As Acting USPTO Director Coke Morgan Stewart ("Director") continues to issue discretionary denial decisions, practitioners can benefit from practical insights offered by the Director's recent decisions applying the USPTO's updated Fintiv guidance. Two decisions—both involving Tesla, Inc. ("Tesla") as Petitioner—provide instances in which the Director did not discretionarily deny institution for two primary reasons: Tesla's broad "Sotera+" stipulation, and the complexity of the district court case.
Tesla v. Intellectual Ventures
Tesla initiated IPR proceedings challenging six Intellectual Ventures II LLC ("Intellectual Ventures") patents asserted against it in one district court litigation.1 The Acting Director denied Patent Owner's discretionary denial request despite finding many considerations favoring denial—including a "scheduled trial date [that] precedes the projected final written decision due date," "insufficient evidence the district court is likely to stay its proceeding even if the Board were to institute trial," and "meaningful investment in the parallel proceeding by the parties." As detailed below, the denial was nevertheless bolstered by additional considerations that consisted of Tesla's "broad stipulation," strong "merits" based on previous Board findings, and "complex and diverse" parallel litigation proceedings.
First, it is common for Petitioners to file stipulations in a district court agreeing to not assert certain arguments. For example, a Sotera stipulation is one type that prevents a petitioner from raising in district court "any ground raised or that could have been reasonably raised in an IPR."2 Stipulations are considered in the Fintiv analysis, such as through the fourth Fintiv factor about the "overlap between issues raised in the petition and in the parallel proceeding."3
Tesla's "broad stipulation," agreed to waive three categories of prior art grounds:
[I]f the PTAB institutes an IPR (and does not subsequently vacate institution) in response to Defendant's petition against Plaintiff's U.S. Patent No. 10,952,153 (IPR2025-00217), Defendant will not pursue in this litigation against the claims challenged in IPR2025-00217, (i) the specific grounds raised in IPR2025-00217, (ii) any other grounds that could have reasonably been raised before the PTAB in that instituted proceeding (i.e., any ground that could have reasonably been raised under §§ 102 or 103 on the basis of prior art patents or printed publications), or (iii) any ground based on a combination of system prior art and the references asserted as part of a ground raised in IPR2025-00217, as reflected in the table summarizing the Statutory Grounds for Challenges on page 16 of the Petition.4
Unlike a typical Sotera stipulation, Tesla's "broad stipulation" had an additional provision that promised not to raise "any ground based on a combination of system prior art and the references asserted as part of a ground raised."
Second, with respect to the "merits" favoring institution, the Director determined "that the merits are strong" because the Board's previous determinations related to an "ancestor patent." Specifically, the Director highlighted that the Board, in three separate proceedings, "previously determined there was a reasonable likelihood that similar claims of [the] ancestor patent were unpatentable."
Third, the Director looked toward the "complexity and diversity" of the parallel litigation and found it "tip[ped] the balance against discretionary denial." The litigation involved "eleven patents spanning nine different families that involve a diverse range of subject matter." Due to the "large number and vast scope of the patents asserted in the district court litigation," the Director found the Board to be "better situated to review" the patents-at-issue.
Tesla v. United States
On the same day, the Director denied another of Intellectual Ventures' requests for discretionary denial of a different Tesla IPR.5 This decision found the same factors to weigh for denial—a trial date that precedes a final written decision deadline, "insufficient evidence" for litigation stay, and "meaningful investment" in the parallel proceedings. However, this decision only discussed two factors that undermined discretionary denial: Tesla's "broad stipulation" and "complex and diverse" parallel litigation.
Tesla relied on the same stipulation for this IPR as the one discussed for the first decision above.6 Additionally, the complex parallel litigation is the same litigation as the one noted for the first set of IPRs. However, the Director did not provide any discussion of the merits in this decision.
Takeaways
To avoid discretionary denial, Petitioners should consider filing broad stipulations with scope going beyond Sotera stipulations and emphasizing any complexity of the parallel litigations, including the number of patents involved and the diverse scope of the patents overall. These factors can counsel in favor of institution even if other factors support denial. Petitioners should also examine PTAB decisions challenging related patents and determine whether those findings may be leveraged to show strong merits favoring intuition.
Patent Owners, on the other hand, should consider identifying the lack of broad stipulations or the simplicity of a case in requests for discretionary denial.
Footnotes
1 Tesla, Inc. v. Intellectual Ventures II, Inc., IPR2025-00217, Paper 2 (PTAB Nov. 26, 2024); Tesla, Inc. v. Intellectual Ventures II, Inc., IPR2025-00219, Paper 2 (PTAB Nov. 26, 2024); Tesla, Inc. v. Intellectual Ventures II, Inc., IPR2025-00220, Paper 2 (PTAB Nov. 25, 2024); Tesla, Inc. v. Intellectual Ventures II, Inc., IPR2025-00221, Paper 2 (PTAB Nov. 25, 2024); Tesla, Inc. v. Intellectual Ventures II, Inc., IPR2025-00222, Paper 2 (PTAB Nov. 26, 2024); Tesla, Inc. v. Intellectual Ventures II, Inc., PR2025-00339, Paper 2 (PTAB Dec. 30, 2024).
2 Sotera Wireless, Inc., v. Masimo Corp., IPR2020-01019, Paper 12 at 13-14 (PTAB Dec. 1, 2020).
3 Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 at 14 (PTAB May 13, 2020).
4 See, e.g., Intellectual Ventures II, IPR2025-00217, Paper 8 at Ex. 1067, 2 (May 27, 2025).
5 Tesla, Inc. v. United States, IPR2025-00341, Paper 12 (PTAB Jun. 13, 2025). In this Petition, The United States of America as Represented by the Secretary of the Navy ("US Navy") and Intellectual Ventures II LLC were collectively Patent Owner because The US Navy was the assignee to the challenged patent and Intellectual Ventures was the exclusive licensee having all substantial rights. Id. at 2 n.1.
6 United States, Paper 10 at Ex. 1032, 5.
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