Bypassing Highway [35 U.S.C. Section] 101

This article is intended to address one of the most contentious issues in US patent law, namely, patent eligibility. This article addresses a draft proposal to overhaul the current law.

1. Proposed Changes to §§100 and 101

A bipartisan group of Senators and Representatives produced a draft framework for amending 35 U.S.C. §§100 and 101. Senators Thom Tillis (R-NC) and Chris Coons (D-DE), Chair and Ranking Member of the Senate Judiciary Subcommittee on Intellectual Property; Representative Doug Collins (R-GA-9), Ranking Member of the House Judiciary Committee; Hank Johnson (D-GA-4), Chairman of the House Judiciary Subcommittee on Intellectual Property and the Courts; and Steve Stivers (R-OH-15) sent the draft text via press release on 22 May 2019. The stated goal of releasing the draft is to solicit feedback—there will be additional stakeholder feedback and Senate hearings, according to the press release.

According to Senator Coons,

Today, U.S. patent law discourages innovation in some of the most critical areas of technology, including artificial intelligence, medical diagnostics, and personalized medicine. That’s why Senator Tillis and I launched this effort to improve U.S. patent law based on input from those impacted most. I am grateful for the engagement of all stakeholders participating in our roundtables, as well as the bipartisan and collaborative efforts of colleagues in both the Senate and the House. I look forward to continuing to receive feedback as we craft a legislative solution that encourages innovation.

Senator Tillis stated:

Senator Coons and I requested to reinstate the Senate Judiciary Subcommittee on IP because we saw a need to reform our nation’s complicated patent process, starting with section 101. The release of this framework comes after multiple roundtables and extensive discussions with stakeholders who would be affected by reforming Section 101. Senator Coons and I look forward to receiving feedback from the release of this framework and encourage anyone who might potentially be affected to contact our office and offer us input.

Representative Collins noted: “Upgrading the patent eligibility test is critical if we want American innovation to continue to lead worldwide. Encouraging innovation in Georgia and throughout our country means restoring confidence for inventors and investors that their patent rights will be upheld in court.”

Representative Johnson, who serves as Chairman of the House Judiciary Subcommittee on Courts, IP and the Internet said:

I’m pleased to participate in this important and relevant roundtable. Many have voiced concerns about uncertainties in in this area of patent law jurisprudence, and I’m interested in hearing from all stakeholders as we continue to work towards a consensus solution. I particularly look forward to – and welcome – feedback on the outline proposal we’re considering here today.

Representative Stivers followed on:

In my home state of Ohio, leaders in the fields of biologics research and diagnostics will deliver the cures of tomorrow. This is only possible if we can protect those innovations with the patent protection that rewards the risks and investment necessary to discover the next great idea. We have the opportunity to advance our society in so many exciting and unknown ways, and we need to ensure we have a patent system that encourages that kind of game-changing innovation, instead of stifling it.

The proposed draft framework would:

• Keep existing statutory categories of process, machine, manufacture, or composition of matter, or any useful improvement thereof.
• Eliminate, within the eligibility requirement, that any invention or discovery be both “new and useful.” Instead, simply require that the invention meet existing statutory utility requirements.
• Define, in a closed list, exclusive categories of statutory subject matter which alone should not be eligible for patent protection. The sole list of exclusions might include the following categories, for example:
• Fundamental scientific principles;
• Products that exist solely and exclusively in nature;
• Pure mathematical formulas;
• Economic or commercial principles;
• Mental activities.
• Create a “practical application” test to ensure that the statutorily ineligible subject matter is construed narrowly.
• Ensure that simply reciting generic technical language or generic functional language does not salvage an otherwise ineligible claim.
• Statutorily abrogate judicially created exceptions to patent eligible subject matter in favor of exclusive statutory categories of ineligible subject matter.
• Make clear that eligibility is determined by considering each and every element of the claim as a whole and without regard to considerations properly addressed by 102, 103 and 112.

Draft Amendments

The draft framework to amend 35 U.S.C. Sections 100 and 101 are below.

§100 is proposed to be amended as follows:

§100(a) Whoever invents or discovers any useful process, machine, manufacture, or composition of matter, or a useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

§100(b) Eligibility under this section shall be determined only while considering the claimed invention as a whole, without discounting or disregarding any claim limitation.

§100(k) is proposed to be amended to define the term “useful” to mean “any invention or discovery that provides specific and practical utility in any field of technology through human intervention.

