AIA Trial Institution Rates Leveled Out in 2021 Amid Continued Debate over NHK-Fintiv

The Patent Trial and Appeal Board (PTAB) instituted trial in 61% of the America Invents Act (AIA) review petitions addressed in the fourth quarter of 2021, bringing the year’s institution rate to 58.7%—slightly higher than 2020’s 58.2% but still down from 2019’s 61%.

The dip observed from 2019 to 2020 may be attributed in part to the PTAB’s use of discretionary non-merits denials, based on criteria established through a growing body of internal precedent. While institution rates appear to have leveled out in 2021, such practices have remained a source of heated debate and uncertainty among stakeholders—especially the Board’s practice of discretionarily denying institution due to the status of parallel litigation, through factors established in a pair of precedential decisions known together as the NHK-Fintiv rule.

A particularly impactful NHK-Fintiv factor has been one allowing the PTAB to consider the trial date scheduled in parallel district court litigation, and to deny institution when that date is too close to the deadline for the Board’s own validity decision. When a defendant is sued in a venue that tends to schedule trial dates as early as possible—among them the Western District of Texas—this can force that defendant to file a petition as early as possible to avoid a discretionary denial. Moreover, for efficiency’s sake, a defendant must typically wait to file an AIA review until it knows what the asserted claims are, and a plaintiff typically does not disclose them at the outset of litigation—further compressing the defendant’s one-year statutory window for filing a PTAB petition.

With the Supreme Court’s January 18 denial of two petitions for certiorari challenging the NHK-Fintiv rule, it appears that the practice is here to stay for the immediate future—unless recent interest from Congress leads to legislative action. In the meantime, data show that defendants have increasingly shifted toward ex parte reexamination as an apparent result of NHK-Fintiv, seeking a process for challenging patent validity that may not be subject to the same level of discretion.

See RPX’s review of the fourth quarter and 2021 for more on the NHK-Fintiv rule and the PTAB, as well as a deep dive on other trends impacting patent litigation and the patent marketplace.