Patent Owner’s Delay in District Court Causes the PTAB to Reverse Course and Grant a Rehearing and a Trial After Initial Denial

The Board made a rare reversal of an institution decision – turning a denial of institution into trial in Sand Revolution v . Continental Intermodal Group-Trucking, IPR2019-01393, Paper 24 (PTAB June 16, 2020). The denial had been based on NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential).

After the denial, Petitioner filed a rehearing and a POP request. The POP request was denied. And before deciding the rehearing, the Board requested supplemental briefing based on the evolving facts of the case. In the end, rather than relying on NHK, the Board relied on Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (March 20, 2020) (precedential) and instituted trial. For example, each side was required to brief the Fintiv factors:

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 for a final written decision;
3. investment in the parallel proceeding by the court and the 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

One factor leading to granting rehearing was the “evolving schedule, which indicates a continuing degree of recognized uncertainty of the court’s schedule by the court. Ex. 2004 (original trial date was Apr. 27, 2020, changed to July 20, 2020 (or as available)); Ex. 1012 (updated trial date of Sept. 28, 2020 (or as available) changed to Nov. 9, 2020 (or as available)). Since the parties’ supplemental briefing and evidence was submitted on April 13, 2020, the district court again amended its scheduling order in the related litigation; the jury trial is now indicated as scheduled to begin ‘February 8, 2021 (or as available).”’

The Board also noted that, unlike the District Court “barring exceptional circumstances, the Board adheres to a one-year statutory deadline prescribed by 35 U.S.C. § 316(a)(11) for entry of final decisions in instituted inter partes reviews. And, even in the extraordinary circumstances under which the entire country is currently operating because of the COVID-19 pandemic, the Board continues to be fully operational. See Ex. 1013. The Board’s judges and staff continue to operate on their normal schedules, albeit remotely, and Board oral hearings continue to be conducted on schedule.” So the Board’s schedule was more certain than the district court.

Going through the factors the Board noted many were close calls, but tended to side with Petitioner that institution was warranted.

Finally, the Board stated “we consider six factors when taking ‘a holistic view of whether efficiency and integrity of the system are best served by denying or instituting review.’ Fintiv, Paper 11 at 6. For the reasons discussed above, the Fintiv factors weigh against invoking our discretion to deny institution. Considering the Fintiv factors as part of a holistic analysis, we are not persuaded that the interests of the efficiency and integrity of the system would be best served by invoking our authority under 35 U.S.C. § 314(a) to deny institution of a potentially meritorious Petition.”

This appears to be an extension of the global pandemic and lends itself to showing that it may be harder and harder for patent owner’s to obtain denial under NKH in the near future.