Vidal Amicus in Cambridge Case Urges CAFC to Overturn USPTO’s ‘Settled Expectations’ Rule

“The rule ‘radically departs from the Congressional mandate of the AIA’ and was adopted ‘without notice-and-comment rulemaking, without economic analysis, and without regard to its chilling effect on innovation and competition.’” – PIPLI amicus brief

Last week, former United States Patent and Trademark Office (USPTO) Director Katherine Vidal filed an amicus brief on behalf of the Public Interest Patent Law Institute (PIPLI) with the U.S. Court of Appeals for the Federal Circuit (CAFC) in In re Cambridge Industries USA Inc., urging the court to set aside the USPTO’s recently adopted “settled expectations” rule for discretionarily denying inter partes review (IPR) petitions.

The brief is supporting a mandamus petition filed by Cambridge Industries USA Inc. on October 10, which asked the CAFC to find that the settled expectations doctrine did not apply to its IPR petitions because the doctrine did not exist when the petitions were filed.

The dispute originated from the USPTO’s denial of two of Cambridge’s IPR petitions challenging U.S. Patent Nos. 9,523,826 and 10,042,116, which Applied Optoelectronics, Inc. had asserted against Cambridge in district court litigation. The Patent Trial and Appeal Board (PTAB) denied institution based solely on the new settled expectations rule. On June 27, 2025, former Acting Director Coke Morgan Stewart determined that because the patents “have been in force for nine and seven years, respectively,” the patent owner’s “settled expectations” were “stronger and discretionary denial is appropriate,” according to the decision.

The amicus brief argued that the rule “radically departs from the Congressional mandate of the [America Invents Act] AIA” and was adopted “without notice-and-comment rulemaking, without economic analysis, and without regard to its chilling effect on innovation and competition.” According to the brief, the rule disproportionately insulates older patents from review, even though they are “more likely to be invalid.”

The USPTO’s own data revealed that historically, the USPTO has relied on prior art introduced during the IPR in 93% of its unpatentability findings made in final written decisions, according to the brief. Specifically, 93% of the invalid patents that the USPTO takes off the market were examined without the benefit of the key prior art. In a comprehensive dataset of IPR petitions filed since 2012, for patents that had been in force for more than six years, 82% resulted in the cancellation of at least one claim at the final written decision stage, according to the brief.