Overview
USPTO Director John Squires recently issued a precedential decision in Magnolia Medical Technologies, Inc. v. Kurin, Inc. (“Magnolia Decision”)[1], denying institution of an inter partes review and providing an outline of the policy considerations for the Director’s discretion to institute or deny inter partes review (IPR) and post-grant review (PGR) challenges before the Patent Trial and Appeal Board (PTAB). Beyond the case‑specific outcome, the decision offers a broader explanation of how the Office is approaching discretionary denials, particularly in light of the America Invents Act’s purpose and the public‑interest factors the Director weighs. In the Decision, the Director outlined several factors that he considers when deciding institution:
AIA Reviews Are Intended as a Litigation Alternative—Not a Second Bite at the Apple
The Director emphasized that Congress created AIA proceedings to provide a quick and cost‑effective alternative to district court litigation—not a second forum for duplicative or strategic invalidity challenges. The legislative history is explicit: AIA reviews should not be used for harassment, market‑entry delay, or repeated attacks on a patent.
According to the decision, fifteen years of data show that most AIA petitions arise in the shadow of parallel district court litigation. While this alone is not improper, the Director noted a growing pattern where petitioners use IPRs to expand litigation rather than streamline it, often asserting overlapping prior art and related arguments in both forums. The Director made clear that he views this trend as undermining the AIA’s purpose.
Misuse of AIA Proceedings Remains a Significant Concern
The decision highlights recurring patterns the Director views as misuse:
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- filing multiple petitions on the same patent without sufficient justification
- filing new petitions after losing in district court, the ITC, or the USPTO
- taking inconsistent positions between the PTAB and district courts
- using IPRs to obtain leverage rather than resolve validity efficiently
The Director pointed to a series of recent precedential decisions addressing these issues and reiterated that the Office will continue to use discretionary denial to prevent abusive practices.
Data Does Not Support Claims That AIA Reviews Are Primarily Used by U.S. Small Businesses
The Director called attention to recent studies showing that high‑volume, market‑dominant companies file the majority of AIA petitions. According to the decision, the top ten petitioners alone filed roughly 1,900 petitions—far more than all small businesses combined. The Director also discussed how more scrutiny is being given to assess whether foreign sovereigns are involved in filings as the U.S. government itself cannot file AIA petitions. This context has led the USPTO to request more transparency from parties on issues like U.S. manufacturing, small‑business status, and whether foreign governments are real parties in interest
AIA Reviews Involve Public‑Interest Considerations, Not Just Private Litigation Interests
Unlike district court litigation, the Director explained that AIA proceedings exist to allow the Office to reconsider its own decisions granting patents, with the underlying purpose of eliminating patents that never should have been granted. The Director further noted that the statutory factors guiding institution—such as the efficiency of the Office, the integrity of the patent system, and broader economic considerations—are public‑facing discretionary considerations that encompass more than just the merits of the case.
Recent Federal Circuit decisions have also recognized the breadth of the Director’s discretion: even when a petition satisfies statutory thresholds, the Director is free to deny institution.
In view of these themes, the Director addressed the specific facts in the Magnolia decision. There, petitioner Magnolia Medical Technologies had already fully engaged in district court validity litigation where the exclusion of expert testimony prevented the district court from reaching anticipation and obviousness validity arguments. The Director noted that the petitioner’s validity arguments were not fully considered in district court due to petitioner’s own nondisclosure, and filing the IPR only after losing in district court indicated an attempt to undo the adverse result through a second forum. The Director reasoned that petitioner had the opportunity to properly raise their validity challenges in district court and was not entitled to a second bite at the apple by filing an IPR.
Allowing this type of follow‑on petition, the Director wrote, is “difficult to square” with Congress’s intent for IPRs. The petition was therefore denied.
Key Takeaways For Practitioners
This decision underscores that how and when a PTAB petition is filed alongside district court litigation can make or break the Director’s institution decision. Practitioners should consider the following:
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- Be able to show the PTAB is a true “alternative” to district court, not occurring in parallel or being filed as a do‑over.
- File early, not only after losing key motions or trial in district court.
- Avoid petitions that look like a reaction to adverse rulings (e.g., expert exclusions, jury verdicts).
- Evaluate the stage of litigation and whether the district court is likely to grant a stay; an IPR that simply adds cost and complexity without any realistic prospect of a stay will be harder to justify.
- Ensure consistency across forums—especially on claim construction. Make sure your experts’ opinions and underlying assumptions (including constructions) are properly disclosed and consistent.
- Use multiple petitions only when there is a clear, articulated need (e.g., large claim sets, distinct prior art groupings), and explain that need in the petition.
- Address public‑interest considerations expressly in discretionary briefing. Where relevant, explain U.S. manufacturing, domestic investment, or small‑business considerations that support institution.
While USPTO policies are ever-evolving at the PTAB, thoughtful attention to these points at the outset can improve the chances that a petition will be viewed as consistent with the AIA’s purpose—and reduce the risk that it will be denied as an improper attempt at a second bite at the apple.
[1] IPR2026-00097 (Paper 17), designated as precedential on May 14, 2026 (https://www.uspto.gov/patents/ptab/decisions-and-opinions/precedential).
