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PTAB DISCRETION TO DENY INSTITUTION OF INTER PARTES REVIEW

The PTAB has discretion under 35 U.S.C. § 314(a) to deny institution based on parallel district court proceedings. “[T]he Board takes a holistic view of whether efficiency and integrity of the system are best served by denying or instituting review” by analyzing six factors:

  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 Board’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 Board’s exercise of discretion, including the merits.

Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential) (“Fintiv”).  The USPTO requested public comments on whether the USPTO should codify its current policies and practices, or modify them, in exercising its discretion to institute PTAB trials. (https://www.regulations.gov/document/PTO-C-2020-0055-0346). The USPTO has yet to publish proposed rules. In the meantime, recent PTAB panels have generally applied the factors as follows.

Factor 1 (Stay) – The Board declines to infer, based on actions taken in different cases with different facts, how a district court would rule should a stay be requested in a parallel case because a district judge determines whether to grant a stay based on the facts of each specific case. This factor weighs against exercising discretion to deny institution only if the parallel district court actually stays the case, or at least indicates a willingness to stay pending the Board’s final resolution of the patentability issues. Cellco Partnership D/B/A/ Verizon Wireless v. Huawei Tech. Co. Ltd., 2021 WL 842594, *3 (PTAB March 5, 2021).

Factor 2 (Set Trial Date) – If the district court’s trial date is earlier than the projected statutory deadline, the Board generally has weighed this fact in favor of exercising discretion to deny institution. If the court’s trial date is at or around the same time as the projected statutory deadline or even significantly after the projected statutory deadline, the decision whether to institute will likely implicate other Fintiv factors, such as the resources that have been invested in the parallel proceeding. Fintiv, Paper 11 at 9. See Western Digital Corporation v. Kuster, 2021 WL 627719, *4 (PTAB February 17, 2021) (factor is neutral given “proximity” of trial 3 ½ months before final written decision)

The Board will generally take courts’ trial schedules at face value absent sufficient evidence to the contrary. However, if the district court has not expressly set a specific trial date or merely sets an “estimated trial date,” the Board will not speculate as to a likely trial date and will weigh this factor against exercising discretion to deny institution. See Unified Patents, LLC v. Justservice.net LLC, 2021 WL 650839, *18-19 (PTAB February 18, 2021) (factor weighs against exercising discretion where the court’s form Order Governing Proceedings for Patent Cases states that jury selection and trial occur “52 weeks after Markman hearing (or as soon as practicable)”); DJI Europe B.V. v. Daedalus Blue LLC, 2021 WL 626439, *4-5 (PTAB February 17, 2021) (factor is neutral where the District Court merely “suggests” a trial date); Intel Corp. v. FG SRC LLC, 2021 WL 825767, *6-7 (PTAB March 3, 2021)(Board determined no trial date was scheduled and factor weighs slightly against exercising discretion to deny institution where, under new WDTX practice of setting “estimated trial date,” district court set a trial date four months prior to final written decision and invited the parties to raise movement of the trial date at the Markman hearing); but see 10X Genomics, Inc. v. President and Fellows of Harvard College, 2021 WL 709573, *7 (PTAB February 22, 2021) (district court requiring parties to be “ready for trial” by specific date found to weigh slightly in favor of exercising discretion to deny institution).

The Board considers general evidence of trial delays amid the global pandemic as speculative and only gives weight to evidence showing the district court has expressly indicated the trial date for the particular parallel case may be postponed. See Western Digital Corporation v. Kuster, 2021 WL 627719, *4 (PTAB February 17, 2021) (factor neutral where the rise of COVID-19 cases in Texas may cause further uncertainty in the trial date, Judge Albright’s recent grant of a joint request for postponement of a trial date due to the COVID-19 pandemic, and other district courts in Texas have continued jury trial dates due to the COVID-19 pandemic).

