Another Discretionary Denial of an IPR on the Basis of “Settled Expectations”
Hot on the heels of the discretionary denial of an inter partes review (IPR) based on “settled expectations” in iRhythm v. Welch Allyn (discussed here), USPTO Acting Director Stewart recently issued another discretionary denial for related reasons, this time in Dabico Airport Solutions v. AXA Power IPR2025-00408, Paper 21 (June 18, 2025). However, this time the patent owner had not even tried to invoke the settled expectations of the patent involved (which issued in 2017), and there was no indication (unlike in iRhythm) of how long the petitioner was aware of the patent.
This represents another step in the application of the March memorandum implementing a process for discretionary denial of post-issuance proceedings such as IPRs, a process that was described in the memorandum as “temporary in nature.” The memorandum (discussed here) set out a non-exhaustive list of six considerations which would be relevant for whether discretionary denial should be exercised by the Director.
In the request for discretionary denial the patentee AXA Power invoked two of those considerations, that the patent validity has already been adjudicated by “the PTAB or another forum” (a preliminary(!) injunction from a court in India), and that the challenge to the patent was weak. In connection with the second of these AXA Power argued that substantially the same prior art and arguments in the challenge had already been considered by the examiner during examination, with the decision still made to allow the claims in the issued patent.
The petitioner Dabico Airport Solutions responded on both these points, apparently effectively, but the IPR was discretionarily denied on the basis that there was a “settled expectation” in favor of maintaining the claims, given that the patent had been issued nearly eight years ago. This issue that had not been raised by the patent owner. Nonetheless it was found decisive, even though the petitioner had the better of the argument in the two other factors from the March memo that were addressed by the parties. Acting Director Stewart concluded that the IPR was denied “based on a holistic assessment of all of the evidence and arguments presented.”
The opinion offers little guidance regarding future decisions, conceding that “there is no bright-line rule on when expectations become settled,” although “in general, the longer the patent has been in force, the more settled expectations should be.” Strangely, the opinion draws an analogy to the six-year statute of limitations for filing patent infringement actions – such a limitation does not run from the date of issuance of the patent, only from the time that infringement begins. Probably the best advice for an IPR petitioner is explicitly to address the issue of the length of time the claims have been in force, and how and when the issue of possible infringement became a live one. If the analogy to the statute of limitations for patent infringement is to be taken seriously, the issue date of the patent should not be the fixed date when the patentee’s “settled expectations” begin to accrue, particularly with regard to products or even petitioners not in existence as of the issue date.
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