Federal Circuit upholds PTO’s authority to reject IPRs

(Published on LinkedIn Feb. 16, 2026)

The U.S. Court of Appeals for the Federal Circuit declared in a Feb. 13 decision that the Patent and Trademark Office’s discretion to deny institution is not circumscribed by the Administrative Procedures Act, an outcome that sends a clear signal to stakeholders that PTO will continue to deny institution to a significant percentage of IPR petitions for the foreseeable future.

The context of this decision is that defendants in patent litigation may try to invalidate one or more key claims in the contested patent, thereby nullifying any presumption of infringement. As matters have stood since shortly after passage of the America Invents Act in late 2011, the validity of a patent can be contested in a trial before the PTO’s Patent Trial and Appeal Board (PTAB) in an IPR or other administrative hearing.

These administrative challenges can be conducted in parallel with challenges filed in Article III courts (district and appeals courts along with the Court of International Trade), creating the risk of dual-track litigation that some see as a potentially abusive practice. The problem is felt particularly acutely by small, poorly financed entities that believe their patents have been infringed by larger, better-financed competitors.

Med tech, big tech firms on the same page

One of the more interesting features of Apple Inc. v. Squires is that the plaintiffs, in addition to Apple, consist of Edwards Lifesciences, Google and Intel, an interesting grouping of “big tech” companies and life science firms. Apple may be seen by many as a consumer tech company thanks to its footprint in the consumer tech space, but those consumer tech products include wearables that provide vital sign detection with functional claims that place them squarely in the FDA-regulated product space. Apple has thus been involved in patent litigation with companies that inhabit the medical technology arena, such as Masimo Corp.

In its Feb. 13 ruling, the Federal Circuit stated that PTO’s discretionary denials of IPRs does not require the agency to engage in the notice-and-comment process for rulemaking as would be mandated by the Administrative Procedures Act, or APA. There are several key moving parts that led to this decision, however, which together help explain how this debate over discretionary denials landed where it now resides.

Those in the life sciences are all too familiar with the frequency with which their patents have been challenged in IPRs, a common enough problem that there is a significant level of support for legislation such as the PREVAIL Act. The increasingly widespread practice of parallel litigation seemed to drive the outcome in the IPR case of Apple v. Fintiv.

Decided in 2020, Fintiv led to the formulation of a series of criteria as to whether an IPR could be instituted when the same patent was in litigation in an Article III court. Among the effects of Fintiv is that an IPR is more likely to be instituted when district court proceedings are stayed pending resolution of the parallel proceedings at the PTAB.

Fintiv led to a jump in discretionary denials of IPRs and other PTAB proceedings, prompting then-PTO director Kathy Vidal to issue a memo to PTAB judges in June 2022. Vidal’s memo essentially directed PTAB judges to avoid reflexive denial of institution if the petitioner was able to present “compelling” evidence that the contested patent included one or more claims that could be eviscerated under current patent law. Under these conditions, this memo allowed PTAB judges to institute an IPR even when parallel litigation was in play in an Article III court.

The defendant in latest version of the Apple lawsuit, PTO director John Squires, posted an internal memo in October 2025 advising judges at the PTO’s Patent Trial and Appeal Board (PTAB) that his office will exercise more oversight of IPRs and other matters that are handled by PTAB. Squires states that his review of IPRs and post-grant reviews will be handled with the assistance of “at least” three PTAB judges. He also stated that an IPR may be instituted even when the petitioner is able to make a compelling argument on only one ground that could lead to nullification of the disputed patent.

In its 2023 decision in Apple v. Vidal, the Federal Circuit returned the case to the district court for a second look at whether PTO guidance on discretionary denials was in fact an example of rulemaking that required an APA-style notice-and-comment process. The district court concluded that PTO guidance does not fit the mold of APA-governed rulemaking, a decision the Federal Circuit upheld in its Feb. 13, 2026, decision. The Federal Circuit’s decision includes the observation that even federal agency discretion regarding enforcement action is not ordinarily susceptible to judicial review, let alone matters that could plausibly fall under the category of sub-regulatory guidance.

‘A statement of policy’ not the same as APA-governed rulemaking

Writing for the three-judge Federal Circuit panel, Judge Richard Taranto remarked that the district court judge had concluded that PTO’s instructions regarding denials of institution are “a general statement of policy” rather than “a substantive or legislative rule,” a position the Federal Circuit upheld. The district court decision predated Squires’ memo of October 2025, but Taranto said the October Squires memo does not affect the relevance of the questions raised in either iteration of Apple. Taranto also remarked that no entity has a right to an IPR, given the history of courts’ deference to federal government agencies regarding their use of their administrative tools.

Whether this latest outcome in the IPR institution debate will affect the volume of Article III patent cases is difficult to predict. In any event, the parallel litigation strategy seems at least somewhat less viable than it has been for much of the past three-plus years. Another effect might be that the backlog of PTAB proceedings will ease somewhat for the next few years, an outcome that some litigants might find helpful regardless of where they stand on the question of discretionary denials of IPR requests.