By Donald Zuhn —

Last week, a coalition of
more than 100 companies and organizations including the Biotechnology Industry
Organization (BIO), the California Healthcare Institute (CHI), and Eli Lilly
& Company, sent a letter to Congressional leaders to express their "opposition
to recent legislative proposals expanding the America Invents Act's 'covered
business method patent' program." 
The letter contends that "[t]hese proposals could harm U.S.
innovators — a driving force of economic growth and job creation in this
country — by unnecessarily undermining the rights of patent holders."  The make-up of the coalition was interesting
in that it included industry groups, organizations, and companies in the medical
devices, pharmaceuticals, and biotechnology industries, as well as expected
representatives from the technology, communications, manufacturing, financial services, and software
industries.

The Transitional Program for
Covered Business Method Patents, which was established by § 18 of the
Leahy-Smith America Invents Act, provides a transitional post-grant review
proceeding for reviewing the validity of covered business method patents, which
the section defines as "a patent that claims a method or corresponding
apparatus for performing data processing or other operations used in the
practice, administration, or management of a financial product or service,
except that the term does not include patents for technological inventions."  To date, bills "to make improvements to
the transitional program for covered business method patents" have been
introduced in both the House (H.R. 2766)
and Senate (S. 866).
The Senate bill, entitled the Patent Quality Improvement Act of 2013, was
introduced in May by Sen. Charles Schumer (D-NY), and the House bill, entitled
the Stopping the Offensive Use of Patents (STOP) Act, was introduced in July by
Rep. Darrell Issa (R-CA).  Both bills
would change the definition of a covered business method patent to "a
patent that claims a method or corresponding apparatus for performing data
processing or other operations used in the practice, administration, or management
of an
enterprise, product, or service, except that the term does not include
patents for technological inventions" (change in bold and italics).  H.R. 2766 would also eliminate the sunset
provision of the transitional program (as well as establish a pro bono program at the USPTO "to
assist financially under-resourced resellers, users, implementers,
distributors, or customers of an allegedly infringing product or process").  H.R. 2766 has been referred to the House
Committee on the Judiciary, and S. 866 has been referred to the Senate Subcommittee
on Courts, Intellectual Property, and the Internet.

The coalition letter, which
was sent to Sen. Patrick Leahy (D-VT), Chairman of the Senate Committee on the
Judiciary; Sen. Chuck Grassley (R-IA), Ranking Member of the Senate Committee
on the Judiciary; Rep. Bob Goodlatte (R-VA), Chairman of the House Committee on
the Judiciary; and Rep. John Conyers, Jr. (D-MI), Ranking Member of the House
Committee on the Judiciary, argues that the above legislation proposes to make
the transitional proceedings of § 18 permanent and expand the definition of
'covered business method patent' such that "any party sued for or charged
with infringement can always challenge an extremely broad range of
patents at the USPTO" (emphasis in original).  The letter suggests that the proposed change
to the program "would have far-reaching implications, because data
processing is integral to everything from cutting-edge cancer therapies to
safety systems that allow cars to respond to road conditions in real time to
prevent crashes," and contends that "[s]ubjecting data processing
patents to the CBM program would thus create uncertainty and risk that
discourage investment in any number of fields where we should be trying to spur
continued innovation."  The
coalition letter also notes that the change could also impact the relationship
of the United States with its trading partners, because "it is clear that if this
discriminatory treatment of a select category of patents opposed by special
interests in the United States were to be made a permanent feature of U.S. law,
it would create a harmful precedent for our trading partners to enact
exceptions in their laws to protect special interests in their countries."