Sean Hutchinson

April 2026

Background: PGR and IPR

Patent offices around the world strive to grant valid patents, but sometimes cases slip through the net and proceed to grant when they shouldn’t have. For this reason, many patent offices provide mechanisms for third parties to challenge their decision to grant a patent, and the United States Patent and Trademark Office (“USPTO”) is no exception.

The USPTO currently offers three options for challenging the validity of a granted US patent, these being ex parte re-examination (which enables third parties to bring new prior art to the examiner’s attention), post-grant review (which enables third parties to attack on any statutory ground for invalidity within 9 months of the grant date), and inter partes review (which is similar to post-grant review, but can only be sought after the 9-month deadline for requesting post-grant review has expired and is limited to attacks of lack of novelty and/or lack of inventive step).

When a petition for post-grant review (“PGR”) or inter partes review (“IPR”) is filed, the USPTO’s Patent Trial and Appeal Board (“PTAB”) first decides whether to institute PGR/IPR proceedings in view of the petition. In reaching this decision, the PTAB applies specific tests – in the case of PGR, the test is whether the petition convinces the PTAB it is more likely than not that at least one claim of the granted US patent is invalid, and in the case of IPR the test is whether the PTAB is satisfied there is a reasonable likelihood the petitioner will succeed in ultimately convincing the PTAB at least one claim of the granted US patent is invalid.

These tests do not appear to set very high bars for institution of PGR/IPR, and instead seem intended to prevent cases with no real prospect of success from wasting the USPTO’s time. In practical terms, this means all petitioners have to do for PGR/IPR to be instituted is satisfy the PTAB their arguments are credible.

A Concerning Approach?

The current director of the USPTO, John Squires, has (by way of a memorandum dated 11 March 2026, a link to which is provided above) recently expressed concern that the current tests for institution of PGR and IPR are having a detrimental impact on the American economy and the integrity of the US patent system. Director Squires’ memorandum notes he has an obligation under the America Invents Act (“AIA”) to take action under such circumstances.

Specifically, according to Director Squires, PGR and IPR were introduced to provide mechanisms by which small American businesses sued for infringement of patents owned by their large competitors could challenge the validity of the patents concerned without having to incur expensive court litigation costs. Director Squires argues PGR and IPR are, however, instead more commonly being used by large foreign companies who manufacture their products outside the USA to invalidate US patents impeding their access to the US market. He therefore argues the current tests for institution of PGR and IPR are giving “a tactical advantage to companies that neither manufacture in the United States, nor are making American manufacturing investment”.

Taking Action

Against this background, Director Squires’ memorandum sets out that the USPTO will, effective immediately, no longer base decisions whether to institute PGR/IPR proceedings solely on the above criteria.

Instead, the USPTO will now also take into account “the extent to which any products accused of infringement in a parallel proceeding are manufactured in the United States or are related to investments in American manufacturing operations”, “the extent to which any products made, sold, or licensed by the patent owner that compete with the accused products are manufactured in the United States”, and “whether the petitioner is a small business that has been sued for infringement of the patent at issue”.

Impact

Set against the backdrop of the wider US political landscape, the impact of these changes to the tests for institution of PGR and IPR seems fairly clear: when decisions regarding the institution of PGR/IPR are taken by the USPTO, the interests of small American businesses and firms that invest in American manufacturing will be given priority over the interests of companies that manufacture products outside the USA with the intention of then selling them to the American market.

Questions arise over the compliance of these changes with the World Trade Organization’s TRIPS Agreement, Article 27(1) of which states that “patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced”. However, the reference in Director Squires’ memorandum to “national security damage” caused by manufacturing products for the American market outside the USA might suggest he intends to rely on Article 73(b) of the TRIPS Agreement to defend his position, noting this permits WTO member states to deviate from other provisions of the agreement to protect their “essential security interests”.

These changes are now in effect, and thus anyone seeking to navigate the IP system in the USA would be wise to take note: if you manufacture in America, or if you create jobs for Americans to manufacture in America, then the American IP system appears to be on your side.