`
`IN THE
`Supreme Court of the United States
`
`
`APPLE INC.,
`
`v.
`
`Petitioner,
`
`OPTIS CELLULAR TECHNOLOGY, LLC, OPTIS WIRELESS
`TECHNOLOGY, LLC, AND UNWIRED PLANET
`INTERNATIONAL LIMITED,
`
`Respondents.
`
`
`ON PETITION FOR A WRIT OF CERTIORARI TO THE
`UNITED STATES COURT OF APPEALS
`FOR THE FEDERAL CIRCUIT
`
`PETITION FOR A WRIT OF CERTIORARI
`
`
`MARK D. SELWYN
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`2600 El Camino Real
`Suite 400
`Palo Alto, CA 94306
`
`ALYSON ZUREICK
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`7 World Trade Center
`250 Greenwich Street
`New York, NY 10007
`
`CATHERINE M.A. CARROLL
` Counsel of Record
`SETH P. WAXMAN
`DAVID L. CAVANAUGH
`DAVID M. LEHN
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`1875 Pennsylvania Ave., NW
`Washington, DC 20006
`(202) 663-6000
`catherine.carroll@wilmerhale.com
`
`MARK C. FLEMING
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`60 State Street
`Boston, MA 02109
`
`
`
`
`
`
`
`
`QUESTION PRESENTED
`
`Whether the U.S. Court of Appeals for the Federal
`Circuit may review, by appeal or mandamus, a decision
`of the U.S. Patent & Trademark Office denying a peti-
`tion for inter partes review of a patent, where review is
`sought on the grounds that the denial rested on an
`agency rule that exceeds the PTO’s authority under the
`Leahy-Smith America Invents Act, is arbitrary or capri-
`cious, or was adopted without required notice-and-com-
`ment rulemaking.
`
`
`(i)
`
`
`
`
`
`CORPORATE DISCLOSURE STATEMENT
`
`Apple Inc. has no parent company, and no publicly
`held corporation owns 10% or more of its stock.
`
`DIRECTLY RELATED PROCEEDINGS
`
`United States Court of Appeals (Fed. Cir.):
`A. Apple Inc. v. Optis Cellular Technology,
`LLC, No. 2021-1043 (Dec. 21, 2020).
`B. Apple Inc. v. Optis Wireless Technology,
`LLC, No. 2021-1044 (Dec. 21, 2020).
`C. Apple Inc. v. Unwired Planet International
`Ltd., No. 2021-1046 (Dec. 21, 2020).
`
`
`
`(ii)
`
`
`
`
`
`TABLE OF CONTENTS
`
`Page
`QUESTION PRESENTED ............................................... i
`CORPORATE DISCLOSURE STATEMENT ............. ii
`DIRECTLY RELATED PROCEEDINGS ................... ii
`TABLE OF AUTHORITIES .......................................... vi
`INTRODUCTION .............................................................. 1
`OPINIONS BELOW .......................................................... 4
`JURISDICTION ................................................................. 4
`STATUTORY PROVISIONS INVOLVED .................. 4
`STATEMENT ..................................................................... 5
`A. Legal Background ................................................. 5
`1. Inter partes review ....................................... 5
`2. The NHK and Fintiv decisions .................... 7
`3. The Director’s adoption of the
`NHK-Fintiv Rule .......................................... 9
`B. Proceedings Below .............................................. 11
`REASONS FOR GRANTING THE PETI-
`TION ............................................................................ 16
`I. THE FEDERAL CIRCUIT’S CONCLUSION
`THAT IT LACKS JURISDICTION TO HEAR
`THESE APPEALS CONTRADICTS THIS
`COURT’S PRECEDENT AND IS WRONG ..................... 16
`A. Under This Court’s Precedent, The
`Federal Circuit Has Appellate Jurisdic-
`tion Under §1295(a)(4)(A) Notwith-
`standing §314(d) .................................................. 16
`
`(iii)
`
`
`
`iv
`
`TABLE OF CONTENTS—Continued
`
`Page
`
`B. The Federal Circuit’s View That These
`Appeals Are Barred By §314(d) Be-
`cause They Are Closely Tied To An In-
`stitution-Related Statute Contradicts
`This Court’s Precedent ...................................... 18
`C. The Federal Circuit’s View That
`§314(d)’s Exceptions Apply Only To Ap-
`peals From Final Written Decisions
`Cannot Be Squared With This Court’s
`Precedent ............................................................. 23
`II. THE FEDERAL CIRCUIT HAS TAKEN AN ER-
`RONEOUS APPROACH TO MANDAMUS IN THE
`IPR CONTEXT ............................................................. 26
`A. The Federal Circuit’s Approach To
`Mandamus Has Been Incoherent And
