Institution Rates Continue Their Downward Slide as NHK-Fintiv Rule Limits IPR Access

The Patent Trial and Appeal Board (PTAB) instituted trial in 52% of the America Invents Act (AIA) review petitions addressed during the third quarter of 2021, bringing the overall institution rate for the year thus far to 57.2%—down slightly from 58.1% in the entirety of 2020 and more significantly from 61% in 2019.

As RPX has previously noted, this decrease in the AIA review institution rate can be partly attributed to the PTAB’s increasing use of discretionary non-merits denials. Over the past few years, the Board has expanded the circumstances in which it will exercise this discretion through a growing body of internal precedent—most controversially, through a pair of rulings known together as the NHK-Fintiv rule.

Under NHK-Fintiv, the PTAB may deny institution in an AIA review based on the status of a parallel district court case asserting the same patent based on several factors—including one under which the PTAB may reject a petition if the district court’s scheduled trial date falls too close to the deadline for the Board’s final validity decision. This essentially narrows the time within which a district court defendant can file an inter partes review (IPR): companies already have just one year from the date of service to file such a petition, and now face additional pressure to file as early as possible within that window when sued in venues that prioritize early trial dates (chief among them the Western District of Texas). Yet it can be impractical to file an AIA review within the initial stages of litigation, as plaintiffs often do not disclose the specific claims being asserted—i.e., those that the defendant would want to target before the PTAB—until later.

See RPX’s third-quarter review for more on the PTAB, the NHK-Fintiv rule, and other trends impacting patent litigation and the patent marketplace.