Factor 3 (Work Completed) – The Board considers “the amount and type of work already completed in the parallel litigation by the court and the parties at the time of the institution decision.” Fintiv, Paper 11 at 9 (emphasis added). “Specifically, if, at the time of the institution decision, the district court has issued substantive orders related to the patent at issue in the petition, this fact favors denial.” Id. at 9−10. “Likewise, district court claim construction orders may indicate that the court and parties have invested sufficient time in the parallel proceeding to favor denial.” Id. at 10. “This investment factor is related to the trial date factor, in that more work completed by the parties and court in the parallel proceeding tends to support the argument[ ] that the parallel proceeding is more advanced, a stay may be less likely, and instituting would lead to duplicative costs.” Id. However, “[i]f the evidence shows that the petitioner filed the petition expeditiously, such as promptly after becoming aware of the claims being asserted, this fact has weighed against exercising the authority to deny institution.” Id.  See also, Samsung Elec. Co., Ltd. v. Clear Imaging Research, LLC, 2021 WL 842031 (PTAB March 4, 2021) (a late filed petition allowing much work to be done by the district court and parties weighs strongly in favor of exercising discretion to deny)

 Factor 4 (Overlapping Issues) – This factor weighs strongly in favor of not exercising discretion to deny institution when Petitioner stipulates it will not pursue any ground raised or that could have been reasonably raised in an inter partes review, that is, any ground that could have been raised under 35 U.S.C. §§ 102 or 103 on the basis of prior art patents or printed publications. Sotera Wireless, Inc. v. Masimo Corp., 2020 WL 7049372, *7 (PTAB Dec. 1, 2020) (precedential); DJI Europe B.V. v. Daedalus Blue LLC, 2021 WL 531816, *7 (PTAB February 12, 2021); Sand Revolution, Paper 24 at 12 n.5. Such a stipulation “mitigates any concerns of duplicative efforts between the district court and the Board, as well as concerns of potentially conflicting decisions,” where the petitioner “broadly stipulates to not pursue ‘any ground raised or that could have been reasonably raised.’” Sotera Wireless, 2020 WL 7049372, *7. A broad stipulation of this nature addresses concerns regarding duplicative efforts and potentially conflicting decisions, and ensures an inter partes review functions as a true alternative to litigation in relation to grounds that could be at issue in an inter partes review. Sand Revolution, Paper 24 at 12 n.5.

Factor 5 (Same Party) – “If a petitioner is unrelated to a defendant in an earlier court proceeding, the Board has weighed this fact against exercising discretion to deny institution under NHK.” Fintiv, Paper 11 at 13–14 (emphasis added). If the petitioner is a defendant in the parallel litigation, this factor weighs in favor of exercising discretion to deny institution. Samsung Elec. Co., Ltd. v. Clear Imaging Research, LLC, 2021 WL 842031 (PTAB March 4, 2021)

Factor 6 (Other Circumstances) – The final Fintiv factor is a catch-all that takes into account any other relevant circumstances, including the merits. “[I]f the merits of the grounds raised in the petition are a closer call, then that fact has favored denying institution when other factors favoring denial are present.” 10X Genomics, Inc. v. President and Fellows of Harvard College, 2021 WL 709573, *7 (PTAB February 22, 2021). “A full merits analysis is not necessary as part of deciding whether to exercise discretion not to institute, but rather the parties may point out, as part of the factor-based analysis, particular ‘strengths or weaknesses’ to aid the Board in deciding whether the merits tip the balance one way or another.” Samsung Elec. Co., Ltd. v. Clear Imaging Research, LLC, 2021 WL 842031, *10 (PTAB March 4, 2021).

Balancing the Fintiv Factors – Because the Board’s analysis is fact driven, no single factor is determinative of whether to exercise discretion to deny institution under § 314(a). The Board balances all of the factors. Cellco Partnership D/B/A/ Verizon Wireless v. Huawei Tech. Co. Ltd., 2021 WL 842594, *8 (PTAB March 5, 2021).

