To Institute or not to Institute: Reasons for the PTAB not to grant a petition for Inter Partes Review
February 04, 2021
To Institute or Not to Institute:
Reasons for the PTAB Not to Grant a Petition for Inter Partes Review
Part I – Denials Under 35 U.S.C. § 314(a)
By: Ed Mantilla
Denial of Petition
An Inter Partes Review (“IPR”) is an administrative adjudicative proceeding at the United States Patent and Trademark Office where a three-member panel of Administrative Patent Judges (“APJ”) at the Patent Trial and Appeal Board (“PTAB”) reviews the patentability of one or more claims in a patent. The review is conducted only on novelty and obviousness grounds and only of the basis of prior art consisting of patents or printed publications. Under 37 C.F.R. § 42.108, an IPR is instituted, permitting the review to move forward to a final determination, if “there is reasonable likelihood that at least one of the claims challenged is unpatentable.” However, the PTAB has discretion to deny institution of any petition for IPR even if it meets all of the statutory requirements for institution. A discretionary denial of institution may take the form of a procedural denial under 35 U.S.C § 314(a), where “the Director may not authorize an inter partes review…unless the Director determines that the information presented in the petition…shows that there is reasonable likelihood that the petitioner will prevail with respect to one of the claims….” The petition may also be denied according to a non-merit-based denial under 35 U.S.C. § 325(d), where institution may be denied if “the same or substantially the same prior art or arguments previously were presented to the Office.” This post will discuss discretionary denials under 35 U.S.C § 314(a). A follow-up post will address denials under 35 U.S.C. § 325(d).
The Fintiv Factors
Procedural denials account for 30% of denied petitions, and this trend is expected to continue to rise. The total of procedurally denied petitions in 2020 exceeded the 2019 total. The PTAB has made use of the “NHK-Fintiv” rule, which is derived from two precedential PTAB decisions, to decide whether discretionary denial is appropriate. The NHK-Fintiv rule establishes a set of factors, known as the “Fintiv Factors,” for the PTAB to consider. The Fintiv Factors include:
- Whether a trial court has granted a stay or evidence exists that one may be granted if a proceeding is instituted
- Proximity of a court trial date to the projected statutory deadline for a final written decision
- Investment in a parallel proceeding by court and parties
- Overlap of issues in the petition and a parallel proceeding
- Whether the petitioner and the defendant are the same party
- Other circumstances, including the merits of the petition
Application of the Fintiv Factors and their Effect on Post Grant Litigation Strategy
In NHK Spring Co., the competing litigation was scheduled to conclude before the end of any potentially instituted IPR; this favored a discretionary denial of the petition in that matter under 35 U.S.C § 314(a). This suggests that a potential solution to avoid a denial based on the proximity of a court proceeding to the projected statutory deadline for the issuance of a final written decision by the PTAB may be to file an IPR petition early, as determined by a review of court statistics regarding time to trial, so that the statutory deadline is likely to precede the conclusion of a parallel court proceeding sufficiently to avoid denial. It should be noted that a venue that offers an aggressive trial schedule may weigh against a potential proceeding at the PTAB.
In another case, ZTE (USA) v. Fractus, S.A., the PTAB denied the institution of an IPR based on the fact that the District Court had issued a claim construction Memorandum and Opinion; as a result, the Patent Owner argued that instituting an IPR would be “contrary to the goal of the AIA to provide an efficient alternative to district court litigation.”  The PTAB concluded that the 4th factor – overlap of issues in petition and parallel proceedings-weighed against institution of an IPR, noting that it was “persuaded that granting institution would have the Board consider the same prior art and essentially identical evidence and arguments already under consideration in the Texas District Court Case.” 
None of these factors is dispositive alone, and the PTAB may engage in an analysis of all factors to decide on a discretionary denial.
It is always best to partner with Counsel who is familiar with PTAB rules and procedures to navigate the challenges of the IPR process.
 NHK Spring Co. v. IntriPlex Techs, Inc., IPR2018-00752, Paper 8 (PTAB September 12, 2018) and Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 (PTAB May 13,2020)
 IPR2020-00019, Paper 11 (PTAB May 13, 2020)
 IPR2018-01457, Paper 10 (PTAB February 28, 2019)
 Cisco Systems v. Ramot at Tel Aviv University Ltd., IPR2020-00123, Paper 14, (PTAB, May 15,2020)