Additional Legislative Provisions

The provisions of section 101 shall be construed in favor of eligibility.

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 eligibility of a claimed invention under section 101 shall be determined without regard to: the manner in which the claimed invention was made; whether individual limitations of a claim are well known, conventional or routine; the state of the art at the time of the invention; or any other considerations relating to sections 102, 103, or 112 of this title.

The framework is supported by James Pooley ¹, who commented:

The most important and immediate goals for reforming patent eligibility are predictability, predictability and predictability. This framework, coming from legislators who understand the value to our country of a robust and sensible patent system, is exactly the right approach. It will restore much-needed certainty to the acquisition and enforcement of patent rights, reducing costs for all stakeholders.

Senate Hearings

In June 2019, Senator Richard Blumenthal held a series of hearings with stakeholders. Support and justification for a new framework were provided by several members of Congress, and by outside stakeholders. According to IPWatchdog, during the Senate hearings, Senator Blumenthal set the stage and posed three simple questions:

“Striking the appropriate balance between encouraging innovation and protecting consumers is a key goal of our patent system.

a. What impact will broadening the subject matter that can be patented have on industry?

b. What impact will broadening the subject matter that can be patented have on consumers?

c. Could the proposed reforms increase consumer prices? If so, in what industries or on what products?”

Responses from various panelists have been reported by IPWatchdog. Two panelists below illustrate the two sides of the debate.

Hans Sauer, Deputy General Counsel for IP, Biotechnology Innovation Organization:

Question a. What impact will broadening the subject matter that can be patented have on industry?

Reform of Section 101 of the Patent Act will conform U.S. standards with internationally-prevailing best practices, meaning that inventions that are patentable in other industrialized countries will also be patentable in the United States. This will help with the orderly dissemination of innovation, provide legal certainty, and help maintain U.S. technological leadership for investment-intensive innovative businesses in technology areas ranging widely from artificial intelligence, telecommunications, business software, to antibiotics, industrial enzymes, and biomarker-assisted methods of medical therapy.

Question b. What impact will broadening the subject matter that can be patented have on consumers?

The question, at bottom, is whether the U.S. patent system should incentivize businesses to compete with ever cheaper copies of the same basic products, or by out-innovating each other with new, improved, or disruptive innovative products that may be covered by patents… [I]n my opinion the encouragement of investment in innovation that is inherent in a well-balanced patent system leads to more consumer choice in the long run, and better promotes overall welfare for consumers.

Question c. Could the proposed reforms increase consumer prices? If so, in what industries or on what products?

The kind of invention that is predominantly affected by the current unclear state of Section 101 jurisprudence in the biopharmaceutical space fall more on the side of original or disruptive innovation… For such treatments and tests, the patents that are affected by Section 101 problems are the very patents that make it possible to bring such a product to market in the first place, and absent the availability for patent protection there may not ever be a product to price.

David Jones, Executive Director, High Tech Inventors Alliance:

Question a. What impact will broadening the subject matter that can be patented have on industry?

It will harm industry in the tech sector. As written, the proposed legislation will reduce R&D spending and decrease innovation. R&D investment, venture capital funding, and company market capitalization have soared in the wake of the Supreme Court’s eligibility decisions, hitting new records. The increased availability of business method patents will reverse this trend…

Nearly two-thirds of U.S. patent applications are filed by foreign residents, resulting in the majority of U.S. patents being issued to foreign companies… [B]ecause the rights conferred by U.S. patents are geographically limited to U.S. territory, virtually all enforcement of the patents granted as a result of the proposed changes would be against U.S. businesses.

Question b. What impact will broadening the subject matter that can be patented have on consumers?

U.S. consumers will have fewer choices and higher prices… Additionally, there would be a net reduction in competition.

Question c. Could the proposed reforms increase consumer prices? If so, in what industries or on what products?

Patent laws are quite literally intended to increase prices. The exclusive rights granted by a patent are intentionally designed to reduce competition and allow patent owners to charge supra competitive prices… [T]he problem with the proposed bill is that it would extend patenting to non-technological areas where patenting has been shown to decrease innovation. As a result, the proposed reforms would decrease both competition and innovation, leading to fewer choices and higher prices for consumers.

The draft bill is still open to discussion, and its text in all likelihood will change following the hearings.

[1] Former Deputy Director General of the World Intellectual Property Organization