USPTO Rescinds 2022 Guidance on Discretionary Denials

On February 28, 2025, the United States Patent and Trademark Office announced that it has rescinded the June 21, 2022, memorandum about discretionary denials in Patent Trial and Appeal Board (PTAB) post-grant proceedings with parallel District Court litigation. The Office also announced that, to the extent any PTAB or Director Review decisions relied on the memo, the portions of those decisions relying on the memo are no longer binding or persuasive on the PTAB.

The 2022 memo, titled “Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation,” governed the application of the factors the PTAB uses when deciding whether to exercise its discretion to deny institution where there is parallel District Court litigation involving the same patent. Apple, Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020). The introduction of the Fintiv framework sparked a surge in discretionary denials, which, in turn, prompted the Office to issue a Request for Comments on the PTAB’s approach to discretionary denials. Separately, then-Director Vidal issued the now-rescinded memo, in which she set forth four clarifications about Fintiv denials:

1. The Board will not issue Fintiv denials where the petition presented “compelling merits” of unpatentability.
2. The Board will not issue Fintiv denials where the parallel proceeding was in the International Trade Commission (ITC).
3. The Board will not issue Fintiv denials where the petitioner filed a Sotera stipulation (i.e., a stipulation not to pursue in the parallel District Court proceeding the same grounds as in the petition or any grounds that could reasonably have been raised in the petition).
4. The Board may consider median time-to-trial statistics in the district where the parallel litigation is pending.

The 2022 memo led to a notable decline in Fintiv denials of institution, which has continued through the present day.

While it is too early to state with certainty what the ramifications of the memo’s rescission will be, practitioners likely can expect the following effects:

• A Sotera stipulation will no longer be dispositive on the question of discretionary denial. The Board will likely consider a Sotera stipulation as just one factor “weighing strongly” in favor of not exercising its discretion to deny institution. See Sotera Wireless, Inc. v. Masimo Corp., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential as to § II.A).
• The Board will no longer conduct a dispositive “compelling merits” analysis. Instead, the merits of a petition will be just one factor the Board considers under Fintiv.
• The Board is likely to reconsider whether parallel ITC proceedings support exercising its discretion to deny institution under Fintiv.
• The Board may consider a parallel proceeding’s trial date more relevant than the District Court’s median time-to-trial statistics when comparing proximity of trial to the Board’s projected deadline for a final written decision.

We are monitoring this developing situation closely and will provide updates as they become available.