by Dennis Crouch
Soon after taking office, newly confirmed USPTO Director John Squires formally delegated his discretionary authority over inter partes review institution decisions to Deputy Director Coke Morgan Stewart on September 25, 2025. Just one day later, on September 26, the agency exercised that delegated authority to deny institution in fifteen IPR petitions covering eight patent groups. The denial decisions, though brief (each under two pages of text), reveal continued reliance on the expanded “Fintiv” framework that weighs parallel district court proceedings, while also emphasizing “settled expectations” based on patent age and petitioner delay. Notably, one decision denied institution even though the parallel district court case had been stayed, marking another expansion of discretionary denial grounds beyond trial timing concerns. L’Oréal USA, Inc. v. Brightex Bio-Photonics, LLC, IPR2025-00971. In general, I’m thinking of identifying this approach as Centralized Expanded Discretionary Denial or more simply, the Stewart Framework.
Why "Centralized Expanded Discretionary Denial"? I refer to this as the "Centralized Expanded Discretionary Denial Framework" rather than "Fintiv" or its variants because the current practice has evolved far beyond the original trial-timing analysis. The framework now encompasses multiple independent grounds: parallel litigation timing (Fintiv+), parallel avoidance commitments (Sotera+), settled expectations, customer suits, roadmapping, equitable delay, and business relationships. "Centralized" reflects the 2025 shift from PTAB panel decisions to Director-level review, where the Director or Deputy Director personally exercises § 314(a) discretion rather than delegating these determinations to three-judge panels as was standard practice before 2025. "Expanded" or perhaps "Expansive" captures how denial grounds now extend well beyond timing to encompass equitable and strategic factors.
I expected that Director Squires would continue the discretionary denial approach that Stewart began several months ago. And, the delegation memo confirms ongoing business as usual. The new set of decisions show continued willingness to exercise discretionary authority across multiple scenarios: parallel district court litigation with unfavorable trial timing, customer suits where the petitioner is not directly accused, repeated challenges to the same claims after prior unsuccessful petitions, and cases involving long notice periods and business relationships between parties.
What is Discretionary Denial? Even when a petitioner shows a reasonable likelihood of prevailing on patentability, the USPTO Director may exercise discretion to deny institution of inter partes review under 35 U.S.C. § 314(a). Under the statute, a decision of whether to institute an IPR is non-appealable. However, five mandamus petitions are currently pending before the Federal Circuit arguing that Centralized Expanded Discretionary Denial goes beyond the pale of what is permissible.
The majority of the September 26 denials relied primarily on timing concerns stemming from Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential). Under Fintiv, the Board considers whether efficiency and integrity of the system are best served by denying or staying the petition when a parallel district court proceeding is at an advanced stage. In these cases, the PTAB is looking to the calendar set by the district court judge as well as time-to-trial statistics to see whether there is likely overlap.
Many also highlighted “settled expectations.” Under the Centralized Expanded Discretionary Denial approach, a patent that has been in force for >6 years is presumed to establish “settled expectations” for the patent owner that the patent wil will not be challenged.
One of the cases invoked the “customer suit” doctrine, under which the Board has sometimes denied institution when the petitioner is not itself accused of infringement but seeks to challenge patents being asserted against its customers or business partners. The theory is that such petitioners may lack the same direct stake in the outcome and may be using the IPR process strategically rather than defensively. Instacart v. Fall Line Patents, LLC, IPR2025-00958, Paper 8 at 2 (Director Sept. 26, 2025).
Perhaps the most significant decision from September 26 is L’Oréal USA, Inc. v. Brightex Bio-Photonics, LLC, IPR2025-00971 (Patent 9,542,595 B2), because it represents a clear departure from the Fintiv framework. The Board explicitly acknowledged that “the parallel district court proceeding has been stayed” and that “it is likely that the final written decision in this proceeding will issue before the district court trial occurs.” Under traditional Fintiv analysis, this would weigh heavily against discretionary denial, since there would be no duplication of effort, no risk of inconsistent decisions, and no efficiency concerns.
Nevertheless, the Board denied institution based on equitable considerations unrelated to trial timing. The Board emphasized three factors. First, “the challenged patent has been in force for eight years, creating settled expectations for Patent Owner.” Second, “it is uncontested that the parties were technology partners for many years and developed products together.” Third, Patent Owner provided evidence that it had informed L’Oréal of the filing of the provisional application in 2013, the publication of the non-provisional application in 2014, and the issuance of the patent in 2017, and had also sent L’Oréal a letter in 2022 identifying the patent as relevant to L’Oréal’s products. The Board concluded that “Petitioner appears to have had notice of the challenged patent for a significant period of time” and that “under these circumstances, the considerations that favor discretionary denial outweigh those that counsel against it.” The L’Oréal decision confirms that we are operating in a fundamentally different IPR landscape – and one that continues to shift.
In addition to the above excellent discussion of the massive new IPR denials including “Fitiv on steroids”, the manufactured new “settled expectations” rationale has no legal basis in either statutory or case law. No court has ever prevented patent suit defendants from defending themselves from invalid asserted claims just because the patent was issued for six years. There is no such law. There is no such “quiet title” doctrine for patents any time before their expiration dates, and there is no logical reason for it. It is extreme ultra vires. It is particularly ironic in view of the recent conservative majority Sup. Ct. Loper decision overruling the prior “Chevron Doctrine” to remove any presumption of agency authority for agencies making far less draconian legal interpretations of their controlling statutes, much less for effectively dismantling such statutes.