The US Patent and Trademark Office has reversed the single biggest structural change it made to post-grant practice in the last year. In a memorandum dated 10 November 2026 and addressed to the administrative patent judges of the Patent Trial and Appeal Board, Director John A. Squires and General Counsel and Solicitor John F. Duffy announced that, effective Monday 16 November 2026, merits-based considerations in institution decisions go back to the Board. The Director will keep the first gate — the non-merits, discretionary review — but any petition for inter partes review or post-grant review that survives it will now be sent to a three-member PTAB panel, assigned under Standard Operating Procedure 1 (Rev. 17), to complete the institution decision on the Director’s behalf. The memorandum expressly supersedes the Office’s 17 October 2025 “Director Institution of AIA Trial Proceedings” memorandum to that extent.
The justification offered is that the centralisation worked. The memorandum reports that in June 2025 roughly 60% of petitions were discretionarily denied and about 40% referred for merits review, while in September 2026 the Director denied 15% discretionarily and referred 85% to the merits — evidence, in his reading, that petitioners have adapted to the rubric he set out in Magnolia Medical Technologies, Inc. v. Kurin, Inc., IPR2026-00097, Paper 17 (Director, 14 May 2026), the precedential decision that denied institution on the totality of the record. Over roughly a year the Director states he decided more than 325 proceedings involving merits-based considerations, and that after working alongside the judges on them “any perception of self-interest has no basis in fact or reality”. He also makes clear that the delegation does not divest him: the statute still vests institution authority in the Director, and he retains the power to exercise it.
What matters more than the explanation is the guidance. The memorandum sets out five guidelines the Board must apply when it analyses the merits on the Director’s behalf, and they are not a neutral restatement of the institution standard.
The cut-off is a notice, not a calendar date
Read the transition rule before you read anything else. The new process applies to every IPR and PGR for which the Office has not yet entered the notice identifying the proceeding as referred for consideration of the merits-based issues. The 16 November date is when the switch is thrown; the thing that decides which side of it a given case falls on is a docket entry. So the first task this week is a sweep of every pending petition in the portfolio to establish, case by case, whether that referral notice is already on the docket. If it is, the Director retains the merits call under the old model. If it is not, a panel of three judges will decide — and the brief you are about to file is addressed to a different reader than the one you drafted it for.
There is a related trap in the briefing sequence. Under the Office’s interim discretionary process, a patent owner that does not file a discretionary denial brief causes the Office to enter the referral notice. A patent owner who treats the discretionary brief as optional therefore does not simply forgo an argument; it accelerates its own case onto the panel track and fixes which decision-maker will weigh the merits.
Equipoise now decides against the petitioner
Guideline five is the provision to put in front of clients. Where the arguments for and against unpatentability of a particular challenged claim are both reasonably supported on all the evidence — in equipoise — the Board is directed not to treat the petitioner as having met the “reasonable likelihood” standard of 35 U.S.C. § 314(a) or the “more likely than not” standard of § 324(a) as to that claim. A tie is a loss for the petition.
The memorandum grounds that in the preliminary-injunction case law the AIA’s drafters borrowed from, quoting Senator Jon Kyl’s floor statement that the “reasonable likelihood” test mirrors the injunction standard and effectively requires a prima facie case for rejecting the claims. The practical consequence of importing that line of authority is the one the memorandum spells out: a party opposing an injunction need only raise a substantial question of invalidity, not prove invalidity. Transposed to institution, a patent owner who raises a substantial, well-evidenced question about the petition’s own case can defeat a reasonable likelihood without having to win the argument outright.
“Substantial majority” is a discipline on claim counts
Guidelines two, three and four all turn on the same phrase. The Board will deny institution if the petitioner fails to make the requisite showing for a substantial majority of the challenged claims — whether that failure is apparent on the petition, is established by a well-supported patent owner preliminary response, or is identified by the panel itself. Because SAS Institute v. Iancu, 584 U.S. 357 (2018) makes institution all or nothing, that converts the length of a claim challenge from a free option into a liability. A petition that attacks twenty claims to protect the two that matter now exposes the whole filing if the other eighteen are thin. Petitioners should expect to trim, not pad.
Guideline one closes the other common shortcut. For any prior-art ground, in any technology, the petition must point out how the art discloses or renders obvious each limitation of each challenged claim, with an understandable element-by-element explanation and identification of the particular portions of the art relied on. Pointing to a USPTO examiner’s findings does not satisfy 37 C.F.R. §§ 42.104(b)(4) and 42.204(b)(4). That is a resourcing point as much as a drafting one: the mapping work and the prior-art searching behind it have to be finished before filing, because the record at institution is now being read by technically specialist judges against an explicit sufficiency checklist.
What has not changed
Discretionary denial has not come back to the Board, and it has not gone away. The Director keeps that review, keeps the Magnolia public-interest rubric, and keeps the residual statutory power to decide institution himself. Petitioners who read the 15% September figure as the end of discretionary risk are reading a snapshot of one month under centralised control, not a rule. Nor should anyone expect a reasoned roadmap at every step: the memorandum authorises the Director to refer or deny by summary notice, and tells panels to address only the merits considerations they found important, as to at least one claim and one ground — citing Oil States, 584 U.S. 325 (2018), and the ordinary practice of courts disposing of reconsiderations without opinion.
One structural safeguard is worth noting for anyone briefing a trial. If a panel institutes, a different panel is assigned to conduct the trial under SOP 1 (Rev. 17), with none of the institution judges carried over. Arguments that landed at institution are not pre-sold to the body that decides the final written decision, and nothing in the institution panel’s reasoning should be treated as banked.
Three things to do before 16 November
First, docket the referral-notice question on every pending petition and record the answer, because it determines the decision-maker and therefore the audience for the next brief. Second, on the patent owner side, re-budget the preliminary response: guidelines three and five together mean that reliable, credible evidence filed before institution, aimed at the substantial majority of claims rather than the strongest one, is now the most leveraged filing in the proceeding — and that is a validity analysis commissioned earlier than most defensive budgets assume. Third, on the petitioner side, review claim selection in anything not yet filed. Under an all-or-nothing institution rule with a substantial-majority test and a tie-breaker that runs against you, the marginal challenged claim is no longer free.