`Wrong ................................................................... 26
`B. If The Federal Circuit Lacks Jurisdic-
`tion Over This Appeal, Mandamus
`Should Issue To Correct The PTO’s De-
`nial Of Apple’s IPR Petitions ............................ 28
`III. THE QUESTION PRESENTED IS IMPORTANT
`AND RECURRING ........................................................ 30
`CONCLUSION ................................................................. 34
`APPENDIX A: Opinion of the United States
`Court of Appeals for the Federal Circuit,
`dated December 21, 2020........................................... 1a
`
`
`
`
`
`v
`
`TABLE OF CONTENTS—Continued
`
`Page
`
`APPENDIX B: Opinion of the Patent Trial
`Appeal Board of the United States Patent
`and Trademark Office re IPR2020-00465,
`dated September 17, 2020 ......................................... 5a
`APPENDIX C: Opinion of the Patent Trial
`Appeal Board of the United States Patent
`and Trademark Office re IPR2020-00466,
`dated September 15, 2020 ....................................... 31a
`APPENDIX D: Opinion of the Patent Trial
`Appeal Board of the United States Patent
`and Trademark Office re IPR2020-00642,
`dated September 9, 2020 ......................................... 49a
`APPENDIX E: Order of the United States
`Court of Appeals for the Federal Circuit
`Denying Petition for Panel Rehearing and
`Rehearing En Banc, dated February 26,
`2021 ............................................................................. 65a
`APPENDIX F: Opinion of the United States
`Court of Appeals for the Federal Circuit in
`In re Cisco Systems Inc., 834 F. App’x 571,
`dated October 30, 2020 ............................................. 69a
`APPENDIX G: Statutory Provisions Involved
`28 U.S.C. § 1295 ........................................................ 75a
`35 U.S.C. § 314 .......................................................... 79a
`
`
`
`
`
`
`
`vi
`
`TABLE OF AUTHORITIES
`
`CASES
`
`Page(s)
`
`Arthrex, Inc. v. Smith & Nephew, Inc.,
`941 F.3d 1320 (Fed. Cir. 2019) .................................... 6
`Caron v. United States, 524 U.S. 308
`(1998) ............................................................................ 24
`Celgene Corp. v. Peter, 931 F.3d 1342
`(Fed. Cir. 2019) ........................................................... 27
`Cisco Systems Inc. v. Ramot at Tel Aviv
`University Ltd., 834 F. App’x 571
`(Fed. Cir. 2020) ........................................................... 13
`Click-To-Call Technologies, LP v.
`Ingenio, Inc., 899 F.3d 1321 (Fed. Cir.
`2018) ............................................................................. 24
`Cuozzo Speed Technologies, LLC v. Lee,
`136 S. Ct. 2131 (2016) ...................... 3, 13-19, 21-25, 27
`Gutierrez de Martinez v. Lamagno,
`515 U.S. 417 (1995) ..................................................... 16
`Hollingsworth v. Perry, 558 U.S. 183
`(2010) ....................................................................... 29-30
`In re Cuozzo Speed Technologies, LLC,
`793 F.3d 1268 (Fed. Cir. 2015) ............................ 24, 27
`In re Power Integrations, Inc., 899 F.3d
`1316 (Fed. Cir. 2018) .................................................. 27
`Johnson v. Robison, 415 U.S. 361 (1974)........................ 20
`Judulang v. Holder, 565 U.S. 42 (2011).......................... 33
`Lincoln v. Vigil, 508 U.S. 182 (1993) ........................ 25, 30
`
`
`
`
`
`vii
`
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`
`Lindahl v. Office of Personnel
`Management, 470 U.S. 768 (1985) ................ 16, 20, 24
`Make the Road New York v. Wolf,
`962 F.3d 612 (D.C. Cir. 2020) .................................... 30
`Medtronic, Inc. v. Robert Bosch
`Healthcare System, Inc., 839 F.3d
`1382 (Fed. Cir. 2016) .................................................. 27
`Microsoft Corp. v. i4i Ltd. Partnership,
`564 U.S. 91 (2011) ......................................................... 6
`Mylan Laboratories Ltd. v. Janssen
`Pharmaceutica, N.V., 989 F.3d 1375
`(Fed. Cir. 2021) .............................. 14-15, 24-25, 28, 30
`SAS Institute, Inc. v. ComplementSoft,
`LLC, 825 F.3d 1341 (Fed. Cir. 2016) ........................ 24
`SAS Institute, Inc. v. Iancu, 138 S. Ct.
