Padagis US LLC v. Neurelis, Inc.

Informative decision only: persuasive authority, not binding precedent. When a petitioner shows an apparent material error by the Office, such as an examiner crediting a provisional priority date for claims that substantially overlap claims the Board earlier held not entitled to that priority date, the Director may decline to discretionarily deny institution, even though a district court trial date precedes the projected final written decision date. The decision weighs this material-error showing, the likelihood of a stay, and the absence of strong settled expectations in recently issued patents, in a holistic assessment. No prior precedent directly addressed this issue beyond Advanced Bionics, which the decision cites for the proposition that concerns of material error make review an appropriate use of Office resources. For petitioners, the decision shows that a persuasive claim-by-claim comparison with claims the Board already held unpatentable and not entitled to a provisional's priority date can outweigh an unfavorable parallel-litigation timeline. For patent owners, an examiner's contrary priority finding made despite an earlier Board decision on related claims will not by itself support settled expectations or denial, especially for patents issued in 2022 and 2023, and a later-issued family member raising the same priority issue may be reviewed with them. The decision cites no Federal Circuit or Supreme Court authority as binding on the discretionary analysis, and mentions the Federal Circuit only as having affirmed the earlier Board unpatentability decision. LEGAL TEST OR STANDARD: The Director decided on the totality of the evidence and arguments, in a holistic assessment, and considered the timing of the district court trial against the projected final written decision date, whether the petitioner appears to show material error by the Office (citing Advanced Bionics), whether a stay may be granted if an IPR is instituted, whether the patent owner has developed strong settled expectations, and the efficient use of Board resources. TRIGGERING FACTS: The earlier IPR2019-00451 on related U.S. Patent No. 9,763,876 held the challenged claims unpatentable and not entitled to the priority date of the '558 provisional application, and the Federal Circuit affirmed. The examiner of the patents in IPR2025-00465 and IPR2025-00466 later found the claims entitled to that priority date because the claims were different. Petitioner's comparison showed significant overlap in claimed subject matter. The patents issued in 2022 and 2023, and the third patent in the same family raised the same priority issue. The projected final written decision (September 17, 2026) fell after the district court trial date (February 9, 2026), but petitioner presented evidence suggesting a stay may be granted. KEY QUOTE: "Accordingly, the patent examiner’s conclusion directly contradicts the Board’s determination and raises concerns of material error such that review of the challenged patents is an appropriate use of Office resources." (Paper 12, p. 3) PRIOR PRECEDENT AFFECTED: Follows Advanced Bionics, LLC v. MED-EL Elektromedizinische Geräte GmbH, IPR2019-01469, Paper 6 at 8 (PTAB Feb. 13, 2020) (precedential), on material error by the Office. No prior precedential or informative decision is otherwise directly affected. PRACTICE TIP: In opposing a discretionary denial request, present a concrete comparison of the challenged claims against claims in a prior Board decision, showing that the examiner's priority finding contradicts that decision, and add evidence that a stay is likely and that the patent's age defeats settled expectations.