SCOTUS Declines Challenge to NHK-Fintiv Rule

Loeb Patent Trial and Appeal Board (PTAB) Trials chair Brent Babcock is quoted in two articles by the World Intellectual Property Review (WIPR) discussing the Supreme Court’s decision to not overturn the NHK-Fintiv rule. The rule, which is favored by the PTAB, allows the U.S. Patent and Trademark Office to refuse patent challenges when there has been a parallel infringement case in another federal agency or court. According to lawyers interviewed by the publication, more challenges to the controversial directive are likely.

Many technology companies and generic drug manufacturers have pushed back against the NHK-Fintiv rule, arguing that it prevents their ability to seek inter partes reviews (IPRs) of patents under the America Invents Act. Brent predicts that in 2022, there will be a turning point in which the authority of the rule will begin to wane.

“The institution rate of IPRs will level out at around 60%, a slight increase from 2021 as discretionary denials under Fintiv decrease slightly,” Brent told WIPR. “While analysis will continue to provide administrative patent judges with considerable discretion to deny petitions based on co-pending litigation, it will place less emphasis on the scheduled trial date and more emphasis on the petitioner’s alacrity in filing the petition.”

Brent also anticipates that if Kathi Vidal is confirmed as head of the USPTO, her tenure could certainly impact discretionary denials. With Vidal in charge, Brent foresees that the PTAB will “finally promulgate rules on discretionary denial considerations, such as Fintiv,” he said.

In addition, Brent explained that the consistent downturn in discretionary denials can be attributed to the PTAB’s response to immense criticism to NHK-Fintiv, along with practitioners becoming more aware of discretionary denial issues. “The PTAB has now issued dozens of decisions applying the NHK-Fintiv factors, and by so doing, a modicum of predictability has returned to PTAB institutions,” he noted.