USPTO Rulemaking on Discretion to Institute Trials Before the PTAB – A Balancing Act
The U.S. Patent and Trademark Office is considering promulgating rules relating to the Patent Trial and Appeal Board’s discretion to institute trials. The rulemaking will consider various factors that may go into account in the determination of whether to institute AIA trials in light of serial and parallel petitions as well as proceedings in the district courts and ITC.
The rulemaking is expected to be controversial, with patent challengers arguing that denial of institution, particularly under the Fintiv factors, is in contrast to the intent of Congress to provide a less expensive forum to resolve patent disputes, forces defendants to file IPRs early, and can result in forum shopping. In contrast, patent owners note that there is nothing that entitles defendants to two bites at the apple to challenge a patent, discretionary denial of an IPR petition under Fintiv reduces the possibility of contradictory outcomes in district court and the PTAB, and that there is no statutory provision that prevents the USPTO from considering the stage of a parallel litigation when deciding whether to institute an IPR. Public comment was requested regarding rulemaking related to: (1) serial petitions; (2) parallel petitions; (3) proceedings in other tribunals; and (4) any other considerations related to these issues. 85 FR 66502 (Oct. 20 2020). Comments may be viewed at https://www.regulations.gov, docket PTO-C-2020-0055.Interestingly, the PTAB recently made two decisions precedential where the board instituted review of patents while there was a pending court litigation. In Sotera Wireless, Inc. v. Masimo Corporation, IPR2020-01019 (December 1, 2020), Masimo Corporation had sued Sotera Wireless in the Southern District of California. Sotera filed a stipulation in district court stating that if the board reviews the patent, the company will not pursue any invalidity argument in the trial that is raised, or reasonably could have been raised, in the IPR. The consideration of minimal overlap between the two proceedings led the board to institute review. In Snap, Inc. v. SRK Technology LLC, IPR2020-00820 (October 21, 2020), SRK Technology had sued Snap Inc., in the Central District of California. The district court decided to stay the infringement case until the PTAB issues a final written decision, and the board again instituted the case, indicating that the stay allays concerns about inefficiency and duplication of efforts.