Licensing Considerations In Informative Discretionary Denial Decisions, PTAB Litigation Blog

On January 9, the USPTO designated as informational two recent Director decisions involving licensing activities, highlighting the evolving nature of “settled expectations” in discretionary denial determinations. The decisions—Apple Inc. v. Allani (IPR2025-00856) and Alliance Laundry Systems v. PayRange (IPR2025-00950)—reached opposite outcomes, but both demonstrate how licensing-related factors can significantly influence whether the Director exercises discretion to deny institution.

In Apple v. Allani, Patent Owner sought discretionary denial of Apple’s petitions challenging two patents. Patent Owner argued that the challenged patent in IPR2025-00856 had been in force for thirteen years, creating strong settled expectations. The Director acknowledged this factor weighed in favor of denial. Nevertheless, Apple successfully argued that it did not expect enforcement of the patent because it had concluded it did not require a license and had advised Patent Owner of its position. Critically, Patent Owner did not assert the challenged patents until eleven years after the parties’ initial discussions—and only after the patents had expired. The Director found these licensing-related circumstances weighed against discretionary denial, ultimately referring the petitions to the Board.

In contrast,the licensing calculus cut the other way in Alliance Laundry v. PayRange. This was the third petition challenging the ’608 patent, with both prior petitions having been denied on the merits. The Director noted concerns about roadmapping, as Petitioner relied on the same primary reference (Breitenbach) used in a prior post-grant review while adding new secondary references to “cure” purported deficiencies. Although the challenged patent had only been in force since 2021, Patent Owner presented evidence that it had licensed the patent, which the Director found creates some settled expectations favoring Patent Owner. Combined with the serial petition concerns, these factors outweighed the fact that the related district court litigation had been stayed. The Director granted discretionary denial.

These companion decisions illustrate that licensing considerations can play a meaningful role in the discretionary denial analysis. Patent owners seeking denial should document actual licensing activity to support settled expectations arguments. Petitioners, meanwhile, may benefit from demonstrating a lack of licensing engagement or extended periods of non-enforcement. Just as with equitable estoppel in district court litigation, parties must weigh the potential consequences of licensing outreach on potential future litigation.