The Fintiv Factors: Strategic Choices for OC Companies October

The Fintiv Factors: Strategic Choices for OC Companies October 12, 2021 Presented by: Markey Group 5 1

The NHK-Fintiv Rule Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB March 20, 2020). PTAB has expansive authority to hear or deny IPR proceedings under Sections 314 and 325. Underlying premise is to reduce redundancies with parallel proceedings. 2

Background

The NHK-Fintiv Rule Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB March 20, 2020). The rule lets the Patent Trial and Appeal Board decline to review a patent based on the progress of a parallel infringement case in a federal court or other agency. The rule grew out of NHK Spring v. Intri-Plex, a 2018 PTAB decision that found the advanced state of a parallel district court lawsuit weighed in favor of denying review. NHK Spring v. Intri-Plex, No. IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential). In May 2020, the board designated precedential Apple v. Fintiv, which laid out factors for judges to consider when deciding whether to institute review, including the trial date in the parallel case, whether the other tribunal has paused its case for PTAB review, and the extent of the overlapping issues. Decisions designated precedential are binding on PTAB judges. 4

Why Discuss This? Timing is Everything Companies suing in districts that have fast court dockets, and are reluctant to pause cases, impacts the analysis. Similar to these courts, the ITC moves quickly and doesn’t like to stay its investigations, so ITC cases have also been subject to this denial issue. See 19 U.S.C. § 1337(b)(1) (requiring that ITC investigations be completed expeditiously). Because jurisdictions vary in speed, critics say the rule encourages plaintiffs to forum shop. Apple, in PTAB documents, said denying review based on trial dates limits “PTAB access to only defendants sued in slower jurisdictions,” effectively insulating other patents from review. 5

Apple Cert Petition The Fight is Just Getting Started In July, Apple petitioned the Supreme Court for relief after the Federal Circuit refused to review the Board’s denial of inter partes review. Federal Circuit refused on the basis that it lacked the jurisdiction to review the denial. Apple arguments rely on battle of authority Rule in violation of AIA as PTO exceeded its authority Federal Circuit does have ability to review as stated by SCOTUS precedent Rule exceeds authority Congress gave PTO director 6

The Fintiv Factors

The Fintiv Factors Factors 1-3 1. Whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted (existence of a stay weighing strongly against discretionary denial); 2. Proximity of the court’s trial date to the Board’s projected statutory deadline for a final written decision (FWD) (a trial date preceding the date of FWD weighing in favor of discretionary denial); 3. Investment in the parallel proceeding by the court and the parties (district court issuance of substantive orders related to patent at issue, or claim construction orders weighing in favor of discretionary denial); 8

The Fintiv Factors Continued Factors 4-6 4. Overlap between issues raised in the petition and in the parallel proceeding (a greater degree of overlap weighing in favor of discretionary denial, taking into account overall the similarity of claims challenged in a petition to claims at issue in district court); 5. Whether the petitioner and the defendant in the parallel proceeding are the same party (lack of relation tending to weigh against discretionary denial, but to be considered in conjunction with factor 4, overlap of issues); and 6. Other circumstances that impact the Board’s exercise of discretion, including the merits (without necessarily going into a full merits analysis, a stronger petition would tend to weigh against discretionary denial, while a weaker petition would tend to weigh in favor of discretionary denial). 9

The Fintiv Factors Continued These factors, the Board explained, “relate to whether efficiency, fairness, and the merits support the exercise of authority to deny institution in view of an earlier trial date in the parallel proceeding.” Apple Inc. v. Fintiv, Inc., IPR202000019, Paper 11 at *3, 6 (PTAB March 20, 2020). Each factor is “non-dispositive” and that, “in evaluating [them], the Board takes a holistic view of whether efficiency and integrity of the system are best served by denying or instituting review.” Id. at *2-3. 10

How The Apple Institution Decision Shook Out Factors 1-3 Factors 4-6 Factor 1 neutral as no party moved to stay DC action. Factor 4 favored denial, as invalidity arguments based on same prior art Factor 2 favored denial, as trial set for 2 months before IPR decision’s due date Factor 5 favored denial, as the parties were the same Factor 3 favored denial, as court had invested effort in lit by issuing claim construction, and parties had exchanged final contentions Factor 6 favored denial, as the board found weakness in the petition’s merits. 11

