The Federal Circuit heard oral argument today in Apple Inc. v. Squires, 24-1864, a long-running challenge to the USPTO's Fintiv discretionary denial framework. Apple, Cisco, Google, and Intel argue that the NHK-Fintiv rule should have been adopted through notice-and-comment rulemaking under the Administrative Procedure Act (APA) rather than through precedential Board designations.
In one of those cases, a judge lifted the hold on construction, ruling that a lack of a sound justification for the hold made it "the height of arbitrary and capricious," a legal standard that determines whether federal decision-making is acceptable under the Administrative Procedures Act. If this were a fictional story, that would be considered foreshadowing. With no indication of how long the comprehensive assessment would take, 17 states sued to lift the hold on permitting.
These three focused on the USPTO's February 2025 rescission of Sotera stipulation guidance offered a safe harbor against discretionary denial for petitioners involved in parallel district court litigation over the patent. The three-judge panel was almost the same of Judges Dyk, Linn (opinion author), and Cunningham (with Stoll replacing Cunningham on the Google decision) rejected constitutional and Administrative Procedure Act (APA) challenges to the policy change, holding that 35 U.S.C. § 314(d) renders institution decisions "final and nonappealable" and that mandamus is ordinarily unavailable to review such discretionary determinations.
The petition argues that Dir. Stewart's novel denial criteria were imposed without the notice-and-comment rulemaking required by the Administrative Procedure Act, exceed the Director's statutory authority under 35 U.S.C. § 314(a), and were applied retroactively to Instacart's petition in violation of due process. The petition argues that the NPRM is tacit admission of the rulemaking requirement.
The statutory language, 'shall issue,' mandates a separate preliminary analysis for public review and comment 'in any case' where the Commission issues a notice of proposed rulemaking and the $100 million threshold is surpassed.
