Tesla's Preservation of District Court Indefiniteness Positions Creates IPR Roadblock

In Tesla, Inc. v. Intellectual Ventures II LLC, No. IPR2025-00340, Paper 18 (Director, Nov. 5, 2025) (informative), Director Squires issued a director review order reversing an initial decision granting institution because the Petitioner argued in district court litigation a claim term was indefinite, but in the IPR contended "no claim term requires express construction" and applied the "plain and ordinary meaning." The Director found these were inconsistent constructions, and de-instituted because the Petitioner failed to provide a sufficient explanation to assert different positions. Notably, this decision was marked informative.

This decision came after Tesla survived the USPTO's stricter discretionary denial rules due to (i) Tesla agreeing to a broader Sotera stipulation, (ii) three previous Board decisions instituting similar claims, and (iii) the patent being involved in a highly complex litigation involving 11 patents spanning nine different families, as we previously discussed in a previous post.¹[A1]

In seeking director review of the institution decision, Intellectual Ventures argued that the Board should have discretionarily denied the petition because Tesla advanced inconsistent claim construction positions for the same claim term in the IPR and a parallel district court case. The Director agreed, focusing on two positions Tesla took for the claim limitation "generating said target feature information from said data statistics":

1. In District Court, Tesla argued the limitation was indefinite because a person of ordinary skill in the art could not determine its meaning and scope with reasonable certainty.
2. At the PTAB, Tesla argued that "no claim term requires express construction" and adopted the Patent Owner's "plain and ordinary meaning" construction from the district court litigation.

The Director acknowledged the rules do not "prohibit [P]etitioners from taking inconsistent claim construction positions," but the Petitioner is required to explain why those different positions are warranted. Tesla's only explanation noted the "statutory[] prohibit[ion] [on] raising indefiniteness challenges in an inter partes review." The Director, however, found this insufficient, stating it "amounts to an assertion that a Petitioner should be permitted to raise inconsistent invalidity challenges in [] two forums."

The Director explained what a sufficient argument might have looked like:

Petitioner's explanation may have risen to a sufficient level, for example, if Petitioner had shown that, notwithstanding the alleged indefiniteness of the claim term, an ordinarily skilled artisan would understand that the asserted art satisfies the claim limitation (such as if the limitation prescribed a range and only the outer bounds of the range were unclear).

Because Tesla failed to provide this level of detail or another sufficient explanation, the Director found that its approach "detracts from, the Office's goal of 'providing greater predictability and certainty in the patent system.'" Accordingly, the Director granted director review, vacated the institution decision, and discretionarily denied the petition.

Petitioners should be cautious when asserting different claim construction positions in the district court and at the Board, even when they are statutorily barred from raising a position at the PTAB, such as where a claim term is indefinite. If facially inconsistent positions are taken, Petitioners should sufficiently explain why different positions are warranted in different forums. In preparing discretionary denial arguments, Patent Owners should review whether Petitioners have presented claim construction positions before the Board that differ from those taken in other forums.

Footnote

1. On July 2, 2025, Acting Director Stewart denied Intellectual Ventures' discretionary denial request and referred IPR2025-00340 to the Board for the same reasons as those discussed in Tesla, Inc. v. Intellectual Ventures II LLC, IPR025-00217, Paper 9 (Director June 13, 2025). The hyperlinked blog post discusses reasons why the IPR025-00217 petition was referred.

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