Holding: USPTO guidance rescinding the prior policy favoring institution of an IPR in the presence of a Sotera stipulation may be applied retroactively. A Sotera stipulation is no longer sufficient on its own to avoid discretionary denial of IPR in view of parallel district court proceedings.
In August 2023, Stellar, LLC filed suit against Motorola alleging patent infringement of eight patents. In July 2024 and August 2024, Motorola filed petitions for IPR seeking review of Stellar’s patents. With its petitions, Motorola filed a Sotera stipulation, a statement that they would not pursue the same grounds or any grounds that could have reasonably been raised before the PTAB in the parallel district court proceeding. The PTAB instituted IPRs based on both sets of petitions.
However, in March 2025, the Acting Director of the USPTO, John Squires, deinstituted the first set of IPRs, deciding that these reviews would be an inefficient use of resources considering the ongoing district court proceedings between the parties over the patents. The second set of IPRs were deinstituted in May 2025. Motorola petitioned for mandamus relief, arguing that the Acting Director violated procedural protections guaranteed by the Administrative Procedure Act and the Due Process Clause of the Fifth Amendment.
The issue of IPRs and parallel district court proceedings is typically addressed using the Fintiv factors, a multi-factor discretionary standard to determine whether to deny institution of an IPR when parallel proceedings are pending. The Fintiv factors include: (1) “whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted”; (2) “proximity of the court’s trial date to the Board’s projected statutory deadline for a final written decision”; (3) “investment in the parallel proceeding by the court and the parties”; (4) “overlap between issues raised in the petition and in the parallel proceeding”; (5) “whether the petitioner and the defendant in the parallel proceeding are the same party”; and (6) “other circumstances that impact the Board’s exercise of discretion, including the merits.”
On June 21, 2022, then Director Katherine Vidal issued a memo (the “Vidal Memo”) that provided additional guidance on how to apply the Fintiv factors. This memo stated that the PTAB would not discretionarily deny institution of an IPR in view of parallel district court proceedings when a petition includes a Sotera stipulation. On February 28, 2025, Acting Director Squires rescinded the Vidal memorandum and issued new guidance stating that a Sotera stipulation should no longer be considered dispositive, but instead be considered as highly relevant. This new guidance applied to any case in which the PTAB had not yet issued an institution decision or where a request for rehearing or Director Review of an institution decision was still pending.
The new guidance provided the basis on which Acting Director Squires deinstituted Motorola’s IPRs. Motorola argued that Acting Director Squires’ actions amounted to improper rulemaking and that the retroactive application of the new guidance violated both the APA and Motorola’s due process rights. Motorola sought mandamus asking the court to direct the PTO to vacate Acting Director Squires’ rescission of the Vidal Memo and to reinstate institution of their IPR petitions. Mandamus is appropriate only when the petitioner can establish: (1) clear and indisputable right to relief; (2) the lack of an adequate alternative means to obtain the relief it seeks; and (3) the writ is appropriate under the circumstances even when the first two prerequisites are met.
As to Motorola’s Due Process claims, the Federal Circuit found that there is no property right in the institution of an IPR. The Due Process Clause provides that no person “shall be . . . deprived of life, liberty, or property, without due process of law.” Agency regulations can create a property right in certain circumstances. But when a statute leaves a benefit to the discretion of a government official, there is no protected property interest. In the America Invents Act, Congress left institution decisions to the discretion of the Director. This discretion is protected from judicial review by 35 U.S.C. § 314(d), which makes institution decisions final and nonappealable.
Motorola argued that the Vidal Memo created a constitutionally protected interest in having IPR petitions considered without regard to the Fintiv factors when a Sotera stipulation was made. However, the Federal Circuit held that the Vidal Memo did not create a non-discretionary benefit requiring institution of an IPR when a Sotera stipulation was provided. The Vidal Memo did not force the PTAB to reach a certain decision for a petition, but merely directed the PTAB to not rely on certain criteria when denying review and only until further notice by the USPTO. There is no independent property interest in having the PTAB consider an IPR without applying the Fintiv factors, even when the party agrees to not raise the same challenges in a copending district court proceeding.
Rescission of the guidance offered in the Vidal Memo also was not a due process violation. Motorola was aware that the PTAB precedent and the Vidal Memo could be modified at any time. Reliance on the Vidal Memo was not sufficient to establish a constitutional violation, and Motorola still has the ability to raise its patentability defenses in the parallel district court proceeding.
Motorola’s arguments regarding the APA were also unpersuasive. Motorola could challenge the rescission of the Vidal Memo in an APA action in federal district court rather than seeking mandamus. Additionally, mandamus cannot not be used to circumvent the Section 314(d) bar to judicial review of a Director’s decision in an institution decision.
Federal Circuit Precedential 
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