Factor 1 Whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted (existence of a stay weighing strongly against discretionary denial). Snap, Inc. v. SRK Technology LLC, patentee argument that the thenstayed district court litigation would likely resume and that the trial would be held before an IPR final decision rejected as “unfounded speculation.” Fintiv: Mere denial of stay request only sometimes weighs in favor of discretionary denial. ITC considerations: See, e.g., Regeneron Pharmaceuticals v. Novartis, IPR2020-01317, Paper 15 at *12–13 (PTAB Jan. 15, 2021). 12

Considerations in Judge Albright’s Courtroom Speed Is The Name Of The Game When Judge Albright was first appointed, he went on record about his speed, saying “It's my job to give people the opportunity to have their cases tried in a federal court . and I probably can get a patent trial resolved more quickly than the PTAB can.” Law360, West Texas Judge Says He Can Move Faster Than PTAB Has been very limited in granting stays: Has only done so when the plaintiff has first sued other companies over a patent in a different district, and the defendant in that case has initiated a PTAB review that is well underway by the time another company is sued in the Western District of Texas. In that scenario, where "the PTAB process is already down the road and it looks like that would be the most prudent way to do it, that's fine and I would defer" to the board, Judge Albright said. 13

Fintiv Factor #2: Proximity of Trial Date to End of IPR The challenge in courts like W.D. Texas with a fast schedule: 14

Fintiv Factor #2: Proximity of Trial Date to End of IPR But a district court trial date before the FWD is not necessarily a death knell to institution. For example: Trial date scheduled “around the same time” as FWD deadline treated as neutral for this factor. Sotera Wireless, Inc. v. Masimo Corp., Paper 12, p. 15 (PTAB Dec. 1, 2020) (precedential). Trial date scheduled 1 month before FWD deadline treated as neutral for this factor. SMIC Ams. V. Innovative Foundry Techs., LLC, Paper 10, p. 20-21 (PTAB Oct. 5, 2020). Trial date scheduled 3 months before FWD deadline treated as “at most, slightly in favor of” denying institution. Dish Network L.L.C. v. Broadband iTV, Inc., Paper 14, p. 21-26 (PTAB Jan. 27, 2021). 15

Fintiv Factor #3: Investment in Parallel Proceeding “[I]f, at the time of the institution decision, the district court has issued substantive orders related to the patent at issue in the petition, this fact favors denial.” Apple v. Fintiv, IPR2020-00019, Paper 11, p. 9-10 (PTAB Mar. 20, 2020) (precedential). The Board looks at how much litigation has advanced in the district court, including substantive determinations (e.g., claim construction), extent of fact discovery, etc. This Factor often runs parallel with Factor #2. One consideration is whether the petitioner acted “expeditiously” in filing petition. 16

Fintiv Factor #4: Overlap in Issues with Parallel Proceeding “[I]f the petition includes the same or substantially the same claims, grounds, arguments, and evidence as presented in the parallel proceeding, this fact has favored denial.” Apple v. Fintiv, IPR2020-00019, Paper 11, p. 12 (PTAB Mar. 20, 2020) (precedential). It is now common for petitioners to stipulate to some form of “early estoppel” or “institution estoppel” to encourage institution by the Board. Stipulation not to pursue in district court “any ground raised or that could have been reasonably raised in an IPR” turns factor “strongly in favor” of institution. Sotera Wireless, Inc. v. Masimo Corp., Paper 12, at *18-19 (PTAB Dec. 1, 2020) (precedential). Petitioners have tried other, less complete stipulations with mixed results. 17

Fintiv Factor #5: Overlap in Parties with Parallel Proceeding “If a petitioner is unrelated to a defendant in an earlier court proceeding, the Board has weighed this fact against exercising discretion to deny institution[.]” Apple v. Fintiv, IPR2020-00019, Paper 11, at *13-14 (PTAB Mar. 20, 2020) (precedential). If related, then supports denying institution. Sotera v. Masimo Wireless, IPR2020-01019, at *19 (PTAB Dec. 1, 2020) (precedential). What constitutes overlap in parties? Could it be “real party-in-interest” and not just the named parties? 18

Fintiv Factor #6: Other Circumstances This is the “everything else” factor. As one example, “there may be strengths or weaknesses regarding the merits that the Board considers as part of its balanced assessment.” Apple v. Fintiv, IPR2020-00019, Paper 11, at *15-16 (PTAB Mar. 20, 2020) (precedential). In Sotera v. Masimo Wireless, IPR2020-01019 (PTAB Dec. 1, 2020) (precendential), PTAB noted that this factor does not weigh for or against denying IPR even though concluded that IPR could proceed. In Snap v. SRK Technology, IPR2020-0820, at *18 (PTAB Oct. 21, 2020) (precendential), addressed benefits of discovery in forums. “Reasonable likelihood of success” vs. “likelihood of success on the merits” 19

