How a Recent USPTO PTAB Policy May Favor U.S. Manufacturing and Small Business

The Patent Trial and Appeal Board (PTAB) has been one of the most powerful forces in patent law since its creation in 2012. Through inter partes review (IPR), the PTAB allows third parties to challenge issued patents, often invalidating claims that companies spent years obtaining.

In March 2026, USPTO leadership reportedly issued a memorandum that appears to reshape how the PTAB decides whether to institute IPR proceedings. As with any policy update, its practical effect will depend on how it is applied in individual cases.

Understanding the PTAB and IPR

IPR generally works in two phases: the institution phase (a discretionary decision to proceed) and the trial phase (typically well over a year). Historically, a large share of instituted claims have reportedly been found unpatentable, though exact figures vary by source and over time. Because of this, the institution decision often matters a great deal to the outcome.

What the Memorandum Reportedly Changes

Factor 1: Small Entity and Micro Entity Status

When the patent holder is a small or micro entity and the petitioner is a large entity, the PTAB reportedly weighs this disparity toward denial. IPR proceedings can be costly, often representing a disproportionate burden for small entities, though actual costs vary considerably by case.

Factor 2: Domestic Manufacturing

If the patent covers technology manufactured domestically, this factor weighs toward denying institution, aligning with broader policy to support domestic manufacturing and supply chain resilience.

Industry Impact

• Semiconductors: Domestic chipmakers may receive added consideration under these factors, depending on the facts
• Medical Devices: Small/mid-sized manufacturers benefit from combined small-entity and domestic-manufacturing factors
• Automotive & Clean Energy: EV battery, charging, and power management patent holders gain additional defense
• Software: Less direct benefit from manufacturing factor, but small entity factor remains highly relevant

Strategic Implications for Patent Holders

1. Document your manufacturing: Compile facility addresses, employment data, investment records, supply chain documentation, and revenue attribution
2. Maintain small entity status where possible for both fee reductions and strategic PTAB advantages
3. Strengthen your portfolio proactively with thorough prior art searching, well-drafted claims, and continuation strategies

Implications for IPR Petitioners

• Stronger petitions required when challenging small entities or domestic manufacturers
• Cost-benefit recalculation needed with higher denial rates expected
• Alternative strategies (licensing, design-around, district court) may be more effective

Action Plan

1. Verify entity status on all patent filings
2. Create a manufacturing evidence file tied to your patents
3. Review portfolio for IPR vulnerability
4. Develop an IPR response plan incorporating the new factors
5. Engage experienced IP development professionals