A motion recently filed by US Inventor, Inc. in the United States District Court for the Northern District of California seeks a temporary restraining order and a preliminary injunction to prevent the United States Patent and Trademark Office (“USPTO” or “Patent Office”) from instituting any new reviews of any patent until it solves the debate over the “NHK-Fintiv rule” by promulgating a rule under the proper notice-and-comment procedure of the American Procedure Act (“APA”). US Inventor, Inc. is a non-profit association of inventors devoted to protecting the intellectual property of individuals and small companies.
Declaring the current situation “an emergency,” US Inventor argued that the relief requested – a restraining order and preliminary injunction – is “the only way to preserve the status quo for inventors” and “protect the availability of a lawful remedy” for the trial at hand. The motion was filed in the lawsuit Apple, Inc., et al. v. Iancu,[1] in which a number of tech companies have challenged the NHK-Fintiv rule and the USPTO’s authority. US Inventor intervened, arguing instead that the rule should be promulgated through the proper channel.
The NHK-Fintiv rule stems from a line of cases where the USPTO’s Patent Trial and Appeal Board (“PTAB”) declared its discretionary authority to deny institution of American Invents Act (“AIA”) review trials based on parallel proceedings in federal district courts. In the two precedential opinions from which the rule takes its name, the PTAB outlined a number of factors that would weigh against instituting review of a patent whose validity is already at issue in a pending district court trial. Although the Patent Act gives the PTAB discretion to deny AIA review for any reason, it also requires that the Director prescribe regulations setting forth the standards to show sufficient grounds to institute review. US Inventor points to the latter as its basis for arguing that the Patent Office may not develop standards like the NHK-Fintiv rule in an ad hoc adjudicative decision, and instead must promulgate regulations through the statutory process of notice-and-comment rulemaking.
US Inventor pointed to “traditional preliminary injunction factors,” such as public interest weighing in favor of granting its relief. Specifically, US Inventor identified the harm of patentees being “deprived of a procedural protection to which they are entitled,” where the current rules lack the clarity and balance that only notice-and-comment rulemaking can provide; and that US Inventor’s members are irreparably harmed by having to formulate arguments and responses under deadlines without proper guidance as to the discretionary facts, where an adverse decision would mean a loss of their property.
The parties stipulated to and the court granted a deadline of October 12, 2020, for the USPTO to respond to US Inventor’s motion.
[1] No. 5:20-cv-06128 (N.D. Cal. Sept. 29, 2020).
