PTAB discretionary denial: what changed and what to do now
As of October 2026, whether the USPTO will hear an inter partes review (IPR) depends as much on PTAB discretionary denial as on the prior art. Since 2025, the USPTO Director, not a three-judge panel, has decided whether IPR and post-grant review (PGR) petitions go to trial. The Office has also added new reasons to say no, including how long a patent has been in force. A proposed rule that would bar many IPRs outright is still under White House review.
This article is for two readers: startups and research-driven companies that own patents, and companies deciding whether to challenge one. It covers what changed, where things stand as of October 24, 2026, and what each side should do now.
Key takeaways
- As of October 2026, the Director decides IPR and PGR institution in consultation with at least three PTAB judges, usually by a one-line summary notice. This process took effect on October 20, 2025.
- Patent owners can file a separate discretionary denial brief within two months of the petition’s filing-date notice. “Settled expectations,” meaning how long the claims have been in force, is one of the listed factors.
- Since March 2026, the Director also weighs U.S. manufacturing and whether the petitioner is a small business that has been sued.
- The proposed rule that would categorically bar many IPRs (90 FR 48335) was not final as of October 24, 2026. It has been under OIRA review since July 22, 2026.
- Courts have largely left these policies alone. Institution decisions are “final and nonappealable,” and the Federal Circuit has turned away challenges to the Director’s institution guidance.
What is PTAB discretionary denial?
PTAB discretionary denial is the USPTO’s refusal to start an IPR or PGR trial for reasons other than the merits, even when the petition may show that a claim is likely unpatentable. The statute says the Director “may not” institute unless a threshold is met. It never says the Director must institute, and that gap is the source of the discretion.
An IPR is a trial at the Patent Trial and Appeal Board (PTAB) in which a challenger argues that issued claims are invalid over patents and printed publications under 35 U.S.C. § 102 (novelty) or § 103 (obviousness). Under 35 U.S.C. § 314, the petitioner must show a reasonable likelihood of prevailing on at least one claim. The same section makes the institution decision “final and nonappealable.”
For years, PTAB discretionary denial mostly meant the Fintiv factors, which ask whether a parallel court case will reach validity first. In 2025–2026 the list grew considerably.
What changed in 2025 and 2026?
Four steps reshaped institution between February 2025 and March 2026. The USPTO withdrew its 2022 limits on Fintiv denials, moved discretionary decisions to the Director, then moved the entire institution decision to the Director, and finally added new factors.
| Date | Action | Status as of October 24, 2026 |
|---|---|---|
| February 2025 | USPTO rescinds the June 2022 memo that had limited Fintiv denials | Rescinded |
| March 26, 2025 | Interim process: separate discretionary denial briefing, decided by the Director | In effect (briefing steps) |
| October 17, 2025 (effective Oct. 20) | Director decides all institution questions, usually by summary notice | In effect |
| October 17, 2025 | Proposed rule on IPR institution bars and stipulations (90 FR 48335) | Not final; under OIRA review since July 22, 2026 |
| November 17, 2025 | Voluntary search disclosure declarations treated as a factor favoring institution | In effect |
| March 11, 2026 | New factors: U.S. manufacturing and small-business petitioners | In effect |
The bifurcated briefing process
A March 26, 2025 memorandum set up what the USPTO calls the Interim Director Discretionary Process. The patent owner may file a discretionary denial brief within two months of the Notice of Filing Date Accorded. The petitioner may oppose within three months of that notice. Under the USPTO’s process page, each brief is limited to 20 pages for briefs due on or after September 1, 2025.
The memorandum lists non-exhaustive factors:
- whether the PTAB or another forum has already decided the validity of the claims;
- changes in law or new precedent since the claims issued;
- the strength of the unpatentability challenge;
- how heavily the petition relies on expert testimony;
- the parties’ “settled expectations,” such as how long the claims have been in force;
- compelling economic, public health or national security interests.
The Director takes over institution
Director John Squires issued a memorandum on October 17, 2025, effective October 20, 2025. Under it, the Director decides whether to institute every IPR and PGR, weighing discretionary, merits and non-discretionary issues together, in consultation with at least three PTAB judges. Routine grants and denials issue as summary notices. A written decision issues only for novel or important issues. Instituted cases then go to a three-judge panel for trial.
