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Petitioner's District Court Stipulation Results in PTAB Trial Institution Under the PTAB's Fintiv Analysis

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Sterne, Kessler, Goldstein & Fox

In December 2020, the Patent Trial and Appeal Board’s (“PTAB” or “Board”) designated an opinion as precedential (Sotera Wireless, Inc. v. Masimo Corporation),[i] where the Board instituted trial, i.e., did not exercise its discretion to deny institution under 35 U.S.C. § 314(a), after carefully considering the unique facts of a parallel district court proceeding. Specifically, the Board applied the Fintiv factors to ultimately determine that, because Petitioner had filed a stipulation in district court, instituting trial would still preserve the efficiency and integrity of the patent system.

The Fintiv Factors:

In March 2020, the PTAB set forth six Fintiv factors governing the exercise of its discretion to deny institution of a post-grant proceeding in view of a parallel district court or ITC litigation.[ii] The Fintiv factors aim to preserve the efficiency and integrity of the patent system and require the Board to look at circumstances outside the USPTO when determining whether to deny a PTAB petition.

The six Fintiv factors include:

  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;
  3. Investment in the parallel proceeding by the court and 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.[iii]

Sotera Wireless, Inc. v. Masimo Corporation:

In June 2019, Sotera (“Patent Owner”) filed a complaint against Masimo (“Petitioner”) in district court alleging infringement of U.S. Patent No. RE47,353 (the ’353 patent). In May 2020, Sotera filed a petition requesting inter partes review of the ’353 patent. After Patent Owner filed its Preliminary Patent Owner Response (POPR), the Board allowed each party to file additional briefing to address the Fintiv factors.

Before filing its additional briefing at the PTAB, Petitioner filed a stipulation in the district court stating, that if the PTAB institutes inter partes review, it “will not pursue in [the District Court] the specific grounds [asserted in the inter partes review], or on any other ground . . . that was raised or could have been reasonably raised in an IPR (i.e., any ground that could be raised under §§ 102 or 103 on the basis of prior art patent or printed publications).”[iv]

The Board’s institution decision explained that “Petitioner’s stipulation here mitigates any concerns of duplicative efforts between the district court and the Board, as well as concerns of potentially conflicting decisions . . . Importantly, Petitioner broadly stipulates to not pursue ‘any ground raised or that could have been reasonably raised.”[v] The Board then concluded that “Petitioner’s broad stipulation ensures that an inter partes review is a ‘true alternative’ to the district court proceeding” and this weighs “strongly in favor of not exercising discretion to deny institution under 35 U.S.C. § 314(a).”[vi]

After walking through each of the other Fintiv factors and taking a “holistic view of whether efficiency and integrity of the system are best served by denying or instituting review,” the Board ultimately determined that the parties had expended a “relatively limited investment in the parallel proceeding to date” and that “the timing of the Petition was reasonable.”[vii] The Board instituted trial against the ’353 patent.
 
Practice Tip: Parties should be aware that actions taken in a parallel proceeding, including a Masimo-like stipulation, may carry significant weight at the PTAB and can influence the Board’s decision whether or not it should exercise its discretionary power under § 314(a).


[i] Sotera Wireless, Inc. v. Masimo Corporation, IPR2020-01019, Paper 12 (PTAB December 1, 2020) (Precedential as to §II.A).

[ii] See Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB March 20, 2020) (Precedential).

[iii] Fintiv at 6.

[iv]  Sotera Wireless at 13-14.

[v] Id. at 19.

[vi] Id.

[vii] See id.at 14-20.


This article appeared in the January 2021 issue of PTAB Strategies and Insights. To view our past issues, as well as other firm newsletters, please click here.