Director Squires Revamps The Workings Of The U.S. Patent Office

What You Need to Know

• Key takeaway #1 Director Squires intends to implement AI tools to improve the evaluation and examination of U.S. patent applications.
• Key takeaway #2 Director Squires advocates for return to the prior case law standard of patenting "everything under the sun," with a few exceptions.
• Key takeaway #3 Director Squires is exercising statutory authority to rein in the review of certain granted patents by the Patent Trial and Appeal Board.

In March 2025, President Trump nominated John A. Squires for the positions of Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO). After being approved by the Senate Judiciary Committee by a vote of 20-2, Squires was confirmed by the Senate on September 17, 2025, by a vote of 51-47 after anti-filibuster measures were invoked. During and after the confirmation process, Squires emphasized several goals for the USPTO during his time as Director. Such goals included:

• Reducing the backlog of patent and trademark applications;
• Improving quality of granted patents;
• Reducing uncertainty under Section 101; and
• Improving certainty as to validity of established patents.

1. Backlog of Applications

As of the January 20, 2025, inauguration of President Trump, there were a record 837,928 unexamined patent applications. From 2020 to January 20, 2025, there was an increase of 261,825 unexamined patent applications, while during the same time frame annual filings decreased by more than 8,000. Steps were taken in 2025 to increase the actual time taken by Examiner to examine patent applications. In just over six months' time, the backlog was decreased by almost 50,000 applications. It is expected that the backlog will continue to decrease with the hiring of around 1,100 new patent examiners and with the implementation of new incentives and bonuses for all patent examiners.

Also, new avenues of examination will be explored to reduce the backlog. For example, the USPTO launched a pilot program on October 24, 2025, that will allow patent applications (maximum of 200 applications) containing only one independent claim and no more than ten total claims to be advanced for examination out of turn.

2. Improved Quality of Examination via AI

Squires has repeatedly pointed out that the Patent Trial and Appeal Board (PTAB) has found errors of one type or another in 68% of the patents they have reviewed since its inception. Squires points to such a high percentage as reason to look for ways to improve the quality of examination at the USPTO. Squires believes that AI is a tool that can improve examination quality.

As of October 20, 2025, patent applicants can participate in the USPTO's Automated Search Pilot Program (called ASAP!). The program is limited in term and the number of patent applications processed. Upon filing a Petition and a fee ($450 for large entities, $180 for small entities, $90 for micro-entities), a patent application accepted in the program will receive an automated AI-based prior art search before receiving a first Office Action on the merits. The results of the search will be sent to the Applicant and allow the Applicant to decide how to proceed in view of the prior art uncovered by the search. For example, the Applicant may decide to amend the claims of the patent application further or to abandon the patent application. It is hoped that this process will result in stronger patents being granted.

Besides the ASAP! program, the USPTO is empowering its patent examiners to use AI as a tool while performing their searches during normal examination. The USPTO believes that the more prior art that is considered by the patent examiner will result in stronger patents being granted.

3. The Door is Wide Open at the USPTO

Squires believes that only narrow exceptions should prevent inventions from being patent eligible pursuant to 35 U.S.C. § 101. To interpret Section 101 otherwise would defy Congress's intent and would deter the innovation sought under the Constitution. Squires would like to return to days when patentable subject matter was considered as "anything under the sun made by man" subject to such narrow exceptions as perpetual motion machines and those identified by the courts through the years.

Squires has pointed out to the patent of Samuel Morse as an example where the right balance between ineligible subject matter and eligible subject matter was achieved. That patent contained a claim 8 reciting electromagnetism and a claim 5 regarding a dot and dash system to convey the alphabet electromagnetically over a wire. Claim 8 was deemed unpatentable as a law of nature, while claim 5 was deemed patentable and launched a revolution throughout the world.

Besides fostering new technologies, liberal eligibility standards also enhance national security of the United States. For example, Squires points to the development of radar in during World War II and his own efforts in filing patents that regarded inventions that detected and deterred financial activities and suspicious transactions that could be applied to terrorists at the time of 9/11.

As a symbol of the opening of the doors of the USPTO to inventions of all types, the first two patents granted under the purview of Director Squires regarded: 1) U.S. Patent No. 12,419,201, entitled "Materials and Methods for Performing Histochemical Assays For Human Pro-Epiregulin and Amiphiregulin; and 2) U.S. Patent No. 12,419,202 for "Systems and Methods For Generating An Architecture For Production of Goods and Services."

In addition, Director Squires vacated a PTAB decision that entered a new rejection based on Section 101. The patent application at issue regarded machine learning. The Director wrote "[c]ategorically excluding AI innovations from patent protection in the United States jeopardizes America's leadership in this critical emerging technology . . . This case demonstrates that §§ 102, 103 and 112 are the traditional and appropriate tools to limit patent protection to its proper scope."

