The IPR Sequencing Trap: What Tesla v. Bulletproof Teaches About Forum Choice

Authored by Babak Akhlaghi on July 8, 2027. Most companies think about IPR strategy after they get sued.

That is too late.

The most important IPR decision is not which prior art to use. It is whether you have managed your litigation sequencing so the Fintiv door stays open when you need it.

Tesla got this right in Tesla v. Bulletproof Property Management. Seven IPR petitions. Seven patents. One clean strategic move that dismantled the patent owner’s strongest argument before the hearing even began.

Here is what they did, and what you need to know before your next patent dispute.

The Sequencing Problem Nobody Talks About

Your strategic litigation starts way before your IPR filing.

If you challenge validity in district court first and then try to file an IPR, the patent owner will say this is duplicative. Another bite at the apple. And the USPTO will likely agree. That door closes.

The data confirms this. From May to July 2025, the PTAB denied institution in 120 cases — 92 of those denials were on discretionary grounds. The rate of discretionary denials rose from 15% to 77% in a single policy shift.

Translation: you only get one bite at the apple.

With new USPTO guidance, forum choice is permanent. Choose IPR or district court. But if you start in district court and change your mind, the IPR door may already be closed.

This is a decision that gets made in the earliest stages of a dispute, before a single brief is filed.

What Tesla Did (The Exact Playbook)

Bulletproof Property Management, a company that appears to manage intellectual property, not real property, held seven automotive patents and sued Tesla for infringement.

Tesla responded with seven IPR petitions.

Bulletproof filed a request for discretionary denial. Their argument: this is duplicative, the patents are being challenged in parallel litigation, and Tesla has known about these patents for years.

Tesla made two moves that dismantled that argument entirely.

First: the trial date in district court was vacated. No currently scheduled trial,  no imminent judgment, and no Fintiv timing problem.

Second: Tesla filed a broad stipulation. They would not advance in the parallel litigation any ground that reasonably could have been raised in an IPR, or any combination of system art with prior art asserted in the IPR.

These two moves removed the very argument that kills most IPR petitions at the discretionary stage. The Fintiv concern is always: why should we duplicate effort when a district court is already going to resolve this?

Tesla’s answer: we are taking that argument off the table entirely. We will not raise these grounds in litigation. Full stop.

The USPTO Director agreed. The decision, designated informative on June 15, 2026, stated that the stipulation “reduces the concern of inconsistent outcomes or significant duplication of efforts” and allows the IPR to function as an alternative to litigation — not a supplement.

These two moves disarm the strongest ammunition that the patent owner has in favor of discretionary denial.

The Two-Year Clock on Newly Issued Patents

Settled expectations is a real discretionary denial factor.

The longer a patent has been in force,  enforced, licensed, relied upon commercially, the harder it is to challenge. The USPTO has used this factor to deny institution even when other Fintiv factors favor the petitioner.

In this case, the patents issued between 2024 and 2025. Tesla challenged them within two years.

The Director said two years is not enough time to establish settled expectations. The decision explicitly stated that “the challenged patents have not been in force for a significant period of time“ and accordingly, Bulletproof had not developed strong settled expectations that favor discretionary denial.

Be mindful of how long the patent has been issued. The longer it is in issuance, the longer it is enforced, the harder it gets to challenge the patent, the easier it is to show settled expectations.

Lesson for petitioners: if you are going to challenge a patent, the best time is now. Not after it has been enforced for five years.

Lesson for patent owners: the window of vulnerability is real. Strengthen your enforcement position before asserting. Build licensing history. Document commercialization. Create market reliance evidence.

Because once that short window (probably 4-5 years) closes, the settled expectations argument becomes much stronger.

The Prior Art Argument Most Practitioners Will Miss

Bulletproof argued that the prior art Tesla cited, particularly a reference called Joos, was previously presented to the Office. Therefore, it does not raise a substantial new question of patentability.

This is a common discretionary denial argument. If the examiner saw the art and issued the patent anyway, why should the PTAB take another look?

Tesla’s response was surgical.

First, they showed that Joos was not cited in the parent application (Patent 11,932,230 B1), which served as the priority base for all the other challenged patents. In the child applications, Joos was cited in an IDS, but the examiner did not apply it in any rejection.

Second, and this is the move most practitioners will walk right past, Tesla went to the examiner’s reasons for allowance. They identified exactly what the examiner said was missing from the prior art. Then they showed that Joos actually teaches that very feature.

The Director agreed. The examiner overlooked certain teachings in Joos that appear to disclose allowable subject matter. This demonstrated that the Office erred in a manner material to the patentability of the claims.

That is the argument that wins. Not loud. Precise.

If you are a petitioner, take a look at the examiner’s reasons for allowance. Then take a look at the cited art. Show where that cited art teaches the limitation the examiner said was missing.

That disarms any argument that the art is cumulative or fails to raise a substantial new question of patentability, even if it was cited in an IDS.

The U.S. Manufacturing Factor (And Why It Matters Now)

The Director introduced something new in this decision: he weighed the fact that Tesla manufactures the accused products in the United States as an affirmative factor supporting institution.

This is not a standard Fintiv factor. This is policy.

The justification for IPRs has always been that they help small businesses and protect U.S. manufacturing. But recent data shows that significant of IPR petitioners are large companies, and many of those companies manufacture their products outside the United States.

The USPTO issued a memorandum on March 11, 2026, stating that it will consider U.S. manufacturing and small business status when making discretionary denial decisions. This decision is the first major application of that guidance.

Tesla provided evidence that it manufactures the accused products in America. Bulletproof alleged that 30% to 40% of the components are sourced in foreign countries, but provided no supporting evidence.

The Director found Tesla’s evidence more persuasive. U.S. manufacturing is now a live factor in IPR institution decisions.

If you are a petitioner, document your U.S. manufacturing activities. If you are a patent owner, be prepared to rebut that evidence with specifics, not allegations.

What This Means for Your Next Patent Dispute

The door to IPR is open. It just has to be done fairly. It has to be done based on the guidelines.

Here is what Tesla got right:

1. They managed the sequencing. They never let the district court litigation get traction enough to become a Fintiv problem. No trial date. Broad stipulation. Clean separation of forums.

2. They challenged the patent early. Within two years of issuance. Before settled expectations could take root.

3. They used the examiner’s own words against the record. They found the reasons for allowance, identified the missing limitation, and showed that the prior art teaches it.

4. They documented U.S. manufacturing. They provided evidence that the accused products are made in America, and the patent owner could not rebut it.

These are not theoretical strategies. These are the exact moves that kept seven IPR petitions alive when the discretionary denial rate is running at 77%.

If you are facing a patent dispute, as a petitioner or a patent owner, the lesson is the same.

Your strategic litigation starts way before your IPR filing.

The forum you choose in the first week of a dispute may determine whether you have any forum choice at all six months later.

Choose carefully.