USPTO Director Issues Guidance Favoring Small Businesses and U.S. Ties in IPRs and PGRs | Fitch, Even, Tabin & Flannery LLP
On March 11, USPTO Director John Squires issued a memorandum encouraging small businesses that have been sued for infringement and companies with significant manufacturing investments in the United States to identify themselves in all inter partes review (IPR) and post-grant review (PGR) petitions. This move is intended to assist the Patent Trial and Appeal Board (PTAB) in protecting domestic interests.
Since Director Squires assumed sole authority over institution of IPR and PGR proceedings on October 20, 2025, institution rates have declined significantly. In response to concerns that this decline has had a negative effect on American manufacturers and small businesses, the Director’s memorandum encourages petitioners to identify the following, which may be taken into account in determining whether to institute IPR and PGR proceedings:
- the extent to which products accused of infringement are manufactured in the U.S. or relate to investments in U.S. manufacturing
- the extent to which competing patent owner products are manufactured in the U.S.
- whether petitioner is a small business that has been sued for infringement under the patent at issue
This change in procedure took place immediately and is a response to the concerns of American manufacturers and small businesses. While acknowledging that the America Invents Act (AIA) requires the Director to consider the effect of institution standards on the economy and the integrity of the patent system, Director Squires specifically noted that many of the most frequent users of IPR and PGR proceedings are large companies that have taken no significant steps to invest in U.S. manufacturing.
In view of this memorandum, small businesses and companies with significant investments in U.S. manufacturing that have been accused of infringement in parallel U.S. proceedings should emphasize relevant economic factors up-front in any IPR and PGR petitions that they file. This includes, but is not limited to, existence of U.S. manufacturing facilities owned or utilized by the petitioner, investments in U.S. manufacturing, employment or subcontracting to U.S. citizens, the patent owner’s lack of ties to U.S. manufacturing and other U.S. industries, and any facts tending to show that the petitioner is a small business (including but not limited to qualification of small entity status for purposes of USPTO fee payments).
