Sand Revolution II, LLC v. Continental Intermodal Group – Trucking LLC

Informative decision only: persuasive authority, not binding precedent. When a parallel district court trial date is uncertain because the schedule has repeatedly been extended and carries an "or as available" qualifier, the court and parties have invested little in the invalidity merits, the petitioner stipulates not to pursue the petition's grounds in court, and the merits appear strong, the Board may decline to exercise discretion under 35 U.S.C. § 314(a) to deny institution after weighing the six Fintiv factors holistically. On such a record, the Board granted rehearing of an NHK-based denial and instituted review. The Board applied the Fintiv factors (Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (March 20, 2020) (precedential)) to a case it had initially denied under NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential), and found the circumstances distinguishable from NHK on the evolving record. For petitioners, the decision shows that evidence of a shifting trial schedule, thin court investment in invalidity, a Sotera-style narrowing stipulation (here, not pursuing the same grounds), and strong merits can defeat discretionary denial, and that a broader stipulation might have helped more. For patent owners, a scheduled trial date before the final written decision deadline and a same-party defendant are not enough, and the Board will scrutinize the claim that the schedule is firm and who sought extensions. The decision cites In re Gartside, 203 F.3d 1305, 1315-16 (Fed. Cir. 2000), for the abuse-of-discretion standard on rehearing and SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348 (2018), for instituting on all challenged claims. LEGAL TEST OR STANDARD: Rehearing is reviewed for abuse of discretion (37 C.F.R. § 42.71(c)). The Board applied the Fintiv nonexclusive factors: 1. whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted; 2. proximity of the court's trial date to the Board's projected statutory deadline for a final written decision; 3. investment in the parallel proceeding by the court and the parties; 4. overlap between issues raised in the petition and in the parallel proceeding; 5. whether the petitioner and the defendant in the parallel proceeding are the same party; and 6. other circumstances that impact the Board's exercise of discretion, including the merits. These are weighed in a holistic view of whether efficiency and integrity of the system are best served by denying or instituting review. TRIGGERING FACTS: No stay was requested or ordered, so factor 1 was neutral. The trial date moved repeatedly (April 27, 2020 to July 20, 2020 to September 28, 2020 to November 9, 2020 to February 8, 2021), each marked 'or as available', through joint motions after the denial, so factor 2 weighed marginally against denial. The court had issued only a two-page Markman order, with fact discovery ongoing and expert reports and substantive motions still to come (factor 3 weighed marginally, if at all, for denial). Petitioner stipulated not to pursue the same grounds in district court (factor 4 marginally against denial). Parties were the same (factor 5 favored denial). The merits were strong (factor 6 against denial). KEY QUOTE: "Considering the Fintiv factors as part of a holistic analysis, we are not persuaded that the interests of the efficiency and integrity of the system would be best served by invoking our authority under 35 U.S.C. § 314(a) to deny institution of a potentially meritorious Petition." (Paper 24, p. 14) PRIOR PRECEDENT AFFECTED: Follows and applies Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (March 20, 2020) (precedential), and distinguishes NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential), on which the Denial Decision relied. Also notes General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper 19 (PTAB Sept. 6, 2017) (precedential as to § II.B.4.i), does not apply because no other petitions were filed. Cites Fintiv, Paper 15 (May 13, 2020) (non-precedential), as a comparison. PRACTICE TIP: When opposing discretionary denial, support the argument with evidence: docket entries showing schedule extensions and 'or as available' trial dates, the extent of the court's investment in invalidity, and a stipulation. Consider a stipulation broader than the petition's grounds (any ground that could reasonably have been raised in an IPR) or an express waiver in district court, which the Board said might tip the overlap factor more conclusively. Also show the merits are strong.