SGB – Lead and Local Counsel for Patent Cases in the Western District of Texas (Austin and Waco)

Slayden Grubert Beard is a trusted partner of clients and law firms involved in patent infringement cases in our home forum, the Waco and Austin Divisions of the Western District of Texas.  We are experienced lead and local counsel, and we welcome the opportunity to help you navigate the unique procedures and personalities of our district.

Below are links to standing orders and local procedures we’ve found helpful in the initial stages of litigation in the Waco and Austin Divisions.  We look forward to working with you the next time you find yourselves in the Western District of Texas.   

Current Standing Order regarding Waco Trials (trials are currently proceeding as scheduled)

Current Standing Order regarding Trials in Other Divisions of the Western District of Texas (all trials are continued through April 30, 2021)

Local Rules for the Western District of Texas

Judge Albright’s Order Governing Proceedings for Patent Cases (OGP Version 3.2) (includes default infringement/invalidity contention deadlines, interim protective order, default discovery limits, and claim construction procedures)

Pro Hac Vice and ECF Registration Forms

Judge Albright’s Notice of Readiness (Waco)

Judge Albright’s Form Scheduling Order (Waco)

Judge Albright’s Microsoft Excel Scheduling Date Calculator Tool (Waco)

Judge Albright’s Patent Case FAQs (Waco) (includes telephonic hearing procedures for discovery disputes)

Slayden Grubert Beard PLLC Welcomes Accomplished Patent Trial Lawyer

Slayden Grubert Beard PLLC (SGB) is pleased to announce that Joseph (Joey) Gray has joined the Firm as a shareholder.

Mr. Gray is an accomplished trial lawyer and patent attorney with over 15 years of experience trying bench and jury trials in district courts around the country, at the International Trade Commission, and before the Patent Trial & Appeal Board.  He advises in all areas of intellectual property for clients of all shapes and sizes, from individual inventors and emerging companies to multinational corporations.

Mr. Gray joins SGB from Baker Botts LLP, where he was an intellectual property partner for the past seven years.  “I am delighted to be joining SGB’s first-rate team of IP lawyers, including several former Baker Botts colleagues I highly respect,” said Mr. Gray.  “SGB has found a way to practice IP law in a way that is different and better than large law firms – including being more nimble, flexible, and responsive to client needs.  I’m excited to introduce my clients to the extraordinary talent at SGB, and I look forward to continuing to provide exemplary client service at a substantially reduced cost.”

Mr. Gray earned his undergraduate degree from the University of Texas at Austin, where he studied in the Engineering Honors Program and graduated with highest honors from the McCombs School of Business.  Mr. Gray also attended The University of Hawaii (Manoa) and The University of Edinburgh (Scotland) during his undergraduate studies. He subsequently attended Stanford Law School, where he graduated with distinction and served as managing editor of the Stanford Journal of Law, Business & Finance.

After completing a clerkship with the Hon. William Wayne Justice of the U.S. District Court for the Eastern District of Texas, Mr. Gray began his legal career with Vinson & Elkins before joining Baker Botts in 2011.  Among other awards, Mr. Gray was recognized in The Best Lawyers in America from 2013-2020 and as a Texas Super Lawyer-Rising Star from 2011-2019.

Increasingly Faster Ex Parte Appeals Before the USPTO – New Fast Track Appeal Program

by Jerry F. Suva

Historically, patent practitioners regarded ex parte appeals of examiner decisions as very slow. These appeals, submitted to the Patent Trials and Appeal Board (PTAB) at the United States Patent and Trademark Office (USPTO), often required several years of waiting for a decision.

However, under Director Andrei Iancu, the decision time for an ex parte appeal decision has dropped dramatically. Once all briefs and answers have been submitted, the PTAB now issues a decision in an average time of 13-15 months. However, earlier this month the USPTO launched a new effort called the “Fast-Track Appeals Pilot Program” (FTAPP) which will make ex parte appeals even faster.

