IP Law Daily, PATENT NEWS: Reps. Kiley, Peters spearhead Patent Eligibility Restoration Act in U.S. House, (Sep 11, 2024)

By Justin Marcus Smith, J.D.

The lawmakers’ summary of PERA described how a string of Supreme Court decisions, followed by rejected review of more than 100 cases, have led to calls for Congress to resolve resulting confusion.

Representatives Kevin Kiley (R-Cal.) and Scott Peters (D-Cal.) have introduced legislation known as the Patent Eligibility Restoration Act of 2024 (PERA) in the United States House of Representatives, as of September 6, 2024. The eight-page bill seeks to amend title 35 of the United States Code, “to address matters relating to patent subject matter eligibility,” i.e., the perceived ambiguity surrounding judicial exceptions to 35 U.S.C. § 101. In the lawmakers’ view, Supreme Court disinterest in resolving judicially -created ambiguity is rendering an increasing number of inventions ineligible for patent and placing the United States at a competitive disadvantage.

Senate introduction. In June 2023, Senators Chris Coons (D-Del.) and Thom Tillis (R-N.C.) introduced PERA in the Senate (S.2140). PERA would eliminate all judicially-created exceptions to U.S. patent eligibility law, overturn the U.S. Supreme Court’s Alice/Mayo framework, and codify specific exclusions from eligibility. The Senators have been promoting PERA because, in their view, the Supreme Court has repeatedly failed to clarify United States patent eligibility law.

PERA includes a lengthy findings section explaining the need for legislative action to clear up the confusion created by judicially created exceptions to patent eligibility under 35 U.S.C. § 101.

The Senators have contended the lack of predictable patent rights is, in the words of Senator Tillis, “undermining American innovation and allowing foreign adversaries, such as China, to overtake us in key technology innovations.”

USPTO testimony. In January, 2024, Former USPTO Directors David Kappos and Andrei Iancu urged the Senate Judiciary Subcommittee on Intellectual Property that Congress should enact PERA. The Subcommittee heard testimony from six other witnesses who offered a mixture of support and opposition to PERA. (See IP Law Daily coverage of the hearing here).

House introduction. Representatives Kiley and Peters have now put their weight behind PERA in the House. In a news release, Representative Kiley said PERA “will allow American inventors to patent a wider variety of inventions that foreign nations, like China, already allow their own innovators to patent[.]” Representative Peters noted that our patent system has historically enabled the U.S. to become the innovation capital of the world; however, in recent years, “the Supreme Court has created confusion about what exactly is eligible for a patent.” Peters continued that revolutionary technologies in medical diagnostics, artificial intelligence, and software are currently patentable in Europe and China but “may not be eligible in the U.S.” Other commonly -noted areas of competitive concern include artificial intelligence, 5G, and blockchain. Peters urged that the U.S. may “lose even more ground to our global competitors” if Congress does not step up to clarify patent eligibility.

Senators Tillis and Coons joined in the representatives’ press release. Senator Tillis concurred that “clear, strong, and predictable patent rights” are “[c]ritical to the economic and global competitiveness of the United States, as well as to its national security[.]” He warned that “[o]pponents to patent eligibility reform will attempt to sow confusion by conflating patent eligibility and patentability.” He emphasized that “patent eligibility is simply one consideration in the process of determining patentability.”

Senator Coons also joined in the representatives’ press release reiterating his position that “[a] series of Supreme Court decisions has muddied the waters of patent eligibility, threatening American innovation and our economy[.]” He pressed his call for Congress to pass the legislation.

Confusing exceptions. According to the lawmakers’ summary of the legislation, a series of Supreme Court decisions beginning in 2010 “established a new test for patent eligibility and significantly expanded existing judicially created exceptions to patent eligibility for abstract ideas, mathematical formulas, and products of nature.” The lawmakers’ summary footnoted the key Supreme Court decisions forming their viewpoint with supplied parenthetical commentary:

“Bilski v. Kappos, 561 U.S. 593 (2010) (under which most patents on business methods are now ineligible); Mayo Collaborative Services v. Prometheus Laboratories, 566 U.S. 66 (2012) (under which most diagnostic testing patents are now ineligible); Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013) (under which gene-fragment patents are ineligible); Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014) (under which most software patents are ineligible).”

Codification. According to the representatives’ press release, the lawmakers have advanced PERA on the ground that it will maintain existing statutory categories of eligibility that have “worked well for over two centuries” while addressing “concerns regarding inappropriate eligibility constraints by enumerating a specific but extensive list of excluded subject matter.”

The lawmakers’ summary contended PERA will clarify patent subject matter eligibility by:

• Replacing judicially created exceptions with more clearly defined exceptions;

• Codifying exceptions (e.g., mathematical formulas) as the only exceptions;

• Clarifying narrow conditions under which otherwise unpatentable processes (e.g., genes, processes which cannot be performed without a machine or computer) may be eligible for patent;

The lawmakers’ summary further contended that PERA will abandon “vague” factors, like whether portions of a claim include “conventional” or “routine” elements, to restore clarity to patent eligibility determinations. Such considerations putatively “blur the line between Section 101 and other statutory requirements for a patent, such as novelty and non-obviousness under Sections 102 and 103.” Last, under proposed PERA § 101(c)(1)(A), patent claims are to be “read as a whole,” without consideration of patentability factors like novelty or non-obviousness, “ensuring that Section 101 focuses solely on subject-matter eligibility.”

The representatives’ press release stated that all 12 judges of the United States Court of Appeals for the Federal Circuit have “lamented” the current state of the law. The lawmakers’ summary stated that the lower courts, the Solicitor General, USPTO directors, and other stakeholders have all acknowledged that the Supreme Court decisions have led to inconsistent and unpredictable results. The summary said there are now calls for Congress to pass legislation because the Supreme Court “declined to provide more guidance and certainty by rejecting review of more than 100 cases on these issues.”

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