"Settled Expectations" – A New Front in Discretionary Denials at the PTAB

The world of Inter Partes Review (IPR) is shifting again, and this time, it’s about more than just timing or parallel litigation. The USPTO has recently embraced a new discretionary denial rationale that patent challengers need to understand: settled expectations.

If your strategy involves challenging patents that have been issued for years, this doctrine could stand between you and institution—even if your petition is otherwise strong on the merits.

Understanding Settled Expectations

The term "settled expectations" refers to a patent owner's reasonable reliance on the long-standing enforceability of their patent. This is especially true when:

• The patent has been in force for many years (e.g., 6–10+ years).

• No prior challenges or disputes have arisen.

• The claims have been consistently maintained or unchallenged during prosecution and post-grant.

• The challenger had knowledge of the patent long before filing the petition (e.g., via a previously filed IDS).

  
  

In short, if a patent has quietly coexisted with competitors for a long period, the PTAB may consider that stability a reason to decline to institute IPR. They cite the disruptive nature of challenging "settled expectations."

Real Cases, Real Consequences

Recent PTAB decisions have applied the doctrine to deny institution, even in situations where the merits of the petition appeared strong:

• In iRhythm v. Welch Allyn, the Board noted that iRhythm had long been aware of the challenged patent and chose to wait until litigation was initiated—casting doubt on its good faith. The Board stated, "Patent Owner argues that because one of the patents has been in force since as early as 2012 and Petitioner was aware of it as early as 2013—having cited the then-pending application that issued as the challenged patent in an Information Disclosure Statement Petitioner filed in its own patent application—settled expectations favor denial of institution. DD Req. 30–31. Patent Owner's argument is persuasive. Petitioner's awareness of Patent Owner's applications and failure to seek early review of the patents favors denial and outweighs the above-discussed considerations."

  
  

• In Dabico v. AXA, the PTAB emphasized that the patent was over eight years old and had created market stability—denying institution despite substantial prior art.

  
  

In both cases, discretionary denial was not based on Fintiv factors (like parallel litigation) but instead on the perceived disruption to an established market. This is similar to laches-type doctrines.

Implications for Petitioners

This evolving doctrine adds another discretionary tool for patent owners and a significant risk factor for petitioners, especially those targeting older patents.

Strategic Takeaways for Challengers

• File Early: Waiting until litigation is threatened or initiated may weaken your credibility.

• Document Good-Faith Efforts: If you’re filing late, be prepared to explain why the delay was necessary or unavoidable.

• Avoid Rehashing Known Art: The Board may be less sympathetic if you’re relying on references disclosed years earlier.

• Prepare for Discretionary Denial: When challenging a patent that has been in force for six years or longer, a petitioner needs to be ready to respond to a patent owner’s request for discretionary denial. Provide specific reasons why the PTAB should deny the motion and expend resources reviewing a patent that may be entitled to settled expectations.

  
  

Benefits for Patent Owners

Patent owners now have a stronger argument to push back against late-stage IPR filings—even those with technically solid prior art.

How to Leverage Settled Expectations

• Emphasize the Patent’s Age and Market Presence: Highlight how long the patent has been in force.

• Document the Petitioner’s Prior Knowledge: Use evidence such as IDS filings and licensing discussions.

• Argue the Impact of an IPR: Discuss how an IPR could affect long-established business and investment decisions.

• Highlight the Lack of Prior Challenges: Point out that there have been no previous challenges or material changes to the claims.

  
  

Final Thoughts

The emergence of settled expectations as a standalone discretionary denial factor gives patent owners a new line of defense. This rests not only on legal doctrine but also on fairness and policy.

For petitioners, it serves as a reminder that in IPR practice, timing is everything. Strong art and solid arguments aren’t always enough when the USPTO sees disruption where stability once ruled.

At Your Patent Counsel, we help clients navigate these nuances—whether you’re seeking to protect your IP assets or planning a surgical IPR petition or response. With deep experience in prosecution, litigation, and inter partes review strategy, we know how to make (or break) a discretionary denial.

📩 Need help evaluating a patent challenge? Contact us today for a strategic consultation.

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