On Friday, October 17, the USPTO published a proposed rule that, if implemented, would likely reduce filings of inter partes review patent validity challenges. In addition, USPTO Director John Squires announced, in an open letter and memo, that, starting today, October 20, he will make all institution decisions (addressing both discretionary denial and the merits) for PTAB petitions.
USPTO’s Proposed Rule on IPR Institution
The USPTO’s proposed rule would restrict multiple challenges to the same patent in multiple IPRs or in both an IPR and district court or the ITC. The USPTO proposed the following changes to IPR institution practice:
- An IPR would not be instituted or maintained unless each petitioner stipulates that, if an IPR is instituted, it will not raise a Section 102 or 103 validity challenge—that is, it will not argue the patent is invalid based on prior art—in any other proceeding.
- An IPR would not be instituted or maintained against a claim if a U.S. court, the ITC, or the PTAB previously found the claim valid and the decision has not been vacated or reversed.
- An IPR would not be instituted or maintained against a claim if a court trial, ITC determination, or another PTAB final written decision involving the claim would likely precede the IPR’s final written decision due date.
- Notwithstanding the above, the Director could institute an IPR under extraordinary circumstances.
The USPTO is currently accepting public comments on the proposed rule. Comments are due by November 17, 2025, and may be submitted electronically to the regulations.gov website linked here.
The proposed rule signals that Director Squires seeks to strengthen “the reliability of patent rights and incentives to invest in new technologies” by limiting multiple, overlapping validity challenges. Before the proposed rule is implemented, or if it is never implemented, parties can expect Squires to continue to use discretionary denial and institution decisions to limit PTAB validity challenges.
Director to Make All Institution Decisions
The newly announced policy modifies the bifurcated institution process previously announced by former Acting Director Coke Morgan Stewart. Effective today, October 20, for all petitions not previously referred to the PTAB for consideration of the merits under the bifurcated process, the Director will address both discretionary denial and the merits in deciding whether to institute a PTAB validity challenge. A PTAB panel will decide institution based on the merits for previously referred petitions.
The new policy retains the separate discretionary-denial and merits briefing of the bifurcated process. However, after briefing is complete, the Director will consult with at least three PTAB judges and generally issue a single “summary notice” addressing discretionary denial and the merits. The Director may issue more detailed decisions to address “novel or important” issues, or may refer petitions involving complex issues to one or more PTAB judges.
Director Squires provided several reasons for the new policy, including: (1) eliminating the appearance of self-interest caused by the previous policy of the PTAB both instituting and conducting trials; (2) aligning with statutory language that the Director decides institution; (3) enhancing transparency, trust, and accountability by consolidating institution authority with an officer appointed by the President and confirmed by the Senate; and (4) addressing the “difficulty” that the bifurcated process “appears to have inadvertently produced extraordinarily high institution rates” for cases referred to the PTAB. The latter reason suggests that Director Squires may use his institution-decision authority to limit PTAB validity challenges.
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