USPTO Proposes Major PTAB Reforms

The U.S. Patent and Trademark Office (USPTO) has released a Notice of Proposed Rulemaking titled “Revision to Rules of Practice before the Patent Trial and Appeal Board” (Docket No. PTO-P-2025-0025).

The proposed revisions to 37 C.F.R. Part 42 aim to significantly reshape how inter partes review (IPR) proceedings are initiated before the Patent Trial and Appeal Board (PTAB).

The primary objectives appear to be reducing serial and parallel challenges, promoting finality and fairness, and restoring the original intent of the America Invents Act (AIA) to provide a streamlined alternative to district court litigation, rather than serving as a second forum for the same disputes.

The Policy Rationale

The USPTO notes that more than 54% of all IPR petitions filed since 2011 have been part of multiple challenges against the same patent, and over 80% have coincided with ongoing litigation. Instead of providing an alternative, IPRs often duplicate proceedings in district courts and the ITC, resulting in increased costs and prolonged uncertainty.

The Office argues that these serial challenges have eroded confidence in patent rights, especially among startups and small businesses that rely on IP protection to attract investment and compete against dominant market players. The proposed rule aims to refocus IPRs on their intended purpose: to review only those patents that have not yet been adequately tested in another forum.

Key Proposed Amendments to 37 C.F.R. § 42.108

1. Stipulation Requirement

Under the proposed § 42.108(d), petitioners must stipulate that they, along with any privies, will not pursue challenges related to § 102 (novelty) or § 103 (obviousness) in district court or the ITC if an Inter Partes Review (IPR) is instituted.

This rule aims to codify the Fintiv-style efficiency rationale into regulation, ensuring that IPRs serve as a complete substitute for litigation rather than a duplicate.

2. Previously Upheld Claims Bar

Proposed § 42.108(e) would prohibit an institution from challenging claims (or the independent claims they depend on) that have previously been found valid or patentable in the following contexts:

·         District court or jury verdicts (not vacated or reversed)

·         ITC (International Trade Commission) determinations

·         PTAB (Patent Trial and Appeal Board) final written decisions

·         Ex parte reexaminations

·         Federal Circuit reversals of invalidity rulings

The USPTO’s position is that once a claim has survived both Office and judicial scrutiny, further IPR (Inter Partes Review) offers little public benefit and undermines the reliability of the patent.

3. Parallel Litigation Bar

According to § 42.108(f), the Patent Trial and Appeal Board (PTAB) will deny institution if a district court, the International Trade Commission (ITC), or another PTAB proceeding is likely to make a validity determination first. This provision codifies discretionary denial principles similar to those established in Apple v. Fintiv and Comcast v. Rovi Guides."

4. Extraordinary Circumstances Exception

New § 42.108(g) allows the Director to personally authorize an institution despite the above restrictions, but only in "extraordinary circumstances." These circumstances include:

·         Evidence that a prior proceeding was filed in bad faith to obstruct later review; or

·         A substantial change in statute or Supreme Court precedent.

The rule specifically excludes routine developments, such as new prior art, new legal arguments, or unappealed decisions, from qualifying as extraordinary.

Expected Impact

The USPTO expects the rule to:

·         Reduce duplicative litigation and associated costs;

·         Enhance predictability in PTAB institution decisions;

·         Reallocate PTAB resources toward ex parte appeals; and

·         Strengthen investor confidence by ensuring greater finality in issued patents.

While petitioners may face a modest administrative burden (an estimated one extra hour to prepare the required stipulation), the Office anticipates an overall net decrease in litigation costs for both sides

Practical Takeaways

The proposed reforms build on the USPTO’s multi-year effort to streamline PTAB practice, following initiatives from 2020 to 2024 that addressed discretionary denials, multiple petitions, and settlement procedures. If finalized, this rule would represent a significant structural change to the institution of Inter Partes Review (IPR). These structural changes may have practical implications for litigators and patent owners.

The new rule discourages petitioners from filing IPRs while active litigation is ongoing. As a result, petitioners must decide early whether to challenge a patent's validity in court or before the Patent Trial and Appeal Board (PTAB). They can no longer rely on timing or stay arguments to convince the Board to initiate a review if there are concurrent district court actions.

For patentees, this rule brings greater certainty, especially if they have successfully navigated previous litigation or reexamination. Since IPRs will be off-limits if prior litigation was resolved at an "early stage," parties may have an incentive to settle disputes early to avoid the risk of subsequent PTAB reviews. Conversely, settlements that occur late in the process, such as after claim construction or summary judgment, may not protect a patent from future IPRs.

Overall, these proposed changes require careful consideration by both petitioners and patentees regarding their litigation strategies. IPRs.