iRhythm Technologies, Inc., v. Welch Allyn, Inc., IPR2025-00363, IPR2025-00374, IPR2025-00376, IPR2025-00377, IPR2025-00378 (P.T.A.B. June 6, 2025)
On June 6, 2025, United States Patent and Trademark Office (“USPTO”) Acting Director Coke Morgan Stewart exercised her authority under 35 U.S.C. § 314(a) to grant Welch Allyn’s (“Patent Owner”) request to discretionarily deny institution of five inter partes review (“IPR”) proceedings initiated by iRhythm Technologies (“Petitioner”).
The USPTO recently updated its approach to how the PTAB exercises its discretionary authority to deny institution of IPR petitions. On March 26, 2025, the USPTO issued a memorandum, entitled “Interim Process for PTAB Workload Management,” which outlined revised procedures for evaluating institution decisions. Under this new framework, the process occurs in two stages: (1) the USPTO Director conducts an initial threshold review, focusing exclusively on factors relevant to discretionary denial; and (2) if the petition passes this threshold review, a panel of PTAB judges then considers whether to institute review based on the petition’s substantive merits.
Turning to iRhythm, in addressing her decision to deny the institution of the IPRs, Director Stewart initially acknowledged that several factors weighed against discretionary denial. These included: (1) the expected final written decision date of August 12, 2026, which would precede the district court’s scheduled trial in March 2027; (2) the relatively minimal investment by both parties in the parallel district court litigation; (3) the strong likelihood that the district court would grant a stay if the IPR were instituted; and (4) that the use of expert testimony by the Petitioner, which the Patent Owner argued the Petitioner overly relied upon, was properly supported with citations and conformed to PTAB standards, consistent with the Board’s precedent in Xerox Corp. v. Bytemark, Inc., IPR2022-00624, Paper 9 (Aug. 24, 2022) (precedential).
Despite these numerous factors weighing against discretionary denial, Director Stewart exercised her discretion to deny institution of the IPRs based primarily on one new discretionary denial factor “settled expectations”. Director Stewart found it compelling that, as early as 2013, the Petitioner had cited the then-pending application of the challenged patent in an Information Disclosure Statement (“IDS”) submitted during prosecution of its own patent. Despite this awareness, the Petitioner waited nearly ten years before filing an IPR petition. Director Stewart emphasized that this prolonged delay, especially given that the patent had been enforceable since 2012, created “settled expectations” regarding the patent’s validity. Considering the totality of the circumstances, she exercised her discretion to deny institution of the IPRs.
This decision highlights the PTAB’s ongoing focus on enhancing efficiency and managing its caseload, consistent with the priorities outlined in its March memorandum. Importantly, the ruling introduces the aforementioned discretionary denial factor, “settled expectations,” which has subsequently been applied in Globus Medical, Inc. v. Spinelogik, Inc., IPR2025-00225 (PTAB), Paper 8 at 2 (June 12, 2025). The decision also underscores the critical importance of closely examining a patent’s citation history during both the preparation and defense of IPR petitions. Petitioners must account for both backward and forward citations, as prior references to the challenged patent, particularly through their own IDS filings, can now be used to show early awareness. Such evidence may support a discretionary denial under 35 U.S.C. § 314(a). For Patent Owners, this development offers a valuable strategic tool: by demonstrating the Petitioner’s prolonged awareness and delay, and invoking the concept of “settled expectations,” they can strengthen arguments against institution.