IP Law Daily, PATENT NEWS: USPTO Director Vidal affirms PTAB decision denying rehearing of non-institution decision, (Sep 13, 2022)

By Cheryl Beise, J.D.

A petitioner must offer a stipulation related to Fintiv factor 4 before the Board’s decision of whether to institute review.

The Patent Trial and Appeal Board properly denied petitioner NXP USA, Inc.’s request for rehearing of a decision denying institution of inter partes review of a patent held by Impinj, Inc., USPTO Director Kathi Vidal has determined in a precedential ruling. Director Vidal sua sponte granted review “to address the limited question of whether the Board may reconsider a decision to deny institution based on a stipulation filed after the institution decision is made.” Director Vidal concluded that the Board correctly determined that a stipulation not to pursue certain invalidity grounds in parallel district court litigation, offered by a petitioner for the first time after a decision denying institution, was not a proper basis for granting rehearing of the decision on institution. According to the Director, the only appropriate time for a petitioner to offer a stipulation related to the Fintiv factor 4 analysis is prior to the Board’s decision of whether to institute review (NXP USA, Inc. v. Impinj, Inc., September 7, 2022, Paper 13).

Impinj, Inc. owns U.S. Patent No. 10,776,198 B1 (the ’198 patent) relating to radio frequency identification ("RFID") technology. On April 21, 2022, the Board declined to institute inter partes review (IPR) of claims 1-20. NPX filed a request for rehearing of the decision denying institution. The request included three exhibits relating to pending district court litigation between the parties involving the ’198 patent, among others.

On August 25, 2022, the Board denied NPX’s request for rehearing, in view of Apple Inc. v. Fintiv, Inc., IPR2020-00019, (PTAB Mar. 20, 2020) (Fintiv) (precedential). Among the matters raised by the petitioner was the Board’s prior analysis of Fintiv factor 4, which concerns “overlap between issues raised in the petition and in the parallel proceeding.” The Board found that the petitioner failed to offer “any explanation or justification as to why its stipulation is being offered so late in this proceeding.” The Board also noted that the Board’s precedent on stipulations was issued “long before” the petition was filed, and that the petitioner could have offered this stipulation prior to the Board’s decision denying institution, but chose not to.

Director Vidal instituted sua sponte review of the Board’s decision “to address the limited question of whether the Board may reconsider a decision to deny institution based on a stipulation filed after the institution decision is made.”

Director Vidal concluded that the Board correctly determined that a stipulation—offered by a petitioner for the first time after a decision denying institution—is not a proper basis for granting rehearing of the decision on institution. Director Vidal noted that the Office’s Interim Procedure for Discretionary Denials in AIA Post Grant Proceedings with Parallel District Court Litigation (June 21, 2022) (“Guidance Memo”) states that “the PTAB will not discretionarily deny institution of an IPR or PGR in view of parallel district court litigation where a petitioner stipulates not to pursue in a parallel district court proceeding the same grounds as in the petition or any grounds that could have reasonably been raised in the petition.” But even before the Guidance Memo, this form of stipulation has been found by prior panels to influence Factor 4 such that it weighs in favor of instituting trial. The Director explained that this policy mitigates concerns of potentially conflicting decisions and duplicative efforts between the district court and the Board. “Permitting a petitioner to wait and see if the Board denies institution under Fintiv, and then offer such a stipulation for the first time on rehearing, frustrates these goals and would open the door to gamesmanship,” Director Vidal said. “I therefore hold that the only appropriate time for a petitioner to offer a stipulation related to the Fintiv factor 4 analysis is prior to the Board’s decision of whether to institute review.”

The case is IPR No. 2021-01556.

Attorneys: Matthew W. Johnson (Jones Day) for NPX USA, Inc. Daniel Keese (Perkins Coie LLP) for Impinj, Inc.

Companies: NPX USA, Inc.; Impinj, Inc.

News: Patent USPTO