Acting Director Stewart Blunts Impact of Sanctions in Reversing Former Director Vidal’s Cancellation of All Claims of Sanctioned Party’s Patent

"Absent extraordinary circumstances, the Board should never cancel claims it has not determined to be unpatentable as a sanction."

On June 5, 2025, Acting Director Coke Morgan Stewart modified former Director Kathi Vidal's July 2024 affirmation of an adverse judgment canceling 183 challenged claims across five patents for Patent Owner misconduct by Longhorn.[1] While Director Stewart agreed that Longhorn engaged in misconduct, the Director disagreed that this conduct warranted such consequential sanctions. Instead, Director Stewart took the position that, absent extraordinary circumstances, sanctions should never cancel claims that have not been found to be unpatentable on the merits.

Proceedings at the PTAB

Back in April of 2021, Petitioner Spectrum Solutions LLC (“Spectrum”) initiated IPRs challenging five of Longhorn Vaccines & Diagnostics, LLC’s (“Longhorn”) patents. On May 3, 2023, the PTAB concurrently issued a Final Written Decision and a Sanctions Order, with the latter finding all challenged claims unpatentable due to Longhorn’s misconduct withholding relevant factual evidence during an IPR. Director Vidal initiated sua sponte Director Review of only the Sanctions Order and authorized additional briefing from the parties and amici curiae on whether Longhorn’s conduct warrants sanctions deeming all challenged claims unpatentable.

On July 26, 2024, Director Vidal issued a 67-page Director Review decision finding that Longhorn “engaged in sanctionable misconduct by orchestrating a deliberate scheme to hide relevant factual evidence from the Board and thereby mislead the Board,” including “intentionally withholding and concealing relevant factual evidence in violation of 37 C.F.R. §§ 42.11(a) and 42.51(b)(1)(iii); intentionally relying on known falsely elicited expert testimony in violation of 37 C.F.R. §§ 42.11(a), 42.11(c), and 11.18(b)(2); and intentionally making a false statement of fact in violation of 37 C.F.R. § 42.11(c) and 11.18(b)(2).”

Longhorn’s Appeal and PTO’s Intervention

Longhorn appealed the Final Written Decision and the Sanctions Order to the Federal Circuit, and filed its opening brief on December 23, 2024. With respect to the Sanctions Order, Longhorn asserted that the Director erred because she lacked statutory and regulatory authority to cancel otherwise-patentable claims as a sanction or, at the very least, abused her discretion in making her sanction rulings.

Also in December 2024, former Director Vidal stepped down, with Acting Director Stewart taking the position in the subsequent month. In March of 2024, Longhorn and Spectrum settled. The Federal Circuit provided a deadline for the USPTO to intervene, and Acting Director Stewart elected to participate in the appeal. However, rather than defend the Sanctions Order as-is, the Acting Director sought and was granted a limited remand to revise the Director Review decision at issue. 

Director Stewart’s Decision

On remand, Acting Director Stewart modified former Director Vidal’s July 26 decision. The decision maintained the prior determination and underlying findings—including that Longhorn engaged in sanctionable misconduct to mislead and deceive the Board, as Director Vidal detailed. However, Director Stewart found that this misconduct failed to qualify as “extraordinary circumstances” that would warrant cancelling claims that were not deemed unpatentable on the merits. Instead, the Director found that compensatory expenses, such as attorney fees, would have been a more appropriate sanction. Given that the parties had settled, Director Stewart found no reason to apportion fees and instead admonished Longhorn for its conduct, cautioning that any future misconduct before the Office will be met with additional sanction.

Endnotes

[1] Spectrum Sols. LLC v. Longhorn Vaccines & Diagnostics, LLC, IPR2021-00847, -00850, -00854, -00857, -00860, Paper 147 (June 5, 2025).