The rule book and the black box
USPTO Rescinds the Vidal Memorandum
Acting USPTO Director Coke Stewart has rescinded the June 2022 Vidal Memorandum. The move is sending ripples through the patent world.
That memo limited the PTAB’s ability to issue discretionary denials of inter partes review (IPR) petitions. The limits applied mainly when parallel district court litigation was pending.
Now, with the memo withdrawn, the PTAB regains broader discretion. As a result, many expect an uptick in discretionary denials.
The Return of the Fintiv Framework
So, what does this shift mean for patent stakeholders?
In short, the PTAB can again rely heavily on the Fintiv framework. This framework includes six factors. These factors guide whether to deny an IPR petition when district court litigation overlaps.
For example, the PTAB considers how soon trial is scheduled. It also evaluates how much investment the court has made. In addition, it looks at whether the same issues appear in both forums.
Put simply, if a case is already advancing in court, the PTAB may decline review.
A Policy Pendulum in Motion
Importantly, this is not the first policy shift. Under former Director Kathi Vidal, the USPTO added guardrails. Those changes made discretionary denials less likely. Petitioners could submit a Sotera stipulation to limit district court defenses. They also could show “compelling evidence” of unpatentability. Together, those options made the IPR process more predictable. They also made it more accessible.
Strategic Implications for Patent Owners and Petitioners
Now, however, those protections are gone. Consequently, both patent owners and petitioners must adjust strategy. Patent owners will likely push district court cases forward more aggressively. Faster trial dates can support arguments against IPR institution. Meanwhile, petitioners may need to file IPRs earlier. They also should consider requesting early stays in district court. These steps may reduce Fintiv-related risk.
The Bottom Line
Ultimately, PTAB policy is once again in flux. Therefore, practitioners must stay agile.
Although discretionary denial standards may shift, core principles remain. Timing matters. Coordination matters. Strategy matters more than ever.
For more updates on IPR discretion: Protecting the Little Guy… or Bad Patents?