Fintiv Not a Single Step Framework
USPTO Director Vidal has issued a number of sua sponte Director decisions since her arrival. I haven’t bothered discussing them here as the majority are directed to rather unique 314(a) fact patterns that are unlikely to repeat going forward.
Today, in Commscope Technologies LLC v. Dali Wireless the Director issued her most recent decision on 314(a) practices. This decision, while similar in character to the previous decisions, shows the Director’s interest in assuring that her 314(a) framework is correctly followed.
As a reminder, Director Vidal adjusted 314(a) practices via memo. Denials under 314(a) are now far less common. However, where there is an imminent trial date in a district court, and no Sotera stipulation, a full Fintiv analysis is still required. In that analysis, if the first 5 factors (steps 1-5) weigh in favor of a discretionary denial, trial may still be instituted where the petition is especially compelling on the merits (step 6).
Today’s Director decision (here), explains that the Board may not omit analysis of Fintiv steps 1-5. That is, when determining whether to institute an AIA Trial Proceeding consistent with 314(a) Board panels should first assess Fintiv factors 1-5; only if that analysis favors discretionary denial should the Board should then engage the compelling merits question at step 6.
In this case, the panel pointed out that there was a compelling showing (step 6) without going through steps 1-5. Maybe because steps 1-5 wouldn’t matter where the showing was compelling. While that conclusion would make perfect sense, the Director appears to prefer that the Board nevertheless show its work relative to steps 1-5. Likewise, the Director wants to be clear that in parallel scenarios where there is no stipulation, her memo did not reduce Fintiv to step 6 only., explaining:
My Guidance Memo (Guidance Memo at 5) states that “the PTAB will not deny institution based on Fintiv if there is compelling evidence of unpatentability.” Although I now recognize that this instruction could be read to allow for a compelling merits determination as a substitute for a Fintiv analysis, that was not my intent. By that instruction, I intended for PTAB panels to only consider compelling merits if they first determined that Fintiv factors 1–5 favored a discretionary denial.
(Note: The institution decision is silent as to whether skipping to step 6 was meant as a short cut, or a belief that Fintiv was altered in by the memo).
Secondarily, the Director points out that the Board must explain the compelling case without relying on portions of its opinion that apply the lower standard for institution for review purposes.
On remand back to the Board, one would expect the Fintiv steps to be explained without any change in the ultimate institution outcome. To my eye, this was more about sending a message to the APJs to clarify what was intended by the memo vis-à-vis step 6, and on the expected amount of Fintiv analysis.
The take away for practitioners –for those rare cases that might fall into this category going forward– is that the Board is going to have to spend more effort in explaining its 314(a) analysis where there is no Sotera stipulation. For petitioners, more effort for institution is not a good thing. Just another reason to file the Sotera stipulation (appropriately worded)