It was another year of hundreds of procedural denials at the PTAB, as the Board ruled on Fintiv and discretionary issues in almost half of all decisions. The dip in the number of discretionary denials in 2021 from 2020’s record high likely reflects parties adjusting to the recent requirements by filing so-called Sotera stipulations, devoting petition space to briefing the Fintiv factors, and shifting to file ex parte reexaminations over IPRs (which increased by half, as shown below). 

And while grants were down and it is difficult to measure how much time, money, and efforts have been expended responding to Fintiv, data shows the Board considered discretionary issues in approximately 500 of the institution decisions issued in 2021, or roughly more than a third of all the 1,249 decisions it made. In short, Fintiv affected almost half the cases on the Board’s docket in 2021. 

2021 saw 179 institution decisions denied on procedural grounds, compared to 228 in 2020 and 162 in 2019. 

Of institution decisions issued in 2021, the Board used Section 314(a) 123 times to dodge the merits and deny the petition. 

When combining Section 314(a) denials with Section 325(d) denials, this number again was down slightly from 2020.

With Director Iancu stepping down at the beginning of the Biden administration and caretaker leadership currently in place at the USPTO until a new director is confirmed, an interesting story emerges when examining the quarter-by-quarter data. A quarter-by-quarter analysis shows that procedural denials were at a high in the first half of 2021, falling off over the second half as petitioners adjusted to Fintiv by filing Sotera stipulations, dedicating larger portions of their petition to Fintiv issues, or simply opting to file reexams. After the high, the Board’s overall use of 314(a) to discretionarily deny petitions has dropped slightly. However, the trend of discretionary denials under 314(a) related to expensive ITC proceedings and faulty stipulations continued unabated, and discretionary denials under Section 325(d) have been on the rise in recent months.  Ultimately, there was a 73% decrease from the first quarter of 2021 to the last quarter of 2021. Whether that is a combination of parties getting savvier about Sotera stipulations and Fintiv briefing and the lack of further precedential efforts in the area, or more reflective of a longer-term trend, remains to be seen—but with 40% of petitions addressing the issue this year, Fintiv has become omnipresent and shows no signs of stopping. 2022 looks set to exceed last year’s numbers as January already has 18 discretionary denials.

What is clear is that discretionary considerations continue to make up a substantial portion of the Board’s overall institution decision docket, and as a result, they eat up a fair number of pages, additional briefing, and party and Board time. These are pages and time that could be spent on addressing the merits of a challenge, rather than used to jump through procedural hoops that are outside the boundaries of the IPR statute. 
Section 314(a) denials are now used by the Board nearly 12.4% of the time.

Meanwhile, Section 325(d) denials remain consistent at 5.9%. Note that all 325(d) denials are statutory—i.e., the express considerations are outlined in the statute, rather than reflected in a series of Board decisions interpreting the Board’s authority—so there is no need to further subdivide the category.

The NHK Spring/Fintiv framework, in particular, remained consistent with last year, while Parallel Petition Denials decreased by 75%—suggesting that most parties are simply avoiding filing multiple petitions on the same patent, regardless of length of claims, need, or space issues. These changes could be indicative of future changes to come at the PTAB, or they could represent parties changing their filing behaviors to avoid what they now see as a stumbling block for all petitions.

Over the same period, companies began to revive ex parte reexaminations–an old, but nonetheless effective, tool. From 2020 to 2021, the number of reexaminations increased by 47%. Over 300 reexaminations were filed in 2021, as parties occasionally forwent IPRs that raised discretionary or stay-related issues.

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