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TAKEAWAY: Parties before the PTAB should carefully consider recent holdings in NHK and Fintiv when parallel district court trial proceedings might coincide with a potential PTAB trial.

Earlier this month, the USPTO Patent Trial and Appeal Board (PTAB) designated as precedential an order outlining factors that should be considered when deciding whether to deny institution in Apple Inc. v. Fintiv, Inc. (IPR2020-00019). Authored by Vice Chief Administrative Patent Judge Fink, the order outlines considerations for each of the six factors:

  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
  6. Other circumstances that impact the Board’s exercise of discretion, including the merits

The order also required the parties to submit additional briefing pre-institution in light of the scheduling of a trial in parallel district court proceedings. Following the briefing, the Board exercised its discretion to deny institution where the district court trial was scheduled two months before the FWD was expected to issue. This comes on the heels of a decision in NHK Spring Co., LTD. V. Intri-Plex Technologies, Inc. (IPR2018-00752) designated precedential last year, where the Board denied institution in part because the jury trial in a parallel district court proceeding was set to conclude four months before the PTAB trial was scheduled to begin.

Of particular importance is the potential overlap between a district court trial and the potential date of a final written decision (FWD) in a PTAB trial. In Sand Revolution II, LLC v. Continental Intermodal Group – Trucking LLC (IPR 2019-01393), the PTAB denied institution based solely on trial timing in a parallel court proceeding. The panel pointed out that the district court trial, scheduled for July 20, 2020, would conclude over seven months before the FWD date were the petition to be instituted. Unified Patents recently released a study reporting that discretionary denials may double in 2020 as compared to 2019 (wherein the PTAB exercised discretionary denial of institution in nearly 12% of petitions filed).

Patent-heavy “rocket docket” district courts are known to set aggressive scheduling practices, including E.D. Virginia, E.D. Texas, and relative newcomer W.D. Tex. with the appointment of Judge Albright, a former patent litigator. Parties should carefully consider Fintiv and NHK when preparing litigation strategy involving a post grant challenge at the PTAB.