By Ian Lewis, Head of Intangible Assets, Arch Insurance International
This was first published by Commercial Risk
Recent changes to patent policy in the United States are set to change the dynamic in litigation and increase companies’ exposure to patent infringement suits. The changes result from a more pro-patent approach from the current Administration, which seeks to reverse some of the main trends in US patent policy over the past decade.
New Director at the Helm
The US Patent and Trademark Office (USPTO) swore in a new Director in September 2025, John A Squires, an experienced intellectual property (IP) lawyer and now leader of an organisation with nearly $5 billion in annual revenue.
As well as overseeing the granting of patents and trademark rights, the USPTO Director advises the Secretary of Commerce and the President on matters relating to IP policy, advancing US innovation and US global competitiveness.
This change in leadership has resulted in the US Administration adopting a strongly pro-patent position, pledging to tackle the backlog in US patent applications. In his Senate confirmation hearing in May, Squires said: “We benefit as a society from patents ‘born strong,’ beginning with the original patent grant.” Moreover, in his first official act as USPTO Director, Squires signed into issuance one patent in the field of distributed ledger/crypto technologies, and another in the field of medical diagnostics, saying: “I wanted to send a clear message with the first two patents issued on my watch: the US Patent Office is open for business, especially for the technologies of tomorrow.”
Changes to the US Patent System
Changes are being made to patent policy in the US that could have significant implications for patent holders, in particular relating to the Patent Trial and Appeal Board (PTAB). Set up in 2012, the PTAB serves as a body to hear cases concerning the validity of patents and importantly handles so-called Inter Partes Review (IPR) proceedings in which third parties can challenge the validity of granted patents on the grounds that the patent claims lack novelty and/or are obvious.
The PTAB has widely been seen as leading to more US patents being invalidated, as it offers a more predictable and cost-effective way for defendants to invalidate patents compared to district court litigation. However, two recent changes have been proposed that will likely make it harder to challenge the validity of patents in PTAB proceedings.
Firstly, the USPTO published new rules of practice which will focus IPR proceedings “on patent claims that have not previously been challenged in litigation or where prior litigation was resolved at an early stage”. This change will create an additional hurdle for patent challengers, restricting access to the IPR process.
Secondly, the USPTO Director announced that he will personally determine whether to institute trial in IPR proceedings, something that had previously been delegated to the PTAB.
These two changes will likely result in fewer IPR petitions being made, leading to more patents being maintained and asserted in the US.
Increased Risks for Businesses
So, what does this mean for businesses? The changes recently made at the USPTO will lead to greater uncertainty for businesses in the short- to medium-term and could lead to more patent infringement trials being brought and greater pressure on defendants to settle claims.
There may also be further changes coming to support this pro-patent agenda. For example, the USPTO is exploring using AI tools to improve efficiency in patent granting, which could lead to more grants being issued.
In this new environment, it is imperative to prepare for and manage potential risks arising from patent infringement. For patent owners, that includes ensuring appropriate levels of insurance coverage to protect against the costs of defending any challenges.
For any business (whether or not they own IP rights) it could mean obtaining a policy to cover legal fees and damages arising from infringing a third-party’s intellectual property, as well as business interruption loss caused by an injunction.
Additionally, with a more pro-patent approach being taken in the US, businesses may also consider purchasing IP enforcement coverage to protect against the often substantial costs that can be incurred when the need arises to assert their IP rights against infringers.
Many US patent cases are heard by juries; damages awards can be very high and, whatever the outcome, legal fees are also likely to be significant. Recent and potential further changes in the US could ultimately lead to greater exposure to businesses. Now is therefore a good time to review coverage and consider relevant IP insurance.