Missing Sotera/Tesla Stipulation Dooms Petition on Young Patents in Phison

In Phison Electronics Corporation v. Vervain, LLC, IPR2025-00213, -00214, -00215, PGR2025-00011, -00010, Paper 14 (PTAB Jul. 10, 2025), USPTO Acting Director Coke Morgan Stewart denied institution of three IPR and two PGR proceedings based on parallel district court action under Fintiv. For three of the patents, the Director might have referred as the patents were young, but for the absence of a Sotera stipulation.

For all the IPRs, the Acting Director noted that the projected date for final written decision in the Board proceedings is eight months after the district court’s scheduled trial date, and it is therefore unlikely that a final written decision in these Board proceedings would issue before the district court trial occurs. The Acting Director additionally pointed to a lack of evidence that the district court would stay its proceeding if the Board were to institute the IPRs. The Acting Director further explained that “there has been meaningful investment in the parallel proceeding by the parties,” as the district court has already held a Markman hearing and fact discovery is expected to be completed prior to a decision on institution issues.

For two of the IPRs (IPR2025-00213 and IPR2025-00214), the analysis ended there. However, for the other three proceedings that were denied institution (IPR2025-00215, PGR2025-00010, and PGR2025-00011), the Acting Director found that the challenged patents have not been in force for a significant period of time, having issued in 2021, 2024, and 2024, respectively. The Acting Director noted that “[o]rdinarily this might favor referral to the Board.” However, the Acting Directed noted that Petitioner did not offer a stipulation “to address concerns of duplicative efforts and potentially conflicting decisions in view of a significantly earlier trial date in a co-pending case that is unlikely to be stayed,” which the Acting Director found weighed in favor of discretionary denial.

This decision underscores the importance of including a stipulation, even when challenging more recently issued patents. While these “early challenge” patents may ordinarily favor referral to the Board, it may not outweigh Fintiv considerations without one.