The briefing steps stayed the same, so the parties’ papers are often the only reasoning in the record.
New factors in 2026
A March 11, 2026 memorandum asks parties to address three more facts. The first is whether the accused products are made in the United States or tied to U.S. manufacturing investment. The second is whether the patent owner’s competing products are made in the United States. The third is whether the petitioner is a small business sued on the patent.
A separate November 17, 2025 memorandum lets petitioners file a voluntary search disclosure declaration. This exhibit explains how they found art the examiner missed. The Office treats it as a “non-exclusive, non-dispositive favorable discretionary factor.” Petitioners who skip it are not penalized.
How does the “settled expectations” factor work?
Settled expectations asks whether a patent has been in force long enough that the owner, and the market, have reasonably come to rely on it. Older patents weigh toward denial. There is no bright-line age.
The USPTO has designated decisions that show the range. In Dabico Airport Solutions v. AXA Power (IPR2025-00408, decided June 18, 2025, designated informative January 9, 2026), the Acting Director denied review of a patent in force almost eight years. The decision said that “the longer the patent has been in force, the more settled expectations should be.”
In Amgen v. Bristol-Myers Squibb (IPR2025-00601 to -00603, decided July 24, 2025, also designated informative), the patent had been in force about three years. Strong settled expectations could have come from extraordinary investment in research, trials and regulatory approval, but the owner did not show it, so the petition went to the Board.
For a life-sciences startup, that second point matters. If you are spending heavily to develop a product covered by a patent, as with a new small-molecule drug candidate, document that investment now.
What would the proposed IPR rule do?
The October 17, 2025 proposed rule would make several denials mandatory for IPRs. It would bar review of claims already upheld in another forum, and of claims likely to be decided elsewhere first. It would also require petitioners to give up §§ 102 and 103 defenses in other forums. As of October 24, 2026, it is not in effect.
The notice of proposed rulemaking (90 FR 48335) would amend 37 C.F.R. § 42.108 in four main ways:
- Prior-decision bar. No IPR on a claim already found not invalid or patentable by a district court (at trial or summary judgment), the ITC, a PTAB final written decision or an ex parte reexamination.
- Parallel-proceeding bar. No IPR if a court trial, ITC determination or other PTAB decision on §§ 102/103 is more likely than not to come first.
- Stipulation. Every petitioner would have to stipulate that, if trial is instituted, it will not pursue §§ 102 or 103 invalidity in any other forum. That is broader than the IPR estoppel the statute already imposes.
- Narrow exception. Only “extraordinary circumstances” could overcome a bar. New prior art, new expert testimony, new case law and new legal arguments would not count.
The final rule (RIN 0651-AD89) has been pending Executive Order 12866 review at OIRA since July 22, 2026. As of October 24, 2026, no final rule has appeared in the Federal Register, and the final text, which may differ from the proposal, is not public.
Can a discretionary denial be appealed?
Generally, no. Section 314(d) makes institution decisions final and nonappealable. As of October 2026, the Federal Circuit has refused to force the USPTO to reconsider denials based on settled expectations. It has also held that the Director’s institution instructions did not require notice-and-comment rulemaking.
In In re Cambridge Industries USA (Dec. 9, 2025), the court denied mandamus where two IPRs had been denied on settled expectations for patents about seven and nine years old. In Apple Inc. v. Squires (Feb. 13, 2026), the court held that the Director’s Fintiv instructions to the Board were a general statement of policy, so notice-and-comment rulemaking was not required.
The practical lesson: the PTAB discretionary denial briefing is likely your only real chance. Within the agency, a party can still seek rehearing or Director Review within 30 days of a denial.
Who benefits from the new approach?
