Companies that have avoided filing patents because they assumed their AI models, algorithms, or software innovations were not patentable might want to revisit that decision. The U.S. Patent and Trademark Office (USPTO)’s new leadership under Director John Squires signals a potential shift in how the agency evaluates patent eligibility for AI and software innovations.
Since his confirmation in September 2025, Director Squires has committed to “making sure the door to the patent office is wide open to transformative technologies.” In November 2025, he made a key decision precedential that reversed a rejection of a machine learning patent application based on patent eligibility. The rejection had categorically labeled the claims as too abstract to patent, a common barrier for AI companies.
The bottom line: The USPTO is now telling patent examiners to evaluate AI and software applications using traditional standards like novelty and obviousness, rather than making sweeping determinations that entire categories of technology cannot be patented.
Director Squires has explicitly connected patent protection to venture capital: “Without reliable patent protection, AI start-ups cannot secure the venture capital needed to compete against state-backed giants in China and elsewhere.” For early-stage companies, this creates strategic opportunities in IP protection, investor confidence, and competitive positioning.
Technologies in AI, fintech, e-commerce, computer-aided diagnostics, and bioinformatics that historically faced eligibility hurdles may now have clearer paths to patent protection.
Act Now on Portfolio Building: The current USPTO posture is more favorable to AI and software innovations than it has been in years. If you have held off on patent filings due to eligibility concerns, this may be an opportune window.
Document Technical Improvements: Articulate during development how your technology improves system performance, reduces computational costs, or solves technical bottlenecks. This type of information directly supports the USPTO’s framework emphasizing technical improvements to computer functionality.
Frame Around Architecture: Director Squires stated that “eligibility follows architecture” and emphasized that “when technology rewires how information flows, that’s when invention begins.” Thus, articulate how your invention changes the way systems operate, not just what they calculate.
Coordinate with Counsel: Engage patent attorneys who understand current USPTO practice to develop a filing strategy aligned with your business goals and funding timeline. Consider funding rounds and product launches when developing timing strategies for patent filing.
Balance Patents and Trade Secrets: Not everything should be patented. Work with counsel to determine which technologies benefit from patent protection and which should remain confidential.
This shift represents a significant change in USPTO patent eligibility determinations, but the window may not remain open indefinitely. USPTO policy can shift with changes in leadership or Federal Circuit decisions. The companies building patent portfolios now may find themselves with significant competitive and fundraising advantages as the AI sector matures.