In Q3 2020, PTAB Petitions Went Up as Stakeholders Debated Rule Impacting Frequent Petitioner-Defendants

In the third quarter of 2020, 461 petitions for America Invents Act (AIA) review were filed with the Patent Trial and Appeal Board (PTAB), including 440 petitions for inter partes review (IPR), nine petitions for covered business method (CBM) review, and 12 petitions for post-grant review (PGR). The overall number of AIA review petitions filed in Q3 was 21.3% higher than the previous quarter, during which 380 petitions for AIA review were filed—the third quarterly increase in a row, following four quarters of relatively flat activity.

The third quarter also saw an increasingly heated debate over a set of recent PTAB rule changes that may impact frequent petitioner-defendants. In particular, two decisions designated as precedential by the Board’s Precedential Opinion Panel—one issued in NHK Spring v. Intri-Plex Technologies (IPR2018-00752) and the other in Apple v. Fintiv (IPR2020-00019)—establish a six-factor test under which the PTAB may deny institution of an AIA review petition based on the status of a parallel district court case. These factors are collectively known as the “NHK-Fintiv rule”.

As noted in RPX’s latest quarterly report, the NHK-Fintiv factor allowing the consideration of a district court trial date (one of six factors) can be particularly significant for petitioners involved in parallel district litigation. The reason pertains to timing: a district court defendant may only file an inter partes review (IPR) petition within one year of being served with an infringement complaint. Since defendants often do not learn what claims are asserted against them until later in litigation, IPRs are often filed toward the end of that window—a window that can become even narrower if that defendant is sued in a venue that prioritizes relatively quick time to trial, such as the Western District of Texas. Defendants wishing to avoid a discretionary denial by the PTAB under the NHK-Fintiv rule may therefore find themselves in a race of sorts against the district court’s trial date to file a PTAB petition.

As recently reported by RPX, a coalition of tech companies has sued USPTO Director Andrei Iancu to challenge the NHK-Fintiv rule, arguing that it violates the AIA, is arbitrary and capricious, and is procedurally unsound, not having been “adopted through notice-and-comment rulemaking” under the Administrative Procedure Act (APA). An inventor’s advocacy group has since sought to intervene, seeking to halt all AIA review trial institutions in the meantime—prompting pushback from the USPTO and the plaintiffs in that case.

See RPX’s third-quarter review for more on this and other trends.