Recent Petitions Denied under the Fintiv Factors

Fintiv Factors Apple Inc. v. Fintiv Inc. (IPR2020-00019) sets forth the following factors the Board balances when determining whether to exercise its discretion to deny institution: 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. 21

Canadian Solar et al. v. The Solar Corp. (IPR2021-00659, Sep. 30, 2021) Canadian Solar filed a Petition to institute an IPR of claims 1, 2, 6, 8–10, and 12–20 of U.S. Patent No. 10,651,333; A parallel district court filing in N.D. Cal. was made on Mar. 31, 2020 with Markman scheduling for Sep. 2021; a parallel ITC investigation was filed on Sep. 15, 2020; PTAB held 1st factor is neutral because the district court is yet to grant a stay (despite previous decisions shows it likely will); PTAB held 2nd and 3rd factor favors denial because “ITC is scheduled to complete its investigation seven-and-a-half months before the due date for final written decision” and that ITC has already completed claim construction; Though the petitioners stipulated they would not pursue any grounds raised in the ITC investigation in the IPR, PTAB held said stipulation does not include challenges that could have been reasonably raised and therefore finds Fintiv factor 4 favors denial. 22

Hewlett Packard et al. v. Q3 Networking (IPR2021-00754, Oct. 8, 2021) HP and three other defendants filed a petition requesting an IPR of claims 1–10, 12, and 13 of U.S. Patent No. 8,797,853; Patent Owner argue the IPR should not be instituted under Fintiv because a parallel ITC proceeding is scheduled to begin before the Board makes its institution decision, and the final determination at the ITC is scheduled to take place by April 7, 2022; Petitioners argue that Fintiv factors weigh in favor of institution because the parallel district court proceeding was stayed; PTAB noted “Fintiv expressly addresses ITC Investigations”, holding Fintiv factor 1-5 weigh against institution. 23

Statistics of Petitions Denied under the Fintiv Factors

Statistics of Fintiv Denials – Trends Overall IPR petitions have declined, and the institution decisions have also gone down; NHK Spring/Fintiv is growing as the dominant framework of 314(a) denials; NHK Spring/Fitniv accounts for 73% of all 314(a) so far in 2021, whereas in 2020 only 51% were based on the Fintiv framework. Source: https://www.unifiedpatents.com/insights/2021/9/22/an-early-look-at-the-ptabs-use-of-fintiv-and-discretion-discretionary-denials-through-september-2021 25

Apple v. Iancu, 5:20-cv-06128 (N.D. Cal.) On August 31, 2020, Apple, Intel, Google, and Cisco Systems filed suit against former PTO director, Andrea Iancu; Plaintiffs allege Fintiv run contrary to the America Invents Act and is in violation of Administrative Procedure Act; Issue: Is the Fintiv framework a substantive decision that requires formal agency rulemaking (notice and comment)? DOJ says not substantive because outcome isn’t predetermined. Court denied an invitation to stay the summary judgement proceeding and instead ordered that they shall be determined concurrently; No order yet, but Law360 said Judge Davila said, “It just seems to have changed the whole procedural aspect of IP practice, and to such an extent that it's not something that is in the purview of the director's unilateral decision.” 26

Sponsoring Senators Of the Proposed Legislative Amendment Relating to the Fintiv Factors

The Restoring America Invents Act – Just a Bill Proposed Legislation by Sen. Leahy (DVT) on left and Sen. Cornyn (R-TX) (2002) on right “Leahy-Cornyn bill will improve proceedings at the patent office to address problems in the American economy caused by poor-quality patents” – Leahy Press Release “This legislation would improve the ability of our system to maintain the quality of American patents by improving the mechanism for challenging them”. - Cornyn 28

