Tech companies challenge ‘unlawful’ IPR rule
Major tech companies including Apple and Google are challenging the US Patent and Trademark Office (USPTO) on a rule limiting the availability of patent reviews.
In a lawsuit filed yesterday, August 31 at the US District Court for the Northern District of California, the tech companies said the USPTO’s so-called NHK-Fintiv rule is unlawful.
The informal rule was adopted after the USPTO designated two Patent Trial and Appeal Board decisions (NHK and Fintiv) as precedential in May 2019 and May 2020.
Under this precedent, the PTAB can decide not to institute inter partes review (IPR) of patent claims which are the object of pending litigation.
The America Invents Act (AIA) allows parties being sued for patent infringement to challenge those same claims through the IPR system, if they do so within one year of being sued.
The NHK and Fintiv decisions outline a set of factors for the PTAB to take into account when deciding whether to institute IPR when parallel litigation is pending.
These include the amount of resources invested in the litigation, the proposed trial date, and whether the court is likely to grant a stay if IPR is instituted.
Now, tech companies, also including Cisco and Intel, claim the precedential NHK and Fintiv decisions established a “binding rule” on the PTAB which violates the AIA.
Fintiv itself stemmed from an unsuccessful IPR filed by Apple, over a patent being asserted against it in court.
In the new lawsuit, the tech companies argue that the factors outlined in NHK-Fintiv are not consistent with the purpose of the AIA.
“Given its purpose to provide an efficient alternative to litigation, Congress expected that IPR would often proceed in parallel with litigation in which the validity of the same patent claims is at issue—particularly in cases where a defendant accused of patent infringement in a lawsuit seeks to challenge the asserted patent claims through IPR,” the complaint said.
The plaintiffs also argue that NHK-Fintiv was imposed on the PTAB unlawfully. They claim that, as it is a “substantive rule that alters the rights and interests of IPR”, the USPTO was required to implement it through the notice-and-comment system.
The mechanism by which USPTO director Andrei Iancu designated the decisions as precedential was a “unilateral, internal process that involved no opportunity for public comment and no consideration by the Director of any public input”.
Did you enjoy reading this story? Sign up to our free daily newsletters and get stories sent like this straight to your inbox.
