On August 23, 2022, Director Vidal initiated a sua sponte Director review decision in two IPRs between Code200 and Bright Data (IPR2022-00861, -00862), which vacated the Board's denial of Code200's IPRs as improper follow-on petitions under General Plastics. More specifically, Code200 had previously filed two IPR petitions in 2020 that were denied under Fintiv (i.e., without addressing the underlying merits). Then, when a separate IPR petitioner challenged the same patents Code200 was concerned with, Code200 filed its current set of petitions along with a motion for joinder. The Board denied joinder and institution of Code200's petitions because, under General Plastic, Code200 previously filed IPR petitions directed to the same claims of the patents-at-issue (and would also not agree to file a stipulation in its district court case agreeing not to raise the grounds asserted in Code200's current IPRs in the district court litigation).
The Director "respectfully disagree[d]" with the Board's analysis. Director Vidal noted that when a prior IPR petition by the same petitioner was discretionarily denied or otherwise not evaluated on the merits, General Plastic factors 1-3 "only weigh in favor of discretionary denial when there are 'road-mapping' concerns under factor 3 or other concerns under factor 2." That is, if the petitioner gained no tactical advantage through the Board's earlier decisions, such as by gaining an understanding of the Board's view of the asserted prior art, then much of the underlying concern and rationale behind General Plastic goes away. This pronouncement from Director Vidal also further weakens Fintiv practice.
As a reminder and as reported in our June 23, 2022, post (linked here), the Office recently issued a memo explaining that it will not deny institution of an IPR or PGR under Fintiv:(1) when a petition presents compelling evidence of unpatentability; (2) when a request for denial under Fintiv is based on a parallel ITC proceeding; or (3) where a petitioner stipulates not to pursue in a parallel district court proceeding the same grounds as presented in the petition or any grounds that could have reasonably been raised in the petition (i.e., a Sotera-style stipulation). Now, for those IPR petitioners that previously had their IPR denied under Fintiv and are still within their statutory one-year-filing window, or that can latch onto a separately filed IPR petition with a motion for joinder as was the case with Code200, Director Vidal's decision substantially weakens the Board's ability to shut down the later petition as an improper "follow-on" under General Plastic.
Fintiv's prior stronghold over IPR practice continues to diminish under Director Vidal's leadership.
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