Are you planning on challenging a competitor’s patent at the US Patent and Trademark Office (USPTO)? The policies of the new director of the USPTO may cause you to rethink your strategy. The USPTO has recently proposed a new rule that, if adopted, would upend the conventional wisdom on inter partes reviews (IPRs).
An IPR is a litigation-like proceeding conducted before the Patent Trial and Appeal Board (PTAB) of the USPTO, which allows a third party to challenge the validity of patent claims. Because IPRs are generally more time- and cost-efficient than district court litigation, they have become a popular tool for challenging patents. Another attractive feature of IPRs for patent challengers is that, unlike in district court litigation, there is no presumption that the challenged patent is valid.
Due at least in part to their popularity with patent challengers, IPRs have come under fire for allegedly causing unpredictability for patent owners. According to these critics, technological innovation and business objectives are hampered because patent owners cannot safely rely on their patents to protect their innovations because (a) the invalidity burden is less in an IPR than in district court litigation and (b) IPRs threaten costly, parallel litigations (e.g., multiple IPRs, district court litigation, and/or International Trade Commission investigations).
Under Director John Squires, the USPTO has recently responded to these concerns by proposing a rule that seeks to increase patent owner certainty by decreasing the number of IPRs instituted. That is good news for patent owners and innovators and bad news for accused infringers and patent challengers. In particular, the proposed rule seeks to return the PTAB’s institution authority back to the USPTO director and to narrow the number of instances in which IPRs may be instituted. Under the proposed rule, the following changes would be made to the IPR institution decision process:
- Prior art stipulations: Under the proposed rule, a patent challenger must stipulate that it will not pursue certain invalidity challenges in parallel litigations. Notably, this rule would preclude patent challengers from raising in district court litigation prior art arguments that are based on prior art systems or products.
- Prior proceedings: The proposed rule would preclude IPRs from being instituted in cases in which the challenged patent claim has been found valid in, for example, a prior district court litigation or previous IPR. Notably, this rule means a later alleged infringer cannot challenge a patent in an IPR if an earlier alleged infringer has already done so, regardless of whether the later alleged infringer had any participation in the earlier IPR.
- Parallel litigation: Under the proposed rule, an IPR petition will be denied if a validity decision is “more likely than not” to be reached in a parallel litigation (e.g., a district court litigation) before the conclusion of the IPR.
- Extraordinary circumstances: The proposed rule also allows the PTAB to institute an IPR in “extraordinary circumstances.” Notably, the rule lists a number of circumstances that are deemed not extraordinary: “new or additional prior art, new expert testimony, new caselaw . . . or new legal argument, or a prior challenger’s failure to appeal.”
The comment period for this proposed rule closes after November 17, 2025. If adopted, the proposed rule would upend current patent litigation norms and signal a new era in patent litigation strategy. The proposed rule will also benefit patent owners and innovators, perhaps giving companies more incentive to invest in research and development of new products.
To learn more about how this proposed rule might impact your IP strategy or practice, please contact the author or any other member of McCarter & English’s Intellectual Property Practice Group.