On August 5, several major tech companies, including Apple and Google, submitted a legal brief challenging the NHK–Fintiv rule established by the U.S. Patent and Trademark Office (USPTO) for discretionary denials of inter partes review (IPR) proceedings at the Patent Trial and Appeal Board (PTAB). The brief argues that the NHK–Fintiv rule, which was developed through PTAB precedential decision-making, should have gone through a notice-and-comment rulemaking process because it affects private interests and binds administrative patent judges (APJs) at the PTAB.
This latest appeal stems from the tech companies’ previous unsuccessful attempts to challenge the NHK–Fintiv rule in the Northern District of California. While the Federal Circuit found that at least Apple had standing to challenge the lack of notice-and-comment rulemaking required by the Administrative Procedures Act (APA), the district court ultimately granted summary judgment to the USPTO, determining that the NHK–Fintiv rule is exempt from the rulemaking requirements.
The tech companies argue that the NHK–Fintiv rule significantly impacts the ability of petitioners to challenge patent rights through IPR, affecting the private interests of infringement defendants. The rule also limits the discretion of the PTAB in deciding whether to institute IPR petitions based on the factors outlined in the NHK–Fintiv framework. Both the appellate and district courts have noted an increase in denials of IPR petitions due to the NHK–Fintiv rule, which the tech companies believe should have undergone notice-and-comment rulemaking.
Apple and Google further argue that the sixth factor of the NHK–Fintiv framework, which considers other circumstances including the merits of a petition, does not provide significant latitude for deviation from the other factors. They also point to provisions in the America Invents Act (AIA) that suggest notice-and-comment rulemaking should have been followed for the NHK–Fintiv framework to be valid.
Overall, the tech companies believe that the flaws in the NHK–Fintiv rule highlight the importance of adhering to notice-and-comment procedures, especially when rules impact the rights of petitioners in IPR proceedings. They argue that the lack of transparency in the development of the NHK–Fintiv framework has had significant implications for parties involved in patent disputes and should have been subject to public input through the rulemaking process.