PTAB ‘almost always wrong’ on Fintiv trial dates, research reveals
The US Patent Trial and Appeal Board (PTAB)’s dependence on trial dates to help it determine whether to apply the controversial NHK-Fintiv rule to inter partes (IPR) review petitions is flawed, according to research.
Established under former US Patent and Trademark Office (USPTO) director Andrei Iancu, the rule stemmed from NHK Spring v Intri-Plex (2018) in which the PTAB held that the existence of a parallel district court lawsuit should preclude an IPR review.
Since May 2020, the PTAB has relied on the six scenarios outlined in Apple v Fintiv, including the trial date in a parallel litigation case, to justify the dismissal of a review petition.
But law firm Perkins Coie released findings on October 29 that revealed that its reasoning is often derived from inaccurate data as the trial dates are “almost always pushed back”.
For its study, the firm carried out a survey of all discretionary denials that were based on parallel litigation and issued between May and October 2020.
In a blog post, firm partners Andrew Dufresne, Nathan Kelley and Lori Gordon noted that: “Key among the factors guiding those Fintiv denials is whether and to what extent the other proceeding’s trial date is scheduled to precede the board’s deadline for issuing a final written decision.”
‘Remarkably inaccurate’
The firm’s research found that “the board was almost always wrong when predicting trial dates in parallel litigation” and that out of 55 discretionary denials, only seven cited a trial date that proved accurate.
Notably, in four of those, the cited date was correct because trial had already occurred when the board denied the institution. However, when the board evaluated future trial dates, it was wrong 94% of the time.
The firm's research noted that out of the 51 cases where the board relied on a predicted future trial date, only three occurred on time.
Elsewhere, five trials were delayed by between one and three months, 17 were delayed by between three and six months, three were delayed by six and 12 months, and seven are still pending.
Another 15 litigations were terminated by the board without any ruling on validity on the grounds of settlement, bankruptcy, and summary judgment on other issues.
The partners concluded that the board’s reliance on scheduled trial dates has “proven remarkably inaccurate”, and that “trial dates in patent litigation are not stable and make a very poor barometer for evaluating the potential efficiency of denying institutions based on a parallel proceeding”.
A dramatic effect
Since May 2020, the effect of the rule has been dramatic: PTAB reviews fell by 63% last year compared to the previous year, according to research carried out by Unified Patents.
According to an analysis of 2020’s IPR petitions by law firm Womble Bond Dickinson, the PTAB had already applied NHK-Fintiv factors in determining whether to exercise its discretion to deny reviewing at least 24 patents by September 2020.
In September 2021, Senator Patrick Leahy announced plans for new legislation to erode the power of the PTAB to reject IPRs under the controversial rule.
According to Leahy, the new legislation would abolish PTAB’s ability to deny review petitions for reasons other than the merits of the case and would enable government agencies to file challenges.
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