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On March 11, 2026, the United States Patent and Trademark Office (USPTO) issued a Director Memorandum titled “Additional Discretionary Institution Considerations – U.S. Manufacturing and Small Business Use of AIA Proceedings.” The memorandum signals that, in deciding whether to institute inter partes review (IPR) and post-grant review (PGR) proceedings, the Director may consider not only traditional discretionary frameworks, but also where accused and competing products are manufactured, whether those products are tied to U.S. manufacturing investment, and whether the petitioner is a small business that has been sued for infringement.
Additional Discretionary Considerations
When determining whether to institute an IPR or PGR, the Director may now consider, in addition to existing discretionary frameworks, the following non-merits factors:
1. Accused Products and U.S. Manufacturing – The extent to which products accused of infringement in a parallel proceeding are manufactured in the United States or are related to investments in U.S. manufacturing operations.
2. Patent Owner’s Competing Products – The extent to which products made, sold, or licensed by the patent owner that compete with the accused products are manufactured in the United States.
3. Small-Business Petitioners – Whether the petitioner is a small business that has been sued for infringement of the patent at issue.
The memorandum encourages parties to address these considerations in discretionary briefing, where relevant, to assist the Office in evaluating the broader economic context of a petition.
Scope of “Manufacturing” and Small-Business Status
The USPTO clarifies that manufacturing is not limited to final assembly in the United States. Parties may address, among other things, where components are produced and whether products made domestically are sent abroad for further processing. For method claims, the relevant “product” is identified as the device used to perform the claimed method, with the example from the memo being a computer used to implement a method of operating a computer
In assessing whether a petitioner qualifies as a small business, the Director may consider factors raised by the parties, including Small Business Administration size standards and USPTO regulations governing small-entity status for fee purposes.
Applicability
The memorandum applies to all IPR and PGR proceedings in which the due date for a patent owner’s discretionary denial brief has not yet passed. It does not alter the statutory merits standards for institution but signals that manufacturing footprint and small-business status may play a role in the Director’s discretionary analysis going forward.
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