Snap, Inc. v. SRK Technology LLC

When the parallel district court proceeding is stayed, the Board applying the Fintiv factors may find that the stay allays concerns about inefficiency, duplication of effort and conflicting decisions, so that the first Fintiv factor "weighs strongly against exercising discretion to deny institution" under § 314(a). Speculation that the court would lift the stay and try the case before a final written decision is due does not shift the second factor toward denial. A stay can also outweigh claim overlap in the fourth factor, because the Board will likely address patentability before the district court reaches invalidity at trial. The decision applies the six-factor framework of Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB March 20, 2020) (precedential, designated May 5, 2020) to a case where the district court has stayed the litigation. It builds on NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential), where a stay has weighed strongly against denial. For petitioners, a stay is a strong basis to oppose discretionary denial. It also lets a petitioner treat a patent owner's prediction of an accelerated trial as unfounded speculation, and a petitioner can rely on the stay even where the petition and the invalidity contentions overlap. For patent owners, a bare prediction that the court will resume and "tighten up" the schedule if institution is denied will not carry the first and second factors. Delay in filing and claimed secondary-considerations discovery also failed to carry the argument. The Board relied on Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016), SAS Inst., v. Iancu, 138 S. Ct. 1348 (2018), and Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356 (Fed. Cir. 2016) for the Director's discretion under § 314(a). LEGAL TEST OR STANDARD: The Board applied the 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. The Board takes a holistic view and no single factor is determinative. TRIGGERING FACTS: The district court case had been stayed by joint stipulation in April 2020, and Petitioner said the stay would last until a final written decision. Before the stay the court had held only a scheduling conference in November 2019 and issued no claim construction or other substantive orders. The petition was filed April 8, 2020, a year after suit began, but Patent Owner had not responded to the January 31, 2020 invalidity contentions. The petition relied on art (Araki, Trewin) absent from those contentions, and the same-party factor was neutral or slightly favored denial. KEY QUOTE: "We agree with Petitioner that the District Court's stay of the litigation pending denial of institution or a final written decision allays concerns about inefficiency and duplication of efforts." (Paper 15, p. 9) PRIOR PRECEDENT AFFECTED: Follows and applies Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB March 20, 2020) (precedential, designated May 5, 2020), and NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential), under which a stay has weighed strongly against denial. On the separate § 325(d) issue it applies Advanced Bionics, LLC v. MED-EL Elektromedizinische Geräte GmbH, IPR2019-01469, Paper 6 (PTAB Feb. 13, 2020) (precedential), and Becton, Dickinson & Co. v. B. Braun Melsungen AG, IPR2017-01586, Paper 8 (PTAB Dec. 15, 2017) (precedential as to Section III.C.5, first paragraph). PRACTICE TIP: Petitioners facing a Fintiv argument should get a stay entered or document that one is in place or likely, submit the stipulation or order as evidence, and use it to answer arguments on the second, third and fourth factors. Patent owners should offer concrete evidence about how the court would proceed rather than speculation.