PTAB Institution Rate Dropped in Q2 After USPTO Removed Fintiv Restrictions
July 23, 2025
The Patent Trial and Appeal Board (PTAB) instituted trial for 51% of the America Invents Act (AIA) review petitions addressed in Q2 2025, down substantially from that same quarter last year (during which the institution rate was 75%) and from Q1 2025 (67%).
The primary cause of that decline has been a series of changes by Acting USPTO Director Coke Morgan Stewart that have steadily expanded the use of discretionary denials at the PTAB.
In February, Stewart withdrew guidance from her predecessor, Kathi Vidal, that limited such denials based on parallel litigation under the NHK-Fintiv rule. In particular, the withdrawal, as explained in a subsequent memorandum, explicitly eliminated certain safe harbors created by that June 2022 guidance: While the guidance essentially exempted petitions from discretionary denial if they presented “compelling merits”, the memorandum stated that the merits could no longer be dispositive on their own. Though the guidance provided that discretionary denial would not occur where petitioners agree not to assert invalidity grounds that they raised or reasonably could have raised at the PTAB in a parallel district court case—formalizing a practice established in the PTAB’s December 2020 precedential decision in Sotera Wireless v. Masimo, now known as a “Sotera stipulation”—the memorandum instead established that such stipulations would merely be relevant, and again not dispositive. Moreover, the guidance had established that the NHK-Fintiv factors apply only to district court litigation and not investigations before the ITC, but the memorandum specifically extended them to encompass ITC actions. Finally, the guidance had limited the Board’s ability to deny institution based on the proximity of the district court’s scheduled trial date, as shown by certain aggregate data, to the PTAB’s final written decision deadline; while the memorandum now allows any evidence bearing on district court trial dates or ITC final determination target dates. Significantly, the memorandum made
Two days later, on March 26, Stewart issued a memorandum that established a new two-stage process for AIA review institution: Now, the USPTO director first decides whether to issue a discretionary denial, applying an expanded set of factors based on various PTAB precedents and on considerations related to PTAB staffing (a notable limit given recent efforts by the Trump Administration to reduce the federal workforce). Only if she determines such denial is inappropriate will the director then refer the case to a standard three-member PTAB panel to make an institution decision that addresses the merits.
– Retroactive Application Prompts Pushback
The USPTO now faces Federal Circuit pushback from two PTAB petitioners, SAP and Motorola Solutions, that had filed IPRs prior to the withdrawal of the Vidal guidance, in which they agreed to broad Sotera stipulations in order to avoid discretionary denial as provided in the guidance. However, both ultimately had their petitions denied under the post-withdrawal standard—SAP’s in the first instance, and Motorola’s after the patent owner sought director review. Both have now filed mandamus petitions asking the Federal Circuit to intervene, arguing in part that the withdrawal itself, and its retroactive application, violated their Fifth Amendment Due Process rights.
A host of industry associations have also sought to file amicus briefs in support of the petitioners in both cases. More on those filings and the two mandamus petitions is available here.
– Decision Allowing Denials Based on “Settled Expectations” Draws Controversy
Stewart has also continued to issue decisions that could further expand the use of discretionary denials since withdrawing the Vidal guidance. One that has attracted some of the most heated criticism has been Stewart’s June 6 decision in iRhythm v. Welch Allyn, which provided that the PTAB can discretionarily deny institution solely based on the “[s]ettled expectations of the parties, such as the length of time the claims have been in force”—here, denying institution because the petitioner, which cited the challenged patent in a 2013 Information Disclosure Statement (IDS) filed in its own patent application, failed to file an early challenge. Stewart has since held in part that settled expectations are greater the longer a patent has been in force, and that denial on this basis may not be proper due to legal changes relating to unpatentability, or where the patent has not been “commercialized, asserted, marked, licensed, or otherwise applied in a petitioner’s particular technology space, if at all”.
The iRhythm decision has since sparked a heated debate in the IP space, included marked criticism from Vidal and other stakeholders.
For more on that debate, and other developments impacting the PTAB and the patent space more broadly, see RPX’s second-quarter review.