In his first Director Review decision, newly-confirmed USPTO Director John Squires terminated the proceeding, without remand, based on the Board improperly crediting an unreliable expert witness. Interactive Commc'ns Int'l v. Blackhawk Network, IPR2024-00465, Paper 40 (Director Oct. 9, 2025).1 In so doing, he explicitly stated that "[t]his decision does not constitute a final written decision under 35 U.S.C. § 318(a)." This novel procedural posture creates substantial uncertainty for both parties, particularly regarding the availability of appeal and of estoppel.
In its request for Director Review, Patent Owner argued that the Board abused its discretion by crediting inconsistent and contradictory expert testimony when it invalidated all challenged claims of U.S. Patent No. 11,488,451. Highlighting the Board's statements that the expert testimony at issue lacked credibility and had "multiple material contradictions," Director Squires held that the Board abused its discretion by considering the expert testimony. However, Director Squires did not issue a final written decision reversing the Board. Nor did he remand the matter to the Board for a new final written decision. Instead, Director Squires terminated the proceeding, stating that his decision "does not constitute a final written decision under 35 U.S.C. § 318."
By terminating the proceeding without remand and stating that the termination was not a final written decision under 35 U.S.C. § 318, this first Director Review decision from Director Squires raises concerns for both petitioners and patent owners. First, without a final written decision, there is arguably no right to an appeal under 35 U.S.C. § 319, as appeal under that statute is available when a party is "dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318(a)."
Second, although nominally the "winner" of the director review, this decision means the issue of invalidity based on these grounds is not final. Estoppel under 35 U.S.C. § 315(e) only attaches when a final written decision issues. Without this estoppel, challenged patents remain vulnerable to the same prior art in district court, which is especially troubling when, as here, the dismissal is based on procedural grounds rather than the merits of the art.
Director Squires cited two cases as support for terminating the proceeding, rather than issuing a final written decision or remanding for the Board to issue one.2 However, neither case appears to involve termination based on evidentiary issues related to the merits of the proceeding arising after institution. Instead, both related to "deinstitution" decisions, related to issues normally addressed at institution.3Conversely, the credibility of the expert testimony relates only to facts developed after the institution decision has already been made.
It remains to be seen whether decisions like Interactive Communication will become standard practice, or if the Federal Circuit will determine this procedure is disallowed under the statute due to the instruction in 35 U.S.C. § 318(a) that "the [PTAB] shall issue final written decision" if inter partes review is instituted. But for now, both patent owners and petitioners should plan to address this process in director review requests.
Footnotes
1. This decision replaced an earlier version of the same decision. Interactive Commc'ns Int'l v. Blackhawk Network, IPR2024-00465, Paper 39 (Director Oct. 1, 2025). The Director in the revised order corrected the procedural result from "reversing" the Final Written Decision to "vacating" it.
2. See Sling TV, L.L.C. v. Realtime Adaptive Streaming LLC, 840 F. App'x 598 (Fed. Cir. 2021); BioDelivery Scis. Int'l, Inc. v. Aquestive Therapeutics, Inc., 935 F.3d 1362 (Fed. Cir. 2019).
3. In Sling TV, the IPRs were deinstituted due to a determination the IPR should have been time bared under 35 U.S.C. § 315(b). Sling TV, L.L.C. v. Realtime Adaptive Streaming LLC, IPR2018-01342, Paper 45 (P.T.A.B. Jan 17, 2020); Sling TV, L.L.C. v. Realtime Adaptive Streaming LLC, IPR2018-01331, Paper 39 (P.T.A.B. Jan 17, 2020). In BioDelivery, the IPR was deinsitituted following the change in law after the Supreme Court's decision in SAS Institute v. Iancu, based on its discretion to choose not to institute where only some claims have a likelihood of success BioDelivery Scis. Int'l, Inc. v. Aquestive Therapeutics, Inc., IPR2015-00165, Paper 91 (P.T.A.B. Feb. 7, 2019); BioDelivery Scis. Int'l, Inc. v. Aquestive Therapeutics, Inc., IPR2015-00168, Paper 88 (P.T.A.B. Feb. 7, 2019); BioDelivery Scis. Int'l, Inc. v. Aquestive Therapeutics, Inc., IPR2015-00169, Paper 89 (P.T.A.B. Feb. 7, 2019).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
