Draft Bill to Overhaul what is Eligible for a Patent

Magdalena Christoforou is a J.D. candidate, 2021 at NYU School of Law.

On May 22, 2019, a bipartisan group of lawmakers unveiled a draft bill to rewrite the law on what is patentable subject matter under Section 101 of the Patent Act (35 U.S.C. § 101). Members of Congress leading the initiative include Senator Thom Tillis (R.-N.C.), who stated that the proposed legislation will “restore integrity, predictability and stability to our nation’s patent system, while also preventing the issuance of overly broad patents.”

So, what exactly is so special about this proposed reform? Perhaps the most drastic change in the draft bill is the elimination of judicially created exclusions from patent-eligibility. Under current law, there are three: abstract ideas, laws of nature, and natural phenomena.

The reform states, “No implicit or other judicially created exceptions to subject matter eligibility, including ‘abstract ideas,’ ‘laws of nature,’ or ‘natural phenomena,’ shall be used to determine patent eligibility under section 101, and all cases establishing or interpreting those exceptions to eligibility are hereby abrogated.”

The bill’s Senate co-sponsors emphasize that the legislative amendment is intended to reduce frustration created by recent Supreme Court decisions that have invalidated patents based on these exceptions. For example, a 2012 decision in Mayo Collaborative Services v. Prometheus Laboratories, which invalidated a patent on a process for adjusting drug dosage levels based on the concentration of metabolites in a patient’s blood. Explaining its rationale, the Court highlighted that the purportedly innovative dimension was merely the application of a “law of nature” to a known structure. Other key rulings include Association for Molecular Pathology v. Myriad Genetics, Inc., which established that human genes cannot be patented since they are a naturally occurring phenomenon, as well as Alice Corporation v. CLS Bank International, which held that software for a business method was an “abstract idea” ineligible for patent protection. Critics of these decisions argue that by invalidating patents on vital technologies, the Supreme Court has not only reduced innovation incentives, but also generated substantial uncertainty regarding what constitutes an abstract idea, natural phenomenon, or law of nature.

Besides disposing of judicial exceptions to patent eligibility, the draft bill proposes other noteworthy changes. First it adds that “the provisions of Section 101 shall be construed in favor of eligibility,” which appears designed to steer courts away from invalidating patents based on subject matter eligibility. Further, the bill removes Section 101’s requirement that the useful process, machine, manufacture, or composition or any “useful improvement thereof” must be “new” for patent eligibility. It goes on to emphasize that considerations from other sections of the Patent Act should be excluded from the eligibility analysis. Together, these changes are aimed at shifting questions of patent validity to other sections of the Patent Act, since the question of whether a patent is new can be more properly evaluated under Sections 102 and 103 of the Patent Act, which screen patents for novelty and nonobviousness, respectively.

Proposed Section 100(k) also adds a definition for what is considered “useful”: “any invention or discovery that provides specific and practical utility in any field of technology through human intervention.” Finally, the proposal adds that patent eligibility “shall be determined only while considering the claimed invention as a whole, without discounting or disregarding any claim limitation.” This amendment seems intended to bar judges from rejecting a complex patent as ineligible on the basis that it involves a subject-matter ineligible phenomenon in cases where it nonetheless involves patent-eligible elements.

The bill’s co-sponsors have emphasized that the draft is very much a work in progress, and in order to generate extensive feedback on the proposed enactment, they’ve invited 45 witnesses to testify before the Senate Judiciary Committee’s Subcommittee on Intellectual Property. So, what has the response to the bill looked like and what are the implications for patent law if this bill is passed? As expected, there has been a divided response. For critics who have ridiculed the Supreme Court’s application of judicially created exceptions as unclear, inconsistent, and confusing, the proposed bill provides welcome grounds for more consistent outcomes going forward. Representatives of the biotechnology industry and research universities applauded the proposal for increasing incentives to innovate and discouraging investors from moving their money to nations with stronger patent protections. Whereas research in the medical diagnostic community and on isolated natural products such as genes has been hampered in the wake of Mayo and Myriad, proponents of the bill assert that erasing judicially created exceptions to patent eligibility could spur such research.

Others have been far less optimistic. For example, in the software area, where the problem of patent trolls is prevalent, there is a compelling argument that the Supreme Court’s decision to invalidate a software patent as an abstract idea in Alice provided a much-needed correction to such overreaching patents. Advocating for caution, critics have stated that it is important to first evaluate what is beneficial about the current version of section 101 before discarding two hundred years of eligibility case law. In addition, the American Civil Liberties Union (ACLU) and more than a hundred signatories released a letter warning that the proposed changes would result in a mire of patent claims that would hamper scientific exchange and impede patients’ access to diagnostic tests.

Additionally, the ACLU raised the concern that the abrogation of judicial exceptions will revive the debate on whether human genes are patentable. However, proponents have argued this is unlikely to occur since human genes do not result from “human intervention” and thus would not qualify as “useful” as defined in the draft bill. Further, since researchers have already published extensive descriptions of the human genome, claims directed towards human genes would likely fail the novelty and nonobvious inquiries that are the subjects of Sections 102 and 103, respectively, even if they did clear the threshold imposed by Section 101. In fact, shifting questions of validity to other sections of the Patent Act in just this way seems to be a principal aim of the proposed bill. Nevertheless, overturning Mayo could open the door for patent claims for tests that use genetic markers to predict whether a patient will be amenable to a given treatment, which could stymy patient access to diagnostic medicine.

Finally, critics worry about the effect on future disputes that would result from codifying the meaning of “useful” as “any invention or discovery that provides specific and practical utility in any field of technology through human intervention.” It’s likely that the debate around patent eligibility will shift from determining what is an abstract idea, natural phenomenon, or law of nature to focusing on what the words “specific” and “practical” encompass and what degree of “human intervention” will be needed to satisfy the “useful” requirement. As stressed by the draft bill’s opponents, the manner in which courts would construe these terms is uncertain at best.

While annulling years of complicated case law around Section 101 could set the stage for many more inventions to be patent-eligible, the new language of the draft bill also has the potential to trigger a whole new slew of litigation around these proposed words. Since the hearings, the Senate co-sponsors of the draft bill have conducted further industry roundtable meetings to discuss the proposed changes. Observers expect a revised bill, updated on account of these meetings, to be formally unveiled sometime this fall.