On Monday, the PTAB made clear that the ultimate outcome of the Fintiv rule championed by Director Iancu is the elimination of inter partes review (IPR) as a viable alternative to challenging patents in litigation. RAI sued Philip Morris on April 9th, 2020. Less than a month later, on May 8th, 2020, Philip Morris filed a petition for IPR against three of the asserted patents. (When I was in practice, I worked on a number of IPRs. Filing a petition in less than a month is an impressively diligent feat—typically it takes six to nine months to file a petition.)
Monday, the PTAB denied two of the three petitions for IPR. (The third petition was instituted, despite being in the exact same procedural posture, without any discussion of these issues.)
Here’s what the PTAB judges said about the petition as they denied it:
“Petitioner has demonstrated that the Office erred in a manner material to the patentability of challenged claims.”
“The merits of Petitioner’s three grounds are particularly strong on the preliminary record.”
But at the end of the day?
“… the anticipated EDVA trial between the same parties eight to nine months before the projected statutory deadline outweighs slightly the factors that favor institution, including Petitioner’s diligence in filing the Petition, the strength of the Petition on the merits, the relatively modest investment in the district court action to date, and the lack of exact overlap based on Petitioner’s narrow stipulation.”
Initial trial dates are often delayed (even when there isn’t a pandemic.) And Congress intended the PTAB to serve as an alternative to litigation over validity, not to only be available if there was no co-pending litigation.
Despite this, the PTAB decided that an early trial date outweighs all other considerations. That includes a petition being filed within a month of being sued, 11 months before the statutory bar date. That includes a petition which the PTAB panel explicitly found to be “particularly strong on the merits.” And that includes the fact that the district court hasn’t made any significant effort or investment into the case to date. The PTAB is elevating the presence of a trial date—a date that is often delayed—over all other considerations, including the critical fact that the PTAB thinks that the patent is likely invalid.
What that means is that any plaintiff filing in a district which sets an aggressive time to trial—districts like the Eastern and Western Districts of Texas, home of NPEs, and the Eastern District of Virginia, home to this case—can ensure that no matter how quickly a defendant gets its petition together, no matter how invalid the patent appears to be, the PTAB will refuse to hear the case. That’s not what Congress intended, and that’s not good for the patent system.
This decision makes clear what the underlying goal of the Fintiv rule is—eliminating meaningful access to IPR. So why is the USPTO Director trying to force through an eleventh-hour rule that would enshrine Fintiv into regulation?