Nuts and Bolts of the FTAPP

The FTAPP is remarkably simple—pay an additional $400 fee in conjunction with an electronic petition, and the PTAB will issue a decision on your ex parte appeal in six months. The FTAPP parallels the “Track One” prosecution program, wherein one can also “cut in line” by paying an extra fee for expedited prosecution. The FTAPP is limited to 125 applications per quarter for the next year. As of July 24, twenty (20) applications have been accepted into the FTAPP, so plenty of opportunities still exist to take advantage of this expedited appeals process. Appellants who have previously filed a pending ex parte appeal can enter the FTAPP by simply paying the fee and filing the electronic petition. Oral hearings are available under the FTAPP but rescheduling such hearings is not flexible.

“6 Months”—But After the Reply Brief

The six-month window begins after filing of the Appeal Brief, the Examiner’s Answer, and the Reply Brief (if any). Obviously, the Appellant can reduce the time for the Appeal Brief or the Reply Brief by quickly filing these briefs. However, M.P.E.P. § 1207.02 states that the “examiner should furnish [the Examiner’s Answer] within 2 months” (emphasis added). The examiner is thus not required to provide the Examiner’s Answer within any given length of time. Anecdotally, examiners will wait as long as six months to provide their answer.

The six-month window for the decision under the FTAPP should thus be compared with the present average pendency for the decision. The average pendency varies over time and depends upon particular art units, but is roughly 15 months. Practitioners can view up-to-date USPTO pendency statistics here.

Thus, the FTAPP will save the average appellant about nine months.

Appeals are Now Even More Appealing

The USPTO promotes the FTAPP as suitable for emerging technologies or fast-to-market inventions. However, consider filing under the FTAPP by default for every ex parte appeal. The $400 fee is a small incremental cost when compared to the other USPTO fees and the necessary attorney fees for an appeal. Moreover, strongly consider filing an FTAPP petition for any already-filed ex parte appeal.

The FTAPP makes ex parte appeals an even more viable option when compared to other tactics for rejected claims, such as making an amendment and filing a Request for Continued Examination (RCE). Assuming efficiencies such as one month to draft an Appeal Brief, two months waiting for an Examiner’s Answer, and one month to draft a Reply Brief, the ex parte appeal process could be completed in ten months. A ten-month time span for an appeal compares favorably with the time for an RCE. Compared to an RCE, the ex parte appeal need not further limit the claims, receives substantive review by three PTAB judges, and limits potentially multiple subsequent office actions.

Potential patentees and patent practitioners should reconsider any traditional expectations in view of the FTAPP, and revisit ex parte appeals as a viable tactic in obtaining patent protection.

Slayden Grubert Beard Launches New Website Following 5-Year Anniversary

Slayden Grubert Beard PLLC (“SGB”) is pleased to announce the launch of its new website.  A lot has changed since we opened the SGB doors and launched our first website in 2015.  For example, SGB has grown from its three founders (Bruce W. Slayden II, Andreas Grubert, and R. William Beard Jr.) to twelve attorneys, one U.S. patent agent/German attorney, and three paralegals. 

Since 2015, SGB has:

  • Helped its clients obtain 1,282 U.S. patents
  • Represented clients in 33 cases in the following U.S. district courts:
    • Western District of Texas
    • Southern District of Texas
    • Eastern District of Texas
    • Delaware
    • Northern District of California
    • Eastern District of New York
    • Minnesota
    • Southern District of Florida
    • Northern District of Illinois
    • Arizona
    • Utah
  • Represented clients in the following courts of appeals:
    • Federal Circuit
    • Tenth Circuit
  • Represented clients in fifteen inter partes review and covered business method proceedings before the Patent Trial & Appeal Board

SGB looks forward to many more years of providing excellent service and obtaining favorable results for its clients.