The United States Patent and Trademark Office (USPTO) issued a Memorandum on March 11, 2026, signaling that the Patent Trial & Appeal Board may place increased weight on domestic manufacturing activity and the interests of small businesses when deciding whether to institute inter partes review (IPR) or post grant review (PGR).
The America Invents Act (AIA) established IPR and PGR proceedings as mechanisms for challenging the validity of issued patents before the Board. In establishing the framework for institution decisions, the statute directs the USPTO Director to consider broader policy concerns, including the impact on the US economy, the integrity of the patent system, and the efficient administration of the USPTO.
The Memorandum highlights concerns regarding the decline of US manufacturing, particularly in the electronics and computer sectors. Citing government studies, the USPTO notes that the offshoring of key industries has contributed to economic and national security vulnerabilities. According to the USPTO, these developments bear directly on the Director’s statutory obligation to consider the economic effects of Board institution decisions.
While some stakeholders contend that IPR and PGR proceedings protect US manufacturers and small businesses from weak patents, the USPTO observed that many of the most frequent petitioners are large companies that report little domestic manufacturing activity and have not made meaningful investments in US production. According to the Memorandum, this data prompted the USPTO to question whether the current discretionary institution framework adequately accounts for the interests of companies that do invest in domestic manufacturing.
As a result, the USPTO announced that certain factors related to US manufacturing and small businesses may now inform discretionary institution determinations. The USPTO encourages parties to address these considerations explicitly in their discretionary briefing.
When evaluating whether to institute an IPR or PGR, the Director may consider:
- Whether the products accused of infringement in parallel litigation are manufactured in the United States or tied to domestic manufacturing investments.
- Whether the patent owner produces competing products in the US.
- Whether the petitioner qualifies as a small business that has been sued for patent infringement.
The Memorandum clarifies that manufacturing considerations are not limited to final assembly but may also encompass the production of components and situations in which products manufactured domestically are later processed abroad. For method claims, the relevant product for this analysis will be the device used to perform the claimed method.
These considerations apply to all to all IPRs and PGRs in which the due date for a patent owner discretionary brief has not yet elapsed.
