PTAB Designates Decision on Discretionary Denial as Precedential

The PTAB has discretion to decline to institute an inter partes review for many reasons, including if a parallel district court proceeding is ongoing. In Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020)—designated precedential on May 5, 2020—the Board described six non-dispositive factors it may consider under 35 U.S.C. § 314(a) in determining whether to institute an IPR that involves an ongoing parallel district court proceeding.¹ 

When the petitioner in Apple Inc. filed its petition, a district court proceeding involving the same patent was fairly advanced, although no trial date had yet been set. By the time the patent owner filed its preliminary response, the district court had scheduled the trial to be held six months before the statutory deadline for the PTAB’s Final Written Decision. The patent owner argued that the PTAB should deny institution because the petitioner had raised the same invalidity challenges in the district court proceeding, which would be resolved before the PTAB reached its final decision. 

The Board identified six non-dispositive factors that it considered in determining whether to institute the IPR under 35 U.S.C. § 314(a):

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., IPR2020-00019, Paper 11, at 6. The Board explained that these factors often overlap, and that it will take a holistic view of overarching concerns including judicial efficiency, fairness, and patent quality. The decision then discussed the six factors, explaining how each should be analyzed.

For example, in considering the factors, the Board noted that if the district court in a parallel proceeding has stayed the case, that fact should weigh heavily against denying institution. So too would the fact that the district court has expressed on the record that it would reconsider a previously-denied motion to stay upon institution. These considerations remain important even if the district court case was stayed pending resolution of an International Trade Commission investigation, despite the fact that neither the Board nor the district court would be bound by the Commission’s final determinations. 

The Board also noted that timing of the petition’s filing is also relevant. If the petitioner filed the petition soon after learning which claims would be asserted in the district court proceeding, that would weigh against denying institution. But if the petitioner waited to file its petition, for example until after the patent owner responded to invalidity contentions, those facts would favor denial. 

And, relevant to the Apple Inc. case, the Board found that if a district court trial has been scheduled to begin before the statutory deadline for the PTAB to issue its final written decision, that fact weighs in favor of denying institution. The panel thus requested that the parties submit supplemental briefing to present facts that may be relevant to the six discretionary factors. The Board ordered that the briefing be no longer than 10 pages per party, and may be accompanied by documentary, but not declaratory, evidence.

The parties submitted the requested briefing, but the Board has not yet decided whether to institute the IPR.

Endnotes

¹ On the same day, the USPTO de-designated the Board decision in Oracle Corp. v. Click-to-Call Techs. LP, IPR2013-00312, Paper 36 (Oct. 30, 2013) in view of the Precedential Opinion Panel’s decision in GoPro, Inc. v. 360Heros, Inc., IPR2018-01734, Paper 38 (Aug. 23, 2019).  In GoPro, the Precedential Opinion Panel held that “service of a pleading asserting a claim alleging infringement triggers the one-year time period for a petitioner to file a petition under 35 U.S.C. § 315(b), even where the serving party lacks standing to sue or where the pleading is otherwise deficient.”  Id. at 6.