Q3 in Review: IPR Restraints Tighten as SEP Venues Spar over Interim Licenses

US NPE litigation increased by 10% in the third quarter of 2025, when such plaintiffs added 530 defendants to patent campaigns. NPE filings are up by 23% for the year to date.

The third quarter also brought additional changes to the Patent Trial and Appeal Board (PTAB), which saw a series of rulings from former Acting USPTO Director Coke Morgan Stewart that continued to expand the use of discretionary denials in America Invents Act (AIA) reviews. Early indications are that this approach may continue under new USPTO Director John A. Squires, who was confirmed as Q3 drew to an end.

Over the last three months, the Unified Patent Court (UPC) further cemented its position as a key European patent venue, following a decision earlier in the year that extended its reach outside the EU. Q3 also saw a series of significant developments related to standard essential patent (SEP) litigation, including recent pushback from the UPC and a top German court against UK rulings forcing SEP owners to offer interim licenses in disputes over fair, reasonable, and nondiscriminatory (FRAND) rates.

The third quarter was a busy month on the IP policy front as well, with the Wall Street Journal reporting in August the rumored consideration by the US Commerce Department of a value-based patent fee system. Also during August, Commerce Secretary Howard Lutnick notified Harvard of a plan for march-in on the university’s patents under the Bayh-Dole Act.

Finally, RPX continues to monitor disclosure of third-party litigation funders in ongoing patent campaigns; it also conducts extensive review of public documents for evidence of funding relationships. During Q3, roughly a dozen plaintiffs tied to litigation funders started new patent campaigns. RPX also flagged multiple notable disclosures made during the quarter that shed light on funding sources.

Download Full Report (PDF)

RPX members will also soon have exclusive access to an on-demand RPX Community webinar covering highlights from this post; CLE credit may be available.

Additionally, the operating company data above leave out another distinct category of litigation filed by a small group of design and utility patent owners targeting copycats and counterfeiters selling products online. RPX excludes such “e-seller” cases from analyses of district court litigation because they tend to follow a different dynamic compared to what one might consider the usual patent suit. These e-seller cases sometimes name hundreds of defendant entities, many of which may be merely online storefronts or aliases for the same ultimate parent. Also, plaintiffs primarily seek injunctive relief instead of damages, and their cases often end with the e-seller defendant’s failure to answer, followed by a default judgment.

This category of litigation is shown in grey below to illustrate its magnitude. As shown by the rightmost bar, e-seller litigation in Q3 2025 accounted for 672 defendants added, or 45% of all litigation during the quarter—a much smaller number than in recent quarters past. While the number for Q3 remains subject to the caveat about defendants potentially having multiple online storefronts noted above, the decrease could also be related to efforts by some judges to apply stricter procedural rules to e-seller cases. In the Northern District of Illinois, by far the top venue for such litigation, District Judge John F. Kness issued an August 8, 2025 order that decried the “deluge of Schedule A cases” (referring to the sealed “Schedule A” complaint attachments that name defendants in e-seller cases) in his and other districts, arguing that these cases work “only by stretching applicable procedural rules past their breaking point”. Judge Kness determined that because these cases routinely award preliminary injunctive relief without adversarial proceedings, involve widespread sealing, and rely upon improper mass joinder of defendants, the relief sought should be obtained “by other means”.

The District of New Jersey appears to be following Judge Kness’s lead. On September 25, Chief Judge Renée Marie Bumb issued an order requiring plaintiffs in e-seller cases to “plausibly plead allegations of personal jurisdiction”, including “some evidence of each defendant’s contacts with the forums” (emphasis in original)—stating that “[t]he law is well-settled that simply being an online seller on Amazon isn’t enough”. The order also limits each e-seller complaint to a “single defendant or group of defendants acting under the same operator”.

Apart from the following graph, the other analyses in this report exclude pure design patent and e-seller litigation.

The Eastern District, long a patent hotspot, saw the two largest patent damage awards of the third quarter—a jury awarding $175M to Headwater Research LLC in July and another awarding $78.5M to Anonymous Media Research Holdings LLC in September. The latter is notable in part because of the starkly different results between that case and another parallel Anonymous Media suit that was transferred from the Western District of Texas to the Northern District of California. While the East Texas case saw District Judge Rodney Gilstrap deny a motion to stay pending the outcome of certain inter partes review (IPR) proceedings, issue a claim construction order, and grant summary judgment of no invalidity under Alice prior to the verdict, the California case was stayed pending IPR, with District Judge Vince Chhabria invalidating the asserted patents under Alice—eleven days after the conflicting ruling by Judge Gilstrap.

