USPTO Director Reclaims Authority to Institute AIA Trials
Dir. Squires issues a Letter and a Memo
In more big news for post-grant proceedings, the U.S. Patent and Trademark Office (USPTO) announced that Director John A. Squires will personally determine whether to institute Inter Partes Review (IPR) and post-grant review (PGR) proceedings. The change, effective October 20, 2025, centralizes authority that had been delegated to the Patent Trial and Appeal Board (PTAB) since the America Invents Act (AIA) was enacted.
In an open letter, Director Squires presented the decision as a necessary step to align the office’s procedures with statutory design and to address public-facing concerns about the PTAB process (Letter, p. 1). Effective October 20, 2025, the Director, in consultation with a three-judge panel, will decide on institution for all IPR and PGR petitions (Memorandum, pp. 1-2).
This announcement comes a day after the Office withdrew a 2024 rulemaking package and then announced a new Notice of Proposed Rulemaking (NPRM) aimed at IPR challenges against the same patent. Some stakeholders may be skeptic, but the end result looks to be fewer institutions of AIA trials across the board.
The Director’s Stated Rationale
The primary justification offered for the change is the plain language of the AIA. The open letter emphasizes that under 35 U.S.C. § 314(a), Congress vested institution authority directly in the USPTO Director (Letter, p. 1). The statute reads, “The Director may not authorize an inter partes review to be instituted unless the Director determines that the information presented in the petition...shows that there is a reasonable likelihood that the petitioner would prevail” (Letter, p. 1).
According to the open letter, while past Directors delegated this function to PTAB panels, the Director statutorily “retains full and concurrent authority” over these decisions (Letter, p. 1). The new policy is described as restoring the “statutory framework mandated by Congress” (Letter, p. 3).
The Director also pointed to “structural, perceptual, and procedural concerns” that arose from the delegated model (Letter, p. 1). The key issues cited in the open letter include:
Perception of Bias: A system where the PTAB decides whether to institute a case and then adjudicates it has created an “appearance that institution decisions affect docket size, credit, and resource allocation” (Letter, p. 2). This invited concern that the Board may be “’filling its own docket,’” which “undermines public confidence” (Letter, p. 2).
High Institution Rates: Past bifurcated review processes inadvertently led to “extraordinarily high institution rates (at one point exceeding 95 percent) for referred cases” (Letter, p. 2).
Accountability: The new structure returns accountability for the threshold institution decision to the Director, a “Presidentially appointed and Senate-confirmed officer,” as intended by the AIA (Letter, p. 2).
The stated goal is to “eliminate the appearance of self-interest by separating the power to institute from the body that conducts the trial” and “enhance transparency and public trust through a single line of authority” (Letter, p. 2).
The New Institution Process
A memorandum issued to PTAB judges outlines the new procedure. Effective October 20, 2025, the Director will decide on institution for all IPR and PGR petitions (Memo, p. 1). This process builds upon the “Interim Processes” established in March 2025 for handling discretionary denials (Memo, p. 1).
Under the new framework:
The Director, in consultation with “at least three PTAB judges,” will determine whether to institute a trial (Memo, p. 1).
In most cases, the Director will issue a “summary notice” to the parties either granting or denying institution (Memo, p. 2).
For proceedings with “novel or important factual or legal issues,” the Director may issue a more detailed written decision (Memo, p. 2).
Any instituted trial will be referred to a three-member PTAB panel for adjudication (Memo, p. 2).
This new procedure supersedes the previous practice of referring merit-based institution decisions to a PTAB panel (Memo, p. 2).
How This Differs from the March 2025 Policy
This new directive is a significant expansion of the “interim” policy set by former Acting Director Coke Morgan Stewart in late March 2025. Those “Interim Processes for PTAB Workload Management” bifurcated the institution decision (Stewart Memo, p. 1).
Under that process, the Director would only review petitions for discretionary considerations (like Fintiv factors) (Stewart Memo, p. 1). If a petition was not discretionarily denied, the Director would “refer the petition to a three-member panel of the PTAB,” which would then conduct its own review and issue a decision on the merits of institution (Stewart Memo, p. 1).
Director Squires’s October memo explicitly changes this. The new policy “supersedes the Interim Processes” by removing the PTAB panel from the institution decision entirely (Memo, p. 2).
Instead of a two-step process (Director on discretion, PTAB on merits), the new procedure consolidates both discretionary and merits-based reviews into a single decision made by the Director (Memo, pp. 1-2).
Analysis: Competing Views
The decision to centralize institution authority has generated varied reactions across the IP landscape, reflecting different perspectives on the role of AIA reviews.
Proponents, primarily patent owners and inventor groups, view this as a positive step toward strengthening patent rights. They argue that centralizing decisions will lead to a more consistent and predictable application of discretionary denial standards. This could reduce the frequency of repetitive challenges against the same patent, thereby lowering costs for patent holders and bolstering the perceived value and reliability of issued patents.
Conversely, critics of the move, often including technology companies and other frequent IPR petitioners, express concern that it consolidates too much power in a single, politically appointed official. They argue this could make it more difficult to challenge and invalidate weak patents, potentially allowing non-practicing entities (NPEs) to assert questionable claims with less risk of an administrative review. This could, in turn, lead to increased litigation and licensing costs for accused infringers.
Taking a step back, concentrating all institution decisions within the Director’s office could create a potential bottleneck. While the Director will consult with PTAB judges, the ultimate decision rests with one person, which may impact the timeliness of decisions.
Furthermore, the plan to use “summary notices” for routine decisions may frustrate parties (Memo, p. 2). Without detailed analysis, petitioners and patent owners may struggle to understand the basis for a decision, hindering their ability to adapt future strategies. It could also slow the development of precedent on key institution issues.
Conclusion
Director Squires’s decision to reclaim institution authority is one of the most significant structural changes to AIA trials since their inception. The move, combined with the new NPRM, is meant as a response to years of feedback and criticism from the patent-holder community regarding the fairness and integrity of the PTAB system.
The ultimate impact of this policy shift is the subject of considerable debate. Whether it will stabilize the patent system by promoting fairness and predictability, as the Director intends, or whether it will shield weak patents from scrutiny and alter the litigation landscape, remains to be seen.
The intellectual property community will be watching closely to see how this new process affects institution rates, decision timelines, and the overall predictability of post-grant challenges as this new process is implemented.
Disclaimer: This is provided for informational purposes only and does not constitute legal or financial advice. To the extent there are any opinions in this article, they are the author’s alone and do not represent the beliefs of his firm or clients. The strategies expressed are purely speculation based on publicly available information. The information expressed is subject to change at any time and should be checked for completeness, accuracy and current applicability. For advice, consult a suitably licensed attorney and/or patent professional.