On February 13, 2026, the Federal Circuit issued its long-awaited decision in Apple Inc. v. Squires, No. 2024-1864 (Fed. Cir. Feb. 13, 2026), affirming that the USPTO Director’s NHK-Fintiv framework governing discretionary denials of IPR institution is a “general statement of policy” exempt from notice-and-comment rulemaking under 5 U.S.C. § 553(b).
The opinion closes what many viewed as the final viable Administrative Procedure Act (APA) challenge to the NHK-Fintiv regime. In doing so, the court reinforces three themes that have defined the Federal Circuit’s post-Arthrex IPR jurisprudence: (1) the Director’s institution authority is broad and largely unreviewable; (2) policy guidance directing how that discretion is exercised is not easily transformed into a binding legislative rule; and (3) the APA’s “general statement of policy” exception remains a powerful shield for agency enforcement and non-enforcement frameworks.
As discussed below, this decision has meaningful implications for patent challengers, patent owners, and anyone navigating the institution stage before the PTAB.
Procedural Background: From Vidal to Squires
The case has a long procedural arc. In 2020, Apple, Cisco, Google, and Intel challenged the USPTO’s NHK-Fintiv discretionary denial framework in the Northern District of California. The plaintiffs argued that the Director’s instructions to the Board:
- Contravened 35 U.S.C. ch. 31;
- Were arbitrary and capricious under the APA; and
- Required notice-and-comment rulemaking under 5 U.S.C. § 553.
The district court initially held all three challenges unreviewable. On appeal, the Federal Circuit in Apple Inc. v. Vidal, 63 F.4th 1 (Fed. Cir. 2023), agreed that the statutory and arbitrary-and-capricious claims were unreviewable, but held that the notice-and-comment challenge was reviewable and remanded.
On remand, the district court held that the NHK-Fintiv instructions were a “general statement of policy” exempt from notice-and-comment rulemaking. Apple appealed again. The Federal Circuit has now affirmed that conclusion.
The Legal Question: Legislative Rule or General Statement of Policy?
The central issue was whether the NHK-Fintiv framework constituted a “substantive” or “legislative” rule requiring notice-and-comment under 5 U.S.C. § 553—or instead a “general statement of policy” exempt under § 553(b).
The Supreme Court has long drawn this distinction. In Chrysler Corp. v. Brown, 441 U.S. 281 (1979), the Court explained that legislative rules have the “force and effect of law,” while general policy statements merely advise the public how the agency intends to exercise its discretion. Similarly, in Lincoln v. Vigil, 508 U.S. 182 (1993), the Court emphasized that notice-and-comment requirements apply only to legislative rules.
The Federal Circuit framed the question in familiar terms: does the agency pronouncement bind the agency itself and alter individual rights and obligations with the force of law?
Why the Court Found NHK-Fintiv Non-Binding
The Federal Circuit’s analysis turned on two interrelated features of the IPR statutory scheme:
1. The Director Retains Ultimate Authority
Under 35 U.S.C. § 314(a), the Director—not the Board—has authority to decide whether to institute IPR. Although the Director has delegated that authority to the PTAB, the Director retains the power to review or reverse Board decisions.
Crucially, the NHK-Fintiv precedential decisions bind only the Board—not the Director. The Director can displace a Board institution or non-institution decision at any time.
Because the challenged framework did not bind the statutory decisionmaker, it lacked the “force and effect of law” required for a legislative rule.
The court emphasized that whether an agency pronouncement binds the agency itself is “central” to the § 553 inquiry.
2. Institution Decisions Are Committed to Unreviewable Discretion
The court repeatedly invoked Supreme Court precedent, including:
- Cuozzo Speed Technologies, LLC v. Lee, 579 U.S. 261 (2016)
- Thryv, Inc. v. Click-to-Call Technologies, LP, 590 U.S. 45 (2020)
- United States v. Arthrex, Inc., 594 U.S. 1 (2021)
These cases underscore that institution decisions are committed to the Director’s discretion and are generally unreviewable.
The Federal Circuit reasoned that guidance concerning how the Director (or delegate) exercises unreviewable discretion is paradigmatically the kind of “general statement of policy” contemplated by § 553(b).
As the court put it, Apple has “no right to an IPR.” A non-institution decision leaves the challenger’s legal rights unchanged—they remain free to litigate validity in district court or pursue reexamination.
That framing proved decisive.