`1348 (2018) ............................ 3, 13, 16-17, 19, 21-22, 24
`Serrato v. Clark, 486 F.3d 560 (9th Cir.
`2007) ............................................................................. 30
`Thryv, Inc. v. Click-To-Call
`Technologies, LP, 140 S. Ct. 1367
`(2020) ........................................ 5-6, 16-17, 21-22, 27, 31
`United States v. Arthrex, Inc., 141 S. Ct.
`1970 (2021) .............................................................. 5, 25
`Utility Air Regulatory Group v. EPA,
`573 U.S. 302 (2014) ..................................................... 25
`Weyerhaeuser Co. v. U.S. Fish & Wildlife
`Service, 139 S. Ct. 361 (2018) .................................... 25
`
`
`
`
`
`viii
`
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`STATUTES AND LEGISLATIVE MATERIALS
`5 U.S.C.
`§706 ................................................................... 13, 17, 19
`§8347 ............................................................................. 20
`28 U.S.C.
`§1254 ............................................................................... 4
`§1295 .................................................. 3, 12, 15-18, 24-25
`35 U.S.C.
`§6 ..................................................................................... 6
`§311 ........................................................................ 5-6, 21
`§312 ............................................................................... 21
`§314 ...................................................................... passim
`§315 ...................................................... 6-7, 11-12, 21, 30
`§316 ............................................................................. 6, 9
`§319 .................................................................... 15, 24-25
`§325 ................................................................................. 7
`Leahy-Smith America Invents Act,
`125 Stat. 284 (2011) ....................................................... 3
`H.R. Rep. No. 112-98 (2011) ............................................... 5
`157 Cong. Rec. S1041 (daily ed. Mar. 1,
`2011) ............................................................................. 31
`157 Cong. Rec. S1326 (daily ed. Mar. 7,
`2011) ............................................................................. 31
`157 Cong. Rec. S1352 (daily ed. Mar. 8,
`2011) ............................................................................... 5
`157 Cong. Rec. S5429 (daily ed. Sept. 8,
`2011) ............................................................................. 31
`S. 23, 112th Cong. (2011) ................................................... 31
`
`
`
`
`
`ix
`
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`
`ADMINISTRATIVE DECISIONS
`Apple Inc. v. Fintiv, Inc., No. IPR2020-
`00019, 2020 WL 2126495 (P.T.A.B.
`Mar. 20, 2020) ........................................................... 8-10
`Apple Inc. v. Fintiv, Inc., No. IPR2020-
`00019, 2020 WL 2486683 (P.T.A.B.
`May 13, 2020) ......................................................... 10, 32
`Intel Corp. v. VLSI Technology LLC, No.
`IPR2020-00106, 2020 WL 2201828
`(P.T.A.B. May 5, 2020) ......................................... 10, 32
`NHK Spring Co. v. Intri-Plex
`Technologies, Inc., No. IPR2018-
`00752, 2018 WL 4373643 (P.T.A.B.
`Sept. 12, 2018) ......................................................... 8, 10
`
`REGULATIONS AND AGENCY MATERIALS
`37 C.F.R.
`§42.2 ................................................................................ 6
`§42.4 ................................................................................ 6
`§42.71 ............................................................................ 31
`§42.100 ............................................................................ 5
`§42.107 ............................................................................ 5
`§42.108 ............................................................................ 6
`Patent Trial and Appeal Board, Standard
`Operating Procedure 2 (rev. 10, Sept.
