Light & Wonder, Inc. v. Evolution Malta Ltd.

When exceptional circumstances affecting institution arise after institution but before trial has progressed meaningfully—such as a co-pending litigation ruling that all or substantially all challenged claims are invalid—the Director may extend the deadline for Director Review, initiate sua sponte review, vacate institution, and deny the petition for efficiency. Going forward, under 37 C.F.R. § 42.5(b) ('The Board may waive or suspend a requirement of part[] . . . 42 and may place conditions on the waiver or suspension.') and § 42.75(c)(1) ('upon a showing of good cause'), requests for Director Review of institution decisions are due in 30 days rather than 14 days, with further extensions available in exceptional circumstances. This applies Hulu: where all challenged claims already stand invalid in district court, maintaining IPRs on other patentability grounds is unnecessary and inefficient. This makes binding and extends Hulu, LLC v. Piranha Media Distribution, LLC, IPR2024-01252, Paper 27, which was informative, by applying its parallel-litigation-invalidity rationale post-institution through Director Review rather than only at the institution stage; no prior precedential decision directly addressed this issue. For petitioners, continued IPR trial is less likely after a district court invalidates all or substantially all challenged claims, so a petition and later opposition must address any pending § 101 or other invalidity ruling, whether it is final/with prejudice, whether the same challenged claims are covered, and whether the IPR has progressed meaningfully. For patent owners, the decision enables prompt Director-level presentation of post-institution changed circumstances—especially with-prejudice invalidity rulings, dismissal of substantially all claims, or Sotera violations—but forecloses relying on the panel itself to terminate instituted IPRs for discretionary reasons. The Director relied on PTAB/Director precedent and regulations, not any circuit-level or Supreme Court authority. LEGAL TEST OR STANDARD: No numbered test was applied; the Director announced these controlling standards: 'the Office is waiving the time period under 37 C.F.R. § 42.75(c)(1) for requests for Director Review of a decision to institute a trial' and '[t]he waiver will extend the deadline from fourteen days to thirty days'; 'in exceptional circumstances, the Office may extend the deadline for filing a request for Director Review of a decision on institution, so long as the trial has not progressed meaningfully'; 'Such exceptional circumstances include, for example, dismissal of all or substantially all claims in a co-pending litigation, findings of fact and conclusions of law that render all or substantially all challenged claims invalid in litigation, and a violation of a Sotera stipulation'; and 'where a district court already has found the challenged claims invalid, the efficiency and integrity of the patent system is best served by denying institution'. TRIGGERING FACTS: The district court initially dismissed without prejudice under § 101, the IPR petitions were then filed, discretionary denial was denied because the Rule 12(b)(6) motion remained pending and the district case was stayed, the Board instituted, and only after institution did the district court dismiss with prejudice and find the challenged claims patent-ineligible under § 101. The IPR trial had not progressed meaningfully because the reply and sur-reply remained pending and the Board had not held oral argument or prepared a final written decision. KEY QUOTE: 'Because all of the challenged claims now stand invalid, it is unnecessary and inefficient to maintain these IPRs to further review the claims for patentability under other grounds.' (Paper 30, p. 5). PRIOR PRECEDENT AFFECTED: Hulu, LLC v. Piranha Media Distribution, LLC, IPR2024-01252, Paper 27 (Apr. 17, 2025) (informative) is applied and extended from pre-institution discretionary denial to post-institution Director vacatur and denial. Sotera Wireless, Inc. v. Masimo Corp., IPR2020-01019, Paper 12 (PTAB Dec. 1, 2020) is not modified, but Sotera stipulation violations are identified as exceptional circumstances. Magnolia Med. Techs., Inc. v. Kurin, Inc., IPR2026-00097, Paper 17 (May 14, 2026) is cited for Office efficiency and timely-completion concerns. PRACTICE TIP: If a post-institution litigation event or Sotera issue arises after the ordinary Director Review deadline, do not rely on a Board motion to terminate for discretionary reasons; promptly email Director_PTABDecision_Review@uspto.gov, copy all counsel, and provide a no-more-than-three-sentence explanation of the exceptional circumstances supporting an extension and Director Review.