Sotera Wireless, Inc. v. Masimo Corporation

When a petitioner files a district court stipulation that, if review is instituted, it will not pursue any ground raised or that could have been reasonably raised in an IPR (any §§ 102 or 103 ground based on patents or printed publications), the Board, applying the Fintiv factor 4 (overlap between issues in the petition and the parallel proceeding), finds that this broad stipulation mitigates duplicative effort and conflicting decisions and weighs strongly against exercising § 314(a) discretion to deny institution. Such a stipulation makes the IPR a "true alternative" to the district court case, and it is weighed within the holistic Fintiv assessment. The decision applies the Fintiv Order (Apple, Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11) and follows the informative Sand Revolution decision on stipulations. It does not overrule either. It treats a broad stipulation as weighing "strongly" against denial, not merely as a neutral point, and it clarifies that reserving §§ 101 and 112 defenses does not undercut the stipulation. For petitioners, a stipulation covering all grounds that could reasonably have been raised in an IPR can counter a parallel-litigation discretionary denial argument, even when the petitioner is the defendant and the trial date is near the final written decision deadline. For patent owners, arguing that a stipulation is unclear or leaves room for other references is weaker when the text expressly covers all §§ 102 and 103 patent and printed publication grounds. The Board relied on Cuozzo, SAS and Harmonic only for the point that § 314(a) discretion is permissive, not for the stipulation analysis. LEGAL TEST OR STANDARD: The Board weighs the six Fintiv 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. It then takes a holistic view of whether efficiency and integrity of the system are best served by denying or instituting review. TRIGGERING FACTS: Petitioner filed a stipulation in the S.D. Cal. case that if the PTAB institutes, it will not pursue the IPR grounds or any other ground that was raised or could have been reasonably raised in an IPR (any ground under §§ 102 or 103 based on prior art patents or printed publications). The stipulation preserved §§ 101 and 112 invalidity. Trial was set for Nov. 30, 2021, around the final decision deadline. The stay motion was undecided, Markman deadlines were vacated, and the petition came about two weeks before the statutory deadline with an explanation the Board found reasonable. The parties were the same, and the petition challenged all claims, not only those asserted in court. KEY QUOTE: "Accordingly, Petitioner's broad stipulation ensures that an inter partes review is a “true alternative” to the district court proceeding." (Paper 12, p. 19) PRIOR PRECEDENT AFFECTED: Applies the Fintiv Order, Apple, Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential), and NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential). Follows the informative decisions Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 (PTAB May 13, 2020) (informative) and Sand Revolution II, LLC v. Cont'l Intermodal Group – Trucking LLC, IPR2019-01393, Paper 24 (PTAB June 16, 2020) (informative), including its footnote 5 on broad stipulations. PRACTICE TIP: If you are a petitioner facing a Fintiv challenge, file a district court stipulation that expressly covers any ground that was raised or could have been reasonably raised in an IPR (all §§ 102 and 103 patent and printed publication grounds), and cite it under factor 4. If you are a patent owner, test the stipulation's wording for gaps, because an unequivocal broad stipulation will likely weigh strongly against denial.