Last week, Director of the Patent & Trademark Office (USPTO) John Squires issued a memorandum indicating that he will now be responsible for deciding whether to institute inter partes review or post-grant review trial proceedings. 

This is a significant shift. Although the statute gives the director the discretion to institute these trials, since their inception in 2012, that power had been delegated to panels of the Patent Trial and Appeal Board (PTAB). Challenges to this arrangement had mostly been unsuccessful. So, for over a decade, PTAB panels issued decisions granting or denying institution of post-grant proceedings. 

While this action may seem like just a simple switch in administrative procedure, the reasons behind the change portend a drastic swing in favor of patent owners. From the beginning, critics of the post-grant system characterized the PTAB panels as “death squads” for patents –institution rate percentage at times lingered in the seventies, and cancellation rates were similarly skewed toward petitioners. The USPTO, mostly unsuccessfully, attempted to fight this public perception.

Director Squires’s has publicly expressed concern over the appearance that the PTAB may be granting institution to keep themselves busy, rather than on pure merit. While that may or may not be the case, his taking back of the process should prevent further accusations of the sort. Combined with the USPTO’s recently proposed rules severely limiting the use of post-grant proceedings in instances of co-pending litigation, and the decisions the last few months denying institution as contrary to “settled expectations” of patent owners, the USPTO appears to be taking an almost hostile approach to petitioners. 

Of course, it remains to be seen whether Director Squires’s institution rates will be significantly lower than the PTAB, and the new rule proposals must go through the notice and comment period, but the USPTO’s direction is leaning much more favorably toward patent owners than it has in a long time.