USPTO Director Issues Informative Decision Denying Discretionary Institution Denial in Tesla IPR Case

The United States Patent and Trademark Office (USPTO) Director issued an informative decision on June 15, 2026, in the matter of Tesla, Inc. v. Bulletproof Property Management, LLC (IPR2026-00204), addressing the question of whether to discretionarily deny institution of inter partes review (IPR).

In this decision, the Director declined to exercise discretion to deny institution despite multiple considerations that sometimes weigh in favor of denial. The decision was published as Paper 14 and is designated as informative, providing guidance on the application of the Office’s memorandum regarding discretionary denial.

Key factors influencing the Director’s decision included the procedural posture of the related district court litigation. Specifically, the trial date in the co-pending parallel district court case had been vacated. This procedural development, combined with the petitioner’s submission of a broad stipulation, allowed the IPR proceeding to function effectively as an alternative forum to the district court litigation.

Additionally, the petitioner demonstrated what the Director described as an apparent Office error. This factor supported allowing the IPR to proceed to address the patentability issues raised.

The timing of the petitioner’s challenge also weighed in favor of institution. The petitioner brought the challenge at an early stage, which the Director noted as a positive consideration under the discretionary denial framework.

Importantly, the petitioner provided evidence of U.S. manufacturing specific to the accused products. The Director recognized this as a significant factor weighing against discretionary denial, reflecting the USPTO’s consideration of the impact on domestic manufacturing in its discretionary decisions.

Taken together, these multiple considerations led the Director to decline to deny institution discretionarily, allowing the IPR to proceed. The decision underscores the USPTO’s nuanced approach to discretionary denial, balancing procedural, substantive, and policy factors.

This informative decision serves as a reference point for future cases where discretionary denial is contemplated, particularly where parallel litigation is involved and evidence of U.S. manufacturing is presented.