[author: Kristen Logan, Law Clerk]
Recently, the Supreme Court received two petitions for writ of certiorari challenging the NHK-Fintiv rule. The PTAB applies the NHK-Fintiv rule when deciding whether to grant institution of an inter partes review. The two petitioners, Apple and Mylan, seek to challenge both the lawfulness of the NHK-Fintiv rule and the Federal Circuit’s contention that it lacks the jurisdiction to review Board denials made under the NHK-Fintiv rule.
The NHK-Fintiv Rule
The NHK-Fintiv rule results from two precedential PTAB decisions, NHK Spring v. Intri-Plex and Apple v. Fintiv. In 2018, the Board held in NHK Spring v. Intri-Plex that a parallel district court litigation might preclude granting inter partes review. Then, in the 2020 Apple v. Fintiv decision, the Board laid out six factors relevant to the decision for instituting review. A few of those factors outline criteria related to parallel litigations, including the trial date of the district court litigation, whether the district court case was stayed pending the Board review, and any overlap between the issues in both the PTAB proceeding and the district court litigation. Together, these cases form the NHK-Fintiv rule, which allows the Board to deny institution of an IPR where a parallel litigation is taking place in federal court. To date, the Board has applied the NHK-Fintiv rule to over 200 IPR petitions.
Apple Inc. v. Optis Cellular Technology, LLC
In July, Apple petitioned the Supreme Court for relief after the Federal Circuit refused to review the Board’s denial of inter partes review. The Board previously declined institution of Apple’s three IPR petitions, justifying the decision with the NHK-Fintiv rule. The Board reasoned that the status of a parallel litigation taking place in the Eastern District of Texas would render an IPR “an inefficient use of Board resources.” The Federal Circuit subsequently dismissed Apple’s appeal of the Board’s decision, arguing that the court lacks the jurisdiction to review the denial. As a result, Apple petitioned the Supreme Court, primarily focusing on whether the NHK-Fintiv rule exceeds the Patent and Trademark Office’s rule-making authority and the Federal Circuit’s jurisdiction to hear the Board’s denial of institution.
First, the petition argues that the NHK-Fintiv rule is unlawful because “the rule exceeds the PTO’s authority under the Leahy-Smith American Invents Act. . ., is arbitrary and capricious, and was adopted without the notice-and-comment rule-making required by the Administrative Procedure Act.”
Apple further argues that the Federal Circuit has the authority to hear an appeal concerning the Board’s denial. The petition explains that the Federal Circuit’s refusal to review the Board’s decision is contrary to Supreme Court precedent, which makes clear the Federal Circuit can hear challenges to Board decisions “when review is sought on the grounds that the denial rested on a rule that exceeds the PTO’s statutory authority, is arbitrary and capricious, or was adopted without legally required procedures.”
Apple also asserts that the NHK-Fintiv rule “exceeds the authority that Congress delegated the [PTO] director.” The petition explains that “the NHK-Fintiv rule undermines the role of IPR in Congress’s effort to improve the integrity of the patent system,” arguing that the Patent and Trademark Office usurped congressional intent by requiring that the Board deny IPRs where there was a parallel infringement suit pending.
Mylan Laboratories Ltd., v. Janssen Pharmaceutica N.V.
On August 9th, Mylan petitioned the Supreme Court on grounds similar to those discussed in the Apple petition. The questions presented in the Mylan petition are:
- Does 35 U.S.C. § 314(d) categorically preclude appeal of all decisions not to institute inter-partes review?
- Is the NHK-Fintiv Rule substantively and procedurally unlawful?
In its petition, Mylan argues that the NHK-Fintiv rule is unlawful because it was not adopted through the proper notice and comment process. The petition expands on this argument by stating, “had the public been given a chance to weigh in, they could have identified the rule’s many defects, and the director would have had to alter the rule to address those defects or else provide a reasoned explanation for refusing to do so.”
Mylan further asserts that if the Board’s institution decisions were not reviewable by the Federal Circuit, the result would “effectively [hand] the director and the board carte blanche to deny IPR petitions for any random (and potentially unlawful) reason they can dream up.”
The Future of NHK-Fintiv
The Apple and Mylan petitions do not stand alone in the push for challenging the NHK-Fintiv rule. Both Supreme Court petitions join other attempts to challenge this rule, including a California district court litigation based on similar arguments. Considering these pending petitions, the future of the NHK-Fintiv rule is unclear. As for now, however, it is likely that the NHK-Fintiv rule will continue to apply to IPR petitions where a parallel district court litigation exists.
 See Unified Patents, “Portal,” https://portal.unifiedpatents.com/ptab/caselist?discretionary_denial_refs=Nhk+Spring+%2F+Fintiv&discretionary_denial_refs=Parallel+Petition+Denial&sort=up_termination_date&up_status=Not+Instituted&up_substatus=Procedural