The Trump Administration Patent Office — Not Business as Usual
The Trump Administration Patent Office — Not Business as Usual
Companies sued for patent infringement have several tools to combat the infringement claims brought against them, including options for challenging patents in the U.S. Patent & Trademark Office (“PTO”). Companies regularly finding themselves accused of infringement have reliably turned to the “inter partes review” or “IPR” proceedings in the PTO. At least before January 2025. As in many areas, the availability of these IPR proceedings has been significantly curtailed with the second Trump administration. Those patent defendants who previously would ask the PTO to declare invalid the patents asserted against them often find that such processes are no longer available under the current administration. Thus, many of these defendants find themselves in a position similar to where the industry was before the 2011 patent-law amendments that sought to overcome what many perceived as significant problems with the American patent system.
2011 — Implementation of the America Invents Act
After the internet bubble burst at the turn of the century, many American businesses found themselves defending countless patent-infringement lawsuits. Many suits were filed by patent holding companies who acquired significant patent portfolios from struggling or bankrupt startup technology companies. These patent owners faced little risk in pursuing wide-ranging litigation, as they typically had no assets other than the patents being asserted. But they did pose a significant risk to the defendants in the suits, which were often joined in large-scale lawsuits with dozens of similarly situated defendants. And these cases were commonly filed in venues commonly believed to favor plaintiffs. The risks of going to trial proved too much for most of these defendants, leading to settlements with significant licensing payments being made to the patent owners. Defendants that chose not to settle would often regret that decision after the jury rendered its verdict.
So significant was the perceived threat of patent litigation by these so-called “non-practicing entities” or “NPEs” that the giants of the tech industry undertook massive lobbying efforts to have Congress amend the Patent Act. Using pejoratives like “patent trolls” to describe the patent-plaintiffs, the powerful companies argued that the patent system was broken and needed to be reformed. Inventors and companies having established licensing programs opposed many of the proposed changes. But eventually, Congress sided with the tech companies, and in 2011, it passed the America Invents Act (“AIA”), which ushered in some of the most significant changes to the patent laws since the enactment of the Patent Act of 1952.
A major component of the AIA was the establishment of a new board within the PTO called the Patent Trial and Appeal Board (“PTAB”). The PTAB would assume the mundane task of deciding appeals from final rejections of pending patent applications, but it also had the responsibility for presiding over new types of proceedings established under the AIA for persons or companies (normally those accused of infringing a patent) to challenge the validity of one or more claims of an issued patent. By far the most common type of proceeding is “Inter Partes Review” or “IPR.”[1] A key differentiator of IPR proceedings from prior techniques for patent challenges in the PTO is that the IPR petitioner (i.e., the party seeking a ruling that the claims are unpatentable) remains actively involved in the proceedings all the way through final determination.
IPR Proceedings—A cost-effective way to weed out invalid patents?
For those companies that perceived patent litigation as anything from an annoyance to a significant drain on the business’s financials, the AIA’s IPR proceedings appeared to offer some relief from being sued repeatedly for alleged infringement. Many envisioned that after being sued, a defendant could file an IPR proceeding at the PTAB and then get the district court to stay the ongoing litigation pending the outcome of the IPR proceeding. The process involves the patent challenger filing a petition explaining why it believes that the patent is invalid. The patent owner may optionally respond, and the PTO will decide whether to institute the IPR proceeding. If the proceeding is instituted, the patent owner provides a detailed response to the petition, citing its own reasons why the patent is valid.
After a full record is developed, a three-judge panel within the PTAB makes a determination of patentability in a Final Written Decision. Obviously, if the PTAB finds the patent claims to be invalid,[2] then the expense of costly infringement litigation would be avoided. And even if the patent survives the IPR proceeding, arguments and rulings in the IPR proceeding may help to narrow or focus the issues remaining to be decided in the litigation. At least that was the theory.
Unsurprisingly, patent owners generally do not favor the IPR process, which they perceived as a roadblock between their patent rights and damages for infringement. They also believed that the IPR process improperly gave infringers an additional way to seek invalidation of an asserted patent. Patent owners were not alone in their criticism. In one notable example, Randall Rader, the former Chief Judge of the U.S. Court of Appeals for the Federal Circuit, predicted that the PTAB panels would be “patent death squads.” Still, there was nothing to prevent accused infringers from filing IPR proceedings. And they did. To date, over ten thousand IPR proceedings have been filed since enactment of the AIA.
If the PTO’s conclusion that patents it previously granted are actually invalid constitutes a “success,” the IPR process has been highly successful.
Depending on whether a company was typically a patent plaintiff or patent defendant, opinions widely vary on whether the IPR process is a good thing. But the statistics suggest a problem within the American patent system as a whole. The PTO is charged with the initial patent granting authority—trained patent examiners at the PTO review patent applications and determine whether the claims in the application are valid, including by verifying that they are patentable over the prior art. Only after the examiner gives the approval will a patent issue, and that issuance comes with a statutory presumption that the patent claims are valid. Yet through the IPR process, the PTAB—another branch of the same PTO—later sits in judgment of whether the patent claims are actually valid.
