USPTO to Consider Extent of U.S.-Based Operations in Deciding AIA Institutions

The U.S. Patent and Trademark Office (USPTO) issued a memo late on Wednesday indicating that the USPTO Director will consider additional discretionary factors for institution of inter partes review (IPR) and post grant review (PGR) going forward that focus on the extent to which products involved in those proceedings are manufactured and sold in the United States.

According to the memo, the motivation for the announcement is to address the trend over the last few decades of “substantial segments of the United States’s existing manufacturing base-particularly in the electronics and computer industries” having moved overseas. Since the America Invents Act (AIA) calls on the Director to consider the effects of standards for institution on the “economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to timely complete proceedings,” the Office will now take into account the following additional factors when deciding which IPRs and PGRs to institute:

1. the extent to which any products accused of infringement in a parallel proceeding are manufactured in the United States or are related to investments in American manufacturing operations;
2. the extent to which any products made, sold, or licensed by the patent owner that compete with the accused products are manufactured in the United States; and
3. whether the petitioner is a small business that has been sued for infringement of the patent at issue.

The memo noted that, while many stakeholders have maintained that the availability of IPRs and PGRs is crucial to protecting U.S. manufacturers and small businesses, “the off-shoring trends discussed above have continued, notwithstanding the broad availability of lPR and PGR proceedings for fifteen years.” Furthermore, the biggest users of AIA proceedings are large companies without a significant manufacturing presence in the United States, said the memo.

At a November 2024 markup of the Promoting and Respecting Economically Vital American Innovation Leadership Act (PREVAIL Act), for example, Senator Chris Coons (D-DE) pointed out that all of the top users of the Patent Trial and Appeal Board (PTAB) are big tech companies: “Samsung, Apple, Google, Intel and Microsoft accounted for 80% of all PTAB petitions a few years ago and 85% of defendants in litigation have used it as a duplicative rather than all alternative path,” Coons said. And the USPTO memo cited the findings of the Office’s “Study of High-Volume Filers and Domestic University-Related Patentees in District Court Litigation at the PTAB” (Oct. 2025) to further support this point. “These facts and data raise a legitimate question about whether the current institution framework appropriately weighs the interests of entities that invest in domestic production,” it said.

In addition to providing information about the three factors noted above, the Office also encouraged petitioners who are small businesses that have been sued for infringement to identify themselves in order to better understand how often small businesses are using IPRs and PGRs to defend against such claims.

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