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Supreme Court Called Again to Review IPR Appeal: This time on Discretionary Denials


by Dennis Crouch

The NHK-Fintiv Rule supplies the PTAB with authority to disclaim establishment of IPR proceedings when the challenged patent is already topic to pending parallel district court docket litigation.  The rule stems from two PTAB selections that have been later designated as precedential.

  • NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc., IPR2018-00752, 2018 WL 4373643 (Patent Tr. & App. Bd. Sept. 12, 2018), designated precedential on May 7, 2019.
  • Apple Inc. v. Fintiv, Inc., IPR2020-00019, 2020 WL 2126495 (Patent Tr. & App. Bd. Mar. 20, 2020), designated precedential on May 5, 2020.

IPR proceedings have two main determination pointsInstitution: After IPR petition is filed, the PTO Director determines whether or not or to not institute the IPR. The statute supplies the director with discretionary authority on whether or not or to not institute the IPR, however does create a threshold — requiring that the petition show at the least “a reasonable likelihood that the petitioner would prevail.” 35 U.S.C. 314.  Also, the PTO Director has delegated their establishment authority to the PTAB, and so a PTAB panel really makes the choice.  Final Decision: If the IPR is instituted then the PTAB is charged with holding a trial and reaching a remaining determination “with respect to the patentability of any patent claim challenged.”  On the opposite hand, if establishment is denied, the case is over and no appeal is permitted. “The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” 35 U.S.C. 314(d).  Note right here that “nonappealable” has been typically interpreted as ordinarily not appealable. See Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016) and Thryv, Inc. v. Click-To-Call
Technologies, LP, 140 S. Ct. 1367 (2020).

With NHK-Fintiv, PTAB panels are ready to make use of their discretionary authority to disclaim establishment in conditions involving parallel litigation guided by a six-factor take a look at that typically dance across the overarching query of whether or not “instituting a trial would be an inefficient use of Board resources.”

  1. Whether the court docket granted a keep or proof exists that one could also be granted if a continuing is instituted;
  2. Proximity of the court docket’s trial date to the Board’s projected statutory deadline for a remaining written determination;
  3. Investment within the parallel continuing by the court docket and the events;
  4. Overlap between points raised within the petition and within the parallel continuing;
  5. Whether the petitioner and the defendant within the parallel continuing are the identical occasion; and
  6. Other circumstances that affect the Board’s train of discretion, together with the deserves.

Apple v. Fintiv.  The take a look at has been used dozens of circumstances to disclaim establishment, and litigants and district court docket judges have discovered strategic methods to push these elements of their favored course.

In a brand new petition to the U.S. Supreme Court, Apple has requested requested for aid, arguing that NHK-Fintiv “undermines access to IPR, contrary to Congress’s express design.”  Apple v. Optis Cellular (Supreme Court 2021) (petition for writ of certiorari).  Apple argues that the rule allowing denial “exceeds the PTO’s authority … is arbitrary or capricious, or was adopted without required notice-and-comment rulemaking.”  Id.

After its IPR petition in opposition to an Optis Cellular patent was denied, Apple sought aid from the Federal Circuit who refused — holding that it had no energy to  hear the case both on appeal or through mandamus. Apple Inc. v. Optis Cellular Tech., LLC, 2021-1043, 2020 WL 7753630, at *1 (Fed. Cir. Dec. 21, 2020) (non-precedential order).  The court docket extra typically supplied its reasoning in Cisco Systems Inc. v. Ramot at Tel Aviv University Ltd., 834 F. App’x 571 (Fed. Cir. 2020).

Meanwhile, the district court docket case in opposition to Apple proceeded in E.D. Tex. The jury discovered the Optis patent claims willfully infringed and never confirmed invalid and awarded $506 million in damages. Judge Gilstrap entered judgment for the injury award, however didn’t improve the damages — discovering in his view that the case lacked egregiousness.  I imagine that the case is awaiting judgment on Apple’s excellent motions for brand spanking new trial and JMOL.

The Petition for Certiorari: The petition is attention-grabbing primarily from an appellate and administrative process entrance.  Here, the company used a selected mechanism of rulemaking that seems to be performed with out discover + remark and that isn’t appealable. From that perspective it appears problematic.


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