USPTO Director Bars Foreign State-Owned Companies from Filing IPR Petitions in Precedential Ruling

Just one week after issuing a Memorandum adding new institution factors favoring domestic manufacturing and small business protection (see Steptoe’s recent blog post on this here), USPTO Director Squires issued a precedential decision to further protect U.S. innovation and national security. In a March 18, 2026 decision, the Director ruled that foreign governments, and entities they have a stake in, cannot file inter partes review (IPR) petitions or participate as real parties in interest (RPIs). This extends the Supreme Court’s Return Mail doctrine within the PTAB, which bars U.S. federal agencies from petitioning for AIA reviews, to foreign sovereigns.

The March 18^thdecision denied institution of IPR2025-01579, filed by Tianma Microelectronics against LG Display’s U.S. Patent No. 11,251,394 B2. LG argued that Tianma is affiliated with Aviation Industry Corporation of China (AVIC), a Chinese state-owned aerospace and defense conglomerate on the U.S. Department of Commerce’s Entity List, and Tianma failed to disclose AVIC as an RPI. The Director explained that Return Mail bars a petition when a foreign government is an RPI of a petition because to allow a petitioner to file an IPR on behalf of a foreign government would “create a ready recipe ripe for mischief.” The Director’s goal is clear – to prevent foreign adversaries from using “opaque investment structures … to gain influence over, or access to, U.S. intellectual-property assets and proceedings.” Finding LG’s evidence sufficient to put the RPI issue into dispute and Tianma’s rebuttal declarations lacking substantive documentation, the Director denied institution because of AVIC’s involvement.

The Director continues to use his broad discretion when deciding whether to institute post-grant proceedings. In addition to emphasizing the importance for the PTAB to know who is behind a petition, this ruling complements the March 11^thMemorandum’s focus on protecting domestic manufacturing, by adding a clear national security dimension to discretionary denial practice. Petitioners must now be prepared to demonstrate both independence from foreign sovereign influence and meaningful investment in U.S. production.