The Restoring America Invents Act – The Democrat Senator Patrick Leahy (VT) Vermont Roots. Born in Montpelier. Undergrad St. Michael’s College. 1964 Georgetown JD 1966 State’s Attorney, Chittenden County 1974 US Senator, VT – Only 34 when elected, now the longest serving Senator, Sen. Pres. Pro Tem (third in line to be President) Committee Assignments show passions: Appropriates, Agriculture, and Judiciary – IP Subcommittee Chairman Self-proclaimed leader on Technology Issues Second Senator to have an Internet Homepage. Known as a “Net-Friendly Senator” FOIA Hall of Fame Member Sponsor of the 2011 AIA Bill Supported the failed 2013 Patent Abuse Reduction Act (Patent Litigation Reform). Sponsored of the failed 2019 CREATES Act (pro-Generics) 2013 – Urges FTC to act against Patent Trolls Jurisdiction of the Judiciary IP Subcommittee: USPTO, Office, all things IP related to Fed. “I am writing to encourage the FTC to prioritize investigations of and enforcement actions to prevent unfair and deceptive trade practices in patent infringement allegations,” Leahy wrote. “The situation is particularly egregious when a patent owner sends numerous demand letters threatening an infringement action without having made a reasonable inquiry into the claims, and therefore having no actual intent to file a civil action, for which the owner would be subject to sanctions. These letters are simply used to extract unwarranted payments.” Top Contributors: Media/Entertainment, namely, Disney, WarnerMedia, Technology Sector, and General Dynamics 29

The Restoring America Invents Act – The Republican Senator John Cornyn (R-TX) Everything San Antonio. Born, Undergrad, Law. Trinity University Grad in Journalism. Started as Biology. St. Mary’s Law. Malpractice Defense Attorney (Dr’s. & Esq’s). 1977 State Judge, elected. 1984 UVa Master of Laws. 1990 Texas Supreme Court 1997 Texas Att. General (first R since 1890s) 2002 US Senator, Texas Committee Assignments show passions: Finance, Intelligence, and Judiciary – IP Subcommittee Member Jurisdiction of the Judiciary IP Subcommittee: USPTO, Office, other IP related to Fed. 2014 Opinion Article “our nation’s laws fail to protect innovators from needless and costly litigation.” The rise of abusive patent litigation by so-called patent trolls has made the need for reform all the more urgent. Patent trolls are entities that exploit the structural imbalances in the litigation process to fleece inventors and innovators of billions of dollars each year. Sponsored the failed 2013 Patent Abuse Reduction Act. Sponsored the failed 2019 Patent Thicket Bill (punish big pharma). Industry Donations (double what Leahy gets): Livestock, Fossil Fuels, Construction, and Private Equity & Investment 30

The Restoring America Invents Act – A Bill For Stopping §314(a) Denials Relevant language Regarding the Removal of Discretional Denials of Institution of IPRs (B) in § 314— (i) in subsection (a), by striking ‘‘The Director may not authorize an inter partes review to be instituted unless’’ and inserting the following: ‘‘Subject only to the discretion of the Director under § 325(d)(4), a petition that meets the requirements of this chapter shall be instituted if’’ – Col. 6, Lines 10-18 Keeps limited discretion to deny or alter institution based upon multiple proceedings involving the same patent/patent family. Col. 10, Lines 8-21 Would create a rebuttable presumption of consolidation of related cases. Col. 11, Lines 3-8 31

The Restoring America Invents Act – What Else Is In There? Return Mail – SCOTUS Rejected – “governmental entity” added as one that can file an IPR Arthrex Fix - language added to make clear that the Director is to issue a written opinion explaining rehearing decision. But does not appear to require Director review or to provide reasoning for denial of Director review. Expands IPRs to include obviousness-type double patenting and applicant admissions. Click-to-Call – Rejected – Litigation involving a patent that was dismissed without prejudice would not trigger a 1-year deadline for filing the IPR. New Claims - Added to a patent by reexamination or reissue, even if petitioner is outside of its window on the original claims, those claims get a fresh IPR petition window. Aqua Products – Rejected - New or Amended Claims - Added during IPR - patent owner has burden to prove patentability of any new or amended claims, including §§ 101, 102, 103, and 112, with the PTAB acting as Examiner. Stay that Litigation – Provides factors for Courts to Stay Litigation that are pro-Stay. Stay Denied? Appeal immediately with de novo review. No Politics – PTAB Judges no communications with superiors, except as allowed by COCUSJ. Patent Owner Estoppel – No claims that are indistinct from previously invalidated/cancelled claims. Pro-Patent – Overrules the exception to estoppel for joined parties. No Standing No Estoppel - A party who lacks standing to appeal its loss before the PTAB would not later be estopped based upon the IPR outcome. 32

Reactions from Industries and Legal Experts On the Proposed Legislative Amendment Relating to the Fintiv Factors

