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The United States Patent and Trademark Office ("USPTO") has begun implementing changes to inter partes review ("IPR") proceedings which would decrease both the availability of such proceedings and the likelihood that IPR proceedings will result in one or more patent claims being invalidated.
Discretionary Denial
On March 26, 2025, the Acting Director issued a memorandum addressing "Interim Processes for PTAB Workload Management" (the "Process Memo")1, which provided for discretionary denial of IPR petitions by the Director, as well as various factors that may be considered in determining whether discretionary denial is appropriate. The Process Memo indicates that the following factors should be considered in deciding whether to deny institution:
- Whether the Patent Trial and Appeal Board ("PTAB") or another forum has already adjudicated the validity or patentability of the challenged patent claims;
- Whether there have been changes in the law or new judicial precedent issued since issuance of the claims that may affect patentability;
- The strength of the unpatentability challenge;
- The extent of the petition's reliance on expert testimony;
- Settled expectations of the parties, such as the length of time the claims have been in force;
- Compelling economic, public health, or national security interests; and
- Any other considerations bearing on the Director's discretion.2
Most notably, with respect to the settled expectations of the parties, the Acting Director clarified through various discretionary denial decisions that patents in force for more than six years "creat[e] strong settled expectations for [a patentee]."3 This change has had a drastic affect on IPR institution rates. While institution rates for FY 2024 were 74%,4 the most recently available statistics from the PTO shows that the rate has fallen to approximately 40%.5 This trend seems unlikely to change in the short term, as the appointment of USPTO Director John Squires merely resulted in Squires' authority being delegated back to the Acting Director who initially created the discretionary denial process.6
Other Proposed Changes
On October 17, 2025, Director Squires issued a memorandum stating that "effective October 20, 2025, the Director will determine whether to institute trial" for IPR and post-grant review ("PGR") proceedings.7 Previous USPTO directors had delegated their statutory authority to determine whether to institute AIA trials to the PTAB judges who would preside over the case once instituted. While it remains to be seen whether this will result in a change in institution rates, the USPTO's present approach toward IPRs indicate that institution rates are likely to decrease further.8
On the same day, the USPTO also issued proposed rulemaking which would bar IPR proceedings: (1) unless the petitioner agrees to not make any invalidity arguments based on anticipation or obviousness in other proceedings, (2) where the challenged claims were previously upheld in a prior case (including in court, USPTO proceedings, and ITC proceedings), or (3) it is more likely than not that a validity decision would be issued in another forum prior to the PTAB's IPR decision deadline. If the proposed rules are adopted, in whole or in part, IPR filings and institution rates are likely to further decline.
Conclusion
In sum, the USPTO has taken actions which would significantly limit IPR proceedings, thereby changing the calculus regarding patent assertions for both plaintiffs and defendants. It remains to be seen how this will ultimately play out. TC's IP group regularly advises clients on patent issues. Please reach out to a member of TC's IP team if you have a patent issue.
Footnotes
1 USPTO Memorandum, Interim Processes for PTAB Workload Management (Mar. 26, 2025).
2 Id. at 2-3.
3 HS Hyosung Advanced Materials Corp. v. Kolon Industries, Inc., IPR2025-00662, -00663, -00664, Paper 12 at 2 (Director August 14, 2025) (citing Dabico Airport Sols. Inc. v. AXA Power ApS, IPR2025- 00408, Paper 21 at 2–3 (Director June 18, 2025)).
4 PTAB Trial Statistics October 2024 IPR, PGR, USPTO, at 7, https://www.uspto.gov/sites/default/files/documents/ptab_aia__20241031.pdf (accessed Oct. 19, 2025).
5 See, e.g., PTAB Trial Statistics July 2025, USPTO, at 6, https://www.uspto.gov/sites/default/files/documents/Trial_Statsistics_July_2025.pdf (accessed Oct. 15, 2025).
6 Robert Hails Jr. and Jason Hoffman, USPTO Director Squires' First Move: Delegating Discretionary Denial Review Authority to Deputy Director Stewart, JDSupra (September 30, 2025), https://www.jdsupra.com/legalnews/uspto-directorsquires-first-move-5783397/.
7 John Squires, Memorandum: Director Institution of AIA Trial Proceedings, USPTO (Oct. 17, 2025), https://www.uspto.gov/sites/default/files/documents/Director_Institution_of_AIA_Trial_Proceedings.pdf; see also Ryan Davis, USPTO Head To Take Over Patent Review Institution Decisions, Law360 (Oct. 17, 2025), https://www.law360.com/ip/articles/2401076?nl_pk=fcf245e6-2b05-4aa0-8a62-f2996cf16cb1&utm_source=newsletter&utm_medium=email&utm_campaign=ip&utm_content=2401076&read_main=1&nlsidx=0&nlaidx=0.
8 See Dennis Crouch, Unexplained and Unreviewable: The New Normal for IPR Institution, PatentlyO (Oct. 17, 2025) ("I believe we will see a major downturn in IPR petitions in the coming months.").
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