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:
- whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted;
- proximity of the court’s trial date to the Board’s projected statutory deadline for a final written decision;
- investment in the parallel proceeding by the court and the parties;
- overlap between issues raised in the petition and in the parallel proceeding;
- whether the petitioner and the defendant in the parallel proceeding are the same party; and
- 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).