On February 28, the US Patent and Trademark Office (USPTO) rescinded former Director Kathi Vidal’s 2022 memorandum on discretionary denials in Patent Trial and Appeal Board (PTAB) post-grant proceedings running parallel to district court litigation.

The USPTO additionally clarified that any PTAB or director review decisions relying on Vidal’s memo are no longer considered binding or persuasive authority.

Vidal’s memo had clarified when the PTAB should exercise its discretion to deny institute trial in PTAB proceedings when there is a parallel district court litigation over the same patent. Specifically, the now-rescinded memo made clear that the PTAB should not discretionarily deny institution in three particular situations: (1) where the petition presented “compelling merits” of unpatentability; (2) where the parallel proceeding before the International Trade Commission, and (3) where the petitioner stipulates not to pursue in the parallel proceeding the same unpatentability grounds as in the petition or any grounds that could reasonably have been raised in the petition (a Sotera stipulation).

Unsurprisingly, Vidal’s memo led to a notable decline in discretionary denials and a corresponding rise in the PTAB’s institution rate.

Without replacing guidance, it is difficult to predict the exact implications of the USPTO’s rescission of Vidal’s memo. While the PTAB may still conduct a “compelling merits” analysis, it will only be one factor and no longer a dispositive one. So too with Sotera stipulations. The PTAB may also begin discretionarily denying institution in ITC parallel proceedings.

Absent further guidance from the USPTO, practitioners should expect a more unpredictable and discretionary approach to post-grant proceedings.

We are monitoring this situation closely as it develops and will provide updates as they are available.