By Michael Borella —

Patent eligibility is broken.

The only semi-cogent arguments that I have ever heard in support of the status quo is that the U.S. Patent and Trademark Office issues too many broad, vague patents, and that 35 U.S.C. § 101 affords defendants a low-cost way of quickly invalidating bad-faith patent assertions on the pleadings.  The rest boil down to "I don't like patents."

While the former point has a grain of truth, in that the USPTO does grant patents that it should not from time to time, the law's current remedy based on Alice v. CLS Bank Int'l has the nuance of a high-energy shrapnel bomb.  Collateral damage has already impacted plenty of narrowly-scoped and useful inventions.  And the latter is equivalent to saying "I'm fine with bad laws being on the books as long as they help me."

To make an admittedly stark analogy, the Department of Justice has estimated that about 75% of violent crime in the U.S. is perpetrated by men.[1]  If a societal goal is to reduce violent crime, then incarcerating all men would cause the violent crime rate to drop dramatically and would eliminate the difficulty and cost of determining whether suspects were guilty or innocent through investigation, arrest, pleadings, trial, and so on.  Such a proposal is outrageous.  But not granting or invalidating certain types of patent matters on arbitrary grounds and with conclusory reasoning should generate at least a modicum of outrage.

In any event, both of the arguments above can be addressed in a more equitable and logical fashion with narrowly-tailored legislation.  Enter Senators Tillis and Coons.

This is the third time that one or both of the senators have proposed or introduced a bill to revise § 101.  The first two attempts garnered discussion but little tangible progress.  At this point, the patent community is feeling like Charlie Brown repeatedly getting the football yanked away.

Nonetheless, such proposals are worth of consideration, so let's take a look at the bipartisan Patent Eligibility Restoration Act of 2023.

First off, like previous proposals, the bill initially addresses definitions in § 100.  Notably:

(k) The term 'useful' means, with respect to an invention or discovery, that the invention or discovery has a specific and practical utility from the perspective of a person of ordinary skill in the art to which the invention or discovery pertains.

Cool.  A POSITA gets to decide what has "specific and practical utility".  Keeping that in mind, here is the meaty part (and I will focus on the impact to engineering and computing innovations, as we have already published an analysis from the life sciences perspective):

§ 101. Patent eligibility

(a) IN GENERAL.—Whoever invents or discovers any useful process, machine, manufacture, or composition of matter, or any useful improvement thereof, may obtain a patent therefor, subject only to the exclusions in subsection (b) and to the further conditions and requirements of this title.

(b) ELIGIBILITY EXCLUSIONS.—

(1) IN GENERAL.—Subject to paragraph (2), a person may not obtain a patent for any of the following, if claimed as such:

(A) A mathematical formula that is not part of a claimed invention in a category described in subsection (a).

(B)    (i) Subject to clause (ii), a process that is substantially economic, financial, business, social, cultural, or artistic, even though not less than 1 step in the process refers to a machine or manufacture.

(ii) The process described in clause (i) shall not be excluded from eligibility for a patent if the process cannot practically be performed without the use of a machine or manufacture.

(C) A process that—

(i) is a mental process performed solely in the human mind; or

(ii) occurs in nature wholly independent of, and prior to, any human activity.

(D) An unmodified human gene, as that gene exists in the human body.

(E) An unmodified natural material, as that material exists in nature.

(2) CONDITIONS.—For the purposes of subparagraphs (D) and (E) of paragraph (1), a human gene or natural material shall not be considered to be unmodified if the gene or material, as applicable, is—

(A) isolated, purified, enriched, or otherwise altered by human activity; or

(B) otherwise employed in a useful invention or discovery.

(c) ELIGIBILITY.—

(1) IN GENERAL.—In determining whether, under this section, a claimed invention is eligible for a patent, eligibility shall be determined—

(A) by considering the claimed invention as a whole and without discounting or disregarding any claim element; and

(B) without regard to—

(i) the manner in which the claimed invention was made;

(ii) whether a claim element is known, conventional, routine, or naturally occurring;

(iii) the state of the applicable art, as of the date on which the claimed invention is invented; or

(iv) any other consideration in section 102, 103, or 112.

(2) INFRINGEMENT ACTION.—

(A) IN GENERAL.—In an action brought for infringement under this title, the court, at any time, may determine whether an invention or discovery that is a subject of the action is eligible for a patent under this section, including on motion of a party when there are no genuine issues of material fact.

(B) LIMITED DISCOVERY.—With respect to a determination described in subparagraph (A), the court may consider limited discovery relevant only to the eligibility described in that subparagraph before ruling on a motion described in that subparagraph.

Now let's break this down into a few bite-sized chunks.

Part (b)(1)(A):  This provision seems to be stating that inclusion of or reference to mathematical formulas in claimed inventions does not impact eligibility, but a claim to a formula itself and in isolation would be ineligible.  Under that assumption, this language seems fine and would get us out of the current situation where the Supreme Court tells us in Alice that the claim of Diamond vs. Diehr is still eligible but gives us a test vague enough to invalidate that claim.

