UNITED STATES PATENT AND TRADEMARK OFFICE
`
`UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND
`DIRECTOR OF THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`DATE:
`
`June 21, 2022
`
`MEMORANDUM
`
`TO:
`
`FROM:
`
`Members of the Patent Trial and Appeal Board
`
`KatherineK. Vidal Kllffl\'RL lf,t\! V\ilitl,
`
`Under Secretary of Commerce •for Inte~ tt 1 Property and
`Director of the United States Patent and Tra e ark Office (USPTO or the Office)
`
`SUBJECT:
`
`INTERIM PROCEDURE FOR DISCRETIONARY DENIALS IN AJA POST(cid:173)
`GRANT PROCEEDINGS WITH PARALLEL DISTRICT COURT
`LITIGATION
`
`Introduction
`
`Congress designed the America Invents Act (AJA) post-grant proceedings "to establish a
`
`more efficient and streamlined patent system that will improve patent quality and limit
`
`unnecessary and counterproductive litigation costs." H.R. Rep. No. 112- 98, pt. 1, at 40 (2011),
`
`2011 U.S.C.C.A.N. 67, 69; see S. Rep. No. 110- 259, at 20 (2008). Parallel district court and
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`AJA proceedings involving the same parties and invalidity challenges can increase, rather than
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`limit, litigation costs. Based on the USPTO's experience with administering the AJA, the agency
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`has recognized the potential for inefficiency and gamesmanship in AJA proceedings, given the
`
`existence of parallel proceedings between the Office and district courts. To minimize potential
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`conflict between the Patent Trial and Appeal Board (PTAB) and district court proceedings, the
`
`Office designated as precedential Apple Inc. v. Fintiv, Inc. 1 This precedential decision aiiiculates
`
`1 See Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (designated
`precedential May 5, 2020).
`
`P.O. Box 1450, Alexandria, Virginia 22313-1450 - WWW.USPTO.GOV
`
`Google Exhibit 1035
`Google v. Ericsson
`
`

`

`the following set of nonexclusive factors (the Fintiv factors) th.at the PT AB considers on a case(cid:173)
`
`specific basis in determining whether to institute an AIA post-grant proceeding where there is
`
`parallel district comt litigation:
`
`1. whether the comt 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 comt and the patties;
`
`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
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`6. other circumstances that impact the Board's exercise of discretion, including the
`merits.
`
`The Office issued a Request for Comments (RFC) 2 on the PT AB' s current approaches to
`
`exercising discretion on whether to institute an AIA proceeding, including situations involving
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`parallel district comt litigation. The Office received 822 comments from a wide range of
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`stakeholders. In light of the feedback received, the Office is planning to soon explore potential
`
`rulemaking on proposed approaches through an Advanced Notice of Proposed Rulemaking. In
`
`the meantime, I have dete1mined that several clarifications need to be made to the PTAB's
`
`current application of Fintiv to discretionary institution where there is parallel litigation.
`
`As explained below, to benefit the patent system and the public good, the PT AB will not
`
`rely on the Fintiv factors to discretionai·ily deny institution in view of parallel district comt
`
`litigation where a petition presents compelling evidence ofunpatentability. This memorandum
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`also confirms that the precedential imp01t of Fintiv is limited to facts of that case. Namely,
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`Fintiv involved institution of an AIA proceeding with a pai·allel district comt litigation. The
`
`2 Discretion to Institute Trials Before the Patent Trial and Appeal Board, 85 FR 66502 (Oct. 20,
`2020); Discretion to Institute Trials Before the Patent Trial and Appeal Board; Extension of
`Comment Period, 85 FR 73437 (Nov. 18, 2020).
`
`2
`
`

