In Microsoft v. ParTec, Error by the Office Trumps Fintiv, Leading to Referral

In Microsoft Corp. v. ParTec Cluster Competence Center Gmbh, IPR2025-00318, Paper 9 (P.T.A.B. June 12, 2025), the Acting Director referred the IPR to a board panel because the petitioner, Microsoft, demonstrated error by the office during prosecution under 35 U.S.C. § 325(d). This was despite an indication discretionary denial may have been considered appropriate under the separate Fintiv analysis for parallel litigations, had Microsoft not demonstrated error.

Under § 325(d), the Office determines whether the same prior art or arguments were previously presented to the office and, if so, whether petitioner has demonstrated the office “erred in a manner material to the patentability of challenged claims.”[1] Here, Patent Owner ParTec argued denial was appropriate because one of the three primary references, Lippert, had been previously considered by the examiner in an office action.

The Acting Director disagreed. While ParTec did demonstrate Lippert was previously before the examiner, Microsoft provided sufficient evidence demonstrating the Office erred “by overlooking the teachings of the Budenske and Kambalta, and the combined teachings of Budenske and Lippert, or Budenske and Kambalta with Lippert.” Accordingly, the Acting Director stated “it is an appropriate use of Office resources to review the potential error.”

Notably, this demonstration of error affected more than just the § 325(d) analysis. ParTec had separately argued for discretionary denial under Fintiv, because the trial in a parallel litigation between the parties was scheduled before the expected final written decision date. The Acting Director indicated that while “[o]rdinarily, a scheduled district court trial date that precedes the date projected for a Board final written decision weighs in favor of exercising discretion to deny the Petition,” the material error by the Office outweighed this consideration.

This decision thus illustrates that when a petitioner can demonstrate the Office made a material error—here, overlooking relevant teachings or combination of teachings—that error can outweigh other discretionary denial considerations, like the Fintiv factors, and result in a referral.

Endnotes

[1] Advanced Bionics, LLC v. MED-EL Elektromedizinische Geräte GmbH, IPR2019-01469, Paper 6 at 8 (PTAB Feb. 13, 2020) (precedential).

In determining whether to discretionarily deny a petition under § 325(d), Office policy requires a determination of “(1) whether the same or substantially the same art previously was presented to the Office or whether the same or substantially the same arguments previously were presented to the Office; and (2) if either condition of first part of the framework is satisfied, whether the petitioner has demonstrated that the Office erred in a manner material to the patentability of challenged claims.’”