The third quarter was also notable for posttrial activity that led to the fall of two other large damage awards. In September, the Federal Circuit overturned a $166.3M verdict issued in January 2023 for inventor-controlled Finesse Wireless, LLC against AT&T, finding that it had been based on flawed testimony from the plaintiff’s infringement expert—including some the court found to be “contradictory”, “confusing”, and “unclear”—and thus could not stand. Also in September, District Judge Robert W. Schroeder, III toppled a $112M verdict returned against Samsung in May 2025 in litigation from Maxell, granting judgment as a matter of law of noninfringement for all three tried patents and for invalidity as to two of those patents.

Judge Gilstrap, who passed the Eastern District’s chief judgeship to Judge Amos L. Mazzant in March 2025, once again oversaw the most patent litigation in the nation last quarter.

In second place was Western District of Texas Judge David Counts, who rose in the rankings after adopting a similar case management order to District Judge Alan D. Albright—once the nation’s top patent judge but tied for seventh place with Delaware District Judge Maryellen Noreika in Q3. Judge Albright, a former patent litigator, came to oversee the bulk of the nation’s patent litigation after openly seeking to attract such cases to his courtroom—enabled by a filing loophole that let plaintiffs target a specific division, thus guaranteeing that anyone filing in Waco would get Judge Albright (Waco’s only district judge). A 2022 order targeted that concentration, ordering that all Waco patent cases be randomly assigned among a larger group of judges, including Judge Albright. His patent caseload has slimmed dramatically as a result.

While Judge Counts also presides in a single-judge division (Midland-Odessa), his patent docket is not subject to a similar case reassignment order, thus enabling plaintiffs to target his courtroom in the same manner they once could for Judge Albright—and, by all accounts, they have done so.

Earlier this year, Judge Albright announced that he would move from the Waco Division to the Austin Division. While he has stated that he would do so while still managing Waco’s docket until his replacement is confirmed, he has increasingly been hearing patent cases in Austin, where he has continued to follow a familiar approach to motions to transfer for convenience. Under that approach, the filing of such motions in Judge Albright’s courtroom triggers a new, distinct phase of patent litigation, the “convenience transfer phase”—one that involves a period of venue-related discovery and subsequent briefing. In one Austin case, Judge Albright vacated in July a recommendation by Magistrate Judge Mark Lane that a case be transferred to the Northern District of California because the court had not ordered venue discovery, subsequently rejecting a motion for reconsideration—holding that now that the suit was before him (Judge Albright), such discovery must now occur to enable a suitably “fulsome record”.

More on Judge Albright’s approach, including with respect to the various transfer factors, can be found here.

Among the NPEs that filed E-Commerce and Software litigation this past quarter were several linked to established monetization firms. One was Fortuna IP, LLC, a Dominion Harbor Enterprises, LLC plaintiff that in mid-September launched a new campaign targeting casino gaming machines that support certain rewards programs. In early August, Equitable IP Corporation also kicked off a campaign over branded contactless consumer credit cards through plaintiff Induction Devices LLC. Additionally, several NPEs associated with Dynamic IP Deals, LLC (d/b/a DynaIP) and affiliated entity Pueblo Nuevo LLC filed suits in this sector in Q3: Throughout September, MISSED CALL, LLC added a trio of cases to its ongoing campaign, tagging communication platforms that notify users of missed calls; in late August, Random Chat LLC filed another complaint over customer support chat services; and throughout July, Wolverine Barcode IP LLC also continued to file cases against providers of mobile apps with QR code support. Moreover, in mid-July, Texas monetization firm Empire IP LLC added another case to its campaign targeting augmented reality features for viewing virtual items within a physical room. Additionally, Artificial Intelligence Industry Association, Inc. (AIIA), which describes itself as having a membership-based “cooperative” licensing model, filed its first infringement cases throughout August and September—alleging infringement through a variety of products that allegedly use synthetic image generation for machine learning, among other functionality.

Also joining the fray were at least two plaintiffs with litigation funding: In late August, plaintiff Vusura Technology LLC began a new campaign over contact center systems, litigation that public records reveal is backed by a funder linked to several other plaintiffs. Furthermore, plaintiff SitNet LLC brought its second complaint in July with the backing of a prominent litigation funder, targeting social media emergency response and advertising functionality.

