Vidal Memo Clarifying PTAB Discretionary Denial Analysis Says Fintiv Does Not Apply to Parallel ITC Investigations

“The plain language of the Fintiv factors is directed to district court litigation and does not apply to parallel U.S. International Trade Commission (ITC) proceedings.”

Fintiv memo - Patent and Trademark Office (USPTO) Director Kathi Vidal has issued a memorandum on the “Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation” clarifying current Patent Trial and Appeal Board (PTAB) practice on discretionary denials of inter partes review (IPR) and post grant review (PGR) proceeding institutions. The memo and corresponding press release explain that the PTAB “will not deny institution of an IPR or PGR under Fintiv (i) when a petition presents compelling evidence of unpatentability; (ii) when a request for denial under Fintiv is based on a parallel ITC proceeding; or (iii) where a petitioner stipulates not to pursue in a parallel district court proceeding the same grounds as in the petition or any grounds that could have reasonably been raised in the petition.”

The memo downplays broad application of Apple Inc. v. Fintiv, Inc. and the six factors outlined in that precedential decision, which the PTAB considers in determining whether to institute a post-grant proceeding where there is parallel district court litigation. “[T]o benefit the patent system and the public good, the PTAB will not rely on the Fintiv factors to discretionarily deny institution in view of parallel district court litigation where a petition presents compelling evidence of unpatentability,” the memo says. It continues:

“This memorandum also confirms that the precedential import of Fintiv is limited to facts of that case. Namely, Fintiv involved institution of an AIA proceeding with a parallel district court litigation. The plain language of the Fintiv factors is directed to district court litigation and does not apply to parallel U.S. International Trade Commission (ITC) proceedings, as the ITC lacks authority to invalidate a patent and the ITC’s invalidity rulings are not binding on the Office or on district courts.”

Compelling Evidence

With respect to compelling evidence, the memo explains that other Fintiv factors may be considered when the information presented at the institution stage “is merely sufficient to meet the statutory institution threshold.” However, “where the PTAB determines that the information presented at the institution stage presents a compelling unpatentability challenge, that determination alone demonstrates that the PTAB should not discretionarily deny institution under Fintiv.”

According to the memo, this balances concerns about avoiding potentially conflicting outcomes and overburdening patent owners with the need to eliminate “patents that are not robust and reliable.”

ITC Excluded

Next, the memo clarifies that the PTAB will no longer use the Fintiv factors to discretionarily deny petitions involving parallel International Trade Commission (ITC) investigations. Since the ITC cannot resolve patent invalidity, its decisions “will not necessarily minimize potential conflicts between PTAB proceedings and district court litigation.”

As to the proximity of trial dates, Vidal’s memo notes that a number of commenters in the recent Request for Comments on discretionary denial practice pointed to problems with using trial dates as a factor. “Stakeholders correctly noted that scheduled trial dates are unreliable and often change. A court’s scheduled trial date, therefore, is not by itself a good indicator of
whether the district court trial will occur before the statutory deadline for a final written decision.” For this reason, the proximity to trial date factor should not alone outweigh other factors, says the memo. It adds:

“Parties may present evidence regarding the most recent statistics on median time-to-trial for civil actions in the district court in which the parallel litigation resides 12 for the PTAB’ s consideration. Where the parties rely on time-to-trial statistics, the PTAB will also consider additional supporting factors such as the number of cases before the judge in the parallel litigation and the speed and availability of other case dispositions.”

Joshua Goldberg of Finnegan said the memo brings welcome clarity in a number of areas on which different PTAB panels have taken varying positions. “The ITC is a good example of this,” Goldberg said. “This is the first time to my knowledge that the PTAB as a whole will be taking the position [that parallel ITC proceedings are excluded from the Fintiv analysis].”

Goldberg also said that the guidance on compelling evidence of unpatentability is interesting in the context of PGR, since “the test is very similar to the general standard for PGR,” making Fintiv virtually a non-issue for PGR now. The standard for instituting a PGR is “whether the petition demonstrates that it is ‘more likely than not’ that at least one of the claims challenged in the petition is unpatentable.”

Overall, said Goldberg, the guidance will be useful for both sides in PTAB trials. “I have a pretty split practice [between patent owners and petitioners], and for both sides it’s been a struggle as far as wondering what a particular panel is going to look at – the clarity [the memo] has brought is the key here; you know how to act.”

PTAB Parallel Litigation Study

The USPTO’s press release also noted a study published today on the impact of PTAB denials of petitions when there is a parallel district court proceeding. Titled “the PTAB Parallel Litigation Study,” it explores Fintiv denials from the second quarter of FY 2019—”when the first PTAB precedential decision (NHK) on this issue was designated”—through the first quarter of FY 2022.

The study quantifies the “sharp overall decline in Fintiv denials” in that time period, and the USPTO noted the following highlights:

  • After Fintiv was designated precedential, parallel litigation was raised in about 40% of all cases.
  • Fintiv denials peaked in the second quarter of fiscal year 2021 and dropped significantly afterward.
  • The PTAB had issued no Fintiv denials based on parallel litigation in the Western District of Texas since August 2021.
  • The USPTO’s guidance on using stipulations appears to have led to an increase in stipulation filings and a significant decrease in Fintiv.
  • The PTAB has denied institution based on Fintiv of only three total AIA petitions challenging drug patents: two Orange Book-listed patents and one biologic drug patent.

An upcoming Boardside Chat will address this study in further detail.

Commenting on the memo, Vidal said: “The USPTO is committed to providing clarity and transparency around all our processes, especially in PTAB’s practice of discretionary denials. It is critical that we all play a role in ensuring that our patent system serves the public good the way it was intended. I look forward to hearing more from our stakeholders on these issues.”

The Office will be engaging in official rulemaking on this and other topics; the memo serves as interim guidance. See the PTAB’s resources and guidance page for more information.



Warning & Disclaimer: The pages, articles and comments on do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of

Join the Discussion

No comments yet.

Varsity Sponsors

IPWatchdog Events

Patent Portfolio Management Masters™ 2024
June 24 @ 1:00 pm - June 26 @ 2:00 pm EDT
Webinar – Sponsored by LexisNexis
August 22 @ 12:00 pm - 1:00 pm EDT
Women’s IP Forum
August 26 @ 11:00 am - August 27 @ 5:00 pm EDT
IP Solutions, Services & Platforms Expo
September 9 @ 1:00 pm - September 10 @ 2:00 pm EDT
Webinar – Sponsored by Anaqua
September 19 @ 12:00 pm - 1:00 pm EDT

From IPWatchdog