PTAB’s New Temporary Process: Director to Screen IPR/PGR Petitions for Discretionary Denial

What Just Happened: On March 26, 2025, USPTO Acting Director Coke Morgan Stewart issued a memo introducing interim processes to manage the Patent Trial and Appeal Board’s (PTAB) workload. It splits institution decisions for IPRs and PGRs into discretionary (handled by the Director) and merits-based reviews. Parties can now file separate briefs on discretionary denial, addressing factors like prior adjudications and PTAB capacity. These temporary changes aim to boost efficiency, maintain AIA proceeding capacity, and cut ex parte appeal delays.

Why It Matters: This reshapes PTAB practice, emphasizing discretionary denials and strategic briefing. Practitioners must adapt, and the patent community should track its evolving impact.

Summary of the Memo

The memo, addressed to all PTAB judges, introduces interim processes to manage the PTAB's workload, balancing its statutory duties under 35 U.S.C. § 6(b) to handle ex parte appeals and America Invents Act (AIA) trial proceedings, such as IPRs and post-grant reviews (PGRs). Issued by Acting Under Secretary of Commerce for Intellectual Property and Acting Director Coke Morgan Stewart, the memo outlines the following key changes:

1. Bifurcated Institution Decisions:

   • Decisions on whether to institute an IPR or PGR are split into two phases:

     • Discretionary Considerations: The Director, consulting with at least three PTAB judges, will first assess whether discretionary denial is warranted. If so, the Director will deny institution.

     • Merits and Non-Discretionary Considerations: If discretionary denial is not appropriate, the Director will issue a decision to that effect and refer the petition to a three-member PTAB panel. This panel will then evaluate the merits and other statutory factors in the normal course.

       
       

2. Separate Briefing for Discretionary Denial:

   • Parties can file dedicated briefs addressing discretionary denial:

     • Patent owners may file a brief within two months of the Notice of Filing Date Accorded to the petition.

     • Petitioners may file an opposition brief within one month of the patent owner’s brief.

     • Additional briefing may be allowed for good cause.

     • Word limits are set at 14,000 words for discretionary denial briefs and 5,600 words for replies.

   • The existing merits briefing schedule and timelines for requesting rehearing or Director Review remain unchanged.

     
     

3. Discretionary Considerations:

   • Parties may address factors such as:

     • Prior adjudication of the challenged claims by the PTAB or another forum.

     • Changes in law or judicial precedent since the claims were issued.

     • Strength of the unpatentability challenge.

     • Reliance on expert testimony.

     • Settled expectations (e.g., duration claims have been in force).

     • Economic, public health, or national security interests.

     • Any other relevant factors.

   • The Director will also weigh the PTAB’s ability to meet pendency goals for ex parte appeals, statutory deadlines for AIA proceedings, and overall workload needs.

     
     

4. Implementation and Temporary Nature:

   • These processes apply to IPRs and PGRs where the patent owner’s preliminary response deadline has not yet passed.

   • If the discretionary denial briefing window has already elapsed, patent owners may file briefs within one month of the memo’s date (March 26, 2025).

   • The measures are temporary, driven by current PTAB workload demands.

     
     

The goal is to enhance efficiency, maintain AIA proceeding capacity, reduce ex parte appeal pendency, and ensure consistent application of discretionary considerations.

Analysis

The memo introduces a significant procedural shift by prioritizing discretionary considerations in the institution process and formalizing a separate briefing mechanism. Key points of analysis include:

• Focus on Discretionary Denials: By bifurcating the institution decision, the PTAB elevates discretionary factors (e.g., parallel litigation under Fintiv, serial petitions under General Plastic) above merits-based evaluation. This could lead to more denials without a full merits review.

• Director’s Role: The Director’s direct involvement, with input from three judges, centralizes discretion and may introduce consistency but also subjectivity influenced by workload pressures.

• Workload Management: The explicit consideration of ex parte appeal pendency and AIA deadlines suggests a strategic effort to prevent backlog in one area from overwhelming another.