Additionally focusing on E-Commerce and Software litigation this past quarter were a variety of plaintiffs associated with notable individuals active in the patent assertion space. In particular, one patent monetization professional who appears to be linked to a growing number of NPE plaintiffs was apparently behind several plaintiffs hitting the sector in Q3: ContactWave LLC, which in late September filed a new wave of cases in its ongoing campaign targeting various e-commerce platforms and related advertising services; CheckWizard LLC, which in late August filed a second round in its campaign targeting mobile check depositing within banking apps; and Querytron LLC, which in late July brought a wave of complaints over various business-to-business e-commerce platforms.

A variety of inventor-controlled NPEs hit the E-Commerce and Software space in the third quarter as well—including EasyWeb Innovations, LLC, which in mid-September filed a case over certain social media authentication functionality, asserting the newest-issued patent from a family previously gutted by Alice. Also targeting a social media platform was Florida plaintiff Search & Share Technologies LLC, which in early September began its first campaign over functionality related to content search and ranking. ToutVirtual, Inc., also in early September, initiated a campaign over cloud computing technology and related management software. In late August, inventor-controlled Yopima LLC added a new round of cases against delivery and/or rideshare mobile apps with device location tracking functionality. Additionally in August, inventor-controlled H.S. Treasure Contacts Ltd filed a pair of complaints (see here and here) over mobile apps with features for sending app download links to prospective users; while Joto, Inc. filed its first litigation, with e-commerce platform features for recommending items for sale or events, as well as for providing targeted advertising, at issue.

The PTAB instituted trial in just 35% of the AIA review petitions addressed in Q3, a significant drop from that same quarter last year (during which the institution rate was 72%) and from Q2 2025 (51%)—which itself was down substantially compared to Q1 (68%).

The downward trend in institution rates is largely the result of changes to the PTAB’s discretionary denial practices that were implemented over the course of this year by Deputy Director Coke Morgan Stewart, who served as acting USPTO director until the September 18 confirmation of new USPTO Director John Squires.

Key among those changes was the February 2025 withdrawal of June 2022 guidance issued by former Director Kathi Vidal that had limited discretionary denials based on parallel litigation under the NHK-Fintiv rule in several respects, leading to a drop in discretionary denials. The following month, Stewart assumed a more direct role in addressing discretionary denials—establishing a revamped, two-stage process for AIA review institution under which the director first decides requests for discretionary denial before a panel then considers the merits of a petition. Under that process, the director makes that discretionary denial assessment based on an expanded set of factors—including some based on various PTAB precedents, including Fintiv; General Plastics, which lays out factors under which multiple petitions from the same petitioner can be discretionarily denied; and Advanced Bionics, which covers discretionary denials where the USPTO has previously considered the asserted prior art or arguments. The new process also allows the director to issue such denials based on the PTAB’s workload, including its ability to hit the statutory deadlines for AIA review trials.

–  “Settled Expectations” Factor Applied More Broadly in Q3

Stewart has since used that authority to issue a series of rulings that have markedly expanded the use of discretionary denials. Perhaps the most significant, and most hotly debated, has been a line of decisions that deny institution based on the “[s]ettled expectations of the parties, such as the length of time the claims have been in force” (another one of the factors established under the March memorandum detailing the new institution process). Beginning with her early June decision in iRhythm Technologies v. Welch Allyn, Stewart has made it clear that she will deny institution solely on the basis of such “settled expectations” for patents that have been in force for longer periods of time.

Stewart has held that there is no bright-line rule for exactly how long patents must be in force. However, the age of the patents subjected to denial on this basis has been steadily ticking downward, most recently including rejections of IPRs against patents issued as recently as three years ago (see, e.g., the August 22 ruling in Samsung v. GenghisComm, IPR2025-00788, issued by Acting Deputy Chief Administrative Patent Judge Kalyan K. Deshpande, to whom Stewart (while still acting director) delegated her discretionary authority over institution for circumstances where she has a conflict.)

Stewart has also ruled that subsequent acquirers of older patents can still benefit from “settled expectations”, even when they obtained the challenged patents much more recently than the issuance date. For example, Stewart found that there were “strong settled expectations” for a 17-year-old patent even though current owner Valtrus Innovations Limited acquired it in 2021, also doing so in an IPR against Polaris PowerLED Technologies, LLC for patents acquired in 2021 and 2022 despite the petitioner having stipulated to broader estoppel (a so-called Sotera stipulation, discussed further below) and the fact that the parallel infringement litigation had been stayed.

