The Pendulum of Fintiv in Motion

On February 28, 2025, the USPTO announced that it was rescinding a 2022 memorandum issued by former USPTO Director Kathi Vidal, entitled “Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation,” which had curtailed discretionary denials of PTAB post-grant proceedings. The February 2025 announcement directs parties to refer to PTAB precedent for guidance, including the decisions in Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) and Sotera Wireless, Inc. v. Masimo Corp., IPR2020-01019, Paper 12 (PTAB Dec. 1, 2020). The announcement further indicates that, to the extent any PTAB or Director Review decisions relied on the 2022 memorandum, the portions of those decisions shall not be binding or persuasive on the PTAB.

In Fintiv, the PTAB set forth six factors to consider when deciding whether to institute post-grant proceedings in view of a parallel district court litigation:

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.

After Fintiv, the rate of discretionary denials under 35 U.S.C. § 314(a) surged—until the PTAB’s decision in Sotera. In Sotera, the PTAB weighed in favor of not exercising its discretion to deny institution if a petitioner stipulates that it will not pursue a parallel district court litigation on any ground raised or that could have been reasonably raised in the post-grant proceeding. The Sotera decision resulted in additional variations of stipulations, with varying degrees of restrictions. The so called “Sotera Stipulation” is the broadest of the stipulations and mirrors the estoppel language of 35 U.S.C. § 315(e). Other variations include the narrower “Sand Revolution Stipulation” from Sand Revolution II, LLC v. Cont’l Intermodal Group-Trucking LLC, IPR2019-01393, Paper 24 (PTAB June 16, 2020), in which the petitioner stipulates that it will not raise the same invalidity grounds it pursued in the IPR petition in the district court case. Parties have also tried additional narrow stipulations tied to art selected for the IPR grounds. The narrower stipulations have been used with varying success in getting institution despite Fintiv arguments from patent owners.

To provide clarity to the parties on how the Fintiv and Sotera cases would be applied going forward, the 2022 memorandum sought to “strike[] a balance among the competing concerns of avoiding potentially conflicting outcomes, avoiding overburdening patent owners, and strengthening the patent system by eliminating patents that are not robust and reliable.” The 2022 memorandum limited the PTAB’s application of Fintiv by instructing the PTAB to not deny institution of a post-grant proceeding in the following scenarios:

1. When a petition presents compelling evidence of unpatentability;
2. When a request for denial under Fintiv is based on a parallel ITC proceeding;
3. Where a petitioner stipulates not to pursue in a parallel district court proceeding the same grounds as in the petition or any grounds that could have reasonably been raised in the petition; and
4. When the median time-to-trial of a parallel district court proceeding is around the same time or after the projected statutory deadline for the PTAB’s final written decision, the PTAB will weigh this factor (Fintiv factor two) against exercising discretion to deny institution.

Following this 2022 memorandum, rates of discretionary denials at PTAB dropped significantly. That was, until the former USPTO director issued a precedential opinion in CommScope Technologies LLC v. Dali Wireless, Inc., IPR2022-01242, Paper 23 (PTAB Feb. 27, 2023), which clarified the application of the “compelling evidence/merits” analysis under Fintiv factor six and referenced her 2022 memorandum. The CommScope decision clarified that the compelling merits should only be considered if Fintiv factors one through five favored discretionary denial. In other words, the CommScope decision indicated that the compelling merits analysis under Fintiv factor six is not to be considered to the exclusion of all other factors. The CommScope decision resulted in a significant upswing of discretionary denials, with the focus of the analysis shifting back to all the Fintiv factors instead of just the compelling merits. 

The Office’s decision to rescind the 2022 memorandum formally restoring the PTAB’s broader discretion under Fintiv may provide insight into the mindset of the Office and a desire to keep the rates of discretionary denials higher.