`20, 2018), https://www.uspto.gov/
`sites/default/files/documents/
`SOP2%20R10%20FINAL.pdf ............................... 9-10
`
`
`
`
`
`x
`
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`
`SECONDARY AUTHORITIES
`Unified Patents, “Portal,” https://
`tinyurl.com/xwmajkyx (visited July
`26, 2021) ....................................................................... 10
`McKeown, Scott, District Court Trial
`Dates Tend to Slip After PTAB Dis-
`cretionary Denials (July 24, 2020),
`https://www.patentspostgrant.com/
`district-court-trial-dates-tend-to-slip-
`after-ptab-discretionary-denials/ ............................. 32
`
`DOCKETED CASES
`Apple Inc. v. Iancu, No. 20-cv-6128 (N.D.
`Cal.) .............................................................................. 29
`Apple Inc. v. Maxell, Ltd., No. 20-2132,
`-2211-2213, 2021-1033 (Fed. Cir.) ....................... 13, 15
`Cuozzo Speed Technologies, LLC v. Lee,
`No. 15-446 (U.S.) ......................................................... 26
`Google LLC v. Uniloc 2017 LLC, No. 20-
`2040 (Fed. Cir.) ........................................................... 15
`Intel Corp. v. VLSI Technology LLC,
`Nos. 21-1614, -1616-1617, -1673-1677,
`-1738-1741 (Fed. Cir.) ................................................. 15
`Optis Wireless Technology LLC v. Apple
`Inc., No. 19-66 (E.D. Tex.) ........................................ 11
`
`
`
`
`
`
`
`IN THE
`Supreme Court of the United States
`
`No. 21-
`
`APPLE INC.,
`
`v.
`
`Petitioner,
`
`OPTIS CELLULAR TECHNOLOGY, LLC, OPTIS WIRELESS
`TECHNOLOGY, LLC, AND UNWIRED PLANET
`INTERNATIONAL LIMITED,
`
`Respondents.
`
`
`ON PETITION FOR A WRIT OF CERTIORARI TO THE
`UNITED STATES COURT OF APPEALS
`FOR THE FEDERAL CIRCUIT
`
`PETITION FOR A WRIT OF CERTIORARI
`
`
`Apple Inc. respectfully petitions for a writ of certio-
`rari to review the judgment of the U.S. Court of Appeals
`for the Federal Circuit in this case.
`
`INTRODUCTION
`A decade ago, Congress recognized that the patent
`system had become imbalanced—patents were too easy
`to obtain and too hard to challenge once issued, allowing
`dubious patents to be used to stifle innovation and com-
`petition. In response, Congress enacted a slate of re-
`forms to improve patent quality. One of the principal re-
`forms was the creation of inter partes review (“IPR”),
`an administrative process designed to serve as a more
`
`
`
`
`
`2
`
`efficient and reliable alternative to litigation for review-
`ing the validity of already-granted patents.
`Through a pair of actions in the past two years, the
`Director of the Patent and Trademark Office (“PTO”)
`decreed a rule that has sharply undermined access to
`IPR, contrary to Congress’s express design. That rule—
`referred to here as the NHK-Fintiv Rule—requires the
`Patent Trial and Appeal Board (“Board”) to deny insti-
`tution of IPR when it determines that IPR would be in-
`efficient in light of pending infringement litigation in-
`volving the same patent. The Board has routinely ap-
`plied the NHK-Fintiv Rule to deny IPR petitions, in-
`cluding several filed by Apple.
`The NHK-Fintiv Rule undermines the role of IPR
`in Congress’s effort to improve the integrity of the pa-
`tent system. The Rule often forecloses the availability
`of IPR in precisely the circumstances when Congress
`thought it would be most useful: when a patent holder
`asserts a dubious patent in a lawsuit claiming infringe-
`ment. Congress gave the PTO no authority to decline to
`institute IPR merely because a parallel infringement
`suit was pending, even though Congress did grant such
`authority when other types of proceedings involving the
`same patent are ongoing. With respect to infringement
`litigation, Congress imposed only one restriction—that
`IPR petitions be filed within one year of the complaint
`alleging infringement, a requirement Apple met here.