`

`(cid:51)(cid:155)(cid:363)(cid:478)(cid:162)(cid:870)(cid:555)(cid:5)(cid:162)(cid:10)(cid:32)(cid:364)(cid:38)(cid:70)(cid:870)(cid:1)(cid:436)(cid:870)(cid:177)(cid:462)(cid:2)(cid:870)(cid:14)(cid:38)(cid:46)(cid:68)(cid:41)(cid:69)(cid:71)(cid:441)(cid:385)(cid:756)(cid:1)(cid:88)(cid:57)(cid:870)(cid:12)(cid:57)(cid:870)(cid:125)(cid:479)(cid:54)(cid:6)(cid:13)(cid:757)(cid:135)(cid:24)(cid:870)(cid:58)(cid:3)(cid:870)(cid:402)(cid:140)(cid:698)(cid:178)(cid:172)(cid:152)(cid:23)(cid:179)(cid:870)(cid:23)(cid:1)(cid:589)(cid:196)(cid:870)(cid:556)(cid:12)(cid:93)(cid:480)(cid:74)(cid:4)(cid:180)(cid:481)(cid:40)(cid:593)(cid:870)(cid:9)(cid:8)(cid:126)(cid:870)(cid:35)(cid:1)(cid:411)(cid:699)(cid:870)(cid:50)(cid:1)(cid:94)(cid:870)(cid:9)(cid:52)(cid:31)(cid:25)(cid:202)(cid:870)(cid:95)(cid:1)(cid:870)
`plain language of the Fintivfactors is directed to district court litigation and does not apply to
`
`parallel U.S. International Trade Commission (ITC) proceedings, as the ITC lacks authority to
`(cid:86)(cid:5)(cid:675)(cid:5)(cid:568)(cid:569)(cid:2)(cid:80)(cid:870)(cid:362)(cid:268)(cid:345)(cid:249)(cid:870)(cid:326)(cid:83)(cid:758)(cid:36)(cid:676)(cid:619)(cid:365)(cid:194)(cid:482)(cid:1)(cid:594)(cid:4)(cid:557)(cid:870)(cid:350)(cid:677)(cid:376)(cid:127)(cid:2)(cid:870)(cid:315)(cid:3)(cid:592)(cid:20)(cid:700)(cid:701)(cid:149)(cid:3)(cid:16)(cid:870)(cid:212)(cid:64)(cid:359)(cid:316)(cid:219)(cid:870)(cid:52)(cid:678)(cid:3)(cid:386)(cid:2)(cid:2)(cid:68)(cid:20)(cid:16)(cid:10)(cid:702)(cid:227)(cid:870)(cid:67)(cid:56)(cid:870)(cid:44)(cid:15)(cid:17)(cid:870)(cid:64)(cid:360)(cid:317)(cid:870)(cid:21)(cid:47)(cid:13)(cid:154)(cid:57)(cid:870)(cid:9)(cid:832)(cid:181)(cid:19)(cid:3)(cid:88)(cid:153)(cid:182)(cid:202)(cid:870)(cid:96)(cid:3)(cid:870)
`
`invalidate a patent and the ITC’s invalidity rulings are not binding on the Office or on district
`(cid:141)(cid:595)(cid:845)(cid:9)(cid:558)(cid:483)(cid:24)(cid:33)(cid:759)(cid:72)(cid:870)(cid:366)(cid:870)(cid:31)(cid:28)(cid:760)(cid:6)(cid:8)(cid:761)(cid:870)(cid:367)(cid:8)(cid:24)(cid:870)(cid:762)(cid:463)(cid:36)(cid:870)(cid:327)(cid:351)(cid:318)(cid:208)(cid:703)(cid:870)(cid:484)(cid:596)(cid:846)(cid:4)(cid:559)(cid:142)(cid:14)(cid:143)(cid:188)(cid:862)(cid:870)(cid:55)(cid:842)(cid:560)(cid:485)(cid:597)(cid:453)(cid:18)(cid:870)(cid:4)(cid:645)(cid:2)(cid:870)(cid:7)(cid:1)(cid:763)(cid:870)(cid:120)(cid:486)(cid:7)(cid:69)(cid:487)(cid:7)(cid:75)(cid:870)(cid:3)(cid:7)(cid:870)(cid:183)(cid:19)(cid:2)(cid:870)(cid:337)(cid:445)(cid:13)(cid:17)(cid:870)(cid:1)(cid:41)(cid:870)(cid:1)(cid:16)(cid:870)(cid:14)(cid:12)(cid:56)(cid:177)(cid:41)(cid:488)(cid:23)(cid:184)(cid:870)
`
`(cid:387)(cid:26)(cid:590)(cid:827)(cid:704)(cid:250)(cid:870)
`courts.
`
`(cid:319)(cid:85)(cid:16)(cid:705)(cid:489)(cid:56)(cid:764)(cid:48)(cid:598)(cid:765)(cid:870)(cid:199)(cid:490)(cid:185)(cid:464)(cid:870)(cid:18)(cid:49)(cid:66)(cid:28)(cid:54)(cid:23)(cid:71)(cid:21)(cid:39)(cid:55)(cid:29)(cid:42)(cid:30)(cid:59)(cid:60)(cid:1)(cid:71)(cid:15)(cid:47)(cid:26)(cid:11)(cid:6)(cid:12)(cid:71)(cid:58)(cid:465)(cid:412)(cid:870)(cid:338)(cid:352)(cid:303)(cid:110)(cid:870)(cid:856)(cid:152)(cid:570)(cid:571)(cid:870)(cid:84)(cid:85)(cid:44)(cid:870)(cid:35)(cid:491)(cid:706)(cid:388)(cid:646)(cid:136)(cid:766)(cid:492)(cid:22)(cid:50)(cid:5)(cid:647)(cid:493)(cid:156)(cid:203)(cid:870)(cid:24)(cid:11)(cid:599)(cid:61)(cid:870)(cid:494)(cid:7)(cid:174)(cid:95)(cid:495)(cid:828)(cid:843)(cid:767)(cid:77)(cid:3)(cid:16)(cid:870)
