As we have written about previously, the USPTO announced new Interim Processes for PTAB Workload Management ("Discretionary Denial Memo") on March 27, 2025. In addition to the existing discretionary denial decisions like Fintiv, the Discretionary Denial Memo called out several new factors for the parties to consider. In iRhythm Technologies, Inc. v. Welch Allyn, IPR2025-00363, -00374, -00376, -00377, -00378, Paper 10 (PTAB June 6, 2025), two of those factors have been applied for the first time: the "settled expectations of the parties" and "extent of the petition's reliance on expert testimony."
In iRhythm, the Patent Owner presented multiple discretionary denial arguments, but the Acting Director only analyzed three: (1) Fintiv, (2) overreliance on expert testimony, and (3) settled expectations.
The Acting Director found that Fintiv supported institution. She specifically noted there was evidence a stay would be granted (Fintiv factor 1), the final written decision was due seven months before trial (Fintiv factor 2), and that there had been "little investment by the parties in the district court proceeding" (Fintiv factor 3).
Similarly, the Acting Director also found that Petitioner's reliance on expert testimony also supported institution. The Patent Owner argued for denial because of Petitioner's "over-reliance" on its expert. However, the Acting Director stated "Patent Owner does not identify any portions of the expert testimony that suggest Petitioner is using its expert to fill gaps in the prior art," and thus determined this factor "weighs against discretionary denial." There has been some question as to how this factor will be applied, so the explicit reference to "gap filling" may provide some guidance as to what "over-reliance" mean, in light of the requirement that IPRs be supported by sufficient evidence (including expert testimony).
Notwithstanding the above, the Acting Director denied institution under the "settled expectation of the parties" factor. She determined that because "one of the patents has been in force since as early as 2012 and Petitioner was aware of it as early as 2013—having cited the then-pending application that issued as the challenged patent in an information disclosure statement Petitioner filed in its own patent application—settled expectations favor denial of institution"
This decision applied to four patents in the same family having issue dates spanning from 2012 to 2018. The Petitioner argued the "settled expectation" was that the patents "had nothing to with petitioner's products, and Petitioner did not need to expend resources in contesting an invalid patent," since Patent Owner never asserted any of the patents in the family until 2024, despite the accused products receiving FDA approvals in July 2012, June 2017, and May 2021 (DD Opp. At 34-35). The Acting Director did not address this argument in her decision.
Thus, the decision would seem to caution against a "wait and see" approach if accused infringers wish to preserve IPR as an option.
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