Unpacking Squires’ Recent Discretionary Denial Guidance Focusing on American Manufacturing

1. The USPTO is explicitly elevating US manufacturing as a discretionary factor: 
Director Squires’ new guidance adds American manufacturing activity as a consideration when deciding whether to institute PTAB review, signaling a policy to align PTAB adjudication with domestic economic priorities.

2. Both petitioners and patent owners should be prepared to address manufacturing evidence early:
Parties may effectively be required to develop and present evidence about US vs. foreign manufacturing, supply chains, and business operations at the institution stage, despite procedural constraints.

3. The guidance adds uncertainty to PTAB practice:
Because the manufacturing-focused factor can be fact-heavy and yet to be developed, its impact may vary significantly case by case, making institution decisions harder to predict as the Director’s institution framework continues to evolve.

US Patent and Trademark Office Director John Squires’ institution guidance for inter partes reviews and post-grant reviews puts an emphasis on American manufacturing, but applying these new factors may prove practically challenging under the current discretionary denial decision procedure.

The memorandum adds three new discretionary considerations to IPR and PGR
institution decisions:

• the extent of US manufacturing (and related investment) for accused products;

• the extent of US manufacturing for the patent owner’s competing products; and

• whether the petitioner is a small business sued for infringement.

Although framed as an effort to account for domestic manufacturing and the position of smaller accused infringers, the 11 March guidance invites briefing on business facts that are often hard to develop quickly and safely disclose. For both petitioners and patent owners, the immediate implication is a heavier up-front burden to investigate supply chains, manufacturing footprints and entity status – often on a compressed schedule and with limited or no discovery.

How the Patent Trial and Appeal Board and Squires apply these factors in early decisions will determine whether they become case-determinative equities or largely neutral add-ons to existing discretionary doctrines like settled expectations, parallel litigation and examiner error.

Broader policy shift

Since the Acting Director Coke Morgan Stewart’s March 2025 memorandum, discretionary denial has expanded beyond the USPTO’s established Fintiv, General Plastic and Advanced Bionics lines of cases to include considerations such as the parties’ “settled expectations”.

This new memorandum continues that trend. It expressly invites parties to submit business facts that are not directly tied to the patentability of the challenged claims, signalling that institution is moving further away from an inquiry focused mainly on the merits of the petition. At the same time, it reflects a clearer shift towards broader economic policy considerations. The memorandum identifies the director’s obligation to consider the effect of institution on the US economy as the basis for these new factors and frames the change around domestic manufacturing and the position of smaller accused infringers.

This development is significant because the director’s institution discretion is both broad and appears to date to be largely insulated from judicial review. In a series of recent mandamus orders, the US Court of Appeals for the Federal Circuit has taken a deferential approach and declined to narrow the director’s discretion, even as new factors have been introduced. Although previous factors have not focused broadly on “the economy” as the justification for their consideration, it remains to be seen whether any further challenge to these new factors would reach a different conclusion.

It is also notable that the memorandum is addressed to PTAB users, not the board itself, suggesting that it may become a practice of the director in advising the public prospectively how he will exercise discretionary institution authority.

Individualised institution determinations

Institution appears to increasingly be about who the parties are, how they are situated and whether allowing the proceeding to go forward is viewed as consistent with the USPTO’s broader policy objectives.

That same theme appears in other recent threshold disputes, including real-party-in-interest issues, which focus less on the merits of the petition and more on the identity, relationships and background of the entities behind the filings. The new memorandum pushes that trend further by making the petitioner’s business profile and the parties’ manufacturing footprint potentially relevant at institution.

The memorandum suggests that institutions may become harder to obtain in some cases involving foreign manufacturing and easier in others involving domestic manufacturing or small-business petitioners. But it is still unclear how heavily these new considerations will be weighed in practice. In some disputes, the factors may prove important; in others, they may be largely neutral.

For example, where a patent owner is a non-practising entity backed by foreign litigation funding, parties may test whether that circumstance affects how the equities are assessed against a US company whose products are manufactured abroad or a foreign company who has manufacturing or processing in the US. What seems more certain is that the memorandum adds another layer of uncertainty to an institution framework that has been evolving rapidly over the last year.

New rules, same page limit

The most immediate takeaway is that discretionary denial briefing may need to begin earlier and may involve a broader factual investigation than even the factors considered to date.

So far, the most prevalent factors have addressed relatively limited factual records, involving things like the prosecution history (for prior error), litigation procedural schedule (for Fintiv style parallel litigation considerations) and the age of the patents (for settled expectations). To engage with the new factors, the parties may need to delve into factual support for their manufacturing footprint – proof the related products
practise the patent – and investments in the products both in the US and worldwide.

These sorts of issues can involve complicated factual records, as can be seen at the US International Trade Commission, where complaints need to prove they have established or are in the process of establishing a domestic industry related to the asserted patent claims.

There, the record on domestic industry can involve not just documentary evidence but supporting economic and technical expert testimony and hundreds of pages of briefing. Accomplishing the same for both parties within the 20 pages allotted for discretionary denial briefing will be a challenge, especially given the need to address the other discretionary factors.

What to keep in mind

Petitioners may need to decide at the outset whether they can make an affirmative showing on US manufacturing or small-business status, and whether doing so is worth the cost and potential disclosure burden. Patent owners should identify early whether they, their affiliates or their licensees have domestic manufacturing facts that could support denial. In some cases, the burden of gathering those facts can be substantial

Parties may need to investigate, gather and verify evidence supporting business facts within the same compressed timeframe in which they are also addressing settled expectations, examiner error, parallel litigation and other threshold issues. That will make coordination with in-house business personnel more important and may require counsel to gather information that PTAB counsel has not traditionally needed at the institution stage.

The new factors also raise confidentiality and strategy concerns. Supply-chain data, manufacturing locations, sourcing decisions and investment details may be commercially sensitive, yet parties may feel pressure to disclose at least some of that information to frame the equities in their favour. At the same time, it may be difficult to rebut an opponent’s factual assertions without discovery, which remains limited at the PTAB, particularly at the pre-institution stage.

Uncertainty also arises from the way institution decisions are often issued. If decisions continue to be delivered through summary orders or limited explanations, parties may receive little immediate guidance on what level of domestic manufacturing or investment matters, how small-business status will be weighed or how these factors interact with other discretionary considerations.

As with settled expectations, how these new factors will be applied and to what extent would only be clarified through future institution decisions and any additional guidance the director chooses to provide – like the upcoming opinion he teased at a conference this week. Until then, parties should keep a close eye on new institution decisions and be prepared to adapt quickly. In this increasingly fluid landscape, institution or non-institution may depend as much on framing the equities and the facts surrounding the individual parties as on the merits of the petition itself.