The acting director of the US Patent & Trademark Office (PTO) granted a patent owner’s request for discretionary denial and denied institution of an inter partes review (IPR) proceeding, finding that the petitioner engaged in unfair dealings by challenging a patent on which its employees were the inventors. Tessell, Inc. v. Nutanix, Inc., IPR2025-00322 (PTAB June 12, 2025) (Stewart, Act. Dir.)

Four individuals were Nutanix employees when they invented the subject matter of the challenged patent. Two of the individuals left to form Tessell and later hired the other two. Tessell, which now includes nearly all of the inventors of the challenged patent, filed a petition for IPR arguing that the claims of the patent were unpatentable. Nutanix filed a request for discretionary denial, which Tessell opposed.

The doctrine of assignor estoppel generally prevents an inventor who has sold or assigned a patent from challenging the validity of the patent. Although assignor estoppel does not apply in IPR proceedings, the acting director explained that the PTO may consider unfair dealings as a factor when determining whether to exercise discretion to deny institution under 35 U.S.C. § 314(a). The acting director found that it was inappropriate for the inventors to have used PTO resources to obtain a patent only to later advocate for its unpatentability. The acting director therefore exercised discretion to deny institution.