How “Material Error” Has Become Key To Avoiding Discretionary Denial at the PTAB

Former associate, Tyler Drye, contributed to this article.

Introduction

Discretionary denial has long been one of the most important—and sometimes unpredictable—features of PTAB practice. Although the statutory bases for discretionary denial under 35 U.S.C. §§ 314(a) and 325(d) have remained unchanged, the framework governing the exercise of that discretion has evolved significantly over the past several years. What began as a landscape dominated by the consideration of specific factors set forth in Board precedent has recently entered a new phase under new USPTO leadership.

The most visible changes are procedural. In 2025 and 2026, the USPTO implemented a discretionary-denial process placing the Director—not the Board—at the center of institution decisions, including both discretion and the merits. At the same time, the Office introduced and expanded discretion considerations. Despite the growing number of factors now relevant to institution decisions, one concept repeatedly appears at the center of recent Director Review decisions: material error.

Historically, material error was associated with petitions relying on prior art or arguments that had already been presented to the USPTO. Petitioners seeking to overcome discretionary denial under § 325(d) were required, under Board precedent, to demonstrate that the Office previously erred in a manner material to the patentability of the challenged claims. More recently, however, Director decisions elevated material error from a component of the § 325(d) inquiry into a broader institution consideration that can outweigh other factors favoring discretionary denial. Indeed, as explained below in detail, recent decisions found material error sufficient to overcome concerns regarding settled expectations, parallel litigation, and even combinations of discretionary-denial factors that otherwise would have presented substantial obstacles to institution.

Equally noteworthy, the concept of material error itself appears to be expanding. Recent decisions suggest that the Office may have committed a material error when an examiner overlooked teachings in previously presented prior art (including references cited in an IDS), ignored relevant PTAB proceedings, employed an inadequate search strategy, or failed to consider newly identified prior art never considered by the Office.

This article examines the emergence of material error as a central feature of current PTAB discretionary-denial practice. After tracing the doctrine’s origins, this article reviews recent Director Review decisions that explain what constitutes material error and analyzes the growing role such findings play in institution decisions. As recent cases demonstrate, material error has become a central consideration in institution disputes, influencing both how petitioners frame their challenges and how patent owners defend against institution.

The Evolution of the Material Error Requirement

The current material-error framework emerged from the PTAB’s efforts to determine when petitions relying on previously considered prior art should nevertheless receive institution. In Becton, Dickinson[1], the Board articulated a non-exclusive set of factors for evaluating discretionary denial under 35 U.S.C. § 325(d). Among those factors was whether the petitioner had sufficiently explained how the examiner erred in evaluating the prior art before the Office. Although one factor among several, this inquiry introduced the idea that demonstrable Office error could justify revisiting issues previously addressed during original prosecution.

The doctrine took on greater significance in Advanced Bionics,[2] where the Board reorganized the Becton, Dickinson factors into a two-part framework. Under that framework, the Board first considers whether the same or substantially the same prior art or arguments were previously presented to the Office. If so, the petitioner must demonstrate that the Office erred in a manner material to the patentability of the challenged claims. This reformulation transformed a consideration of examiner error into the now-familiar requirement of showing a “material error” by the Office.

More recently, the Office clarified that merely presenting strong prior art is not enough. Ecto World[3] emphasized that, under prong two of Advanced Bionics, petitioners must specifically identify the alleged Office error and explain why it was material to patentability. As a result, identifying and explaining the Office’s mistake has become an increasingly important—and often essential—component of discretionary denial analysis.

Material Error in the Current Era

The significance of material error has grown substantially under the recently expanded discretionary-denial framework. Following implementation of a new Director-centered review process, the USPTO identified several considerations that may influence whether a petition is denied on discretionary grounds, including settled expectations,[4] inconsistent claim construction positions,[5] and domestic-industry concerns.[6] These considerations expand the circumstances in which discretionary denial may be appropriate and reflect a broader approach to institution decisions.

A review of recent discretionary denial decisions reveals that material error frequently serves as the decisive counterweight to these competing factors. In multiple cases, the Director declined to exercise discretionary denial after concluding that the Office had committed a material error affecting patentability, even at times where other considerations favored denial. Accordingly, material error appears to occupy a unique position in the current discretionary-denial analysis. While the new framework has expanded the range of factors considered at institution, recent decisions suggest that a persuasive showing of material error may play a significant role in institution determinations, even where other discretionary considerations are present. Rather than merely satisfying a component of the Advanced Bionics framework, material error increasingly serves as an affirmative justification for institution notwithstanding other discretionary factors.

