The USPTO has prompted increasing pushback over recent changes that have expanded the use of discretionary denials at the Patent Trial and Appeal Board (PTAB) over the past year. As 2025 came to a close, the Federal Circuit denied a series of mandamus challenges to those practices, declining to find violations of due process or other procedural rules through some of those changes. Now, a new mandamus petition filed by Volkswagen (VW) takes a different approach based on the separation of powers, arguing that the USPTO director's unfettered discretion over America Invents Act (AIA) review institution is an unconstitutional delegation of Congress's authority to grant patents.
– Changes at the PTAB—and Earlier Mandamus Denials
The aforementioned changes have encompassed the processes and substantive factors governing institution at the PTAB and began in early 2025: In February, then-Acting USPTO Director Coke Morgan Stewart withdrew guidance issued in 2022 by former USPTO Director Kathi Vidal that had limited discretionary denials based on the status of parallel litigation under the NHK-Fintiv rule. Soon after, Stewart implemented an interim two-stage process in which she would decide requests for discretionary denial, rather than a panel of PTAB administrative patent judges (APJs) making that determination. Under that interim process, Stewart followed an approach allowing discretionary denials based on a broader set of factors—including a controversial one allowing denials for petitions against patents longer in force based on the "settled expectations" of the parties. Only if Stewart determined no discretionary denial was warranted would the acting director then refer the petition to a PTAB panel for consideration of the merits and nondiscretionary factors.
Then, on October 17, recently confirmed USPTO Director John Squires announced that he would now handle the entire AIA review institution process, including both discretionary denials and the merits/nondiscretionary factors—making those determinations with no accompanying written decisions in most cases. Squires explained that the new process was necessary in part to eliminate the "appearance of self-interest" resulting from workload structures that based APJs' compensation in part on the number of trials they instituted, and to "[e]nhance transparency and public trust through a single line of authority".
The changes made by Stewart prompted a series of mandamus petitions from petitioners with IPRs denied under the updated standards. On November 6, the appellate court denied three such petitions from Motorola Solutions, SAP, and Alphabet (Google) and Samsung, rejecting arguments that by withdrawing the Vidal guidance and applying more restrictive standards retroactively, the agency violated the petitioners' due process rights, also declining to hold that the changes were procedurally invalid for being implemented without notice-and-comment rulemaking.
The Google/Samsung and SAP petitions additionally argued that by exceeding the bounds of statutory provisions concerning estoppel, the changes violated the separation of powers. However, only the decision on the former petition addressed the issue, doing so by sidestepping it—holding instead that the petitioners had misconstrued the PTAB's underlying argument, and explaining that the Board's decision was based on efficiency concerns rather than on the estoppel provisions at issue.
Then, on December 9, the appellate court applied similar reasoning with respect to due process and procedural violations to reject an additional trio of petitions, including two (one filed by SanDisk Technologies and Western Digital, and the other by Cambridge Industries) protesting the "settled expectations" factor and another (filed by HighLevel) that fought a Fintiv denial based on a district court's invalidation of the patent at issue under Alice.
– VW's Mandamus Petition
Seven mandamus petitions challenging various aspects of the USPTO's discretionary denial changes remain pending, including the one just filed by VW (which stemmed from Stewart's denial of a VW IPR petition due to "strong settled expectations" based on the age of the challenged patent). However, while a petition from Tesla invokes separation of powers and related issues at a relatively high level, VW's is the only one that squarely deals with this issue.
VW's petition focuses in particular on the principle that the USPTO has frequently used to justify its expansion of discretionary denials: that under cases like Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals (Federal Circuit 2018), the director has "complete discretion" to deny IPR. VW explains that the USPTO has used this principle to justify shielding from appellate review, under 35 USC § 314(d), the director's creation of "discretionary considerations like 'settled expectations' to justify denying a petition that otherwise satisfies the statutory requirements for institution".
