Case Overview
On February 13, 2026, the United States Court of Appeals for the Federal Circuit issued its precedential decision in Apple Inc. v. Squires, Case No. 2024-1864 (Fed. Cir. Feb. 13, 2026), affirming the Northern District of California’s rejection of an Administrative Procedure Act challenge to the U.S. Patent and Trademark Office (USPTO) Director’s NHK–Fintiv instructions.
Apple Inc., Cisco Systems, Inc., Google LLC, and Intel Corporation challenged three sets of instructions issued by the Director of the USPTO to the Patent Trial and Appeal Board (PTAB) governing discretionary denials of inter partes review petitions in light of parallel district court litigation. Two of the instructions were embodied in precedential Board decisions—NHK Spring Co. v. Intri-Plex Technologies, Inc., IPR2018-00752, 2018 WL 4373643 (P.T.A.B. Sept. 12, 2018), and Apple Inc. v. Fintiv, Inc., IPR2020-00019, 2020 WL 2126495 (P.T.A.B. Mar. 20, 2020)—which identified six nonexclusive factors to guide discretionary institution decisions. Slip Op. at 4-5. A third instruction, issued via memorandum, modified the earlier guidance. Id.
The plaintiffs contended that the Director was required to promulgate the NHK–Fintiv framework through notice-and-comment rulemaking under the Administrative Procedure Act, 5 U.S.C. § 553. Slip Op. at 3. After an earlier appeal revived the procedural challenge but not the substantive ones, the district court held that the instructions constituted a “general statement of policy” exempt from notice-and-comment requirements. Id. The Federal Circuit agreed. Id.
Legal Issue Analysis
The central question before the Federal Circuit was whether the challenged instructions were “substantive” or “legislative” rules requiring notice-and-comment rulemaking, or instead “general statements of policy” exempted by 5 U.S.C. § 553(b). Slip Op. at 6.
The Court began by reiterating the statutory framework. Section 553 requires notice-and-comment procedures for substantive rules, but expressly exempts “interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice.” 5 U.S.C. § 553(b). Citing Chrysler Corp. v. Brown, 441 U.S. 281, 301 (1979), the Court emphasized that “[t]he central distinction among agency regulations found in the APA is that between ‘substantive rules’ on the one hand and ‘interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice’ on the other.” Id.
The Federal Circuit reaffirmed its own articulation of the standard: “Legislative rules alter the landscape of individual rights and obligations, binding parties with the force and effect of law.”Slip Op. at 12 (citing Stupp Corp. v. United States, 5 F.4th 1341, 1352 (Fed. Cir. 2021)). By contrast, general statements of policy “do not have the force and effect of law” and merely advise the public prospectively how the agency intends to exercise discretionary power. Id.
Applying that distinction, the Court concluded that the NHK–Fintiv instructions were not binding on the agency itself. Id. at 13. Critically, “the NHK-Fintiv instructions are not binding on the agency, i.e., on the statutory decisionmaker—the Director.” Id. at 14. The Director, as the official vested with institution authority under 35 U.S.C. § 314(a), retains full authority to decide whether to institute inter partes review and may reverse or supplant Board determinations. Id.
This structural feature proved dispositive. The “critical factor,” the Court explained, is “the extent to which the challenged directive leaves the agency, or its implementing official, free to exercise discretion to follow, or not to follow, the announced policy in an individual case.” Id. Because the Director’s discretion remained intact and unreviewable, the instructions could not be said to bind the agency with the force and effect of law. Id.
The Court further emphasized that Congress provided “no legal right to institution of an IPR.” Id. at 3. Institution decisions are committed to the Director’s discretion and are insulated from judicial review, at least absent constitutional concerns. Id. at 17. In that context, the challenged guidance concerned a quintessentially discretionary, non-enforcement decision.
In language that underscores the breadth of Director discretion, the Court explained that a non-institution decision “leaves a patent challenger’s actual legal rights and obligations unchanged—what they would be if Congress had not enacted the IPR regime.” Id. at 18. Challengers remain free to litigate validity in district court and to pursue reexamination under 35 U.S.C. ch. 30, §§ 301–07. Id. at 19.
Apple argued that the practical effect of Fintiv was to reduce the likelihood of institution and therefore to affect substantive interests. Id. at 16. The Court rejected that reasoning, cautioning against equating Article III injury with the “force and effect of law” required for a legislative rule. Id. at 11. The fact that guidance may influence outcomes does not render it binding in the statutory sense contemplated by § 553. Id. at 17.
The Federal Circuit also distinguished precedent relied upon by Apple, including American Federation of Labor & Congress of Industrial Organizations v. National Labor Relations Board, 57 F.4th 1023 (D.C. Cir. 2023), and General Electric Co. v. EPA, 290 F.3d 377 (D.C. Cir. 2002). In those cases, the challenged measures were found to bind the agency or directly alter statutory entitlements. Id. at 19-20. Here, by contrast, the instructions neither constrained the Director’s authority nor altered any party’s legal status.
Notably, during the pendency of the appeal, the Director rescinded certain guidance and later proposed formal rulemaking that, if adopted, would bind the agency. Id. at 9-10. The Court held that these developments did not moot the case, as the precedential NHK and Fintiv decisions remained in place and could again govern Board action. Id. at 10.
Ruling
The Federal Circuit affirmed the district court’s judgment, holding that the NHK–Fintiv instructions constitute “a ‘general statement of policy’ exempted from notice-and-comment rulemaking procedures by the express terms of § 553(b).” Id. at 3. Because the instructions neither bind the Director nor alter individual rights and obligations, formal rulemaking was not required. Id.
Conclusion and Commentary
The practical significance of Apple v. Squires extends well beyond the procedural question presented. As contemporaneous commentary has observed, the decision reinforces that the USPTO Director’s institution discretion is extraordinarily broad, constrained primarily by constitutional limitations or self-imposed rules rather than by the Administrative Procedure Act’s procedural safeguards.
By framing the NHK–Fintiv framework as internal “instructions” rather than binding norms, the Federal Circuit has effectively insulated a wide range of discretionary institution policies from notice-and-comment challenges. The Court’s reasoning suggests that unless the Director promulgates a rule that binds the agency itself or alters statutory rights, most guidance concerning institution decisions will fall within the “general statement of policy” exception.
For patent challengers, the takeaway is sobering. There is no statutory entitlement to inter partes review, and a denial of institution leaves challengers in substantially the same position they would occupy absent the IPR regime. For patent owners, the decision places them in a stronger position to resist IPR challenges, particularly in parallel litigation scenarios, because the Director retains broad, largely unreviewable discretion to deny institution—and may exercise that discretion through flexible policy guidance rather than formal rules.
The decision also brings doctrinal clarity to what is already occurring in practice under Director Squires’ leadership: centralized control over institution decisions, policy-driven decision-making, and an increased reliance on discretionary denial. Apple v. Squires removes key procedural obstacles and confirms that the Director may shape institution practices with limited judicial oversight. For stakeholders, this indicates that the discretionary denial landscape is not only intact—it is now firmly grounded and likely to remain a defining feature of PTAB practice in the near term.