PTAB Institution Rate Dipped in Q1 Amid Changes to NHK-Fintiv Rule

The PTAB instituted trial for 68% of the AIA review petitions addressed in Q1 2025, down slightly from that same quarter last year (during which the institution rate was 69%) but up from Q4 2024 (60%).

Arguably the most significant factor impacting AIA institution rates in recent years has been the NHK-Fintiv rule, a set of discretionary factors governing the PTAB’s practice of discretionarily denying institution due to the status of parallel litigation. That practice could see a resurgence due to two key changes implemented by Acting USPTO Director Coke Morgan Stewart this past quarter.

The first of those changes was the rollback of a June 2022 memorandum from Stewart’s predecessor, former Director Kathi Vidal, that had limited the application of NHK-Fintiv in certain respects. That guidance insulated AIA reviews that are especially likely to succeed—those presenting “compelling, meritorious challenges”—from discretionary denial; established that the NHK-Fintiv factors apply only to district court litigation and not investigations before the ITC, since the latter lacks the power to issue binding invalidity rulings; and provided that discretionary denial would not occur where petitioners agree not to assert invalidity grounds that they raised or reasonably could have raised at the PTAB in a parallel district court case (formalizing a practice established in the PTAB’s December 2020 precedential decision in Sotera Wireless v. Masimo, now known as a “Sotera stipulation”). Additionally, the guidance lessened the impact of the controversial NHK-Fintiv factor allowing discretionary denial when the PTAB’s final written decision falls after a scheduled trial date, stating that this factor alone cannot tip the scales toward denial under NHK-Fintiv when the other factors are neutral, and further clarified that this determination must be made based on aggregate data, including the district’s median time to trial.

Discretionary denials fell significantly in the immediate aftermath of the guidance’s issuance. They then partially rebounded (see, e.g., here) in the wake of Vidal’s February 2023 precedential ruling, under her post-Arthrex director review power, that limited the “compelling merits” exception: In CommScope v. Dali Wireless, Vidal held that PTAB panels must first apply the five NHK-Fintiv factors and may only address compelling merits if the other factors favor discretionary denial.

However, the USPTO returned the PTAB to the prior status quo with its February 28, 2025 announcement that it had withdrawn the 2022 guidance and all decisions relying upon it, stating that parties should instead refer back to the PTAB’s precedential decisions in Apple v. Fintiv (the underlying decision, designated as precedential in 2020, that memorialized the five NHK-Fintiv factors, building on NHK Spring v. Intri-Plex Technologies, designated in 2019) and Sotera Wireless v. Masimo (discussed above). PTAB Chief Administrative Patent Judge (APJ) Scott Boalick clarified that withdrawal in a March 25 memorandum that explicitly each of the key points from the rescinded 2022 guidance.

The second of these two changes was Stewart’s creation of a new two-stage process for AIA review institution, established in a memorandum issued on March 26: First, the USPTO director is to make a determination as to the discretionary denial factors, doing so in consultation with three PTAB APJs, and will then issue a decision explaining the reasons why discretionary denial is appropriate or inappropriate. If the latter, the director will then refer the case to a standard three-member PTAB panel that will then make an institution decision that addresses the merits and other non-discretionary statutory considerations. In making her discretionary denial determination, the memorandum provides a broader list of relevant considerations drawn from certain precedent, including Fintiv; General Plastics, which lays out factors under which multiple petitions from the same petitioner can be discretionarily denied; and Advanced Bionics, which covers discretionary denials where the USPTO has previously considered the asserted prior art or arguments.

The new process also provides that the director will consider the PTAB’s workload in deciding whether to issue a discretionary denial—a factor that is likely to prove significant due to the Trump administration’s efforts to reduce the size of the federal government through staffing reductions that have already reduced the PTAB’s complement of APJs. These changes, plus upcoming PTAB layoffs announced in late March, are likely to result in an increase in discretionary denials.

For more on the PTAB, patent policy under the new administration, and other key patent trends, see RPX’s report on the first quarter.