Returning Merits-Based Considerations to PTAB

United States Patent and Trademark Office (USPTO) Director John Squires’s 10 November 2026 memorandum returns merits-based institution determinations to the Patent Trial and Appeal Board (PTAB), effective 16 November. But practitioners should not mistake the change for a wholesale restoration of the former delegated-institution model. The Director retains non-merits screening and ultimate statutory authority, while separate panels will decide institution and conduct any ensuing trial, with no overlap to avoid bias or preconceived perceptions of the arguments.

Under the revised process, petitions surviving the Director’s initial review go to a three-member PTAB panel for a merits-based institution decision. The change applies to IPRs and PGRs for which a merits-referral notice has not yet been entered. Existing procedures for briefing discretionary considerations and merits/non-discretionary issues remain unchanged. The October 2025 centralization memorandum is superseded only to the extent specified.

The delegation encompasses more than statutory threshold determinations. It includes merits-related discretion, particularly whether sufficiently strong challenges justify institution across the petition. Non-merits discretionary considerations remain centralized with the Director. Practitioners therefore must distinguish between discretion based on overarching policy and discretion grounded in the strength of the patentability case.

The memorandum outlines five illustrative, non-exhaustive guidelines:

• Prior-art grounds require understandable, element-by-element explanations identifying the particular disclosures supporting each challenged limitation. Reliance on an examiner’s findings does not substitute for the petitioner’s own mapping and explanation.
• The Board will deny institution if the petitioner fails to make the requisite showing for a substantial majority of challenged claims.
• Denial likewise follows where the preliminary response presents a reasonable argument, supported by reliable, credible evidence, demonstrating that failure.
• The Board may independently identify such an evidentiary basis for denial.
• In applying those substantial-majority guidelines, reasonably supported arguments on both sides results in no institution. The memorandum instructs the Board not to treat that claim as satisfying either the IPR reasonable-likelihood standard or the PGR more-likely-than-not standard. This direction makes evidentiary development in the preliminary response especially consequential at the institution stage.

The memorandum situates these guidelines within the statutory minimum thresholds and SAS’s all-or-nothing institution framework. It also invokes preliminary-injunction jurisprudence to explain why a substantial counterargument may defeat a reasonable-likelihood showing without establishing the opponent’s ultimate entitlement to prevail. Prior determinations sustaining challenged or related patent claims may also bear on the institution burden.

Institution decisions need not resolve every ground or argument. Panels must briefly identify important merits considerations and provide sufficient information concerning the applicable standard for at least one claim and one asserted ground. If review is instituted, a new panel will conduct trial.

For petitioners, the practical message is to stress-test claim coverage and evidentiary support across the petition, rather than rely on one strong challenge to carry weaker claims into trial. For patent owners, focused, credible preliminary-response evidence targeting a substantial majority of claims becomes a central institution strategy. The organizational handoff is significant, but the memorandum preserves the Director’s policy gatekeeping and embeds his merits guidance in the Board’s renewed decisional role.

By: Jason Engel, Erik Halverson and Jared Lund