Part (b)(1)(B):  Here we have some problems.  Specifically, what is "a process that is substantially economic, financial, business, social, cultural, or artistic?"  How "substantially" does the process need to involve these excluded categories?  And does this provision only apply to process claims and not machine (e.g., device, system) or article of manufacture claims (e.g., computer readable media)?  As an example of the problems we can expect from use of vague terms like "artistic", what if my invention is an algorithm used by a digital camera to sharpen images?  The process might be technical but the outcome can be viewed as artistic.  Nonetheless, section (ii) seems to provide an out so long as the inventions can only be practically performed by computer.  This would positively impact patentees in the artificial intelligence and machine learning space where inventions often require training with large data sets.

Part (b)(1)(C):  This provision seems to shut the door on the mental process exception, one that is remarkably problematic in practice, not to mention completely illogical.  In short, some USPTO examiners and judges have taken the position that anything that could be done in theory by a human with the help of a computer or other tools, even if doing so would take millions of years, is an ineligible mental process.  If the legislation would make it such that a computer-implemented process is by definition not a mental process, then that is progress.

Part (c)(1):  This language is similar to that of Senator Tillis's proposed § 101 fix from last year, in that it is saying that "you need to consider the claim as a whole, and we really mean it".  Additionally, it reverses the ambiguity introduced when Alice and Mayo v. Prometheus misappropriated notions of §§ 102, 103, and 112 and shoved them into the § 101 inquiry.

Part (c)(2):  And here we have a bone for fans of the quick kill.  A court can, at any time and based on its own discretion, allow § 101 invalidity arguments with limited discovery.  Hopefully that is enough to keep some stakeholders happy.

So is this legislation perfect?  No.  There are still some ambiguities, mostly surrounding what we commonly refer to a business method inventions or hybrid business / technical inventions.  If litigated or left to USPTO interpretation, it is likely that we would end up right back where we are with the overly broad exception for "methods of organizing human activity" being used as a cudgel against claims with non-business merit.

But as they say, perfection is the enemy of good enough.  So it may be best to hold our noses and support this legislation, as it is does seem to be an incremental improvement over the current eligibility mess.

[1] https://bjs.ojp.gov/content/pub/pdf/cvus0702.pdf, table 38.

By Kevin E. Noonan –

Through the vicissitudes of the continuing chaos of subject matter eligibility, Senators Coons and Tillis have been steadfast in attempting to provide a legislative solution.  They chaired a series of Congressional hearings in 2019 (see "Senators Tillis and Coons Release Statement on Recent Patent Reform Hearings"), have asked the Patent and Trademark Office for its statistics and other information on patent eligibility (see "Senators Request USPTO to Provide Information on Subject Matter Eligibility"), and have proposed several bills providing various iterations of these solutions (see "Senator Tillis Proposes Patent Eligibility Reform (Again)").  Today, they co-sponsored the latest attempt, entitled "The Patent Eligibility Restoration Act of 2023."

The bill contains a preamble of "Findings" that amount to a litany of all the reasons why Supreme Court decisions and how they have been implemented by district courts, the Federal Circuit, and the Patent and Trademark Office have "led to extensive confusion and a lack of consistency" regarding eligibility.  This portion of the bill reads as a justification (to the Senators' colleagues, the judiciary, and the public) of the need for subject matter eligibility reform by Congress; it cites for example an "increasing number of inventions ineligible for patent protection" as a consequence of creation of the "judicial exceptions" by the Supreme Court and other courts.  It also asserts that "[m]any judges of the United States Court of Appeals for the Federal Circuit and of various district courts of the United States have explicitly expressed the need for more guidance with respect to the meaning of section 101 of title 35, United States Code" as well as "many patent owners, and persons that engage with patent owners, complain[ing] that the interpretation of that section is extremely confusing and difficult to discern and apply with any confidence."  The cosponsors' intentions with these amendments are plainly set out, starting with the elimination of all judicial exceptions and that "any" invention or discovery in the statutory categories (process, machine, manufacture, or composition of matter) be eligible for patenting apart from explicitly recited exceptions recited in the statute.  Also recited in this Findings section is that the other statutory requirements under Section 102, 103, and 112 are not to be used to determine patent eligibility.

The bill provides then provides specific modifications to the patent statute.  These begin with the provisions defining a "process" (Section 100), which are amended by deleting the phrase  ''includes a new use of a known process'' and inserting ''includes a use, application, or method of manufacture of a known or naturally-occurring process."  Also provided is a definition of the word "useful" to mean "with respect to an invention or discovery, that the invention or discovery has a specific and practical utility from the perspective of a person of ordinary skill in the art to which the invention or discovery pertains.''

Section 101 is amended to abrogate the so-called "judicial exceptions" by enumerating an explicit and exclusive set of ineligible subject matter.  These exceptions include and are limited to:

• a mathematical formula that is not part of a claimed invention in a statutory category [of process, machine, manufacture, or composition 16 of matter, or any useful improvement thereof];

• a process that is substantially economic, financial, business, social, cultural, or artistic, even though not less than 1 step in the process refers to a machine or manufacture, but not if the process cannot be cannot practically be performed without the use of a machine or manufacture;

• a mental process performed solely in the human mind, or that occurs in nature wholly independent of and prior to any human activity;

• an unmodified human gene as it exists in the human body; or

• an unmodified natural material as that material occurs in nature.

