By: Andrea Pacheco

Congress is actively debating the Patent Eligibility Restoration Act (“PERA 2025”), a legislative effort to clarify and expand which inventions are eligible for patentability under 35 U.S.C. §101.[1] The bill was introduced by Senators Thomas Tillis and Christopher Coons, along with Representatives Kevil Kiley and Scott Peters, in an effort to restore patent eligibility for inventions across various fields.[2] PERA 2025 aims to overturn or limit the judicially created exceptions from cases such as Mayo Collaborative Services. v. Prometheus Labs., Inc.[3] and Alice Corporation Pty. LTD. v. CLS Bank International,[4] which have constrained patent eligibility in recent years.[5] The Supreme Court in Mayo Collaborative Services held that a process concerning the treatment of autoimmune diseases could not be patented because the process did not transform unpatentable natural laws into an eligible application of those laws.[6] In Alice Corporation Pty., the Supreme Court ruled that a claim for patent protection may be ineligible if the concept centers around an underlying abstract idea without adding any substance.[7] These exceptions demonstrate how, under the current judicial framework, many software, AI, biotech, and diagnostic inventions face uncertainty in patentability.[8]  PERA 2025 would eliminate the judicial exceptions to patent eligibility so that it would only be subject to a small set of statutory exclusions.[9] The bill would explicitly override previous cases and return U.S. eligibility law to a more expansive baseline.[10] At its core, PERA 2025 would restore eligibility to any useful process, machine, manufacture, or composition of matter while excluding subject matter considered too abstract, human mental steps, or unmodified natural materials.[11]

In October 2025, the Senate Subcommittee on Intellectual Property held a hearing on PERA 2025, where witnesses presented their views for and against passage of the act.[12]  Proponents argue that eligibility uncertainty has chilled innovation and deterred businesses from investing in emerging tech sectors.[13] Among the proponents were former USPTO Directors Andrei Iancu and David Kappos, who framed PERA 2025 as restoring Congressional authority over eligibility.[14] Other proponents argued that the current law has discouraged investment and weakened U.S. competitiveness.[15] On the other side of the argument, opponents raised concerns about reviving low-quality patents and enabling excessive litigation.[16]

From a business law perspective, PERA 2025’s passage affects how companies, investors, and counsel approach risk.[17] If enacted, PERA 2025 would have profound implications for intellectual property strategy and protection.[18] As the standards for eligibility become clearer, investors may bring more capital to intellectual property startups.[19] Expanding patent eligibility would encourage innovation in industries where inventors were previously shut out by 35 U.S.C. §101 challenges.[20] For example, biotech inventions and medical diagnostics would see revived protections for methods that were previously held ineligible, specifically those used in cell and gene therapy.[21] Software and AI inventors may regain the ability to patent inventions that hinge on algorithms or data processing when coupled with a technical solution.[22] However, broader eligibility also raises the risk of low-quality or vague and overly broad patents flooding the system.[23] Broader eligibility may also increase litigation exposure for operating companies because a wider pool of enforceable patents can raise the risk of being sued and defending against new claims.[24]

Ultimately, PERA 2025 represents a potential change in how inventions are protected or excluded in the U.S.[25] Whether it restores clarity or reignites litigation, every company that relies on intellectual property investment and protection should be preparing for potential outcomes now.[26]

 

[1] The Patent Eligibility Restoration Act-Restoring Clarity, Certainty, and Predictability to the U.S. Patent System: Hearing Before the Subcomm. on Intell. Prop., U.S. Senate Comm. on the Judiciary, 119th Cong. (2025) [hereinafter “Patent Hearing”], https://www.judiciary.senate.gov/committee-activity/hearings/the-patent-eligibility-restoration-act_restoring-clarity-certainty-and-predictability-to-the-us-patent-system-10-08-2025 [https://perma.cc/YD2N-38CR].

[2] Press Release, Tillis, Coons, Kiley, and Peters Reintroduce Landmark Legislation to Restore American Innovation (May 1, 2025),  https://www.tillis.senate.gov/2025/5/tillis-coons-kiley-and-peters-reintroduce-landmark-legislation-to-restore-american-innovation [https://perma.cc/L44V-FVJQ].

