Mayer Brown Establishes PTAB Precedent in Securing Discretionary Denial Against Foreign-Government-Backed Petitioner

On March 18, 2026, the Director of the US Patent and Trademark Office (USPTO) issued a precedential decision denying institution of an inter partes review (IPR) in IPR2025-01579. The Director concluded that the Petitioner was barred from seeking AIA review of a US Patent because a real party in interest (RPI) related to the Petitioner was a foreign sovereign, or at least plausibly could be a foreign sovereign, and the Petitioner failed to carry its burden to prove otherwise.

Key Takeaways

• Foreign Governments Barred as Petitioners and RPIs: Applying Return Mail, Inc. v. United States Postal Service, which bars US federal agencies from filing AIA petitions, to foreign sovereigns, the Director held that a foreign government is not a “person” under 35 U.S.C. §§ 311(a) and 321(a), and therefore cannot be a petitioner—or a real party in interest—in AIA proceedings.
• Enhanced Scrutiny of Foreign State-Linked Structures: Where evidence suggests foreign state ownership or control—especially involving entities on national security lists—the USPTO will scrutinize RPI disclosures closely, with an eye to preventing evasion of Return Mail and protecting national security and the integrity of PTAB proceedings.
• Burden on Petitioners Once RPI Is Put in Dispute: When a patent owner produces credible evidence that a foreign sovereign may be an RPI, the burden shifts to the petitioner to demonstrate that all RPIs have been identified and that no foreign sovereign (or entity it can control) is an RPI. Conclusory declarations, without supporting documents, are insufficient.
• Consequence of Foreign-Sovereign Involvement: If a petitioner, or any of its RPIs, is a foreign government or foreign governmentally owned entity, the USPTO will not institute review of the patent, or will terminate an already-instituted trial.

Legal Framework and Analysis

1. Application of Return Mail to Foreign Governments

Under the AIA, only “a person” other than the patent owner may file an IPR or post‑grant review petition. The Supreme Court in Return Mail held that a US federal agency is not a “person” eligible to petition for AIA review. The patent statutes do not define “person,” and the Court relied on the Dictionary Act (1 U.S.C. § 1) and the longstanding presumption that “person” does not include the sovereign.

The Director extended this reasoning to foreign governments, relying on judicial decisions interpreting “person” in other statutes to exclude foreign sovereigns. The decision concludes:

• A foreign government is not a “person” under §§ 311(a) and 321(a);
• A foreign government therefore cannot be a petitioner in AIA proceedings; and
• A petitioner is barred from AIA proceedings where a foreign government is an RPI.

The Director emphasized that allowing foreign governments (but not the US Government) to file IPRs would create an “unfair, asymmetrical predicament” inconsistent with congressional intent. Symmetric application of Return Mail places foreign governments and the US Government on equal footing in PTAB practice.

2. Foreign Governments as Real Parties in Interest

The Director further held that Return Mail’s sovereign‑as‑non‑person rule applies not only to named petitioners, but also to RPIs. Allowing a foreign sovereign to participate as an undisclosed RPI—by acting through nominal “persons”—would enable circumvention of Return Mail and undermine statutory and policy objectives.
To prevent such “end‑runs” around Return Mail, the decision:

• Confirms that AIA petitions must be denied (or terminated) if a foreign government is an RPI at the time of filing; and
• Explains that an IPR properly instituted may nonetheless be terminated if, during the proceeding, a foreign sovereign later becomes an RPI (e.g., by acquiring a controlling interest in the petitioner).

3. Integrity of PTAB Proceedings and National Security Concerns

The decision relies on prior USPTO guidance emphasizing the importance of transparency regarding who is “behind” a petition—who funds, directs, and benefits from the proceeding. The Director cited concerns that:

• “Opaque investment structures” have been used by foreign adversaries to influence or access US IP assets and PTAB challenges; and
• Certain foreign, state-linked entities on US sanctions or trade lists have engaged in conduct aimed at manipulating US IP systems, including PTAB proceedings, to weaken or misappropriate US technological leadership.

The Director noted that entities on the Department of Commerce “entity list,” which identifies parties involved in activities “contrary to the national security or foreign policy interests of the United States,” have been frequent IPR petitioners. If aggregated, these filers would rank among the highest‑volume IPR petitioners over recent years.

With this backdrop, the decision stresses that “fundamental fairness” and the USPTO’s mandate to protect the public interest requiring rigorous enforcement of RPI disclosure obligations where foreign sovereign involvement is credibly alleged.

