2025 Post-Grant Annual Report

Why It Matters

The reforms reshape PTAB workload, improve patent quality, and could restore U.S. competitiveness by expanding eligibility and limiting fragmented litigation. Stakeholders from startups to pharma will feel the effects in filing strategy and enforcement.

Key Takeaways

• Squires centralizes PTAB institution decisions, dropping institution rate to 42% FY 2026.
• Ex parte Desjardins makes AI‑eligible inventions precedent, updating MPEP.
• New policy memos require strict real‑party‑interest disclosure and full ground coverage.
• Proposed Rule 42.108 would bar IPRs after prior validity findings elsewhere.
• PREVAIL Act seeks single‑forum, higher PTAB burden of proof, mixed industry response.

Pulse Analysis

John A. Squires’ confirmation as the 60th Director of the United States Patent and Trademark Office marks a decisive turn for U.S. intellectual‑property policy. A former chair of Dilworth Paxson’s Emerging Companies and IP practice, Squires built his reputation on AI, blockchain, and FinTech matters, and he entered the role with a clear free‑market philosophy. Within weeks of being sworn in, he re‑engineered the PTAB’s institution workflow, moving final authority for inter‑ parties review and post‑grant review decisions to the Director’s office. This centralization aims to curb the backlog that has plagued the Board for years while signaling a more disciplined approach to patent quality.

The new institutional framework has already produced measurable results. The PTAB’s institution rate fell from 68 % in fiscal year 2024 to 42 % in FY 2026, reflecting tighter discretionary standards and the requirement that petitioners demonstrate a lack of prior adjudication. Complementary policy memoranda now enforce strict real‑party‑interest disclosures and demand that panels address every ground raised, reducing fragmented rulings. Together with the revised discretionary‑denial process, these changes are expected to raise the bar for challengers, protect settled expectations for patent owners, and streamline examiner resources for higher‑quality grant work.

Legislative activity mirrors the USPTO’s internal shift. The PREVAIL Act, backed by bipartisan sponsors, would lock patent owners into a single forum, raise the PTAB’s evidentiary burden to clear‑and‑convincing, and codify a presumption of validity—measures that could curb abusive petition filings but also limit legitimate challenges, especially for generic drug makers. At the same time, the Patent Eligibility Restoration Act seeks to broaden § 101 coverage, a stance reinforced by the Ex parte Desjardins decision that now guides AI‑related examinations. If both bills pass, the United States could see a more permissive eligibility landscape paired with a more restrained PTAB, reshaping innovation strategy across tech and life‑science sectors.