USPTO Tells SCOTUS to Skip Intel’s Challenge to Fintiv Framework

The U.S. Patent and Trademark Office (USPTO) responded last week to a petition for certiorari that is asking the Supreme Court to overturn a U.S. Court of Appeals for the Federal Circuit (CAFC) decision that said appellate review of whether the Patent Trial and Appeal Board’s (PTAB’s) discretionary denial rules for inter partes review (IPR) are “arbitrary and capricious” is precluded by Section 314(d) of the patent statute.

In the underlying Federal Circuit decision, the court agreed with the U.S. District Court for the Northern District of California that the petitioners’ claims should be dismissed because they challenged USPTO Director actions that were not reviewable. The district court specifically said that the “35 U.S.C. § 314(d), together with Cuozzo and Thryv, precluded review because, to rule on the challenges, the court ‘would have to analyze questions that are closely tied to the application and interpretation of statutes’ governing institution decisions.”

But in their petition, Intel Corporation and Edwards Life Sciences said the USPTO rules that have developed around discretionary denial have “curtailed access to [inter partes review] IPR by setting restrictive, non-statutory standards the Board must apply in deciding whether to institute an IPR.”

The so-called Fintiv instructions governing the PTAB’s discretion to deny institution of IPR proceedings came to be after then-USPTO Director Andrei Iancu designated as precedential, “and hence binding on Board panels,” two decisions denying IPR petitions: NHK Spring Co. v. Intri-Plex Technologies, Inc., and Apple Inc. v. Fintiv, Inc.

The petitioners, along with Apple, Inc., initially asserted three grounds at the district court under the Administrative Procedure Act (APA): (1) that the Director acted contrary to the IPR provisions of the patent statute; (2) that the Fintiv instructions are arbitrary and capricious; and (3) that the Fintiv instructions were issued without compliance with the notice-and-comment rulemaking requirements.

On appeal, the plaintiffs argued to the CAFC that the district court erred in its determination to dismiss and said that the Director’s instructions both violate the IPR statute and are arbitrary and capricious. The CAFC disagreed and affirmed the district court on those challenges, but said that the third challenge brought on appeal, that the instructions were not promulgated via notice-and-comment rulemaking, was not barred under 5 U.S.C. § 701(a)(1) nor § 701(a)(2) and that at least Apple had standing to bring it, reversing the district court on that aspect of the dismissal.

In its recent brief, the USPTO said that, although the America Invents Act (AIA) identifies “certain circumstances in which inter partes review may not lawfully be instituted,” it does not specify any circumstances “in which institution is required. Thus, even when a petition meets the statutory conditions for inter partes review, there is ‘no mandate’ for the USPTO ‘to institute review,’” explained the brief. As the High Court itself stated in United States v. Arthrex, Inc., 141 S. Ct. 1970, 1977 (2021), the brief added, “Congress has committed the decision to institute inter partes review to the Director’s unreviewable discretion.”

The USPTO further argued that the Court has already denied three previous petitions for writs of certiorari raising challenges to the Fintiv factors: Intel Corp. v. VLSI Tech. LLC, 142 S. Ct. 1363 (21-888); Mylan Labs. Ltd. v. Janssen Pharmaceutica, N.V., 142 S. Ct. 874 (21-202); and Apple Inc. v. Optis Cellular Tech., LLC, 142 S. Ct. 859 (2022) (21-118). While those petitions challenged individual decisions in which the Board declined to institute inter partes review, the USPTO said “the Court should reject petitioners’ attempt to obtain a different result by raising the same basic arguments in a freestanding APA challenge to the Director’s guidance.”

Three amici have weighed in, and Apple, Google and Cisco, who are all respondents in the district court, have submitted letters from counsel urging the court to grant the petition. The three amici also support granting certiorari.

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Author: Arcady
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