United States: Congress and Industry Discuss Patent Eligibility Reform
Congress and key industry players in the United States are considering a significant reform on patent eligibility. On January 23, 2024, the Senate Judiciary Committee’s Subcommittee on Intellectual Property heard from eight witnesses on the Patent Eligibility Restoration Act of 2023 (PERA), which aims to address the complexities surrounding patentable subject matter under 35 U.S.C. § 101.
Section 101 governs what inventions are eligible for patent protection in the U.S. However, its brevity has led to confusion and frustration among inventors, patent practitioners, and judges. Recognizing this issue, PERA aims to simplify the analysis of patent eligibility by eliminating judicial patentability exceptions and providing clearer statutory categories for determining patentable subject matter.
Currently, patent eligibility is determined through the two-step Alice test derived from Supreme Court decisions in 2012 and 2014. This test assesses whether an invention is directed at a patent-ineligible concept like abstract ideas or natural phenomena. If so, it may still be eligible if it contains an inventive concept that transforms the claimed invention into an eligible application. However, the application of this test has been inconsistent, leaving stakeholders without clear guidance.
This lack of clarity is particularly problematic for cutting-edge developments in software-heavy fields like artificial intelligence, machine learning, and electric vehicles. Innovators, unsure of the availability of patent protection, often resort to alternative forms of protection such as trade secrets and copyright. While this may safeguard their technology, it hampers knowledge sharing and deprives the public of valuable information that would be disclosed in patent applications.
PERA intends to address these challenges by amending Section 101 to establish specific areas where patents are ineligible, such as mathematical formulas, mental processes, and unmodified human genes. The bill also includes exceptions allowing the patenting of business methods that require the use of a machine or manufacture. Furthermore, genes would not be considered unmodified if they are isolated through human activity. By adopting a categorical approach to eligibility, PERA aims to simplify and replace the Alice framework.
While many patent practitioners and stakeholders agree that reform is overdue, there are concerns over the balance struck by PERA. Critics argue that the bill grants patent protection to areas that were previously subject to scrutiny, such as isolated (but otherwise unmodified) genes and business methods. Representing the high-technology and biotechnology industries, panelists at the January 23 hearing expressed worries that PERA could stifle innovation instead of encouraging it by making almost any human activity patent-eligible.
This proposal to reform Section 101 is not the first of its kind, as similar bills have been introduced in the past. Whether the current proposal will lead to substantive and meaningful reform or serve as another iteration remains uncertain. The debates surrounding patent eligibility reform continue, with Congress and industry stakeholders weighing the potential impact on innovation and patent protection.
