Fintiv rule is on the decline for a laundry list of reasons.

In 2021, Fintiv1 continued to be one of the hottest and most controversial issues facing the patent bar.2 The USPTO Patent Trial and Appeal Board's (PTAB) precedential Fintiv decision enumerated factors that the PTAB applies when evaluating whether to exercise its discretion to deny instituting an inter partes review (IPR) or post-grant review (PGR) in light of parallel district court or US International Trade Commission (ITC) litigation involving the same patent.3 Because Fintiv can deprive parties—who file otherwise meritorious petitions—of review, some stakeholders criticize Fintiv as contrary to the Congressional intent of the America Invents Act (AIA) and seek to defang or eliminate Fintiv altogether. Others argue that Fintiv is rooted in sound policy that avoids duplicative and expensive litigation and increases the value of patents. Regardless of where one stands, Fintiv remains a key issue that must be analyzed by any party faced with the prospect of parallel patent litigation at the PTAB and any other trial tribunal.

Analyzing over 400 PTAB decisions, this article presents a data-driven analysis of the following key developments that emerged in 2021 with respect to the PTAB's evaluation and application of the Fintiv framework:

Petitioner Stipulations: Following the PTAB's informative Sand Revolution II4 and precedential Sotera5 decisions, petitioners have been advancing stipulations that agree to forgo presenting certain invalidity challenges in parallel litigation if the PTAB institutes review. These stipulations vary in scope, and this article categorizes the various flavors of stipulation—from narrowest to broadest—and evaluates their efficacies. Unsurprisingly, advancing the broadest stipulation was most likely to favorably impact the Fintiv analysis for petitioners. But our findings on art-and ground-based stipulations may surprise you. ITC vs. District Court: One of the more controversial applications of Fintiv is when the PTAB denies AIA review based on parallel litigation at the ITC. Nevertheless, our data indicate that Fintiv denials based on parallel ITC litigation had a strong year in 2021. In fact, our findings indicate that ITC-based denials are on the rise while district court-based denials have fallen precipitously. Denials By District: In 2021, was the PTAB more likely to deny AIA review over parallel litigation in the Eastern or Western District of Texas? We reveal the answer below and explain some factors that may be driving our results. Spoiler alert: EDTX.

Before diving into these issues, we provide a brief background on Fintiv and general statistics on Fintiv denials.

Background and Lay of the Land

35 U.S.C. 314(a) and 324(a) grant the Director of the US Patent and Trademark Office (USPTO) discretion to deny instituting an AIA trial. As explained in the PTAB's Trial Practice Guide, the PTAB interprets these statutes as permitting denial in light of 'events in other proceedings related to the same patent, either at the Office, in district courts, or the ITC.'6 In Fintiv, the PTAB enumerated six non-exhaustive factors weighed by the PTAB when determining whether to exercise this discretion in view of parallel litigation: (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 PTAB'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 PTAB's exercise of discretion, including the merits.7

Following Fintiv's precedential designation in May 2020, parties saw a spike in Fintiv-based discretionary denials. At first a boon to patent owners, such denials fell significantly over the course of 2021 as an important new tool—the stipulation—became available and more widely used and understood by petitioners. In 2021, the PTAB also scrutinized trial dates of parallel cases more closely, shifting away from its prior approach of taking them at face value. Indeed, the PTAB often recognized that the facts surrounding parallel litigations are fluid, and even reversed some institution decisions when circumstances changed in parallel cases.8

The analysis in Figure 1 considered cases in which the PTAB evaluated the Fintiv factors. It does not include decisions that mention Fintiv but denied review for other reasons, such as the merits. Overall, the results show a lower rate of Fintiv-based denials in 2021 (23%) compared to 2020 (38%). Nevertheless, the statistics also show that Fintiv has become a routine part of the PTAB's and parties' analyses, with the PTAB addressing the Fintiv factors in almost 400 cases this year, significantly more than in previous years. The institution rate for cases in which the Fintiv factors were evaluated in 2021 (77%) is also significantly higher than the PTAB's overall institution rate for 2021 (59%).9 One reason for this result may be that, when Fintiv is in play, patent owners may focus their preliminary responses more on discretionary denial arguments than on rebutting the grounds of unpatentability.

Breaking these cases down by quarter (see Figure 2), the PTAB's denial rate peaked in the second half of 2020, which aligns with Fintiv's precedential designation in May 2020. A decline is then seen in each subsequent quarter of 2021.

A number of factors—including the rise of petitioner stipulations; uncertainty of district court trial dates caused by the COVID pandemic, court congestion, and venue challenges; and public criticism of Fintiv—likely contributed to 2021's fall in Fintiv-based denials. The sections below address issues that have influenced the PTAB's discretionary denial analysis in 2021, as well as those that may influence the PTAB's analysis in the coming