IP Law Daily, PATENT NEWS: Another setback for opponents of the NHK-Fintiv doctrine, (Jan 9, 2024)

By Matthew Hersh, J.D.

The Supreme Court turns down another invitation to review the controversial PTO rule.

A controversial Patent and Trademark Office doctrine that allocates patent validity decisions between the federal courts and agency regulators—and that has been widely criticized for excessively deferring to the former—will not be reviewed by the Supreme Court. The decision, which turns down a petition brought by Intel Corporation, is the latest disappointment for major corporate patent holders who have frequently challenged the agency doctrine—so far without success.

The PTO doctrine at issue concerns the process for handling challenges to patent validity that arise simultaneously in the agency and in federal courts. Under the America Invents Act of 2011, the PTO may initiate what is called an inter partes review, or IPR, to challenge the validity of a patent. Because patents may be challenged in court as well as in administrative proceedings, the PTO is frequently asked to institute an IPR over a patent that is already the subject of litigation. In two precedential decisions, the Patent Trial and Appeal Board—the administrative entity delegated by the PTO to decide IPRs—has determined that in certain circumstances it will defer to the courts in lieu of initiating an IPR. In NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc., the PTAB determined that it would defer to court proceedings that were in an “advanced state.” Two years later, in Apple Inc. v. Fintiv, Inc., the PTAB reaffirmed its decision and set out six factors it would consider in determining whether to defer to ongoing court proceedings, among them the investment of the parties in the parallel proceeding and the proximity of the trial date.

The so-called Fintiv doctrine (also sometimes referred to as the NHK-Fintiv doctrine) has been the subject of considerable controversy within the patent community. The rule is especially opposed by large patent holders—who typically have an interested in invalidating patents that would encroach on their lucrative domain—on the asserted grounds that, among others, PTAB review is more accurate and more reliable. In addition, some observers have expressed concern that the application of the doctrine encourages excessive deferral to district courts that intentionally position themselves, through the setting of speedy trial dates—or “rocket dockets”—as a favored forum to aggressive patent litigants.

The petition in this case, filed by Intel Corporation, was not strictly speaking about the merits of the Fintiv rule. Rather, it was about who gets to decide those merits in the first place. Under Section 314(d) of the Patent Act, the PTO’s determination whether to institute an inter partes review “shall be final and nonappealable.” The provision gives the PTO the unilateral right to decide whether to initiate inter partes review in a particular case. But does that mean the PTO has the unilateral power to decide whether to impose a broad-based rule like the Fintiv doctrine? In March of last year, in Apple Inc. v. Vidal, the Federal Circuit held that it did. Longstanding doctrine “bars judicial resolution of even run-of-the-mill statutory interpretation issues inherent in an institution determination by the [PTO],” the court reasoned, “as long as the statutory provision is one sufficiently focused on institution itself.” Section 314 was just such a statute, the court reasoned—so the courts were without power to interfere. (IP Law Daily covered the Federal Circuit’s decision here).

The Federal Circuit’s decision was wrong, Intel asserted, for three reasons. First, the petition asserted, the Court has “repeatedly held that statutes barring review of specific agency actions do not bar review of agency standards governing those actions.” Thus, the petition argued, the court of appeals was simply wrong to think that it could not review the doctrine at issue here. Second, the petition argued, the Federal Circuit’s hands-off approach was inconsistent with the Court’s decision in SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018), a case in which the Court considered a challenge to a PTO regulation authorizing the practice of “partial institution”—that is, instituting IPR for only some of the patent claims challenged in a petition while denying review for the rest. If the Federal Circuit were right about Section 314, Intel argued, the Court would not have been able to resolve the challenge at all. Finally, the petition noted, the Federal Circuit’s doctrine threatens consequences that go beyond the mere Fintiv doctrine. Indeed, the petition argued, the holding “endangers the patent system more broadly by threatening to shield from review any PTO rule setting standards to govern institution of IPR, no matter how absurd or unlawful.”

Intel is far from the first patentholder to ask the Supreme Court to weigh in on the controversial doctrine. In January 2023, in a decision covered by IP Law Dailyhere, the Court turned away petitions by Apple and Mylan over the doctrine.

The question presented in the petition was: “whether 35 U.S.C. § 314(d), which bars judicial review of “[t]he determination … whether to institute an inter partes review,” applies even when no institution decision is challenged to preclude review of PTO rules setting standards governing institution decisions.”

The Case is Dkt. No. 23-135.

Attorneys: Catherine Mary Agnes Carroll (Wilmer Cutler Pickering Hale and Dorr) for Intel Corporation, Edwards Lifesciences Corporation, and Edwards Lifesciences LLC. Nathan Kip Kelley (Perkins Coie LLP) for Google LLC. Elizabeth B. Prelogar, Solicitor General, U.S. Department of Justice, for Katherine K. Vidal.

Companies: Intel Corporation; Edwards Lifesciences Corporation; Edwards Lifesciences LLC; Google LLC

News: Patent FedCirNews USPTO GCNNews