There has been a dramatic increase in denials of Patent Trial and Appeal Board petitions following the March 24 guidance on how to apply the PTAB’s patent-owner friendly decision in Apple v. Fintiv when reviewing patent validity. The Fintiv precedent eases the ability of administrative judges, or the Director of the US Patent & Trademark Office, to reject challenges for patents involved in parallel infringement suits.
The PTAB issued Fintiv denials in 36 of its 143—or one in four—institution decisions from March 24 to May 12. There were no Fintiv denials among the 77 institution decisions issued from Feb. 28, when the Trump administration rescinded Biden-era USPTO Fintiv guidance, to the new March 24 guidance.
Fintiv denials are discretionary and thus resist universal rules, but the arguments and strategies discussed below are statistically the most likely to avoid such denials.
The dominant Fintiv factor is whether the expected district court trial date will precede the PTAB’s statutory date for a final written decision, according to our analysis. If the pattern continues, the most viable petitioner strategy to avoid Fintiv denial will be to expedite filing a PTAB petition to secure the final written decision due date earlier than the expected trial date. Other factors may be given little weight where the expected trial date precedes the final written decision date.
Under the new guidance, the PTAB denied 30 of the 36 petitions where it found the expected trial date precedes the final written decision date, finding that the trial date outweighed any pro-institution Fintiv factors. Most notably, the PTAB denied 25 of 30 petitions where the petitioner filed a stipulation under Sotera Wireless v. Masimo, promising not to present, in court, grounds it had raised or reasonably could have raised in the PTAB.
Within that set of 36 petitions, the PTAB denied the petition in seven of nine cases where it found little investment in the court case. The PTAB instituted only the six petitions where it found the merits strong.
With the new guidance, the PTAB instituted all nine petitions where it was uncertain whether the trial date would precede the PTAB final written decision date. Each of those decisions recited specific reasons to doubt the trial date. In four cases involving Samsung Electronics and Harbor Island Dynamic, the PTAB found the court schedule “contemplates the possibility of a continuance.” In three petitions filed by Nikon and Fujifilm, the PTAB found it unlikely the court cases would go to trial because the parties had reached a settlement-in-principle, and the court had referred to the trial date as “just a placeholder.”
In Samsung Electronics Co. v. Mullen Industries, the PTAB relied on a pending motion to transfer the district court case to the same district already adjudicating the patent. In Liberty Energy, Inc. v. U.S. Well Services, the board found the trial date would likely be delayed past the two-month-later final written decision date because the court had postponed the claim-construction hearing.
In each case, the PTAB found two additional Fintiv factors favored institution: The petitioner had filed a Sotera stipulation and the board found minimal investment in court litigation.
The PTAB, following the new guidance, instituted four of five petitions where it found the expected trial date follows the final written decision date. The board instituted two such cases despite multiple Fintiv factors favoring denial: Therabody, Inc. v. Hyperice IP Subco, and Bio-Rad Labs. v. Cal. Inst. of Tech.
The PTAB denied the petition in Arthrex v. Medshape, even though it found the trial would likely follow the final written decision. However, the board recognized that case had a “unique record” involving allegedly indefinite terms with claim-construction issues that “may be more efficiently addressed” in court.
From May 16 to June 13, Acting USPTO Director Coke Morgan Stewart issued several discretionary-denial decisions based on Fintiv factors under the recently announced bifurcated institution procedure in which the Director decides discretionary-denial issues. Consistent with the above-analyzed PTAB decisions, the expected trial date has been the predominant factor in the Fintiv analysis.
With two notable exceptions, Stewart denied petitions with expected trial dates preceding the final written decision date, but didn’t deny petitions with expected trial dates following final written decision dates. In the exceptions, Stewart relied significantly on new factors not enumerated in Fintiv.
In Tesla, Inc. v. Intellectual Ventures II LLC, Stewart didn’t deny several petitions where the district court trial date preceded the projected final written decision date.In addition to traditional Fintiv factors, Stewart relied on a new factor—that the board “is better suited to review [the] large number of patents involving diverse subject matter” asserted in district court.
In iRhythm Technologies, Inc. v. Welch Allyn, Inc., Stewart denied several petitions where the projected final written decision date preceded the district court trial date. Stewart found “settled expectations” favored denial because a challenged patent issued in 2012 and the petitioner knew about it in 2013, as shown by an information disclosure statement. In other cases, Stewart weighed settled expectations against denial when the challenged patent issued recently. Because there are limited cases, it is too early to tell how significant this new settled-expectations factor will be in future discretionary-denial decisions.
Our analysis shows that, if recent trends continue, the most viable strategy to avoid Fintiv denial will be filing the petition early enough to secure a final written decision date earlier than the trial date. Two ways petitioners can expedite filing are early searching for prior art and preparing the petition before the patent owner identifies asserted claims or serves infringement contentions. When unable to secure a final written decision date earlier than the trial date, the petitioner should submit concrete evidence, beyond speculation, casting doubt on the trial date.
Filing a Sotera stipulation may tilt the balance toward institution, especially when the trial date is uncertain or falls near the final written decision date. And, of course, a petitioner should present a strong unpatentability case to improve its odds under Fintiv and on the merits.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.
Author Information
Ted Cannon is a litigation partner at Knobbe Martens and chair of the firm’s PTAB trials practice group.
Write for Us: Author Guidelines
To contact the editors responsible for this story: