PTAB Rule Revamp: Director Takes Over Institution; Proposal Restricts IPRs with Parallel 102/103 Challenges
The past week ended with a series of changes that could significantly reshape the Patent Trial and Appeal Board (PTAB). On October 17, recently confirmed USPTO Director John Squires announced that the entire America Invents Act (AIA) review institution process would now be handled by the director, including the assessment of discretionary denial requests as well as the merits and nondiscretionary factors—making those determinations with no accompanying written decisions in most cases. That same day, the USPTO also published a Notice of Proposed Rulemaking (NPRM) that would bar AIA review institution unless petitioners stipulate not to raise invalidity challenges under Section 102 or 103 in parallel litigation, where the parallel forum would likely address validity on that basis before the PTAB issues its final written decision, or where the patent’s validity has already been upheld by another forum.
– Director to Handle All Aspects of PTAB Institution Decisions
The director’s takeover of the PTAB’s institution process marks the second significant change to that system since the start of the second Trump Administration. In February 2025, then-Acting USPTO Director Coke Morgan Stewart withdrew a June 2022 guidance issued by former USPTO Director Kathi Vidal that had limited discretionary denials based on parallel litigation under the NHK-Fintiv rule in several respects, which had led to a drop in discretionary denials. The following month, Stewart assumed a more direct role in addressing discretionary denials—establishing an interim two-stage process for AIA review institution (the “Interim Process”) under which the director first decides requests for discretionary denial, in consultation with at least three PTAB administrative patent judges (APJs). Only if the director determines that discretionary denial is inappropriate will he or she then refer the case to a standard three-member PTAB panel to make an institution decision that addresses the merits and other nondiscretionary factors.
On September 25, one week after his confirmation as director, Squires delegated his authority to exercise discretion over AIA review institution, as detailed in the Interim Process, back to Stewart (who has otherwise returned to her role as deputy director).
Then, on October 17, Squires sent a memorandum to all PTAB APJs to inform them that effective on October 20, the USPTO director would now directly decide whether to institute petitions for inter partes review (IPR) and post-grant review (PGR), detailing an approach that “flows from the processes” established in the March memorandum. Similar to that interim process, Squires explained that the director would decide discretionary denials as well as the merits and non-discretionary factors for every petition, in consultation with at least three PTAB APJs. However, the new process goes further by providing that decisions granting or denying institution would just be accompanied by a summary notice, and the director would only issue full institution decisions “[i]n proceedings involving novel or important factual or legal issues”. Squires also establishes that “where the Director determines detailed treatment of issues raised in a petition is appropriate (e.g., complex claim construction issues, priority analysis, or real party in interest determination), the Director may refer the decision on institution to one or more members of the PTAB”.
If the director decides to institution a petition, a three-member PTAB panel will then conduct the trial as before. The new process only covers petitions not yet filed or instituted, as the October 17 memorandum explains that the AIA reviews that have already been referred to a panel for the merits prong of the interim institution process will “remain” with a panel.
Notably, it is possible that Stewart could continue to handle at least some aspects of the institution process under this new system. Although the October memorandum does not explicitly mention her role here, Squires’s September 25 memorandum explicitly provides that his delegation to Stewart of his discretionary institution power, as detailed in the Interim Process, “remains in effect until revoked”—and no such revocation has occurred as of the date of this report. Moreover, the October memorandum only “supersedes the Interim Processes” with respect to limiting routine decisions to summary notices and having the director handle merits-based institution instead of a panel—thus leaving the remainder of that Interim Process, as covered by the delegation order, in place.
Along with the memorandum to the PTAB’s APJs discussed above, Squires also detailed the rationale behind the new system in an accompanying open letter. Noting that the AIA vests the institution power in the director, Squires argues that while the post-AIA delegation of the institution power to PTAB panels was “initially practical, experience has raised structural, perceptual, and procedural concerns inconsistent with the AIA’s design, clear language, and intent”. Chief among those concerns, per Squires, is the alleged “perception of self-incentivization”: The director asserts that while the PTAB has done an “admirable job”, its “performance metrics and workload structure” (under which compensation is based in part on the number of trials instituted, a point of concern for some stakeholders) “have created the appearance that institution decisions affect docket size, credit, and resource allocation—inviting concern that the Board may be ‘filling its own docket’”.
Squires then contends that “reclaiming the Director’s statutory role” over institution accordingly serves to “[e]liminate [that] appearance of self-interest by separating the power to institute from the body that conducts the trial”; to “[r]emove a perceived referral-signal bias by centralizing the decision point”; to “[e]nhance transparency and public trust through a single line of authority’; and to “[r]e-align the duties and responsibilities” of the director with the language and intent of the AIA.
Additionally, Squires observes that the bifurcated Interim Process introduced in March, while “smart and necessary”, had an unintended consequence—explaining that for the decisions that Stewart referred to PTAB panels for evaluation on the merits, an “extraordinarily high” number of those were then instituted (“at one point exceeding 95 percent”).
– Rulemaking Proposal Floats Sweeping New Limits on AIA Reviews
Potentially even more impactful is the NPRM that the USPTO published in the Federal Register on October 17, following an initial release the day before. As noted above, the proposal could significantly restrict access to the PTAB by imposing sweeping new limits on AIA review institution.
The NPRM details a revision to the PTAB’s rules of practice under which the Board would only institute trial where (in relevant part) the challenged “patent has not previously been challenged in litigation”. (It also calls for denial where “prior litigation was resolved via settlement at an early stage”, but does not appear to detail new requirements to that effect.) The proposal states that these changes are designed to promote “fairness and efficiency” by limiting “similar patent challenges to a single forum”, in order to ensure that IPRs “generally serve as a complete substitute for at least some phase of [parallel infringement litigation]’”.
In particular, the PTAB would not institute trial where the petitioner “intends to pursue invalidity challenges under §§ 102 or 103 in other venues, such as district court or the U.S. International Trade Commission (ITC)”, which would be enforced via a requirement that the petitioner stipulate as such in the other venue (building on recent decisions by Stewart that have required broader stipulations to avoid discretionary denial). The proposal also indicates that the rule would bar institution for claims that have already received “adequate scrutiny” under Sections 102 or 103, including independent claims found not invalid on that basis by a district court, the ITC, or USPTO (in post-grant review or reexamination), or where the Federal Circuit has reversed a prior decision of invalidity or unpatentability, as well as “dependent claims where the independent claim on which each depends has already received scrutiny”.
Additionally, the proposal would bar institution where a decision addressing invalidity under Sections 102 and 103 will likely occur in parallel litigation prior to the deadline for the Board’s final written decision—specifically, if (before that deadline) a district court were to hold a trial in which the petitioner “challenges the patent” under 102 or 103, or if the ITC were to issue an initial or final determination addressing validity on that basis. That said, the proposal additionally allows for institution despite the above restrictions under “extraordinary circumstances”, which it defines as including where a “prior challenge barring institution was initiated in bad faith” and “substantial” changes in a statute or Supreme Court precedent. Not considered “extraordinary circumstances” would be “new or additional prior art, new expert testimony, new caselaw (except as provided above) or new legal argument, or a prior challenger's failure to appeal.”
The NPRM also details the underlying policy rationale behind the USPTO’s proposed changes—arguing that IPRs have ceased to be a true “alternative” to district court litigation as contemplated by Congress for the AIA. The USPTO further highlights the practice of “serial or parallel” IPRs, arguing that this can be “wasteful” by forcing the relitigation of validity issues already considered, or being considered in parallel, by the USPTO, district courts, and the ITC.
On that point, the USPTO argues that even a “reliable” patent—defined elsewhere in the proposal as one that gives the inventor or others enough confidence to “invest in the patented technology”—becomes unreliable when subjected to repeated challenges. Based on the likelihood that skilled practitioners may reasonably disagree on whether certain claims meet the statutory requirements of patentability, the USPTO asserts that “patents cannot serve their economic function if they are perpetually subject to de novo review”. To illustrate this argument, USPTO cites the hypothetical example of a “reliable” patent for which 70% of “experienced patent practitioners would conclude that the claim was properly granted”, meaning that it has a 70% chance of surviving a de novo challenge. Such a patent has “less than a 50% chance of withstanding two or more de novo patentability challenges”, the USPTO contends.
The agency then turned to IPR, which it characterized as “subject[ing] . . . patent[s] to essentially de novo review”—arguing that the current regime strays from the policy goals underpinning the AIA. Citing statements from the legislative history of the AIA, the USPTO argues that Congress did not intend for “unlimited challenges” against a patent. The USPTO further contends that Congress made two policy choices “[t]o protect quiet title to patent rights necessary to drive investment”: It “left in place the presumption of patent validity in litigation in district court or at the ITC, and provided the Director with broad discretion to determine when the strong medicine of IPR proceedings would be appropriate”.
Despite those policy goals, the USPTO argues, several aspects of how the IPR regime has developed in practice run counter to that intent: First, it contends that “serial and parallel patent challenges, including challenges raising the same or substantially similar prior art and/or arguments, remain a significant problem” despite the designation of PTAB precedent designed to address those “risks”—including General Plastic v. Canon and Valve v. Electronic Scripting Products, which lay out factors under which multiple petitions from the same petitioner can be discretionarily denied; Comcast v. Rovi Guides, dealing with parallel petitions; Apple v. Fintiv, dealing with the impact of parallel litigation; and Advanced Bionics v. Med-El, dealing with prior art or arguments previously considered by the USPTO. The agency states that “since 2019, the percentage of petitions that are one of multiple challenges to the same patent has declined, yet remains above 45%”.
Second, the USPTO states that “more than 80% of IPRs have co-pending district court litigation where the petitioner is also challenging patent validity”, meaning that a patent subjected to even a single IPR will “usually be challenged twice—once in the IPR and once in district court or at the ITC”. The USPTO further explains that while the IPR estoppel provision—which prevents PTAB petitioners from later asserting in district court invalidity “ground[s]” that they “raised or reasonably could have raised” in their earlier IPR—and related stipulations contemplated by PTAB precedent “mitigate” this issue, “petitioners still frequently bring ‘repetitive challenges based on slightly rebranded evidence’” (citing a March 2025 decision by Northern California District Judge William H. Orrick that endorsed a broader interpretation of estoppel than the one adopted by the Federal Circuit in its Maydecision in Ingenico v. IOENGINE, discussed further here).
Though the USPTO acknowledges that district courts sometimes stay cases pending the outcome of parallel IPRs, the agency argues that this only helps improve efficiency and speed when the PTAB invalidates the challenged claims—observing that if they survive, the result will have been a delay of 18 months or longer (counting an appeal or remand). The USPTO further observes that any simplification of a parallel district court case is “limited” in that the petitioner will typically just swap an estopped invalidity theory for another in the district court suit, that they still have the same amount of time and available briefing to raise those theories, and that they can spend time litigating a potentially estopped invalidity theory before the PTAB issues its final decision.
“These serial and parallel patentability challenges have undermined the reliability of patent rights and deterred investment in new technologies”, the USPTO asserts, stating also that this identified harm disproportionately impacts small- to medium-sized businesses.
The USPTO then details why it believes its newly proposed changes are a proper use of the agency’s statutory authority—including the “broad discretion to decide not to proceed with institution” that is vested in the director, and the “expansive authority” given to the USPTO to “prescribe regulations governing AIA proceedings, including IPRs”.
The NPRM gives 30 days for the public to submit comments, ending on November 17, 2025.
On the same day that it released its new proposal, the USPTO also withdrew a narrower NPRM released by the Biden Administration in April 2024, citing the need to “evaluate future actions in light of the administration’s current priorities”. That earlier proposal included certain rules to limit the impact of “serial” and “parallel” petitions as well as validity arguments previously addressed by the USPTO.
The April 2024 NPRM, in turn, replaced a far more sweeping Advance Notice of Proposed Rulemaking (ANPRM) from April 2023, with possible changes including the codification and expansion of the Board’s discretionary denial practices under NHK-Fintiv as well as the creation of a standing requirement for petitioners. Then-Director Vidal later clarified that this ANPRM was overbroad by design to gather as much feedback as possible—and indeed, the proposal proved controversial, prompting several hundred of public comments.
However, some of the 2023 proposal’s most significant reforms—including the proposed standing requirement—are now before Congress as part of the PREVAIL Act, a legislative reform proposal reintroduced in May 2025.
– Expanded Use of Discretionary Denials Causes Drop in Institution
As stakeholders consider the USPTO’s latest batch of reforms, the changes already put in place under the current administration have had a dramatic impact on the PTAB: As a result of a series of decisions throughout the year that have expanded the use of discretionary denials, AIA review institution rates have been steadily declining, with the Board instituting just 35% of those addressed in Q3 2025—down from 72% during the same quarter last year.
See RPX’s report on the third quarter for a deep dive on those decisions—including some that have controversially denied review for patents that have been in force longer due to the “settled expectations” of the parties—and for more on the PTAB and other key patent trends in Q3.
