Discretionary Denials Rise: USPTO Signals Petitioners Must Justify IPRs for Patents Issued Nearly a Decade Ago

6.26.25

In a recent PTAB blurb, we discussed the June 6, 2025 decision in which USPTO Acting Director Coke Morgan Stewart exercised authority under the Office’s new bifurcated discretionary review process to deny institution of five inter partes review (IPR) petitions filed by iRhythm Technologies (“Petitioner”) against patents owned by Welch Allyn (“Patent Owner”). That decision emphasized that knowledge of a patent family for over a decade may create “settled expectations” that weigh in favor of discretionary denial, even when other factors might support institution. This article follows up on that discussion, highlighting a subsequent decision that offers additional clarity on how the USPTO is applying the settled expectations doctrine in discretionary denial analyses.

More recently, in a June 18, 2025 decision in Dabico Airport Solutions Inc. v. AXA Power ApS (IPR2025-00408), the Acting Director again denied institution—this time based on a settled expectations analysis that the Patent Owner itself had not raised. Notably, the Director initiated and developed the “settled expectations” rationale sua sponte, finding that “the challenged patent has been in force almost eight years, creating settled expectations.” This conclusion was supported only by citation to the face of the patent itself (U.S. Patent No. 9,771,169 B2), illustrating the Office’s increasing willingness to act on the mere passage of time.

Although AXA Power had requested discretionary denial, it did not rely on settled expectations to do so. The Director also emphasized the lack of a compelling counterargument from the Petitioner, stating: “Petitioner does not provide any persuasive reasoning why an inter partes review is an appropriate use of Office resources. There may be persuasive reasons why the Office should review the challenged patent, but, in the absence of any such information, the Office is disinclined to disturb the settled expectations of Patent Owner in this instance.”

The Director further explained that “although there is no bright-line rule on when expectations become settled, in general, the longer the patent has been in force, the more settled expectations should be.” As in previous cases such as iRhythm, the Director reiterated that the discretionary denial analysis is holistic and context-specific, but that extended delay in filing challenges may tip the scales toward denial.

Recent Decisions Reflect Evolving Standards

In iRhythm, the Acting Director had already found a twelve-year delay in challenging long-known patents “persuasive” and sufficient to outweigh arguments favoring institution. Conversely, in decisions such as Tesla, ResMed, and Globus, the Director found that recent patent issuance or non-maintenance behavior could rebut presumptions of settled expectations.

The Dabico decision marks an important evolution: it shows the USPTO may act on settled expectations without the Patent Owner raising the issue, and even in cases where the challenged patent has been in force for less than a decade.

Practical Takeaways for Petitioners

These recent decisions—especially Dabico—signal a clear shift: petitioners now bear a greater burden to justify institution when challenging older patents. The USPTO will increasingly ask whether the use of Office resources is justified, and whether public expectations of patent stability weigh against institution.

As the Acting Director explained: “Moreover, patent applications (after 18 months) and issued patents are almost always publicly available to provide notice to the public, other inventors, competitors, and commercial interests.” (citing 35 U.S.C. § 122). Thus, the onus is now on parties to proactively monitor published patent applications and issued patents and to identify those that may warrant a validity challenge early—well before potential “settled expectations” develop.

Petitioners should factor into their strategy not just the strength of the prior art, but also how long the patent has been in force, whether it has been enforced, and what actions might create a presumption that the claims are valid. Waiting several years before mounting a challenge—especially in the absence of compelling new evidence or litigation triggers—may now increase the risk of discretionary denial.

Samuel Raque | Associate Attorney