`
`Consistent with Sotera Wireless, Inc.3 the PTAB will not discretionarily deny institution
`
`in view ofparallel district court litigation where a petitioner presents a stipulation not to pursue
`(cid:12)(cid:30)(cid:870)(cid:198)(cid:496)(cid:37)(cid:60)(cid:870)(cid:40)(cid:437)(cid:870)(cid:167)(cid:5)(cid:91)(cid:5)(cid:80)(cid:81)(cid:11)(cid:81)(cid:870)(cid:68)(cid:78)(cid:707)(cid:768)(cid:648)(cid:79)(cid:23)(cid:769)(cid:870)(cid:13)(cid:620)(cid:833)(cid:649)(cid:770)(cid:870)(cid:21)(cid:12)(cid:93)(cid:497)(cid:10)(cid:33)(cid:771)(cid:498)(cid:40)(cid:8)(cid:870)(cid:60)(cid:139)(cid:413)(cid:650)(cid:6)(cid:870)(cid:4)(cid:870)(cid:53)(cid:29)(cid:772)(cid:144)(cid:773)(cid:499)(cid:621)(cid:600)(cid:6)(cid:89)(cid:870)(cid:31)(cid:651)(cid:6)(cid:43)(cid:71)(cid:601)(cid:180)(cid:708)(cid:870)(cid:33)(cid:870)(cid:709)(cid:97)(cid:500)(cid:87)(cid:27)(cid:25)(cid:119)(cid:97)(cid:501)(cid:1)(cid:7)(cid:870)(cid:602)(cid:1)(cid:94)(cid:870)(cid:96)(cid:1)(cid:870)(cid:51)(cid:27)(cid:652)(cid:18)(cid:32)(cid:2)(cid:870)
`
`in a parallel proceeding the same grounds or any grounds that could have reasonably been raised
`(cid:145)(cid:603)(cid:870)(cid:5)(cid:870)(cid:53)(cid:5)(cid:679)(cid:9)(cid:572)(cid:81)(cid:11)(cid:155)(cid:870)(cid:168)(cid:55)(cid:166)(cid:389)(cid:2)(cid:17)(cid:68)(cid:502)(cid:8)(cid:10)(cid:870)(cid:774)(cid:466)(cid:2)(cid:870)(cid:710)(cid:5)(cid:39)(cid:2)(cid:870)(cid:10)(cid:680)(cid:634)(cid:834)(cid:163)(cid:69)(cid:711)(cid:870)(cid:26)(cid:653)(cid:870)(cid:368)(cid:164)(cid:863)(cid:870)(cid:454)(cid:681)(cid:26)(cid:835)(cid:50)(cid:14)(cid:57)(cid:870)(cid:186)(cid:15)(cid:4)(cid:775)(cid:870)(cid:13)(cid:3)(cid:27)(cid:157)(cid:35)(cid:870)(cid:19)(cid:9)(cid:847)(cid:414)(cid:870)(cid:172)(cid:29)(cid:67)(cid:712)(cid:22)(cid:8)(cid:4)(cid:380)(cid:561)(cid:204)(cid:870)(cid:381)(cid:73)(cid:36)(cid:8)(cid:870)(cid:682)(cid:4)(cid:503)(cid:174)(cid:17)(cid:128)(cid:870)
`
`before the PTAB. Additionally, when considering the proximity ofthe district court’s trial date
`(cid:121)(cid:415)(cid:449)(cid:654)(cid:11)(cid:870)(cid:193)(cid:76)(cid:2)(cid:870)(cid:339)(cid:353)(cid:304)(cid:63)(cid:251)(cid:870) (cid:46)(cid:133)(cid:129)(cid:78)(cid:776)(cid:20)(cid:3)(cid:30)(cid:4)(cid:80)(cid:156)(cid:61)(cid:228)(cid:870)(cid:60)(cid:15)(cid:37)(cid:604)(cid:870)(cid:13)(cid:622)(cid:16)(cid:713)(cid:504)(cid:403)(cid:6)(cid:683)(cid:548)(cid:30)(cid:10)(cid:870)(cid:98)(cid:467)(cid:17)(cid:870)(cid:169)(cid:684)(cid:40)(cid:860)(cid:505)(cid:49)(cid:20)(cid:777)(cid:203)(cid:870)(cid:3)(cid:438)(cid:870)(cid:98)(cid:19)(cid:6)(cid:870)(cid:14)(cid:506)(cid:92)(cid:178)(cid:655)(cid:507)(cid:13)(cid:778)(cid:870)(cid:390)(cid:623)(cid:591)(cid:196)(cid:209)(cid:42)(cid:870)(cid:99)(cid:90)(cid:79)(cid:33)(cid:158)(cid:870)(cid:14)(cid:28)(cid:187)(cid:72)(cid:870)
`
`to the date when the PTABfinal written decision will be due, the PTAB will consider the median
`(cid:779)(cid:1)(cid:870)(cid:188)(cid:76)(cid:11)(cid:870)(cid:130)(cid:5)(cid:780)(cid:2)(cid:870)(cid:200)(cid:468)(cid:2)(cid:7)(cid:870)(cid:781)(cid:469)(cid:136)(cid:870)(cid:340)(cid:354)(cid:870)(cid:305)(cid:110)(cid:870)(cid:446)(cid:7)(cid:4)(cid:159)(cid:870)(cid:201)(cid:173)(cid:508)(cid:829)(cid:2)(cid:605)(cid:870)(cid:127)(cid:70)(cid:34)(cid:78)(cid:714)(cid:20)(cid:26)(cid:16)(cid:870)(cid:857)(cid:12)(cid:21)(cid:21)(cid:870)(cid:382)(cid:48)(cid:870)(cid:14)(cid:836)(cid:37)(cid:229)(cid:870)(cid:189)(cid:470)(cid:2)(cid:870)(cid:65)(cid:116)(cid:870)(cid:311)(cid:63)(cid:870)(cid:199)(cid:12)(cid:21)(cid:573)(cid:870)(cid:23)(cid:3)(cid:50)(cid:43)(cid:12)(cid:126)(cid:6)(cid:54)(cid:870)(cid:186)(cid:19)(cid:6)(cid:870)(cid:49)(cid:135)(cid:24)(cid:146)(cid:28)(cid:164)(cid:870)