Importantly, the term "unmodified" as it is used with regard to human genes or natural products is defined in the statute not to include embodiments that have been "isolated, purified, enriched, or otherwise altered by human activity" or "otherwise employed in a useful invention or discovery."

The amendments to Section 101 also include a section on how eligibility is to be determined which includes:

• 'by considering the claimed invention as a whole and without discounting or disregarding any claim element'; and

• without regard to "the manner in which the claimed invention was made," "whether a claim element is known, conventional, routine, or naturally occurring," "the state of the applicable art, as of the date on which the claimed invention is invented," or any other considerations in the other statutory sections (specifically Section 102, 103, or 112).

Finally, the amendments provide that in infringement actions, eligibility can be addressed by motion of a party when there are no genuine issues of material fact, and that a court can consider permitting "limited discovery" before ruling.

As is frequently the case, introduction of the bill was accompanied by a press release, with the Senators joining in announcing their bill and the necessity for it.  In his statement, Senator Coons said:

More than a decade after the Supreme Court waded into patent eligibility law, uncertainty remains about which areas of innovation are eligible for patent protection.  Critical technologies like medical diagnostics and artificial intelligence can be protected with patents in Europe and China, but not in the United States.  The Supreme Court has repeatedly failed to clarify the law, so Congress must act.  I'm proud to join Senator Tillis' bill that would reform patent eligibility law to bring vital clarity for inventors and innovators and ensure the United States maintains its competitive edge.  I look forward to working with all stakeholders as we move this bill in Congress to restore confidence in our patent system.

For his part Senator Tillis's statement reads:

I have long said that clear, strong, and predictable patent rights are imperative to enable investments in the broad array of innovative technologies that are critical to the economic and global competitiveness of the United States, and to its national security.  Unfortunately, our current Supreme Court's patent eligibility jurisprudence is undermining American innovation and allowing foreign adversaries like China to overtake us in key technology innovations.  This bipartisan legislation with Senator Coons maintains the existing statutory categories of eligible subject matter, which have worked well for over two centuries, and addresses concerns regarding inappropriate eligibility constraints by enumerating a specific but extensive list of excluded subject matter.  I look forward to continuing to work with all interested stakeholders on this important matter.  Passing patent eligibility reform remains one of my top legislative priorities during my second term.

Also set forth in Senator Coons' official website is a statement from two former Directors of the U.S. Patent and Trademark Office, David Kappos and Andrei Iancu, now Co-Chairs of the Council for Innovation Promotion (C4IP), who said:

C4IP applauds Senators Tillis and Coons for introducing critically important legislation to correct patentable eligibility law.  The Patent Eligibility Restoration Act of 2023 is much-needed legislation to foster the development of next-generation technologies across many innovative industries, including artificial intelligence, medical diagnostics, quantum computing, and telecommunications, to name a few.  With products in these sectors currently categorically ineligible for patent protection, the United States is losing its standing as the world's innovation leader.  By introducing this legislation, Senators Tillis and Coons are standing up for American inventors and ingenuity, and are positioning the United States to continue its leadership in these technologies of the future.

The draft bill has two immediate impediments to passage (others will no doubt arise during the legislative process).  The first and perhaps most significant is that to the extent the Supreme Court has based its subject matter eligibility jurisprudence as an exercise in its role in limiting Congress to the constraints in the Constitution, that its power to grant patents must "promote progress," it is likely to strike down any law that abrogates its judicial exceptions as being ultra vires of the proper exercise of Article I power.  Two generations ago Giles Sutherland Rich (and P.J. Federico) were able to introduce obviousness into the statute by casting it as an enactment of Supreme Court precedent reaching back to Hotchkiss that patentability required something more than novelty.  It was the Supreme Court's variable ex post facto definitions of what that ineluctable something was (flash of genius, etc.) that had made "the only patent that is valid . . . one which [the] Court [had] not been able to get its hands on" and that provided the impetus for introducing obviousness as a statutory requirement.  But how later-Judge Rich effected this enactment was done with sufficient subtlety and obeisance to the Court's precedent that in Graham v John Deere the Supreme Court opined that Section 103 was just that, codification of the principle it had enunciated all along.  This bill lacks that subtlety and accordingly is much less likely to pass supreme judicial muster.

The other aspect of the bill likely to face stiff political rather than judicial opposition is in the changes to patent eligibility of human genes and natural products.  It is extremely likely that some groups, particularly the American Civil Liberties Union and its allies in the Myriad case will argue that the definition of "unmodified" would permit patenting of isolated human genes and oppose the bill on that basis (as they have in other embodiments of reform bills from the Senators (see "ACLU (Predictably) Opposes Patent Subject Matter Eligibility Proposal").

Neither of these impediments are incapable of being overcome by amending the scope of the statute, of course but their existence makes less likely from the outset that the bill will provide the solution the Senators seek.