IPR and Fast-Moving District Court Litigation: PTAB Formalizes the Analysis for Balancing Efficiency and Fairness

The Patent Trial and Appeal Board (“PTAB”) has designated two key institution decisions as “Informative.”  With these informative decisions, the PTAB has provided guidance on how the PTAB will apply efficiency and fairness factors that guide decisions to institute an inter partes review (“IPR”) when there is a fast-moving parallel district court litigation that may reach trial before the PTAB’s final written decision would be due.  Both patent owners and petitioners should take heed of these decisions, because with the increased utilization of fast paced forums for patent disputes such as the Western District of Texas, these issues will come up more often at the PTAB.

The newly designated decisions are Apple Inc. v. Fintiv, Inc., Case IPR2020-00019, Paper 15 (May 13, 2020) and Sand Revolution II, LLC v. Continental Intermodal Group – Trucking LLC, Case IPR2019-01393, Paper 24 (June 16, 2020).  In both cases, the patent owner requested a discretionary denial of institution pursuant to § 314(a) due to the advanced state of a parallel proceeding.

In the Fintiv decision, the PTAB first set forth six factors to balance efficiency and fairness when deciding such requests.  The six factors applied by the PTAB are:

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.

In the Sand Revolution decision, the PTAB re-evaluated a previously denied institution when certain facts changed to favor institution under the Fintiv factors.

The new designation of “informative” indicates that these decisions will provide guidance on norms for the PTAB to follow in the future when similar situations present again.  As we have previously written, this guidance is important for both patent owners and petitioners.  Petitioners should consider filing IPR petitions early as opposed to close to the one-year deadline to reduce the possibility of the Fintiv factors weighing against institution. Likewise, patent owners in fast-moving jurisdictions should evaluate the Fintiv factors when drafting the patent owner preliminary response.  As more practitioners pay closer attention to the Fintiv factors, the case law should become more developed and provide even further guidance.

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