2026 Mid-Year Patent Update
The first half of 2026 delivered a mix of developments for patent owners’ monetization prospects. On the post-grant procedural front, the venue for challenging patent validity has shifted decisively, shifting the risk/reward map for IP enforcers and implementers alike.
Meanwhile, in the litigation and damages arena, the Federal Circuit handed down two impactful decisions on patent infringement litigation – one that potentially broadens the scope of royalty calculations of infringed patents, and another that raises the evidentiary bar for proving infringement of certain types of patent claims.
Taken together, these developments suggest a landscape that is becoming more forgiving for patent owners in some respects and more demanding in others – and understanding the full picture is essential for anyone assessing the potential value of their IP.
Significant shifts to post-grant challenges and outcomes
On the administrative front, during the first half of 2026 the strategy for challenging patent validity underwent a dramatic shift – migrating away from Inter Partes Review (IPR) petitions before the Patent Trial and Appeal Board (PTAB) and toward Ex Parte Reexaminations (EPR).
Driven by USPTO procedural changes initiated in early 2025, and discussed in more detail in a previous Vitek IP post , post-grant filing statistics experienced an almost exact year-over-year inversion.
In H1 2025, for example, IPRs were the post-grant challenge of choice, with about 73% share of filings, while reexaminations accounted for just 23.6%. By H1 2026, EPRs captured about 75% (594 requests) while IPRs accounted for 22% (174 petitions) of all post-grant actions.
IPR institution grant rates also sharply declined, given the rise in procedural denials. After standing over 80% in January 2025, the IPR institution rate dropped to nearly 20% by early 2026. With the probability of securing an IPR trial plummeting, filings of IPR petitions hit an all-time low of just 57 in Q2 2026 (down over 80% from Q2 2025).
Meanwhile, challengers are directing resources toward Ex Parte Reexaminations, pushing EPR volume to new heights. Q2 2026 set a quarterly record with 336 reexamination requests – a nearly 150% increase over Q2 2025.Overall, reexamination requests have now outpaced all combined PTAB petitions for three consecutive quarters, cementing EPR as the leading venue for patent validity challenges today.
From a patent enforcement and monetization perspective, this shift represents a reduction in patent owners’ catastrophic downside risk. Unlike in IPR trials, patents subjected to EPR rarely face total claim cancellation and often emerge with confirmed or revised claims.
However, because EPRs are significantly cheaper to petition for than IPRs by challengers, and carry no filing deadlines relative to related litigation as IPRs do, patent owners looking to enforce or capitalize on their inventions may still face post-grant administrative actions that can throw a wrench in their plans.
Valuations for component-level patents may get a boost
The U.S. Court of Appeals for the Federal Circuit issued two rulings that especially caught our eye in 2026 – once being Exafer Ltd. v. Microsoft. In the original suit, Exafer alleged that Microsoft’s Azure cloud platform (specifically its Smart Network Interface Cards and Virtual Filtering Platform features) infringed patents directed to optimizing virtual network communications.
Exafer’s economic damages expert calculated a reasonable royalty using Azure virtual machine (VM) usage hours as the royalty base, even though the VMs were not directly accused of infringement. Exafer argued that by implementing its inventions to offload network processing and reduce CPU overhead, Azure’s servers could host and profit from significantly more VMs. The district court judge ruled that such a broad royalty base was improper, and excluded the expert’s report.
In March, the U.S. Court of Appeals for the Federal Circuit reversed the district court judge’s ruling, stating that calculating a royalty base using metrics related to products or services that are not themselves accused of direct infringement can sometimes be acceptable. The ruling held that an unaccused product metric can serve as a valid royalty base if there is a well-supported “causal connection” from the invention’s gain to that metric.
The Exafer decision represents a positive development for owners of patents related to specific components or niche system features. The ruling provides guidance that potential damages would not be restricted to revenues explicitly tied to isolated or low-margin subcomponents, for example, when the real-world value of the invention produces gains elsewhere in capacity, revenue, or cost savings.
The bar to prove equivalence of means plus function claims is raised
Another Federal Circuit decision, Genuine Enabling Technology LLC v. Sony Group, originated from claims that Sony PlayStation’s Bluetooth-enabled controllers and consoles infringed a patent for merging multiple data streams (like button presses and motion sensors) into a single signal stream. The asserted claim was of a means-plus-function claim, where the term “encoding means” corresponded to the logic block illustrated in the patent’s specification.
Genuine Enabling Technology’s expert determined that a clock signal in Sony’s circuitry was structural equivalent to the “encoding means,” but did not explain why other elements seen in the circuitry were insubstantial to that finding. The trial judge tossed the expert’s testimony for ignoring too much of the circuit’s structural components in relation to the patent’s drawn logic block, and granted Sony’s request of a finding of noninfringement.
In February, the Federal Circuit affirmed Sony’s win. Genuine Enabling argued that Sony’s Bluetooth implementation could be viewed as a “black box” that must be equivalent to the patent claim as evidenced by the outputted combined data stream. The Federal Circuit rejected that argument, ruling that structural equivalence arguments require evidence about how an accused device performs the function.
For patent owners, Genuine Enabling Technology provides cautionary guidance that they cannot rely on high-level generalizations about the accused technology to survive the advanced stages of litigation. To survive pre-trial expert challenges or summary judgment motions, plaintiffs may have to spend significant resources on technical discovery, reverse engineering, or teardowns of accused products.
Looking Ahead
Taken together, these developments point to an interesting direction for patent owners heading into the second half of 2026. Patents may be becoming more resilient to invalidation and, in certain circumstances, more flexible in how their economic value can be measured.
At the same time, successful enforcement still demands deep technical expertise, rigorous evidence, and careful litigation strategy. For companies evaluating their patent portfolios, the takeaway is clear:
Patent value isn’t determined solely by whether a patent can survive a challenge. It also depends on how effectively the technology’s real-world value can be demonstrated, quantified, and ultimately monetized.
As the patent landscape continues to evolve, understanding both the procedural risks and the economic opportunities will be critical to making informed decisions about which patents to maintain, enforce, license, or sell.
About Vitek IP, LLC. Founded by a team with over six decades of experience in IP and tech, Vitek’s patent consultancy, brokerage group, and research organization provides clients exceptional guidance navigating the patent landscape. Vitek team members have developed and managed hundreds of patent transaction engagements for the world’s largest telecommunications, software, and computer companies. For more information, visit www.vitek-ip.com.