By Hannah Mehrle and Matt Johnson

In IPR2022-01242, Director Vidal clarified that her prior guidance, which allows the Board to institute inter partes review even if the Fintiv factors favor discretionary denial first requires the Board to find that Fintiv factors 1-5 favor discretionary denial.

Director Vidal’s June 2022 Guidance Memo (the “Memo”) explained that where the Board “determines that the information presented at the institution stage presents a compelling unpatentability challenge, that determination alone demonstrates that the PTAB should not discretionarily deny institution under Fintiv.”  Memo at 4–5.  The present case reiterated that the proper analysis starts with a review of Fintiv factors 1-5, followed by a compelling merits evaluation if those factors favor a discretionary denial.

The Memo states that compelling merits standard is higher than the “reasonable likelihood” statutory standard needed for institution of an IPR.  Under the compelling merits test, the Board looks for a Petition “in which the evidence, if unrebutted in trial, would plainly lead to a conclusion that one or more claims are unpatentable by a preponderance of the evidence.”  Memo at 4.  In doing so, the Board should determine if it is highly likely that the petitioner would prevail with respect to at least one challenged claim.  The Director reasoned that both “the patent system and the public benefit from instituting challenges where there is a showing of unpatentability by compelling merits.” The Memo  notes that the Board should only complete this heightened analysis “when other considerations favor discretionary denial.”

Here, Director Vidal expressed no opinion on whether the Fintiv factors favored discretionary denial, or whether the compelling merits test should be met in the present case regarding CommScope Technologies’ challenge to a Dali Wireless patent.  Instead, Director Vidal noted two issues with the Board’s finding that the petition met the compelling merits test.  First, the Board looked at the compelling merits test without first doing an analysis of whether the Fintiv factors 1-5 favored discretionary denial.  Second, the Board did not provide reasoning as to why the Petition met the compelling merits test.

As to the first deficiency, the Memo states that “the PTAB will not deny institution based on Fintiv if there is compelling evidence of unpatentability.”  Memo, at 5.  Director Vidal clarified that this means that the Board must first complete an analysis on whether the Fintiv factors favor discretionary denial before completing the compelling merits determination.  This means the compelling merits test should be, and is only, completed when the Board first finds that Fintiv factors 1-5 favor discretionary denial.

As to the second deficiency, Director Vidal noted that the Board did not provide sufficient reasoning to support its conclusions that the merits were compelling.  Merely pointing to its analysis under the lower, reasonable likelihood institution standard, is insufficient.

Accordingly, Vidal exercised her review powers and vacated the Board’s decision, stating that the Board must first do an analysis under Fintiv, and, if after assessing the Fintiv factors, the Board determines that the factors merit discretionary denial, only then should the Board determine whether the Petition meets the compelling merits test.  If the Board reaches the compelling merits analysis, it must provide reasoning to explain its determination.

The following two tabs change content below.
Matt Johnson is one of the Firm's primary contacts on practice before the PTAB. Currently co-chairing the Firm's PTAB subpractice and involved in proceedings at the Board since the first day of their availability in September 2012, Matt regularly represents clients as both petitioners and patent owners at the Board. He further works as an advocate for clients in appeals from Board proceedings at the Federal Circuit.