USPTO Introduces New Policy on PTAB Discretionary Denials for Patent Challenges

U.S. Patent and Trademark Office (USPTO) announced a new policy on October 1, 2024, for the Patent Trial and Appeal Board (PTAB). The policy provides guidance on when PTAB judges should exercise discretion to deny institution of inter partes review (IPR) petitions.

This follows public comments received earlier in the year on proposed rules. The policy focuses on factors such as serial petitions, where multiple challenges target the same patent, and parallel proceedings in district courts. PTAB judges must now consider these elements more systematically when deciding whether to institute reviews.

The guidance applies to petitions filed on or after the announcement date.

The PTAB, established under the America Invents Act of 2011, handles post-grant patent challenges including IPRs.

Discretionary denials allow judges to reject petitions even if they meet statutory requirements, to manage workload and avoid redundancy. Prior to this policy, decisions on denials varied across panels, leading to inconsistencies. In 2023, the USPTO solicited feedback on standardizing these practices amid a rise in patent challenges from overseas entities.

Data from the USPTO shows that foreign companies filed about 40% of IPR petitions in fiscal year 2023. The new policy responds to that input without altering statutory authority. The policy outlines 11 specific factors for judges to weigh, including the number of prior petitions and their outcomes.

It also addresses situations where a patent is involved in ongoing litigation. Implementation involves training for PTAB judges to ensure uniform application.

Overseas companies, which often challenge U.S. patents held by domestic firms, may face higher denial rates under the new guidelines. For instance, entities from China and Europe have been active in PTAB proceedings. The policy could lead to fewer instituted reviews, potentially strengthening patent enforcement.

Patent holders affected include those in technology sectors like semiconductors and pharmaceuticals, where IPRs are common. Challengers must now prepare petitions with greater emphasis on avoiding discretionary denial triggers. The USPTO plans to monitor the policy's effects and issue further clarifications if needed.

Next steps involve PTAB judges applying the guidance in upcoming cases. Stakeholders can submit feedback through USPTO channels. The policy does not retroactively affect pending petitions.