Posts Tagged: "Fintiv"

The U.S. Patent and Trademark Office (USPTO) responded last week to a petition for certiorari that is asking the Supreme Court to overturn a U.S. Court of Appeals for the Federal Circuit (CAFC) decision that said appellate review of whether the Patent Trial and Appeal Board’s (PTAB’s) discretionary denial rules for inter partes review (IPR) are “arbitrary and capricious” is precluded by Section 314(d) of the patent statute.

Between the precedential Fintiv decision in March of 2020 and Director Vidal’s Guidance Memo regarding the application of Fintiv in June of 2022, the discretionary denial rates of inter partes review (IPR) institution decisions under 35 U.S.C. § 314(a) plummeted from 40-50% to 11-16%. Coupled with the order issued by the Chief Judge of the Western District of Texas in July of 2022 declaring that all new patent cases filed in the Waco Division will be randomly assigned among the 12 judges in the district, the substantial decline in denials based on Fintiv in 2022 was not surprising. Now, amid speculations that Fintiv denial rates will increase once again, the USPTO recently announced a set of proposed rules on discretionary denial practice in an Advance Notice of Proposed Rulemaking (ANPRM).

On March 30, U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal issued a decision on sua sponte Director review that vacated a decision of the Patent Trial and Appeal Board (PTAB), which had previously denied institution of inter partes review (IPR) proceedings brought by semiconductor company Wolfspeed. In her latest in a series of sua sponte decisions, Director Vidal ruled that the PTAB erred in determining that prior art asserted by Wolfspeed was essentially the same as other prior art asserted against the same Purdue University patent claims in previous IPR proceedings that were also denied institution by the PTAB.

The U.S. Court of Appeals for the Federal Circuit (CAFC) on Monday said that Apple has standing to pursue its claim that the U.S. Patent and Trademark Office (USPTO) Director’s instructions to the Patent Trial and Appeal Board (PTAB) regarding discretionary denial practice under Apple Inc. v. Fintiv, Inc. were made without proper notice-and-comment rulemaking. The CAFC affirmed the district court’s ruling on two other challenges brought by Apple, Cisco, Intel and Edwards Lifesciences, but said that at least Apple had standing to present the challenge that the discretionary denial instructions were improperly issued and reversed on that ground. The appeal relates to Apple’s and the other companies’ challenge of the Fintiv instructions governing the PTAB’s discretion to deny institution of inter partes review (IPR) proceedings based on their contention that they will result in too many denials.

U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal has been on a tear recently, reviewing sua sponte a number of Patent Trial and Appeal Board (PTAB) decisions and designating others precedential. Many of those decisions have helped to make America Invents Act (AIA) proceedings more rigorous and fair, such as the Director’s decisions correcting the PTAB for relying on conclusory expert statements and putting at least some teeth in the real parties in interest requirement. Her most recent interventions in Commscope Technologies v. Dali Wireless IPR2022-01242 and AviaGames, Inc. v. Skillz Platform, Inc., IPR2022-00530 however, add more confusion than clarity to the Fintiv analysis, and more work for parties and the Board, without improving fairness or efficiency.

U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal today issued a second Director Review decision correcting the Patent Trial and Appeal Board (PTAB) on its approach to the “compelling merits” analysis outlined in her June 2022 Guidance Memo. In AviaGames, Inc. v. Skillz Platform, Inc., IPR2022-00530, Vidal vacated the PTAB’s denial of AviaGames’ petition to institute IPR of certain claims of Skillz’s U.S. Patent 9,479,602 B1. She explained that the Board’s determination to deny the petition following a Fintiv analysis was improperly based on the district court’s judgment of invalidity under 35 U.S.C. § 101, since that is “a statutory ground that could not have been raised before the Board” and “does not raise concerns of inefficient duplication of efforts or potentially inconsistent results between the Board and the district court.”

On July 6, the U.S. Court of Appeals for the Fifth Circuit heard oral arguments in US Inventor v. Hirshfeld, an appeal from a lawsuit first filed in February 2021 to challenge the U.S. Patent and Trademark Office’s (USPTO’s) development of the Fintiv framework for discretionary denials of petitions for Patent Trial and Appeal Board (PTAB) proceedings. Although the appeal comes to the Fifth Circuit following the district court’s dismissal due to the plaintiffs’ lack of Article III standing, much of the oral arguments focused on whether the Fifth Circuit or the U.S. Court of Appeals for the Federal Circuit had proper jurisdiction to hear the appeal.

Day two of IPWatchdog’s Patent Litigation Masters Program yesterday included panels on IP Finance, Mega Verdicts in Patent Litigation, Expert Witnesses and the Fintiv Saga. During the latter panel, former U.S. Court of Appeals for the Federal Circuit Judge Kathleen O’Malley joined other speakers to discuss the effects of the Patent Trial and Appeal Board’s (PTAB’s) Fintiv decision, a controversial precedential PTAB opinion that outlined factors for the Board to consider in choosing whether to discretionarily deny institution of an inter partes review (IPR) proceeding. Todd Walters of Buchanan Ingersoll & Rooney presented statistics showing that the rate of denials due to Fintiv has recently fallen off a cliff.

The first panel of Tuesday’s PTAB Masters™ 2022, titled “Discretionary Denials: Has the WDTX Been Neutered?”, presented data that reveals the U.S. Patent and Trademark Office’s (USPTO’s) Patent Trial and Appeal Board (PTAB) seemingly stopped citing Fintiv as a reason to discretionarily deny inter partes review (IPR) proceedings for cases with parallel litigation in the Western or Eastern Districts of Texas (WD of TX/ ED of TX) during the last four months of 2021. While the PTAB issued a larger number of institution decisions overall in those months compared with previous months, and a larger number of cases citing Fintiv, there was also a relatively low number of cases across all jurisdictions in which discretion to deny was applied based on the Fintiv analysis.

On September 16, 2020, the Patent Trial and Appeal Board (PTAB) denied institution of Mylan Labs Ltd.’s petition for IPR of U.S. Patent No. 9,439,906 (“the ’906 patent”) in IPR2020-00440.  In doing so, the PTAB exercised discretion to deny institution based on the six factors set forth in its precedential order in Apple Inc. v Fintiv Inc. For Hatch-Waxman Defendants interested in challenging the validity of Orange Book-listed patents at the PTAB, IPR petitions should be filed as early as possible in order to avoid this same result.