On June 6, 2025, the acting Director of the U.S. Patent and Trademark Office (USPTO), Coke Morgan Stewart, issued a decision in iRhythm Technologies v. Welch Allyn, Inc.1 that initiates a new basis for discretionary denial of inter partes review (IPR) petitions. The Director denied institution of iRhythm’s IPR petitions because iRhythm had upset Welch Allyn’s settled expectations in the enjoyment of its patents. iRhythm is the first such IPR discretionary denial and raises questions about the scope of this new doctrine and its congruence with judicial and congressional developments.
Background
The statutes creating IPR set only one time bar for filing a petition2 but otherwise permit filing by any person (other than the patent owner) at any time.3 The statutes have also been construed to confer virtually unreviewable discretion on the USPTO Director to grant (or deny) an IPR petition. This past March, Director Stewart issued a memorandum indicating a more active Director role in denying IPR petitions.4 Among other considerations for granting or denying institution, the memo listed “[t]he extent of the petition's reliance on expert testimony” and “[s]ettled expectations of the parties, such as the length of time the claims have been in force.” The memorandum was not followed by rule making or additional guidance on how this consideration would be applied in practice.
In February 2024, Welch Allyn sued iRhythm on four related patents.5 Last December,6 iRhythm Technologies filed five petitions against the four patents (including two petitions against one patent). Welch Allyn requested discretionary denial on several bases, including settled expectations.7 iRhythm opposed.8
The Director’s Decision Denying Institution
The Director’s four-page decision considered the entirety of the record and arguments before denying iRhythm’s IPR petitions. The decision acknowledged “[s]everal arguments weigh against discretionary denial.”9 Specifically, collateral litigation has barely begun and is unlikely to conflict with these IPRs.10 The decision also rejected Welch Allyn’s argument that the petitions are overly reliant on expert testimony, noting Welch Allyn failed to identify any gap in the prior art filled with expert testimony; rather expert testimony only explained the prior art.11 The Director was persuaded, however, that “settled expectations favor denial of institution.”12
The decision explained that iRhythm “was aware of [one13 Welch Allyn patent] 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.”14 According to the decision, this “awareness of [Welch Allyn’s] applications15 and failure to seek early review of the patents favors denial and outweighs the above-discussed considerations” favoring institution.16 The decision states its assessment was “holistic”17 but does not explain what weight it placed on each of the considerations or why the settled-expectation consideration outweighed the other-litigation and expert-testimony considerations, suggesting the settled-expectation decision alone was dispositive.
Analysis
Director Stewart’s decision in iRhythm initiating IPR denials under the settled-expectations consideration outlined in her memorandum raises questions that are likely to be answered in future matters. For example, the factual scenario in iRhythm—actual knowledge of a challenged patent for over a decade—is far from the universal scenario. Yet denial of all iRhythm’s petitions without mentioning the other patents suggests the scope of this consideration will not be limited to actual knowledge of each challenged patent. Moreover, applying this consideration without rule making or other guidance means that parties will only learn the contours of this consideration as it is applied in future cases.
The decision also does not address the petitioner’s settled expectations. The governing statute sets no such time bar, and patents have been subject to third-party review at USPTO in reexaminations since 198118 and in IPRs since 2012.19 When iRhythm filed its petitions last December, it presumably had an expectation that IPR was available—at least until the Director’s March 2025 memorandum unsettled this expectation.
The effect of this new settled-expectation doctrine is to place even greater emphasis on a petitioner filing its IPR petition as soon as feasible. For a petitioner defending against an infringement suit, this advice was already important due to both the statutory time bar20 and a separate discretionary-denial doctrine based on the stage of the collateral litigation. This new laches-like doctrine, however, seemingly creates a bar even when no collateral litigation is pending.
Rigorous application of the settled-expectation consideration will also be in tension with parallel developments in the U.S. Court of Appeals for the Federal Circuit (CAFC) and Congress. The CAFC, which is the reviewing court for IPRs, polices standing when petitioners appeal. When a petitioner does not face a concrete injury (like an infringement suit), the CAFC dismisses the petitioner’s appeal. Indeed, the court’s application of this standing screen is so stringent, one judge in a recent concurrence wrote, “Our precedent on whether parties have standing to appeal to this court from an adverse administrative post-grant review is too restrictive and creates a special standing rule for patent cases.” Moreover, pending legislation contemplates adding a similar standing requirement for a petitioner to file an IPR petition.21 Yet a settled-expectations bar that applies even when a petitioner does not yet face a concrete injury potentially places the petitioner in a catch-22 in which it must file early and risk having no standing or file once it has standing only to be punished for waiting. Navigating this strait will require careful planning.
The decision helpfully provides some clarification about the expert-testimony consideration by indicating that its focus is on impermissible gap-filing.
Conclusion
The factual scenario in this case (awareness of a challenged patent for over a decade) is fairly unusual; nevertheless, consideration of “settled expectations” could have broader applicability. Given the tension with the Federal Circuit’s (constitutionally based) standing requirement, and pending legislation also emphasizing standing, the settled-expectation consideration will likely undergo extensive refinement before USPTO settles on a workable practice.
Please reach out to Michael Rosato, Matthew Argenti, Jad Mills, or another member of Wilson Sonsini’s Post-Grant Review practice or Patent Litigation practice with questions regarding any of the discussion above.
[1] iRhythm Technologies v. Welch Allyn, Inc., IPR2025-00363, -00374, -00376, -00377, -00378, Paper 10 (USPTO Dir.. June 6, 2025).
[2] 35 U.S.C. 315(b) (barring a petition from a defendant more than one year after service of an infringement complaint.
[3] 35 U.S.C. 311(a). The Supreme Court subsequently held the U.S. government is not a “person” for purposes of this statute.
[4] Memo, Interim Processes for PTAB Workload Management (USPTO Dir. Mar. 26, 2025).
[5] Welch Allyn, Inc. v. iRhythm Technologies, 1:24-cv-00224 (D. Del.).
[6] Three months before Director Stewart’s memorandum.
[7] E.g., IPR2025-00363, Paper 7.
[8] E.g., IPR2025-00363, Paper 9.
[9] IPR2025-00363, Paper 10 at 2.
[13] Of the four Welch Allyn patents challenged.
[15] Sic: the decision and briefing only identifies awareness of one patent. See, e.g., IPR2025-00363, Paper 7.
[18] Pub. L. 96–517, §1, Dec. 12, 1980, 94 Stat. 3015.
