Navigating the Brave New World of PTAB Discretionary Denials
The America Invents Act and Discretionary Denials
The America Invents Act (AIA), passed in 2011, established new procedural routes for challenging existing patents. Following the AIA, any person challenging a patent’s validity could ask the U.S. Patent and Trademark Office (PTO) Director to institute either inter partes review (IPR) (for patents more than 9 months old) or post-grant review (PGR) (for patents under 9 months old). For the Director to institute such proceedings, the petitioner needed to show a reasonable likelihood of invalidity on at least one claim (for IPR) or that is more likely than not that at least one claim is invalid (for PGR).[1]
Consistent with its broader goals of making patent litigation more efficient, however, the AIA also made clear that whether to institute such proceedings always lay within the Director’s discretion. In fact, the Director could exercise his or her discretion to deny a petition—i.e., order a discretionary denial—even if the petition satisfied the merits standards for instituting proceedings.[2] From 2012 to 2025, the Director delegated the discretionary authority to institute IPRs and PGRs to the panels of Patent Trial & Appeal Board (PTAB) judges that heard those AIA proceedings, including the authority to issue discretionary denials.
Initially, the PTAB was aggressive in instituting AIA proceedings. According to the PTO’s trial statistics, the yearly institution rates by petition fluctuated slightly but averaged 63% between FY2015 and FY2023. In all years from that period, institution rates were over 50%—meaning that, more likely than not, an IPR or PGR petition would result in institution of an IPR or PGR proceeding. Discretionary denials, however, came significantly less often, issued for only 17% of petitions from FY2017 to FY2021 before cratering at just 6% for FY2022 and FY2023.
The PTO Overhauls Discretionary Denials
Earlier this year, however, that settled landscape shifted nearly overnight. Acting Director Coke Morgan Stewart first rescinded a 2022 memorandum that limited discretionary denials, then established a bifurcated process by which the Acting Director first considers whether discretionary denial is appropriate.[3] Under the bifurcated process the parties submit a first round of separate briefs solely on discretionary denial issues before the patent owner’s preliminary response to the merits petition. If discretionary denial is not appropriate, the Acting Director then refers the petition for an institution decision on the merits based on the petition and patent owner’s preliminary response.
After Director Squires was confirmed in September 2025, he delegated discretionary denials to now-Deputy Director Stewart, who had established the new bifurcated process.[4] In October, he also rescinded the delegation of institution decisions to PTAB panels, reserving merits institution decisions to himself going forward for IPR petitions filed after October 20, 2025.[5] Denials, whether based on merits or discretionary factors, will generally be announced by summary notice without significant analysis.
The aggregate differences in outcomes have been significant. In the decade-plus since AIA proceedings began in 2011, institution grants always dwarfed discretionary denials. But from May to October of this year alone, Acting Director Stewart denied an astonishing 379 petitions on discretionary grounds, while the PTO instituted proceedings on only 225 petitions over the same period.
And the PTO doesn’t appear to be finished with its project, either. Director Squires recently issued a proposed rule that would amend the PTO regulations to allow even fewer IPRs.[6] Once effective, the proposal would: prohibit IPR whenever there is parallel litigation unless the challenger files a Sotera stipulation[7]; prohibit IPR in any case where the claim (or an independent claim supporting a challenged dependent claim) has been found valid previously; and prohibit IPR in any case where trial in parallel litigation will “more likely than not” occur before the potential IPR’s final written decision.
In short, the IPR and PGR institution processes look very different than before, and will soon look even more different.
Key Recommendations
In light of these important changes, requesting discretionary denial is a much more meaningful procedural option for patent owners now than it was even just a year ago. Patent owners and patent litigators should consider requesting discretionary denial in response to virtually every IPR or PGR petition where there is parallel district court litigation, keeping in mind the below:
- Know the current rules. Pay close attention to the instructions and FAQs for the discretionary denial process on the PTO website. These have been updated several times in the months since the bifurcated process took effect, and a practitioner who does not stay current risks prejudicing the client’s real chances at discretionary denial. Keep an eye as well on Director Squires’ latest proposed rule while it goes through notice-and-comment.
- Watch your deadlines. The briefing deadlines for discretionary denial requests, based on the current PTO instructions, fall 30 days before a patent owner’s preliminary response is due. The PTO warns that deadline extensions are unlikely because the deadlines are designed to provide the Director full discretionary denial briefing at the same time the patent owner files its preliminary response.
- Use them or lose them. Under the PTO’s current instructions, a patent owner may not include arguments for discretionary denial in its preliminary response, as was previously the practice. The request for discretionary denial is the patent owner’s one and only shot to make Fintiv or 324(d) arguments.[8] (And though the PTO director may always deny institution for discretionary reasons that no party has raised, for obvious reasons a practitioner should not rely on that possibility.)
- Know what matters. Pay attention to the PTO director’s 2025 discretionary-denial decisions to get a sense of what is most important under this new regime. The decisions are all only 1-2 pages, so it is easy to get a broad overview of general trends. For example, a Sotera stipulation by the petitioner[9] is no longer treated as the complete bar to discretionary denial that it was previously. And virtually every discretionary denial from this year addresses some combination of the scheduled trial date in the parallel district court litigation (including whether time-to-trial statistics for the district support that scheduled date) and how long ago the patent was issued.
For more information on protecting your patent rights, please contact Kelsey Nix, John Gibbons, or your Smith Anderson attorney.
[1] 35 U.S.C. §§ 314(a), 324(a).
[2] 35 U.S.C. §§ 314(a), 324(a); BioDelivery Sciences Int’l, Inc. v. Aquestive Therapeutics, Inc., 935 F.3d 1362, 1365 (Fed. Cir. 2019) (“Subsection (a) identifies a threshold requirement that must be met before the Director is even authorized to institute review, and then ‘grants the Director discretion not to institute even when the threshold is met.’”).
[3] Interim Processes for PTAB Workload Management, Memorandum from Coke Morgan Stewart, Acting Under Secretary of Commerce for Intellectual Property and Acting Director of the United States Patent and Trademark Office to All PTAB Judges (Mar. 26, 2025).
[4] Delegation of Authority by John A. Squires, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (Oct. 17, 2025), available at https://www.uspto.gov/sites/default/files/documents/dsco-delegation.pdf.
[5] Letter from John A. Squires, “Bringing the USPTO Back to the Future: Return of Institution Authority under 35 U.S.C. §§ 314 and 324 to the Director” (Oct. 17, 2025), available at https://www.uspto.gov/sites/default/files/documents/open-letter-and-memo_20251017.pdf.
[6] Patent and Trademark Office, Revision to Rules of Practice Before the Patent Trial and Appeal Board, 90 Fed. Reg. 48,335 (Oct. 17, 2025).
[7] Sotera Wireless, Inc. v. Masimo Corp., IPR2020-01019, Paper 12 (Dec. 12, 2020).
[8] Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper No. 11 (Mar. 20, 2020) (precedential); 35 U.S.C. § 324(d).
[9] Sotera Wireless, Inc. v. Masimo Corp., IPR2020-01019, Paper 12 (Dec. 12, 2020).
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