Judicial Review Is Available for PTO Director’s Fintiv Rulemaking Procedure

| Justin J. Gillett


Before Lourie, Taranto, and Stoll. Appeal from the United States District Court for the Northern District of California.

Summary: Judicial review is available to determine whether the PTO Director’s instructions regarding Fintiv IPR dismissals required notice-and-comment rulemaking.

Apple and other companies sued the Director of the Patent and Trademark Office in district court to challenge the Director’s so-called “Fintiv instructions.” The Fintiv instructions appear in two Board decisions that the Director designated as precedential. Those decisions address the role of co-pending district-court infringement litigation involving the same patent on the decision whether to institute an IPR.

Plaintiffs challenged the Fintiv instructions under the Administrative Procedure Act. That challenge was based on three alleged grounds: (1) that the Director acted contrary to the IPR provisions of the patent statute; (2) that the Fintiv instructions are arbitrary and capricious; and (3) that the Fintiv instructions were issued without compliance with the notice-and-comment rulemaking requirements of 5 U.S.C. § 553. The district court granted a motion by the government to dismiss the challenge on all three grounds. It held that the Director’s challenged actions were not reviewable. Plaintiffs appealed.

The Federal Circuit affirmed dismissal on the first two grounds of plaintiffs’ challenge. According to the Court, those first two grounds regard the content of the Director’s institution instructions. The Federal Circuit noted that the IPR statute precludes institution decisions from judicial review, and held that such preclusion encompasses review of the Director’s institution instructions.

The Federal Circuit reversed dismissal on the third ground of plaintiffs’ challenge, which is that the Director issued the Fintiv instructions without notice and comment. The Court again noted that the IPR statute precludes institution decisions from judicial review. But it held that such preclusion does not cover the Director’s choice of whether to use notice-and-comment rulemaking to announce instructions for the institution decision. The Federal Circuit also found that Apple had standing, noting that Apple has, on a regular basis for many years, been sued for infringement and then petitioned for an IPR of patent clams at issue in that suit. The Court therefore remanded for consideration of whether the Fintiv instructions were improperly issued without notice and comment.

Editor: Paul Stewart