`The NHK-Fintiv Rule also yields arbitrary results.
`For example, the Rule requires the Board to deny IPR
`petitions when it determines that IPR would be ineffi-
`cient based on its speculation about when the infringe-
`ment trial will conclude, even though trials are fre-
`quently rescheduled—and often not until after it is too
`late for the Board to correct its denial.
`
`
`
`
`
`3
`
`This petition concerns the authority of the Federal
`Circuit to act when the Board denies an IPR petition on
`a basis (like the NHK-Fintiv Rule) that is challenged as
`unlawful. Here, the Board applied the NHK-Fintiv Rule
`to deny Apple’s IPR petitions, and like other thwarted
`IPR petitioners, Apple appealed the denials to the Fed-
`eral Circuit. And like others, Apple sought to argue that
`the denials were unlawful because the Rule exceeds the
`PTO’s authority under the Leahy-Smith American In-
`vents Act, 125 Stat. 284 (2011) (“AIA”), is arbitrary and
`capricious, and was adopted without the notice-and-com-
`ment rulemaking required by the Administrative Proce-
`dure Act (“APA”). Although the Federal Circuit has ju-
`risdiction over such appeals under the plain language of
`28 U.S.C. §1295(a)(4)(A), the Federal Circuit—as it has
`done in all such appeals—dismissed for lack of jurisdic-
`tion based on 35 U.S.C. §314(d), and held in the alterna-
`tive that mandamus relief was unavailable.
`The Federal Circuit’s conclusion that §314(d) elimi-
`nates its appellate jurisdiction conflicts with this Court’s
`decisions in Cuozzo Speed Technologies, LLC v. Lee, 136
`S. Ct. 2131 (2016), and SAS Institute, Inc. v. Iancu, 138
`S. Ct. 1348 (2018), which make clear that, consistent with
`the APA and background principles regarding the avail-
`ability of judicial review, §314(d) does not bar the Fed-
`eral Circuit from hearing challenges to Board decisions
`denying institution 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. Fur-
`ther, the Federal Circuit’s refusal to grant mandamus
`demonstrates the need for this Court’s guidance about
`the availability of mandamus relief in this context.
`The Federal Circuit’s position, if not corrected, will
`permit the PTO to continue to constrict the availability
`
`
`
`
`
`4
`
`of IPR far beyond what Congress intended by denying
`IPR petitions—free from any judicial scrutiny—based
`on the unlawful NHK-Fintiv Rule or other similarly un-
`lawful grounds. If the Federal Circuit’s position stands,
`no court could review the PTO’s decision even if the
`agency denied an IPR petition based on a coin flip or a
`view that all IPR petitions should be denied automati-
`cally. By treating such decisions as if they are immune
`from judicial review, the Federal Circuit’s position en-
`dangers a tool that Congress determined to be essential
`to the integrity of the patent system.
`
`OPINIONS BELOW
`The court of appeals’ decision (App. 1a-4a) is un-
`published but available at 2020 WL 7753630. The deci-
`sions of the Patent Trial and Appeal Board (App. 5a-30a,
`31a-48a, and 49a-64a) are unpublished but available at
`2020 WL 5580473, 2020 WL 5539827, and 2020 WL
`5413619.
`
`JURISDICTION
`The court of appeals issued its decision on December
`21, 2020, and denied Apple’s rehearing petition on Feb-
`ruary 26, 2021 (App. 65a-67a). On March 19, 2020, this
`Court extended the deadline to file petitions for writs of
`certiorari to 150 days from the date of the lower court
`judgment or order denying rehearing. This Court has
`jurisdiction under 28 U.S.C. §1254(1).
`
`STATUTORY PROVISIONS INVOLVED
`Section 314 of title 35, U.S. Code, and section 1295 of
`title 28, U.S. Code, are reprinted in the appendix to this
`petition. App. 75a-79a.
`
`
`
`
`
`5
`
`STATEMENT
`A. Legal Background
`1. Inter partes review
`A decade ago, Congress became “concerned about
`overpatenting and its diminishment of competition,”
`Thryv, Inc. v. Click-To-Call Techs., LP, 140 S. Ct. 1367,
`1374 (2020), concluding that “questionable patents
`[were] too easily obtained and too difficult to challenge,”
`H.R. Rep. No. 112-98, at 39-40 (2011) (“House Report”).
