Apple v. Squires: No Right to Institution

Apple argued that the instructions telling the Board when to deny inter partes review for discretionary reasons were legislative rules, and so invalid because the USPTO never put them through notice-and-comment rulemaking. The Federal Circuit disagreed. The instructions are a general statement of policy, which the Administrative Procedure Act expressly exempts, and the court went further: Congress provided no legal right to institution at all, so a petitioner who satisfies every statutory prerequisite still has no entitlement to a trial. For anyone planning a challenge, that means the discretionary case is not a formality attached to the merits. It is a separate case, and it can be lost on its own.

What Apple Argued, and What the Court Answered

Seeking relief under the Administrative Procedure Act, Apple asserted that "the instructions led to too many non-institution decisions" and attacked them on three grounds: contrary to the statute, "arbitrary and capricious", and issued without notice-and-comment. This page covers the ground the court resolved on appeal, the third.

The statutory hook is section 553(b)'s express exclusion of "interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice" from notice-and-comment procedures. The court held, "in agreement with the district court, that the Director" 's instructions are a "general statement of policy" and so "exempted from notice-and-comment rulemaking" by the express terms of the section. Applying the policy-versus-legislative-rule distinction, the instructions "are on the statement-of-general-policy side of the line".

The operational test is what the pronouncement does to the decisionmaker, not how much it affects outcomes. Apple's strongest fact was that institutions fell sharply after the instructions issued. The court treated that as beside the point: instructions to a delegatee about how to exercise discretion remain policy however much they change results.

The Sentence With the Longest Reach

That is what makes the discretionary stage described on the companion page consequential rather than procedural: there is no backstop entitlement underneath it. A petition built only as a prior-art document is incomplete. The discretionary case needs its own budget, its own evidence and its own argument, because it can be lost while the merits are strong.

The decision also forecloses the most natural administrative-law attack on whatever discretionary framework is in force. An argument that instructions changing outcomes this much must be legislative rules is the argument this court rejected.

What the Opinion Leaves Open

• It addressed the NHK-Fintiv instructions, not every feature of the process in use today. The framework the Office applies now post-dates the instructions Apple challenged; the reasoning is broad enough to reach it, and the opinion does not say so.
• "Congress provided no legal right to institution" is stated, and its limits are not explored. The opinion does not address what, if anything, would make a denial reviewable.
• The other two grounds Apple raised, contrary to statute and arbitrary and capricious, are not covered on this page.
• No subsequent history was checked after the record date above.

What This Does Not Decide

• It does not say whether any particular petition will be instituted.
• It does not say whether a specific discretionary denial was lawful.
• It says nothing about patentability.

Educational, not legal advice. This page reports what an authority says. Applying it to a matter is work for a registered practitioner with the file in front of them.