USPTO Director's Memo Highlights New Considerations For US Manufacturers In AIA Patent Challenges

The United States Patent and Trademark Office (USPTO) recently introduced a significant policy shift in America Invents Act (AIA) patent challenges that could impact US companies in the manufacturing, automotive, and semiconductor industries that are involved in patent disputes. In a memorandum issued March 11, 2026 (the “Memo”), USPTO Director John Squires announced that US manufacturing activities of the parties will now play a critical role in determining whether to institute inter partes review (IPR) and post-grant review (PGR) proceedings. This change reflects a broader effort to prioritize domestic economic interests and address concerns about the offshoring of US manufacturing capabilities.

Under the new policy, the Director will consider several factors related to US manufacturing when deciding whether to institute AIA reviews. These include:

1. whether the products accused of infringement in related patent cases are manufactured in the United States,
2. whether the patent owner's competing products are made domestically, and
3. whether the petitioner is a small business that has been sued for infringement.

The Director will also evaluate the extent of US-based manufacturing investments, including the production of components and assembly processes, as well as the use of US-made products in further processing abroad. These considerations attempt to address AIA proceedings that the USPTO believes disproportionately benefit entities with limited or no US manufacturing presence, particularly foreign companies. 

This policy shift introduces new complexities for both petitioners and patent owners. US manufacturers now have an opportunity to leverage their domestic production activities as a strategic advantage in AIA proceedings. This will come at a cost, however, because parties will need to gather and present detailed evidence of their manufacturing operations and investments to avail themselves of this advantage. This process could be time-consuming and costly, particularly for companies with complex supply chains or limited access to internal data from opposing parties.

For the US automotive industry, which relies heavily on domestic manufacturing and supply chains, this development could provide a competitive edge in defending against patent challenges. By emphasizing their contributions to the US economy and innovation ecosystem, automakers and suppliers may strengthen their positions in AIA proceedings. However, foreign manufacturers and multinational corporations with limited US operations may face greater challenges in securing IPR or PGR institution, potentially leading to disputes over whether the policy aligns with international trade obligations.

The Memo also introduces significant implications for the semiconductor and chip industry, given the sector's reliance on complex global supply chains and its critical role in US economic and national security. The Memo could incentivize semiconductor companies that often are involved in US patent disputes to bolster their domestic production capabilities to strengthen their positions in AIA proceedings. Those companies should consider how to document and demonstrate their US-based manufacturing activities, including the production of chips or components domestically or the use of US-made products in further processing abroad. Additionally, the policy could create hurdles for foreign semiconductor manufacturers seeking to challenge patents in the US.

The USPTO's new focus on US manufacturing activities represents a significant shift in AIA patent challenge proceedings. US manufacturers that often are involved in US patent disputes, including those in the automotive and semiconductor industries, should work closely with their legal teams to assess how these changes may affect their patent strategies. By proactively documenting and presenting evidence of their domestic manufacturing investments, these companies can better position themselves to navigate this evolving landscape.

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