What Constitutes Material Error?

Recent Director decisions suggest that “material error” is not limited to a narrow fact pattern. Instead, material error may arise in different circumstances, ranging from obvious prosecution mistakes to more nuanced failures to appreciate the significance of prior art, related Board proceedings, or even newly identified references. Although the boundaries of the doctrine continue to develop, for practicality’s sake, the cases can be grouped into several categories.

The most straightforward examples involve clearly identifiable errors that occurred during prosecution. These types of clear errors involve cases in which the Office allowed claims that should not have issued in the form ultimately granted. For example, in Volkswagen,[7] Petitioner showed that the issued claims did not recite the language that the examiner indicated was allowable. In Skullcandy,[8] the alleged error was even more direct: the challenged claims did not include the features that the examiner specifically identified as being allowable. The Board also found error where the examiner first rejected claims over a prior art reference, failed to apply a rejection to the same claims in a later Office Action, and ultimately allowed claims incorporating the previously rejected subject matter without explaining why that subject matter was allowable over the previously applied reference.[9] Other examples of a clear error involve situations where the examiner’s allowance directly conflicted with prior Board priority findings, without an explanation of the discrepancy by the examiner. As an example, in Padagis,[10] the Board previously determined that claims were not entitled to an asserted priority date and were found to be unpatentable, yet, in later-filed applications, the examiner allowed similar subject matter based on the same priority claim. Error was similarly found.

Material error may also arise from less obvious examination failures. One recurring theme is that an examiner may have technically “considered” a reference but failed to meaningfully evaluate its relevant teachings. Petitioners have advanced creative grounds for such a failing, including that the timing and volume of IDS submissions, for example, more than 10,000 pages submitted shortly after allowance, suggest that the examiner did not meaningfully consider all of the cited art,[11] that the examiner failed to appreciate a well-known term of art,[12] and that the examiner’s incomplete search strategy failed to uncover highly relevant non-patent literature.[13] Several Director Decisions[14],[15],[16] also found that the examiner overlooked teachings in references that were actually applied against the claims during prosecution.

While the above examples fall within the more traditional assessment of material error—pointing out how an examiner failed to consider or to fully appreciate the teachings of art previously before the Office—the Office recently widened the application of material error to include less clear cases. For example, material error was found in an examiner’s failure to account for prior PTAB proceedings in related patents. In ClearCorrect,[17] material error existed where later-issued claims were substantially similar to claims previously found unpatentable, and the examiner did not discuss why the later-issued claims were distinct (and thus allowable). Likewise, in Rode Microphones[18] and Alliance Laundry,[19] the examiners failed to consider references or proceedings from related PTAB challenges that could have affected patentability.

Perhaps the most notable development is the apparent willingness to treat newly identified prior art as supporting a finding of material error. Traditionally, the requirement for showing material error was associated with art already before the Office but that had been misunderstood or overlooked.[20] Recent decisions, however, suggest a broader approach in which, even when most of the asserted references were not previously presented to the Office, the Board may nevertheless find that the examiner’s failure to consider those references constitutes material error.[21],[22],[23] For example, in Anthony v. ControlTec and in Tesla, the Examiner erred by failing to consider the teachings of a reference (Carter and Letendre, respectively) that was newly presented to the Office in the Petition.[21],[22] In Partec, although only one of three references cited in the Petition (Lippert) had been before the Examiner, the Examiner erred by failing to consider the two newly-presented references.[23]

Taken together, these decisions suggest that material error now encompasses more than an examiner overlooking or failing to fully appreciate art previously before the Office. It may include issuing incorrect claims, failing to properly justify an allowance, misunderstanding technical disclosures, conducting inadequate searches, disregarding or failing to appropriately consider related PTAB proceedings, or even failing to consider prior art that was not previously presented to the Office. These decisions underscore the importance of carefully analyzing what the Office considered during examination and whether any alleged omission could have affected patentability of the challenged claims.

Why Material Error Matters

Material error has become increasingly important because it is no longer confined to considerations of previously presented art or arguments. But if a petition relies on previously presented art or arguments, under Advanced Bionics and Ecto World, the petitioners must do more than demonstrate unpatentability; they must explain how the Office erred in a manner material to the patentability of the challenged claims. As a result, identifying a material error is now a critical component of many petitions.

