The Death of Defaulting to IPR
For the last decade, the defensive playbook for large companies and technology platforms has been largely binary: if sued, file an inter partes review (IPR). It was the standard break-glass-in-case-of-emergency maneuver — expensive, yes, but predictable enough to create settlement leverage and, ideally, a stay of district court litigation. As we enter 2026, this calculus has shifted. The default IPR strategy is no longer just expensive; it is becoming a potential procedural liability. This is the result of a convergence of factors, including administrative centralization, hardened discretionary barriers and a fundamental change in how the U.S. Patent and Trademark Office (USPTO) manages its docket.
The pivotal moment arrived late last year. With the confirmation of USPTO Director John Squires in September 2025, and the subsequent centralization of IPR institution authority, the Patent Trial and Appeal Board (PTAB) has moved from a panel-centric model to a Director-centric one. This is not merely a bureaucratic shuffle; it changes the likelihood of IPR institution for every petition that is filed. When combined with the March 26, 2025, PTAB Workload Management memorandum, which formalized discretionary denial as a distinct, front-loaded gate, the IPR path has become narrower and more treacherous.
For a company managing a massive portfolio of distinct technologies — from codec efficiency and low-latency streaming to algorithmic curation — this means a scorched-earth, multifaceted approach to validity challenges is becoming less tenable. The new reality requires a more nuanced triage, one that increasingly favors a tool many sophisticated defendants had previously mothballed: ex parte reexamination (EPR). The resurgence of EPR is not a retreat by patent owners; it is a recalibration to a system where the Director, not just the merits, decides who gets through the door.
Comparative Strategy: Procedural Triage in the Squires Era
The following matrix outlines some of the primary considerations for selecting a post-grant vehicle under the Squires administration.
ConsiderationInter Partes Review (IPR)Ex Parte ReexaminationProceeding type/postureAdversarial PTAB trial between petitioner and patent owner, with briefing, limited discovery, cross-examination and, sometimes, an oral hearing.Examination proceeding in the Central Reexamination Unit (CRU) between the Office and the patent owner. Third-party requester participation is limited.Decision-makerPTAB panel of Administrative Patent JudgesUSPTO examiner (CRU); appeal goes to the PTAB (but the requester cannot appeal).Threshold to institute/orderInstitution only if there is a reasonable likelihood the petitioner would prevail with respect to at least one challenged claim; but subject to discretionary denial by DirectorOrdered if the request raises a “substantial new question of patentability” (SNQ).When it can be filed/key barsMust be filed no later than one year after the petitioner is served with an infringement complaintAny person may file at any time; however, AIA-trial estoppel can bar requesting/maintaining reexamination in certain circumstances.Prior art; groundsPatents and printed publications; Sections 102/103Patents and printed publications; Sections 102/103Participation after filingPetitioner remains an active party throughout the proceeding (petition, replies, evidence, motions practice).Requester can file the request and (if the patent owner files a statement) one reply; after that, the process is ex parte between the Office and patent owner.Discovery/testimonyLimited discovery, including depositions of declarants and other discovery in the interests of justice.No discovery or depositions; record is developed through Office actions and written responses.Timing/decision speedFinal written decision generally within one year of institutionMust be conducted with “special dispatch,” but no fixed statutory end date.Estoppel/preclusion effectsStatutory estoppel after a final written decision can bar the petitioner from later asserting grounds that were raised or reasonably could have been raised.No reexamination-specific estoppel against the requester.Identity/RPI disclosureMandatory identification of real parties-in-interest; filings are public and routinely scrutinized.Requester can file through an agent or attorney.The New Gatekeeper: Centralized Authority and Summary Denial
To understand why the calculus has changed, we must look at the structural reforms. Under the previous administration, institution decisions were largely delegated to three-judge panels. That ended when Director Squires moved to centralize institution authority for IPR and Post-Grant Review (PGR) proceedings, reclaiming power that had been delegated to the board for years.
The practical impact of this centralization is the rise of the summary notice denying institution of IPR. To clear the backlog and impose uniform policy, the Director’s office now issues summary dispositions on institution for what are deemed routine matters. The March 26, 2025, PTAB Workload Management memorandum sets forth this bifurcated process:
First, decisions on whether to institute an IPR or PGR will be bifurcated between (i) discretionary considerations and (ii) merits and other non-discretionary statutory considerations. Under this interim procedure, the Director, in consultation with at least three PTAB judges, will determine whether discretionary denial of institution is appropriate. If it is appropriate, the Director will issue a decision denying institution. If it is not appropriate, the Director will issue a decision regarding that determination and refer the petition to a three-member panel of the PTAB assigned according to Standard Operating Procedure (SOP) 1.
