PTAB Practice Evolution: Don't Beat a Dead Horse (or Patent)

A quiet, but important, shift occurred in PTAB practice on April 17, 2025 when USPTO Acting Director Coke Morgan Stewart broke new ground in defining how district court judgments affect IPR institution decisions. The Director Review Order in Hulu v. Piranha Media Distribution charts new territory in the evolving landscape of discretionary denials - and practitioners on both sides need to understand its implications immediately.

Core Facts

• The USPTO Director granted Patent Owner Piranha Media Distribution's request for Director Review

• The Director vacated the PTAB's earlier decision granting institution of IPR against Patent 11,463,768 B2

• The Director denied institution of the IPRs (IPR2024-01252 and IPR2024-01253)

• Critical factor: Before the PTAB's institution decision, a district court had already entered final judgment invalidating the challenged claims under 35 U.S.C. § 101

  
  

Legal Reasoning

The Director's primary rationale was efficiency-based: since the district court had already invalidated the patent claims via a Rule 12(b)(6) motion under § 101, initiating a parallel PTAB proceeding to review the same claims on other grounds was deemed unnecessary and inefficient. The Director noted that if the Federal Circuit were to reverse the district court's decision, Petitioner could raise its invalidity arguments in district court on remand. The Director once again is citing efficiency. So one way to avoid an institution of an IPR -- not recommended -- is to lose on invalidity at the district court.

Impact on Fintiv Analysis

Notably, the Director acknowledged that the Fintiv framework doesn't "fit neatly" with this case because Fintiv typically addresses ongoing parallel proceedings, whereas here, the district court had already reached a final judgment before the PTAB's institution decision. Nevertheless, the Director emphasized that Fintiv's core concerns about efficiency and system integrity supported denying institution. Essentially, don't beat a dead horse.

Insights and Implications

Novel Precedent

This decision establishes important new precedent that a final district court judgment of invalidity strongly favors denial of institution under the Director's discretion, even if it doesn't fit perfectly within the traditional Fintiv framework. It extends Fintiv's efficiency principles to completed district court proceedings.

Strategic Considerations

1. Timing Impact: The decision highlights the critical importance of timing between district court proceedings and PTAB actions.

   
   

2. §101 Strategy: Successful early § 101 challenges in district court can now effectively block subsequent IPR proceedings.

   
   

3. Petitioner Dilemma: Petitioners now face a strategic paradox - succeeding too quickly in district court may foreclose their PTAB options.

Procedural Nuances

The Director didn't just apply the traditional Fintiv factors mechanically but focused on the underlying policy concerns of efficiency and system integrity. This suggests a more holistic application of discretionary denial principles rather than rigid factor-by-factor analysis.

Recommendations for PTAB Practitioners

For Petitioners:

1. Strategic Timing: Carefully coordinate district court and PTAB strategies - consider delaying district court motions that could result in final judgments until after PTAB institution decisions.

   
   

2. Parallel Arguments: Ensure all invalidity arguments are preserved in district court if pursuing IPRs.

   
   

3. Estoppel Awareness: Be mindful that district court success could foreclose PTAB options - evaluate which forum provides the strongest likelihood of comprehensive invalidity findings.

   
   

For Patent Owners:

1. Expedite District Court Proceedings: Push for early resolution of district court motions, especially on § 101 grounds, before PTAB institution decisions.

   
   

2. Highlight Final Judgments: Immediately bring district court final judgments to the PTAB's attention through procedural vehicles like Director Review.

   
   

3. Efficiency Arguments: Frame arguments around system efficiency rather than strict Fintiv factors when district court proceedings have concluded.

   
   

General Practice Tips:

1. Monitor Parallel Proceedings: Implement robust tracking systems for developments in all forums.

   
   

2. Update Director Review Strategies: Consider Director Review as a viable avenue when PTAB decisions do not properly account for district court final judgments.

   
   

3. Brief Development: Develop briefing templates that emphasize efficiency and system integrity arguments outside the traditional Fintiv framework.

How this Affects Future IPRs

This decision likely signals increased consideration of system-wide efficiency in institution decisions. Based on this order and the reasoning behind it, we may see the following going forward:

1. More Director Review requests highlighting completed district court proceedings.

   
   

2. Greater coordination between litigation and PTAB strategy teams.

   
   

3. More careful sequencing of district court and PTAB challenges by petitioners.

   
   

4. Increased emphasis on early § 101 challenges by patent owners.

   
   

5. Development of a distinct framework for handling cases where district court proceedings have reached judgment prior to institution decisions.

   
   

Conclusion: Navigating the New Paradigm

This decision represents a further evolution in the PTAB's discretionary denial jurisprudence that practitioners should carefully incorporate into their strategic planning. The Hulu v. Piranha Media decision represents at a minimum another sign in the interplay between district court litigation and PTAB proceedings. By extending Fintiv principles to completed district court proceedings, the USPTO Director has created a new framework emphasizing patent system efficiency over rigid procedural formalities.

This decision demands that practitioners adopt a holistic, multi-forum approach to patent validity challenges. Gone are the days when district court and PTAB strategies could be developed in isolation. Success now requires careful orchestration of timing, argument selection, and procedural sequencing across venues.

For patent owners, this decision provides a powerful new shield against "second bite" validity challenges when accused infringers have already prevailed in district court. For petitioners, it necessitates careful strategic planning about which forum offers the best opportunity for comprehensive invalidation.

This order further shifts the patent litigation landscape. Those who recognize and adapt to this new reality - viewing district court and PTAB proceedings as complementary rather than independent - can gain significant strategic advantages in the evolving world of patent validity challenges. The Director has spoken clearly: efficiency and finality, not procedural redundancy, will guide the USPTO's discretionary decisions going forward.