On March 11, 2026, USPTO Director Squires issued a Memorandum specifying three new discretionary factors to be considered when determining whether to institute an IPR or PGR. The PTAB is now directed to consider (1) the extent to which accused products in a parallel proceeding are made in the United States, (2) whether the patent owner’s competing products are domestically manufactured, and (3) whether the petitioner is a small business sued for infringement. U.S. manufacturing is to be considered broadly, and includes domestic component manufacture, final assembly, and the extent to which domestic components are exported for further processing.

The director notes that the offshoring of substantial segments of the domestic manufacturing base over the past several decades has caused significant economic and security damage in the U.S. and threatened U.S. innovation leadership. Further to his statutory obligation to protect the economy and the integrity of the patent system, the new factors will tie the PTAB’s institution decisions to considerations of domestic activity.  Petitioners who manufacture domestically or qualify as small businesses may obtain institution more easily than those with no manufacturing activities or investments in the U.S.

The directive signals a policy shift for institution decisions, which by statute are based on consideration of prior art. Now, domestic manufacturing and investment is part of the institution calculus.

Going forward, petitioners and respondents should be prepared to address U.S. manufacturing activities, related investments, and petitioner’s status as a small business in discretionary briefing before the PTAB.