Squires Helps Patent Owners Again With Latest Challenge Tweak

After making it harder to challenge patents before a specialized tribunal, the US Patent and Trademark Office has now raised the bar on a route challengers had turned to as an alternative.

PTO Director John Squires has curtailed access to the Patent Trial and Appeal Board through a screening process called discretionary denial, sending defendants accused of infringement scrambling to a once-obscure procedure dating back to 1981—ex parte reexamination.

With reexamination requests climbing to an all-time high, Squires on April 5 gave patent owners the right to file an opposition brief before the agency decides to take up a challenge.

Owners previously only took an active role after that screening decision was already made.

The Central Reexamination Unit, which handles the proceedings, instituted more than 95% of requests filed between 2015 to 2022, according to a study published in the American Bar Association journal Landslide.

A patent office email announcing the change said the “new process is expected to permit the USPTO to efficiently and effectively address the recent increased volume of ex parte reexamination requests.”

Under the new pre-order procedure, patent owners will be permitted to file a 30-page brief explaining why a request doesn’t raise a “substantial new question of patentability,” the statutory threshold for whether a challenge is instituted.

Inventor-Friendlier PTO

The PTO has sharply limited the number of validity challenges that reach the judges on the board, with Squires taking over prescreening authority and bolstering a framework for rejecting petitions filed at the tribunal for reasons unrelated to their merits.

He told House lawmakers at a March 25 hearing that additional changes to the patent review process are meant to “restore fairness and balance” after patent suit defendants used the forum to wage serial attacks on patents. Central to his vision is the idea that patents should achieve “finality,” he said.

Attorneys who practice before the agency said the reexamination tweak fits with the theme of PTO leadership during the second Trump administration, building on prior reforms considered favorable to patent owners.

Squires is “giving patent owners a little more influence in a process where certainly there’s been some concerns expressed that the balance had tipped in favor of challengers,” said Eagle Robinson, head of the patents group at Norton Rose Fulbright.

“This changes the math a little bit when thinking about the finances of bringing or defending a patent lawsuit,” Robinson said. “There’s less certainty for a defendant in challenging the validity of a patent, and it’s another few grains on the scale back toward the strength of patent assertion.”

‘Arcane’ No More

Though the procedural tweak may seem incremental, the reexamination process has taken on additional importance for patent lawyers in the past year and a half.

Reexamination was “this sleepy, arcane thing,” said Scott Cummings, a partner at Bryan Cave Leighton Paisner, but “its importance has been elevated” as the PTAB became a riskier proposition.

Cummings, who represents both challengers and patent owners, said it’s unclear how much impact the new procedures will have, but “presumably the desired outcome from the patent owner perspective is to clamp down on the institution, or order, rate.”

Either path — discretionary denial or reexamination — is more favorable than trying to make the same sort of patent invalidity arguments to a district court jury, said Alex Yap, a partner at Morrison & Foerster who’s a former PTAB judge.

“Those numbers are not very good, especially coming out of Texas,” said Yap.

Texas has traditionally been a popular state with patent plaintiffs—with its federal court’s Eastern and Western districts drawing high numbers of lawsuits. Roughly 42% of all such litigation over the last 12 months was filed in the Lone Star state, according to a Bloomberg Law analysis.

The new procedures for reexamination will encourage some patent owners to try to defeat requests before they’re granted, Yap said. The institution rate, he said, “can only come down, since instead of hearing just one side of the story” the CRU will “hear the patent owner’s side of the story,” as well.

More denials, in turn, he said, would encourage more district court patent litigation.