United States: After Fintiv: The Continuing Evolution Of Discretionary Denial At The PTAB

In 2019, the U.S. Patent Trial and Appeal Board (PTAB) designated precedential NHK Spring Co., Ltd. v. Intri-plex Technologies, Inc.¹, a decision in which the PTAB exercised its discretion under 35 U.S.C. § 314(a) to deny institution of a timely filed² petition for inter partes review (IPR) based on the advanced stage of a related district court litigation. Following NHK Spring, many patent owners began urging the PTAB to deny petitions in light of co-pending district court litigations, and many petitioners saw petitions denied on this ground.

In Apple Inc. v. Fintiv, Inc.³, which was designated precedential in May 2020, the PTAB articulated six factors (Fintiv factors) for Administrative Patent Judges to weigh when considering whether to exercise discretion to deny institution. This article summarizes the Fintiv factors and explores subsequent developments pertaining to each.

I. The Fintiv Factors

The Fintiv "factors relate to whether efficiency, fairness, and the merits support the exercise of" discretionary denial by the PTAB.⁴ Because "there is some overlap among these factors," the PTAB explained, "[s]ome facts may be relevant to more than one factor."⁵ "In evaluating the factors," the PTAB "takes a holistic view of whether efficiency and integrity of the system are best served by denying or instituting review."⁶ Each factor is explored below.

A. Fintiv Factor 1: Whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted

Fintiv Factor 1 considers stays of the district court litigation. According to the Fintiv panel, "[a] district court stay of the litigation pending resolution of the PTAB trial allays concerns about inefficiency and duplication of efforts."⁷ Accordingly, a stay of the district court litigation "has strongly weighed against exercising the authority to deny institution." ⁸ This is also true where the district court litigation is stayed pending an ITC investigation, rather than any IPR.⁹ A denial of a motion to stay, on the other hand-absent any indication that the district court will "reconsider . . . if a PTAB trial is instituted"-can "sometimes weigh[] in favor of exercising authority to deny institution."¹⁰

Since Fintiv, the PTAB has stated that where a stay has been neither requested nor granted, "[t]his factor does not weigh for or against discretionary denial."¹¹ Panels have "recognize[d] that many legitimate reasons may lead a party not to file a motion to stay prior to the Board's institution decision, including that such a motion may be premature."¹² In the informative decision Sand Revolution II, LLC v. Continental Intermodal Group-Trucking LLC, the PTAB explained that, "[i]n the absence of specific evidence"-that is, specific to the instant district court case-the PTAB "will not attempt to predict how the district court . . . will proceed because the court may determine whether or not to stay any individual case . . . based on a variety of circumstances and facts beyond our control and to which the Board is not privy."¹³ In the subsequent institution decision in Fintiv, also designated informative, the panel reasoned similarly: "We decline to infer, based on actions taken in different cases with different facts, how the District Court would rule should a stay be requested by the parties."¹⁴

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Footnotes

1. NHK Spring Co. v. Intri-Plex Technologies, Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (designated precedential May 7, 2019).

2. 35 U.S.C. § 315(b) ("An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.").

3. Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (designated precedential May 5, 2020) (Fintiv).

4. Id. at 5.

5. Id.

6. Id. at 6.

7. Id.

8. Id. at 7-8. See also, e.g., Snap, Inc. v. SRK Tech. LLC, IPR202-00820, Paper 15 at 9 (PTAB Oct. 21, 2020) (designed precedential Dec. 17, 2020).

9. Fintiv at 8 ("[E]ven though the Office and the district court would not be bound by the ITC's decision, an earlier ITC trial date may favor exercising authority to deny institution . . . if the ITC is going to decide the same or substantially similar issues to those presented in the petition.").

10. Id. at 7-8.

11. Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 at 12 (PTAB May 13, 2020) (designated informative July 13, 2020) (Fintiv II).

12. GlobalFoundries Inc. v. UNM Rainforest Innovs., IPR2020-00984, Paper 11 at 10 (Dec. 9, 2020).

13. Sand Rev'n II LLC v. Cont'l Intermodal Grp. - Trucking LLC, IPR2019- 01393, Paper 24 at 7 (PTAB June 16, 2020) (designated informative July 13, 2020).

14. Fintiv II at 12. See also, e.g., Dish Network L.L.C. . Broadband iTV, Inc., IPR2020-01280, Paper 17 at 13 (PTAB Feb. 4, 2021) ("[D]etermining how the Texas court might handle the issue of whether to stay . . . when no motion for stay has been filed invites conjecture . . . this factor is neutral to the exercise of our discretion.").

Originally Published by IP Litigator: March/April 2021.

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