Upon inception of the PTAB in 2012, Congress decreed a minimum for instituting an IPR but no affirmative requirement to do so. 37 C.F.R. §42.108(b); 35 U.S.C. §314(a). As a result, the PTAB has broad discretion to deny institution—recognized by both the Federal Circuit and the Supreme Court. Recently the PTAB has increasingly used its discretion to deny institution under 35 U.S.C. §§314(a) and 325(d). Section 314(a) gives the PTAB discretion to deny institution of a petition with no statutorily delineated limits, while §325(d) grants discretion to deny institution when arguments are similar to those previously presented to the Patent Office.

Denials Under §314(a)

Although §314(a) empowers the Board with a broad discretion backstop, the Board often relies on §314(a) to deny institution of "follow-on petitions" that stage arguments in multiple petitions, often with the purpose of adapting each petition to responses of Patent Owner and the Board. The Board weighs a series of factors in determining whether to deny institution of a follow-on petition. These General Plastic factors fundamentally consider: (1) whether the same petitioner previously sought review of the same patent claims; (2) whether petitioner knew of subsequently used prior art at the time of filing the first petition; and (3) whether the petitioner had received any preliminary response from patent owner to a first petition. Notably, the General Plastic factors also apply when multiple petitioners challenge the same patent, as seen in Valve Corp. v. Electronic Scripting Prods., IPR2019-00062, Paper 11 (PTAB April 2, 2019).

For example, in Alere v. Rembrandt Diagnostics, IPR2017-01130, Paper 10 (PTAB Sept. 28, 2017), the Board denied a follow-on petition after weighing the General Plastic factors. The Board reached this conclusion because the follow-on petition challenged the same claims in the first petition, the petitioner had access to the preliminary response and institution decision at the time of filing the follow-on petition, and because multiple, staggered petitions are an inefficient use of the PTAB's resources.

Recently, given that partial-institution is no longer an option post-SAS, the PTAB has denied institution pursuant to §314(a) even when petitioner demonstrates a reasonable likelihood of prevailing on some challenged claims. For example, in VRG Controls v. Dresser, IPR2019-00618, Paper 7 (PTAB Aug. 7, 2019), the Board denied institution under §314(a) because petitioner met its burden on only two of 13 challenged claims.

In addition, the Board has considered status of any proceedings related to the challenged patent in determining whether to institute under §314(a). For example, in Bio-Rad Labs. v. 10X Genomics, IPR2019-00567, Paper 23 at 26-30 (PTAB Aug. 8, 2019), the Board determined that an IPR proceeding would be an inefficient use of Board resources given the advanced stage of co-pending litigation. In particular, petitioner's challenge at the ITC had been fully argued and would be decided at least a year before the Board would reach a final decision.

Denials Under §325(d)

The Board also has discretion under §325(d) to deny institution when a petition presents "the same or substantially the same prior art or arguments" previously before the Office, whether during prosecution or in another post-grant proceeding. In 2014, the PTAB designated seven informational decisions highlighting the PTAB's considerable discretion under §325(d). For example, in Cultec v. StormTech, IPR2017-00777, Paper 7 (PTAB Aug. 22, 2017), the PTAB denied institution under §325(d) because a petition's asserted reference was deemed not prior art during prosecution. The PTAB has also denied institution when asserted art was presented in a prior petition for IPR, as seen in Unilever v. Procter & Gamble Co., IPR2014-00506, Paper 17, (PTAB July 7, 2014).

Over time, the PTAB developed a multi-factor analysis to compare a petition's arguments to those previously presented to the Office. These factors, known as the Becton, Dickinson factors, chiefly consider: (1) asserted art compared to prior art referenced in prosecution; (2) the similarity of current arguments to those made during examination; and (3) whether petitioner has provided evidence warranting reconsideration of prior art, arguments, or the Examiner's evaluation. By delineating these factors, the PTAB provided guidelines to analyze and challenge asserted references under §325(d). For example, in Edge Endo v. Maillefer Instruments Holding S.A.R.L., IPR2018-01349, Paper 15 (PTAB Jan. 14, 2019), the PTAB weighed each Becton, Dickinson factor to determine that petitioner's arguments based on an asserted reference were duplicative of arguments previously before the Office during prosecution.

