Since taking the helm as USPTO Acting Director in January, Coke Morgan Stewart has played an especially active role for an interim agency leader in revamping how the Patent Trial and Appeal Board (PTAB) handles discretionary denials. In February, Stewart withdrew guidance from her predecessor, Director Kathi Vidal, that limited the PTAB’s use of the NHK-Fintiv rule that governs such denials based on the status of parallel litigation, and in March took over the assessment of discretionary denial requests herself as part of a new two-stage institution process. Stewart has since closely scrutinized prior discretionary denial decisions made before that new process took effect, holding in mid-April that a PTAB panel was wrong to institute trial in an inter partes review (IPR) after a district judge had invalidated the challenged claims under Section 101. That decision has now been designated as “informative”, providing nonbinding guidance for future panels.

Setting the Stage: Stewart Walks Back Vidal-Era Fintiv Limits

Vidal’s aforementioned guidance, issued by the USPTO in June 2022, limited NHK-Fintiv in several respects, perhaps most significantly by providing that that the Board should not discretionarily deny petitions that present “compelling, meritorious challenges”—essentially, exempting America Invents Act (AIA) reviews that are especially likely to succeed. In addition, the guidance clarified that NHK-Fintiv only applies to district litigation, not investigations before the International Trade Commission (ITC); and established that discretionary denial would not occur where petitioners agree not to assert invalidity grounds that they raised or reasonably could have raised at the PTAB in a parallel district court case, in accordance with the PTAB’s December 2020 precedential decision in Sotera Wireless v. Masimo. The guidance also lessened the impact of the controversial NHK-Fintiv factor allowing discretionary denial when the PTAB’s final written decision falls after a scheduled trial date, stating in part that this factor alone cannot tip the scales toward denial.

Those changes appeared to have an impact, as discretionary denials fell significantly in the immediate aftermath of the guidance’s issuance—though they partially rebounded (see, e.g., here) in the wake of Vidal’s February 2023 precedential ruling, under her post-Arthrex director review power, that limited the “compelling merits” exception. In CommScope v. Dali Wireless, Vidal held that PTAB panels must first apply the five NHK-Fintiv factors and may only address compelling merits if the other factors favor discretionary denial.

However, as RPX has previously noted, the USPTO returned the PTAB to the prior status quo with its February 28, 2025 announcement that it had withdrawn the 2022 guidance and all decisions relying upon it, stating that parties should instead refer back to the PTAB’s precedential decisions in Apple v. Fintiv (the underlying decision, designated as precedential in 2020, that memorialized the five NHK-Fintiv factors, building on NHK Spring v. Intri-Plex Technologies, designated in 2019) and Sotera Wireless v. Masimo (as mentioned above). PTAB Chief Administrative Patent Judge (APJ) Scott Boalick clarified that withdrawal in a March 24 memorandum that explicitly repudiates the key points from the rescinded 2022 guidance.

On March 26, Stewart then released another memorandum that created a bifurcated institution process for AIA reviews. Now, the USPTO director is to decide all requests for discretionary denial, and only after the director rejects such a request may a PTAB panel then address the merits and non-discretionary factors. The memorandum provides a broader list of relevant considerations for the director’s discretionary denial assessment that are drawn from certain precedent, including Fintiv; General Plastics, which lays out factors under which multiple petitions from the same petitioner can be discretionarily denied; and Advanced Bionics, which covers discretionary denials where the USPTO has previously considered the asserted prior art or arguments.

Significantly, the memorandum further indicates that the director will also consider the PTAB’s workload in deciding whether to discretionarily deny institution. The PTAB has already reportedly seen a reduction in its headcount of APJs as a result of the Trump administration’s sweeping efforts to reduce the size of the federal workforce, which have included voluntary resignation programs and layoffs, with resignations also potentially encouraged by its order to end remote work. It will take time for the full impact of these changes to become clear, but initial reactions from stakeholders and the media (see, e.g., here and here) have predicted that the result—between staffing reductions and the rollback of Fintiv limits—will be a significant increase in discretionary denials, greater uncertainty over how PTAB panels will apply the governing factors, and even an upswing in NPE litigation.

In the meantime, it appears that stakeholders will have the chance to weigh in on the new discretionary denial procedure: In mid-April, the PTAB announced in one of its “Boardside Chat” webinars that it planned to put the process through notice-and-comment rulemaking, allowing the public to provide feedback before a potential final regulation.

Acting Director Stewart Pushes More Expansive Application of Fintiv

Since taking over discretionary denials, Stewart has used that power to closely scrutinize prior PTAB decisions on that issue—including, as noted above, by revisiting the application of Fintiv where a court has issued a Section 101 ruling invalidating the challenged claims.

