PTAB Rebalancing Under Trump Directs Enforcement Back to Roots

The Bottom Line

• The Patent Trial and Appeal Board insitution rates are a swinging pendulum that currently favors patent owners.
• Changes to the board under the Trump administration have swung in the favor of patent holders rather than infringers.
• A focus on patent holders’ “settled expectation” is a fair, reasonable, and efficient process whose critics are frustrated with recent outcomes rather than a change in process.

The Patent Trial and Appeal Board was established to adjudicate the validity side of patent disputes faster and more cost effectively than traditional district court litigation. In practice, however, the PTAB often adds costs and delays to all parties involved, fueling stakeholder concerns over opportunistic challenges that undermine the stability of long-issued patents.

To address these issues and foster a more equitable system, the US Patent and Trademark Office has instituted new interim procedures for discretionary denial. These rules aim to recognize substantial investments in innovation, licensing, and enforcement while curbing potential abuses of the inter partes review process and efficiently managing PTAB resources.

The new procedures establish a bifurcated process that prioritizes the protection of patent owners’ “settled expectations.” Patent owners can now file dedicated briefs on discretionary factors within two months of a petition receiving a notice of filing date, allowing the director to independently assess denials before a merits review by a separate PTAB panel.

Patent owners are already benefitting from the effects of the changes, which have led to more denials of IPR petitions against well-established patents—often those in force for over a decade. Inventors and rights-holders are now more likely to be shielded from disruptive late-stage attacks.

The changes also enhance predictability in the patent ecosystem and boost incentives for technological progress by affirming the enduring value of intellectual property. And, where appropriate, the PTAB’s limited resources now can better address the questionable patents that it was created to review.

PTAB Policy Pendulum

Acting Director Coke Morgan Stewart’s interim process is the latest in a series of policy changes at the PTAB in the second Trump administration, reflecting the inherent flexibility of administrative agency procedures.

While inventors have praised the greater efficiency and fairness, the changes face strong opposition from large technology companies and their supporters. Such objections appear focused not on the process itself, but on the substantive result: a greater likelihood that accused infringers must answer for infringement in court.

Critics arguing that the PTAB’s respect for the settled expectations of patent owners is unfair or harmful to innovation overlook the PTAB’s history. Indeed, the establishment of the board itself created unanticipated obstacles and harm for patent owners, such as post-grant challenges of patents under procedures that didn’t exist when some patent applications were filed or when patents were issued.

The PTAB and its policies have been a sine wave, with the dissatisfied now satisfied under different directors. Administrative priorities naturally shift with leadership and the recent changes under Stewart are just the latest example, this time simply rebalancing the scales to offer patent owners more fairness. This cycle isn’t likely to stop after this administration.

Statistical Reality

The PTAB has vexed patent owners from the start, so much so that former US Court of Appeals for the Federal Circuit Chief Judge Randall Rader termed the PTAB a patent “death squad.” A 2017 analysis found that when, considering all outcomes, more than 90% of patents challenged at the PTAB resulted in an unfavorable outcome for patent owners.

Patent trial institution rates by petition started at 87% when the PTAB was established in 2013 and have never dropped below 56% until recently, meaning that most challenged patents have faced a lengthy and costly defense. The per-patent institution rate for 2024 was 74%. On a per-claim basis, the invalidation rate increased from 70% to 78% between 2019 and 2024. Factoring in disclaimed claims, more than 80% of challenged patent claims were invalidated in 2024.

Unlike in district court, a patent owner at the PTAB doesn’t benefit from a presumption that their patents are valid. Stewart’s changes to the process provide a well-appreciated correction. The current outcry reflects dissatisfaction with the results, not the procedures, because the same procedures have existed since the PTAB adopted discretionary denial factors in early 2020.

In fact, former PTO Director Kathi Vidal did exactly what critics say Stewart is doing—changing the rules midstream—when Vidal modified the crucial Fintiv doctrine established by her predecessor.

Discretionary Denial’s Evolution

Courts have affirmed that while PTO directors have statutory discretion to institute an IPR trial or a PGR trial, they are “never compelled” to do so. When a challenged patent is involved in co-pending district court litigation, efficiency and consistency are critical considerations.

To address this, the PTAB under PTO Director Andrei Iancu articulated six non-exclusive factors in Apple v. Fintiv to guide discretionary denials when parallel litigation exists:

• Whether a court stay is likely if a proceeding is instituted
• Proximity of the court trial date relative to the PTAB’s statutory deadline
• Investment in the parallel proceeding by the court and the parties
• Overlap in issues between the petition and the parallel proceeding
• Whether the petitioner and the defendant in the parallel proceeding are the same
• Other circumstances impacting the PTAB’s exercise of discretion, including the merits

Under Fintiv, trial institution rates that had hovered in the mid-to-upper 60% range dropped below 60% for the first time in PTAB history.

