USPTO to Consider Extent of U.S.-Based Operations in Deciding AIA Institutions

"the motivation for the announcement is to address the trend over the last few decades of 'substantial segments of the United States's existing manufacturing base-particularly in the electronics and computer industries' having moved overseas."

"the Office will now take into account the following additional factors when deciding which IPRs and PGRs to institute: 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."

"while many stakeholders have maintained that the availability of IPRs and PGRs is crucial to protecting U.S. manufacturers and small businesses, 'the off-shoring trends discussed above have continued, notwithstanding the broad availability of lPR and PGR proceedings for fifteen years.'"

The USPTO issued a memo announcing that the Director will incorporate additional discretionary factors for instituting inter partes reviews (IPRs) and post-grant reviews (PGRs). These new factors address decades of manufacturing offshoring, particularly in electronics and computer industries. The Director will now evaluate whether products involved in proceedings are manufactured or sold in the United States, whether competing products made by patent owners are U.S.-manufactured, and whether the petitioner is a small business facing infringement litigation. This approach aligns with the America Invents Act's requirement that the Director consider effects on the economy, patent system integrity, office administration, and proceeding efficiency.

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