Earlier this week, Chief Administrative Patent Judge Scott Boalick issued a memorandum ("Boalick Memo") addressing the United States Patent and Trademark Office's (USPTO) February 28, 2025 bulletin withdrawing a memorandum issued by the former Director Kathy Vidal ("Vidal Memo") providing guidance on what circumstances the Patent Trial and Appeal Board ("PTAB") would exercise its discretion and deny a request to review the patentability of a granted patent.
The bulletin issued by the USPTO withdrawing the Vidal Memo did not explain why the guidance was being withdrawn, or offer any new guidance on the application of discretionary denials. The recently issued Boalick Memo explains that the Vidal Memo "was intended to provide guidance while the USPTO explore potential rulemaking," and "[i]n the absence of rulemaking, the USPTO rescinded the Interim Procedure to restore policy in this area to the guidance in place before the Interim Procedure . . ." The Boalick Memo goes on to set forth additional guidance in this area, which can be summarized as follows:
- The Vidal Memo's recission applies to any case in which the Board has not issued an institution decision, or where a request for rehearing or Director Review of an institution decision was filed and remains pending;
- Contrary to the Vidal Memo, the Board will apply the Fintiv factors when there is a parallel proceeding at the International Trade Commission ("ITC"), and that the Board is more likely to deny institution when the ITC's projected final determination date is earlier than the Board's deadline to issue a final written decision;
- A timely filed Sotera stipulation* "is highly relevant, but will not be dispositive by itself. Instead, the Board will consider such a stipulation as part of its holistic analysis under Fintiv";
- The Board may consider evidence bearing on the district court's trial date or the ITC's final determination target date, such as median time-to-trial statistics for civil actions in the district court in which the parallel litigation resides; and
- "Compelling merits" of the petition is not dispositive to the decision of whether to exercise discretionary denial.
The USPTO's withdrawal of the Vidal Memo had generated uncertainty and alarm with certain stakeholders. For example, a number of industry groups that could be characterized as representing industries who face patent infringement lawsuits with some frequency penned a letter to the Secretary of Commerce, Director of the National Economic Council of the United States, and the White House expressing their concern that the withdrawal of the Vidal Memo would serve to limit access to inter partes review to the detriment of innovation and the American economy.
Even with the additional guidance set forth in the Boalick Memo, the practical impact of the application of Fintiv factors by individual PTAB judges going forward remains uncertain.
It remains prudent of prospective patent challengers to file their patentability challenges as soon as possible after litigation is initiated involving the patent to be challenged, and should also consider a stipulation that the same unpatentability grounds that are raised, or reasonably could have been raised, before the PTAB will not be pursued in the District Court (Sotera stipulation). Furthermore, while not dispositive, a well-drafted petition for inter partes review presenting a compelling case on the merits will also help tip the scales in their favor.
The Boalick Memo also seems to confirm that patent owners are no longer constrained by the bright line safe harbors and restrictions to the application of Fintiv contained in the now-withdrawn Vidal Memo.
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