Recently, the Board has considered an additional element in weighing these factors—the status of any related district court proceeding under §314(a). In giving weight to this factor, the PTAB has denied institution as an inefficient alternative to district court litigation under a hybrid §§325(d) and 314(a). For example, in the precedential decision NHK Spring Co. v. Intri-Plex Techs., IPR2018-00752, Paper 8 at 19-20 (PTAB Sept. 12, 2018), the Board denied institution finding inter partes review to be inefficient given that co-pending district court proceedings were near final stages.

In weighing this additional factor, the Board has also considered evidence of secondary considerations in previous litigation to determine whether to exercise its discretion. In Stryker v. KFX Medical, IPR2019-00817, Paper 10 at 23-29 (PTAB Sept. 16, 2019), the Board considered such evidence as weighing in favor of denying institution under §§325(d) and 314(a). In particular, the Board found that fully-developed evidence of long-felt need, failure of others, and commercial success weighed against finding the challenged claims obvious.

Denials Under §§314(a) and 325(d) in the Trial Practice Guide

This discretionary denial trend is reflected in the most recent version of the Trial Practice Guide, which encourages parties to address discretionary issues under 35 U.S.C. §§314 and 325(b). The July 2019 Update provides specific sections for each of §§314(a) and 325(b) listing General Plastic and Becton, Dickinson factors, respectively. However, the Update notes that each list of factors is "non-exclusive."

For §314(a), the Update mentions that the Board considers the relationship between petitioners who file staggered petitions in addition to the General Plastic factors. In particular, the Update indicates the Board will consider status of other proceedings related to the challenged patent, including related proceedings at the USPTO, in district court, and before the ITC. Notably, the Update provides guidance for parties to address issues relevant to §314(a) in a separate five-page paper filed with the petition or preliminary response.

The Update provides similar guidance regarding §325(d) by encouraging parties to address each Becton, Dickinson factor as well as additional factors relevant to the Board's discretion to deny institution. Additional considerations include whether the same or substantially the same art was presented in an earlier filed post-grant proceeding.

The Update also recognizes that the Board maintains discretion to deny institution under a hybrid §§314(a) and 325(b) by weighing additional considerations such as whether the petition would be an efficient use of Board resources. Notably, the Update indicates that this discretion may be used even if a petition's challenge satisfies the threshold requirement for institution.

Practical Considerations

The PTAB's exercise of its broad discretion under §§314(a) and 325(d) appears to be gaining momentum. The accompanying chart illustrates the increase in discretionary denials under §§314(a) and 325(d) since 2016. The underlying data is sourced from Docket Navigator and considers denials of institution under §314(a), §325(d), or both. In fact, discretionary denials under these sections have nearly tripled since 2016.

Given the current status of denials under §§314(a) and 325(d), practitioners should weigh several considerations of their own. Petitioners should especially beware of the changing landscape given there is no appeal for a denial of institution. Where a petition relies on art considered during prosecution, petitioners should explain how the art was used during prosecution. How the art was used—whether in an office action or as simply a background reference—could impact how much weight a panel will give to the discretionary factors. Petitioners should also consider the status of related proceedings, such as ITC or district court, and whether trial is imminent. Where necessary to file a follow-on petition or use previously considered art or arguments, petitioner should affirmatively address the General Plastic or Becton, Dickinson discretionary factors in the petition itself, or take advantage of the separate five-page paper mentioned in the July 2019 Update to the Trial Practice Guide.

Patent owners, on the other hand, should consider whether discretionary denial under §§325(d) and 314(a) is applicable to their case. When multiple petitioners are involved, patent owners should consider General Plastic factors in a separate five-page paper adjoined to a preliminary response. Patent owners should also consider the status of all related litigation—from completed litigations (e.g., fully developed secondary consideration arguments) to impending trials.

James M. Glass is chair of the post-grant patent practice at Quinn Emanuel Urquhart & Sullivan in New York. Richard Lowry is an associate in the firm's Washington, D.C. office, focusing on high-tech IP litigation and post-grant proceedings.