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Turning Away a Patent Challenge: The NHK-Fintiv Rule Explained

March 3, 2021, 11:00 AM

A rule that lets the U.S. Patent and Trademark Office refuse to consider a patent challenge—to avoid duplicating proceedings—has sparked lawsuits, complaints, and even a request for Congress to investigate.

Inventors say the NHK-Fintiv rule helps patent owners avoid fighting attacks on multiple fronts.

But tech heavyweights such as Apple Inc. and Google LLC say it’s unraveling Congress’ attempt to rein in abusive patent legislation—and are suing over it. Patient groups fear it will slow generic drugs from coming to market.

(1) What is the NHK-Fintiv rule?
The rule—a product of precedent established under former PTO director Andrei Iancu—lets the Patent Trial and Appeal Board decline to review a patent based on the progress of a parallel infringement case in a federal court or other agency.

The rule grew out of NHK Spring v. Intri-Plex, a 2018 PTAB decision that found the advanced state of a parallel district court lawsuit weighed in favor of denying review.

In May 2020, the board designated precedential Apple v. Fintiv, which laid out factors for judges to consider when deciding whether to institute review, including the trial date in the parallel case, whether the other tribunal has paused its case for PTAB review, and the extent of the overlapping issues. Decisions designated precedential are binding on PTAB judges.

(2) What’s the problem?
Many companies are finding it more difficult to challenge a patent because of the rule, which the PTO says offers flexibility to help ensure the PTAB is an alternative to district courts, not just instituting redundant proceedings.

One active challenger at the PTAB, Unified Patents LLC, found the board exercised its discretion to deny review in 228 cases in 2020—up 60% from the previous year. Most of the denials came under the NHK-Fintiv or another rule that discourages parallel petitions, Unified said.

Because the NHK-Fintiv framework emphasizes the speed of parallel litigation, companies suing in Waco, Texas, are finding it especially difficult to get review. The judge there, Alan Albright, has a fast court docket and is reluctant to pause his cases while the PTAB reviews a patent.

Fitbit Inc., among other companies, complains that it’s also nearly impossible to get a PTAB review when there is a related infringement case at the U.S. International Trade Commission. Similar to Albright, the ITC moves quickly and doesn’t like to stay its investigations.

Because jurisdictions vary in speed, critics say the rule encourages plaintiffs to forum shop. Apple, in PTAB documents, said denying review based on trial dates limits “PTAB access to only defendants sued in slower jurisdictions,” effectively insulating other patents from review.

(3) What do others say?
The PTO has gotten more than 800 comments since it announced last fall that it was considering codifying its discretionary denial practices, including the NHK-Fintiv rule, through rulemaking.

The PTAB Bar Association said there was “nearly uniform dissatisfaction with the Fintiv analysis” among its members. The American Bar Association’s IP Law Section said the factors appear based on “incorrect assumptions” about the realities of litigation.

The New York City Bar Association noted Hatch-Waxman lawsuits, which involve disputes between brand-name and generic drug makers, and ITC cases are likely to be “disproportionately affected” under the current approach.

By contrast, a group called the Coalition for 21st Century Patent Reform that counts 3M, Johnson & Johnson, and General Electric Co. among its members says having a presumption against PTAB review when a court or the ITC won’t pause its case serves to “relieve patent owners from the burden” of concurrent proceedings.

And Sen. Thom Tillis (R-N.C.), the former chairman of the Senate Judiciary IP subcommittee, told Iancu in a letter that codifying the rule would help provide “long-term certainty.”

(4) What’s next?
Judge Edward Davila of the U.S. District Court for the Northern District of California is scheduled to hear arguments next month in the lawsuit Apple and other tech companies filed against the PTO, which argues the rule violates the Administrative Procedure Act.

An inventor group, US Inventor, sued in the U.S. District Court for the Eastern District of Texas to enhance the rule by forcing the PTO to put it through a formal rulemaking. It also wants the PTAB blocked from starting new patent reviews until the rulemaking is complete.

Days later, Mylan argued in the U.S. Court of Appeals for the Federal Circuit that the rule was unconstitutionally applied in its challenge to a Janssen Pharmaceutical N.V. patent because the PTAB considered a looming trial against a different generic drug company, Teva Pharmaceuticals USA Inc. The court has yet to rule.

On Capitol Hill, the Electronic Frontier Foundation and Computer & Communications Industry Association asked the last Congress to investigate the issue of PTAB discretion. It’s too early to say if the new Congress will take up such a query.

To Learn More:
—From Bloomberg Law

Mylan, Janssen Face Flurry of Questions on Patent Review Appeals

Patent Office Hit With Fresh Lawsuit Over Its Review Decisions (1)

Verizon, Others Say Patent Office’s Challenge Rule Ignores Reality

Companies Hit With ITC Patent Complaints Face Long Odds at PTAB

To contact the reporter on this story: Matthew Bultman in New York at

To contact the editors responsible for this story: Melissa B. Robinson at, Keith Perine at