USPTO Details Broad Principles of Discretionary Denial in AIA Proceedings 

Need to know 

The USPTO has issued a precedential decision in an IPR proceeding emphasizing a public-interest-oriented discretionary denial framework under which AIA proceedings must function as alternatives to litigation, not as additional opportunities to challenge patentability.  

On May 14, 2026, the U.S. Patent and Trademark Office (USPTO) issued a precedential decision in an inter partes review (IPR) proceeding that details what it views as the principles underlying the Director’s discretion to institute trials in America Invents Act (AIA) proceedings. The decision generally positions the Patent Trial and Appeal Board (PTAB) as a narrowly focused, public-interest-driven forum whose purpose is to serve as an alternative to federal district courts, not as a parallel or subsequent forum to challenge patentability. It reiterates that Congress gave the Director broad authority to exercise discretion to ensure fairness, efficiency, and predictability in AIA proceedings.  

The case at issue

In the instant case, the patent at issue was previously challenged in district court, where the jury found the patent not invalid. However, the petitioner’s anticipation and obviousness arguments were not presented to the jury because the court excluded the testimony of the petitioner’s invalidity expert. The petitioner thus argued that, because its expert’s testimony had been excluded, no forum had adjudicated the patentability of the claims under 35 U.S.C. § 102 or 103.  

The Director explained that the lack of a jury verdict on anticipation or obviousness does not entitle the petitioner to relitigate the same issues at the PTAB. Here, the petitioner first challenged the validity of the patent on the same grounds that it could have presented to the Office. The Director noted that the district court precluded the expert due to his failure to disclose the claim construction upon which he had based his opinions — something that was within the petitioner’s control. The Director found that the petitioner had the opportunity to fully and fairly litigate these issues before the district court but was now attempting to use the PTAB for a repeat challenge to undo its litigation loss.  

The Director thus exercised his discretion to deny institution, holding that to institute trial in this proceeding would contravene Congress’ stated intent for the AIA to be an alternative to district court litigation.  

Principles of discretionary denial  

The decision is notable for its restatement of the principles underlying the Director’s discretion to institute trials in AIA proceedings. According to the Director, such discretion should seek to serve the following policy goals:  

• AIA proceedings as alternatives to litigation: The decision explains that Congress intended AIA proceedings to serve as quick and cost-effective alternatives to district court litigation. According to the Director, AIA proceedings should not expand disputes, duplicate litigation, or be used for tactical leverage.  
• Prevention of AIA review misuse: The decision identifies what the Director sees as several recurring problematic behaviors, including multiple petitions without justification, repeated challenges after prior losses, and inconsistent positions between the PTAB and district courts.  
• Primary use of AIA review by small, U.S.-based manufacturers: The decision notes that available data indicate that a handful of market-dominant companies have filed most petitions for AIA review, which the Director cites as undercutting the view that AIA proceedings protect American manufacturers and small businesses.¹
• AIA review in service of the public interest: The decision asserts that the central purpose of AIA proceedings is to determine whether the patent at issue should have been granted, not to adjudicate private disputes — a function traditionally reserved for Article III courts. Public interest considerations include the efficiency of the Office, the integrity of the patent system, and the timely resolution of AIA reviews.  

The decision references prior precedential and informative decisions providing guidance on how the Office will address the above factors. For example, the decision notes that inconsistent claim constructions, foreign sovereign involvement, settled expectations, and examiner error all bear on the public interest and influence the Director’s decision to exercise his discretion to deny institution. The Director also left open the door for further public interest considerations to be incorporated into the discretionary denial framework, noting that the Office “will continue to issue, guidance as to what, specifically, the public interest entails.”  

Takeaways

• The public interest takes a central role: Although the Supreme Court held in Oil States² that patents are public rights subject to reconsideration by the USPTO, the decision establishes that the Director views the PTAB as serving the public interest and not as a forum for resolving private disputes. Parties to AIA proceedings should thus consider addressing how institution would or would not serve the public interest (as articulated in the factors above) in their petitions and responses.  
• A patent challenger should plan on playing one card: The decision articulates a strong preference for judicial economy; if a petitioner has litigated validity in district court, then its subsequent petition is likely to be denied absent a strong stipulation to not pursue the same arguments in district court.  
• Procedural missteps in district court cannot be “cured” at the PTAB: Failure to present evidence properly in district court litigation does not entitle the aggrieved party to seek a do-over at the PTAB.  
• Parties should tell their domestic industry story: Profound investments are being made in domestic manufacturing, and the impact on downstream industry is even more significant. Often, telling this story requires intensive fact-gathering. Start early to tell this story.    
• Director-centric decision-making: The decision continues the trend under Director Squires of expanding the circumstances under which institution may be discretionarily denied.