4. The Doors for the PTAB are Narrowing

Stewart's New Approach to Handle Discretionary Denial Requests and the Settled Expectation Doctrine

On January 20, 2025, Coke Morgan Stewart was appointed and sworn in as the Acting Director of the USPTO. Beginning in February 2025, Stewart formally rescinded the prior discretionary denial guidance under Biden administration. Such guidelines regarded the circumstances in which discretionary denials of PTAB post-grant proceedings were granted when parallel district court litigations were pending. The Biden guidelines significantly reduced discretionary denials of such PTAB post-grant proceedings. With the recission of the Biden guidelines, it is expected that the USPTO will aggressively apply the factors presented in Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) to deny institutions. It should be noted that Stewart indicated that the case Sotera Wireless (PTAB Dec. 1, 2020) was still precedential and so the USPTO would likely not allow a discretionary denial if a stipulation is made by a petitioner that if an IPR is instituted, then the petitioner would not pursue in District Court any ground raised or could have been reasonably raised in the IPR.

In March 2025, Stewart announced a new bifurcated discretionary review process. Stewart's new approach asserts pro-patentee principles: emphasizing "settled expectations" for patents older than six years, prioritizing efficient resource use, and more frequently issuing discretionary denials. The institution rate has fallen substantially, reflecting a major procedural shift favoring patent stability.

Stewart's "settled expectations" doctrine presumes that owners of older patents or those subject to multiple prior challenges have a right to stability, supporting discretionary denial. Stewart maintains that evidence of material error or major factual shifts can still overcome this presumption in select cases. Between May and October 2025, Stewart decided hundreds of petitions, most of which were denied. For example, during the week ending August 15, 2025, Stewart denied 54 petitions and referred 22 petitions to PTAB for further consideration. Denials frequently cite the age of the patent, parallel litigation likely to resolve validity, repeated prior challenges, or conflicting claim construction positions. Grants have largely occurred in cases of young patents, alleged examiner errors, or complex multi-jurisdiction disputes, underscoring that only exceptional circumstances prompt review.

Proposed Revision of PTAB Rules of Practice

On October 17, 2025, Director Squires published both an Open Letter and a Notice of Proposed Rulemaking (NPRM), signaling a "return to the future" for PTAB institution authority. The proposed rules create mandatory bars to IPR institution in three main categories: (i) when patent claims have previously been upheld, (ii) if parallel litigation is likely to reach a validity decision first, and (iii) absent broad stipulations to forgo anticipation or obviousness challenges in other venues. The changes formalize prior discretionary factors into categorical rules and require strict upfront commitments from petitioners, potentially limiting defenses in other proceedings. The proposal drew over 11,000 public comments during the Notice & Comment period, with sharp division—patent owners and some lawmakers hail "predictability," while tech, life sciences, and industry voices argue that the rules exceed USPTO authority, conflict with the AIA, and chill legitimate patent review. Congress's original sponsors are split, and further legislative action (e.g., the PREVAIL Act) is being encouraged to clarify PTAB procedures.

Institution Rate Trends: From 0% to 4%

Since Director Squires assumed personal control of all IPR institution decisions in October 2025, the institution rate has dropped dramatically. For several weeks, Squires denied 100% of petitions—91 straight denials, most by summary order without explanation. As of December, four petitions have been granted among 105 decided, nudging the rate up to 4%, but still dramatically below historical averages (~67%). Practitioners report not only a near-shutdown of PTAB reviews but also rising concern over summary, unexplained denials, and the prospect of future decisions on purely discretionary or procedural grounds. Comments on rule changes further suggest that, unless modified, the proposed framework would keep the institution rate at historic lows and potentially undermine the PTAB's longstanding role as a viable alternative to district court litigation.

Mandamus Petitions

In response to the USPTO's increasingly restrictive discretionary denial policies, the number of mandamus petitions at the Federal Circuit continues to grow. Following denials of earlier high-profile petitions in the court's November 6 decisions, at least seven petitions are pending, challenging Director-level institution denials as exceeding statutory authority, lacking reasoned explanation, and undermining Congressional intent behind the America Invents Act (AIA). Petitioners allege the new practices are ultra vires and violate due process, particularly as Director Squires issues summary denials without explanation. While the Federal Circuit has been unreceptive, these actions highlight ongoing concerns about transparency, the legal bounds of director discretion under 35 U.S.C. § 314, and potential impacts on patent litigation strategy.

Strict RPI Requirements for IPR Petitions

Squires has reinstated strict requirements for identification of all real parties in interest (RPI) before IPR institution, reviving precedent under Corning Optical Communications RF, LLC v. PPC Broadband Inc. Faulty or incomplete RPI disclosures no longer may be amended, and petitions are denied outright—often with the one-year statute of limitations (SOL) prohibiting refiling. The USPTO justifies this stricter approach both as a procedural safeguard and a national security measure, emphasizing the need for transparency and preventing misuse by foreign adversaries. Practically, this heightens the risk for petitioners and demands careful attention to RPI at the time of filing.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.