By Michael Doane
IPPI Scholar & Assistant Professor of Law, The University of Akron School of Law
Since the beginning, the second Trump Administration indicated that the promotion of domestic manufacturing and support of small businesses would be key objectives of its economic policy.[i] In the intellectual property sphere, support of small businesses and small innovators was signaled by the filing of Statements of Interest by the U.S. Patent and Trademark Office (USPTO) and the U.S. Department of Justice in two patent infringement actions seeking to clarify when injunctive relief for small entities was appropriate.[ii] Further, in several determinations, which the U.S. Court of Appeals for the Federal Circuit (CAFC) declined to review, the USPTO exercised its discretion to deny institution of requested Inter Partes Review (IPR) and Post Grant Review (PGR) proceedings in apparent response to allegations of abuse of IPR and PGR procedures by large high-volume filers.[iii] In a Memorandum dated March 11, 2026, the Director of the USPTO announced “Additional Discretionary Institution Considerations” for institution of IPR and PGR proceedings relating to (1) the U.S. manufacturing operations of both the petitioner and the patent owner and (2) whether the petitioner is a small business.[iv] These new considerations are meant to address the fact that many, if not most, of the high-volume filers requesting such proceedings do not manufacturer their products in the United States.[v] These new discretionary considerations appear to establish something similar to the domestic industry requirement of an unfair imports investigation conducted under Section 337 of the Tariff Act of 1930 for institution of an IPR or PGR.
The purpose of these new discretionary consideration factors is to ensure that IPR and PGR proceedings are not used to the detriment of U.S. manufacturing and small businesses. As noted by the USPTO, “substantial segments of the United States’s existing manufacturing base—particularly in the electronics and computer industries—have moved overseas.”[vi] For example, over 95% of Apple products are manufactured in China.[vii] IPR and PGR proceedings were purportedly developed to provide a mechanism outside of U.S. district court in which the validity of U.S. patents could be challenged more expeditiously. In practice, however, it is at best questionable whether these proceedings have benefitted the U.S. economy and U.S. intellectual property system, particularly when U.S. patents are challenged by entities with little or no commitment to U.S. manufacturing. Under such circumstances it is appropriate when deciding whether to invalidate a U.S. patent “to consider the effect of institution standards on the economy and the integrity of the patent system.”[viii]
The United States provides various avenues to enforce or challenge patent rights with the primary venue being an infringement action or declaratory judgment action in U.S. district court. This venue is, of course, available to all. A U.S. patent owner may also enforce its patent rights against imported infringing products with an unfair import investigation before the U.S. International Trade Commission (USITC) pursuant to Section 337 of the Tariff Act of 1930. Mere ownership of a patent, however, is not sufficient to bring a Section 337 investigation successfully. The complainant must establish that it has made a significant or substantial commitment to the U.S. economy through investments in the United States in various activities related to an article that practices the asserted patent, most notably manufacturing.[ix] In short, as a trade remedy offered “in addition to any other provision of law,”[x] the relief granted is only available to those supporting a domestic industry in the United States.
Similarly, IPR and PGR proceedings were created as a venue, in addition to U.S. district court, in which to challenge the validity of a U.S. patent. As a U.S. patent is presumed valid, institution of an IPR or PGR proceeding by the USPTO is discretionary. The new discretionary factors that the Director will consider are:
- the extent to which any products accused of infringement in a parallel proceeding are manufactured in the United States or are related to investments in American manufacturing operations;
- the extent to which any products made, sold, or licensed by the patent owner that compete with the accused products are manufactured in the United States; and
- whether the petitioner is a small business that has been sued for infringement of the patent at issue.[xi]
Discretionary considerations that include domestic manufacturing and small business status permit the USPTO to focus on those challenges that benefit U.S. manufacturing and small businesses rather than those challenges that seek to invalidate U.S. patents in support of entities that chose not to invest in the United States.
IPR and PGR proceedings, much like Section 337 Investigations, offer relief in addition to that provided under federal law to all parties in U.S. district court. As a matter of trade policy and intellectual property policy, it seems logical to limit access to forms of additional relief, at least on a discretionary basis, to those entities that engage in certain specific activities, such as manufacturing, in the United States. Neither Section 337 nor the USPTO discretionary considerations restrict or guarantee access to relief based on the nationality of the petitioner. These actions, however, have some differences. For example, in a Section 337 investigation, patent infringement and patent validity are addressed in the context of issuing a trade remedy and, therefore, do not have preclusive effect in district court.[xii] IPR and PGR proceedings may result in a finding of invalidity of a challenged patent that is binding in district court. This distinction will impact how these discretionary considerations are perceived particularly in comparison to the domestic industry requirement of Section 337.
The USPTO has taken important steps to eliminate or at least limit the apparent abuse of IPR and PGR proceedings by high volume filers. The additional discretionary considerations adopted by the USPTO seek to reign in these abuses by imposing what might be considered a domestic industry standard similar to that required in Section 337 investigations.
[i] America First Trade Policy Memorandum § 2(c) (Jan. 20, 2025).
[ii] Radian Memory Sys. LLC v. Samsung Elecs. Co., Civil Action No. 2:24-CV-01073, Statement of Interest (E.D. Tex. June 24, 2025); Collision Communications, Inc. v. Samsung Electronics Co. Ltd, et al, Civil Action No. 2:23-cv-00587-JRG, Statement of Interest (E.D. Tx. Feb. 27, 2026).
[iii] Dani Kass, Still No Shenanigans: Fed. Circ. Keeps Review Bar High, Law 360 (March 19, 2026).
[iv] John A. Squires, Director, USPTO, Memorandum – Additional Discretionary Institution Considerations – U.S. Manufacturing and Small Business Use of AIA Proceedings, (USPTO, Mar. 11, 2026) (USPTO Memorandum).
[v] Id.
[vi] Id.
[vii] China continues to produce over 95% of Apple’s products, TechNode Feed, (Oct. 23, 2023); (“Last week, Apple CEO Tim Cook visited Luxshare Precision, a Chinese electronic components manufacturer in Zhejiang Province, China. During his visit, Cook asserted that over 95% of Apple’s products are still manufactured and assembled in China.”).
[viii] USPTO Memorandum at 1.
[ix] 19 U.S.C. § 1337(a)(2)-(3).
[x] 19 U.S.C. § 1337(a)(1).
[xi] USPTO Memorandum at 2.
[xii] Texas Instruments Inc. v. Cypress Semiconductor Corp., 90 F.3d 1558, 1568-69 (CAFC 1996)