Who Has Filed Amicus Briefs in Apple and Mylan thus far? Apple Inc. v. Optis Cellular Technology, LLC (U.S. No. 21-118) Mylan Laboratories Ltd. v. Janssen Pharmaceuticals, N.V. (U.S. No. 21-202) In support of petitioner: In support of petitioner: Computer and Communications Industry Association (Amazon, Google, Intel, Facebook, Samsung, etc.) Leading Innovators (Cisco, Verizon, Comcast, VIZIO, Mylan, Edward Life Sciences, etc.) ACT The App Association Roku, Inc. In support of either: Association for Accessible Medicines (representing generics and biosimilar manufacturers and distributors) Intel Corporation In support of either: Jeremy C. Doerre (a patent attorney) In support of respondent: briefs are not yet due Jeremy C. Doerre (a patent attorney) In support of respondent: briefs are not yet due 34

Statements by Industry Groups Supporting the RAIA Amendment Opposing the RAIA Amendment Computer and Communications Industry Association (Amazon, Google, Intel, Facebook, Samsung, etc.) Innovation Alliance (AbbVie, Qualcomm, Cantor Fitzgerald, etc.) United for Patent Reform (Amazon, Facebook, Google, GM, etc.) Coalition Against Patent Abuse (Kaiser Permanente, Blue Cross Blue Shield, etc.) Software and Information Industry Association 35

United for Patent Reform (including Amazon, Facebook, Google, General Motors, etc.) UFPR Sends Letter in Support of Restoring the America Invents Act “Unfortunately, through a series of internal, discretionary changes, the PTO dramatically weakened the IPR program. As a result, abusive patent litigation targeting American businesses -- including numerous UFPR members -- has once again been on the rise. This upward trajectory continued throughout the pandemic. Litigants targeted struggling businesses of all types for their use of technology to make dining, shopping, and traveling safer for employees and customers alike. Restoring the AIA is critical to our membership. We support innovation and strong patents, but recognize that PTO examiners are overburdened and do not always have sufficient time to engage in a thorough review before issuing a patent. There is nothing more important for the U.S. patent system's role in support of American innovators and businesses than making sure it prioritizes quality. Otherwise, the abuses will be allowed to continue, and so will the economic harm.” https://www.unitedforpatentreform.com/files/ufpr-letter-in-support-of-raia---29-sept-20211786551574.pdf 36

Coalition Against Patent Abuse (including Kaiser Permanente, Blue Cross Blue Shield, etc.) CAPA Applauds Introduction of Leahy/Cornyn Bill to Restore the America Invents Act and Improve Patent Quality The “Restoring the America Invents Act” Aims to Reduce Big Pharma’s Manipulation of the Patent System and Strengthen Tools Such as the Inter Partes Review Process to Increase Patent Quality It’s been ten years since the America Invents Act was passed with the goal to balance the value of innovation with price-reducing competition. Unfortunately, continued patent abuse by many major pharmaceutical companies has tilted this balance away from pro-patient, pro-consumer competition and drug pricing. Now, it is up to Congress to enact meaningful legislation to lower drug costs and make true innovation sustainable for generations to come, and this is a strong step towards that goal. CAPA looks forward to continuing our work with Congress to lower drug costs and improve patent quality. The “Restoring the America Invents Act” will reform the Patent Act and strengthen tools such as IPR within the USPTO to improve patent quality. The bill will also increase transparency of the Patent Trial and Appeal Board’s (PTAB) patent review process while ensuring it is free from political influence. https://www.capanow.org/for-the-media/capa-applauds-introduction-of-leahy-cornyn-bill-to-restore-theamerica-invents-act-and-improve-patent-quality/ 37

Innovation Alliance (including AbbVie, Qualcomm, Cantor Fitzgerald, etc.) Bill Would Allow Gaming of the PTAB by Big Tech Firms and Other Large Corporate Infringers and Undermine Patent Rights of Smaller Inventors “the Innovation Alliance opposes the changes to the USPTO’s Patent Trial and Appeal Board (PTAB) review process proposed in the bill.” “In recent years, USPTO updated the post-grant system at the PTAB in a variety of ways to make it a fairer and more balanced system, and one that we believe more accurately reflects congressional intent in the America Invents Act. Those updates reinforced that PTAB trials should be a cost-effective alternative to district court litigation, not an additional avenue for challenging patents. Before those updates were adopted, more than 85% of PTAB reviews were filed in parallel to district court litigation, forcing inventors to defend their patents in simultaneous and duplicative proceedings. The bill introduced today would eliminate many of those updates and reestablish PTAB trials as a parallel avenue, as opposed to an alternative to district court trials. “The most frequent users of the PTAB process are the same Big Tech companies that many in Congress believe are already too powerful. We believe this bill would help make them more powerful by giving them additional tools to game the PTAB process to drag out infringement disputes and increase the cost of enforcing valid patents. That would place an often insurmountable burden on smaller companies and inventors who don’t have the resources to continue fighting to enforce their rights.” https://innovationalliance.net/from-the-alliance/innovation-alliance-statement-on-restoring-the-america-invents-act/ 38

