As the last quarter of 2022 is winding down, procedural denials have decreased by over 61%, year-over-year. The total number of PTAB decisions, by contrast, has increased just 7.5%. For the year, the overall institution rate is now over 68%, compared to 58.8% (a low) in 2021. 

Put simply, there was but one use of 314(a) to deny a petition in the third quarter of 2022 in light of an intervening cancellation under 101 in the district court—a use that the Director subsequently sua sponte moved to review; and just three discretionary denials total, the others under 325(d).  (She moved to review on one of those two as well.)  On the year to date, we count only 13 NHK Spring/Fintiv denials, most of those coming in Q1.

The market change in Fintiv denials (or section 314 in general) is plainly Director-dependent, and, it is worth noting, is likely related to Director Vidal’s clarification memo and subsequent precedential Board decisions from June.  See Kathy Vidal, Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation, June 21, 2022. In that memo, Director Vidal clarified that: 1) Fintiv denials were inappropriate over ITC proceedings; 2) Fintiv should not be used when there are compelling merits to the patentability challenge; 3) Sotera stipulations also demand the Board look past Fintiv; and 4) for the controversial “factor 2” trial dates, the Board would now rely on median time-to-trial, rather than scheduled trial dates, when assessing the potential for conflict. 

Looking at year-to-date, the Board has issued just 70 discretionary denials—down substantially from the Director Iancu-era years—with most of those 70 coming prior to Director Vidal assuming the post. 

Procedural denials based on 314(a) to date are just a quarter of the total in 2021, with only 34.  Interestingly, while not subject of the Director’s memo, discretionary 325(d) denials are likewise down 71% (to date) as compared to 2021, with no signs of taking off in Q4. 

Looking at 314 and 325 combined, the number of denials based on either ground has dropped 64% (to date, assuming little change in Q4). 

Looking at the quarter-by-quarter trends, 314(a) was used only once in Q3 of 2022, resulting in an 83% decrease since Q1 of 2021.  As noted above, that one use is under Arthrex Director Review.  

When looking at all denials to date, 11.2% have been based on 314(a), while another 22.1% have been other procedural-based denials.  The Board has denied on the merits two-thirds of the time; these percentages of discretionary denials went up dramatically under the former Director. 

Denials that rely on 325(d) (versus other denials), represent just 5.6% of all denials before the Board since inception. 

As of Q3 2022, only 13 NHK Spring/Fintiv denials have been issued this year. 

What is clear is that, while Fintiv grew popular after being introduced by the last administration, changes to the rule made by this Director—likely coupled with increased sophistication from District Courts and parties, as well as a general realism as to trial dates adopted by many judges at the Board—seem to have contributed to a rule that has all but been overturned. This begs the question of why the Board and the USPTO don’t simply overturn the case, and offer recognition that, while the Office may have some discretion over institution, it cannot harness that to policy aims contrary to the real goals of the America Invents Act, regardless of lobbying pressure to do otherwise.

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