The only other director review decision addressing a similar scenario came from Stewart’s predecessor, in AviaGames v. Skillz Platform (IPR2022-00530). In AviaGames, a PTAB panel denied institution in August 2022 after a district court invalidated a subset of the challenged claims under Section 101. The panel found that while the circumstances of the case were a poor fit for the NHK-Fintiv factors—as the patent had been invalidated on a basis not available to the PTAB, Section 101—the requirement under Fintiv that the PTAB take a “holistic” view of “efficiency and preventing the waste of resources”, per the panel, “strongly favors denial of institution” where the challenged patent has already been “ruled invalid”.

However, Vidal—who soon after initiated director review sua sponte (i.e., on her own initiative, without the request of either party)—reversed and remanded that decision in March 2023. Vidal highlighted not just the fact that the district court invalidated the patent under grounds that the PTAB may not address (Section 101), but also that the validity ruling was non-final pending appeal, and that by the time an appeal would be concluded, the petitioner would be time-barred from filing another IPR under the one-year window imposed by 35 U.S.C. § 315(b). The director then cited her guidance memo as establishing that “the Board shall not deny institution of an IPR in view of a district court judgment of invalidity if the record prior to institution meets the compelling merits standard”, ordering the panel to assess compelling merits accordingly.

In the case just revisited by Stewart, Hulu v. Piranha Media Distribution (IPR2024-01252, IPR2024-01253), a district court also issued an Alice decision against the challenged patent, here invalidating all claims at issue (as opposed to a subset in AviaGames). This time, though, the PTAB panel weighing institution—after noting that a subsequent PTAB decision requires the application of the NHK-Fintiv factors prior to a compelling merits analysis where a Section 101 invalidity ruling is being appealed—cited the considerations raised by Vidal’s AviaGames decision (the PTAB’s inability to consider Section 101, and the time bar issues resulting from the pending appeal) as weighing against discretionary denial.

Stewart’s April 17, 2025 director review decision, issued in response to a request from the patent owner, reached the opposite conclusion from the panel in this case, and from Vidal in AviaGames. In a four-page ruling, Stewart held that “[b]ecause the patent claims already stand invalid, it is unnecessary to institute another proceeding to review them for patentability under other grounds”—and that if the Federal Circuit reverses the district court’s Alice ruling, the petitioner could raise other invalidity grounds in the district court litigation (thus implicitly dismissing the concern raised by Vidal that the petitioner would be time-barred from raising those invalidity arguments in another IPR). Stewart also observed, similar to the panel in AviaGames, that “the Fintiv framework does not fit neatly with the circumstances of this case” because it contemplates a still-ongoing parallel proceeding, whereas the district court had already invalidated the challenged claims under Alice. “Here, . . . where a district court already has found the challenged claims invalid, the efficiency and integrity of the patent system is best served by denying institution”, Stewart concluded.

The May 7 designation of that decision as informative came shortly after Stewart issued another director review ruling that suggested she may adopt a restrictive posture toward PTAB challenges of patents with multiple prior validity challenges. In Verizon Connect v. Omega Patents (IPR2023-01162), the patent owner sought director review of a panel’s decision with respect to obviousness and secondary considerations, flagging the fact that the patent at issue had survived seven other validity challenges since issuance, including five ex parte reexaminations, a district court verdict, and another IPR. Ruling on May 2, Stewart agreed with the patent owner that the panel had made certain substantive errors, but while she observed that a remand would ordinarily be the next step, she held that in light of those “seven prior challenges to the claims[,] . . . a remand to the Board may be inefficient and terminating the proceeding may be the more appropriate course of action”. Stewart then ordered the petitioner to file a five-page brief within 14 days to show cause why the IPR should not be terminated.

Stewart’s first discretionary denial decision since launching the new two-stage institution process also adopted a narrower posture than the panel decision under review with respect to multiple Fintiv factors, reversing a prior set of PTAB decisions that had instituted trial in four IPRs filed by Motorola Solutions against Stellar, LLC. In a March 28 order issued sua sponte, Stewart found that the PTAB had given too much weight to the petitioner’s Sotera stipulation because its invalidity arguments in the parallel district court case were more expansive than those in its petition. Stewart also determined that the panel had “misapprehend[ed] the relevant inquiry” of the Fintiv factor contemplating the extent of the “investment in the parallel proceeding by the court and the parties” by finding that the PTAB trial could relieve some of the court’s burden, instead pointing to the “substantial time and effort” spent on the litigation as “strongly” favoring denial.

For more on the PTAB, see RPX’s latest quarterly report.