Vidal subsequently limited the application of Fintiv in a 2022 memorandum. Her guidance eliminated the impact of parallel litigation by allowing petitioners to file a stipulation agreeing not to pursue certain grounds in district court. Such stipulations dramatically decreased the denial rate, virtually guaranteeing institution for the petitioner.

Consequently, trial institution rates rose precipitously from 58% in FY21 to 68% in FY24, which marked the conclusion of Vidal’s tenure.

The Stewart Reforms

The new Trump administration brought Stewart to the helm, who prioritized rebalancing the PTAB to make it more fair, more efficient, and a true alternative to district court litigation, consistent with congressional intent.

Stewart first rescinded Vidal’s 2022 memorandum, then Chief Administrative Patent Judge Scott R. Boalick issued a memorandum indicating the PTAB would again apply Fintiv factors broadly, regardless of the forum of the parallel litigation.

A follow-up memorandum from Stewart detailed additional non-exclusive considerations for discretionary denial:

● Prior adjudication of the challenged claims by the PTAB or another forum
● Changes in law or new judicial precedent affecting patentability
● The strength of the unpatentability challenge
● The extent of the petition’s reliance on expert testimony
● Settled expectations of the parties, such as the length of time the claims have been in force
● Compelling economic, public health, or national security interests
● Any other relevant considerations

These considerations have caused institution rates to swing again. At the time of this writing, trial institution rates are roughly 36% since the start of Stewart’s tenure.

PTAB’s Intended Purpose

While the current institution rates are the lowest they’ve ever been, this is justified. A review of the discretionary denial decisions by the authors confirms that Stewart is refocusing the PTAB on its original mandate—to be a cost-effective alternative to litigation.

For example, of the 371 discretionary denial decisions reviewed, 304 addressed the trial date and overwhelmingly concluded that institution was inappropriate where the parallel litigation would resolve validity before the PTAB could issue a final written decision.

This approach is logical. The PTAB is restricted to adjudicating anticipation and obviousness based only on patents and printed publications under the preponderance evidentiary standard.

District courts, however, adjudicate those issues plus a broader spectrum of validity challenges—such as ineligible subject matter, insufficient disclosure, indefiniteness, prior public use or sale, or inequitable conduct—under a clear and convincing evidentiary standard. District courts also decide infringement and damages, which the PTAB can’t resolve.

Given that the PTAB can only address a small subset of issues in a patent case, deferring to the courts when they will reach trial first, avoids wasting PTAB resources, taxpayer money, and resources of the parties. Instituting an IPR trial in such cases would increase (rather than decrease) costs, and raise the risk of inconsistent validity determinations, leading to costly and lengthy appeals.

Settled Expectations

More than 255 of the 371 discretionary denial decisions addressed the parties’ settled expectations about the validity of the challenged patents. Critics argue these expectations should be overridden by petitioners’ reliance on the PTAB as an efficient mechanism for invalidating patents.

The doctrine of valuing patent owners’ “settled expectations,” however, represents a fair, reasonable, and efficient evolution in PTAB adjudication.

This approach is fair because it safeguards patent owners who have relied on the presumed validity of long-issued patents, often for more than a decade, to make substantial investments in research, development, licensing, or business operations. Denying late or litigation-inspired challenges prevents undue disruption to these established interests and promotes stability in the innovation ecosystem.

It is also reasonable because it introduces a balanced consideration of patent age, the petitioner’s prior knowledge of the patent or patent family, and evidence of reliance. This curbs strategic abuses of the IPR process where challengers delay filing petitions to exploit timing advantages.

This doctrine further enhances efficiency by conserving PTAB resources, prioritizing reviews of newer patents while avoiding redundant proceedings on well-established ones (whether due to age, prior assertion, or adjudication), streamlining dispute resolutions and reducing litigation burdens.

This principle applies equally to patent owners who don’t practice their inventions. Such owners develop settled expectations through acquiring patents at significant cost, negotiating licenses, or enforcing rights over extended periods, all predicated on the patent’s enduring validity.

Recognizing this economic reliance, without requiring active commercialization, maintains consistency in protecting intellectual property rights across diverse ownership models.

Conclusion

The effectiveness of the PTAB can’t be judged based on institution rates alone. It must be judged by the value it brings to the overall IP disputes calculus.

The PTAB remains an “efficient, expert forum” when challenges are, in fact, a “quick and cost effective alternative to litigation,” don’t expose the parties to inconsistent results, honor the parties’ business and legal expectations, and avoid wasting the PTAB’s limited resources.

The new interim procedures instituted by Stewart honor the reasons the PTAB was created in the first place, not the continued high-volume invalidation of patents.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Erick Robinson is partner in the Houston office of Brown Rudnick and chair of the firm’s patent litigation practice.

Eugene Goryunov is partner in the Washington, DC, office of Brown Rudnick and co-chair of the firm’s PTAB practice.

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