• Party Empowerment: Separate briefing gives patent owners an early chance to argue for denial and petitioners an opportunity to counter, potentially intensifying pre-institution advocacy.

• Temporary Status: As an interim measure, the processes may evolve based on their effectiveness, requiring practitioners to stay adaptable.

Forecast for IPR Practice at the PTAB

The interim processes will reshape IPR practice in several ways:

1. Higher Rate of Discretionary Denials:

   • With discretionary factors assessed first and workload as a key consideration, more petitions may be denied without reaching the merits, especially during periods of high PTAB demand or in cases with strong discretionary arguments (e.g., parallel district court litigation).

2. Enhanced Strategic Briefing:

   • The separate briefing schedule creates a distinct phase for discretionary arguments, likely leading to more focused and robust advocacy on these issues. Patent owners may aggressively pursue denials, while petitioners must preemptively address potential denial risks.

3. Impact on Timing:

   • The bifurcated process and additional briefing may extend the time to institution decisions, as the Director’s discretionary review precedes panel evaluation. Practitioners should expect slight delays compared to prior practice.

4. Workload-Driven Selectivity:

   • When ex parte appeal pendency is strained, the PTAB may adopt a more selective approach to AIA proceedings, favoring cases with fewer discretionary hurdles or stronger public interest justifications.

5. Adaptation to Temporary Rules:

   • Given the interim nature, practitioners must prepare for potential refinements or a return to prior procedures, depending on PTAB workload trends and feedback.

     
     

Specific Recommendations for Practitioners

To succeed under these new processes, practitioners should adopt the following strategies:

For Petitioners

• Preempt Discretionary Arguments: In the petition, proactively address potential discretionary denial factors (e.g., explain why parallel litigation should not trigger a Fintiv denial or why serial petitions are justified).

• Strengthen Core Challenge: Emphasize the petition’s merits (e.g., strong prior art) to counterbalance discretionary risks, and limit reliance on expert testimony unless it significantly bolsters the case.

• Robust Opposition Briefs: Use the one-month opposition window to directly rebut patent owner arguments for discretionary denial, focusing on factors like the absence of prior adjudication or changes in law necessitating review.

• Monitor PTAB Capacity: Track PTAB workload and pendency statistics (e.g., via USPTO reports) to gauge institution likelihood and adjust filing strategies accordingly.

For Patent Owners

• Leverage Early Briefing: File a compelling discretionary denial brief within the two-month window, highlighting factors like prior adjudications, settled expectations, or overlap with district court cases under Fintiv.

• Target Weaknesses: Challenge petitions with heavy expert reliance or weak unpatentability arguments as grounds for discretionary denial.

• Invoke Broader Interests: If applicable, argue that denial serves economic, public health, or national security interests to align with the memo’s enumerated considerations.

• Seek Additional Briefing: If complex issues arise, request leave for further briefing to fully develop discretionary arguments.

  
  

For Both Parties

• Tailor Discretionary Briefs: Keep discretionary denial briefs focused and concise, avoiding merits arguments unless directly relevant to discretion (e.g., strength of challenge).

• Stay Updated: Monitor legal developments (e.g., new precedent) and PTAB announcements for changes to these interim processes.

• Prepare Contingencies: Anticipate discretionary denials by planning alternative strategies, such as district court litigation or settlement negotiations.

• Use Word Limits Wisely: Maximize the 14,000-word limit for initial briefs to cover all relevant discretionary factors, reserving the 5,600-word reply for targeted rebuttals.

  
  

Conclusion

The March 26, 2025, memo introduces a temporary but impactful shift in IPR practice at the PTAB, emphasizing discretionary denials to manage workload while preserving statutory obligations. Practitioners must adapt by mastering the new bifurcated process, leveraging separate briefing opportunities, and strategically addressing discretionary factors. By aligning their approaches with the PTAB’s priorities—efficiency, consistency, and capacity—parties can navigate these changes effectively until permanent procedures are established.