Patent Owners Prevail: USPTO’s Stewart Backs IP Holders in Wave of Discretionary Denial Orders

At the core of this policy transformation lies a newly adopted two-step discretionary denial framework, allowing the USPTO Director to screen IPR petitions before sending them to a PTAB panel. This includes an assessment of timing, overlap with ongoing district court litigation, petitioners’ delay in filing, and whether denial would better conserve judicial and administrative resources.

Favoring Stability and Predictability in Patent Enforcement

A key concept frequently invoked by Stewart is “settled expectations.” This doctrine places emphasis on how long a patent has been held and used in the marketplace. Even absent litigation or licensing activity, if a patent has gone unchallenged for years and appears to have formed a basis for commercial reliance, the USPTO may now view post-grant review as disruptive or unfair—especially if brought late by a party with prior knowledge of the patent.

This perspective has proven crucial in several high-profile denials, including cases where petitioners waited years after learning of a patent to initiate an IPR. In one such decision, a petitioner was found to have delayed without just cause while simultaneously engaging in related product development. The USPTO concluded that such actions undermined the fairness of allowing a belated administrative challenge.

Rebalancing the Playing Field

Under prior leadership, the PTAB was seen by some critics as a "patent death squad" due to its high rates of invalidation. Stewart’s shift marks a broader institutional realignment toward protecting patent owners’ procedural rights, particularly small businesses, universities, and independent inventors, who may lack the financial resources to battle prolonged IPRs alongside federal court litigation.

Legal experts say this change is reshaping litigation strategy. “Patent challengers are now under much greater pressure to act quickly, file clean petitions, and demonstrate genuine need for PTAB review,” said Mark Hamilton, a Washington-based IP litigator. “Gone are the days of using IPR as a pressure tool mid-litigation.”

Others note that these decisions may increase the perceived value of U.S. patents, especially in sectors such as biotech, telecommunications, and software, where high-stakes licensing and infringement claims are common. Investors and licensors may view the USPTO’s new posture as evidence of stronger patent enforceability and reduced risk of administrative invalidation.

Meanwhile, critics warn that discretionary denials, if applied too broadly, could make it harder to weed out low-quality or overly broad patents that should never have been granted in the first place. “There’s a risk that bad patents survive not because they’re strong, but because they’re old or litigated slowly,” said a former USPTO examiner who requested anonymity.