`In response, Congress enacted the AIA to “establish a
`more efficient and streamlined patent system that will
`improve patent quality and limit unnecessary and coun-
`terproductive litigation costs.” House Report at 40. A
`centerpiece of the AIA’s reforms was IPR, an adminis-
`trative process by which the Board reconsiders the pa-
`tentability of a previously granted patent. 35 U.S.C.
`§311; see Thryv, 140 S. Ct. at 1370. Congress intended
`IPR to provide a “cost effective alternative[] to litiga-
`tion” over patent validity, House Report at 40, 48, that
`takes advantage of “the expertise of the Patent Office on
`questions of patentability,” 157 Cong. Rec. S1352 (daily
`ed. Mar. 8, 2011) (statement of Sen. Udall); see also, e.g.,
`House Report at 40 (IPR “limits unnecessary and coun-
`terproductive litigation costs”).
`Several features of IPR promote Congress’s goals
`by offering a more streamlined alternative to litigation.
`For example, in IPR, a patent may be canceled as
`unpatentable “only” on grounds of novelty or
`nonobviousness. 35 U.S.C. §311(b). IPR is governed by
`a strict schedule to ensure expeditious resolution. See
`35 U.S.C. §§314(b), 316(a)(11); see also 37 C.F.R.
`§§42.100, 42.107; United States v. Arthrex, Inc., 141 S.
`Ct. 1970, 1977 (2021). Unpatentability may be shown in
`IPR by a preponderance of the evidence, 35 U.S.C.
`
`
`
`
`
`6
`
`§316(e), whereas in litigation invalidity must be shown
`by clear and convincing evidence, Microsoft Corp. v. i4i
`Ltd. P’ship, 564 U.S. 91, 95 (2011). And although patent-
`validity issues in infringement suits are decided by lay
`jurors who typically render a general verdict, IPRs are
`decided by administrative patent judges with “technical
`expertise and experience,” who “contribute to the public
`confidence by providing more consistent and higher
`quality
`final written decisions” on patentability.
`Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320,
`1336 (Fed. Cir. 2019), rev’d on other grounds, 141 S. Ct.
`1970; see 35 U.S.C. §§6(a), 318(a).
`The IPR process begins with a petition to institute
`IPR, which may be filed by anyone who is not the pa-
`tent’s owner. 35 U.S.C. §311(a). The petition may ask
`the Board to cancel one or more claims of a particular
`patent. Id. §311(b). The AIA vests the Director of the
`PTO with the authority to grant or deny IPR petitions.
`Id. §314. The Director has delegated this authority to
`the Board. 37 C.F.R. §42.4(a); see id. §§42.2, 42.108.
`“The AIA sets out prerequisites for institution.”
`Thryv, 140 S. Ct. at 1371. Several of those provisions
`specifically address the conduct of IPR in the face of par-
`allel litigation involving the same patent. The AIA ex-
`pressly provides that when there is a pending overlap-
`ping infringement suit, IPR “may not be instituted if the
`petition … is filed more than 1 year after the date on
`which the petitioner, real party in interest, or privy of
`the petitioner is served with” the infringement com-
`plaint. 35 U.S.C. §315(b). The AIA further specifies that
`the Director “may not” institute IPR if the petitioner
`previously “filed a civil action challenging the validity of
`a claim of the [same] patent,” id. §315(a)(1), but makes
`that bar inapplicable if the petitioner’s previous chal-
`lenge to the patent was made by counterclaim to an
`
`
`
`
`
`7
`
`infringement suit, id. §315(a)(3). And if the petitioner
`files a civil action after petitioning for IPR, the lawsuit
`is “automatically stayed”—unless and “until” the patent
`owner asserts an infringement claim against the IPR pe-
`titioner, at which point the stay is lifted and the infringe-
`ment litigation may proceed, id. §315(a)(2)(B).
