USPTO Eliminates Examiner Stock Ownership Amid Ethics Concerns
On March 2, 2026, United States Patent and Trademark Office (USPTO) Director Squires implemented a significant change to the agency’s ethics framework. He eliminated the longstanding ownership threshold that had allowed examiners to hold limited financial interests in companies whose patent applications they review.
The new directive follows on the heels of a high-profile enforcement action in which USPTO examiner Daxin Wu agreed to pay half a million dollars (while not admitting liability) to settle allegations that she participated in the examination of patent applications filed by companies in which she held a substantial financial stake. The Department of Justice alleged Wu worked on at least nine applications involving firms where she held six-figure investments. She also allegedly examined filings submitted by competitors of a company in which she reportedly owned nearly a million dollars in stock.
Wu’s investments far surpassed the regulatory safe harbor that had been in place under federal ethics rules. Previously existing regulations permitted examiners to maintain up to $15,000 in stock in a single affected company, or up to $25,000 across companies within the same industry sector handled by their art unit.
The backdrop to both Wu’s settlement and the Director’s policy update is a 2024 report from the Commerce Department’s Office of Inspector General (OIG), which concluded that ethics oversight mechanisms had failed to identify numerous potential conflicts. In its sample of 73 examiners, over a third had undetected conflicts, indicating a widespread problem.
Director Squires emphasized the distinctive responsibility patent examiners carry. Their determinations have market-shaping influence and determine whether emerging technologies gain commercial traction -- which is sure to impact investments. He felt that the previous threshold did not sufficiently protect public confidence, and therefore he reduced the amount to zero holdings of an assignee’s holdings, effective immediately. Applications currently assigned to examiners holding any financial interest in the applicant will be reassigned to other examiners. The notification process, however, appears voluntary.
As new forms of market speculation and prediction platforms expand, the gap between inside knowledge and public awareness will increasingly carry significant economic consequences. It is yet to be seen whether this directive will be enough to address the confidentiality concerns of the information an examiner is entrusted with, often years before economic markets gain access.
Setting the recusal threshold at zero does appear to be a step in the correct direction, and we hope that it has sent a clear message that even the appearance of divided loyalties is unacceptable.
The attorneys at Renner Otto will continue to monitor new USPTO developments and advocate for stringent confidentiality and impartiality in the examination process. Contact us for more information.