POP to Decide Further Extension of 314(a)?

A year or so back, I discussed a 314(a) dispute at the Patent Trial & Appeal Board (PTAB) where the Board considered a co-pending ITC investigation. In that decision, the Board instituted trial, pointing out that “the ITC does not have the authority to invalidate a patent and ITC decisions do not necessarily pertain to the issues raised in an inter partes review petition.”  More recently the applicability of ITC investigations to a Fintiv factor 314(a) analysis was raised in Garmin International, Inc. v. Koninklijke Philips N.V., (IPR2020-00754).

In Garmin, the Board found that a co-pending ITC investigation favored a denial of institution. The case is noteworthy as in assessing the Fintiv factors, the Board effectively made clear that any petition concurrent with an ITC filing should be denied.

Now the dispute is up for consideration by the Precedential Opinion Panel (POP).

First, the Fintiv factors relied upon by the Board (here) to deny institution will be present in any ITC proceeding:

1. Lack of a likely stay (stays of actions prior to ITC trial are never granted)

2. Proximity of trial date (even if filing the day the action is filed (very unlikely), you will still be 6+ months into the ITC at time of institution)

3. Investment of issues by the  forum (ITC actions are intensive from the start)

4. Overlap in issues (The best art will be used in both proceedings by definition)

5.  Same parties (always)

6.  Other?

So, although the Board may take the position that each decision is specific to its facts, 5 out of 6 of the Fintiv factors above will always prevent institution where an ITC case is co-pending with a PTAB petition – which I flagged as a potential concern in 2018.

Perhaps most troubling in this specific case is the fact that the decision recognized the petition grounds as “strong” (under Factor 6).  This is not surprising as similar claims have been invalidated around the world in the opposition proceedings of other countries (as explained in the record). So, the agency is effectively deciding that potentially excluding products from the U.S. (which affects the public) is in the best interest of the patent system even for a demonstrably weak patent. Further, the ITC decision on validity is not preclusive, and there would be a second lawsuit (currently stayed) to get damages on the very same patent.

Considering the strength of the grounds, and the fact that the ITC looks to PTAB records for guidance, and has suspended enforcement where a FWD issues, there appears to be plenty for the POP to consider. Indeed, PTAB estoppel was extended to the ITC for the first time in the AIA (it did not apply in inter partes patent reexamination).  On top of that, the one-year bar of 315(b) was only written to cover civil actions, which the ITC is not.  So, there is ample evidence that Congress fully considered the ITC in fashioning the AIA, and decided that the PTAB should move forward, even a year after an ITC action is filed.

As I have pointed out previously, it makes sense for an expert agency to exercise discretion within its expertise.  But accepting/denying petitions based upon what is perceived to be “best interest of the patent system” swallows the entirety of the AIA framework, and naturally results in 100+ judges issuing conflicting assessments of what is best for the patent policy of the U.S..  This is exactly why the agency has been sued. Hopefully, the pending APA litigation will soon rectify this growing problem.

The extension of 314(a) began as noble endeavor to combat follow-on petitions (a topic that suits the expertise of the agency), unfortunately it is now being used to rewrite statutes.