Federal Circuit Denies Mandamus: USPTO Discretionary Denial, Fintiv, and Sotera Stipulations in Motorola-Stellar IPRs

The Federal Circuit’s analysis focuses on the US Patent and Trademark Office’s (USPTO) discretionary institution practices and the current Acting Director John Squires’ rescission of the June 2022 Memorandum by then Director Katherine Vidal as to the effect of Sotera stipulations.

Stellar sued Motorola in district court in August 2023. Motorola filed two waves of IPR petitions in July and August 2024 and submitted a Sotera stipulation, agreeing not to raise certain invalidity grounds in the district court that were or could have been raised in the IPRs. The Patent Trial and Appeal Board (PTAB) initially instituted review on both sets of petitions. Stellar sought director review. Following a change in Administration this year, the then‑acting director rescinded the Vidal Memorandum on February 28 and issued implementation guidance in March. Applying the Fintiv framework, the acting director deinstituted the first set of IPRs on March 28 and later granted director review and likewise deinstituted the second set on May 23, concluding IPR would be an inefficient use of agency resources given the parallel district court case. After Motorola’s motions for reconsideration were denied, Motorola petitioned the Federal Circuit for a writ of mandamus directing the USPTO to vacate the rescission and reinstate the PTAB’s institutions. On November 6, the Federal Circuit denied mandamus.

Legal Framework

The 2022 Vidal Memorandum provided interim guidance that, among other things, counseled against discretionary denial where a petitioner offered a Sotera stipulation. In February-March of this year, the acting director rescinded that interim guidance and instructed that Sotera stipulations would be “highly relevant” but not dispositive, and that the rescission would apply to cases without a final institution decision or with pending rehearings or director review.

Key Findings

The Federal Circuit held that Motorola did not establish a protected property interest or constitutional right to have its IPR petitions considered without regard to the Fintiv factors by virtue of the Vidal Memorandum. The Vidal Memorandum did not create a nondiscretionary entitlement; it offered interim procedural guidance that could be modified “until further notice.” Reliance on interim guidance, standing alone, does not create a due process right. The court found no unfair surprise. Motorola was on notice of both Fintiv-based discretionary denial and the interim nature of the Vidal guidance when it filed its petitions, and the rescission did not prevent Motorola from raising patentability defenses in the district court (subject to its own Sotera stipulation). On the Administrative Procedure Act (APA) arguments, the court concluded that challenges to the rescission as requiring notice-and-comment rulemaking or as arbitrary and capricious could not be used via mandamus to unwind the deinstitution decisions. The court emphasized that Apple v. Vidal, 63 F.4th 1, 8 (Fed. Cir. 2023), permits APA challenges to USPTO rulemaking apart from review of a specific institution decision, but that pathway does not authorize mandamus relief to reinstate institutions.

Practical Implications for Practitioners

The decision reinforces that institution-stage outcomes remain largely insulated from appellate review, including where the director revises or rescinds interim guidance on discretionary denial. Sotera stipulations retain substantial value, but are not dispositive, and their weight may vary depending on the specific case equities and future USPTO guidance. Petitioners should calibrate IPR timing and content with an eye toward the Fintiv factors as actually applied at the time of decision, including trial proximity, investment in the district court case, and issue overlap. Coordination between district court strategy and PTAB practice remains critical in view of accelerated district schedules and the risk of discretionary denial, even in the presence of Sotera stipulations.