A plan by US Patent and Trademark Office director John Squires to return merits-based patent review decisions to Patent Trial and Appeal Board panels risks bringing back inconsistencies in how judges apply the institution standard, warned former deputy director Coke Morgan Stewart.
Speaking at the Licensing Executives Society 2026 annual meeting in San Diego, California on 20 October, Stewart also defended the settled expectations doctrine as essential to maintaining the integrity of inter partes reviews.
She candidly discussed PTAB judges unevenly applying the standard for instituting IPRs and offered her thoughts on the three major patent bills before Congress – and why she believes the RESTORE Patent Rights Act is the bill that lawmakers could pass on Capitol Hill.
PTAB panel inconsistency
Stewart is concerned about inconsistencies in how PTAB judges apply the standard for instituting IPRs.
Squires said on 29 September that he was considering keeping discretionary institution decisions in the director’s office while returning decisions on the merits of a challenge to PTAB panels.
After Squires took office, officials found that the merits portion of institution decisions was approaching 95%. “We thought something doesn’t seem right about that number,” she said. “It seems too high.”
Officials then examined how judges interpreted the “reasonable likelihood” standard for determining whether at least one challenged patent claim is likely to be unpatentable. The results troubled her because “opinions were all over the map” with some judges considering the standard satisfied when there were no glaring errors in a petition, while others conducted a more detailed, element-by-element review of claims and evidence.
Since institution decisions are not appealable, the USPTO decided to bring merits determinations into the front office and use committees of judges and lawyers to scrutinise petitions before making recommendations to the director, she said. Stewart worried that returning merits decisions to board panels now could revive the problem.
“Anytime you have inconsistency in a proceeding like that, it’s not good for the system,” she said. “I don’t think it’s fair to the petitioners or the patent owners to be so dependent on what panel of judges you get.”
Stewart defends settled expectations
Recently, the US Supreme Court declined to review Google’s challenge to the USPTO’s settled expectations doctrine, which was based on a memorandum that Stewart authored during her time as acting director of the patent office.
Stewart welcomed the decision and said the USPTO’s settled expectations doctrine was intended to recognise the real-world consequences of challenging patents that companies have relied on.
When an issued and commercialised patent is challenged before the office, she noted that “it can shutter businesses, people lose their jobs, investment evaporates”.
She said the America Invents Act was built around eliminating bad patents, with IPRs initially expected to number about 300 to 400 annually – but it eventually rose to nearly 2,000 per year.
Applying what she described as a “preponderance of the evidence coin flip” to patent rights was inappropriate as the IPR was originally intended as an error correction mechanism, argued Stewart.
She defended the settled expectations doctrine as putting petitioners and patent owners on a more equal footing, finding it exceedingly unfair to maintain a system that effectively tells a patent owner to explain why the PTAB should reject an IPR. Rather, she believed the petitioner ought to explain why reexamining an issued patent is warranted.
“The patent owner is the one who has gone through examination, who spent the money and who has the presumption of validity in court,” she said. “Why should the tables be turned like that on the patent owner?”
Playing the legislative long game
Stewart remained optimistic about the future of the patent landscape, acknowledging that it may take some time before Congress enacts lasting legislative reform but expressing certainty that it would get there.
Three major patent bills are pending before Congress: the PREVAIL Act to reform the PTAB, Patent Eligibility Restoration Act (PERA) to amend Section 101 and RESTORE to restore patent injunctions.
Stewart, in her new role as president and CEO of the Council for Innovation Promotion, pointed out that even AIA took a decade to pass. “We have to play the long game,” she said. “There is probably some streamlining that can be done of some of the bills.”
She explained that PERA is “a little bit confusing” and may have been overwritten in an attempt to try and build consensus. She described PREVAIL as a series of technical fixes to the PTAB that can be “a little bit hard to track”. However, she highlighted RESTORE as “the ultimate streamlined piece of legislation”.
Stewart pointed to Taction’s blockbuster $5.7 billion jury verdict against Apple (which is fighting the award), noting that data showed that massive jury awards rarely survive appellate review. Given the uncertainty around damages awards, she suggested the RESTORE Act as paramount to re-establish reliable injunctive relief for patent owners.
“Let’s bring back predictable, strong remedies, including injunctions,” she said. “As a general rule, if you want to reduce the burdens on the court, let’s not balloon the PTAB. Let’s bring back injunctions so that people have a real incentive to sit across each other, and take a licence and negotiate.”
Further Information
Read the full article on the IAM website here.
Author Details
Nisha Shetty
Senior Reporter
IAM
nisha.shetty@lbresearch.com
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