As of October 2026, patent owners benefit most, especially those with older patents, U.S.-made products, documented investment or claims that already survived a challenge. Challengers do best as sued small businesses, U.S. manufacturers, or early filers with a strong, art-based case.
| Factor | Tends to favor the patent owner | Tends to favor the challenger |
|---|---|---|
| Age of patent | Long in force; licensed or relied on | Recently issued; little investment shown |
| Parallel litigation | Court trial likely before the PTAB decision | No trial date, or a broad stipulation |
| Prior challenges | Claims already upheld | First challenge; earlier one was not on the merits |
| Manufacturing | Owner’s competing product made in the U.S. | Accused product made in the U.S. |
| Petitioner profile | Repeat or well-funded petitioner | Small business sued on the patent |
| Quality of the case | Heavy reliance on expert testimony | Clear prior art; examiner error; search disclosure filed |
What should startups that own patents do now?
As of October 2026, a patent owner’s best tool is a well-supported PTAB discretionary denial brief, filed within two months of the filing-date notice. Build the evidence before any petition arrives; there is rarely time to reconstruct it under deadline.
- Keep an investment file. Record R&D spending, regulatory work, product launches and licenses tied to each key patent. It matters most for younger patents.
- Track where products are made. The March 2026 factors look at U.S. manufacturing, including components and further processing, so keep supply-chain records current.
- Calendar the brief. If you receive a petition, the discretionary brief is due within two months of the Notice of Filing Date Accorded, and the parties cannot stipulate to extend it.
- Strengthen claims during prosecution. Discretion is not a substitute for validity. Fallback claims grounded in the science, such as a specific crystalline form or a measured waveguide loss, hold up better on the merits.
- Brief investors accurately. I cover the usual questions in what investors ask about your patents.
What should companies weighing an IPR challenge do?
As of October 2026, a challenger should treat institution as uncertain: file early, present the strongest art-based case, address every PTAB discretionary denial factor on the record, and know the alternatives if review is denied.
- File early. The statute bars an IPR filed more than one year after service of an infringement complaint (35 U.S.C. § 315(b)). Filing well before a trial date also helps on parallel litigation.
- Lead with documents, not experts. The interim factors weigh reliance on expert testimony. Petitions built on clear printed art travel better.
- Consider a stipulation. File it as early as practicable; it is weighed by how much it actually reduces overlap with the court case.
- Prepare the new facts. Gather evidence on where your products are made and, if it applies, on your small-business status.
- Decide on a search disclosure. A voluntary search disclosure declaration can help, especially if it shows how the examiner missed the art.
- Keep ex parte reexamination in view. Reexamination is a separate procedure (MPEP § 2209), and the proposed IPR rule does not cover it. Note, however, that a July 22, 2026 proposed rule (91 FR 46038) would require reexamination requesters to name all real parties in interest.
Startups on either side of a dispute face the same timing logic; I discuss early-stage planning for startups and university spin-outs separately.
Frequently asked questions
Who decides IPR institution as of October 2026?
As of October 24, 2026, the Director decides whether to institute IPR and PGR trials under the October 17, 2025 memorandum, consulting at least three PTAB judges. Director Squires has said publicly that he expects to return merits-based institution calls to PTAB judges. No memo making that change had been published as of this date.
Is there a time limit on settled expectations?
No. The USPTO has said there is no bright-line rule. Denials have issued for patents in force around seven to nine years, while a patent about three years old was referred to the Board because the owner did not show extraordinary investment.
Is the proposed PTAB rule in effect?
No. As of October 24, 2026, the rule proposed at 90 FR 48335 is still a proposal. The final version has been under OIRA review since July 22, 2026, and its text has not been released. If published, check its effective date and how it treats pending petitions.
Does discretionary denial apply to post-grant review?
Yes, the Director’s discretionary process covers both IPR and PGR. The proposed categorical bars, however, apply only to IPR. The USPTO has also designated precedential decisions treating PGRs as favored.
What happens after an IPR is denied?
The denial cannot be appealed to the Federal Circuit, though a party may request rehearing or Director Review within 30 days. The challenger can still argue invalidity in court or request ex parte reexamination, and a denial is not a ruling that the claims are valid.
PTAB discretionary denial has made the months before institution the most important part of an IPR. If you own patents that matter to your next financing, or you are weighing a challenge, I’m happy to talk through how these factors apply to your patent strategy.
This article is general information, not legal advice, and reading it does not create an attorney-client relationship. Patent law changes and every situation differs. Please talk to a patent attorney about yours.