Key Takeaways
- A recent Federal Circuit decision in a case involving an inter partes review (IPR) significantly narrowed a patentee's ability to rely on estoppel to block a defendant from raising invalidity grounds.
- The IPR estoppel statute does not prevent an unsuccessful IPR petitioner from relying on non-literature prior art to defend itself during infringement proceedings. This freedom to use non-literature prior art remains even where a patent or printed publication reasonably could have supported the same or a similar invalidity argument during the prior IPR.
- The Patent Trial and Appeal Board (PTAB) has broad discretion whether to deny instituting an IPR when there is a competing district court case or International Trade Committee (ITC) proceeding, even where the Petitioner presents compelling evidence of unpatentability.
- A prior US Patent & Trademark Office (USPTO) policy guidance on the PTAB's discretion for instituting IPRs when there is a competing district court case has been rescinded and the eponymously named Fintiv factors revived.
Of late there have been two significant changes to IPR practice.
Since February 2025, we have seen a May 7 Federal Circuit panel
deciding an important case on the scope of IPR estoppel; and the
Acting USPTO Director has used a new, Director-led process to deny
IPR institution under the Fintiv factors. Both of these changes are
discussed in more detail below.
Estoppel
IPR estoppel is only available if a petitioner challenges patent
claims "on a ground that could be raised under section 102 or
103 and only on the basis of prior art consisting of
patents or printed publications." (35 U.S.C.
§311(b)) (emphasis added). The definition of prior art,
implicitly found in §102, is broader than just patents or
printed publications, and includes situations where the
"claimed invention was ... in public use, on sale, or
otherwise available to the public before the effective filing date
of the claimed invention," among others (35 U.S.C.
§102(a)(1)). In other words, the grounds for instituting IPRs
are limited to invalidity assertions that rely on patents or
printed publications but exclude other grounds for asserting
invalidity.
On May 7, 2025, the Federal Circuit issued its opinion in
Ingenico Inc. v. IOENGINE, -- F.4th --, 2025 U.S. App.
LEXIS 10956. In Ingenico, a Federal Circuit panel held
that IPR estoppel does not prevent a defendant from asserting
during a district court proceeding that a claimed invention was
invalid based upon the other prior art grounds (i.e., if
it was known or used by others, on sale, or in public use), even if
the defendant previously litigated an IPR and printed publications
or patents reasonably could have been raised during that IPR which
made the same or similar disclosures.
The issue arose because Ingenico filed IPR petitions challenging
IOENGINE's patents and the PTAB invalidated most of the
challenged claims. At a subsequent district court infringement
trial concerning surviving claims, Ingenico successfully argued
patent invalidity because a prior art device proved that the
asserted claims were "on sale," "in public
use," or "known by others." IOENGINE appealed,
asserting IPR estoppel because the device was substantially
identical to printed publications that Ingenico reasonably could
have raised during the IPR. The Federal Circuit panel rejected
IOENGINE's arguments, reiterating that IPR proceedings do not
allow a petitioner to challenge a claimed invention as being
previously known or used by others, on sale, or in public use based
upon e.g. a device, and therefore estoppel did not
apply.
Implications: Previously, IPR petitioners lacked certainty
as to whether IPR estoppel applied to devices that are cumulative
of prior art that were or could have been the basis for an IPR
challenge. District courts were split on this issue with some
holding that IPR estoppel prevented the use of these devices while
others held that IPR estoppel does not apply. See e.g. Prolitec
Inc. v. Scentair Techs., LLC, 2023 U.S. Dist. LEXIS 223508, at
*69 (D. Del. Dec. 13, 2023) (collecting cases).
The Ingenico decision provides clarity on this issue while
also significantly narrowing the scope of IPR estoppel because it
is less likely to block the use of non-literature prior art even
though it may be nearly duplicative of what is described in a
patent or printed publication. We hear talk of a possible request
for reconsideration or consideration by the full, en banc
court. Without further judicial action, however, this decision can
be seen to significantly change estoppel practice and strategic
decision making.
Discretionary Denials
In 2020, the PTAB set forth a multifactor test for determining
whether to deny an IPR petition when a parallel district court case
was pending based. The test was set out in Apple Inc. v.
Fintiv, Inc., IPR2020-00019 (Mar. 20, 2020), and has become
known as the "Fintiv factors." They are:
- whether the district court has granted a stay or would grant a stay if an IPR proceeding is instituted;
- the proximity of the district court's trial date to the PTAB's projected statutory deadline for a final IPR written decision;
- the extent of investment in the parallel proceeding by the court and the parties;
- how much overlap exists between issues raised in the IPR petition and in the parallel proceeding;
- whether the petitioner and the defendant in the parallel proceeding are the same party; and
- any other circumstances that impact the PTAB's exercise of discretion, including the merits.
For the last few years, the PTAB had been operating under 2022
memo that told the PTAB not to follow those factors. On February
28, 2025, however, the Acting USPTO Director rescinded that 2022
memo. A March 24, 2025 guidance from the Chief Administrative
Patent Judge instructed the PTAB to rely again on the
Fintiv factors where there is a parallel proceeding in
district court or the ITC. (The Acting Director recently asked for
briefing concerning Fintiv factors in light of a
concurrent ITC proceeding.) Two days later, the PTAB implemented an
interim process under which the decision on whether to institute an
IPR will be bifurcated between (1) discretionary considerations and
(2) merits and other non-discretionary statutory
consideration.
Under this process, the USPTO Director (in consultation with at
least three PTAB judges) will first decide whether to deny the
petition on discretionary grounds. If the petition survives that
step, it will be referred to a three-member PTAB panel who will
address the merits and other non-discretionary statutory
considerations. To facilitate this bifurcated approach, parties may
also file separate briefs requesting a discretionary denial that
can address PTAB precedent including Fintiv. In the short
time since this change, various bloggers have reported that IPR
institutions have decreased from 69% to about 46%.
On May 16, 2025, the Acting USPTO Director issued the first four
decisions on requests for discretionary denials. She ruled that two
requests were warranted and denied the institution, while the other
two were not. Each of the four decisions consist of short (1 or 2
pages) substantive analysis of whether the IPR petitions should be
denied. The primary focus of each is when a trial is likely to take
place in the related, district court infringement litigation,
although the Acting Director also made some brief references to
other discretionary factors as well.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
