The PTAB Pendulum Swings Further: Inside USPTO's Propose and In-effect Changes to IPR Institution

Building on recent trends at the USPTO involving institution decisions for inter partes review (IPR) proceedings at the Patent Trial and Appeal Board (PTAB), Director Squires has taken two additional steps that revise and add to the bifurcated process introduced by then–acting Director Stewart:

1. The USPTO Director (Squires) now holds sole authority to decide whether to institute, in effect as of October 17, 2025; and
2. Squires has proposed rule changes to 37 CFR § 42.108 that, once approved, prevents IPR institution in certain circumstances.[i]

Together, these steps are in the same spirit of the bifurcated process introduced by Stewart, to reduce the number of IPR proceedings, but Squires goes further. In the bifurcated process, then–acting Director Stewart delegated herself along with three administrative law judges (ALJs) to determine whether or not there was a discretionary reason (i.e., regardless of merits/ability to meet statutory threshold) to deny institution. Stewart also acted unilaterally at times by denying institutions in her role as acting Director.  But where not discretionarily denied, a separate PTAB panel had been responsible for reviewing the petition on the merits, as had previously been done for all institution decisions prior to 2025. Now, Squires alone will decide whether to deny or grant post-grant institutions on the merits, in addition to deciding any discretionary denial questions. Squires has made clear that the “process for briefing the merits and non-statutory considerations will remain the same,” and that the bifurcated process of deciding discretionary denial first before the merits will continue.

Turning to the future of IPR institutions, Squires’ proposed changes to 37 CFR § 42.108 aim to “focus IPR proceedings on cases where the patent has not previously been challenged in litigation or where prior litigation was resolved via settlement at an early stage.” In essence, this amended rule would force a challenger to choose to bring IPR proceedings first, or not at all. And if that challenger brings an IPR, it would only have one opportunity to contest a patent under §§ 102 or 103 because of newly proposed revisions to 37 CFR § 42.108. Those revisions introduce a stipulation requirement and several significant changes:

• Under proposed § 42.108(d), if an IPR is instituted, the petitioner must stipulate that neither they nor their assignees/successors will pursue §§ 102 or 103 invalidity challenges in any other forum, including district court or the ITC. Unlike the discretionary Fintiv factor or the voluntary Sotera stipulation, this new requirement is mandatory and far-reaching. Petitioners must now choose whether to challenge validity at the PTAB or in another venue. As the rule is currently drafted, the stipulation appears to extend to all claims of a patent, not just those challenged in the IPR petition.
• Under proposed § 42.108(e), an IPR will not be instituted (except in extraordinary circumstances) for claims already found valid under §§ 102 or 103 in previous USPTO, district court, ITC, or Federal Circuit proceedings. This bar to institution automatically extends to dependent claims.
• Under proposed § 42.108(f), an IPR will not institute for claims with parallel proceedings in district court or at the ITC that are likely to decide validity before the IPR’s final written decision. Previously, this was just one Fintiv factor; now, it is dispositive.
• Under proposed § 42.108(g), only the Director (Squires) decides what constitutes “extraordinary circumstances.” Notably, new prior art, expert testimony, caselaw, or legal arguments do not qualify, nor does a prior challenger’s failure to appeal.

It’s important to note that these proposed changes are not yet in effect. The USPTO extended the deadline for public comments out to December 2, 2025. However, if adopted, which seems likely, the implications of these rule changes are broad: patents with any previous, current, or future challenges—regardless of claim overlap—could be affected. For software patent owners, this may be a favorable development, but challengers should prepare for a new strategic reality. 

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