The constitutional problem here, VW explains, stems from the nondelegation clause: Article I, Section I provides that all legislative powers are vested in Congress, and Supreme Court precedent (including the Court's 2019 decision in Gundy v. United States) establishes that this assignment of power to Congress is accompanied by a bar on further delegation of that power. Under that precedent as subsequently applied by the Supreme Court (including its 2025 decision in FCC v. Consumers' Research), for Congress to "'vest[] discretion' in executive agencies to implement and apply the laws it has enacted", it must set forth an "intelligible principle" to guide the agency in doing so. If Congress has in fact given the USPTO director "unbounded authority" over institution, then VW argues that no such "'intelligible principle' exists, and that delegation of power violates the separation of powers under the nondelegation doctrine".
VW asserts that the nondelegation doctrine is indeed implicated here, first because a delegation of legislative authority has occurred in the context of AIA review: The Constitution gives Congress the authority to grant patents by statute, and Congress has delegated that authority to the Executive Branch, subject to the public's "paramount interest in seeing that patent monopolies . . . are kept within their legitimate scope". The petitioner further argues that IPR "involves the same basic matter as the grant of a patent" (as characterized by the Supreme Court in its 2018 Oil States Energy Services v. Greene's Energy Group decision, which more broadly upheld the constitutionality of IPR) and, as interpreted by the Supreme Court in Cuozzo Speed Technologies v. Lee, was created both to resolve patent disputes between parties and protect that same public interest in "keeping patent monopolies within their legitimate scope".
Notably, the company also contends that by forcing petitioners to instead litigate validity claims in district court, the director's "settled expectation" practice further amounts to a delegation of Congress's ability to determine which "actions are entitled to Article III proceedings with a jury trial" and which are instead assigned to "agency adjudication" under the Fifth Circuit's May 2022 panel decision in Jarkesy v. Securities and Exchange Commission (SEC) (affirmed on other grounds in 2024 by the Supreme Court, in SEC v. Jarkesy).
Second, VW addresses whether Congress has provided an "intelligible principle" sufficient to guide the USPTO (and its director) in the application of the delegated patent grant power via IPR.
VW explains that under Supreme Court precedent, a law contains such an "intelligible principle" if Congress has made clear both what "general policy" the agency must follow and "the boundaries of [its] delegated authority" (citing Consumers' Research). This is because Congress must "provide[] sufficient standards" that allow courts and the public to ascertain whether an agency has "followed the law" (also citing Consumers' Research), given that access to the courts protects private rights to "test the application of the policy in the light of these legislative declarations" (citing the Supreme Court's 1946 decision in American Power & Light v. SEC).
The AIA provides no such intelligible principle as currently interpreted by the courts, VW argues: The law establishes the threshold for institution (in 35 USC § 314(a)) and details certain scenarios in which the director may not institute (in particular, highlighting provisions barring IPRs from petitioners that have first filed declaratory judgment actions challenging validity, under § 315(a)(1); barring defendants from filing IPRs more than one year after being served with a district court complaint, § 315(b); and rules governing estoppel for IPRs against claims with final PTAB validity decisions, § 315(e)(1)). However, apart from those limits, it gives the director the "discretion not to institute even when the threshold is met" and "does not address any other issue relevant to an institution determination otherwise met" (citing the Federal Circuit's 2018 decision in Wi-Fi One v. Broadcom).
As such, VW observes, the director may "unilaterally decide the circumstances in which it will or will not resolve the parties' patent-related disputes, and honor or not the public's interest in keeping patent monopolies within their legitimate scope"—thereby creating "a monster which rules with no practical limits on its discretion".