On the other hand, Stewart has additionally held that a petitioner’s assertion of settled expectations, based on the patents’ lack of prior litigation and an evaluation by the petitioner that purportedly found no infringement, did not overcome a patent owner’s “strong settled expectations” for the challenged patents (ten and 17 years old).

–  Time to Trial Considerations

Also notable are decisions denying review based on the proximity of the PTAB’s final written decision deadline and the scheduled trial date in parallel litigation—a factor that Stewart has increasingly invoked since the withdrawal of Vidal’s guidance, which had limited such rulings.

In some of her Q3 decisions based on this factor, Stewart has weighed trial timing and other factors relating to parallel litigation status over settled expectations.

For instance, in late August, Stewart instituted two petitions (IPR2025-00785, IPR2025-00786) against older patents (here, patents that issued 14 and 18 years ago, and are respectively held by two different Intellectual Ventures LLC entities), where those patents also had pending reexaminations, because the two parallel district court cases respectively had a trial scheduled after the PTAB’s final written decision deadline and had not yet scheduled a trial.

That said, in other rulings “settled expectations” have won the day. For example, in another case, Stewart denied review where a trial would likely occur after the Board’s final decision deadline because the patent had been in force for seven years (OnePlus v. Pantech, IPR2025-00637).

–  IPR Estoppel in the Spotlight after Federal Circuit’s Ingenico Decision

Also significant has been Stewart’s approach to discretionary denial issues related to IPR estoppel, which prevents PTAB petitioners from later asserting in district court invalidity “ground[s]” that they “raised or reasonably could have raised” in their earlier IPR. In May 2025, the Federal Circuit’s Ingenico v. IOENGINE decision resolved a longstanding district court split over whether IPR estoppel applies for certain grounds based on system prior art, where a product is used to show that the claimed technology was in public use before a patent’s priority date. The court held that grounds based on system art are not subject to estoppel, even where the prior art references used as evidence of the system’s public use were cited for other prior art invalidity grounds in an IPR (anticipation or obviousness), because public use is not an available invalidity theory in an IPR. The Ingenico decision, which the full Federal Circuit declined to review on September 25, has led to a broader debate over the proper bounds of the IPR estoppel standard.

Among the issues raised in that debate was the decision’s potential impact on stipulated estoppel in PTAB proceedings, under which petitioners agree not to assert invalidity grounds that they raised or reasonably could have raised at the PTAB in a parallel district court case—i.e., by stipulating to a broader form of estoppel in order to minimize the risk of overlapping invalidity issues, in order to avoid discretionary denial under the NHK-Fintiv rule. Some stakeholders predicted that this practice, known as so-called Sotera stipulations, could change as a result of both Ingenico and the withdrawal of the Vidal guidance, which had previously treated these stipulations as a safe harbor from Fintiv—with petitioners possibly required to issue broader stipulations as a result.

That now appears to be happening. For instance, in late August, Stewart vacated the prior institution decision in an IPR (IPR2025-00188) against WSOU Investments, LLC in which petitioner Cisco had offered a Sotera stipulation, in part citing the fact that the petitioner’s stipulation did not encompass all possible grounds beyond those that can be raised in an IPR. Stewart further noted that the defendant had, in a parallel district court case, raised invalidity arguments combining the prior art from this proceeding with system art.

–  Rule Requiring More Expansive Final Decisions Could Trigger Workload-Related IPR Denials

The director may also deny institution based on concerns over the PTAB’s workload, as noted above—a concern that has been especially top-of-mind given staffing reductions impacting the Board as a result of broader cost-saving measures being implemented across the federal government by the Trump Administration. Another change implemented by the USPTO in the third quarter could further impact the Board’s workload—potentially justifying further discretionary denials.

That change relates to the rules governing which claims the PTAB must address in final written decisions. While the PTAB has long been required to institute trial as to all claims challenged in a petition if the petitioner has shown a reasonable likelihood of success for at least one claim (as established in the US Supreme Court’s 2018 opinion in SAS Institute v. Iancu), there had not previously been a similar rule that applied at the final written decision stage. This essentially gave an offramp that allowed PTAB panels to issue such final decisions that focused on dispositive issues. However, a July 29, 2025 memorandum issued by PTAB Chief Administrative Patent Judge (APJ) Scott Boalick appears to have eliminated that offramp: Barring “extraordinary circumstances”, the memo provides that for all AIA reviews in which an oral hearing has not taken place, all PTAB panels “will address all grounds raised in the petition in their final written decisions”.

