On Feb. 28, 2025, the U.S. Patent and Trademark Office (USPTO) rescinded a memorandum issued by former Director Kathy Vidal (the “Fintiv Memo”), which, since June 21, 2022, provided guidance on when the Patent Trial and Appeal Board (PTAB) may discretionarily deny post-grant review (PGR) or inter partes review (IPR).
PGRs and IPRs are trial proceedings before the PTAB (as opposed to a federal district court) to challenge the validity of one or more claims in a granted patent. A PGR is used to challenge a patent based on a wide range of grounds such as written description, enablement, subject matter eligibility and public use, while an IPR is generally limited to arguments of anticipation and obviousness based on printed prior art publications.
Neither a PGR nor IPR may be pursued as a matter of right. Rather, the PTAB reviews a party’s petition and decides whether to “institute” the proceeding. This is akin to the U.S. Supreme Court’s handling of appeals from the lower courts, whereby appellants petition the Supreme Court for the right to appeal (i.e., submit a writ of certiorari for review). The PTAB is no different.
For many years, the only guidance on how the PTAB exercised its discretion to institute proceedings came from two precedential opinions. In Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020), the PTAB identified six nonexclusive factors for evaluating whether efficiency, fairness and the merits supported declining an IPR in favor of a co-pending district court litigation. In Sotera Wireless, Inc. v. Masimo Corp., IPR2020-01019, Paper 12 (PTAB Dec. 1, 2020), the PTAB further established that entering a stipulation limiting the invalidity grounds the petitioner could pursue in district court weighed strongly against denial of institution.
In the wake of Fintiv and Sotera, Director Vidal issued the Fintiv Memo establishing guidance on how the PTAB was to apply Fintiv and Sotera, with the stated goal of minimizing inefficiency, gamesmanship and the risk of conflicts between PTAB and district court decisions. The Fintiv Memo also identified “safe harbors” where cases would not be denied.
On Feb. 28, 2025, however, the USPTO rescinded the Fintiv Memo, stating that any prior PTAB decisions relying on the memo are neither binding nor persuasive on future decisions. As a result, the PTAB has greater flexibility in exercising its discretion to deny PGR and IPR petitions, which may lead to more discretionary denials. In other words, challenging the validity of a patent through either a PGR or IPR may have become more difficult. It remains unclear whether further guidance regarding discretionary denials is forthcoming, or whether Fintiv and Sotera remain the final word on the issue.
