Updates from the USPTO and the Impact of the Government Shutdown

The federal government entered a shutdown on October 1, 2025. The following update provides a summary of the resulting impact on the U.S. Patent and Trademark Office (USPTO), the U.S. International Trade Commission (ITC), and the federal courts. We also discuss recent changes at the Patent Trial and Appeal Board (PTAB). Sterne Kessler will continue to monitor developments and provide regular updates.

USPTO Updates

Closure of USPTO Denver Office
The USPTO announced that it plans to permanently close the Rocky Mountain Regional Outreach Office in Denver, Colorado. The Rocky Mountain Office opened as a satellite office under the AIA. With the enactment of the 2022 Unleashing American Innovators Act (UAIA), the focus of the satellite office shifted to community outreach to expand intellectual property education and support. However, by late 2024, the Denver office employed less than 10 people while costing over $1 million annually to operate. The USPTO cited its effective teleworking program, transition to community outreach model, and growth in virtual engagements as factors for closing the Denver office.

The USPTO also announced on October 1, 2025, a reduction-in-force of about one percent of their workforce to focus on “mission critical operations.”

U.S. Food and Drug Administration (FDA) Shutdown, Patent Term Extensions
A pause in FDA activities could impact Patent Term Extension (PTE) applications. During the lapse in government appropriations, the FDA cannot “accept any regulatory submissions for FY 2026 that require a fee payment and that are submitted during the lapse period.” FDA Lapse Information. (The 2026 federal government fiscal year runs from October 1, 2025, to September 30, 2026.) The HHS/FDA contingency plan states that in the event of a lapse in funding, “FDA’s Human Drugs Program would immediately halt most unapproved prescription drugs activities.” HHS Contingency Plan.

Reduced FDA operations may slow or pause the regulatory review period under 35 U.S.C. § 156. However, the FDA is still statutorily required to respond to requests from the USPTO for determinations of the “regulatory period” within 30 days of the USPTO’s request. 35 U.S.C. § 156(d)(2)(A).

Automated Search Pilot Program
Starting on October 20, 2025, the USPTO will launch an Automated Search Pilot Program. Applicants filing select non-provisional patents can choose to receive an Automated Search Results Notice (ASRN). The ASRN will include up to 10 AI-identified prior art references. Participation in this program is voluntary and not mandatory. The goal is to evaluate whether early input from AI can improve the efficiency of patent examinations. Interested applicants can join until April 20, 2026, or until the program reaches its capacity for each technical center (200 applications). Participation is by filing a petition and fee concurrently with an original, non-continuing, non-provisional utility application.

Shutdown Status of U.S. International Trade Commission

Due to the current lapse in appropriations, the U.S. International Trade Commission has ceased regular operations.  As a result, the USITC website is operating at a limited capacity. EDIS is online for search and document access purposes; document filing has been disabled. The HTS Search Tool and DataWeb are available; staff are not available to answer public inquiries about these applications, and the HTS Help portal will not accept submissions. Electronic correspondence will be handled once regular operations resume. Hearings and other Commission meetings will be rescheduled once regular operations resume.

Judiciary Still Operating as Shutdown Starts

Despite a federal government shutdown that began on Oct. 1, the Judiciary remains open and will continue paid operations through Friday, Oct. 17 by using court fee balances and other funds not dependent on a new appropriation. Most proceedings and deadlines will occur as scheduled. In cases where an attorney from an executive branch agency is not working because of the shutdown, hearing and filing dates may be rescheduled. The Case Management/Electronic Case Files (CM/ECF) system also will remain in operation for electronic filing of documents.

If the shutdown continues after Judiciary funds are exhausted, the courts will then operate under the terms of the Anti-Deficiency Act, which allows work to continue during a lapse in appropriations if it is necessary to support the exercise of Article III judicial powers. Under this scenario, each court and federal defender’s office would determine the staffing resources necessary to support such work.

Director Squires’ First Two Weeks in Office

In his first two weeks in office, USPTO Director John A. Squires has made statements on patent eligibility and issued a Director review decision on expert testimony.

Remarks, Signed Patents, and Appeals Review
On Sept. 24, 2025, Director Squires ceremonially signed two patents on technology that is not generally considered allowable under 35 USC 101. One of the patents involved cancer diagnostics (U.S. Pat. 12,419,201) and the other related to e-commerce (U.S. Pat. 12,419,202).

“From crypto and AI to quantum computing and diagnostics, the marketplace is filled with breathtaking opportunities for invention and investment,” Squires said in his remarks. “Who knows what tomorrow will bring? What I do know is that the patents I signed today represent applied and patent-eligible technologies driving the frontiers of knowledge.”

Squires further indicated his view on patent eligible subject matter in an appeals review panel decision where Squires determined that the USPTO was wrong to deny a patent on machine learning technology for subject matter ineligibility (the decision to deny a patent based upon prior art was not reversed). Though the patent was directed to an abstract concept, Squires claims that the improvement on machine learning is an added inventive step that makes the patent eligible. Read the USPTO’s press release for more information.

PTAB Updates
On Sept. 25, 2025, Squires delegated his authority to oversee discretionary denial decisions to Deputy Director Stewart. Further, Squires issued a decision in IPR2024-00465, granting Director review, reversing the Final Written Decision, and terminating the proceeding. Because Squires did not remand the case, there are questions as to whether the Director decision is appealable.

The decision itself also raised questions. In its Final Written Decision, the Board had determined the patent was obvious based on a first set of grounds and therefore did not address the second set of grounds. The Patent Owner (Blackhawk Network) argued in its request for Director Review that Petitioner’s (Interactive Communications Int’l) expert testimony was inconsistent and not credible and therefore the decision should be reversed on both grounds. Squires agreed, reversing the Board’s decision and further saying “[h]aving determined that [the expert] is not credible as to multiple material aspects of his testimony, it would be inappropriate in this instance to rely on this testimony for other grounds. [] For this reason, the proceeding is terminated.” Decision, p. 4. The decision concluded with: “This decision does not constitute a final written decision under 35 U.S.C. § 318(a).” Because this decision is allegedly not a Final Written Decision, Squires’ decision would not be appealable to the Fed. Circuit. However, some question whether this meets the Federal Circuit’s “shenanigans” exception.

Thank you to Associates Jean Selep and Robin Choi and Patent Agents Gibson Donnan and Matt Swazer for their efforts in summarizing the USPTO News.