PTAB Institutes IPR on Compelling Merits, Despite Other Fintiv Factors Favoring Denial

by | Jun 26, 2024 | PTAB News, Trial Institution

By David Linden and Dave Maiorana –

On October 27, 2023, Inergy Technology, Inc. (“Inergy”) filed concurrent petitions for inter partes review (“IPR”) of U.S. Patent Nos. 7,629,634 (“the ’634 Patent”) (“IPR093”) and 7,812,409 (“the ’409 Patent”) (“IPR094”), each assigned to Force MOS Technology Co., Ltd. (“Force MOS”).  The ’634 Patent discloses and claims a “trenched MOSFET,” which the specification of the ’634 Patent explains is a “type of vertical transistor.”  The ’409 Patent claims a separate semiconductor device.  Both challenged patents are the subject of parallel litigation in the Eastern District of Texas between Force MOS and ASUSTek Computer, Inc. (“ASUS”), a real party in interest in each IPR.

In IPR093, the PTAB rejected Force MOS’s proposed construction of the term “lateral contact layer” in claim 1 as requiring a specific dopant concentration and a dopant implantation feature.  The PTAB noted that although the specification describes embodiments of the lateral contact layer having the proposed dopant concentration and implantation feature, such a limitation cannot be read into unambiguous claim language.  Notably, the only deficiency alleged by Force MOS in Inergy’s primary unpatentability challenge to claim 1 relied on Force MOS’s requested claim construction.  In IPR094, the PTAB similarly refused to adopt claim interpretations proposed by Force MOS that would require limitations not expressly recited in the claims.  The Board then extensively reviewed the asserted prior art and the unpatentability arguments of each party.  In each decision, the PTAB concluded that Inergy demonstrated that it is reasonably likely to prevail at trial in showing that at least one claim is unpatentable.

The PTAB then considered in each case whether institution should nonetheless be denied in light of the parallel district court litigation.  The PTAB applied the factors specified in Apple v. Fintiv, Inc., IPR 2020-00019 (PTAB Mar. 20, 2020) (“the Fintiv factors”) in a substantially similar analysis in each decision:

1) whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted

The PTAB opined that the first Fintiv factor favored discretionary denial, as the only motion to stay the parallel district court proceeding was filed by ASUS and denied with prejudice.

2) proximity of the court’s trial date to the Board’s projected statutory deadline for a final written decision

The Board cited the median time to trial for the Eastern District of Texas and the expected final written decision date, concluding that “the district court would address issues relating to the validity of [each challenged patent] several months before” the PTAB would issue a final written decision.  Thus, the PTAB weighed this second factor as favoring discretionary denial.

3) investment in the parallel proceeding by the court and the parties

The PTAB also weighed the third Fintiv factor as favoring discretionary denial, as the parties had completed preliminary disclosures and claim construction in the parallel proceeding and had nearly completed fact discovery.

4) overlap between issues raised in the petition and in the parallel proceeding

Despite Inergy stipulating “not to pursue invalidity challenges in any district court case based on the same or substantially the same grounds” relied upon in its petitions, the PTAB noted that such a stipulation does not bind ASUS, the defendant in the district court proceeding.  Thus, the PTAB concluded that the fourth Fintiv factor favored denial of institution.

5) whether the petitioner and the defendant in the parallel proceeding are the same party

Considering the fifth Fintiv factor, the PTAB noted that ASUS is identified as a real party in interest in the petitions, thus favoring discretionary denial.

6) other circumstances that impact the Board’s exercise of discretion, including the merits

Despite Fintiv factors 1–5 favoring denial, the Board noted that institution may still be granted where the petitioner has presented compelling evidence of unpatentability.  “[A] compelling-merits challenge,” the Board explained, “is a higher standard than the reasonable likelihood required for the institution of an IPR.”  The PTAB reiterated its assessment of the merits of each petition and concluded that the proffered evidence also met this higher “compelling-merits” standard.  Both institution decisions cited Inergy’s “seemingly straightforward case for claim 1” being unpatentable over the respective prior art references.  Accordingly, the PTAB instituted each IPR.

Takeaway

Parties should consider providing rigorous unpatentability arguments during the pleading stages of an IPR.  Even where parallel litigation otherwise favors denial, institution may be granted in light of a petition demonstrating a compelling case of unpatentability.

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David Maiorana

Partner at Jones Day
Dave Maiorana is a trial lawyer with a notable combination of significant experience as a United States Patent and Trademark Office (USPTO) Examiner and more than 25 years litigating complex intellectual property matters. He has represented clients as both plaintiffs and defendants around the country and in the International Trade Commission (ITC). Dave has experience in diverse technology areas, including e-cigarettes, teeth whitening, diapers, fem care, antibodies, self-inflating tires, oxygen concentrators, flash memory, and digital cameras.