Claim Disclaimer Derails Instituted IPR In Freightcar America

In Freightcar America, Inc. v. National Steel Car Limited, IPR2025-01047, Director Squires de-instituted an already-instituted IPR after a patent owner filed its patent owner response. The decision rested on the patent owner’s post-institution disclaimer of the claims that formed the basis for institution.

The Board’s institution decision found a reasonable likelihood of unpatentability for claim 24, but not for the remaining challenged claims. Following institution, patent owner disclaimed claim 24 and its dependents and requested Director Review of the decision granting institution of the IPR, arguing that it had disclaimed the claims for which the Board found a reasonable likelihood of unpatentability. Petitioner argued that Director Review is improper when it relies on new evidence—such as a post-institution disclaimer—rather than identifying any error in the Board’s institution decision.

The Director granted review, vacated the decision granting institution, and denied institution. The Director explained that the disclaimed claims “are treated as though they never existed,” citing Federal Circuit precedent. Because the Board had already determined that the petitioner failed to show a reasonable likelihood of success as to any remaining, non-disclaimed claims, the Director found that “maintaining this IPR is an inefficient use of Office resources.”

This decision highlights a strategic path for patent owners to use a targeted disclaimer strategy, coupled with Director Review, to overcome institution of IPR proceedings where institution hinges on only a subset of claims. However, this avenue would seem to only be available if the Office issues a decision explaining its reasons for institution, which, under the current procedure, the Office usually will not. This decision also demonstrates that Director Review of institution remains available even once the IPR is at an advanced stage.