The material error consideration is also important because it recognizes that the strongest prior art is not always newly discovered. In many cases, the most relevant references may have already been before the Office, but the examiner failed to appreciate particular teachings, misunderstood their significance, or reached conclusions inconsistent with the record. Material error allows the Office to revisit patentability questions even where highly relevant art was previously considered during examination, provided there is a sufficiently persuasive showing of material error.

Perhaps most significantly, recent Director decisions indicate that, under a holistic discretionary analysis, a persuasive showing of material error may outweigh other considerations that would otherwise favor discretionary denial.[7],[8],[14],[21] Likewise, material error findings can justify institution despite parallel-litigation concerns that traditionally would have favored denial under Fintiv.[10],[23] And, in at least one case, the Director weighed material error as favoring refusing to exercise discretionary denial despite also finding that the Petitioner put forth inconsistent claim constructions in a parallel proceeding and provided a stipulation that was “inadequate to address” such inconsistent claim constructions.[24]

The practical takeaway is straightforward: material error is no longer merely a response to § 325(d). Increasingly, it functions as an affirmative justification for institution and may be one of the most effective tools available to petitioners seeking to avoid discretionary denial.

Practice Implications for Parties Addressing Discretionary Denial

Recent Director decisions suggest that petitioners should approach material error as a central component of institution strategy rather than a narrow response to § 325(d). The first step is identifying a specific Office mistake. Following Advanced Bionics and Ecto World, generalized assertions that the prior art is strong or that the claims are unpatentable are unlikely to suffice. Petitioners should instead explain precisely what the examiner overlooked, misunderstood, or failed to consider and why that error was material to patentability.

A thorough investigation of the prosecution history is therefore essential. Petitioners should review not only cited references and grounds of rejection, but also IDS submissions, examiner search histories, reasons for allowance, and claim amendments. Particular attention should be paid to situations in which the examiner reversed course without explanation, treated a limitation as allowable despite prior art disclosures, or failed to address relevant subject matter altogether.

Petitioners should also look beyond the prosecution record. Recent decisions demonstrate that prior PTAB proceedings, family-member patents, and prior Board ex parte appeal determinations can provide fertile grounds for material error arguments. Likewise, even when relying on new prior art, petitioners should explain why the Office’s failure to identify or consider that art resulted in issued claims that should not have been allowed.

As a practical matter, petitioners should consider building material error into the narrative of the petition as well as any discretionary-denial briefing. Although not enough to guarantee that a petition will survive discretionary denial under the Office’s new holistic assessment, a well-developed narrative explaining the Office’s mistake and its effect on patentability may now be as important as the underlying obviousness or anticipation analysis itself.

Practical Implications for Patent Owners

The increasing prominence of material error in institution decisions also has significant implications for patent owners seeking discretionary denial. As petitioners increasingly rely on material error as an affirmative basis for institution, patent owners should be prepared to challenge both the existence of any alleged Office mistake and its significance to patentability.

First, patent owners should focus on establishing that the Office did not err in its prior consideration. Under Advanced Bionics and Ecto World, the relevant inquiry is not whether the petitioner presents strong prior art, but whether the Office committed a mistake material to patentability. Accordingly, patent owners should emphasize evidence showing that the examiner considered the relevant references, understood their teachings, and deliberately reached the conclusions reflected in the prosecution record. Where the petition simply advances a different interpretation of previously considered art, patent owners should argue that the petitioner has identified a disagreement—not a material error.

Patent owners should also focus on the materiality requirement. Even if an alleged oversight can be identified, the petitioner must still establish that the error mattered to patentability. Patent owners should explain why the allegedly overlooked teaching, reference, or proceeding would not have changed the examination outcome. This can include pointing out that the information is cumulative of art already considered by the Office.[2],[3],[22]

Finally, patent owners should continue to emphasize other discretionary-denial considerations, including settled expectations, parallel proceedings, and other policy concerns recognized under the current Director Review framework. Even where a petitioner advances a colorable material-error theory, patent owners should argue that the asserted error falls far short of the type of clear and consequential mistake that might justify institution.

