Failure To Cite Own Prior Art Tanks Patent Owner’s Discretionary Denial Request

By Mike Lavine –

In Microsoft Corporation v. Sandpiper CDN, LLC, IPR2026-00180 (Paper 15, May 6, 2026), Director Squires denied Sandpiper CDN’s request for discretionary denial of Microsoft’s IPR petition, finding that (1) not all of Microsoft’s challenges relied on previously considered art and (2) that Sandpiper CDN’s failure to cite its own commonly assigned prior art during prosecution undercut its settled expectations.

Sandpiper CDN argued that the challenged patent had been in force for over five years, that it had developed settled expectations regarding the patent’s validity, and that Microsoft’s challenges relied on the same art and analysis the Office previously considered during prosecution–specifically the O’Rourke reference.

Director Squires was not persuaded. He noted that O’Rourke formed the basis for only half of Microsoft’s challenges, while the remaining challenges relied on the Middleton reference which the Office had not previously considered. Sandpiper CDN did not argue that the Middleton-based challenges were cumulative to previously presented art, and the Director found they did not trigger § 325(d).

The Director also highlighted that Middleton was commonly assigned to Sandpiper CDN before the challenged patent was filed; yet Sandpiper CDN failed to cite Middleton during prosecution. Director Squires stated that “[a] patent applicant’s failure to provide prior art that it owns cuts against its settled expectations and weighs against discretionary denial.”

The Director emphasized that his determination rested on the complete record and a holistic assessment of all the evidence, weighing Sandpiper CDN’s settled-expectations arguments against the new prior art grounds and its failure to disclose a commonly assigned reference.

Takeaways

• Commonly assigned art matters. Patent owners seeking discretionary denial based on settled expectations may face an uphill battle where they failed to cite their own prior art during prosecution. The Director views such omissions as undermining the settled expectations that Patent Owners seek to invoke.
• Partial overlap under § 325(d) may not be enough. Even where some grounds rely on previously considered art, the presence of independent grounds based on new references can defeat a discretionary denial request.
• Expect a holistic balancing test. Practitioners should not assume that any single factor–such as patent age or settled expectations–will carry the day. The Director will weigh the totality of the record, and weaknesses like undisclosed commonly assigned art can tip the balance decisively against denial.