File Early or Risk Denial: iRhythm IPR Institution Denial Underscores the Importance of Filing IPR Petitions Sooner Rather Than Later

On June 6, 2025, the Acting Director of the United States Patent and Trademark Office (“USPTO”), Coke Morgan Stewart, issued a decision denying institution of five inter partes review (“IPR”) petitions filed by iRhythm, Inc. against patents held by Welch Allyn, Inc.¹ The denials were issued pursuant to the USPTO director’s discretionary authority under 35 U.S.C. § 314(a).

Acting Director Stewart concluded that iRhythm’s longstanding awareness of the asserted patents and delay in challenging them weighed against institution. This decision is one of a growing number of discretionary denials issued under the USPTO’s updated guidance on IPR institution.

Background

Under 35 U.S.C. § 314(a), the USPTO director has discretion to deny institution of IPR even where the statutory requirements for institution are met. Over the past several years, the Patent Trial and Appeal Board (the “Board”) has developed a multi-factor framework for exercising its discretion. Most notably, in Apple Inc. v. Fintiv, Inc., the Board laid out six non-exclusive factors to guide whether to exercise its discretion:

1. Whether a stay exists or is likely in the district court case,
2. Proximity of the court’s trial date to the projected IPR final written decision date,
3. Investment in the parallel proceeding, including completed discovery and claim construction,
4. Overlap between issues raised in the petition and the district court case,
5. Whether the petitioner and defendant are the same party,
6. Other circumstances that impact the Board’s discretion, including the merits and statutory policies favoring IPR.²

In June 2022, former Director Kathi Vidal issued interim guidance (the “June 2022 Memo”) that narrowed the circumstances under which the Board would apply Fintiv.³ The June 2022 Memo emphasized a preference for reaching the merits and discouraged denials where the petition presented compelling grounds. It also instructed panels to not apply Fintiv where the petitioner and litigation defendant were unrelated and gave weight to Sotera stipulations that limited overlapping issues between the district court litigation and the IPR proceeding. That policy remained in place until February 2025, when the USPTO formally withdrew the June 2022 Memo.

The retraction signaled a return to the Fintiv framework and was followed by two guidance memos in March — one from the Chief Administrative Patent Judge⁴ and another from Acting Director Stewart⁵ (“the March 2025 Memos”). The March 2025 Memos clarified that Fintiv applies to ITC proceedings, Sotera stipulations do not guarantee that a petition will not be denied, and the merits of the petition are no longer prioritized over other factors. The March 2025 Memos outlined a bifurcated institution decision process where a panel composed of the Director and three Administrative Patent Judges (“APJs”) first make an initial decision on discretionary denial. If that panel decides to institute proceedings, a second panel of three APJs then evaluates the merits of the petition. The March 2025 Memos established a new briefing procedure on discretionary denial and listed several substantive factors to be addressed in the parties’ discretionary denial briefs:

• Whether the Board or another forum has already adjudicated the validity or patentability of the challenged patent claims,
• Whether there have been changes in the law or new judicial precedent issued since the issuance of the claims that may affect patentability,
• The strength of the unpatentability challenge,
• The extend of the petition’s reliance on expert testimony,
• Settled expectations of the parties, such as the length of time the claims have been in force,
• Compelling economic, public health, or national security interests, and
• Any other considerations bearing on the Director’s discretion.

The Opinion

This new framework was recently applied in iRhythm, Inc. v. Welch Allyn, Inc., where the Acting Director emphasized the “settled expectations” of the parties as a central factor in the discretionary denial analysis. Welch initially sued iRhythm for patent infringement in the District of Delaware in February 2024.⁶ In response, iRhythm filed multiple IPR petitions challenging the validity of Welch’s asserted patents. Welch then invoked the USPTO’s discretionary denial process and submitted briefing urging denial under § 314(a).

Welch argued that iRhythm had long been aware of the asserted patents, citing evidence that one of the patents was referenced in iRhythm’s own patent filings as early as 2013. Despite this early awareness, iRhythm waited until 2024 to challenge the patents. Welch submitted information disclosure statements showing that iRhythm had cited to the patents at issue. Welch argued that this prolonged inaction “created an implicit expectation between the parties, an acquiescence as to the patentability of the claims,” thus justifying discretionary denial.⁷

Acting Director Stewart agreed and concluded that iRhythm’s delay supported a finding that the petitions were untimely under the “settled expectations” factor. While several factors weighed against denial — including the early stage of the district court proceedings, a projected trial date well after a potential final written decision, and a high likelihood of a stay pending Board resolution — those factors did not outweigh the petitioner’s delay. Acting Director Stewart ultimately held that iRhythm’s longstanding awareness of the patents, coupled with its failure to timely pursue review, supported denial of institution.

What This Means for You

The iRhythm decision reflects the ongoing shift in the USPTO’s approach to discretionary denial — one that departs from the more permissive framework adopted under former Director Vidal. For petitioners, timing matters. Petitioners considering IPR should move quickly once they become aware of challengeable patents. Early identification and timely filing are critical to preserving access to Board review. At the same time, patent owners should be prepared to raise discretionary denial arguments grounded in petitioner delay, particularly in cases involving older patents or long-standing awareness.

¹ iRhythm Technologies Inc. v. Welch Allyn, Inc., IPR2025-00363, -00374, -00376, -00377, -00378, Paper 10 (P.T.A.B. June 6, 2025).

² IPR2020-00019 (P.T.A.B. Mar. 20, 2020) (“Fintiv”).

³ Katherine Kelly Vidal, Dir., U.S. Pat. & Trademark Off., Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation (June 21, 2022) (the “June 2022 Memo”).

⁴ Scott R. Boalick, Chief Administrative Patent Judge, U.S. Pat. & Trademark Off., Guidance on USPTO’s recission of “Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation” (Mar. 24, 2025).

⁵ Coke Morgan Stewart, Acting Dir., U.S. Pat. & Trademark Off., Interim Processes for PTAB Workload Management (Mar. 26, 2025).

⁶ Complaint, Welch Allyn, Inc. v. iRhythm Technologies, Inc., No. 1:24-cv-224 (D. Del. filed Feb. 20, 2024).

⁷ Patent Owner’s Discretionary Denial Paper, iRhythm, Inc. v. Welch Allyn, Inc., IPR2025-00363, Paper 7 at 31 (P.T.A.B. April 18, 2025).

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.