Federal Circuit Rejects Challenges of PTAB’s “Settled Expectations” Rule

The USPTO has adopted an increasingly expansive approach to discretionary denials at the Patent Trial and Appeal Board (PTAB) this year. In February, then-Acting USPTO Director Coke Morgan Stewart withdrew guidance that had limited such denials for America Invents Act (AIA) review petitions based on the status of parallel litigation under the NHK-Fintiv rule. Stewart then adopted an approach allowing discretionary denials based on a broader set of factors, including one allowing denials for petitions against patents longer in force based on the “settled expectations” of the parties. Challenges to those changes have not succeeded thus far: In November, the Federal Circuit denied three mandamus petitions arguing that the withdrawal of the guidance violated the petitioners’ due process rights. Now, the appellate court has applied similar reasoning to reject an additional trio of petitions, including two protesting the “settled expectations” factor and another that fought a Fintiv denial based on a district court’s invalidation of the patent at issue under Alice.