IP Law Daily, PATENT—Fed. Cir.: Apple loses challenge, PTO director’s instructions exempt from notice-and-comment rulemaking procedures, (Feb 13, 2026)

By Jonathan Anderson

The decision stems from litigation brought by Apple challenging the director’s instructions to the board to not institute inter partes review proceedings.

The Patent and Trademark Office (PTO) director was exempt from notice-and-comment rulemaking procedures when instructing the Patent Trial and Appeal Board (PTAB) to not institute inter partes review (IPR) proceedings, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit has held in a precedential decision. Affirming a lower court, the panel found that the instructions were a general statement of policy expressly exempted by statute. The court reasoned that the challenged instructions were not binding on the director and that Apple had no right to an IPR. Further, the court said substantive rules must have the force and effect of law, but the challenged instructions led to non-institution decisions that lacked the force of law (Apple Inc. v. Squires, No. 24-1864 (Fed. Cir. Feb. 13, 2026)).

Background. The case stems from instructions the director issued to PTAB for its exercise of delegated non-institution authority addressing the situation of when an IPR petitioner and patentee are already involved in district court litigation over a patent. Two of the challenged instructions, which are the most relevant to the decision, were in the form of precedential PTAB decisions to govern later board decisions.

The principal issue before the court was whether the challenged instructions were a substantive/legislative rule or a general statement of policy. The U.S. Supreme Court has held that notice-and-comment requirements apply only to legislative or substantive rules. Lincoln v. Vigil, 508 U.S. 182, 196 (1993). Further, 5 U.S.C. § 553(b) expressly excludes “interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice” from notice-and-comment procedures unless another statute requires them.

The district court held that the challenged instructions were a general statement of policy rather than a substantive or legislative rule, and that the director was not required to conduct notice-and-comment rulemaking. Apple appealed.

Analysis. The governing standard for a substantive/legislative rule is: “Legislative rules alter the landscape of individual rights and obligations, binding parties with the force and effect of law.” In contrast, general statements of policy are pronouncements that lack the force and effect of law and are merely “statements issued by an agency to advise the public prospectively of the manner in which the agency proposes to exercise a discretionary power.” Applying that distinction to the challenged instructions, the court concluded that they “are on the statement-of-general-policy side of the line.”

Binding effect. First, the court found that the challenged instructions were not binding on the director, nor did they purport to bind the director. Rather, the director could always make the relevant decision personally whether PTAB made an initial decision. The challenged instructions merely inform PTAB how it should exercise the director’s discretionary power. Although the director has in the past generally not displaced the initial PTAB decisions, the court said that fact does not mean the director has effectively treated those decisions as binding.

Nature and statutory treatment. Second, the court found that the “nature and statutory treatment of the decision that is the subject of the challenged instructions... further confirm that the instructions” do not require notice and comment under 5 U.S.C. § 553(b). The court noted that Apple has no right to an IPR, and that the director “has broad and protected discretion not to launch an IPR, even when the statutory preconditions are present.” The exercise of such discretion is protected from judicial review, which the court said strongly indicates that the challenged instructions are statements intended to advise the public of the manner in which the agency proposes to exercise discretionary power.

Force and effect of law. Third, the court noted that substantive rules must have the force and effect of law with respect to “individual rights and obligations.” A non-institution decision “is protected as a matter of unreviewable discretion” and “leaves a patent challenger’s actual legal rights and obligations unchanged.” Such a decision, the court said, “has no legal effect on the underlying patent rights and obligations.”

Apple’s citations differ materially from present case. Fourth, the court responded to Apple’s contention that the D.C. Circuit held in various cases that agencies violated § 553 by not using notice-and-comment procedures. The court found that those decisions “involved issues or circumstances that differed materially from those present in this case.”

The Case is No. 24-1864.

Judge: Taranto, R.

Attorneys: Mark Christopher Fleming (Wilmer Cutler Pickering Hale and Dorr LLP) for Apple Inc. Weili J. Shaw, U.S. Department of Justice, for John A. Squires.

Companies: Apple Inc.

Cases: Patent FedCirNews TechnologyInternet GCNNews