USPTO Director Defines “Exceptional Circumstances” for Director Review—and Terminates Three IPRs

In a precedential order issued 22 June 2026, USPTO Director John A. Squires took the rare step of initiating sua sponte Director Review across three inter partes review (IPR) proceedings to provide meaningful guidance on when “exceptional circumstances” justify extending the 30-day deadline to seek Director Review of an institution decision.

The Procedural Backdrop

The Board had granted institution of IPR in the three proceedings in December 2025. Following institution, Patent Owner filed a Motion to Terminate, which the Board denied on the grounds that it lacked authority to terminate the IPRs for discretionary reasons.  The Patent Owner then sought guidance on how to request Director Review, noting that denial of a motion to terminate is not one of the expressly permitted bases for doing so.

The Director’s Framework for Exceptional Circumstances

The Director acknowledged the gap in the rules head-on. While the Director Review rule does not expressly permit a party to seek review of a decision denying a motion to terminate, the Director recognized that changed circumstances can surface after the review deadline has elapsed but before trial has meaningfully progressed, and that in “exceptional circumstances” the Office may extend the deadline for filing a request for Director Review of an institution decision .

Critically, the Director provided concrete examples of what qualifies. Exceptional circumstances include dismissal of all or substantially all claims in a co-pending litigation, findings of fact and conclusions of law that render all or substantially all challenged claims invalid in litigation, and a violation of a Sotera stipulation.

Why This Case Qualified

This case squarely fit the outlined framework. After the Board instituted the IPRs, the district court granted Petitioner’s motion to dismiss, with prejudice, finding the challenged claims directed to patent-ineligible subject matter under 35 U.S.C. § 101. Because all of the challenged claims now stand invalid, the Director found it unnecessary and inefficient to maintain the IPRs to further review the claims for patentability on other grounds.

A Procedural Takeaway

The Director also announced a prospective rule change: going forward, the Office is waiving the time period for requests for Director Review of a decision to institute a trial, extending the deadline from fourteen days to thirty days, aligning the timeline for all director review requests.

For practitioners, this decision offers a clear checklist: a district court invalidity finding, a dismissal of substantially all claims, or a Sotera stipulation violation may each open the door to Director Review, even after standard deadlines have passed.  The decision does not expressly refer to how the Director might consider an International Trade Commission (ITC) determination with respect to invalidity.

By Jason Engel and Erik Halverson