USPTO Director Squires Ends AI Patent Wars - But Courts Haven't Surrendered

The Patent and Trademark Office has fundamentally altered its approach to artificial intelligence patent applications under Director John Squires, dismantling nearly a decade of restrictive examination practices. But this administrative détente runs headfirst into federal courts that show no appetite for similar accommodation.

The Squires Doctrine

Since taking office in September 2025, Squires has systematically reversed the USPTO's adversarial stance toward AI patents. The August 2025 Kim Memo instructed examiners to abandon categorical "mental process" rejections for machine learning algorithms that process volumes of data beyond human cognitive capacity. An appeal panel decision soon after vacated a board rejection and stressed patentability of improvements in ML model operations.

Most significantly, the November 2025 guidance rescinded the Biden administration's February 2024 framework that allowed broader AI inventorship consideration. The new policy treats AI systems as "tools only" and eliminates any special eligibility analysis for AI-assisted inventions. As Squires put it: "The USPTO is open for business, not only for the technologies of today, but especially for those of tomorrow."

The practical impact is immediate. Patent applications that required extensive prosecution workarounds under prior guidance now face streamlined examination. Claims previously deemed "too abstract" may find clearer paths to protection. The office extended its AI-driven prior art search pilot through June 1, 2026, waiving petition fees and doubling intake targets to 3,200 applications.

The Federal Circuit Holds the Line

Courts are unmoved by this administrative pivot. The April 2025 Recentive Analytics decision confirmed that improved accuracy or efficiency through machine learning "does not transform an abstract idea into patent-eligible subject matter under § 101." The Federal Circuit stressed that generic computing functions and high-level algorithmic references remain vulnerable regardless of USPTO approval.

This creates a dangerous divergence. Patents granted under Squires' relaxed standards face aggressive validity challenges once they reach federal court. Early motion practice targeting AI patents has become routine, with district courts applying strict Alice/Mayo analysis that the USPTO now avoids.

Strategic Implications

The split demands careful navigation. Companies whose AI patent strategy was shaped by years of hostile USPTO examination should reassess filing decisions. Technology previously deemed too abstract may now warrant protection efforts. But claims must still satisfy eventual court scrutiny.

Successful AI patent prosecution in 2026 requires drafting for two audiences: USPTO examiners operating under Squires' guidance and federal judges applying unchanged Federal Circuit precedent. Focus on specific technical improvements rather than generic automation. Detail how claimed inventions integrate abstract concepts into practical applications. Generic computing or high-level algorithmic descriptions remain lethal in court, regardless of USPTO approval.

The office's new Subject Matter Eligibility Determination (SMED) procedures allow applicants to submit objective evidence addressing § 101 rejections. While optional, these submissions may strengthen prosecution records and bolster issued patents against future court challenges.

The Supreme Court's Shadow

The March 2026 denial of certiorari in Thaler v. Perlmutter eliminated any near-term Supreme Court intervention on AI authorship questions. With no higher court guidance forthcoming, the USPTO-Federal Circuit split will persist.

Congress continues to consider the Patent Eligibility Restoration Act, which could roll back Alice's impact. But legislative solutions remain speculative.

What's Next

The immediate window for AI patent filings under relaxed USPTO standards closes June 1, when the ASAP pilot programme ends. Companies should evaluate whether pending or planned applications can use current examination practices.

But remember: patents are only as valuable as their enforceability. A grant from the USPTO under Squires' guidance provides no immunity from Federal Circuit invalidation. The real test comes not at the examiner's desk, but in federal court.

Squires has ended the USPTO's AI patent wars. Courts are fighting a different battle entirely.