Vidal in Latest Director Review: File Stipulations Early or Deal with Fintiv Denials

“The Board correctly determined that a stipulation, offered by a petitioner for the first time after a decision denying institution, is not a proper basis for granting rehearing of the decision on institution.” – USPTO Director Kathi Vidal Patent and Trademark Office (USPTO) Director Kathi Vidal on September 7 granted sua sponte Director Review and affirmed a Patent Trial and Appeal Board (PTAB) decision denying rehearing of the Board’s decision not to institute a request for inter partes review (IPR) by NXP USA, Inc. The ruling clarified that Sotera-type stipulations submitted after an institution denial cannot serve as a basis for granting rehearing.

In the underlying case, the PTAB denied institution of an IPR relating to IMPINJ, Inc.’s U.S. Patent No. 10,776,198 B1 under 35 U.S.C. § 314(a), in view of Apple Inc. v. Fintiv, Inc. Most relevant to Vidal’s Director Review decision, NXP in its rehearing request “submitted a stipulation agreeing that, should trial be instituted in this case, Petitioner will not pursue any grounds based on the [prior art] references relied on in this IPR matter.” The Board responded that NXP had offered no explanation as to why that stipulation was offered so late in the proceeding, rather than in the initial IPR petition. The Board noted that its precedent on stipulations to avoid Fintiv denials (including Sotera Wireless, Inc. v. Masimo Corporation, IPR2020-01019, Paper 12 (Dec. 1, 2020) (precedential)) had issued long before the petition was filed, so NXP was well aware that it could have included such language in its initial request.

Vidal then sua sponte granted Director Review and affirmed the Board’s analysis, noting that she did so “to address the limited question of whether the Board may reconsider a decision to deny institution based on a stipulation filed after the institution decision is made.” Vidal then explained:

Upon review, I hold that the Board correctly determined that a stipulation, offered by a petitioner for the first time after a decision denying institution, is not a proper basis for granting rehearing of the decision on institution.

While the USPTO’s Guidance Memo of June 21, 2022, codified PTAB practice that had developed to allow for institution even when a petition might otherwise be denied under Apple Inc. v. Fintiv, Inc., so long as the 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,” Vidal said in this week’s decision that allowing such a stipulation to be filed in a rehearing request would frustrate the intended goal of balancing demand for PTAB trials with mitigating concerns about “potentially conflicting decisions and duplicative efforts between the district court and the Board.” She added:

“Permitting a petitioner to wait and see if the Board denies institution under Fintiv, and then offer such a stipulation for the first time on rehearing, frustrates these goals and would open the door to gamesmanship. I therefore hold that the only appropriate time for a petitioner to offer a stipulation related to the Fintiv factor 4 analysis is prior to the Board’s decision of whether to institute review.”

The decision is the latest of about a dozen Director Review cases that Vidal has either decided or are pending as of today. The NXP v. IMPINJ case is one of six that Vidal has granted relating to an institution decision.


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Author: kikkerdirk


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