In Apple, Inc. v. Iancu,Judge Edward Davila dismissed a lawsuit brought by tech companies who had asked to set aside the “NHK-Fintiv rule.”This rule allows the Patent Trial and Appeal Board (PTAB) to consider various factors when determining whether to institute review of a patent that is asserted in ongoing parallel district court litigation.
Rather than appealing specific PTAB decisions where the NHK-Fintiv rule was used to deny institution, Plaintiffs’ complaint challenged the administrative framework of the PTAB’s precedential opinions. Plaintiffs presented three arguments: 1) the Director exceeded statutory authority in adopting the NHK-Fintiv rule; 2) the NHK-Fintiv rule is arbitrary, capricious, and violates the AIA; and 3) the NHK-Fintiv rule is a final, binding rule that was issued without notice-and-comment rulemaking. In response, the Government filed a motion to dismiss alleging that Plaintiffs lacked standing and that the issues were not justiciable under the Administrative Procedure Act.
The Court granted the Government’s motion to dismiss, finding that Plaintiffs had standing to bring the case, but that the issues were not justiciable in light of the Supreme Court’s decisions in Cuozzoand Thryv.
Regarding standing, the Court found that Plaintiffs had established an injury-in-fact based on the PTAB’s denial of an opportunity to obtain the benefit of inter partes review (IPR) through the application of the NHK-Fintiv rule. The Court also found the complaint showed a causal connection between the NHK-Fintiv rule and diminished opportunity to experience the benefits of IPR. Finally, the Court concluded that injury was redressable by the ability to enjoin the Director from applying the NHK-Fintiv rule.
After finding standing, the Court addressed the justiciability of Plaintiffs’ arguments. The Court examined the underlying rational of Cuozzo and Thryv, which held that issues closely related to the Director’s decision to institute an IPR petition are non-appealable under 35 U.S.C. § 314(d). Relying on this precedent, the Court found that it “cannot deduce a principled reason why preclusion of judicial review under § 314(d) would not extend to the Director’s determination that parallel litigation is a factor in denying IPR.”The Court then concluded that § 314(d) bars Plaintiffs’ challenge and granted the Government’s motion to dismiss.