By: Chris Katsantonis
On May 22, 2019, U.S. Senators Thom Tillis (R-NC) and Chris Coons (D-DE), and several members of the House of Representatives released a bipartisan, bicameral draft bill that would reform Section 101 of the Patent Act (“Subject Matter Eligibility”). Currently, U.S. patent law discourages innovation in some of the most critical areas of technology, including artificial intelligence, medical diagnostics, and personalized medicine. Specifically, since 2010, both the Supreme Court and the Federal Circuit have created numerous patent eligibility rulings that have restricted the ability to patent certain technologies and made it difficult to apply the laws pertaining to subject matter eligibility with consistency.
The main benefit for companies to obtain patents is to give that company exclusive rights, for a limited period, to the patented invention. In turn, a company with a patent can prevent its competitors from copying the invention, entering the market, or otherwise competing with that company. In addition to the possible business-oriented benefits conferred by obtaining a patent, patents also facilitate innovation benefiting society at-large, such as personalized medicine. However, many companies choose to forego developing cutting-edge technologies since obtaining protection for their intellectual property under the current legal framework is unlikely.
In response, the proposed legislation for Section 101 outlines three main provisions: (1) amend Section 101 to act as an eligibility threshold and not a standard for determining patentability; (2) abrogate all case law that promulgated the judicially created exceptions to subject matter eligibility; and (3) clarify the eligibility of a claimed invention under section 101 shall be determined without regard to other relevant patent statutes.
Amending Section 101 to act as a threshold—and not a standard for determining patentability—would bar Section 101 from being used as a tool for invalidating patents. Rather, it would be used as a tool that favors patentability. Such an amendment would refocus patent law back to viewing patents under a presumption of validity.
With respect to the proposed legislation’s second main provision, judicially created exceptions to subject matter including “abstract ideas,” “laws of nature,” or “natural phenomena,” will be prohibited in determining patent eligibility. In essence, the proposed legislation would undo the judicially created exceptions created by Supreme Court and Federal Circuit precedent that has plagued subject matter eligibility since 2010. In doing so, ideas and innovations in artificial intelligence and personalized medical treatments would face better odds in receiving patents.
Lastly, the third main provision would ensure eligibility under Section 101 is determined without regard to: 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 article.” This is further evidence that Congress intends Section 101 to be an eligibility threshold and not a gatekeeper on patentability. This explicitly removes the controversial “well known, conventional, or routine” standard of Section 101 analysis, and places such determination solely within the novelty (section 102), obviousness (section 103), and written description (section 112) requirements for patentability. This should reduce the confusion between eligibility and patentability standards currently applied by the United States Patent and Trademark Office and the Federal Courts.
Essentially, the proposed legislation would make it easier for companies to obtain patents in, and further advancements in, science and technological fields that have been stifled by the current patent law framework. In doing so, both companies and society will benefit tremendously under the proposed legislation. Although the proposed bill is still subject to change, it is clear that Congress is taking steps in the right direction.
Scott McKeown, Congress Floats Draft Bill Outlining New 101 Framework, Ropes & Gray(May 22, 2019),https://www.patentspostgrant.com/congress-floats-draft-bill-of-new-101-framework/.
See Eileen McDermott, Change May Be Coming: Members of Congress Release Framework to Fix Patent Eligibility Law, IPWatchdog(April 17, 2019), https://www.ipwatchdog.com/2019/04/17/change-may-coming-members-congress-release-framework-fix-patent-eligibility-law/id=108371/ (discussing Senator Coons’s comments regarding the proposed Section 101 legislation).
See Michael Sweeney, Will Congress Solve the Patent Eligibility Conundrum?, Foley & Lardner(May 14, 2019), https://www.foley.com/en/insights/publications/2019/05/will-congress-solve-patent-eligibility-conundrum (noting the “Federal Circuit and district courts have struggled to apply the broad principles expounded in these decisions to specific patents.”).
See Siraprapha Rungpry, Patents as a tool for business and innovation, Lexology(July 12, 2013), https://www.lexology.com/library/detail.aspx?g=a01cfdf1-1b99-4ce0-9342-b78a1885b722.
See id. (explaining patent owners are able to sue companies that infringe its patented products).
See generally DavidPridham, The Top 10 Reasons Why Your Startup Needs Patents, Forbes(Aug. 18, 2015), https://www.forbes.com/sites/forbesleadershipforum/2015/08/18/the-top-10-reasons-why-your-startup-needs-patents/#363b074b22c7 (discussing several benefits obtained by owning patents).
See Eileen McDermott, Draft Text of Proposed New Section 101 Reflects Patent Owner Input, IPWatchdog(May 22, 2019), https://www.ipwatchdog.com/2019/05/22/draft-text-proposed-new-section-101-reflects-patent-owner-input/id=109498/ (finding patents reward the risk and investments leaders in the fields of biologics incur to discover lifesaving cures and startups in every industry revolutionize technology usage and have the opportunity to propel society forward with innovative discoveries and products).
See id. (insinuating companies may not invest in discovering cutting edge technology if a patent cannot be obtained to practice its exclusive rights).
Michelle K. Holoubek & Ali Allawi, IP Hot Topic: The Draft Subject Matter Eligibility Bill: A Work In Progress, Sterne Kessler(June 17, 2019), https://www.sternekessler.com/news-insights/client-alerts/ip-hot-topic-draft-subject-matter-eligibility-bill-work-progress.
See id. (noting patents are currently invalidated under section 101).
See id. (favoring patentability by including, “provisions of section 101 shall be construed in favor of patentability.”)
See Sweeny, supra note 3.
Kevin E. Noonan, Senate Proposal for Section 101 Reform: Effect on Biotech/Pharma Inventions, Patent Docs(May 23, 2019), https://www.patentdocs.org/2019/05/senate-proposal-for-section-101-reform-effect-on-biotechpharma-inventions.html.