In 2020, PTAB increasingly rejected meritorious requests for review under its discretion, as my partner Steve Auvil and I recently discussed. Many such denials have been made in relation to pending litigation under the so-called Fintiv Factors passed last May. The response to the PTAB’s approach has been noisy and divided, and the USPTO received a record number of responses to its request for comments on the matter, but no changes were made. Rather, the PTAB has set two priority decisions, in which a review was initiated despite pending legal disputes. This more closely confirms how their decisions will depend on the actions of both the courts and the litigants.
Central to both decisions was the slow progress of the co-pending litigation in the first year, a factor that could compensate for filing a motion on or near the legal attorney’s date. Two further considerations were weighed strongly against it Exercise discretion to refuse institution. The first was the court’s motion to stay the case In front The PTAB issued a decision on setting up the review. The second was a stipulation by the petitioner that he “would not pursue any ground which was raised in an IPR or which could reasonably have been invoked”. In either case, the PTAB was less likely to reject the petition at its discretion.
In order to understand how these considerations may affect the PTAB’s discretion to refuse the Institute, it is necessary to recall the Fintiv factors. Since its decision in the Apple v Fintiv case in May 2020, PTAB has considered the following six factors:
Factor 1: Whether the court granted residence or whether there is evidence that one can be granted if proceedings are initiated
Factor 2: Proximity of the court hearing date to the planned statutory deadline for the Board of Directors for a final written decision
Factor 3: Investment of the court and the parties in the parallel process – including whether the petitioner showed negligence or delay in filing the application
Factor 4: Overlap between the issues raised in the petition and in the parallel procedure
Factor 5: Whether the petitioner and the defendant are the same party in the parallel proceedings
Factor 6: Other circumstances affecting the Board of Directors’ exercise of discretion, including merit
The designated decisions
In Sotera Wireless v Masimo., Which was classified as a priority on December 17, 2020, the PTAB applied the Fintiv factors and found the following:
Factor 1: Pending a motion to stay pending intellectual property protection did not positively affect or counter the facility’s refusal.
Factor 2: A trial date set “at about the same time” as the facility deadline did not positively affect or counter the facility’s refusal.
Factor 3: Where in the context of the legal dispute the creation of claims, expert opinions and substantive movement practices still had to be carried out and the determination of the facts was still ongoing, “limited investments” were of importance against Exercise discretion to refuse institution.
- The fact that the petition was filed just two weeks before the one-year period after service had expired did not change the rating of factor 3, as the filing was just two months after the disputes and a large number of patents and claims was submitted problem.
Factor 4: The petitioner’s provision states that “if IPR are introduced, they will not be pursued in the District Court [l]itigation any reason that was reasonably put forward or could have been raised in an IPR ” strongly against it Exercise discretion to refuse institution.
In Snap v. SRK Technology, which was also rated priority on December 17, 2020, the PTAB applied the Fintiv factors and found the following:
Factor 1: If a district court has already granted a postponement pending the establishment or final decision of the PTAB, this factor is important strongly against it Exercise discretion to refuse institution.
Factor 2: The progress of a case that is currently suspended is speculative, so this factor cannot speak in favor of exercising any discretion to refuse by the institution.
Factor 3: The suspension of a case prior to the completion of the fact-finding process and prior to the issuance of any patent-related orders will weigh against Exercise discretion to refuse institution
- The fact that the petition was filed over a year after the complaint was filed did not change the score of factor 3 as the litigation was still in its early stages.
Factor 4: Reliance on a petition in a reference that was neither explicitly nor implicitly identified in the litigation was a key difference between the two proceedings and was weighed along with the litigation stay against Exercise discretion to refuse institution.
In each of these cases, factor 5 was neutral as the petitioner was a defendant in the parallel proceedings. With regard to factor 6, the PTAB found that the petitioners had fulfilled their burden of demonstrating a reasonable likelihood that the challenged claims were not patentable.
Discovery and Secondary Considerations
In Snap, the PTAB also examined whether the availability of discoveries in the litigation was weighted over secondary circumstantial evidence of non-obviousness in favor of denial of residence. The PTAB determined that this was not the case. The PTAB rejected the patentee’s argument that it was in the interests of justice that such a discovery be made in the District Court, and stressed that its own rules provide for a limited discovery.
The Sotera and Snap decisions are a clear and strong message from PTAB about how it will respond to certain actions by a petitioner and / or a court in pending litigation. If the litigation progresses slowly, the PTAB is less likely to reject an otherwise meritorious petition if (1) the petitioner submits different grounds for nullity on the issues and / or states that he or she does not or may not be cited in the litigation Pursuing a reasonable reason has been adequately addressed in IPR, or (2) the court has shown its deference by granting a motion to stand before a decision by the Institute. Petitioners and courts who wish to be reviewed by the PTAB should proceed accordingly.