The new director of the U.S. Patent and Trademark Office, Katherine Vidal, recently issued a memorandum clarifying the Patent Trial and Appeal Board (PTAB) application of Fintiv to discretionary denial of PTAB proceedings, such as inter partes review (IPR) and post grant review (PGR), under Fintiv. Key elements of the director’s new guidance are outlined below.
When a party is accused of infringing a patent, it has become almost routine for the party to seek IPR or PGR of the patent. These proceedings have skyrocketed in popularity since their introduction almost a decade ago. One of the first lines of defense for a patent owner is to advocate for discretionary denial of the proceeding. While there are several grounds to seek discretionary denial, one of the more frequently invoked stems from Fintiv, a precedential decision that set forth a six-factor test to assess whether to institute an AIA post-grant proceeding where there is parallel district court litigation. Since Fintiv, the PTAB has denied institution of a number of petitions on discretionary grounds where the scheduled trial date was earlier than the projected statutory deadline for a final written decision. Several PTAB decisions also extended Fintiv to deny institution based on parallel International Trade Commission (ITC) investigations. The memorandum addresses these and other issues as summarized below.
The message from the memorandum is clear — well supported IPR and PGR petitions are now more likely to result in institution. The overarching takeaway from the director’s new guidance is that discretionary denials under Fintiv are likely to become much less frequent, with a greater emphasis on the merits of the grounds set forth in the petition. Further, Sotera stipulations would appear to be sufficient to avoid denial under Fintiv. Patent owners will need to carefully assess the merits of a petition and the impact of stipulating to not pursue any grounds that could have “reasonably” been raised before the PTAB, particularly if a district court is unlikely to stay pending resolution of the PTAB proceedings. The guidance will also lead to increased significance of the merits arguments presented in a preliminary response. It may also become more common to see expert declarations, which had traditionally been reserved for after institution, to accompany preliminary responses in hopes of illustrating the weaknesses in the merits of the petition (and therefore increase likelihood of denial under Fintiv).