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Volume XII, Number 338


December 02, 2022

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Discretion Retained: USPTO Dodges Attack from Big Tech to Rein in Discretionary IPR Denials

The U.S. Patent and Trademark Office (USPTO) recently thwarted an attempt by big tech companies such as Apple, Cisco, Google, and Intel, to rid themselves of discretionary denials under the Fintiv factors. While these companies will almost assuredly seek other avenues to dismantle such discretionary denials, last week’s developments are a win for patent owners in the short term.  On November 10, 2021, Northern District of California Judge Edward J. Davila dismissed a suit challenging the application of the NHK-Fintiv factors, finding that Supreme Court precedent prevents their challenge under 35 U.S.C. § 314(d), stating that decisions to institute inter partes reviews (IPRs) are “final and nonappealable.”

The IPR process allows parties to challenge the validity of patents at the USPTO’s Patent Trial and Appeal Board (PTAB).  IPRs are popular with companies accused of infringing patents and are used as tools to invalidate patents, often while fighting infringement claims.

However, these companies have been irked by rejections of IPRs due to the agency’s NHK-Fintiv rule.  This rule, created in two precedential decisions, identifies a six-factor “holistic” test used by the PTAB to decide when to deny petitions based on the advanced stage of parallel proceedings (among other things).  The USPTO states this policy is necessary to preserve their limited resources, especially when another forum may resolve validity first.  Precedential decisions are binding on PTAB judges.

In August 2020, Apple, Google, Cisco, Intel, and others sued, alleging the NHK-Fintiv rule’s “vague factors lead to speculative, unpredictable, and unfair outcomes.”  These critics claim the policy undermines the role of IPRs in protecting a strong patent system by drastically reducing the availability of IPRs.

The USPTO moved to dismiss.  Citing Cuozzo Speed Technologies, LLC v. Lee, 579 U.S. 261 (2016) and Thryv, Inc. v. Click-To-Call Technologies, 140 S. Ct. 1367 (2020), Judge Davila found that under § 314(d) of the America Invents Act (AIA), only constitutional challenges and jurisdictional violations related to institution decisions may be appealed.  Plaintiffs’ suit did not fit those categories.  More to the point, Judge Davila found that an analysis into the lawfulness of the NHK-Fintiv rule would require one to address questions closely tied to IPR institution decisions—which Cuozzo forbids.  Judge Davila held that he could not “deduce a principled reason” why that precedent “would not extend to the Director’s determination that parallel litigation is a factor in denying IPR.”

While it is unclear if the tech companies involved will appeal this particular decision, their attacks on the NHK-Fintiv factors are likely far from over. Congress is also considering legislation that could eliminate most of the USPTO director’s discretion to deny IPRs.  Finally, where USPTO director nominee, Kathi Vidal, stands on discretionary denials may play an even more important role in this fight. In short, the fight over PTAB discretionary denials, and the PTAB generally, is far from over.

©1994-2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XI, Number 326

About this Author

Michael J. McNamara, Patent Litigation, Mintz Levin Law Firm

Michael’s practice focuses on patent litigation in the areas of technology and communication networks. He has significant experience in transactional matters including patent drafting and prosecution, managing and analyzing patent portfolios, and license negotiation.

Michael has worked in all areas of patent litigation in matters regarding cellular and landline telephone systems, fiber optic systems, liquid crystal display technology, Internet and search engine technology, and on-demand video content. He also has particular experience in cases...

Daniel B. Weinger Patent Litigation Attorney Mintz Law Firm

Daniel's practice in intellectual property focuses on patent litigation, both at the International Trade Commission and the Federal District Courts. Daniel has participated in all phases of patent litigation, including active engagement in multiple evidentiary hearings at the International Trade Commission. He has done work in a variety of technology areas, including computer software, software architecture, GPS, network devices, semiconductors, converged devices, and LED lighting.

Prior to joining Mintz Levin, Daniel worked as a database...

Kara Grogan Trade & Patent Attorney Mintz Levin

Kara focuses her practice on Section 337 cases in the International Trade Commission, patent litigation, and assisting clients with licensing agreements. She has experience in drafting motions, discovery requests, and license arrangements. She works with clients in a broad range of industries, including consumer products and technology.

Kara was a Law Clerk at Mintz in 2018. While attending law school, she served as a law clerk in the Office of Unfair Import Investigations at the US International Trade Commission; a legal intern at a Massachusetts-based global athletic footwear and...