The Patent Eligibility Reform Act of 2023 (PERA) was introduced by Senators Thom Tillis (R-NC) and Chris Coons (D-DE) in June of 2023. The intent of the bill is to clarify the scope of what Congress intended to be patent eligible subject matter under 35 USC § 101, in the face of various Supreme Court decisions that would seek to unreasonably restrict such eligibility.

Since decisions in Mayo, Myriad and Alice and their progeny, the US Patent Office as well as the US Federal Court system, including the Federal Circuit, have struggled to decipher the metes and bounds of what can and cannot be patented in the US. These judicial limitations are at odds with not only the intent of the Patent Act of 1793 and current 35 USC § 101 (which largely mirrors the 1793 Act), but also with subject matter eligibility guidelines in other jurisdictions around the world.

As a result, applicants have struggled to patent inventions in the US, most notably in medical diagnostics and computer-implemented inventions, while such inventions can be patented in jurisdictions like Europe and China. The result is a stifling of innovation and an inability for technology companies to compete with entities that can obtain patent protection abroad.

PERA seeks to abrogate the Supreme Court precedent and to modify 35 USC § 101 to specify only certain narrow exceptions to subject matter eligibility, including natural substances and processes that are wholly independent of human activity (including unmodified human genes as they exist in the human body), purely mathematical formulae that are not otherwise part of a useful process, machine, manufacture, or composition and purely mental processes that can be performed solely in the human mind.

On January 23, 2024, Congress heard testimony regarding PERA from two panels of witnesses, whose testimony can be found here: https://www.judiciary.senate.gov/committee-activity/hearings/the-patent-eligibility-restoration-act_restoring-clarity-certainty-and-predictability-to-the-us-patent-system.

Witness panel I

Panel I: Andrei Iancu, former Director of the USPTO, Courtenay Brinckerhoff of Foley & Lardner, Stephen Blaylock of Pillsbury Winthrop Shaw Pittman speaking on behalf of his client Invitae Corp., and Phil Johnson, speaking on behalf of the Coalition for 21st Century Patent Reform. 

While the other witnesses spoke in favour of PERA, Mr Blaylock expressed Invitae’s position, reflected in their earlier Submission of Comments in response to the USPTO’s Request for Comments on their Patent Subject Matter Eligibility Guidance, that the increased availability and alleged reduction in cost of genetic testing in recent years was a direct result of the Myriad decision, and that biomarkers are natural phenomena that should not be patent eligible. Mr Blaylock conveyed Invitae’s position that PERA would enable the “privatization of information”. However, Mr Blaylock seemed to be embroiled in the same conflation of the 102/103/112 statutes into the 101 statute that the Supreme Court has perpetuated when he stated that the “mere discovery of information [sic, about ir-] relevant to human health should not be the sole point of novelty that would enable the patenting of a claim”.  

Mr Iancu countered by explaining that all human invention involves the manipulation of nature into practical human use, and that if you eliminated that, you would eliminate the patent system altogether. Ms Brinkerhoff highlighted the inconsistency of current 101 jurisprudence with eligibility standards around the world, for example in Europe and China, and that this jurisprudence is stifling innovation in the US of inventions in healthcare. Mr Johnson noted that considerable time, energy and money is invested in identifying genetic markers that can be basis for therapeutics which benefit the public, and identifying therapeutic uses of these genetic markers incentivises inventors and ultimately benefits consumers. Moreover, he noted that as new innovations emerge, there is increased competition, which will result in lower prices which also benefits consumers. Mr Johnson, as well as others during the hearing, stressed that inventions that are eligible under section 101 will be further subject to the 102/103/112 statutes, and that may render those inventions unpatentable even if they are eligible.

Witness Panel II

Panel II: David Kappos, former Director of the USPTO, David Jones, Executive Director of the High Tech Inventors Alliance (HTIA), Mark Deem, an inventor and Operating Partner of Lightstone Ventures, and Adam Mossoff, a law professor at George Mason School of Law.

Professor Mossoff spoke in support of PERA, noting that the Supreme Court's Alice/Mayo enquiry, which was a “new legal test that converted the patent eligibility doctrine into something never before seen in the US patent system” that turned a threshold test into “a major new patentability requirement…to invalidate patents at rates never before seen in the 234 years since the first Patent Act of 1790”.  He went on to remark that a study has found that court decisions applying the Alice/Mayo standard jumped 730% after 2014, that there was an increase of 1056% between 2014 and 2019 in the number of decisions finding ineligible claims, and a 914% increase in invalidated patents.

Mr Deem listed a number of groundbreaking inventions in therapeutics in which he had been involved, and noted that the US is failing inventors because of the confusion on eligibility which is “costing us cures, treatments, jobs, economic growth and potentially lives”. He noted that inventors cannot spend a decade of their lives and a quarter of a billion dollars of someone else’s money working on developing that invention without the possibility of being able to protect it with a patent.

Mr Jones expressed HTIA’s concerns about the language in PERA and suggested that legislative changes to 101 were unnecessary. He posited that activities such as football plays could be patented under PERA. Mr Kappos countered by explaining that football plays would not become eligible because you add a dance at the end of the football play and that marriage proposals would not become eligible because you include putting a ring on a finger. Indeed, Mr Kappos stated that it was “terrible policy to guide patent laws by reducing our discussion to silly, trivial examples”.

Moreover, those who spoke in favour of the bill, for example Mr Kappos, noted that those opposed to PERA had not come forward, with constructive suggested changes to PERA to address their own concerns.

Mr Kappos specifically referenced the recent Sarepta v. Regenxbio district court decision in which Regenxbio’s claims were found ineligible as covering naturally occurring DNA sequences. He noted that such decisions result in the lack of access of companies to funding to bring the invention to market, a message to companies to not invest in this field, and to investment moving away from important areas of American innovation. He stated that PERA provides a practical and sensible standard which judges can apply. His written testimony concluded with the following:

Strong and predictable patent protection is vital for America’s success. The current Section 101 regime is broken and the courts have been running unguided for too long. This issue cannot be ignored any longer. It is time for Congress to fix America’s law of patent subject matter eligibility.

 

Next steps

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