According to new data from Unified Patents, the rise in discretionary denials at the PTAB is showing no signs of slowing down. In 2019, there were 6 denials based on co-pending litigation (so-called § 314(a) or Fintiv denials). In these denials, the PTAB decides not to institute an inter partes review based primarily on related litigation in the district courts or at the ITC, not based on the merits of the challenge to the patent. (In fact, in some cases, they admit that the challenge is “particularly strong”—and then still deny the challenge.)
In 2020? There were 85. And now, in just the first quarter of 2021, there have already been 43 denials. That represents a doubling of the pace of denials based on co-pending litigation from 2020, assuming the pace doesn’t increase even further during the rest of the year.
And those denials mostly benefit NPEs who don’t make a single product. Most of these denials are associated with patents asserted in the Western or Eastern District of Texas. And in those districts, cases generally involve NPEs—90 percent of cases in the Eastern District and 85 percent in the Western. Just recently, Intel was hit with a $2.1 billion dollar verdict based on VLSI patents that were challenged at the PTAB. The reason those patents weren’t reviewed? Fintiv denials—just one example of the harm that the increasing use of these denials can bring.
It doesn’t always work out in favor of the NPE—witness yesterday’s complete non-infringement verdict in favor of Intel in a second VLSI trial—but NPEs certainly have seen 2.1 billion reasons to keep pushing for discretionary denials.
There may be light on the horizon—in a recent discussion, Acting USPTO Director Drew Hirschfeld indicated that the Office is currently reviewing the more than 800 comments they received on discretionary denials and considering what changes might need to be made to restore balance to the PTAB.