What do IPRs, "Settled Expectations" and "Personal Animosity" Have to Do With SEPS?
- Marta Beckwith
- 1 day ago
- 4 min read
In March of 2025, the then Acting Director of the United States Patent and Trademark Office, Coke Stewart, instituted a policy of “Discretionary Decisions” for inter-partes review (“IPR”) proceedings.[1] With the stroke of a pen, the Interim/Acting Director became the sole person with the power to determine which IPRs would be granted, and which denied. When John Squires took over as the Director of the USPTO in September of 2025, he continued this policy.[2] So, rather than follow the rules-based system of grants and denials that had been instituted under the prior Director, IPR decisions currently are made based on the whims - or as a new amicus brief calls it, the "personal animosity" - of a single individual.
That brief recently was filed by a group of 35 intellectual property law professors led by Stanford Law’s Mark Lemley in Google v. VirtaMove in support of a petition for a writ of certiorari (“Brief”). The Brief argues that Director Squires and Acting Director Stewart “exceeded their statutory authority and are substituting their personal animosity toward inter partes review (IPR) for the text of the Patent Act and congressional intent.”[3]
Interim Director Stewart and Director Squires' History of Discretionary Denials
Over the more than a year that this system has been in place, the majority of all IPR petitions have been denied, first by Interim Director Stewart and then by current Director Squires. At one stage, the amount of discretionary denials was so high that one IP law commentator posted an article titled: “An Era of No: The USPTO’s New 0% Institution Rate.”[4] Another commentator noted that Director Squires had overturned 36 previously instituted IPRs (i.e. ones that previously were granted on the merits, but which Director Squires personally decided should not move forward). This included at least one IPR that the patent challenger already had won, and for which there was a final written determination.[5] More recently, there was a report that Director Squires had granted 138 petitions and denied 383.[6] That is a denial rate of almost 75%. According to that same report, most of the denials were not based on the merits of the petition. In other words, the vast majority of the denials were based on a single individuals’ “personal animosity” towards IPRs.
The Made Up, and Unfair, Doctrine of "Settled Expectations"
Director Squires and Interim Director Stewart made at least some of these non-meritorious denials based on a made up doctrine called “settled expectations.” This made up doctrine essentially says that, if a patent has been in force for a some period of time (a few years), IPRs should not be instituted because of the patent holder’s “settled expectations” that their patent would not be challenged.
Of course, that concept fails to acknowledge that, by similar “logic,” an implementer that has not been sued for several years after the patent issues also has “settled expectations” that it will not be sued. Unless we start denying institution of any patent case filed more than that same number of years after a patent issues because of the implementer’s settled expectations, it is grossly unfair and unreasonable to deny institution of IPRs based on the patent holder’s “settled expectations.”
How This Relates to SEPs
The concept of “settled expectations” was not part of the statutory scheme created by Congress and effectively "neuter[s] the statute's mechanisms for weeding out weak patents" (Brief at p.2). This is particularly true when it comes to SEPs. For many standards, the development time for a major version is 5-10 years. And full scale implementation happens slowly after these standards are released. For example, many phones and service providers are still utilizing 4G/LTE and have not switched fully to 5G even though 5G was released in 2019. Thus, by the time a standard has been adopted and widely implemented, many years have passed since any patents related to the standard have been filled. Assuming a reasonable amount of time to issuance, this would mean that SEP holders almost always had “settled expectations” by the time any licensing or litigation started. Continuing application of this made up doctrine would make IPRs of claimed SEPs essentially unavailable.
Cert is Necessary
In most instances, the Director has not even given a reason, “settled expectations” or otherwise, regarding the basis for his non-meritorious denials. This means we now have a system in which a single person can make murky decisions for murky reasons that impact multiple companies and competition itself and allow bad patents to remain in effect.
Congress enacted a statutory scheme after many years and much consideration and input from multiple stakeholders which established an updated system for post-grant patent review. The Director is ignoring this statutory scheme and the Federal Circuit Court of Appeals has refused to rein in the Director:
The PTO’s disregard for the Patent Act and Congress’s intent in enacting the AIA raises exceptionally important questions of federal law that should be settled by this Court. The PTO has issued hundreds of discretionary denials pursuant to an illegal policy. The Court of Appeals for the Federal Circuit has refused to review the PTO’s actions, deciding in over a dozen cases that these decisions are “final and nonappealable.”
No one person, including Director Squires, should be entitled to unfettered discretion to ignore the clear will of Congress. Congress enacts laws. The administration is supposed to administer those laws – even when they do not personally like those laws.
To quote the Brief: “The petition for a writ of certiorari should be granted.”
[3] See: IP Law Professor Supreme Court Brief
