Background

The stated purpose of the new NPRM is to create rules that “focus inter partes review proceedings on patent claims that have not previously been challenged in litigation or where prior litigation was resolved at an early stage.” 90 Fed. Reg. 48335. The Background section of the NPRM states the USPTO’s view that “[e]ven extremely strong patents become unreliable when subject to serial or parallel validity challenges” and that “[w]hen IPR proceedings cover the same ground as district court litigation, they cease to be an ‘alternative’ and can substantially increase litigation costs.” 90 Fed. Reg. 48335. The same section also concludes that “[i]f investors lack confidence that a patent will be found valid when it is enforced, the patent will not give them the assurances they need to invest.” 90 Fed. Reg. 48335. And it states that “if [a] patent is subjected to repeated de novo patentability review each time it is enforced, it will no longer be reliable.” 90 Fed. Reg. 48335.

The NPRM invokes the USPTO Director’s “broad discretion to identify” circumstances warranting institution or denial of institution, including “even if a petition satisfies the minimum statutory threshold for institution of an IPR.” 90 Fed. Reg. 48336-37. It states the USPTO’s position that the proposed rule will “have a positive impact on the economy” by “decreas[ing] overall expenditures of patent litigation and the transaction costs for patent licensing”; will “promote consistency across IPR proceedings” by drawing “clearer lines” around institution criteria; and will allow more PTAB resources for ex parte appeals. 90 Fed. Reg. 48337-38.

In conjunction with the issuance of this NPRM, the USPTO withdrew the notice of proposed rulemaking dated April 19, 2024, regarding discretion to institute America Invents Act review, published at 89 Fed. Reg. 28693. This prior notice addressed discretionary denial procedures, among other topics, and predated current procedure at the USPTO regarding discretionary denial briefing. Our past client alerts regarding these previous developments are available here: USPTO Publishes Notice of Proposed Rulemaking for Discretionary Denial Briefing, Section 325(d), Instituting Parallel and Serial Petitions, and Settlement Agreements; USPTO Issues Memo on Interim Process for PTAB Discretionary Denial Evaluation.

Overview of Proposed Rules

The NPRM proposes the following changes to 37 C.F.R. § 42.108, which pertains to the institution of IPRs:

• Required Stipulation. Proposed Section 42.108(d) would provide that IPR “shall not be instituted or maintained” unless the petitioner “files a stipulation with the Board and any other tribunal where it is litigating or later litigates regarding the challenged patent, stating that if a trial is instituted the petitioner and any real party in interest or privy of the petitioner will not raise grounds of invalidity or unpatentability with respect to the challenged patent under 35 U.S.C. § 102 or § 103 in any other proceeding.”
  • In contrast to Sotera Wireless, Inc. v. Masimo Corp., IPR2020-01019, Paper 12 (PTAB Dec. 1, 2020) (precedential), this provision makes stipulations not to pursue invalidity in other forums mandatory and requires they extend to any argument under 35 U.S.C. § 102 or § 103, as opposed to just grounds that were (or could have been) raised in IPR. This would therefore also extend to any 35 U.S.C. § 102 or § 103 argument relying on product or system prior art.
• Claims Found Valid in Prior Proceedings. Proposed Section 42.108(e) would provide that IPR “shall not be instituted or maintained” if either a challenged claim or an independent claim from which a challenged claim depends was found not invalid (in a decision that was not vacated or reversed) under 35 U.S.C. § 102 or § 103 by:
  • a district court or jury at trial;
  • a district court in a summary judgment decision finding no dispute of material fact;
  • the International Trade Commission (ITC) in an initial or final determination;
  • the PTAB in a final written decision under 35 U.S.C. § 318(a) (i.e., in an IPR final written decision) or § 328(a) (i.e., in a post-grant review (PGR) final written decision);
  • a decision of the PTAB or an office action following an ex parte reexamination request filed by someone other than the patent owner or its real party in interest or privy; or
  • the Federal Circuit reversing in relevant part a finding of unpatentability or invalidity under 35 U.S.C. § 102 or § 103 in a decision. 
• Parallel Litigation. Proposed Section 42.108(f) would provide IPR “shall not be instituted or maintained” if it is “more likely than not” there will be a district court trial in which a party challenges the patent under 35 U.S.C. § 102 or § 103; an ITC initial or final determination with respect to 35 U.S.C. § 102 or § 103; or a PTAB final written decision in an IPR or a PGR of a challenged claim or an independent claim from which a challenged claim depends, before the due date for the final written decision in the IPR.
• Institution in Extraordinary Circumstances. Proposed Section 42.108(g) would provide “extraordinary circumstances” in which IPR could be instituted notwithstanding the proposed sections summarized above. Specifically, the proposed rule provides that “[i]f a panel of the Board determines that extraordinary circumstances warrant institution notwithstanding paragraphs (d), (e), or (f)[,] the Panel shall refer to matter to the Director[,] who may personally institute inter partes review.” Such circumstances would include “a determination by the Director that the prior challenge barring institution was initiated in bad faith, e.g., for the purpose of preventing future challenges, or that the prior challenge is rendered irrelevant in view of a substantial change in a statute or precedent of the Supreme Court of the United States.” Such circumstances would not include new or additional prior art, new expert testimony, new case law (other than a change in statute or Supreme Court precedent), a new legal argument, or a prior challenger’s failure to appeal.
  • As we note in a separate alert, under the Director’s separate memorandum of October 17, 2025, available here, the Director will consider all institution decisions personally, as opposed to such decisions being made by panels of the Board that would refer issues to the Director. 
• The proposed rule would additionally provide that “[n]either the Director nor the Board shall waive the requirements of paragraphs (d), (e), or (f) of this section except as provided in this paragraph” and that “[f]rivolous or abusive petitions under this paragraph may be appropriately sanctioned, including with an award of attorneys’ fees.”

The NPRM does not contain proposed changes to the rules regarding institution of PGR proceedings (37 C.F.R. § 42.208).

Conclusion

This NPRM proposes significant changes to the rules regarding the institution of IPR proceedings. Industry participants should consider providing comments with regard to the NPRM and should continue to monitor developments in this space. If you have any questions, please contact one of WilmerHale’s attorneys for the latest developments or for consultation.