For the last decade, the in-house playbook for defending against patent assertion was clear: file an Inter Partes Review (IPR) and let the Patent Trial and Appeal Board (PTAB) handle it.
Welcome to 2026. That playbook may be officially obsolete.
Based on recent decisions and rhetoric, the takeaway for General Counsel and IP Directors is stark: The administrative state has moved faster than Congress ever could, and the era of the PTAB as a reliable shield is over.
Here is your executive briefing on the state of US patent policy in 2026.
The PTAB Is No Longer the Safety Valve It Once Was
The most consequential development in patent policy isn't a new law—it's administrative action.
Under Commerce Secretary Howard Lutnik and USPTO Director John Squires, the agency has effectively transformed PTAB institution decisions. Director Squires has personally reclaimed authority over whether to institute IPR proceedings, breaking with decades of practice where directors delegated these decisions to administrative patent judges.
The numbers tell the story: recent data shows that out of dozens of institution decisions reviewed by the Director, the institution rate has dropped to near zero.
The "Zero-Institution" Reality
The USPTO appears to be exercising broad discretion beyond the statutory factors Congress established for institution decisions. For petitioners, this means IPR—once a faster, cheaper alternative to district court invalidity challenges—may no longer be a viable path.
What this means for in-house counsel: If your defensive playbook assumed you could challenge a competitor's patent through IPR for a fraction of district court costs, update your budgets and strategy. The district court is now the primary—and often only—battleground.
Understanding "Settled Expectations"—The New Gatekeeping Doctrine
The USPTO has introduced a theory called "settled expectations" to justify discretionary denials. The basic premise: if a patent has been in force for a significant period (the threshold appears to be around six years), the owner has developed a reasonable expectation that the patent is valid and enforceable.
This doctrine now serves as grounds to deny institution even when the underlying prior art challenge may be strong.
Critics argue the standard lacks nuance. Patents that sat dormant for years without being commercialized or licensed are receiving the same protection as actively enforced patents with robust licensing histories. And the "one and done" approach—barring review if a patent was previously challenged at the PTAB by any party—raises due process concerns that would never fly in district court litigation, where different defendants can raise validity challenges independently.
For portfolio holders: This is favorable terrain. Your older patents now carry significantly more defensive weight.
For frequent defendants: Don't expect IPR to rescue you from an infringement suit involving an established patent. Plan for full district court litigation.
Why Congress Hasn't Fixed This (And Probably Won't Soon)
If the administrative changes seem to have outpaced legislative reform, that's because they have.
The PREVAIL Act, which would have reined in PTAB, narrowly passed the Senate Judiciary Committee last Congress—by a single vote. But House leadership holds fundamentally different views on patent policy, making floor passage unlikely. The PERA Act, addressing Section 101 patent eligibility, faces an even steeper climb. The underlying legal concepts—abstract ideas, laws of nature, the boundaries of patentable subject matter—are notoriously difficult to explain to legislators and staff who didn't come to Washington to work on patent issues.
There's also a structural problem. Patent policy is one of the few genuinely bipartisan areas in Washington—staffers from opposing parties regularly form close working relationships on IP issues. But "bipartisan" doesn't mean "consensus." The stakeholder community remains deeply divided between patent owners and those who face patent assertions, and without a forcing event, legislation stalls.
The forcing event prediction: Industry observers expect a "patent war" within roughly five years. The theory: without PTAB as a check on patent quality, billion-dollar verdicts will start accumulating, C-suite executives will get involved, and only then will Congress act. History suggests this pattern may repeat—the America Invents Act followed a similar trajectory after years of escalating patent litigation.
The 5-Year Forecast: A Looming "Patent War"
With the PTAB neutralized, where does the pressure go? We predict a patent war roughly five years from now.
Without the check of the PTAB, district court litigation will explode. We are likely heading toward an era of multi-billion dollar verdicts.
The Trigger: It will likely take a catastrophic verdict against a major US company to force CEOs to march to Washington and demand a legislative reset.
The Strategy: Until then, in-house counsel must budget for expensive district court litigation. The "cheaper, faster" administrative off-ramp is closed.
Practical Advice for In-House Counsel
How do you advocate in this environment?
Stop Sending Lobbyists: If you need to influence the current administration, sending a DC lobbyist to talk about "innovation ecosystems" won't work.
Send the C-Suite: You need to send your CEO or General Counsel. The administration is listening to a very small circle (roughly "six or seven people").
Tell a Sympathetic Story: Don't talk about how much litigation costs your company (especially if you are Big Tech). Talk about the specific R&D facility in the member's district that is at risk. Talk about the tangible jobs being threatened by foreign-funded litigation.
Wild Cards Worth Monitoring
The Patent Tax Proposal
Reports have surfaced that Secretary Lutnik floated the idea of taxing patent value as an asset. Most observers view this as administratively impractical—how do you value over 3.5 million patents currently in force? The idea hasn't disappeared, however. Some companies might actually support a higher tax rate on litigation judgments specifically, where valuation is straightforward, but broad asset taxation remains speculative.
China Restrictions
One area where bipartisan legislation might actually move: restricting Chinese entities on the Commerce Department's entity list from obtaining or asserting U.S. patents. Representative Fitzgerald's bill has gained quiet traction. With the rules-based trading system already disrupted by tariff actions, concerns about treaty violations (such as TRIPS obligations) carry less weight than they once did.
Senator Tillis's Final Push
Senator Thom Tillis, one of the Senate's most engaged members on IP issues, is retiring at the end of this Congress. Expect him to push hard for movement on PERA or other reform measures before he leaves. Whether he can build the necessary coalition remains uncertain, but motivated members in their final term sometimes find creative legislative paths.
What In-House Counsel Should Do Now
1. Reassess your IPR assumptions. If pending matters rely on PTAB proceedings, develop contingency plans for full district court litigation.
2. Update litigation budgets. District court patent cases are more expensive and take longer than IPRs. Finance needs realistic projections.
3. Revisit M&A due diligence frameworks. Patent validity assessments should now account for near-zero IPR institution rates on established patents. The "settled expectations" doctrine changes how you evaluate target company exposure to patent risk.
4. Consider direct engagement. Personal stories from constituents move congressional offices more than lobbying campaigns. If your company has a compelling narrative about how patent policy affects your business, R&D investment, or local facilities, that message can resonate—especially when delivered directly to your representatives rather than through intermediaries.
5. Watch the oversight hearings. Director Squires will eventually testify before Senate and House Judiciary committees. The questions from members who voted for the America Invents Act—and expected the PTAB to function as designed—will signal where policy may head next.
The Bottom Line
The patent system is in flux. The PTAB, which the patent owner community once called a "death squad," has been effectively neutralized through administrative action rather than legislation. Congress is unlikely to act absent a crisis. And the current administration has significant runway remaining.
For in-house counsel, the winners in this environment will be those who adapt now rather than waiting for clarity that may not come. The cost of assuming the old rules still apply could be measured in eight-figure verdicts.