`The AIA thus expressly recognizes that IPR may
`proceed in parallel with infringement litigation involving
`the same patent, as long as the IPR petition is filed
`within one year after the petitioner was served with the
`infringement complaint. That contrasts sharply with
`how the AIA handles other types of parallel proceed-
`ings, which the statute expressly entrusts to the Direc-
`tor’s discretion. The AIA states that “[i]n determining
`whether to institute [IPR], the Director may … reject
`the petition … because[] the same or substantially the
`same prior art or arguments previously were presented
`to the Office.” Id. §325(d). And the AIA provides that
`the Director “may … stay … or terminat[e]” IPR “if an-
`other proceeding or matter involving the [same] patent
`is before the Office.” Id. §315(d). The AIA contains no
`provision similarly authorizing the Director to decline to
`conduct IPR based on overlap with a pending infringe-
`ment lawsuit.
`The AIA states that the Director’s “determination
`… whether to institute an inter partes review … shall be
`final and nonappealable.” 35 U.S.C. §314(d).
`
`2. The NHK and Fintiv decisions
`In 2018, the Board for the first time asserted author-
`ity to deny IPR petitions based on the pendency of in-
`fringement litigation involving the same patent claims—
`even where the IPR petition was filed within §315(b)’s
`one-year
`limit and meets all other
`statutory
`
`
`
`
`
`8
`
`prerequisites. In NHK Spring Co. v. Intri-Plex Tech-
`nologies, Inc., the Board declared that “the advanced
`state of the [overlapping] district court proceeding is an
`additional factor that weighs in favor of denying the
`[IPR] Petition.” No. IPR2018-00752, 2018 WL 4373643,
`at *7 (P.T.A.B. Sept. 12, 2018). In that case, trial in a
`pending patent-infringement suit in which the IPR peti-
`tioner was defending against the infringement claims by
`asserting “the same prior art and arguments” as it raised
`in its IPR petition was “set to begin” about six months
`before the IPR proceeding would “conclude.” Id. The
`Board determined that conducting an IPR trial in such
`circumstances “would be an inefficient use of Board re-
`sources.” Id. As authority for denying the IPR petition
`based on the pending overlapping litigation, the Board
`cited 35 U.S.C. §314(a). Id. That provision states that
`“the Director may not” institute IPR “unless” the Direc-
`tor finds a “reasonable likelihood that the petitioner
`would prevail with respect to at least 1 of the claims chal-
`lenged in the petition.” 35 U.S.C. §314(a).
`The Board subsequently elaborated on NHK in Ap-
`ple Inc. v. Fintiv, Inc., enumerating six “factors” it
`would “weigh” in deciding whether to deny an IPR peti-
`tion in light of pending overlapping infringement litiga-
`tion, No. IPR2020-00019, 2020 WL 2126495, at *2 (Mar.
`20, 2020):
`1. whether the court granted a stay or evi-
`dence exists that one may be granted if a pro-
`ceeding 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;
`
`
`
`
`
`9
`
`4. overlap between issues raised in the peti-
`tion 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.
`Id. 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.” Id. at *3.
`The Board stated that each factor is “non-dispositive”
`and that, “in evaluating [them], the Board takes a holis-
`tic view of whether efficiency and integrity of the system
`are best served by denying or instituting review.” Id. at
`*2-3.
`None of the six Fintiv factors appears in the AIA.
`As in NHK, the Board purported to derive authority for
`them from §314(a). See Fintiv, 2020 WL 2126495, at *1-
`3. The Board also cited §316(b), which provides that “[i]n
`prescribing regulations under [§316], the Director shall
`consider the effect of any such regulation on the econ-
`omy, the integrity of the patent system, the efficient ad-
`ministration of the Office, and the ability of the Office to
`timely complete proceedings instituted under this chap-
`ter.” See Fintiv, 2020 WL 2126495, at *3.
`
`3. The Director’s adoption of the NHK-Fintiv
`Rule
`“[B]y default,” Board decisions are not binding in
`later cases. Patent Trial and Appeal Board, Standard
`Operating Procedure 2 (“SOP-2”), at 3, 8-9 (rev. 10 Sept.
