Discretionary Denials—Act II

On March 26, 2025, the Acting Director of the United States Patent and Trademark Office fundamentally changed how the Patent Trial and Appeal Board (“PTAB”) initially considers petitions in post grant proceedings under the America Invents Act (“AIA”). No longer would the PTAB issue an up-or-down vote to “institute” review. Rather the process would be bifurcated, with an initial review of discretionary considerations, followed by a merits consideration if the petition passes muster on discretionary considerations. 

Since March, patent stakeholders have primarily focused on discretionary considerations under 35 U.S.C. § 314(a). That provision gives the PTAB license to deny a petition based on the status of co-pending litigation. But the Acting Director had indicated that other discretionary considerations could be considered under bifurcated review. On Monday, in Ecto World, LLC v. Rai Strategic Holdings, IPR2024-01280, Paper 13 (May 19, 2025), the Acting Director issued a precedential decision on a different consideration:  whether a petition should be denied under § 325(d) based on the same or substantially the same art or arguments considered in the original examination of the challenged patent.   

In vacating a panel’s decision and remanding back to the panel, the Acting Director demanded—from both the petitioner and the patent owner—a detailed discussion of the prosecution history under on § 325(d). Ecto World underscores the growing importance (and cost) of discretionary denial briefing for parties engaged in AIA post grant proceedings. And it also provides a warning to patent prosecutors that submitting lengthy information disclosure statements (“IDSs”) will not shield a patent applicant from discretionary denial.

Section 325(d) and the Ecto World Panel Decision

Section 325(d) provides that the Director “may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented in the Office.” 35 U.S.C. § 325(d). The PTAB has settled on a two-part test to handle § 325(d) challenges. The PTAB first considers whether the same or substantially the same art or arguments were previously presented to the Office. See Advanced Bionics, LLC v. MED-EL Elektromedizinishce Geräte GmbH, IPR2019-01469, Paper 6 at 8 (Feb. 13, 2020) (“Advanced Bionics”). And, if so, the PTAB then considers “whether the petitioner has demonstrated that the Office erred in a manner material to the patentability of challenged claims.” Id.  

Some § 325(d) challenges turn on the second step where the petition utilizes references considered, but not applied, by an examiner during the original examination.  That was the issue in Ecto World. During prosecution, the applicant submitted an IDS with over 1,000 listed entries, including hundreds and hundreds of references. The examiner considered the IDS, even though the examiner had requested, without luck, that the applicant identify the references worthy of attention. After the patent issued without a single prior art rejection, a petitioner challenged the patent in an inter partes review based on four of the considered references. The petitioner argued that the examiner “was not afforded the opportunity to seriously consider any of these references, as they were buried in a massive IDS dump of over 1,000 references.” Ecto World, Paper 1 at 110. The Ecto World panel found that the examiner’s consideration of the IDS satisfied the first step of Advanced Bionics. See Ecto World, Paper 10 at 10–11.  But the panel denied review, because petitioner had not addressed the second step, i.e., whether the examiner had erred in its decision to allow the patent. See id. at 11.

A PTAB Split and the Ecto World Director Decision

Following the denial, the Acting Director vacated the decision to address a PTAB split on the second step of Advanced Bionics. Like the Ecto World panel, some panels have required a petitioner to explain the material error. See also Chemtronics USA, Inc. Flatfrog Labs., AB, IPR2024-00015, Paper 11 (Apr. 22, 2024) (dissent). Others have deduced that an error must have occurred if a strong petition relies on art only considered in an IDS. See, id., at 18–20. Under this logic, if a reference previously cited in an IDS discloses a key limitation that was the basis of patentability, the examiner must have overlooked the reference’s disclosure when allowing the patent. Id.

The Acting Director resolved the split by holding that the petitioner bears the burden to analyze examiner error—“even when the asserted prior art is on an IDS, but the Examiner did not apply the reference.” Ecto World, Paper 13 at 5. Specifically, if the patent owner satisfies the first step of the Advanced Bionics framework, then “a petitioner must explain, with reference to Becton, Dickinson factors (c), (e), and (f), how the Examiner erred in overlooking the prior art.”  Id.[1]   

The analysis required varies based on how the art was considered in examination:  if the examiner applied the art, the petitioner must demonstrate that the art teaches the challenged claim limitations and “no reasonable examiner could have found otherwise.” Id. at 5–6. If the art was merely listed in an IDS, by contrast, it may be enough to show that the examiner overlooked the art’s teachings by explaining that “the asserted prior art was not a basis for rejection during examination, is not substantially the same prior art the Examiner applied, and includes specific teachings that impact patentability of the challenged claims.”  Id. at 5 (internal quotation omitted). Even where the petition cannot show the examiner erred by overlooking particular teachings in the IDS art, the petitioner still may be able to avoid discretionary denial by pointing to the number of references in the IDS and the applicant’s failure to identify the most important ones.  See id. at 6.  On remand, the Acting Director invited both the petitioner and the patent owner to address those considerations under the open-ended Becton, Dickinson factor (f) (“additional evidence and facts”). Id.   

Beefed-Up Briefing on Discretionary Denial and Patent Prosecutors Beware

On one level, Ecto World is a straightforward decision requiring petitioners to clearly address both steps of Advanced Bionics. But in vacating and remanding, the Acting Director continues to signal open-ended analyses of discretionary denial considerations. The Office has already updated its procedures to permit lengthy (14,000 words) discretionary denial briefs in every case. Together with other recent decisions addressing denial based on co-pending litigation, Ecto World offers new factors and considerations for the parties to address in those briefs. Petitioners and patent owners alike can expect discretionary denial briefing to demand greater time and expense, while offering patent owners revived avenues to defeat IPR petitions quickly.

Patent prosecutors should also take note of how the applicant’s actions in prosecution came into play in Ecto World. The applicant filed a prioritized examination and submitted a lengthy IDS before examination to ensure the examiner’s consideration. The lengthy IDS allowed the first step of Advanced Bionics to be easily met. But that was a double-edged sword for the patent owner:  the length of the IDS apparently favored petitioner in the second part of the analysis, suggesting that the examiner had missed key disclosures of considered references. The examiner’s request that the applicant identify the important references in the lengthy IDS—and the applicant’s subsequent non-response—likewise suggested that the examiner may have erred. Had the applicant responded by highlighting some art but not the IPR art, however, that might have signaled that the examiner had erred by overlooking the non-highlighted art.  Either way, patent prosecutors need to be aware that IDS submissions can have important downstream considerations beyond inequitable conduct.  

[1] The Becton, Dickinson factors provide “useful insight into how to apply the framework” under § 325(d), such as considering whether the petition art was evaluated by the examiner (factor (c)) and whether “additional evidence and facts” warrant reconsideration (factor (f)). Ecto World, Paper 13 at 3–4 (citing Becton, Dickinson & Co. v. B. Braun Melsungen AG, IPR2017-01586, Paper 8 (Dec. 15, 2017)); see also Ecto World, Paper 10 at 8–9.