PTAB Petitions Dip Due to Discretionary Denials, Prompting a Return to Reexamination

In the fourth quarter of 2020, 356 petitions for America Invents Act (AIA) review were filed with the Patent Trial and Appeal Board (PTAB), including 330 petitions for inter partes review (IPR) and 26 petitions for post-grant review (PGR). While PTAB petitions for the entire year were up by 16.5% compared to 2019, the overall number of AIA review petitions filed in Q4 2020 was 22.8% lower than the previous quarter, during which 461 petitions for AIA review were filed. This ended a streak of quarterly increases observed since Q4 2019.

Arguably, the most important contributing factor behind this decrease, seasonality notwithstanding, is the PTAB’s greater exercise of discretion to deny institution in AIA review trials. Since 2019, the Board has been steadily expanding the circumstances in which it will wield this discretion through a series of decisions designated as precedential. Of those decisions, perhaps none have been more controversial than two that are collectively known as the NHK-Fintiv rule, which allow the PTAB to consider the status of parallel district court litigation in deciding whether to institute.

A lightning rod among the six NHK-Fintiv factors is the one allowing institution to be denied when a scheduled district court trial date is too close to the due date for the PTAB’s final written decision. When litigating in venues that are more aggressive about scheduling early trial dates, such as the Western District of Texas, this factor shrinks the window in which an AIA review petition can be effectively filed to one smaller than what is practically allowed by statute. As recounted in RPX’s latest quarterly report, this has triggered a heated debate on both sides of the issue, prompting both litigation and an avalanche of public comments—the latter in response to a USPTO effort to codify NHK-Fintiv.

As the NHK-Fintiv rule makes AIA reviews a less attractive option, it is perhaps no surprise that some defendants seeking to challenge validity have been increasingly turning to reexaminations, which are not subject to discretionary denials and tend to be much less expensive. Indeed, in some cases, reexaminations have allowed companies to work around NHK-Fintiv denials and win stays in parallel district court litigation when IPR petitions have failed. Notably, this includes two recent rulings by District Judge Rodney Gilstrap of the Eastern District of Texas, one of which stayed litigation filed by NPE AGIS Software Development LLC and another in a case brought by Ramot at Tel Aviv University Limited.

See RPX’s fourth-quarter review for more on the PTAB, as well as other trends impacting the patent space.