USPTO Returns Merits-Based Institution Decisions to PTAB, Clarifies Institution Standards

On November 10, 2026, U.S. Patent and Trademark Office (PTO) Director John Squires and General Counsel John Duffy issued a memorandum announcing that, effective November 16, 2026, the Patent Trial and Appeal Board (PTAB) will again decide whether to institute inter partes review (IPR) and post-grant review (PGR) proceedings based on merits-based considerations. Director Squires will remain the initial gatekeeper, deciding whether petitions should be denied for non-merits-based considerations. But now a three-judge PTAB panel will decide whether to institute a petition that passes the Director’s initial review. That panel must consider whether a “substantial majority” of the challenged claims satisfy the institution standard. If a proceeding is instituted, a different panel of judges will conduct the trial.

Although the memorandum partially reverses Director Squires’ October 2025 decision to centralize institution authority in his office, the new procedures will not substantially change institution outcomes. Director Squires acknowledges that PTAB judges have already been closely involved in evaluating petitions and providing recommendations in more than 325 institution decisions. And the Director cites decisions “memorializing” his existing approach to institution and provides guidelines to “ensure that the PTAB continues to review merits-based and non-discretionary considerations consistently[.]” The procedures for briefing discretionary and merits-based considerations will remain unchanged.

Background

The advent of the second Trump administration marked the beginning of a sweeping transformation at the PTAB. Prior to 2025, IPR and PGR institution decisions were made by panels of PTAB judges. But in March 2025, the acting Director introduced a bifurcated institution procedure. Under this procedure, the acting Director, together with at least three PTAB judges, first considered “discretionary” issues, such as whether another forum would resolve the patent’s validity before the PTAB could complete its review. Only if a challenge survived that initial review would it be referred to a three-judge panel for consideration of the merits. The acting Director subsequently provided additional guidance on “discretionary” issues, including whether a patent owner had “settled expectations” regarding the validity of its patent. 

In October 2025, following his confirmation, Director Squires announced that he would assume sole authority over institution decisions. Under this approach, he would personally determine whether a challenge should proceed at each stage of the bifurcated process. In a May 2026 decision, he explained that his analysis centered on whether the challenge presented a true alternative to litigation, rather than a “second bite at the apple.” The cumulative effect of these changes has been a marked reduction in IPR challenges, a substantial decline in institution rates, and a surge in ex parte reexamination requests.     

Five Guidelines for Evaluating the Merits

In the November 10 memorandum to the PTAB, Director Squires returned responsibility for merits-based institution decisions back to PTAB panels. But the shift does not signal a retreat from his oversight of the institution process. He will continue to resolve non-merits-based discretionary issues and, in the memorandum, he provided five guidelines on how the PTAB should evaluate the merits of institution requests:

1. Element-by-element analysis. For prior-art-based challenges, petitioners must explain how the asserted references disclose or render obvious each limitation of each challenged claim and identify the particular portions of the prior art relied upon.
2. “Substantial majority” requirement. The PTAB will deny institution if the petitioner fails to make the requisite showing for a “substantial majority” of challenged claims.
3. Patent owner arguments. The PTAB will deny institution if the patent owner’s preliminary response presents a reasonable argument, well-supported by reliable and credible evidence, that the petitioner fails to meet the institution standard for a substantial majority of challenged claims.
4. Independent PTAB determination. The PTAB will likewise deny institution if it determines that a reasonable argument, well-supported by reliable and credible evidence, establishes that the petitioner fails to meet the institution standard for a substantial majority of challenged claims.
5. Evidence in “equipoise.” In applying guidelines 2-4, where the arguments for and against unpatentability of a particular claim are both reasonably supported in view of the evidence, the petitioner will not be deemed to have satisfied the institution standard for that claim.

The memorandum describes these guidelines as illustrative rather than exhaustive and cites prior decisions by the Director applying similar principles.

Written Institution Decisions Should Improve Transparency (Within Limits)

One potentially significant procedural change is the return of written decisions addressing the merits of IPR and PGR petitions. Since Director Squires centralized institution authority in October 2025, many institution determinations have been issued through summary notices providing little to no insight into the underlying merits analysis.

Under the memorandum, PTAB panels will issue institution decisions that “briefly address the merits-based considerations that the panel found important.” Although these decisions need not address every argument or ground, they should provide sufficient explanation of whether the petitioner satisfied the institution standard for at least one claim and one ground.

This added transparency should help petitioners and patent owners better understand the Office’s approach to institution and make more informed decisions about rehearing requests and whether (and how) to pursue PTAB proceedings in general. Director Squires may, however, continue to issue summary notices upon reviewing non-merits-based considerations.

The “Substantial Majority” Standard Creates Opportunities for Patent Owners

The memorandum also emphasizes the Director’s view that merely satisfying the “minimum threshold for institution” does not necessarily warrant institution. Under 35 U.S.C. § 314(a), an IPR petitioner must establish a reasonable likelihood of prevailing on at least one challenged claim. But the memorandum directs PTAB panels to deny institution if the petitioner fails to make the requisite showing for a “substantial majority” of challenged claims rather than just one claim.

The memorandum does not require patent owners to conclusively rebut that the challenged claims are unpatentable. Rather, it provides that the PTAB “will deny institution” if a patent owner’s preliminary response raises a “reasonable argument, well-supported with reliable, credible evidence,” showing that the petitioner fails to meet the institution standard for a substantial majority of challenged claims. The same result follows if the PTAB itself reaches that determination. The memorandum’s categorical “will deny institution” language appears to leave little room for discretion once such arguments are established.

Practice Implications

For patent owners, the “substantial majority” guidance may create opportunities to defeat institution even without establishing that every challenged claim survives a petition’s grounds. Patent owners may consider focusing their preliminary responses on demonstrating that the petitioner fails to satisfy the institution standard for a substantial majority of claims, including narrower dependent claims for which the asserted grounds are often weaker. The memorandum’s emphasis on “reliable, credible evidence” at the institution stage may also increase the importance of supporting preliminary responses with evidence, including expert declarations.

For petitioners, the guidance underscores the importance of presenting well-supported challenges across the full scope of challenged claims, rather than relying on a strong showing for a broad independent claim to secure institution of the entire petition. Petitioners should be judicious in selecting claims to challenge, and ensure that their petitions provide detailed, element-by-element explanations of the asserted grounds, particularly for dependent claims.

Ultimately, the memorandum appears to represent more of a procedural adjustment than a substantive shift in PTAB institution practice. Nevertheless, its promise of greater transparency and its express guidance concerning the substantial-majority standard provide important considerations for practitioners on both sides of PTAB proceedings.