Additional Briefing Invited on Binary Application of NHK

Last week I pointed out that the litigation timing factor introduced by NHK Spring Co. Ltd. v. Intri-Plex Technologies Inc., has effectively swallowed the entirety of the General Plastic factors in NHK scenarios. That is, in some recent Board decisions, institution has been declined in AIA Trial Proceedings on the sole basis that a district court litigation would reach trial first. Given the AIA has its own timing mechanism, 35 U.S.C. § 315(b), and plaintiffs seeking to avoid the PTAB need only go to the WDTX (where NPEs tend to go anyway) to leverage this development, this is a troublesome development for the system.

In that same post, I pointed out that a request was made to the Precedential Opinion Panel (POP) to review the Board’s application of NHK (Sand Revolution II LLC., v. Continental Inter Modal Group – Trucking LLC. (IPR2019-01393). While that request was denied, the very next day, the panel in Sand Revolution ordered supplemental briefing on this important topic.

The Order (here) explains that the application of NHK is also being reviewed in Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020), and, as such the parties should brief the “Apple Factors,” identified as:

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.

Factors 1-4 are not necessarily new in this context. Factor 1 may not be a factor at all in some cases (i.e., if the case is stayed, there is no trial date and NHK is not an issue). As some courts will not stay a case until institution, this factor boils down to whether an earlier motion was denied with prejudice, or remains outstanding.

I never found factor 4 especially insightful. There will always be a degree of overlap, whether common claims, common claim terms or the common application of the strongest pieces of prior art; consistency should be expected.

Factor 6 has been applied by some panels, noting the perceived strength of a petition. (see dissent in Sand Revolution). In my view, factors 2-3 and 5-6 are the most balanced in this context, with perhaps the addition of factors directed to litigation realities.

The Order notes that the factors are not exclusive, and, for example, the Board would also consider movement in the district court schedule since the filing of the petition. Additional factors might include: the number of times the patent has been asserted in the past; relatedly, the nature of the Patent Owner’s business (i.e., is it solely a licensing entity); and the degree to which the subject patent has related prosecution currently before the agency.

You can find the Sand Revolution brief (here). CIG brief (here)

Stay tuned.

Scott A. McKeown is an author of the Patents Post Grant