Acting Director Stewart Revises Vidal Era Sanction Decision

On June 5th, 2025, Acting Director Coke Stewart modified a previous Vidal order by announcing that sanctions cancelling claims considered not unpatentable on the merits were too harsh when no “extraordinary circumstances” existed in an Inter-Partes Review (IPR) proceeding. This is a reversal of former Director Kathi Vidal’s position that these sanctions were appropriate in response to a Patent Owner’s misconduct.
PTAB Proceedings and Vidal’s Review
In April 2021, Spectrum Solutions LLC challenged five of Longhorn Vaccines & Diagnostics, LLC’s (“Longhorn’s”) patents in an IPR proceeding. In May 2023, the PTAB Board issued both their Final Written Decision and a Sanctions Order against Longhorn.
The Board found evidence of misconduct by Longhorn, determining they intentionally withheld relevant factual evidence and intentionally provided false evidence to the Board during an IPR. Due to this misconduct, the Board issued a Sanctions Order against Longhorn, cancelling all 183 of Longhorn’s claims across their five patents. Many, but not all, of Longhorn’s claims were not deemed unpatentable on the merits.
In response, former Director Vidal initiated sua sponte Director Review for the Sanctions Order only. In July 2023, she issued her 67-page Director Review Decision affirming the Board’s judgment that Longhorn engaged in “sanctionable misconduct” that violated 37 C.F.R. §§ 42.11(a) and (c), 42.51(b)(1)(iii), and 11.18(b)(2). The Sanctions Order was upheld.
Appeal to the Federal Circuit and Stewart’s Revision
In December 2024, Longhorn filed their brief appealing the Final Written Decision and Sanctions Order to the U.S. Court of Appeals for the Federal Circuit. Longhorn claimed that former Director Vidal lacked the statutory and regulatory authority to cancel claims using a sanction when the claims were not otherwise unpatentable on the merits. Longhorn also claimed that Vidal abused her discretion as Director in upholding the Sanctions Order. The court never considered these claims because the two parties settled in March 2025.
When Acting Director Stewart became acting Director in January 2025, she intervened on behalf of the Federal Circuit and granted a limited remand to revise Vidal’s Director Review. Stewart agreed with the misconduct finding, affirming that Longhorn “engag[ed] in sanctionable misconduct to deceive and mislead the Board through its counsel by:
- intentionally withholding and concealing relevant factual evidence;
- intentionally relying on known falsely elicited expert testimony; and
- intentionally making a false statement of fact.” [Stewart Decision citing the original DRD].
However, Stewart found that “cancelling all challenged claims is not an appropriate sanction here” because “the Board should never cancel claims it has not determined to be unpatentable” when there are no “extraordinary circumstances” present. In this case, Stewart found no “extraordinary circumstances” present. She mentioned that entry of compensatory expenses might be a more appropriate sanction for this type of behavior in the future, but this was irrelevant to the case because the sides settled.
Going Forward
There is no answer to whether the Federal Circuit considers cancelling claims as a sanction when the claims weren’t found to be unpatentable as either within the Director’s power or an abuse of the Director’s discretion because the case settled.
Stewart considered Longhorn’s actions intentionally concealing evidence and more to not be “extraordinary circumstances”; so, for at least similar levels and types of misconduct, it is likely that the less severe sanctions she recommended in this case would be appropriate. This keeps the claims alive but still punishes wrongful conduct. Stewart emphasizes the importance of sanctions and firmly denounces the misconduct and warning that “any future misconduct before the Office will be met with additional sanctions,” but considers Vidal’s approach a step too far.
While this decision was not precedential or informative, parties should be aware of the Director’s position change when they find themselves in IPR proceedings and there is a potential for misconduct. Parties trying to invalidate patents or enforce sanctions should not expect for patentable claims (or, at least, claims not found unpatentable on the merits) to be cancelled based on sanctions alone. They will have to attack the claims along more traditional methods. Parties accused of misconduct should be aware that more lenient sanctions options are available and preferred by the acting Director so that valid claims in their patents would still survive.
We have seen a fairly significant change in the Office’s attitude regarding sanctions because of the change in Director. Should John Squires, Trump’s nominee for Director, be confirmed late this year, it is unclear if he will follow Stewart more lenient view on sanctions are will revert the Office to a stricter view.
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