Squires Returns Merits-Based Institution to PTAB Judges

On Tuesday, a memorandum issued to administrative patent judges (APJs) of the Patent Trial and Appeal Board (PTAB) by U.S. Patent and Trademark Office Director John Squires and USPTO’s General Counsel John Duffy announced that effective November 16, 2026, Director Squires would be relinquishing direct oversight on merits-based PTAB institution decisions to PTAB panels. The decision to return institution decisions back to the PTAB panels themselves has been in the works for several months, as was first reported by IPWatchdog in September. Giving PTAB panels the authority to decide which cases to institute comes just more than one-year after Squires centralized the decision-making power in the Director’s Office.

Citing several developments improving the consistency of institution decision-making, the USPTO’s memo establishes guidelines for analyzing merits-based considerations on the Director’s behalf.  Director Squires says that he will continue to exercise control over discretionary considerations to set overarching PTAB policy.

Magnolia Framework Successfully Improves  PTAB Institutions

Director Squires first centralized control over all PTAB institution decisions last October, informing all APJs that he would personally decide whether to institute all petitions filed at the PTAB for either inter partes review (IPR) or post-grant review (PGR) proceedings. While the USPTO’s operational choice to delegate the Director’s authority to institute IPRs and PGRs pursuant to either 35 U.S.C. § 314 or 35 U.S.C. § 324 to PTAB panels was practical when the America Invents Act (AIA) took effect in 2012, the USPTO’s memo acknowledged perceptual and procedural issues with the delegated-institution model.

Despite centralizing PTAB decisions, Director Squires retained the bifurcated process for reviewing IPR and PGR petitions based on either discretionary or merits-based decisions established by former USPTO Acting Director Coke Morgan Stewart in the interim process for PTAB workload management established March 2025. The USPTO’s memo noted that Director Squires established a rubric for the exercise of discretion based on public interest considerations this May via precedential ruling in Magnolia Medical Technologies v. Kurin, including any American manufacturing or small business considerations related to the challenged patent.

According to Squires, the adoption of the Magnolia framework has led parties to file petitions more in-line with what the AIA envisioned. And the Office seems to be of the belief that because of the existence of the Magnolia framework there is no need for him to be personally involved any longer. Evidence of this, he says, comes from the fact that in June 2025, 60% of petitions were discretionarily denied, with 40% of petitions being referred for a review of the merits. Fast forward to September 2026 and only 15% of petitions were discretionarily denied and 85% of petitions were referred for a review of the merits. Moreover, Director Squires highlighted in the memo that, over the course of 325 institution decisions involving merits-based considerations under the centralized decision-making process, PTAB APJs demonstrated remarkable technical and legal acumen and, after one year of working with them, he found that “any perception of self-interest has no basis in fact or reality.”

Patent owners are sure to notice that Squires’ new position on the PTAB seem to be an abrupt departure from what he has said about the PTAB until now. What is somewhat remarkable, and will no doubt catch patent owners of guard, is Squires’ belief that there is a new self-awareness on the part of petitioners who have in just over a year become trained to submit fewer petitions and to do so only when a review on the merits is justified. Whether that continues once institution decisions are returned to the PTAB panels is an open question that will no doubt be hotly debated.

Notwithstanding, some patent owners and their representatives have been caught off-guard by this announcement and have expressed skepticism to IPWatchdog. One person telling IPWatchdog that no one seriously believes this is evidence that a reform period of just one year fixed the PTAB system.

Squires Establishes Merits-Based Guidelines for PTAB Panels

The USPTO’s memo does attempt to establish ground rules in the form of guidelines for PTAB panels to follow when making merits-based considerations under the new delegated model. Petitioners must show how prior art discloses each limitation of each challenged claim, with petitions providing understandable explanations of the element-by-element specifics of patentability challenges and identifying particular portions of prior art upon which petitioners rely, not merely pointing to a USPTO examiner’s finding.

Further, the guidelines require that PTAB deny institution if petitioners fail to make a requisite showing for a substantial majority of the challenged claims as shown by the patent owner’s preliminary response or determined by the PTAB. As well, if arguments for and against patentability are both reasonably supported when considering all evidence, the PTAB should view the petitioner as not meeting either the reasonable likelihood IPR standard or the more likely than not PGR standard.

Noting that these guidelines are illustrative and not exhaustive, the USPTO’s memo states that they arise out of the AIA’s statutory framework on the minimum threshold for institution coupled with the U.S. Supreme Court’s all-or-nothing institution rule from SAS Institute v. Iancu (2018). The memo also cites legislative history including statements from AIA co-sponsor Senator John Kyl, who underscored the elevated IPR and PGR thresholds under the bill, including IPR’s “reasonable likelihood” threshold that mirrors the test used by U.S. district courts in determining preliminary injunctions.