`
`time from filing to disposition of the civil trial for the district in whichthe parallellitigation
`(cid:190)(cid:509)(cid:39)(cid:2)(cid:870)(cid:452)(cid:1)(cid:39)(cid:870)(cid:447)(cid:574)(cid:549)(cid:606)(cid:75)(cid:870)(cid:191)(cid:166)(cid:870)(cid:131)(cid:510)(cid:175)(cid:86)(cid:1)(cid:18)(cid:511)(cid:187)(cid:151)(cid:1)(cid:7)(cid:870)(cid:1)(cid:439)(cid:870)(cid:192)(cid:471)(cid:137)(cid:870)(cid:124)(cid:512)(cid:848)(cid:513)(cid:562)(cid:870)(cid:782)(cid:685)(cid:550)(cid:5)(cid:563)(cid:870)(cid:450)(cid:656)(cid:870)(cid:183)(cid:15)(cid:2)(cid:870)(cid:14)(cid:145)(cid:18)(cid:783)(cid:41)(cid:514)(cid:13)(cid:193)(cid:870)(cid:515)(cid:7)(cid:870)(cid:858)(cid:15)(cid:20)(cid:391)(cid:15)(cid:870)(cid:784)(cid:15)(cid:2)(cid:870)(cid:87)(cid:4)(cid:41)(cid:4)(cid:161)(cid:21)(cid:6)(cid:21)(cid:870)(cid:157)(cid:20)(cid:98)(cid:516)(cid:10)(cid:47)(cid:185)(cid:141)(cid:3)(cid:84)(cid:870)
`
`(cid:657)(cid:416)(cid:715)(cid:517)(cid:404)(cid:36)(cid:42)(cid:252)(cid:870)(cid:1)(cid:3) (cid:355)(cid:19)(cid:147)(cid:716)(cid:870)(cid:49)(cid:36)(cid:82)(cid:22)(cid:686)(cid:377)(cid:8)(cid:24)(cid:32)(cid:581)(cid:870)(cid:401)(cid:161)(cid:117)(cid:687)(cid:551)(cid:448)(cid:138)(cid:717)(cid:870)(cid:785)(cid:472)(cid:1)(cid:718)(cid:73)(cid:870)(cid:86)(cid:55)(cid:5)(cid:122)(cid:786)(cid:518)(cid:392)(cid:37)(cid:719)(cid:253)(cid:870)
`resides.? This memorandumclarifies those practices.
`
`This memorandum is issued underthe Director’s authority to issue binding agency
`(cid:356)(cid:139)(cid:552)(cid:720)(cid:870)(cid:82)(cid:6)(cid:582)(cid:26)(cid:688)(cid:9)(cid:8)(cid:132)(cid:59)(cid:39)(cid:870)(cid:519)(cid:43)(cid:870)(cid:147)(cid:42)(cid:721)(cid:837)(cid:6)(cid:133)(cid:870)(cid:59)(cid:607)(cid:35)(cid:29)(cid:90)(cid:870)(cid:97)(cid:15)(cid:417)(cid:870)(cid:322)(cid:520)(cid:658)(cid:418)(cid:122)(cid:787)(cid:1)(cid:659)(cid:210)(cid:176)(cid:870)(cid:28)(cid:27)(cid:194)(cid:473)(cid:22)(cid:660)(cid:148)(cid:788)(cid:864)(cid:870)(cid:191)(cid:22)(cid:870)(cid:521)(cid:42)(cid:722)(cid:197)(cid:11)(cid:870)(cid:120)(cid:522)(cid:7)(cid:405)(cid:523)(cid:7)(cid:38)(cid:870)(cid:5)(cid:74)(cid:17)(cid:8)(cid:34)(cid:61)(cid:870)
`
`guidance to govern the PTAB’s implementation of various statutory provisions, including
`(cid:455)(cid:838)(cid:524)(cid:406)(cid:9)(cid:8)(cid:393)(cid:419)(cid:870)(cid:789)(cid:3)(cid:870)(cid:456)(cid:1)(cid:849)(cid:6)(cid:695)(cid:870)(cid:790)(cid:15)(cid:6)(cid:870)(cid:341)(cid:357)(cid:46)(cid:312)(cid:211)(cid:723)(cid:870)(cid:525)(cid:49)(cid:635)(cid:25)(cid:71)(cid:82)(cid:29)(cid:608)(cid:791)(cid:9)(cid:99)(cid:146)(cid:624)(cid:609)(cid:870)(cid:22)(cid:440)(cid:870)(cid:850)(cid:369)(cid:689)(cid:553)(cid:625)(cid:839)(cid:42)(cid:870)(cid:724)(cid:96)(cid:4)(cid:181)(cid:27)(cid:195)(cid:22)(cid:661)(cid:204)(cid:870)(cid:87)(cid:90)(cid:22)(cid:100)(cid:526)(cid:18)(cid:527)(cid:1)(cid:7)(cid:18)(cid:230)(cid:870)(cid:528)(cid:165)(cid:34)(cid:575)(cid:59)(cid:407)(cid:143)(cid:7)(cid:75)(cid:870)
`
