IPR Institution Decision

The IPR institution decision is PTAB's determination of whether to grant a petitioner's request and begin the full IPR trial. STATUTORY INSTITUTION STANDARD — 35 U.S.C. § 314(a): PTAB must not institute IPR unless 'the information presented in the petition filed under section 311 and any response filed under section 313 shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.' WHAT 'REASONABLE LIKELIHOOD' MEANS: this is a relatively LOW threshold — it does not require the petitioner to prove invalidity; it only requires a preliminary showing that there is a reasonable likelihood of prevailing on at least one claim; however, it is NOT automatic — PTAB denies institution in approximately 25–35% of filed petitions depending on technology area; TIMING: PTAB must make the institution decision within 3 months of the Patent Owner Preliminary Response (POPR) or the expiration of the period for POPR (which is 3 months from the filing date of the petition); the 12-month statutory deadline for a Final Written Decision runs from the institution decision, not from the petition filing date; CLAIM-BY-CLAIM INSTITUTION: PTAB typically institutes on a claim-by-claim and ground-by-ground basis; if institution is granted on only some claims, the IPR proceeds on those claims; the petitioner does not have the right to appeal a partial institution decision before the FWD.

Apple v. Fintiv (PTAB 2020, designated precedential) established a multi-factor framework under which PTAB may DENY IPR institution on a discretionary basis — even if the petitioner meets the 'reasonable likelihood' substantive threshold — when a parallel co-pending district court litigation is sufficiently advanced that instituting IPR would not serve judicial efficiency. THE SIX FINTIV FACTORS: (1) Whether the court granted a stay or is likely to grant a stay in view of the IPR filing; (2) PROXIMITY OF TRIAL DATE — whether the trial date in the district court is earlier or later than the PTAB's projected Final Written Decision date; if the district court trial will occur before PTAB can issue its FWD, this strongly favors discretionary denial; (3) INVESTMENT IN THE PARALLEL PROCEEDING — whether the parties have invested substantial effort in the district court litigation before the institution decision; substantial discovery, claim construction orders, or expert reports weigh toward denial; (4) OVERLAP OF ISSUES — the degree of overlap between the IPR grounds and the district court invalidity grounds; if largely the same invalidity arguments are at issue, PTAB may find the IPR redundant; (5) IDENTITY OF PARTIES — whether the petitioner and the defendant in the district court are the same or related parties; (6) OTHER CIRCUMSTANCES — any other circumstances relevant to whether instituting IPR would be an efficient use of PTAB resources. KEY MITIGATION (SOTERA WAIVER): a petitioner can moot Fintiv by filing a voluntary commitment to be bound by § 315(e)(2) estoppel as if a FWD had been entered — this broader estoppel commitment signals to PTAB that the IPR is worth instituting because its outcome will be binding.

The Patent Owner Preliminary Response (POPR) is an optional submission by the patent owner filed before the institution decision, in response to the petition. TIMING: patent owner has 3 months from the petition filing date to file a POPR (this is the statutory period; it can be shortened for good cause or adjusted); after the POPR period expires (or the POPR is filed), PTAB has 3 months to issue the institution decision. WHY FILE A POPR: the POPR is critically important — PTAB can rely on evidence and arguments in the POPR to DENY institution, which would end the IPR entirely; a well-argued POPR can eliminate the need for a full IPR trial; WHAT TO ARGUE IN A POPR: (1) TECHNICAL ARGUMENTS — the petition's prior art does not anticipate or render obvious the challenged claims; the petition misreads the prior art; the petition uses incorrect claim construction; (2) PROCEDURAL ARGUMENTS — § 315(b) time bar (petition filed more than one year after complaint); missing real party in interest; standing issues; § 312 failure to identify all grounds with particularity; (3) FINTIV / DISCRETIONARY DENIAL — argue that PTAB should discretionarily deny institution based on Fintiv factors (advanced parallel district court litigation with an imminent trial date); (4) SUBMISSION OF EVIDENCE — unlike the original petition, the patent owner CAN submit new evidence in the POPR, including expert declarations rebutting the petition's technical arguments; PTAB may consider this evidence in deciding whether the petitioner meets the reasonable likelihood standard.

After PTAB issues an institution decision granting IPR, the following occurs: (1) TRIAL SCHEDULE — PTAB issues a scheduling order setting deadlines for: Patent Owner Response (POR) — typically 3 months after institution; Petitioner Reply — 3 months after POR; Patent Owner Sur-Reply — limited sur-reply may be permitted; Oral Argument — optional, typically ~12 months after institution; Final Written Decision (FWD) — must issue within 12 months of institution (statutory); (2) PATENT OWNER RESPONSE (POR) — the patent owner has 3 months after institution to file a full response: substantive invalidity arguments; sworn expert declarations; claim construction positions; optionally a MOTION TO AMEND claims (rarely successful — requires proactive claim narrowing with new prior art analysis); (3) DISCOVERY — IPR discovery is limited: compulsory party admissions; cross-examination of declarants; routine discovery (deposition of the opposing party's declarants); petitioner must seek authorization for non-routine discovery (unusual circumstances); (4) PETITIONER REPLY — petitioner has 3 months after POR to respond: must be responsive to arguments made in POR; cannot raise new grounds or new prior art citations; (5) ORAL ARGUMENT — optional 1-hour oral argument before the 3-judge PTAB panel; (6) FINAL WRITTEN DECISION (FWD) — PTAB issues FWD canceling, confirming, or amending (very rarely) claims; estoppel attaches under § 315(e); both parties can seek Federal Circuit review under § 319.

The IPR institution rate has fluctuated significantly since AIA took effect in 2013: HISTORICAL INSTITUTION RATES: 2013–2016: extremely high institution rates (70–90%+ of all petitions instituted); PTAB was criticized as a 'patent death squad' — almost every challenged claim was being cancelled; 2016–2019: the SAS Institute v. Iancu decision (S.Ct. 2018) required PTAB to decide institution on a claim-by-claim basis and, if any claim was instituted, to address ALL challenged claims in the FWD; this made partial institution more difficult; 2019–2022: Apple v. Fintiv (2020) introduced discretionary denial, reducing institution rates for petitions filed after a district court complaint; many petitions in active litigations were denied on Fintiv grounds; overall institution rates fell to ~65–70%; 2022–2024: USPTO Director review restored some discretion over Fintiv denials; director-ordered discretionary denials continued; FACTORS AFFECTING INSTITUTION LIKELIHOOD: (1) TECHNOLOGY AREA — software/business methods have somewhat lower institution rates (partially due to § 101 issues that cannot be raised in IPR); pharma/biotech have high rates; (2) PETITION QUALITY — detailed claim mapping with strong prior art and a credible expert declaration dramatically improves institution rates; (3) PATENT OWNER RESPONSE QUALITY — a strong POPR with new expert evidence has increased the denial rate; (4) TIMING — petitions filed close to the § 315(b) bar (just under 1 year after service) are often denied on Fintiv grounds; petitions filed early (before litigation is advanced) are far more likely to be instituted.