RPI Dispute and Burden Allocation

1. Patent Owner’s Showing

In the IPR at issue, the patent owner sought discretionary denial based on alleged RPI defects and national security concerns. It argued that:

• The petitioner is a subsidiary and affiliate of a large aerospace and defense conglomerate wholly owned by a foreign government;
• Corporate disclosure statements filed in related district court litigation identify a foreign state‑owned enterprise holding “10% or more” of the petitioner’s stock;
• Publicly available materials indicate that this state‑owned enterprise is, in turn, owned by a foreign government and appears on the Department of Commerce “entity list”; and
• In other IPRs, the petitioner had identified foreign government‑owned entities as RPIs.

On that record, the patent owner contended that the petitioner had failed to identify all RPIs, that at least one undisclosed RPI is a foreign sovereign or foreign sovereign‑controlled entity, and that the failure raised “compelling national security interests supporting denial.”

2. Petitioner’s Response

The petitioner argued that none of the foreign state‑linked entities identified by the patent owner were RPIs because they did not fund, control, or direct the specific IPR, and lacked authority over petition decisions, strategy, filings, or expert selection.
In support, the petitioner submitted a declaration asserting, in conclusory terms, that those entities did not fund, control, or have the ability to control the IPR.

3. Director’s Findings on the RPI Dispute

On this record, the Director deemed the petitioner ineligible to file an IPR because it failed to establish that a foreign government was not an RPI. The Director’s reasoning applied a burden-shifting framework as follows:

• Patent Owner Met Its Initial Burden to Put RPI in Dispute: A patent owner need only produce “some evidence” tending to show that a third party should be named as an RPI. The patent owner’s evidence of foreign government ownership and the entity‑list designation was “particularly persuasive,” and sufficient to place in dispute whether all RPIs were named and whether any RPI is a non “person” foreign sovereign.
• Burden on Petitioner to Rebut: Once the RPI issue is in dispute, the petitioner bears the burden of persuasion to show that it has named all RPIs and that none is a foreign sovereign or an entity that a foreign sovereign has the ability to control.
• Petitioner Failed to Carry Its Burden: The petitioner admitted in other proceedings that the foreign state‑linked conglomerate is a significant shareholder, yet offered no documentary evidence explaining the rights associated with that shareholding or defining the governance, control, or funding relationships. The Director found the conclusory declaration—unsupported by underlying documents—insufficient to rebut the patent owner’s credible showing.

Practical Implications and Strategic Considerations

For Patent Owners

• Use RPI Challenges Strategically: Where there is evidence of foreign government ownership or influence, patent owners can leverage RPI challenges not only for procedural leverage, but also as a substantive bar under Return Mail as extended to foreign sovereigns.
• Develop an Evidentiary Record: Public corporate disclosure statements, government “entity list” or sanctions listings, annual reports, prior IPR petitions, and other public filings can collectively form the “some evidence” required to put RPIs into dispute.
• Emphasize National Security and Public Interest: Arguments framed around national security, economic security, and the integrity of the patent system may be particularly compelling for Director‑level discretionary decisions.
• Seek Early Discovery or Information: Consistent with USPTO expectations and precedents, patent owners may want to pursue discovery of parent corporations and 10%‑or‑greater owners to identify potential foreign state‑linked RPIs early in the proceeding when there is enough evidence to support seeking such authorization for such additional discovery. 

For Petitioners

• Robust RPI Diligence and Disclosures: Petitioners with any foreign state ownership, investment, or significant contractual relationships should conduct thorough diligence into control, funding, and direction of the petition, and be prepared to produce documentary evidence (governance documents, shareholder agreements, funding arrangements, etc.) if challenged.
• Anticipate Heightened Scrutiny for State‑Linked Entities: Petitioners with ties to foreign sovereigns—particularly entities appearing on US national security or trade lists—should expect close examination of RPI disclosures and must be ready to demonstrate that no foreign government is an RPI or has the ability to control the IPR.
• Avoid Conclusory Evidence: Bare declarations denying foreign sovereign involvement, without supporting documents, may not suffice. The Director’s decision signals an expectation of concrete, contemporaneous evidence addressing ownership, control, funding, and decision‑making authority.
• Monitor Ownership Changes: Petitioners must manage the risk that a foreign sovereign may become an RPI during an ongoing proceeding (for example, through acquisition of a controlling interest), which could warrant termination of the IPR under the Director’s framework.