Board Designates Two Decisions ‘Precedential,’ Applying Discretion for Efficient Use of Resources

Intellectual Property Law

The Patent Trial and Appeal Board (Board) designated as precedential two decisions involving situations where the Board determined whether to institute review, using its discretion and based on whether review would be an efficient use of the Board’s resources.

The first case involved a situation where the petitioner agreed to make different arguments before the Board and in district court. In Sotera Wireless, Inc. v. Masimo Corporation,1 the Board explained that the petitioner’s broad stipulation not to pursue in district court any ground that it raised, or could have raised, in the inter partes review weighed strongly in favor of institution. The Board reviewed the following factors for exercising its discretion when considering an early trial date in related litigation (“Fintiv 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; and

6. Other circumstances that impact the Board’s exercise of discretion, including the merits.2

When analyzing these factors, the Board considers the totality of the circumstances, performing a holistic assessment of whether its efficiency and integrity are furthered by denying or instituting review. The Board explained:

We take “a holistic view of whether efficiency and integrity of the system are best served by denying or instituting review” when considering the six Fintiv factors. . . . Our holistic review of the Fintiv factors, namely that the timing of the Petition was reasonable, the relatively limited investment in the parallel proceeding to date, and that there is minimal potential overlap of the two proceedings, indicates that the Fintiv factors weigh in favor of instituting inter partes review. As such, we are not persuaded that the interests of the efficiency and integrity of the system would be best served by invoking our authority under 35 U.S.C. § 314(a) to deny institution of a meritorious Petition. For the reasons discussed above, we decline to deny institution under § 314(a).3

In the second case, Snap, Inc. v. SRK Technology LLC,4 the Board instituted review in part because the district court stayed the corresponding infringement case. As the Board explained, the fact that a district court stay would remain in place until an inter partes review final written decision weighed heavily in favor of instituting the inter partes review. In deciding not to deny institution of inter partes review, the Board reasoned as follows:

Based on the facts before us, the stay in the parallel District Court proceeding, the early stages of that parallel proceeding prior to the stay, and the lack of overlap between the invalidity contentions in the District Court proceeding and the challenges raised in the Petition allay any concerns regarding inefficiency, duplication of efforts, and the possibility of conflicting decisions. Of the remaining factors, we find only that Petitioner is the same as the defendant in the parallel proceeding to be neutral or to weigh slightly in favor of discretionary denial. Balancing all of the Fintiv factors, on this record, we determine that the circumstances presented here weigh against exercising discretion under § 314(a) to deny institution of inter partes review.5

Lessons

Both of these Board decisions that have been designated as precedential were decisions not to exercise discretion to deny institution of inter partes review. Thus, the Board continues to advise patent owners and challengers that it will do its best to provide an evenhanded approach to contested challenges. The two precedential decisions indicate that the Board will not deny inter partes review where there is no significant overlap between the inter partes review and district proceedings, and where the district court proceeding is stayed. Based on the designation of these Board decisions as precedential, patent owners and challengers should expect the Board to continue to apply the Fintiv factors in a consistent manner when determining whether to exercise its discretion.


Irah Donner is a partner in Manatt’s intellectual property practice and is the author of Patent Prosecution: Law, Practice, and Procedure, Eleventh Edition, and Constructing and Deconstructing Patents, Second Edition, both published by Bloomberg Law.


1 Sotera Wireless, Inc. v. Masimo Corporation, IPR2020-01019, 2020 WL 7049373, Paper 12 (P.T.A.B. Dec. 1, 2020) (precedential as to § II.A).

2 Id., slip op. at 12 (quoting Apple Inc. v. Fintiv, Inc., IPR2020-00019, slip op. at 5-6, 2020 WL 2126495, Paper 11 (P.T.A.B. March 20, 2020) (precedential)).

3 Id., slip op. at 20-21 (quoting Apple Inc. v. Fintiv, Inc., IPR2020-00019, slip op. at 6, 2020 WL 2126495, Paper 11 (P.T.A.B. March 20, 2020) (precedential)).

4 Snap, Inc. v. SRK Technology LLC, IPR2020-00820, 2020 WL 6164354, Paper 15 (P.T.A.B. Oct. 21, 2020) (precedential as to § II.A).

5 Id., slip op. at 19.

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