The Patent Trial and Appeal Board (“the Board”) recently designated Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (March 20, 2020), as precedential.  The decision provides practitioners a six-factor analysis that the Board will employ when assessing whether to apply its discretion to deny institution when there is co-pending district court litigation. 

Under Fintiv, the Board may be less likely to deny institution under § 314(a) when “the district court has set a trial date after the Board’s deadline to issue a final written decision in an instituted proceeding.”  Id. at 3.  The Board noted that it “takes a holistic view of whether efficiency and integrity of the system are best served by denying or instituting review.”  Id. at 6.  The guiding factors are:

  1. Whether a stay exists or is likely to be granted. An existing district court stay weighs strongly against discretionary denial. Guidance of record from a district court that it will issue a stay to avoid duplicating efforts likewise weighs against discretionary denial.  Id. at 7-8.
  2. Proximity of trial date to statutory deadline. When a trial date is earlier than the Board’s projected statutory deadline, this factor weighs in favor of discretionary denial. Id. at 9.
  3. Investment in parallel proceedings. If “at the time of the institution decision, the district court has issued substantive orders related to the patent at issue, this fact favors denial.” Id. at 9-10.  This is also “related to the trial date factor” such that when “parallel proceeding[s] [are] more advanced, a stay may be less likely, and instituting would lead to duplicative costs.”  Id. at 10.  But if “the evidence shows that the petitioner filed the petition expeditiously … this fact has weighed against exercising the authority to deny institution.”  Id. at 11.
  4. Overlap between issues raised in the petition and parallel proceedings. When substantially the identical prior art is at issue in the petition and in parallel litigation, “concerns of inefficiency and the possibility of conflicting decisions [are] particularly strong,” and this factor favors denial. Id. at 12.  However, when different grounds or arguments are presented, or there are non-overlapping claim challenges, this factor may weigh against discretionary denial.  Id. at 13.
  5. Whether the petitioner and defendant in the parallel proceedings are the same party. If the parties are different, the Board has weighed that factor against discretionary denial. Id. at 14.  However, the Board noted that even unrelated petitioners, if raising substantially the same issues, should still explain why addressing substantially the same issues would not be duplicative.  Id.
  6. Other circumstances affecting the Board’s exercise of discretion, including the merits. The Board added a catch-all sixth factor for addressing other relevant circumstances, such as a petition’s strength on the merits. Id. at 14-16.  The Board noted that discretionary analyses under this factor do not require a full assessment of the merits.  In general, prior-art grounds that “seem particularly strong on the preliminary record” may favor institution, while grounds that appear to present “a closer call” on the merits may favor denial.  Id. at 14-15.

In sum, the Board’s recent precedential decision in Apple v. Fintiv provides guidance for Petitioners to employ when deciding when, and if, to file a Petition when co-pending litigation exists.  The decision instructs Petitioners to analyze the Board’s Fintiv factors and describes factual scenarios in which each factor may weigh in favor of, or against, a discretionary denial of institution.