Allowing ‘Settled Expectations’ in Patent Cases Harms Innovation

For nearly 15 years, the Patent Trial and Appeal Board has been an efficient, expert forum to challenge bad patents. It has offered a faster path to justice than having to defend against drawn-out and often meritless patent infringement litigation and served as a much-needed lifeline for American innovators.

But that lifeline is disappearing. Recent actions from the US Patent and Trademark Office have seemed intent on eroding the agency’s review process from within.

First, the PTO re-instituted an arbitrary criteria for denying patent challenges. Then it introduced a new, burdensome procedure allowing the PTO director to personally clear all petitions for PTAB review and decide which ones to deny before challenges can even be heard on their merits.

More recently, the PTO has created an expanded list of criteria under which challenges can be denied by way of a novel legal concept. It’s called the “settled expectations” doctrine, and it’s generating concern and confusion from stakeholders across America’s innovation economy.

Let’s look at one example. In 2024, iRhythm Technologies, a medical device company, was sued by a competitor, Welch Allyn, for allegedly infringing its patents related to heart monitor devices.

iRhythm filed a petition with the PTAB to review the validity of Welch Allyn’s patents, but the PTO denied iRhythm’s petitions in June because the company had been aware of the patents since 2013 and hadn’t challenged them sooner.

Yet, the America Invents Act—the law that established the PTAB—states that companies have one year after being sued for patent infringement to request PTAB review. iRhythm followed that rule. It was sued in 2024 and filed its petitions on time. They deserve a review by the PTAB’s expert judges.

This denial introduced a brand-new and legally unsupported reason to reject a petition: that a company should have brought a patent challenge years earlier simply because it knew it existed—even though no litigation existed at that point and there was no legal obligation to act.

For the first time, the PTO denied a review based not on a missed statutory deadline, but on a subjective assessment that a company could have acted sooner. The legal clock hadn’t even started, but the agency decided that iRhythm waited too long anyway.

This backwards logic is being applied to a handful of other cases, injecting confusion and unpredictability into a system meant to be streamlined and fair.

The PTAB was created to offer a more cost-effective way to challenge patents. But under this new doctrine, petitioners are now expected to monitor and preemptively challenge thousands of patents that might someday be asserted against them, even those with no direct relevance to their products.

This expectation is both unworkable and absurd–not to mention that the larger problem here is that the PTO shouldn’t grant bad patents in the first place.

We all want a more efficient PTO, but the consequences of these new policies will make the agency harder to navigate. Companies will feel compelled to challenge a deluge of new patents that otherwise wouldn’t be contested or litigated, bogging down the already short-staffed agency with unnecessary filings.

“Settled expectations” doesn’t even come close to passing constitutional muster. There are no settled expectations in patent law. The Supreme Court in 2017 clarified in Oil States Energy Services, v. Greene’s Energy Group that the “decision to grant a patent is a matter involving public rights” and “patent claims are granted subject to the qualification that the PTO has ‘the authority to reexamine—and perhaps cancel—a patent claim’.”

In other words, patents can be modified or canceled after the PTO approves them—the rights of patent owners aren’t frozen upon issuance. So why should a patent being in force for some amount of time mean that it’s now “settled” for good?

Even if one were to accept “settled expectations” as a rationale, the application of this standard raises the question: settled expectations for whom?

As iRhythm noted in its petition for director review, the company launched its heart monitor technology as early as 2012, investing heavily and commercializing innovations for the public benefit over the next decade. Welch Allyn’s patents were granted in 2012, and it never asserted them until it filed suit in 2024.

By this logic, shouldn’t productive, innovative companies like iRhythm have just as much of a claim to settled expectations as dormant patent holders like Welch Allyn?

This isn’t about one case or one company. It’s about an agency that appears to be abandoning its congressional mandate to drive US innovation in favor of tilting the playing field toward certain special interests.

The agency shouldn’t wield unilateral power to deny legitimate patent challenges on such vague and novel grounds. Whether it’s Congress, the courts, or whoever is serving as PTO director, someone must step in and do away with this doctrine before it causes further damage.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Bob Goodlatte represented Virginia’s 6th District in the US House of Representatives from 1993 to 2019 and chaired the House Judiciary Committee from 2013 to 2019.

Paul Taylor is a visiting fellow at the National Security Institute at George Mason University’s Antonin Scalia Law School. He served for more than 20 years as counsel to the House Judiciary Committee.

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