PTAB’s New Gatekeeping Rule: U.S. Manufacturing Now Matters at Institution

3.12.26

PTAB discretionary denial just became more policy-driven.

In a new memo, Director John Squires directs the USPTO to consider U.S. manufacturing ties and small-business status when deciding whether to institute inter partes review (IPR) and post-grant review (PGR). The change gives the Director another basis to deny patent challenges before they ever reach a merits determination by a PTAB panel.

The memo identifies three new considerations: whether the accused product in parallel litigation is manufactured in the United States or tied to U.S. manufacturing investment, whether the patent owner’s competing product is manufactured in the United States, and whether the petitioner is a small business that has been sued for infringement.

Why it matters

Now industrial-policy considerations are a part of the institution stage of AIA review. On the patent-owner side, the approach echoes an ITC-style domestic-industry instinct by giving weight to U.S.-based production. On the petitioner side, the policy is more novel: challengers with domestic manufacturing footprints may now stand on stronger footing, while challengers whose products are largely made abroad may face a comparative disadvantage. The small-business factor adds a separate equitable consideration that could help sued smaller companies preserve access to PTAB review.

Practical implications

Patent owners should consider building a discretionary-denial record around U.S. manufacturing, including domestic production, component sourcing, and related investment. Petitioners should be prepared to address where accused products are made, whether there is meaningful U.S. manufacturing activity and if small-business arguments are available. The memo also makes clear that “manufacturing” is not limited to final assembly and may require a more detailed factual showing than parties have previously presented in discretionary briefing.

Bottom line

The institution inquiry is now more explicitly tied to domestic economic policy. Companies involved in PTAB disputes should expect U.S. manufacturing footprint and business size to become more prominent features of institution strategy going forward

Samuel Raque | Associate Attorney