USPTO: No Bright-Line Rule on When Expectations Become Settled

On June 18, 2025, U.S. Patent and Trademark Office Acting Director Stewart issued a discretionary denial decision in Dabico Airport Solutions Inc. v. AXA Power ApS, granting the patent owner’s request for discretionary denial and denying institution of inter partes review. IPR2025-00408 (PTAB Jun. 18, 2025). Considering “the totality of the evidence and arguments the parties have presented,” Acting Director Stewart found that some facts counseled against discretionary denial. However, in denying institution, the decision placed particular focus on one of the new “relevant considerations” listed in Acting Director Stewart’s March 26, 2025, memorandum — the “[s]ettled expectations of the parties, such as the length of time the claims have been in force.”¹

The decision noted that the interim bifurcated process for discretionary denial “permit[s] a patent owner to file a brief explaining why discretionary denial is appropriate and the petitioner not only to respond to patent owner’s argument but also to identify reasons not to exercise discretion to deny institution.” (Emphasis in original.) Here, Acting Director Stewart observed that “the challenged patent has been in force for nearly eight years, creating settled expectations.” The petitioner, however, did not provide “any persuasive reasoning why an inter partes review is an appropriate use of Office resources.” While such reasons may exist, “in the absence of such information, the Office is disinclined to disturb the settled expectations of Patent Owner in this instance.”

Finally, Acting Director Stewart indicated that, while there is no “bright-line rule on when expectations become settled, the longer the patent has been in force, the more settled expectations should be.” In support of this position, the decision cited the time limitation on damages of 35 U.S.C. § 286, notice provided by publication of patent applications, and the public availability of issued patents. “As such, actual notice of a patent or of possible infringement is not necessary to create settled expectations.”

Takeaways

Petitioners may want to consider addressing any “relevant considerations” from Acting Director Stewart's March 26 memorandum, regardless of whether the patent owner raises them in its discretionary denial brief, to offer reasons for the Board not to exercise discretion to deny institution.