The discretionary factors considered by the Director included existing precedent like Fintiv, General Plastic, Advanced Bionics and other factors like:
- Whether the PTAB or another forum has already adjudicated the validity or patentability of the challenged patent claims;
- Whether there have been changes in the law or new judicial precedent issued since issuance of the claims that may affect 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; and
- Any other considerations bearing on the Director’s discretion.
For a petitioner, this introduces risk. You might spend upwards of $100,000 preparing a petition, only to receive a summary denial that offers no substantive justification. This silence is a deliberate policy instrument; it strengthens patent rights by avoiding substantive review and denying defendants a roadmap for future challenges.
The Procedural Trap: Bifurcation and “Settled Expectations”
With these changes, the Director now makes a threshold determination on discretionary denial before the merits are weighed.
This has weaponized the patent owner’s preliminary response. Patent owners may now file an extensive briefing, up to 14,000 words, solely relating to why the petition should be discretionarily denied, including the “settled expectations” of the patent owner – which rings of the defense of laches. A significant line of decisions beginning in mid-2025, such as iRhythm Technologies v. Welch Allyn, have seen petitions denied because, for example, the petitioner was aware of the application that resulted in the challenged patent for 12 years prior to petitioning for IPR.
For in-house counsel, this means winning two entirely different arguments: a complex procedural fight about system efficiency and the actual technical fight about invalidity. The statistics from late 2025 are stark: institution rates dropped from 68 percent in 2024 to less than 40 percent as of December 2025. As of November 2025, the discretionary denial rate for cases subjected to this new briefing process rose to 60 percent.
The Substantive Trap: The End of Gap-Filling Applicant Admitted Prior Art
The risks of IPR in 2026 are not just procedural; they are also substantive. On July 31, 2025, the USPTO issued guidance regarding Applicant Admitted Prior Art (AAPA) that effectively closed a critical loophole for petitioners.
For complex software patents – particularly those involving content delivery networks or cloud infrastructure – petitioners sometimes struggle to find a single piece of prior art that discloses every routine element (e.g., a server, a network interface). Historically, patent challengers used the patent owner’s own specification (AAPA) to fill the gaps, admitting these were known elements so they could focus the fight on the novel claim limitations.
The July 2025 Memorandum strictly enforces 37 C.F.R. § 42.104(b)(4), prohibiting the use of AAPA, expert testimony, common sense and other non- “prior art consisting of patents or printed publications” to supply missing claim limitations in an IPR petition. Petitioners can no longer say that the specification admits a server is known. You must find a printed publication that says it. This sounds minor, but in practice, it can be an issue for many system-type patents.
The Great Migration: Why Reexam is Resurging
Faced with a centralized gatekeeper, a bifurcated discretionary hurdle, and the loss of AAPA, sophisticated defendants are voting with their feet. The data from the last nine months is unambiguous: the industry is pivoting to ex parte reexamination.
According to Unified Patents’ Q3 2025 Report, reexamination requests hit an all-time quarterly high of 198 filings in that quarter alone. By the end of September 2025, the industry had filed 425 requests, nearly matching the full-year total for 2024 of 437. At the same time, IPR filings plummeted from an average of 110 per month to just 66 in November. This stampede is occurring in part because ex parte reexamination is not subject to the same standards:
- No Discretionary Denial: Reexamination is governed by the substantial new question of patentability (SNQ) standard. It is not subject to Fintiv, trial date proximity or settled expectations.
- No Estoppel Trap: Perhaps most importantly for a platform company, reexamination does not trigger the severe estoppel of 35 U.S.C. § 315(e). If you lose an IPR, you are barred from raising any ground you reasonably could have raised in court. If a reexam concludes unfavorably, you usually preserve your ability to argue invalidity in district court trial.
Conclusion
Director Squires’ changes at the USPTO have made it clear that access to the PTAB via IPR is a privilege, not a right. For your team, this means the days of reflexively filing IPR petitions are over. The new discipline requires counsel to stress-test potential petitions against the Squires factors: Is a parallel trial date too close? Do we need AAPA to make the art stick? Is the patent old enough to trigger “settled expectations”? Are there other factors at play that might precipitate a discretional denial of institution?
If the answer to any of these is yes, patent owners are increasingly flowing toward ex parte reexamination. It is slower and it offers less control. But in a centralized, discretionary regime, it is one door that remains reliably open.
Our Intellectual Property Practice Group is tracking this and other intellectual property issues. If you have questions or concerns about patent-related matters, please reach out to attorney Brendan M. Palfreyman at (315) 214-2161 and bpalfreyman@harrisbeachmurtha.com, or the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
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