High Court Denies Intel Bid to Nix Patent Office’s Fintiv Rule

The US Supreme Court won’t take up Intel Corp.‘s challenge to US Patent and Trademark Office rules that administrative patent judges have used to decline validity reviews of patents asserted in a series of high-stakes lawsuits.

The appeal targeted a rule that gave the Patent Trial and Appeal Board discretion to refuse to review a patent if there’s ongoing parallel litigation in district court. The Fintiv rule was implemented under former PTO Director Andrei Iancu.

The rule, which has since been tweaked by current PTO Director Kathi Vidal, directed PTAB panels to refrain from instituting reviews when parallel patent infringement suits in federal district courts were far enough along. It allowed the tribunal to decline cases even when an administrative challenge was filed within a year of the petitioner being sued for patent infringement, a statutory deadline for such petitions set out by Congress.

These administrative trials, called inter partes reviews, or IPRs, are frequently sought by companies after they’re sued for patent infringement in federal court as a method to invalidate patents and dodge infringement rulings. But courts have held that denial decisions themselves can’t be appealed.

The PTAB under Fintiv denied petitions filed by Intel challenging patents owned by VLSI Technology LLC. The tribunal declined to institute IPRs, deferring to a district court judge in Waco, Texas, where VLSI had sued Intel. The resulting trials ended in separate jury verdicts of $2.2 billion and $949 million.

Intel, Edwards Lifesciences Corp., Apple Inc., Google LLC, and Cisco Systems Inc. collectively sued the agency in US District Court for the Northern District of California contending, among other things, that the Fintiv rule was arbitrary and violated the America Invents Act, a 2011 statute that made major updates to the Patent Act and established the framework for IPR proceedings.

The suit didn’t seek to overturn any particular Fintiv denial but rather targeted the rule itself as violating the Administrative Procedure Act. A district court judge dismissed the suit in November 2021 and the US Court of Appeals for the Federal Circuit in March 2023 held that the Fintiv rule isn’t subject to an arbitrariness challenge because of a provision in the AIA.

Intel and Edwards petitioned the high court to review the case, arguing the “unreviewability principle” means a PTO director could disregard the Patent Act and issue a new rule that all “IPR institution decisions will be made by flipping a coin” and there would be no mechanism to challenge such a rule.

The Patent Office countered that Congress delegated the IPR institution decision to the PTO director who, in turn, “must be able to give guidance in the form of instructions” to PTAB judges as a practical matter. Congress expressly barred the type of judicial review of such instructions that Intel and Edwards are seeking, the office said.

Intel is represented by Wilmer Cutler Pickering Hale and Dorr LLP and Edwards is represented by Knobbe Martens Olson & Bear LLP. The US Justice Department and the PTO’s solicitor’s office represents the government.

The case is Intel Corp. v. Vidal, U.S., 23-135, cert. denied 1/8/24.