`(cid:408)(cid:529)(cid:54)(cid:71)(cid:13)(cid:792)(cid:149)(cid:3)(cid:8)(cid:725)(cid:870)(cid:662)(cid:420)(cid:10)(cid:67)(cid:663)(cid:129)(cid:12)(cid:16)(cid:74)(cid:870)(cid:474)(cid:85)(cid:201)(cid:870)(cid:793)(cid:15)(cid:1)(cid:726)(cid:11)(cid:870)(cid:92)(cid:794)(cid:5)(cid:93)(cid:59)(cid:795)(cid:3)(cid:41)(cid:865)(cid:870)(cid:52)(cid:89)(cid:3)(cid:851)(cid:79)(cid:43)(cid:150)(cid:3)(cid:8)(cid:43)(cid:870)(cid:60)(cid:153)(cid:160)(cid:21)(cid:870)(cid:4)(cid:52)(cid:167)(cid:160)(cid:866)(cid:870)(cid:192)(cid:626)(cid:870)(cid:176)(cid:28)(cid:583)(cid:636)(cid:25)(cid:421)(cid:870)(cid:442)(cid:13)(cid:796)(cid:870)(cid:637)(cid:9)(cid:44)(cid:99)(cid:138)(cid:696)(cid:175)(cid:254)(cid:870) (cid:19)(cid:31)(cid:32)(cid:2)(cid:71)(cid:31)(cid:7)(cid:37)(cid:8)(cid:3)(cid:71)
`directions regarding how those statutory provisions will apply to sample fact patterns. See, e.g.,
`
`35 U.S.C. 3(a)(2)(A); PTAB Standard Operating Procedure (SOP) 2 at 1-2.
`(cid:293)(cid:297)(cid:870)(cid:361)(cid:255)(cid:346)(cid:62)(cid:320)(cid:256)(cid:870)(cid:294)(cid:101)(cid:4)(cid:220)(cid:101)(cid:107)(cid:221)(cid:213)(cid:306)(cid:222)(cid:301)(cid:870)(cid:113)(cid:116)(cid:46)(cid:314)(cid:870)(cid:347)(cid:797)(cid:5)(cid:610)(cid:130)(cid:9)(cid:664)(cid:14)(cid:870)(cid:112)(cid:51)(cid:422)(cid:88)(cid:47)(cid:44)(cid:530)(cid:8)(cid:10)(cid:870)(cid:114)(cid:690)(cid:3)(cid:23)(cid:6)(cid:134)(cid:844)(cid:89)(cid:6)(cid:870)(cid:214)(cid:348)(cid:112)(cid:113)(cid:223)(cid:870)(cid:284)(cid:870)(cid:370)(cid:798)(cid:870)(cid:45)(cid:239)(cid:285)(cid:257)(cid:870)
`
`Compelling Merits
`(cid:321)(cid:627)(cid:584)(cid:638)(cid:423)(cid:576)(cid:577)(cid:554)(cid:611)(cid:457)(cid:870)(cid:333)(cid:424)(cid:665)(cid:531)(cid:799)(cid:729)(cid:870)
`
`Analysis
`(cid:46)(cid:84)(cid:4)(cid:25)(cid:867)(cid:727)(cid:12)(cid:728)(cid:870)
`
`In the AJA, Congressestablished post-grant proceedings, including IPR, PGR, and
`(cid:328)(cid:7)(cid:870)(cid:190)(cid:19)(cid:2)(cid:870)(cid:307)(cid:329)(cid:308)(cid:231)(cid:870)(cid:111)(cid:1)(cid:7)(cid:38)(cid:666)(cid:11)(cid:730)(cid:56)(cid:870)(cid:11)(cid:731)(cid:800)(cid:9)(cid:383)(cid:564)(cid:77)(cid:732)(cid:15)(cid:48)(cid:69)(cid:870)(cid:639)(cid:628)(cid:733)(cid:801)(cid:240)(cid:10)(cid:173)(cid:5)(cid:163)(cid:802)(cid:870)(cid:31)(cid:691)(cid:3)(cid:23)(cid:37)(cid:48)(cid:125)(cid:532)(cid:30)(cid:10)(cid:734)(cid:102)(cid:870)(cid:150)(cid:612)(cid:124)(cid:578)(cid:27)(cid:131)(cid:20)(cid:16)(cid:10)(cid:870)(cid:64)(cid:65)(cid:66)(cid:232)(cid:870)(cid:65)(cid:324)(cid:66)(cid:102)(cid:870)(cid:9)(cid:8)(cid:132)(cid:870)
`
`covered business method (CBM)proceedings to improve and ensure patent quality by providing
`(cid:394)(cid:1)(cid:100)(cid:70)(cid:667)(cid:2)(cid:14)(cid:870)(cid:384)(cid:197)(cid:735)(cid:533)(cid:30)(cid:11)(cid:736)(cid:737)(cid:870)(cid:585)(cid:2)(cid:803)(cid:475)(cid:3)(cid:24)(cid:870)(cid:215)(cid:111)(cid:63)(cid:334)(cid:224)(cid:870)(cid:640)(cid:692)(cid:1)(cid:395)(cid:425)(cid:17)(cid:14)(cid:534)(cid:613)(cid:10)(cid:18)(cid:870)(cid:804)(cid:1)(cid:870)(cid:535)(cid:39)(cid:168)(cid:91)(cid:3)(cid:852)(cid:2)(cid:870)(cid:5)(cid:7)(cid:134)(cid:870)(cid:11)(cid:30)(cid:738)(cid:32)(cid:668)(cid:2)(cid:870)(cid:169)(cid:5)(cid:189)(cid:2)(cid:16)(cid:805)(cid:870)(cid:171)(cid:32)(cid:4)(cid:159)(cid:77)(cid:831)(cid:870)(cid:121)(cid:61)(cid:870)(cid:170)(cid:91)(cid:1)(cid:198)(cid:12)(cid:14)(cid:12)(cid:8)(cid:10)(cid:870)
`
`“quick and cost-effective alternativesto litigation” for challenging issued patents. H.R. Rep. No.