`20, 2018). The Director, however, has authority to des-
`ignate Board decisions as “precedential,” which makes
`them “binding” on the Board “in subsequent matters
`
`
`
`
`
`10
`
`involving similar facts or issues.” Id. at 11. Without
`providing public notice or opportunity for comment, and
`without providing any explanation for his action, the Di-
`rector designated NHK “precedential” in May 2019 and
`did the same with Fintiv in May 2020, see 2018 WL
`4373643; 2020 WL 2126495. The Director thus made
`those decisions binding on the Board and thereby
`adopted the NHK-Fintiv Rule, which embodies the pol-
`icy that IPR petitions must be denied where the Board
`determines that conducting IPR would be inefficient in
`light of pending overlapping infringement litigation.
`Since then, the Board has applied the NHK-Fintiv
`Rule to deny hundreds of IPR petitions. See Unified Pa-
`tents, “Portal,” https://tinyurl.com/xwmajkyx. For ex-
`ample, in Intel Corp. v. VLSI Technology LLC, the
`Board denied a timely IPR petition pursuant to the
`NHK-Fintiv Rule where the trial in an infringement
`lawsuit involving overlapping issues was set for seven
`months before the IPR would have ended. No. IPR2020-
`00106, 2020 WL 2201828, at *6 (P.T.A.B. May 5, 2020).
`In Fintiv itself, the Board denied Apple’s timely IPR pe-
`tition pursuant to the NHK-Fintiv Rule, explaining:
`[T]rial is scheduled to begin two months
`before we would reach a final decision …,
`the District Court has expended effort re-
`solving substantive issues in the case, the
`identical claims are challenged based on
`the same prior art in both the Petition and
`in the District Court, and the defendant in
`District Court and the Petitioner here are
`the same party.
`Apple Inc. v. Fintiv, Inc., No. IPR2020-00019, 2020 WL
`2486683, at *3, *7 (P.T.A.B. May 13, 2020). In both cases
`(as in many others), after the Board denied the IPR
`
`
`
`
`
`11
`
`petitions in reliance on upcoming trial dates in the in-
`fringement suits, the trials were postponed. And had
`the Board instituted the IPR in Fintiv, the Board would
`have completed IPR before the district court trial oc-
`curred—indeed the trial still has not occurred.
`
`B. Proceedings Below
`This case is like numerous others that have occurred
`since the PTO adopted the NHK-Fintiv Rule. In Feb-
`ruary 2020, Apple filed three IPR petitions challenging
`patent claims that respondents had accused Apple of in-
`fringing in a pending lawsuit. See App. 50a-51a, 60a;
`App. 32a, 43a; App. 6a, 25a; Compl., Optis Wireless Tech.
`LLC v. Apple Inc., No. 19-66, ECF No. 1 (E.D. Tex. Feb.
`25, 2019).
`Although Apple’s petitions were timely under
`§315(b), the Board denied them pursuant the NHK-Fin-
`tiv Rule. App. 62a-63a; App. 46a-47a; App. 29a. Stating
`that it was “bound by Fintiv and NHK” because they
`had been “designated as precedential” by the Director,
`the Board refused to consider Apple’s arguments that
`the NHK-Fintiv Rule exceeds the Director’s authority
`under the AIA, is arbitrary and capricious, and was
`adopted without the notice-and-comment rulemaking
`required by the APA. App. 61a; accord App. 44a; App.
`27a.1 Applying the Rule, the Board denied the petitions
`because it determined that IPR “would be an inefficient
`
`
`1 See No. IPR2020-00642, Petitioner’s Reply to Patent Owner
`Preliminary Response, pt.II.A, Dkt. No. 34 (P.T.A.B. July 2, 2020);
`No. IPR2020-00466, Petitioner’s Reply to Patent Owner Prelimi-
`nary Response, pt.II.A, Dkt. No. 66 (P.T.A.B. July 2, 2020); No.
`IPR2020-00465, Petitioner’s Reply to Patent Owner Preliminary
`Response, pt.II.A, Dkt. No. 99 (P.T.A.B. July 2, 2020).
`
`
`
`
`
`12
`
`use of Board resources” given the status of the parallel
`lawsuit. App. 62a-63a; accord App. 46a-47a; App. 29a.
`Apple appealed the three denials to the U.S. Court
`of Appeals for the Federal Circuit. See