A Redirection for AIA Proceedings Under New USPTO Director

As many know, change is afoot at the U.S. Patent and Trademark Office. Inter partes reviews and post-grant reviews, in particular, have seen major procedural changes. One noteworthy shift relates to what happens at the institution phase, when the board determines whether to go forward with an IPR or PGR.

This shift may have a big impact on plaintiffs and defendants alike in federal district court and U.S. International Trade Commission patent litigation, for example, in terms of strategy and filings.

It also may affect the general business strategies of companies that own patents, and those that are assessing whether they have freedom to operate in relation to patents that are owned by others.

To understand the context of recent changes, it is helpful to revisit where things were before this year. Since 2017, the USPTO had implemented and refined policies relating to how issues other than the merits — such as discretionary denial considerations — factored into determining whether to institute an America Invents Act trial.

For example, these policies addressed:

• Serial AIA petitions that were filed by the same, or a related, petitioner;
• Parallel petitions;
• When a petition raised the same, or substantially same, prior art or arguments that had been previously presented to the office, pursuant to Title 35 of the U.S. Code, Section 325(d); and
• When a district court or the ITC was likely to address the same validity issues in a trial before the Patent Trial and Appeal Board would have issued a final written decision, as in the PTAB’s 2020 decision in Apple Inc. v. Fintiv Inc.

The impetus underlying such considerations had been to help ensure that IPRs and PGRs work as Congress intended, i.e., they operate as a faster and cheaper alternative to court litigation and as a quality check.

On March 26, acting Director Coke Morgan Stewart issued a memorandum implementing a new bifurcated process for determining whether to institute an IPR or PGR.

Under this process, decisions on institution were bifurcated between (1) discretionary considerations, which were addressed by the acting director in consultation with at least three PTAB judges; and (2) if discretionary denial was inappropriate, the merits and other nondiscretionary considerations, which were addressed by a board panel.

In addition to the established discretionary denial considerations, this memo also introduced a number of new discretionary consideration factors, including “[s]ettled expectations of the parties, such as the length of time the claims have been in force.”

Under the new process, the acting director issued short decisions frequently denying institution, often based on new considerations. Institution rates immediately dropped, bottoming out at below 30% by September.[1]

It is not clear whether these institution rates are here to stay. This is especially true in light of additional changes, both proposed and actual.

On Oct. 16, for example, the office filed a notice of proposed rulemaking, with public comments due Dec. 2, proposing even more limitations on the use of IPRs.

For instance, the NPRM proposes:

• A requirement of a super stipulation, where a petitioner must stipulate not to pursue any challenges under Sections 102 or 103 in other forums, in relation to the entire patent, not just challenged claims;
• To bar instituting or maintaining an IPR if any prior upholding of claims under Sections 102 or 103 exists in any forum, including based on challenges raised by unrelated parties; and
• To bar instituting or maintaining an IPR if an earlier adjudication under Sections 102 or 103 in another forum is more likely than not, even if that adjudication involves an unrelated party.

Among other things, these proposed rule changes would essentially force petitioners to fully commit to the PTAB as the sole forum for any Section 102 and 103 challenges, which would significantly affect defensive strategies in parallel litigation, some of which may not become apparent until later.

The next day, on Oct. 17, the new director, John Squires, issued a memorandum indicating that the director himself, in consultation with at least three judges, will handle the entirety of the process for determining whether to institute an AIA trial, including on the merits.

Shortly after the memorandum, a USPTO webinar confirmed that, in the vast majority of cases, the director would issue summary notices either denying or granting institution in “thumbs-up” or “thumbs-down” decisions.

Under Title 35 of the U.S. Code, Section 314, Congress gave the director the authority to decide whether to institute AIA trials.

This is in contrast to instituted trials, which must be decided, at least in the first instance after the U.S. Supreme Court’s 2021 decision in U.S. v. Arthrex Inc., in final written decisions that are issued by PTAB panels, pursuant to Title 35 of the U.S. Code, Sections 6 and 318.

But USPTO rules, e.g., Title 37 of the Code of Federal Regulations, Section 42.4, until recently, had delegated decisions on institution to PTAB panels.

Some commentators may welcome the recent change in responsibility to the director himself, which they see as centralizing control of institution decisions in the director’s office, reflecting an effort to create greater procedural efficiency. Others have concerns.[2]

Some commentators may wonder, for example, how the director — who is running the USPTO, after all — has time to personally ensure that he is making the right decisions in all cases.

Others have raised concerns regarding transparency and whether summary notices can serve the USPTO’s stated mission of “maintaining a patent system that is fair, predictable, and respected.”

On one hand, a losing party at the institution stage may welcome a summary notice that provides no commentary or substantive information about their or their opponent’s position or cited evidence.

This allows the losing party, for example, to make the same assertions in concurrent litigation or settlement negotiations, such as those relating to claim construction or teachings in the art, without worrying about the negative impact of any analysis or conclusions from the office.

On the other hand, with no information from the director, it may be difficult for a losing party to know, for instance, how to request director review when a request must point out (1) an abuse of discretion, (2) important issues of law or policy, (3) erroneous findings of material fact, or (4) erroneous conclusions of law.

Moreover, a summary notice to institute a trial gives both parties minimal insight to inform strategy, e.g., in terms of the board’s views on claim construction, the strength or weakness of certain grounds, evidence, and the applicability of prior art.

A patent owner also may lack enough information to know whether to file a motion to amend, or to perhaps request reexamination or file a reissue application.

Summary notices also provide no information as to the real parties in interest that are listed by the petitioners, which is particularly noteworthy in view of the designation in October that the PTAB’s 2015 decision in Corning Optical Communications RF LLC v. PPC Broadband Inc. is precedential on this issue.

Lastly, while decisions on institution are generally unreviewable under Title 35 of the U.S. Code, Section 314(d), as stated in the Supreme Court’s 2016 decision in Cuozzo Speed Technologies LLC v. Lee, reviewing courts may “‘set aside agency action’ that is ‘contrary to constitutional right,’ ‘in excess of statutory jurisdiction,’ or ‘arbitrary [and] capricious.'” But how will one know if such things have occurred?

It is important, now more than ever, to keep a close eye on changes at the PTAB, as well as court responses to still-pending mandamus petitions and potential Administrative Procedure Act challenges.

Equally important, stakeholders may want to consider providing feedback to the office on changes to PTAB practice, e.g., in response to the October NPRM, and to Congress, as they see fit.

[1] See, e.g., Patent Dispute Report: Q3 2025 in Review, Oct. 9, 2025, at https://www.unifiedpatents.com/insights/2025/10/9/patent-dispute-report-q3-2025-in-review (see “Institution Rate: NPE vs. OpCo” graphic for decisions on institution in 2025 Q3); Angela Morris, New IPR institution policy expected to accelerate steep decline in PTAB trials, IAM, Oct. 27, 2025.

[2] See, e.g., Dennis Crouch, An Era of No: The USPTO’s New 0% Institution Rate, Nov. 12, 2025, at https://patentlyo.com/patent/2025/11/usptos-institution-rate.html.