`(cid:205)(cid:171)(cid:32)(cid:536)(cid:34)(cid:154)(cid:870)(cid:33)(cid:614)(cid:35)(cid:870)(cid:34)(cid:1)(cid:739)(cid:806)(cid:103)(cid:2)(cid:444)(cid:11)(cid:396)(cid:195)(cid:537)(cid:853)(cid:426)(cid:870)(cid:117)(cid:25)(cid:807)(cid:29)(cid:697)(cid:9)(cid:808)(cid:144)(cid:854)(cid:427)(cid:740)(cid:870)(cid:58)(cid:3)(cid:870)(cid:565)(cid:538)(cid:809)(cid:539)(cid:458)(cid:5)(cid:810)(cid:540)(cid:26)(cid:165)(cid:206)(cid:870)(cid:451)(cid:55)(cid:870)(cid:123)(cid:76)(cid:4)(cid:579)(cid:580)(cid:17)(cid:615)(cid:459)(cid:541)(cid:7)(cid:38)(cid:870)(cid:151)(cid:18)(cid:741)(cid:27)(cid:2)(cid:128)(cid:870)(cid:51)(cid:4)(cid:811)(cid:428)(cid:7)(cid:95)(cid:18)(cid:258)(cid:870) (cid:325)(cid:259)(cid:115)(cid:62)(cid:870)(cid:66)(cid:137)(cid:170)(cid:260)(cid:870)(cid:335)(cid:40)(cid:261)(cid:870)
`
`(cid:280)(cid:281)(cid:286)(cid:241)(cid:299)(cid:108)(cid:233)(cid:870)(cid:641)(cid:179)(cid:269)(cid:870) (cid:282)(cid:234)(cid:870)(cid:47)(cid:812)(cid:870)(cid:296)(cid:108)(cid:302)(cid:870)(cid:61)(cid:33)(cid:34)(cid:71)(cid:24)(cid:43)(cid:62)(cid:50)(cid:71)(cid:349)(cid:62)(cid:870)(cid:115)(cid:6)(cid:31)(cid:262)(cid:870)(cid:336)(cid:3)(cid:263)(cid:870)(cid:45)(cid:283)(cid:104)(cid:242)(cid:287)(cid:298)(cid:109)(cid:235)(cid:870)(cid:118)(cid:182)(cid:870)(cid:288)(cid:276)(cid:870)(cid:216)(cid:6)(cid:861)(cid:53)(cid:25)(cid:4)(cid:542)(cid:83)(cid:140)(cid:8)(cid:10)(cid:870)(cid:813)(cid:476)(cid:9)(cid:814)(cid:870)(cid:58)(cid:19)(cid:429)(cid:870)(cid:207)(cid:31)(cid:1)(cid:92)(cid:184)(cid:103)(cid:38)(cid:693)(cid:118)(cid:616)(cid:94)(cid:870)(cid:669)(cid:2)(cid:100)(cid:142)(cid:17)(cid:200)
`112-98, pt. 1, at 48; see also S. Rep. No. 110-259, at 20 (explaining that the “post-grant review
`
`(cid:1)(cid:2)(cid:20)(cid:67)(cid:35)(cid:56)(cid:25)(cid:71)(cid:22)(cid:57)(cid:36)(cid:44)(cid:28)(cid:63)(cid:64)(cid:4)(cid:71)(cid:16)(cid:48)(cid:27)(cid:9)(cid:71)(cid:70)(cid:9)(cid:71)(cid:17)(cid:65)(cid:40)(cid:45)(cid:51)(cid:71)(cid:13)(cid:52)(cid:58)(cid:53)(cid:10)(cid:5)(cid:71)(cid:330)(cid:342)(cid:344)(cid:292)(cid:277)(cid:289)(cid:278)(cid:243)(cid:105)(cid:45)(cid:104)(cid:106)(cid:109)(cid:236)(cid:870)(cid:343)(cid:9)(cid:53)(cid:6)(cid:54)(cid:870)(cid:45)(cid:107)(cid:870)(cid:217)(cid:114)(cid:358)(cid:309)(cid:313)(cid:870)(cid:323)(cid:73)(cid:13)(cid:264)(cid:870)(cid:106)(cid:237)(cid:870)(cid:290)(cid:279)(cid:291)(cid:105)(cid:225)(cid:870)
`3 Sotera Wireless, Inc. v. Masimo Corp., IPR2020-01019, Paper 12 (PTAB Dec.1, 2020)
`(precedentialas to § II.A).
`(cid:218)(cid:670)(cid:430)(cid:123)(cid:72)(cid:409)(cid:29)(cid:83)(cid:44)(cid:148)(cid:28)(cid:158)(cid:870)(cid:119)(cid:742)(cid:870)(cid:815)(cid:26)(cid:869)(cid:870)(cid:331)(cid:332)(cid:270)(cid:310)(cid:226)(cid:265)(cid:870)
`(cid:2)(cid:3)(cid:462)(cid:95)(cid:95)(cid:51)(cid:56)(cid:300)(cid:271)(cid:271)(cid:200)(cid:200)(cid:200)(cid:250)(cid:843)(cid:56)(cid:23)(cid:1)(cid:843)(cid:41)(cid:95)(cid:56)(cid:250)(cid:10)(cid:1)(cid:198)(cid:271)(cid:56)(cid:95)(cid:4)(cid:95)(cid:12)(cid:56)(cid:95)(cid:12)(cid:23)(cid:56)(cid:241)(cid:41)(cid:2)(cid:51)(cid:1)(cid:41)(cid:95)(cid:56)(cid:271)(cid:4)(cid:7)(cid:4)(cid:157)(cid:61)(cid:56)(cid:12)(cid:56)(cid:241)(cid:41)(cid:2)(cid:51)(cid:1)(cid:41)(cid:95)(cid:56)(cid:271)(cid:436)(cid:2)(cid:14)(cid:2)(cid:41)(cid:4)(cid:157)(cid:241)(cid:23)(cid:1)(cid:843)(cid:41)(cid:95)(cid:241)(cid:590)(cid:4)(cid:7)(cid:4)(cid:10)(cid:2)(cid:590)(cid:2)(cid:7)(cid:95)(cid:241)(cid:56)(cid:95)(cid:4)(cid:95)(cid:12)(cid:56)(cid:95)(cid:12)(cid:23)(cid:56)(cid:870)
`4 https://www.uscourts.gov/statistics—reports/analysis—reports/federal—court—uanageuent—statistics
`
`
`(cid:295)(cid:870)
`
`

