On March 27, 2025, following up on the new Fintiv guidance from earlier in the week, the USPTO announced new Interim Processes for PTAB Workload Management ("Discretionary Denial Memo"). These processes, aimed at "ensur[ing] that the PTAB continues to meet its statutory obligations as to ex parte appeals, while continuing to maintain its capacity to conduct AIA proceedings," create a new bifurcated review scheme, where IPR petitions will not be considered on the merits until after the Director has considered if discretionary denial is appropriate.
The New Bifurcated Discretionary Denial Procedure
The Discretionary Denial Memo creates a new, bifurcated, review scheme, where discretionary denial considerations are analyzed first by the USPTO Director, in consultation with at least three PTAB judges. Discretionary Denial Memo at 1. The Director will then issue a decision either denying institution or allowing the petition to be assigned to a three-judge panel, per the normal procedure. Id.
The new procedure is also accompanied by separate briefing on the discretionary denial factors. Id. at 2. There will be two new briefs allowed as a mater of right:
- Patent Owner's Discretionary Denial Brief, due within two months of the Notice of Filing Date, and limited to 14,000 words.
- Petitioner's Discretionary Denial Opposition Brief, due with one month after the Patent Owner's DD Brief, and limited to 14,000 words.
Id. Any reply briefing, if authorized for good cause, will be limited to 5,600 words. Id.
These briefs are in addition to, not in lieu of, the existing briefing schedule. Id. So, any Patent Owners Preliminary Response ("POPR") will still be due three months after the Notice of Filing date, meaning the POPR will in most cases be filed on or around the same day as the Petitioner's DD Opposition Brief. As such, patent owners should not expect any gained efficiency from the bifurcated procedure, at least as far as early briefing goes.
Factors to be Addressed in Discretionary Denial Briefing
The Discretionary Denial Memo states that the content of discretionary denial briefing is open ended, allowing the parties to address "all relevant considerations," citing Fintiv, General Plastic, and Advanced Bionics specifically. Id. However, it calls out seven considerations:
- Prior adjudication of the patent claims' validity or patentability;
- Relevant changes in law since issuance affecting patentability;
- The strength of the unpatentability challenge;
- The extent of reliance on expert testimony;
- "Settled expectations," such as the length of time the claims have been in force;
- Compelling economic, public health, or national security interests;
- Other considerations bearing on the Director's discretion.
Id. at 2-3. The last factor seems practically likely to include "the ability of the PTAB to comply with . . . workload needs," which is specifically called out in the Memo. Id. at 3.
Timing of Implementation
The discretionary denials briefing procedure goes into effect immediately, for all IPR and PGR proceedings "where the deadline for the patent owner to file a preliminary response has not yet passed." Id. Where the POPR date has not yet passed but the two-month deadline for the Patent Owners DD Brief has, the patent owner may submit a brief within one month of the date of the memorandum, or by Monday, April 28, 2025 (April 26, 2025 being a Saturday). Id.
Considerations for Practitioners
While the real-world impact remains to be seen, it is likely that the discretionary denials briefing procedure, combined with the rollback of the previous Fintiv guidance, will result in more discretionary denials. With the USPTO likely dealing with higher APJ attrition due to the mandate to work from an office, the potential for government wide Reductions in Force, and the federal hiring freeze blocking the USPTO from hiring new judges, attorneys, or examiners, the USPTO seems to be concerned the PTAB will not be able to keep up with its docket. Indeed, the Discretionary Denial Memo specifically calls out workload needs of the USPTO as a consideration for discretionary denials. Discretionary Denial Memo at 3. Petitioners should therefore consider potential alternatives to an IPR, such as an Ex Parte Reexamination, when faced with concerns over the discretionary factors.
Separately, it is unclear how workable this bifurcated scheme will be because the discretionary factors are interwoven with consideration of the merits. For example, the substantive merits of the petition is one of the factors identified by the Memo, and must be considered for one of the Fintiv factors, Factor 6. As such, it seems as though the Director and two separate panels of three judges may need to analyze the merits of each petition—once for the discretionary analysis, and once for the institution decision. This seems counter to the stated goal of the Discretionary Denial Memo of improving efficiency. Practitioners will have to watch the first few proceedings to see how these issues are analyzed separately.
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