The Experts Speak 39

Likelihood of Passing the Fintiv Amendment Anyone want to make a prediction? 40

Likelihood of Passing the Fintiv Amendment This amendment will likely get passed in some shape or form As with the passage of the original AIA, the tech, retail, and other related industries have sounded strong support for this RAIA amendment. The biotech and big pharma industries have not strongly pushed back on this issue. 41

Texan Connection To the Fintiv Factors

Judge Albright’s Expedited Case Scheduling 43

Judge Albright’s Expedited Case Scheduling 44

Judge Albright’s Expedited Case Scheduling 45

Judge Albright’s Expedited Case Scheduling Sample Case Scheduling Order Case Readiness Status Reports (“CRSR”) – 7 days after Defendant responds to pleadings Case Management Conference – 14 days after CRSR Preliminary infringement contentions – 7 days before CMC Preliminary invalidity contentions – 7 weeks after CMC Markman hearing – 23 weeks after CMC “Except with regard to venue, jurisdictional, and claim construction-related discovery, all other discovery shall be stayed until after the Markman hearing” 46

Senator Cornyn’s Sponsorship Senator Cornyn’s consistent position against NPEs and Pharmaceuticals Investor interest in curbing patent litigations Texas gearing to become the next technology hub 47

BONEYARD

Statistics of Fintiv Denials – Year 2020 In 2020, 85 IPR applications were denied under Fintiv/NHK Spring1, which accounts for 37% of total applications denied under procedural grounds (228) and 7% overall (1201). 1. Decided before Fintiv, NHK Spring v. Intri-Plex Techs (IPR2018-00752) found that the “advance state of the district court proceeding” is a factor that weighs against institution. 49

Statistics of Fintiv Denials – Year 2021 As of September 22, 2021, 77 IPR applications were denied under Fintiv/NHK Spring, which accounts for 53% of total applications denied under procedural grounds (144) and 9% overall (890). Source: https://www.unifiedpatents.com/insights/2021/9/22/an-early-look-at-the-ptabs-use-of-fintiv-and-discretion-discretionary-denials-through-september-2021 50

Post-Fintiv Strategies

Revisiting Factors under the NHK-Fintiv Rule Considerations: 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; 3) Investment in the parallel proceeding by the court and 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. 52

Strategies for patent owners Typically want to stay out of PTAB proceedings Pick a forum where judge sets trial quickly (e.g., W.D. Tex., ITC) Argue that parties are invested in the initial venue Demonstrate as much overlap between issues as possible Potential stipulations SK Innovation Co., Ltd. v. LG Chem, Ltd., IPR2020-01239, Paper 14 at 18 (PTAB Jan. 12, 2021) E.g., “contingent upon the Board’s denial of institution, patent owner would limit the district court litigation in the following respect: any challenged claim presented for the district court trial will not extend beyond those addressed in the ITC’s final determination” concession weighed in favor of denying institution 53

Strategies for accused infringers/ PTAB petitioners Typically want to use PTAB proceedings to invalidate patents Motion to transfer out of Texas File IPRs early Rely on a different party to file the PTAB petition File a petition on different claims or different patents Stipulate to stay the district court proceeding. Snap, Inc. v. SRK Technology LLC, IPR2020-00820, Paper 15 (Oct. 21, 2020) (§ II.A precedential). Instituted review after performing Fintiv analysis 54

Strategies for accused infringers/ PTAB petitioners Typically want to use PTAB proceedings to invalidate patents Show that the issues in parallel court and PTAB proceedings are not the same E.g., Stipulation Narrow: Sand Revolution II, LLC v. Cont’l Intermodal Group-Trucking LLC, IPR2019-01393, Paper 24 at 12 (PTAB June 16, 2020). Broad: Sotera Wireless, Inc. v. Masimo Corporation, IPR2020-01019, Paper 12 at 13-14 (PTAB Dec. 1, 2020) E.g., through contentions Limit district court invalidity contentions Not coextensive products: Philip Morris v. RAI, IPR2020-01094, Paper 9 (Jan. 25, 2021). 55