`

`system ... will give third parties a quick, inexpensive, and reliable alternative to district court
`
`litigation to resolve questions of patent validity"). Congress granted the Office "significant
`
`power to revisit and revise earlier patent grants" as a mechanism "to improve patent quality and
`
`restore confidence in the presumption of validity that comes with issued patents." Cuozzo Speed
`
`Techs., LLC v. Lee, 579 U.S. 261,272 (2016) (quoting H.R. Rep. No. 112-98, pt. 1, at 45, 48).
`
`Given those objectives, compelling, meritorious challenges will be allowed to proceed at the
`
`PTAB even where district court litigation is proceeding in parallel. Compelling, meritorious
`
`challenges are those in which the evidence, if umebutted in trial, would plainly lead to a
`
`conclusion that one or more claims are unpatentable by a preponderance of the evidence. That
`
`said, the PT AB retains discretion to deny institution for proceedings where abuse has been
`
`demonstrated.
`
`Fintiv factor six reflects that the PT AB considers the merits of a petitioner's challenge
`
`when determining whether to institute a post-grant proceeding in view of parallel district court
`
`litigation. Where the information presented at the institution stage is merely sufficient to meet
`
`the statutory institution th.reshpld,5 the PTAB has the authority, where warranted, to exercise
`
`discretion to deny institution in view of the other Fintiv factors. In contrast, where the PTAB
`
`determines that the information presented at the institution stage presents a compelling
`
`5 Institution of an IPR is authorized by statute only when "the information presented in the
`petition ... and any response . .. shows that there is a reasonable likelihood that the petitioner
`would prevail with respect to at least 1 of the claims challenged in the petition." 35 U.S.C.
`§ 314(a) (2018). Similarly, institution of a PGR, including a CBM, is authorized only when "the
`information presented in the petition ... , if such information is not rebutted, would demonstrate
`that it is more likely than not that at least 1 of the claims challenged in the petition is
`unpatentable" Id. § 324(a).
`
`4
`
`

`

`unpatentability challenge, that determination alone demonstrates that the PT AB should not
`
`discretionarily deny institution under Fintiv. 6
`
`This clarification strikes a balance among the competing concerns of avoiding potentially
`
`conflicting outcomes, avoiding overburdening patent owners, and strengthening the patent
`
`system by eliminating patents that are not robust and reliable. Consistent with Congress's giving
`
`the Office the authority to revisit issued patents, the PT AB will not deny institution based on
`
`Fintiv if there is compelling evidence of unpatentability. This approach "allows the proceeding
`
`to continue in the event that the parallel proceeding settles or fails to resolve the patentability
`
`question presented in the PTAB proceeding." Fintiv, Paper 11 at 15. The patent system and the
`
`public good benefit from instituting compelling unpatentability challenges.
`
`ITC and Fi11tiv
`
`In 2018, the PTAB issued a decision in NHK Spring. 7 There, the PTAB held that the
`
`advanced state of a parallel district court litigation involving similar validity disputes could be a
`
`factor weighing in favor of denying institution of an IPR because of concerns over the inefficient
`
`6 The compelling evidence test affoms the PT AB' s current approach of declining to deny
`institution under Fintiv where the evidence of record so far in the case would plainly lead to a
`conclusion that one or more claims are unpatentable. See, e.g., 1/lumina Inc. v. Trs. of Columbia
`Univ., IPR2020-00988, Paper 20 (PTAB Dec. 8, 2020) (declining to deny under Fintiv in light of
`strong evidence on the merits even though four factors weighed in favor of denial and remaining
`factor was neutral); Synthego C01p. v. Agilent Techs., Inc., IPR2022-00402, Paper 11 (May 31,
`2022) (granting institution as efficiency and integrity of the system would not be served by
`denying institution of petition with particularly strong evidence on the merits); Samsung Elecs.
`Co. v. Scramoge Tech., Ltd., IPR2022-00241, Paper 10 (June 13, 2022) (Fintiv analysis
`concludes that "very strong" evidence on the merits outweigh concurrent litigation involving
`earlier scheduled trial date and significant overlap in proceedings).
`
`7 NHK Spring Co. v. lntri-Plex Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018)
`(precedential). This decision also based the denial of institution on Director discretion under 35
`U.S.C. § 325(d).
`
`5
`
`

