The U.S. Patent and Trademark Office has denied institution of Inter Partes Review (IPR) proceedings against two Applied Optoelectronics patents in a discretionary decision that highlights how patent age can influence administrative challenges.
In a decision dated June 27, 2025, Acting USPTO Director Coke Morgan Stewart denied Cambridge Industries USA’s petitions to institute IPR proceedings against Applied Optoelectronics patents 9,523,826 B2 and 10,042,116 B2. The denial came despite the Director’s acknowledgment that many of Applied Optoelectronics’ other arguments for discretionary denial were weak.
Key Factors in the Decision
1. Patent Age and Settled Expectations
The decisive factor was the age of the challenged patents. The Director noted that the patents in IPR2025-00433 and IPR2025-00435 “have been in force for nine and seven years, respectively,” creating stronger settled expectations for the patent owner compared to newer patents in related proceedings. As the Director explained: “Patent Owner’s settled expectations as to the patents challenged in IPR2025-00433 and IPR2025-00435 are stronger and discretionary denial is appropriate as to these proceedings.”
2.Parallel District Court Litigation
The parties are engaged in parallel litigation in the Northern District of California, though the impact was limited since there is no currently scheduled trial date and the Markman hearing has been vacated.
3.Rejected Arguments
The Director dismissed several of Applied Optoelectronics’ other arguments for discretionary denial, including claims that Cambridge Industries was over-reliant on expert testimony and arguments under 35 U.S.C. § 325(d).
4.Contrasting Treatment of Patent Families
The decision reveals a split approach based on patent age. While the Director denied institution for the older patents, the decision notes that newer patents from 2019-2020 in related proceedings (IPR2025-00434, IPR2025-00436, and IPR2025-00437) did not warrant discretionary denial based on settled expectations.
Key Takeaways
This decision suggests that challengers should consider the age of target patents when planning IPR campaigns. Patents approaching or exceeding seven years in force may face heightened scrutiny for discretionary denial, particularly when patent owners can demonstrate settled expectations in the marketplace.
The case was decided before Acting Under Secretary of Commerce for Intellectual Property and Acting Director Coke Morgan Stewart. The decision is Cambridge Industries USA, Inc. v. Applied Optoelectronics, Inc., Case Nos. IPR2025-00433 and IPR2025-00435, Paper 11 (Decision Granting Patent Owner’s Request for Discretionary Denial and Denying Institution of Inter Partes Review) (USPTO June 27, 2025).
The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Greg Cordrey at 949.623.7236 or GCordrey@jmbm.com.