Since early 2025, the Patent Trial and Appeal Board (PTAB) has shifted toward a more restrictive, Director-controlled institution regime. Expanded use of discretionary denials—including revived Fintiv-based considerations and “settled expectations” factors—has resulted in fewer inter partes review (IPR) proceedings being instituted and has made it more difficult to challenge issued patents. These changes generally strengthen and de-risk patent portfolios, particularly for branded pharmaceutical and biotechnology companies. However, the large number of institution- and merits-stage reversals and late-stage interventions by the Director increases uncertainty complicating patent litigation strategy.
Director Control
A central development has been the consolidation of institution authority in the Director, replacing prior panel-based decision-making with broad discretionary review authority, formalized as a separate discretionary-briefing track. This procedural change began in early 2025 under former Acting Director Coke Morgan Stewart and was expanded under Director John Squires such that now all institution decisions, both discretionary and merits-based, are made by the Director and the decisions are rendered as summary orders without detailed reasoning. The result is that there is no substantive transparency or ability to appeal the decision. This shift has contributed to fewer instituted proceedings and reduced predictability for petitioners.
Expanded Grounds for Denial
Discretionary denial has also broadened through new and expanded factors, including broader discretion based on Fintiv factors in cases of parallel district court litigation (including reduced impact of Sotera stipulations), new factors relating to “settled expectations” of the patent owner, investors and the public in cases of long-held patents, requirements for identification of the real party in interest, sovereignty and domestic policy considerations, cross-forum consistency, serial or repetitive challenges, preference for PGRs over IPRs, and considerations of administrative error, efficiency, and fairness. Collectively, these factors provide the Director with latitude to deny institution even if petitions present strong merits.
Declining Institution Rates and Appeal Pendency
Following the 2025 policy changes, PTAB institution rates have declined significantly. According to data published by the USPTO, in October 2024 the average institution rate was 60-70% and as of July 2026 the overall institution rate had dropped to 30-40%, with significantly more institution denials than grants. Average appeal pendency (defined as average months from Board receipt date to final decision) is also greatly reduced across all technology areas, falling from over 13 months in May 2025 to just ~7.5 months as of July 2026 (although bio/pharma appeals pendency is longer at ~8.5 months). These changes appear to be a direct result of the expanded use of discretionary denials and the centralization of institution authority within the Director’s office.
Institution Flips and Merits Interventions
Since Director Squires assumed control over institution decisions, a large number of petitions have been retroactively denied, de-instituted, orde-referred. For example, in Revvo Technologies v. Cerebrum Sensor Tech, the Director vacated the Board’s institution grant on the basis that Revvo was arguing different claim construction positions and then cited this decision in denying numerous petitions that were already slated for merits review. These “institution flips” have increased uncertainty in PTAB practice, as parties face reduced predictability regarding whether instituted or denied proceedings may later be reversed.
The current Director has further used the Director Review process to intervene in cases during the merits phase. In October 2025, Director Squires withdrew institution in Interactive Communications Int’l v. Blackhawk Network even though the PTAB had already issued a final written decision (FWD) and ultimately vacated that decision, treating it as if it had never issued and rendering the decision non-appealable. Several cases are now on appeal to the Federal Circuit, where the scope of Director authority is being challenged. In March 2026, the Director sua sponte ordered rehearing of the PTAB’s 2025 decision in Ex Parte Baurin regarding obviousness-type double patenting and how it applies to Patent Term Adjustment. These merits-stage interventions raise significant questions regarding appellate rights and procedural finality for both patent owners and petitioners.
Takeaways for Life Sciences Companies
These recent PTAB developments mean that it will be much harder for life sciences companies to invalidate patents before the PTAB. IPRs have historically been a preferred means for biosimilar applicants to challenge key biologic patents, although less commonly used by generic filers pursuing small molecule generics. The stricter scrutiny of IPR petitions thus benefits life sciences patent owners.
Data from the PTO demonstrates that the recent PTAB changes have just shifted patent challengers toward ex parte reexaminations instead of IPRs. USPTO data shows that filings for ex parte reexams increased significantly in the first half of 2026 (now totally ~75% of post-grant filings) coincident with the decline in PTAB filings (now hovering near ~25%). Ex parte reexams present certain advantages for patent challengers including reduced filing fees, anonymity, and greater flexibility in bringing prior art challenges without estoppel risks in subsequent litigation as well as double patenting challenges. In addition, the USPTO’s new “pre-order” procedure gives patent owners a free opportunity to present arguments against a Substantial New Question of patentability early prior to reexam institution, with only limited opportunity for requesters to respond. However, there are significant drawbacks for patent challengers engaged in ex parte reexams including the inability to raise §§ 101 and 112 challenges and the inability to directly interact with the examiner while the patent owner is free to conduct examiner interviews, submit expert declarations, amend claims and present arguments in favor of patentability. Further, a successful reexam may have the effect of making the challenged patent “bulletproof” if upheld, particularly if the USPTO’s proposed “one and done” rules package advances.
Theoretically, the recent PTAB changes may shift patent challenges to district court although the data does not support this. District court litigation is favorable for patent owners who enjoy a presumption of validity and heightened standard for proving invalidity. However, district court challenges can be very slow and costly for both the patent owner and the patent challenger.
In addition, recent PTAB changes may shift patent challenges to PGRs, to the extent available. However, because PGRs must be filed within nine months of patent grant, many patents are not available for PGR challenge. According to the USPTO, the number of PGR petitions filed remains small.
The more restrictive and unpredictable environment before the PTAB will thus reshape strategies of patent owners and patent challengers alike. The lack of transparency and predictability surrounding Director actions complicates litigation strategy, settlement dynamics, and portfolio valuation.
For life sciences in-house IP counsel intent on challenging patents before the PTAB, we recommend filing petitions sooner rather than later to avoid denials based on settled expectations, and early consideration of factors that go beyond the merits including discretionary factors relating to RPI and how the petition matches the institution’s currently stated goals. Patent owners should strategically plan for discretionary denial briefing and expect that future patent challenges are likely to occur in one forum only, and if before the PTAB file only one petition per patent absent exceptional circumstances.
This article is a part of the 2026 Life Sciences Industry Report. Click here to read the full newsletter.
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