`

`use of PTAB's resources. NHK Spring, Paper 8 at 19- 20. Later, in 2020, the PTAB announced
`
`the Finl iv factors, which the PT AB considers when a patent owner raises an argument for
`
`discretionary denial under NHK Spring due to an earlier trial date. Fintiv, Paper 11 at 5- 6. The
`
`Fintiv factors focus on the interplay between IPRs and district court litigation. Through that
`
`focus, the Fintiv factors seek to avoid duplicative eff01ts between the PT AB and federal district
`
`comts. For example, Fintiv factor one asks whether the "comt" has granted a stay or if one may
`
`be granted. Similarly, Fintiv factor two looks at the proximity of the "comt" trial date.
`
`Likewise, Fintiv factor three concerns the amount of investment in the parallel proceeding by the
`
`"court" and the parties. Fintiv factors five and six refer to the same parallel proceeding
`
`described in factor three.
`
`Although the Fintiv factors are directed to district court litigation and not ITC
`
`proceedings, 8 the PTAB has, in the past, denied AIA reviews based on parallel ITC
`
`investigations. 9 Imp01tant differences, however, distinguish ITC investigations from patent
`
`invalidity trials in federal district courts. Unlike district comts, the ITC lacks authority to
`
`invalidate a patent and its invalidity rulings are not binding on either the Office or a district
`
`court. See Tandon C01p. v. US.ITC., 831 F.2d 1017, 1019 (Fed. Cir. 1987). Therefore, an ITC
`
`determination cannot conclusively resolve an assertion of patent invalidity, which instead
`
`requires either district court litigation or a PTAB proceeding to obtain patent cancellation. Thus,
`
`denying institution because of a parallel ITC investigation will not necessarily minimize
`
`8 Fintiv refers to ITC proceedings in discussing factor one. Fintiv, Paper 11 at 8- 9. Addressing
`the situation where district comt litigation is stayed pending an ITC investigation, Fintiv states in
`dicta that "it is difficult to maintain a district comt proceeding on patent claims determined to be
`invalid at the ITC." Id. at 9.
`9 See, e.g., Philip Morris Prods. S.A. v. Rai Strategic Holdings, Inc., IPR2020-00919, Paper 9
`(PTAB Nov. 16, 2020).
`
`6
`
`

`

`potential conflicts between PTAB proceedings and district court litigation. For the foregoing
`
`reasons, the PTAB no longer discretionarily denies petitions based on applying Fintiv to a
`
`parallel ITC proceeding. This memorandum memorializes that practice. The PT AB will not
`
`discretionarily deny petitions based on applying Fintiv to a parallel ITC proceeding.
`
`Solera Stipulations
`
`Fintiv factor four looks at the overlap between the issues raised in the IPR petition and in
`
`the parallel proceeding in order to evaluate "concerns of inefficiency and the possibility of
`
`conflicting decisions." Fintiv, Paper 11 at 12. If the petition includes the same or substantially
`
`the same claims, grounds, arguments, and evidence as presented in the parallel proceeding, this
`
`fact has favored denial. Id. at 12. Conversely, if the petition includes materially different
`
`grounds, arguments, and/or evidence than those presented in the district comi, this fact has
`
`tended to weigh against exercising discretion to deny institution. Id. at 12- 13.
`
`When a petitioner stipulates not to pursue in a parallel district court proceeding the same
`
`grounds as in the petition or any grounds that could have reasonably been raised in the petition, it
`
`mitigates concerns of potentially conflicting decisions and duplicative efforts between the district
`
`comi and the PTAB. See Sotera, Paper 12 at 18-19. With such a stipulation, if an IPR or PGR
`
`is instituted, the grounds the PTAB resolves will differ from those present in the parallel district
`
`comi litigation. For these reasons, the PTAB will not discretionarily deny institution of an IPR
`
`or PGR in view of parallel district court litigation where a petitioner stipulates not to pursue in a
`
`parallel district court proceeding the same grounds as in the petition or any grounds that could
`
`have reasonably been raised in the petition. This clarification avoids inconsistent outcomes
`
`7
`
`

`

`between the PT AB and the district court and allows the PT AB to review grounds that the parallel
`
`district court litigation will not resolve.
`
`Trial Date
`
`Fintiv factor two considers the proximity of the court's trial date to the Board's projected
`
`statutory deadline for a final written decision. When applying this factor, the PTAB has taken
`
`the "comis' trial schedules at face value absent some strong evidence to the contrary." 10 Thus,
`
`the PT AB has generally weighed this factor in favor of exercising discretion to deny institution if
`
`the trial date is scheduled before the projected statutory deadline for a final written decision.
`
`In response to the RFC, a number of commenters expressed concern with the use of trial
`
`dates as a factor. 11 Stakeholders c01Tectly noted that scheduled trial dates are unreliable and
`
`often change. A court's scheduled trial date, therefore, is not by itself a good indicator of
`
`whether the district court trial will occur before the statutory deadline for a final written decision.
`
`Accordingly, when analyzing the proximity of the comi's trial date under factor two of
`
`Fintiv, when other relevant factors weigh against exercising discretion to deny institution or are
`
`neutral, the proximity to trial should not alone outweigh all of those other factors. See In re
`
`Genentech, Inc., 566 F.3d 1338, 1347 (Fed Cir. 2009). Patties may present evidence regarding
`
`the most recent statistics on median time-to-trial for civil actions in the district comi in which the
`
`10 Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 at 13 (May 13, 2020) (informative)
`(applying the Fintiv factors articulated in the precedential Fintiv decision).
`11 See USPTO Executive Summa,y of Public Views on Discretionary Institution of AJA
`Proceedings (Jan. 2021) ( available at https://www.uspto.gov/sites/default/files/documents/
`USPTOExecutiveSummaryofPublicViewsonDiscretionarylnstitutiononAIAProceedingsJanuary2
`021.pdf).
`
`8
`
`

`

`(cid:33)(cid:2)(cid:19)(cid:2)(cid:337)(cid:35)(cid:1)(cid:35)(cid:461)(cid:11)(cid:67)(cid:31)(cid:9)(cid:21)(cid:2)(cid:37)(cid:9)(cid:5)(cid:4)(cid:461)(cid:8)(cid:1)(cid:3)(cid:66)(cid:16)(cid:1)(cid:3)(cid:1)(cid:2)(cid:3)(cid:117)(cid:8)(cid:461)(cid:10)(cid:122)(cid:1)(cid:461)(cid:42)(cid:34)(cid:63)