Seeking to undo the current jurisprudence “mess” on the issue of patent eligibility, the Senate Judiciary Committee’s Subcommittee on Intellectual Property heard testimony on January 23, 2024, on the Patent Eligibility Restoration Act (PERA) (text here). PERA seeks to address the uncertainty and unpredictable outcomes created by the 2014 Supreme Court of the United States decision in Alice Corp. Pty. v. CLS Bank Int’l.
PERA is the latest iteration of 35 USC § 101 patent eligibility reform that Senators Thom Tillis (R-NC) and Chris Coons (D-DE) have been introducing for years. Although the language has been tweaked over time, the bill’s purpose is to eliminate “[a]ll judicial exceptions to patent eligibility” and in their place codify several categories of inventions as unpatentable, such as mathematical formulas; processes that are substantially economic, financial, business, social, cultural or artistic; processes that are mental or purely natural; unmodified human genes; and unmodified natural materials.
The January 23 hearing featured eight witnesses, divided into two panels. The first panel included:
- Andrei Iancu, former US Patent & Trademark Office (PTO) director
- Richard Blaylock, testifying on behalf of Invitae Corporation
- Courtenay Brinckerhoff, partner at Foley & Lardner
- Phil Johnson, steering committee chair at the Coalition for 21st Century Patent Reform.
The second panel included:
- The Honorable David Kappos, former PTO director
- Adam Mossoff, professor at the Antonin Scalia Law School
- Mark Deem, operating partner of Lightstone Ventures
- David Jones, executive director of the High-Tech Inventors Alliance.
Harkening back to prior panels, the testimony was largely in favor of reform considering what many characterized as inaction by all other stakeholders. Senators and witnesses alike recognized that legislative reform is likely the only way to gain clarity on § 101 considering the Supreme Court’s failure to take up more than 100 certiorari petitions seeking review, many with the Solicitor General’s endorsement.
During the first panel, Blaylock testified that PERA would improperly provide patent eligibility to new uses of natural phenomena, such as genetic material, and therefore “would stifle innovation and harm patient care in the fields of diagnostic genetic testing and precision medicine.” Iancu testified in response that “all human invention is the manipulation of nature towards practical uses by humans on this planet . . . and it should be eligible for a patent.” Brinckerhoff’s testimony also opposed Blaylock’s view; she explained that considerable research and development is needed to develop new uses for isolated natural products and would be disincentivized without patent eligibility. Brinckerhoff highlighted an important theme at the hearing: “PERA would bring eligibility back in line with other countries” by permitting patents on methods of detecting new diagnostic markers, thus maintaining international competitiveness. Lastly, Johnson testified that “[j]ust because something is eligible doesn’t mean it’s patentable” and stressed the importance of using §§ 102, 203 and 112 as additional filters to determine patentability.
During the second panel, venture capitalist Deem testified that “the United States is failing many of our most innovative startups” because § 101 uncertainties disincentivize investment in the artificial intelligence and medical diagnostic industries. Even Jones, who expressed concern that PERA would render any human activity patent eligible, conceded that statistics imply low investments in the diagnostics industry. Mossoff testified that out of a sample of more than 17,000 US patent applications, 1,694 faced § 101-based PTO rejections and were abandoned. However, the same technologies (mainly healthcare discoveries, including diagnostics and AI-supported medical treatments) were granted patent protection in China and Europe. Kappos further countered Jones’s concerns by testifying that PERA would sufficiently carve out patent eligibility and provide courts with the proper framework to “exercise judgment.”
During concluding statements, Senator Coons stated that the hearing reinforced why PERA “is needed to restore clarity, reliability, and predictability to our vital U.S. patent system.” He also said that the “hearing was important to show both the public and policy makers [that] the Supreme Court’s patent eligibility test is currently unworkable and it’s created uncertainty for innovators in high-tech industries, life sciences, reduced investment, [and] made us less competitive.” If PERA passes into law, it will be a landmark overhaul to § 101 and patent eligibility as it currently stands.