Distinguishing the D.C. Circuit Cases
Apple relied heavily on several D.C. Circuit precedents, including:
- AFL-CIO v. NLRB, 57 F.4th 1023 (D.C. Cir. 2023)
- General Electric Co. v. EPA, 290 F.3d 377 (D.C. Cir. 2002)
- Pickus v. U.S. Board of Parole, 507 F.2d 1107 (D.C. Cir. 1974)
The Federal Circuit distinguished each.
In AFL-CIO, the challenged rules altered statutory rights relating to union elections. In General Electric, the EPA guidance facially bound both regulated entities and the agency. In Pickus, parole criteria were self-imposed binding controls subject to judicial review.
By contrast, NHK-Fintiv:
- Did not alter statutory rights;
- Did not bind the Director; and
- Concerned decisions insulated from judicial review.
Those differences were dispositive.
The Standing Clarification
Apple argued that the Federal Circuit’s earlier standing holding effectively decided that NHK-Fintiv was a legislative rule.
The court rejected that argument. Standing requires a “legally protected interest” for Article III purposes, but that does not equate to satisfying the “force and effect of law” standard under § 553.
This clarification reinforces that APA merits inquiries remain analytically distinct from standing analyses.
The 2025 Developments and Mootness
During the appeal, the USPTO:
- Rescinded the June 2022 memorandum;
- Announced that the Director would personally make institution decisions; and
- Issued a notice of proposed rulemaking regarding parallel litigation considerations.
The court held the case was not moot. The Director has not rescinded NHK or Fintiv, and the proposed rule remains only a proposal.
This aspect of the decision signals that voluntary agency modifications will not easily defeat appellate review where the underlying framework remains in place.
Broader Implications for PTAB Practice
The court’s reasoning has several practical implications.
1. Internal PTAB Precedent Is Hard to Attack Procedurally
Where the Director retains ultimate authority and discretion is unreviewable, it will be extremely difficult to characterize PTAB precedent as a legislative rule requiring notice-and-comment.
As Charles Gideon Korrell notes, this decision effectively insulates large swaths of PTAB institution guidance from procedural APA challenges.
2. The Force-of-Law Test Remains Central
The opinion repeatedly returns to whether the pronouncement binds the agency itself.
If future USPTO rulemaking results in regulations that bind the agency and limit Director discretion, the analysis could change. The October 2025 proposed rule suggests the agency may be moving in that direction.
Charles Gideon Korrell believes that once the Director codifies a mandatory institution rule applicable to the PTO itself, a stronger case for legislative-rule treatment would arise.
3. Institution Discretion Is Constitutionally Anchored
The court’s reasoning is tightly interwoven with Arthrex. Because Arthrex requires Director control over institution decisions, guidance that preserves that control is structurally aligned with the Constitution.
This reinforces the post-Arthrex understanding that institution is an executive function, not a quasi-judicial entitlement.
4. The Limits of APA Review in Patent Law
The Federal Circuit continues to narrow the channels for APA-based challenges to IPR institution policy. Substantive challenges were foreclosed in 2023; procedural challenges are now rejected on the merits.
As Charles Gideon Korrell has observed in prior commentary, the combined effect of § 314(d), Cuozzo, Thryv, and now Squires leaves challengers with little recourse outside constitutional claims.
Strategic Takeaways
For petitioners:
- Discretionary denial remains a policy-driven inquiry.
- Arguments should focus on persuading the Director or Board under existing factors rather than expecting judicial review to rescue a denied petition.
- Monitoring final rulemaking developments will be critical.
For patent owners:
- The decision solidifies the legitimacy of discretionary-denial arguments based on parallel litigation.
- The institution stage remains a key battleground for shaping the overall litigation trajectory.
For practitioners generally:
- Internal agency precedent can often qualify as a general statement of policy even when it has significant practical consequences.
- The binding effect on the agency—not just impact on parties—is the decisive consideration.
Conclusion
In Apple Inc. v. Squires, the Federal Circuit has firmly held that the NHK-Fintiv framework is a general statement of policy exempt from notice-and-comment rulemaking. 24-1864.OPINION.2-13-2026_26477…
The opinion reinforces the Director’s broad, largely insulated authority at the IPR institution stage and narrows the procedural avenues for challenging PTAB discretionary-denial policies.
The decision does not eliminate debate about the wisdom of NHK-Fintiv. But it decisively resolves, at least for now, the question of whether that framework required APA rulemaking procedures.
The Director remains unbound—and so, it appears, does NHK-Fintiv.