by Dennis Crouch
When Congress passed the Inter Partes Review (IPR) provisions of the AIA, there was some concern that the USPTO might be overwhelmed with IPR petitions; that patentees might be abusively harassed by IPR petitions; or that IPR petitions might sometimes problematically interfere with ongoing litigation. One solution offered by Congress was give the USPTO Director discretionary and unreviewable authority to grant or deny IPR petitions. We know that the PTO Directors have then passed this authority down to the PTAB who decides the institution petitions. More recently, under Dir. Iancu direction the PTAB developed a more formalized doctrinal process for denying IPR institution when ongoing parallel litigation is already well underway. See, Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential). Because IPR petitions often follow infringement allegations, Fintiv considerations have become a regular aspect of IPR institution. In general, the PTAB has been considering the following factors:
- Is the district court litigation stayed or likely to be stayed if the IPR is granted;
- Has the district court set a trial date that is close-in-time to the IPR statutory deadline for a final written decision;
- Have the district court and the parties already made substantial investment in the district court proceeding;
- Are there substantial overlap between issues raised in the petition and those found in the district court proceeding;
- Are the parties to the IPR the same as those in the parallel litigation;
- Are there other circumstances that suggest the exercise of discretion in denying the petition — including consideration of the merits of the petition.
In a recent release, USPTO Director Vidal has released a set of interim procedures for the PTAB to follow that somewhat modify Fintiv–and particularly make it less likely that the PTAB will exercise discretionary denials. New rules:
- No discretionary denial if the petition presents “compelling evidence of unpatentability.”
- No discretionary denial if the petitioner stipulates that it will not “pursue in a parallel proceeding the same grounds or any grounds that could have reasonably been raised before the PTAB.” (Can the stipulation be conditional upon the grant of the petition?).
- Fintiv precedent does not apply to USITC proceedings.
- Some courts regularly set early trial dates and then repeatedly push them back. And, it seems that at least one judge (Judge Albright) has been strategically setting early trial dates in order to trigger discretionary denial. With that in mind, the PTAB’s consideration of trial dates should consider the median time to trial for the district and potentially other aspects of the litigation rather than simply the particular trial date set by the district court.
As you can see, the substantive changes all weigh against discretionary denials. The memo and other sideline discussions also make clear that the new boss (Dir. Vidal) does not favor discretionary denials. I.e., in addition to new rules, we are also likely to have a different narrowing interpretation of the denial approach.