Apple Inc. v. Fintiv, Inc.

Informative decision only: persuasive authority, not binding precedent. When a patent owner raises the advanced state of a parallel district court case, the Board may deny institution under 35 U.S.C. § 314(a) after holistically weighing the six factors from the Precedential Order (Paper 11): stay, trial date proximity to the final written decision deadline, investment, overlap of issues, same party, and other circumstances including the merits. Here, trial was set two months before the final decision deadline, the identical claims and same art were at issue, and Apple was the defendant, so institution was denied. The decision applies the factors from the Precedential Order in this case (Paper 11) and cites NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential, designated May 7, 2019), as treating an earlier trial date as favoring denial. For petitioners, a petition filed months after infringement contentions, with the same claims and art in the court case, can be denied even within the one-year bar of 35 U.S.C. § 315(b), and the Board acknowledged petitioners may have to act faster than the maximum time Congress allowed. Additional art in district court contentions, or an undecided plan to use the petition art at trial, does not reduce overlap. For patent owners, the decision confirms they can seek denial by pointing to the parallel case's progress, identical claims and art, and merits weaknesses that make the petition a close call. The Board relied on Cuozzo Speed Techs., LLC v. Lee, 579 U.S. __, 136 S. Ct. 2131, 2140 (2016), for Congress giving the Director discretion to deny institution under § 314(a). LEGAL TEST OR STANDARD: The Board considers the factors in the Precedential Order: 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: Fintiv sued Apple in W.D. Tex. in December 2018. Apple filed its petition on October 28, 2019, five months after receiving infringement contentions and ten months after service, and before a trial date was set. The court then set trial for November 16, 2020, later moved by agreement to March 8, 2021, about two months before the final written decision deadline. Claim construction was complete, final contentions were exchanged, and fact discovery was ongoing. The same claims and same art were challenged in both forums, and Apple was the defendant. No stay was requested, so factor 1 was neutral. The merits showed weaknesses in the challenges to claims 11 and 18, and the Board expressed no opinion on claim 23. KEY QUOTE: "We generally take courts' trial schedules at face value absent some strong evidence to the contrary." (Paper 15, p. 13) PRIOR PRECEDENT AFFECTED: Follows and applies the Precedential Order, Paper 11, in this case, and cites NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential, designated May 7, 2019), as considering an earlier trial date a factor favoring discretionary denial. PRACTICE TIP: Petitioners should file early, ideally before the parallel court case advances. In the petition, address each of the six factors and the stage of the court case. Consider a Sotera-style stipulation or other showing to reduce overlap. Do not rely on extra district court art or an undecided trial strategy to show non-overlap, and point to particular strengths in the merits.