Will "Compelling Merits" Institution Standard Lead To Rubber Stamp FWDs?

• Published date: 23 June 2023
• Subject Matter: Intellectual Property, Patent
• Law Firm: Jones Day
• Author: Mr John Marlott and Ryan Mueller

If a PTAB panel finds "compelling merits" of unpatentability when making its initial institution decision, is there any realistic chance that same PTAB panel will reach a different result in the final decision at the conclusion of a post-grant proceeding? That question bears considering, as the PTAB has proposed formally adopting a "compelling merits" standard for institution of an IPR or PGR under certain circumstances.

As discussed in prior posts, the USPTO is considering sweeping changes to the handling of post-grant proceedings Among these proposed changes, the USPTO is considering formalizing a "compelling merits" standard to institute an IPR or PGR when the petition would otherwise be subject to the USPTO's discretionary denial guidance. See 88 Fed. Reg. 24503 at 24507.

The PTAB currently analyzes six factors when determining whether to exercise its statutory discretion to deny institution. See Apple Inv. V. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (designated precedential May 5, 2020). The sixth Fintiv factor requires the PTAB panel to consider other circumstances affecting the decision, including the merits of the challenge. Id. The PTAB has relied on this sixth factor to proceed with institution of a proceeding where there was strong evidence of unpatentability, despite other Fintiv factors favoring a discretionary denial. See, e.g., Illumina Inv. V. Trs. Of Columbia Univ., IPR2020-00988, Paper 20 (PTAB Dec. 8, 2020). On June 21, 2022, Director Vidal issued a memorandum clarifying the PTAB's practice, explaining that "the PTAB will not deny institution based on Fintiv if there is compelling evidence of unpatentability." See Interim Procedure 5. Recently, the USPTO has further clarified that a PTAB panel will only engage in the "compelling merits" inquiry if the other Fintiv factors favor discretionary denial. See CommScope Techs. LLC v. Dali Wireless, Inc., IPR2022-01242, Paper 23 (PTAB Feb. 27, 2023).

Against this backdrop, the USPTO now proposes to formalize the use of the "compelling merits" standard when a petition is otherwise subject to a discretionary denial. Under the proposed "compelling merits" standard, a challenger must show its petition is "highly likely to lead to a conclusion that one or more claims are unpatentable by a preponderance of the evidence." 88 Fed. Reg. 24503 at 24507. The proposed change places this burden on the challenger at the institution stage "to leave the Board with a firm belief or conviction...