Squires Again Broadens Discretion for Post-Grant Proceedings

Why It Matters

The change tilts post‑grant challenge eligibility toward domestic and small‑business petitioners, potentially reshaping litigation strategy and limiting foreign‑based challengers.

Key Takeaways

• Squires adds US manufacturing as institution factor
• Small‑business petitioners gain new advantage
• Offshore‑based challengers face higher institution hurdles
• Policy aligns with 2025 real‑party disclosure memo
• Applies before patent owner’s discretionary brief deadline

Pulse Analysis

The United States Patent and Trademark Office has long used institution decisions to filter inter partes review (IPR) and post‑grant review (PGR) petitions before they proceed to trial. In a March 11 memorandum, Director John Squires announced a significant expansion of that discretion, allowing examiners to weigh whether the accused products or licensed components are manufactured in the United States and whether the petitioner is a small business that has faced infringement suits. The move builds on his October 2025 directive that required disclosure of real parties in interest, reflecting growing concern over foreign influence in the patent‑challenge system.

The new criteria tilt the institutional balance toward domestic innovators and small‑enterprise challengers. Petitioners that can demonstrate U.S. manufacturing or a history of defending against infringement may now secure institution more readily, while foreign‑owned firms that rely on offshore production face an added hurdle. Practitioners anticipate a shift in litigation strategy, with increased emphasis on supply‑chain documentation and early‑stage eligibility assessments. For large multinational corporations, the policy could raise the cost of mounting IPR or PGR attacks, prompting a reevaluation of whether to pursue post‑grant challenges or seek alternative dispute‑resolution pathways.

Industry observers see the memorandum as part of a broader USPTO effort to safeguard America’s innovation leadership by tying patent‑challenge eligibility to domestic economic impact. Critics argue that the rule may introduce de‑facto protectionism and could be challenged in court if it is perceived to discriminate against foreign entities. Companies are likely to respond by bolstering U.S. production footprints, revising licensing agreements, and increasing transparency around real‑party interests. As the policy takes effect, its practical influence will depend on how consistently examiners apply the new factors and whether Congress steps in to codify or limit the director’s discretion.