Though VW acknowledges that the nondelegation doctrine has rarely been invoked to invalidate a statute, it points to three decisions in which courts have done so for statutes that gave a similarly unlimited level of discretion to an executive branch decisionmaker. First, in A.L.A. Schecter Poultry Corp. v. United States (1935), the Supreme Court did so for a statute because it granted the president "virtually unfettered" discretion "in approving or prescribing codes, and thus enacting laws for the government of trade and industry throughout the country". Second, in Panama Refining Company v. Ryan (1935), the Supreme Court invalidated another statute because it gave the president the power to prohibit petroleum transportation but "'established no standard,' 'laid down no rule,' and provided no requirement or 'definition of circumstances and conditions in which the transportation [was] to be allowed or prohibited'", thus giving the president "unlimited authority to determine the policy and to lay down the prohibition, or not to lay it down, as he may see fit". Third and most recently, in 2022, a Fifth Circuit panel—in the aforementioned Jarkesy decision—invalidated the statute at issue, concerning which subjects of SEC "enforcement actions are entitled to Article III proceedings with a jury trial, and which are not", because it gave the agency "no guidance whatsoever" (emphasis in original).
Per VW, it is "[e]ven worse" that Congress barred appellate review of the director's institution decisions in § 314(d), a prohibition that the Federal Circuit has extended to substantive matters under the director's institution discretion:
Accordingly, not only did Congress fail to provide a general policy for the Director to follow or boundaries to constrain the Director's authority, but petitioners do not even have "access to the courts" to ensure the Director complies with the Administrative Procedure Act when considering their petitions. . . . All petitioners can do is pay their nonrefundable filing fee and hope the Director feels like reviewing the merits.
(Citation omitted.) This is particularly significant, VW argues, given the "profound" economic impact that IPRs can have, with "[b]illions of dollars at stake" (as noted in the Supreme Court's 2021 opinion in Arthrex v. United States) that can turn on a PTAB decision.
VW also argues that certain other statutory limits related to institution do not provide the necessary intelligible principle. More specifically, while the petitioner acknowledges that the AIA requires the USPTO to prescribe regulations governing various facets of AIA review (35 USC § 316(a)-(b)), it notes that the agency has asserted that these provisions do not require it to prescribe regulations over the director's institution discretion. Similarly, VW observes that the USPTO has contended in a recent appeal that § 325(d)—which concerns discretionary denials where the agency has previously considered the asserted prior art or arguments—provides "no actual limitations" on the director's discretion to institute.
VW then argues that the fact that Squires has still continued to institute a small number of IPRs does not "cure the constitutional defect", as this is a self-imposed limit—while the director could simply choose to drop "settled expectations" and even "deny[] all petitions as a matter of policy" under the "current interpretation of the law".
Per VW, the cure for this constitutional defect is to bring the institution power "back within Congressional guidelines", by construing § 314 to allow the director to "deny institution only when a statute permits such discretionary denial"—and to prohibit denial for "nonstatutory reasons" like "settled expectations". VW observes that the already-permitted statutory grounds for denial include nondiscretionary factors, such as the "reasonable likelihood of success" threshold for institution as well as the aforementioned bar based on prior district court validity challenges, the one-year statutory bar, and IPR estoppel. "Most critically", VW underscores, § 325(d) gives the director discretion to deny based on previously considered art or arguments. VW contends that its proposal "gives meaning" to statutory discretionary factors like 325(d), which it argues would otherwise be "superfluous under the agency's broader interpretation" that gives the director unlimited discretion.
Finally, VW argues that mandamus review is justified here. The company asserts that it has no other means of relief available to it because of the bar on direct appeals of institution-related decisions, while raising the nondelegation issue during the PTAB proceedings below would have been futile given prior Board rulings declining to address that issue. VW also contends that the issue of whether the director has complete discretion is sufficiently "important and unsettled" to render a writ of mandamus appropriate under the circumstances—pointing in part to the more than 11K comments that the USPTO received in response to an October 2025 rulemaking proposal that would further expand the potential bases for denying IPR.
For more on some of the most notable of those public comments, see "Stakeholders Spar over USPTO Proposal to Limit AIA Reviews" (December 2025). Additional details on the USPTO's rulemaking proposal, and on the various other changes made by Squires to the institution process, can be found at "PTAB Rule Revamp: Director Takes Over Institution; Proposal Restricts IPRs with Parallel 102/103 Challenges" (October 19, 2025).
Lastly, see RPX's fourth-quarter review for more on the impact of the new Squires-led institution process, and other changes impacting the PTAB.
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