Apple Inc. v. Fintiv, Inc.

When a patent owner argues under 35 U.S.C. § 314(a) that institution should be denied because of an earlier trial date in a parallel district court case (NHK), the Board may authorize supplemental briefing and must weigh six factors holistically: (1) whether a stay was granted or may be granted if instituted; (2) proximity of the trial date to the projected statutory deadline for a final written decision; (3) investment in the parallel proceeding by the court and parties; (4) overlap of issues; (5) whether petitioner and defendant are the same party; and (6) other circumstances, including the merits. NHK applies where trial is set before the Board's final written decision deadline, and the Board may be less likely to deny where trial is set after that deadline. The Order clarifies NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 (precedential), by explaining that NHK applies to a trial date earlier than the Board's final written decision deadline, and by collecting the Board's case-by-case practice into a six-factor framework; it also follows Abbott Vascular in declining a bright-line rule. Petitioners facing a parallel case must now build a record on each factor, including stay prospects, diligence in filing, overlap of grounds and claims, and the strength of the merits, and may get a reply to the preliminary response for this purpose. Patent owners may press an early trial date, claim construction orders and other substantive court orders, identical grounds, and unexplained petitioner delay, though no single fact is dispositive. The Order cites no Federal Circuit authority binding on the discretionary analysis; it cites Texas Instruments v. Cypress Semiconductor Corp., 90 F.3d 1558 (Fed. Cir. 1996), only for the point that ITC invalidity determinations are not preclusive. LEGAL TEST OR STANDARD: The Board balances these 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. The Board takes a holistic view of whether efficiency and integrity of the system are best served by denying or instituting review. TRIGGERING FACTS: The patent owner raises NHK discretionary denial based on an earlier district court trial date. Here the petition was filed October 28, 2019, no trial date was set at filing, a scheduling order later set trial for November 16, 2020, about six months before the projected final written decision deadline, claim construction had issued, and the patent owner asserted identical claims and arguments. The petitioner must address stay prospects, filing timing, overlap, party identity and the merits. KEY QUOTE: "Therefore, in evaluating the factors, the Board takes a holistic view of whether efficiency and integrity of the system are best served by denying or instituting review." (Paper 11, p. 6) PRIOR PRECEDENT AFFECTED: Clarifies and applies NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential, designated May 7, 2019), stating that it applies where trial precedes the final written decision deadline. It follows Abbott Vascular, Inc. v. FlexStent, LLC, IPR2019-00882, Paper 11 (PTAB Oct. 7, 2019) in declining a bright-line rule, and cites Polycom, Inc. v. directPacket Research, Inc., IPR2019-01233, Paper 21 (PTAB Jan. 13, 2020) and Iconex, LLC v. MAXStick Products Ltd., IPR2019-01119, Paper 9 (PTAB Dec. 6, 2019) where trial follows the statutory deadline. PRACTICE TIP: In any case with a parallel district court or ITC case, address all six factors with record facts, not just trial date. Petitioners should explain filing timing, offer evidence on stay prospects, and show differences in grounds and claims, ideally in the petition. Patent owners should raise the issue in the preliminary response with facts on trial date, court investment and overlap.