Given the specialized knowledge of patent examiners, one would naturally assume that the IPR process would largely confirm the patentability of most patent claims, with a small percentage that were improperly issued being invalidated during IPR. That is not the case. According to the PTO’s own statistics, in FY2024, the PTAB agreed to institute IPR proceedings on 68% of IPR petitions filed.[3] And for those IPR proceedings that completed the process through a final decision, 78% of the challenged claims were found to be invalid, including a finding that all claims were invalid in 70% of the patents subject to instituted IPR proceedings.
Regardless of their perspective, both sides of the patent bar can find fault with the patent system generally and the PTO specifically. Companies regularly sued for patent infringement defend the PTAB, arguing that the examiners are overworked and don’t have the time to exhaustively research the prior art before making a final decision on patentability. In their view, the PTAB is simply correcting the examiner’s erroneous decisions in view of a more complete record. Patent owners, on the other hand, argue that the PTAB panels, which often lack the specific technical expertise of the patent examiners, employ hindsight bias to invalidate patents based exclusively on arguments made by the patent challengers—who have a vested interest in invalidating the patents.
Changing Times for IPR Proceedings
Reality is likely somewhere between these two positions but there is no doubt that in many patent disputes, accused infringers have availed themselves of the IPR process with a substantial success rate. And during the Biden administration, the percentage of IPRs that were instituted steadily increased. This is undoubtedly based in part by the PTO’s deference at that time to the decisions of the PTAB panels. In particular, some PTAB panels, including a 2020 decision in Apple Inc. v. Fintiv, Inc., IPR2020–00019, had adopted a framework by which the PTAB would use its discretion to deny institution of an IPR where a parallel district-court litigation involving the same patent was approaching trial.
In June 2022, however, the Biden administration’s Director of the PTO, Katherine K. Vidal, issued interim procedures that curtailed the ability of the PTAB panels to discretionarily deny institution of an IPR based on pending litigation. In those procedures, Director Vidal expressly limited the Fintiv decision to its facts and stated:
[T]he PTAB will not deny institution of an IPR or PGR under Fintiv (i) when a petition presents compelling evidence of unpatentability; (ii) when a request for denial under Fintiv is based on a parallel ITC proceeding; or (iii) where a petitioner stipulates not to pursue in a parallel district court proceeding the same grounds as in the petition or any grounds that could have reasonably been raised in the petition.[4]
Director Vidal’s mandate to the PTAB was clear—discretionary denials should be rare, and even if the facts support such a denial, the petitioner can avoid such a denial by stipulating not to raise in the district court grounds that could have reasonably been raised in the petition. By FY2024, PTAB institution rates had grown to the level that 68% of petitions resulted in the institution of a proceeding, and the proceedings instituted were directed to 74% of the patents challenged.[5]
After President Trump’s inauguration in January 2025, change was swift and dramatic at the PTO. On February 28, 2025, the PTO rescinded former-Director Vidal’s memorandum limiting discretionary denials.[6] And then a month later, the Trump administration’s Acting Director of the PTO, Coke Stewart, adopted a bifurcated procedure where the Director of the PTO, rather than individual PTAB panels, would decide whether discretionary considerations favored denial of institution.[7] If the Director found those considerations to favor denial, institution was denied by the Director. Only if the Director found such considerations did not favor denial would the petition be sent to the PTAB panel assigned to the case to determine whether the merits supported institution. In October 2025, the now-confirmed Director of the PTO, John Squires, issued a further directive that effective immediately, it would be the “Director, in consultation with at least three PTAB judges” who makes all decisions on whether to institute a proceeding in the PTAB, including those based on discretionary considerations, non-discretionary considerations, and the merits of the petition.[8]
The changes under the current administration have had a clear impact on institution rates. Between FY2024 and FY2025, the institution rate (based on petitions) dropped from 68% to 50%, even though one-third of FY2024 was during the Biden administration. In the first quarter of FY2026, the institution rate has fallen even lower to just 42%. And the filing rate for petitions has also sharply declined. It thus appears that accused infringers may be unwilling to incur the costs of preparing IPR petitions with the uncertainty and less likelihood of institution under the current leadership at the PTO.
As with the overall IPR process in general, opinions about the current PTO approach are divided. Patent owners largely support limiting institutions, and moving the decision-making from the individual panels to the PTO director removes any perception that a PTAB panel would institute a proceeding solely to provide work for itself. On the other hand, prospective IPR petitioners worry that consolidation of the decision-making authority to a single political appointee increases the risk that institution decisions will not be based solely on the merits of the petition. At the same time, however, there is likely no approach that would satisfy everyone.
Conclusion
Although Congress has not made any substantive changes to the statutory framework that authorizes IPR proceedings, the philosophy of the administration and the PTO leadership can have a dramatic effect on the availability of those proceedings. With the PTO’s current restrictions against IPR institution, many would-be petitioners find themselves in the same place they were before the enactment of the AIA—having to defend patent suits in the district courts without the additional availability of an administrative path to declaring the patent invalid. Whether the pendulum eventually swings to bringing IPR proceedings back into favor remains to be seen, but the PTO’s current approach cautions in favor of careful consideration before expending great effort and expense to prepare an IPR petition.
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