Director adds American manufacturing and small-business status to the inter partes review institution decision

2026-03-11PTAB

Memorandum, "Additional Discretionary Institution Considerations—U.S. Manufacturing and Small Business Use of AIA Proceedings" (Mar. 11, 2026), from John A. Squires, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, to all PTAB users

Director John A. Squires told users of the Patent Trial and Appeal Board that, in deciding whether to institute inter partes review or post-grant review, he will consider three further factors: the extent to which products accused of infringement in a parallel proceeding are manufactured in the United States or tied to investment in American manufacturing; the extent to which the patent owner's own competing products, made, sold or licensed, are manufactured in the United States; and whether the petitioner is a small business that has been sued for infringement of the challenged patent. The memorandum rests on the direction in Sections 316(b) and 326(b) of Title 35 of the United States Code that the Director consider the effect of institution standards on the economy and the integrity of the patent system. It cites the movement of electronics and computing manufacturing overseas and notes that many frequent petitioners report no significant domestic manufacturing. Manufacturing includes where components are made and whether domestic products are finished abroad. For method claims, the relevant product is the device used to perform the method, such as the computer performing a method of operating a computer. Small-business status turns on Small Business Administration size standards, eligibility for reduced fees and other relevant facts. The factors apply to every proceeding whose discretionary brief is not yet due.

What it changesInstitution of an inter partes review now depends partly on the parties' factories, and for software and artificial intelligence patents the memorandum answers the threshold question of what the product is: for a method of operating a computer, it is the computer. A company sued on a software patent should establish, before discretionary briefing opens, where the servers, accelerators and devices that run the accused method are made and assembled, because that record now goes to the Director alongside the merits. A startup sued on a patent should identify itself as a small business in its petition with the evidence the memorandum names, since the third factor exists for petitioners in exactly that position. A patent owner whose technology is practiced by a domestic manufacturer, directly or under license, should put that fact in the record early. None of this changes the merits standard, but it changes what a defendant needs in hand in the first weeks after a complaint is served.

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Burbage Law is the practice of Jon Burbage, a registered patent attorney. 342 United States patents have issued from applications he wrote; the full list is on the Patents page. More about Jon Burbage.

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