In a recent decision, U.S. Patent and Trademark Office Director Squires denied a patent owner’s request for discretionary denial of an inter partes review (IPR) challenge to six patents—marking a notable outlier to the USPTO’s overall trend in issuing discretionary denials.
Patent Owner Bulletproof Property Management, LLC had asserted seven patents against automaker Tesla, Inc. in district court litigation. Tesla petitioned for inter partes review; in turn, Bulletproof asked for discretionary denial of those IPRs. In a short, six-page order, Director Squires denied Bulletproof’s request.
Bulletproof first argued IPR “should [have been] denied in view of co-pending parallel district court litigation.” But the Patent Office rejected this. The trial date had been vacated. Even more, Tesla had offered a broad stipulation, narrowing its prior art case (should the litigation resume) even beyond the limits imposed by § 315 statutory estoppel. Tesla offered not to advance any invalidity ground that reasonably could have been raised in IPR; on top of that, Tesla forewent using any “combination of system art with any” paper prior art references actually used in the IPRs. This “broad stipulation” (and conversely, a potentially narrow invalidity case in district court) “allow[ed the] AIA review to function as an alternative to the co-pending litigation,” not a first-run of it.
About those prior art references: They too weighted in favor of denying the request. Bulletproof argued that one reference, Joos (U.S. 2019/0233009 A1) had already been before the Patent Office. But Bulletproof was overreaching. Recall that there were seven patents subject to IPRs. In the prosecution of the oldest, parent application, Joos had not been cited. And in the six child applications, Joos was disclosed in an IDS but never applied. The Director was persuaded that this was an instance where “the Office [had] erred in a manner material to the patentability of the claims.”
Third, the Director considered the “settled expectations” of patent owner Bulletproof. The challenged patents had not been in force for long, all having issued between 2024 and 2025). So Bulletproof had “not developed strong settled expectations that favor discretionary denial[.]”
Last was a consideration of domestic industry. Tesla provided evidence that it manufactures the accused products in America. Bulletproof countered this with an allegation that the products accused of infringing the challenged patents “comprise 30% to 40% of components sourced in foreign countries,” but never backed that up with supporting evidence—another point in Tesla’s favor.
And with that, Director Squires denied the request for discretionary denial and sent the petition to be evaluated in an institution decision.