Conclusion

Material error has evolved considerably from its origins in Becton, Dickinson and Advanced Bionics. What began as a mechanism for addressing previously presented art has become a prominent feature of current discretionary-denial practice. Recent Director decisions indicate that material error is an increasingly important consideration in institution decisions and expanded the range of circumstances qualifying as material error. Whether viewed as a substantive doctrinal shift or simply a new framework for evaluating discretionary denial, the practical lesson is the same: material error is a central consideration in institution decisions. As a result, both petitioners and patent owners should treat material error not as an ancillary or niche issue only arising in certain cases, but as a core component of PTAB briefing and institution strategy.

[1] Becton, Dickinson and Co. v. B. Braun Melsungen AG, IPR2017-01586, Paper 8 (PTAB Dec. 15, 2017 (precedential).

[2] Advanced Bionics, LLC v. Mel-El Elektromedizinische Gerate GMBH, IPR2019-01469, Paper 6 (PTAB Feb. 13, 2020) (precedential).

[3] Ecto World, LLC v. RAI Strategic Holdings, LLC, IPR2024-01280, Paper 13 (PTAB May 19, 2025) (precedential).

[4] Amgen Inc. v. Bristol-Myers Squibb Co., IPR2025-00601, Paper 9 (PTAB July 4, 2025).

[5] Revvo Techs. Inc. v. Cerebrum Sensor Techs., Inc., IPR2025-00632, Paper 20 (PTAB Nov. 3, 2025) (precedential).

[6] Memorandum titled “Additional Discretionary Institution Considerations – U.S. Manufacturing and Small Business Use of AIA Proceedings,” by Director John A. Squires dated March 11, 2026.

[7] Volkswagen Group of America, Inc. v. Longhorn Automotive Group LLC, IPR2025-01064, Paper 9 (PTAB Oct. 10, 2025).

[8] Skullcandy, Inc. v. Earin AB, IPR2025-00690, Paper 9 (PTAB July 31, 2025).

[9] Apple Inc. v. Advanced Coding Technologies LLC, IPR2025-01070, Paper 11 (PTAB Oct. 17, 2025).

[10] Padagis US LLC v. Neurelis, Inc., IPR2025-00464, Paper 12 (PTAB July 16, 2025) (informative).

[11] See Conjupro Biotherapeutics, Inc. v. Ascletis Pharma China Co. Ltd., PGR2025-00057, Paper 13, 13-14; referred for merits consideration, Paper 15; institution granted, Paper 16 (PTAB Dec. 1, 2025).

[12] Yealink (USA) Network Tech. Co., Ltd. v. Barco N.V., IPR2025-00491, Paper 18 (June 25, 2025).

[13] Samsung Electronics Co., Ltd. v. Wilus Inst. Std. and Tech., Inc., IPR2025-01164, Paper 7, 7-9; referred for merits consideration, Paper 11; institution granted, Paper 15 (PTAB Jan. 9, 2026).

[14] Taiwan Semiconductor Manufacturing Co. Ltd. v. Marlin Semiconductor Ltd., IPR2025-00847, Paper 11 (PTAB Sept. 3, 2025).

[15] Eunsung Global Corp. v. Hydrafacial LLC, IPR2025-00445, Paper 14 (PTAB July 10, 2025).

[16] Ascentcare Dental Prods., Inc. v. Solmetex, LLC, IPR2025-01104, Paper 11 (PTAB Oct. 17, 2025).

[17] ClearCorrect Operating, LLC v. Align Tech., Inc., IPR2025-00814, Paper 14 (PTAB Aug. 29, 2025).

[18] Rode Microphones, LLC v. Zaxcom, Inc., IPR2025-00557, Paper 11 (PTAB July 17, 2025).

[19] Alliance Laundry Systems, LLC v. Payrange LLC, PGR2025-00027, Paper 9 (PTAB July 17, 2025).

[20] Becton, Dickinson, IPR2017-01586, Paper 8 at 17-18.

[21] Anthony Inc. v. ControlTec, LLC, IPR2025-00559, Paper 12 (PTAB July 16, 2025).

[22] Tesla, Inc. v. Charge Fusion Techs., LLC, IPR2025-00152, Paper 11 (PTAB June 12, 2025).

[23] Microsoft Corp. v. Partec Cluster Competence Center GMBH, IPR2025-00318, Paper 9 (PTAB June 12, 2025).

[24] Wybotics, Co. Ltd. v. Zodiac Pool Systems LLC, IPR2026-00158, Paper 12 (PTAB May 6, 2026).