On February 28, 2025, the United States Patent and Trademark Office (USPTO) rescinded the Memorandum entitled "Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation" (Memorandum) issued on June 21, 2022. The Memorandum clarified Patent Trial and Appeal Board (PTAB) practice concerning discretionary denials and limited some of the PTAB's power to discretionarily deny AIA trial proceedings such as inter partes reviews (IPRs). The move comes just over a month after the swearing in of Acting Director Coke Stewart. With this change, practitioners can expect a renewed emphasis on the Fintiv Factors outlined in Apple Inc. v. Fintiv, Inc.
The PTAB has the discretion to deny institution in an AIA trial proceeding where the challenged patent is involved in a parallel district court litigation. In Apple Inc. v. Fintiv, Inc. decided in 2020, the PTAB provided six non-exhaustive factors for evaluating discretionary denial under such circumstances. These factors include (1) whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted; (2) proximity of the court's trial date to the PTAB's projected statutory deadline for a final written decision; (3) investment in the parallel proceeding by the court and the parties; (4) overlap between issues raised in the petition and in the parallel proceeding; (5) whether the petitioner and the defendant in the parallel proceeding are the same party; and (6) other circumstances that impact the PTAB's exercise of discretion, including the merits.
The Memorandum identified specific situations in which discretionary denial should not be exercised. Specifically, the Memorandum stated that the PTAB will not exercise its discretion to deny institution (i) when a petition presents compelling evidence of unpatentability; (ii) when a request for denial under Fintiv is based on a parallel ITC proceeding; or (iii) where a petitioner stipulates not to pursue in a parallel district court proceeding the same grounds as in the petition or any grounds that could have reasonably been raised in the petition. The Memorandum also encouraged parties to provide statistics for the district court where the parallel litigation resides, including median time to trial, as evidence for or against discretionary denial.
The downstream effects of rescinding the Memorandum remain to be seen. Nonetheless, there are some immediate takeaways. First, practitioners should anticipate that the submission of a Sotera stipulation may no longer be dispositive concerning discretionary denial. The Sotera decision remains designated as precedential, and thus the Board's treatment of the stipulation in that case still provides guidance. Second, and similarly, practitioners should anticipate that compelling evidence of unpatentability may be weighed along with the other Fintiv factors. Third, the Board may revisit the applicability of Fintiv denials to cases with parallel ITC proceedings.
With the Guidance revoked, the USPTO reminds parties to continue to rely on PTAB precedent, including Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) and Sotera Wireless, Inc. v. Masimo Corp., IPR2020-01019, Paper 12 (PTAB Dec. 1, 2020). In addition, any portions of PTAB or Director Review decisions relying exclusively on the rescinded Guidance is no longer binding or persuasive.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
