Squires Says Tesla IPRs on Vehicle Gear Selection Control Patents Can Proceed Due Partly to U.S. Manufacturing Activities

The U.S. Patent and Trademark Office (USPTO) announced late Monday that it is designating as informative a decision based in part on USPTO Director John Squires’ recent memo outlining additional discretionary denial factors the Office will consider with respect to institution of inter partes review (IPR) and post grant review (PGR) proceedings. Specifically, the decision found that Tesla, Inc.’s evidence of manufacturing activities in the United States, “including that it manufactures the accused products in America,” favored a finding that discretionary denial is not appropriate.

Tesla, Inc. v. Bulletproof Property Management LLC relates to seven IPRs brought by Tesla against seven different “Vehicle Gear Selection Control” patents owned by Bulletproof. Squires issued a notice denying the request for discretionary denial on May 19, and in today’s decision elaborated on the reasons for that denial.

Bulletproof first argued that the petitions should be denied in light of parallel district court litigation, but Squires was persuaded by Tesla’s arguments that there is no currently scheduled trial date and its stipulation not to advance in the district court “any ground that reasonably could have been raised in an [IPR] and any other ground based on a combination of system art with any prior art reference asserted as the basis of a ground in each IPR.” These two factors favored the petitioner and reduced concerns about inconsistencies or duplicative efforts, said the decision.

Bulletproof also argued that one of the prior art references, Joos, was previously presented to the Office. But Squires put more stock in the fact that the other grounds presented by the petition relied on prior art that was never before the Office, some used in combination with Joos, and that the examiner erred in overlooking Joos and its teachings in some instances. The “Petitioner demonstrates that the Office erred in a manner material to the patentability of the claims,” said the decision.

Bulletproof’s attempt to argue settled expectations also fell flat, as none of the patents has been in force for more than two years.

While the above would have been sufficient to deny the petition for discretionary denial, Squires noted that Tesla’s additional evidence of U.S. manufacturing activities weighs further in favor of considering the IPRs on the merits.

Squires’ March 2026 memo indicated that the Office would 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.

While Bulletproof alleged the products accused of infringing its patents in the parallel litigation “comprise 30% to 40% of components sourced in foreign countries,” Squires said it did not provide supporting evidence for that assertion.

“Petitioner’s evidence of U.S. manufacturing is more persuasive and further demonstrates that discretionary denial in these proceedings is not appropriate,” Squires concluded.

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