USPTO Rescinds 2022 Guidance on PTAB Discretionary Denials, Reverting to Original Fintiv Framework
On February 28, 2025, the United States Patent and Trademark Office (USPTO) rescinded the June 21, 2022, memorandum titled “Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation.” Issued under former USPTO Director Kathi Vidal, the memorandum significantly impacted the way the Patent Trial and Appeal Board (PTAB) exercised its discretion in instituting post-grant proceedings, particularly in light of the Apple Inc. v. Fintiv, Inc. framework.
Background: Fintiv and the 2022 Memo
In 2020, the PTAB’s Fintiv decision established six factors to determine whether to deny institution of inter partes reviews (IPRs) or post-grant reviews (PGRs) when parallel district court litigation exists. These factors include considerations such as trial timing, overlap of issues, and court case progress. The ruling led to a surge in discretionary denials, prompting backlash from petitioners and a subsequent USPTO Request for Comments in 2021.
To address concerns, then-Director Vidal issued a 2022 memo introducing four key modifications to temper Fintiv denials:
1. Petitions with “compelling merits” of unpatentability would avoid denial.
2. Parallel International Trade Commission (ITC) proceedings no longer justified denials.
3. A “Sotera stipulation”—where petitioners agree not to assert overlapping invalidity grounds in court—would preclude denial.
4. Median district court time-to-trial statistics could inform PTAB decisions.
The memo significantly reduced discretionary denials, though criticism arose over its ambiguous “compelling merits” standard, which patent owners argued blurred the line between institution thresholds and post-trial outcomes.
Rescission and Implications
With the memo’s withdrawal, the PTAB will revert to weighing the original Fintiv factors without Vidal’s carveouts. Key anticipated shifts include:
1. Sotera Stipulations as Non-Dispositive: While such stipulations remain a strong factor against denial, they no longer guarantee institution.
2. Merits Analysis Integrated: The “compelling merits” test is eliminated; petition strength will now be one factor among others.
3. ITC Proceedings Reconsidered: Parallel ITC cases may again influence discretionary denials.
4. Trial Dates Over Statistics: PTAB may prioritize specific court trial dates over generalized district timelines.
The USPTO clarified that prior PTAB or Director Review decisions relying on the 2022 memo are no longer binding, urging practitioners to reference Fintiv and Sotera Wireless, Inc. v. Masimo Corp. for guidance.
Stakeholders now anticipate a rise in discretionary denials, mirroring pre-2022 trends. Patent owners may benefit from renewed PTAB flexibility, while petitioners face heightened uncertainty, particularly in districts with swift trial schedules. Acting Director Stewart’s move signals a potential shift toward prioritizing judicial efficiency and reducing parallel litigation overlap. However, the long-term effects remain uncertain, with practitioners advised to monitor early PTAB decisions for emerging patterns. The USPTO’s reversal underscores the evolving nature of post-grant proceedings and the enduring influence of leadership priorities on patent policy.