–  USPTO Under Squires: Discretionary Denial Status Quo but Support for Section 101 Changes

The confirmation of Director Squires has naturally raised the question of whether the USPTO will continue with its more expansive approach toward discretionary denials, now that former Acting Director Stewart has returned to her role as Deputy Director. However, on September 25, Squires delegated his authority over IPR institution back to Stewart—suggesting that USPTO will maintain its current course on this issue, at least for now.

While the discretionary denial status quo may persist for the time being, one early indicator of change under Squires came in a closely scrutinized decision that revisited a Section 101 rejection for a machine learning application from DeepMind Technologies, a Google subsidiary. In Ex Parte Desjardins, an Appeals Review Panel—convened sua sponte prior to Squires’s confirmation, but ultimately comprised of Squires, Acting Commissioner for Patents Valencia Martin Wallace, and Vice Chief Administrative Patent Judge Michael W. Kim—determined that the original PTAB panel that affirmed the rejection erred by concluding that the challenged claims are directed to an abstract idea, in particular a mathematical formula, without the addition of an inventive concept.

Squires, writing for the panel, determined that the claims were instead directed to an “improvement to how the machine learning model itself operates, and not, for example, the identified mathematical calculation”. More broadly, he argued that his case “highlights what is at stake” as a result of the “confusing nature” of Section 101 caselaw, asserting that “[c]ategorically excluding AI innovations from patent protection in the United States jeopardizes America’s leadership in this critical emerging technology”.

That observation echoes statements by Squires, made during his confirmation process as director, that the Supreme Court adopted an overly restrictive test for patent eligibility in Alice—one that may disadvantage US innovation, given the wider patent eligibility standards in China and elsewhere. Given that those statements came in response to questions about his views on certain legislative reform proposals—in part, referring to the now-pending Patent Eligibility Restoration Act (PERA)—it is unsurprising that some (e.g., Professor Dennis Crouch of Patently-O) have read Desjardins as further indicating Squires’s support for Section 101 reform.

On October 9, following a hearing on the PERA, Squires released a statement that included an even more direct push for a broadened version of Section 101. Recounting the points where his professional experience intersected with the evolving debate over patent eligibility, including his work on an amicus brief in the Federal Circuit Bilski case, Squires argued that Section 101 must “remain expansive” to fulfill its intended purpose. “The expansiveness of Section 101 is not a flaw; it is a feature”, Squires explained. “It is what allows our system to evolve with science and to channel creativity into the marketplace where it creates jobs, spurs investment, and strengthens the nation”. In particular, he argued that patents are important for national security as well as innovation, and that “robust patent protection” is needed to enable responses to the “new generation of challenges”—including “cybersecurity threats from state actors”, the AI race, the clean energy transition, and boundary-pushing biotechnology.

–  Reexams Jump as Petitioners Face IPR Constraints

As the USPTO further expands the use of discretionary denials, the resulting constraints on IPR availability have continued to push would-be petitioners toward ex parte reexaminations—which, while slower than IPRs, are not subject to discretionary denials to the same extent.

As RPX has previously noted, the popularity of reexams has tended to climb in response to policy shifts bolstering discretionary denials: In 2020, the year that the Fintiv decision was designed as precedential, the number of requests for ex parte reexam increased by 21%, and then by 53% in 2021. While they held steady at about 330 requests per year in 2022 (the year Vidal issued the just-overturned guidance limiting NHK-Fintiv) and 2023, they surged by 27% in 2024 (following a decision by Vidal, in CommScope v. Dali Wireless, that limited the “compelling merits” exception then in effect under the 2022 guidance).

Reexams have climbed even more substantially in 2025: After a relatively flat first quarter, reexams swung back upward by 32% in Q2 compared to the same quarter last year (around when the aforementioned rollbacks to Vidal-era Fintiv restrictions took place). The biggest jump came in Q3, when reexams rose by 40%—with the highest number of reexams in any quarter from 2019 onward. Indeed, Q3 2025 saw more reexam requests than in all of 2019. Year-to-date through the third quarter, reexams are up by 24% compared to the same period last year.

Additionally, data indicate that the share of patents with reexam requests that have also been litigated in district court was 69% in Q1-Q3 2025, up from 54% last year. Data also show that defendants have requested IPRs for a decreasing share of those same patents, from a peak of 36% in 2021 to 20% in 2024 overall and 21% in 2025 so far.