide whether to proceed with the petition.
This bifurcated approach means that merits are not addressed until after the discretionary denial period concludes. The process fits within the existing six-month timeline for the PTAB to decide on IPR institution but adds complexity for both sides in how they structure their arguments and allocate resources.
Critical Decision Factors Reshape Strategy
A few primary factors emerge as driving discretionary denial decisions: the trial date of the corresponding district court case and the age of the patent. Trial dates versus expected final written decision dates represent perhaps the most decisive element. When district court trial dates are expected or scheduled to occur before the projected PTAB final written decision, discretionary denial becomes highly likely. The likelihood of obtaining a stay from the district court also weighs heavily, as does the overall progression of parallel litigation.
Discovery completion, Markman hearings, and other substantial district court developments may all favor discretionary denial. Companies must now carefully coordinate their district court litigation and post-grant proceedings at the USPTO to develop a planned approach to avoid discretionary denials.
Interestingly, for some petitions where the challenged patents are involved in multiple litigations against different defendants, the USPTO has not granted discretionary denial, finding instead that it was more efficient for the PTAB to handle the validity issues. Further, at least a few decisions give weight to petitioner’s identification of an error or oversight by the USPTO during examination, such as the office’s failure to appreciate that the cited art disclosed aspects of the claims that formed the basis for allowance. The decisions from the interim director express that such errors favor reviewing the merits of the IPR petition so the USPTO could address such errors.
The Emerging Six-Year Rule and Settled Expectations
Perhaps the most controversial development involves “settled expectations” based on patent age. Through a series of decisions, the director has established what appears to be a six-year threshold from patent issuance. Petitions challenging patents older than six years are far more likely to face discretionary denial, while those within the six-year window are more likely to proceed to merit review.
This pattern emerged through cases where petitions were discretionarily denied partly because the petitioner had cited related patents in Information Disclosure Statements years earlier, and recent decisions that created a near bright-line rule based solely on patent age. The logic suggests that patent owners develop “settled expectations” that older patents won’t be challenged, though this reasoning has drawn criticism for potentially conflicting with established precedent.
Strategic Approaches for Petitioners
Companies considering PTAB challenges may want to file petitions as early as possible, particularly for patents approaching the six-year threshold. When challenging older patents, petitioners will want robust arguments addressing settled expectations, including evidence that patents haven’t been commercialized, asserted, or licensed in their field.
Monitoring competitor patent applications as they publish represents another strategic consideration, though this approach may prove impractical in high-volume technology sectors. Companies may also consider whether complex litigation involving multiple patents across diverse technologies might favor PTAB review, as demonstrated in some recent decisions.
The reduced significance of Sotera stipulations (where petitioners agree not to raise overlapping grounds in district court) means companies may no longer be able to rely on such agreements to avoid discretionary denial. This was highlighted in updated guidance published by the USPTO on August 13, 2025, that questions the utility of Sotera stipulations when “petitioner is relying on corresponding system art in a co-pending proceeding and/or several other invalidity theories” in parallel district court cases. The recent guidance also reaffirmed the acting director’s emphasis and petitioner’s discretionary denial must not only respond to patent owner’s arguments but must address “any other matter bearing on the Director’s discretion to institute.” Accordingly, comprehensive briefing on factors supporting PTAB is essential, but in the same issued guidance, the PTAB has limited discretionary briefing to twenty pages (effective September 1, 2025).
Tactical Considerations for Patent Owners
Patent owners will want to advance district court proceedings as quickly as possible while resisting stays. Building comprehensive records early in discovery, including claims charts and evidence of commercial implementation, strengthens arguments for discretionary denial.
When addressing settled expectations, patent owners can emphasize the length of time patents have been in force and any prior enforcement or licensing activities, but they should avoid linking newer patents to older family members, as this may provide a justification for the PTAB to review older patents along with related newer patents.
Alternative Pathways and What’s Ahead
With IPR challenges becoming more difficult, companies may consider ex parte reexamination as an alternative. While these proceedings offer no participation rights after filing and risk “whitewashing” prior art, they remain available without time limits and may face less discretionary scrutiny.
The current procedures are explicitly interim, suggesting potential future changes. However, companies cannot afford to wait for clarity, and the new landscape requires immediate strategic adjustments to protect intellectual property rights and challenge problematic patents effectively.
Success in this evolving environment demands careful coordination between litigation strategy, patent prosecution, and PTAB proceedings, with timing considerations now playing a more decisive role than ever before.
Watch the full webinar.
