SCOTUS dismisses Intel challenge to Fintiv rule
The US Supreme Court has rejected an attempt by Intel to challenge the controversial NHK-Fintiv rule, the latest in a series of denials meted out to tech companies and generic drug makers seeking the same review.
SCOTUS handed down its decision on Monday, March 21, following its rejection of bids by Apple and Mylan to overturn the NHK-Fintiv rule earlier this year.
Unveiled in 2020, the rule dictates that the existence of a parallel district court lawsuit should preclude an inter partes review by the Patent Trial and Appeal Board (PTAB), promoting a sharp rise in denials of IPR petitions of patents over the past two years.
In 2013, the board instituted reviews in 87% of all filed petitions during the first year of the PTAB’s review process, but this sunk to an all-time low of 56% in 2020, according to research carried out by Unified Patents.
Statutory authority
The issues in this case arose when Intel filed petitions for the PTAB to conduct IPRs of patent claims that VSLI Technology had asserted in infringement litigation against Intel.
The board denied 12 of those IPR petitions based The NHK-Fintiv rule adopted by the then director of the US Patent and Trademark Office (USPTO), Andrei Iancu, when he designated as “precedential” the board’s decisions in NHK Spring v Intri-Plex Technologies, (2018), and Apple v Fintiv (2020).
The rule directs the board to deny IPR petitions whenever it determines that conducting IPR would be inefficient in light of pending overlapping infringement litigation.
Intel appealed the denials to the Federal Circuit and alternatively requested mandamus, arguing that the rule exceeds the director’s statutory authority and violates the Administrative Procedure Act.
Patent ‘rocket dockets’
But the Federal Circuit dismissed the appeal on the ground that 35 U.S.C. §314(d) bars judicial review of the PTAB’s IPR decisions and denied mandamus relief.
In its petition to SCOTUS filed on March 1, Intel argued that: “Given the role Congress intended IPR to play in rebalancing the patent system, the Federal Circuit’s decision threatens the patent system’s ability to promote innovation and economic growth, as well as courts’ ability to enforce the legal boundaries of PTO actions and rules.”
It added that research has confirmed the harmful effects of the USPTO’s unlawful effort to constrict the availability of IPR, and that the Federal Circuit “continues to sanction that effort, to the patent system’s detriment”.
In October, Perkins Coie released findings showing that the PTAB’s references to the rule’s dictate of parallel litigation precluding reviews are often derived from inaccurate data as the trial dates are “almost always pushed back”.
Intel also contended that the rule has encouraged “abusive forum-shopping” by patent-infringement plaintiffs. “Since the rule was adopted, the number of infringement suits
filed in the Western and Eastern Districts of Texas—two jurisdictions widely recognised as patent “rocket dockets”—has increased dramatically, and correspondingly those suits have accounted for a whopping number of denials of IPR petitions under the rule,” argued the tech company.
But this week, SCOTUS rejected these arguments and turned down Intel’s petition.
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