You Had Your Chance: Director Squires Slams the Door on Second-Bite IPR Petitions

Article

June 2026

By: Greg Cordrey

Background

In a precedential Director discretionary denial issued May 14, 2026, USPTO Director John A. Squires denied institution of inter partes review in Magnolia Medical Technologies, Inc. v. Kurin, Inc., holding that Magnolia Medical's petition was an improper attempt to re-litigate invalidity after having had the opportunity to contest validity in district court on the same grounds raised in its petition. Notably, Magnolia Medical's invalidity expert had been excluded from trial for failing to disclose the claim construction underlying his opinions, a deficiency the Director noted was entirely within Petitioner's own control. Magnolia Medical filed its IPR petition shortly after that preclusion order, arguing that because no tribunal had actually ruled on the merits of its section 102 and 103 arguments, the PTAB should fill the void. Director Squires rejected that argument flatly.

The Director's Analysis

The denial rests on a straightforward application of congressional intent. The AIA created IPR as a “quick and cost-effective alternative” to district court litigation, not an additional forum for a second bite at the invalidity apple. The Director quoted the House Report's explicit warning against using IPR proceedings as tools for harassment or means to prevent market entry through repeated litigation and administrative attacks.

The operative holding is pointed: having had a full and fair opportunity to litigate validity in district court, Magnolia Medical was not entitled to a do-over at the Office simply because its own litigation failures prevented a merits ruling. The Director was unmoved by the no-forum-has-ruled argument. The relevant question is whether the petitioner had the opportunity to present its arguments, not whether any tribunal ultimately decided them.

The decision also advances Director Squires' broader regulatory framework: IPR is an Article I proceeding aimed at correcting patent office error, not an Article III adjudication of private disputes. As the Director noted, Federal Circuit has confirmed that the Director's institution decision is committed to unreviewable discretion. Apple Inc. v. Squires, 166 F.4th 1349, 1353 (Fed. Cir. 2026) ("Even if certain statutory preconditions for institution are met, non-institution remains within the Director's discretion: No law compels institution.").

Key Takeaways for Practitioners

  1. 1. A prior district court invalidity loss, or a forfeited opportunity to litigate, will likely doom an IPR petition. Petitioners who failed to get their invalidity case before the jury through their own procedural missteps will find no sympathy at the PTAB. The question is not whether the arguments were decided but whether the petitioner had its fair chance.
  2. 2. The U.S. Manufacturing Memorandum is a live factor. Director Squires' March 11, 2026 memorandum directs parties to address American manufacturing and small business considerations in discretionary briefing. Large, non-manufacturing petitioners,  particularly those associated with foreign governments, face additional headwinds.
  3. 3. Discretionary denial briefing must engage the full Squires framework. Patent owners should address prior litigation history, petitioner identity, settled expectations, claim construction consistency across forums, and the public interest in efficient PTAB resource allocation. Petitioners must get ahead of all of these factors proactively, or risk denial on grounds they never addressed.

Bottom Line

This precedential decision makes the PTAB a substantially less attractive backstop for petitioners who raised, or attempted to raise, in district court the invalidity contentions asserted in a petition. If you litigated validity and lost, or lost the opportunity to fully present your invalidity case through your own missteps, the Office is not a safety valve. For patent owners, this decision is a powerful framework for discretionary denial briefing whenever the petitioner has prior district court history on the same patent.

The author is a patent and PTAB trial lawyer at Stradling Yocca Carlson & Rauth LLP. For more information, contact Greg Cordrey at 949.725.4151 or gcordrey@stradlinglaw.com.