[3] 566 U.S. 66 (2012).

[4] 573 U.S. 208 (2014).

[5] See Mayo Collaborative Servs., 566 U.S. at 80; Alice Corp., 573 U.S. at 212; Eileen McDermott, PERA 2025 Debated in Senate IP Subcommittee Hearing, with Business Methods, Diagnostics in Focus, IPWatchdog (Oct. 8, 2025, at 18:52 ET), https://ipwatchdog.com/2025/10/08/pera-2025-debated-senate-ip-subcommittee-hearing-business-methods-diagnostics/id=193017/ [https://perma.cc/9FRC-QANR].

[6] See Mayo Collaborative Servs., 566 U.S. at 80.

[7]  See Alice Corp., 573 U.S. at 212.

[8] See Nafsika Karavida, Patent Law Eligibility Reform, Reavis Page Jump LLP (June 5, 2025), https://rpjlaw.com/patent-eligibility-law-reform/ [https://perma.cc/PA48-T76G]; see also Why C4IP Supports the Patent Eligibility Restoration Act (PERA), Council for Innovation Promotion (Apr. 2, 2024), https://c4ip.org/why-c4ip-supports-the-patent-eligibility-restoration-act-pera/ [https://perma.cc/MXY5-ETXC].

[9] Mandy Wilson Decker, PERA and the Future of Patent Eligibility, Stites and Harbison PLLC (June 5, 2025), https://www.stites.com/resources/client-alerts/pera-and-the-future-of-patent-eligibility/ [https://perma.cc/65UX-D5WV].

[10] See Gene Quinn, Patent Eligibility Reform Returns to the Hill: PERA 2025 Explained, Scott Peters (May 2, 2025), https://scottpeters.house.gov/2025/5/patent-eligibility-reform-returns-to-the-hill-pera-2025-explained https://perma.cc/SCM3-4PB3]; see also Joseph Drayton & Erik Milch, A New Dawn for Patent Owners? Breaking Down the PERA and PREVAIL Acts of 2025, Proskauer Rose LLP (May 16, 2025), https://www.thepatentplaybook.com/2025/05/a-new-dawn-for-patent-owners-breaking-down-the-pera-and-prevail-acts-of-2025/ [https://perma.cc/55BA-6HZ5].

[11] McDermott, supra note 5.

[12] Patent Hearing, supra note 1.

[13] See id.

[14] Id.

[15] See Anne Pritchett, America Can’t Win the 21st Century Without Protecting Intellectual Property, IPWatchdog (Sep. 8, 2025, at 07:15 ET), https://ipwatchdog.com/2025/09/08/america-cant-win-21st-century-without-protecting-intellectual-property/ [https://perma.cc/XF8A-VJXX].

[16] See McDermott, supra note 5.

[17] See Drayton & Milch, supra note 10 (explaining that companies with patent portfolios or investing in areas previously held ineligible for patent protection might gain protection for their investments).

[18] See id. (detailing strategic considerations that investors and businesses should implement in anticipation of PERA 2025).

[19] Id.

[20] Karavida, supra note 8 (“By expanding patent eligibility, the bill could encourage innovation in key industries, particularly in areas where current patent restrictions have been seen as a major barrier.”).

[21] Anne Elise Herold Li et al., PERA Hearing in Senate–Biotech Industry Urged to Prepare for Patent Eligibility Reform, Brownstein Hyatt Farber Schreck, LLP (Oct. 10, 2025), https://www.bhfs.com/insight/pera-hearing-in-senate-biotech-industry-urged-to-prepare-for-patent-eligibility-reform/ [https://perma.cc/LX6E-MGFH].

[22] See Patent Eligibility Restoration Act (PERA) – Clarity for Software Patents?, NK Patent L. (Nov. 4, 2024), https://nkpatentlaw.com/patent-eligibility-restoration-act-pera-patent-clarity-for-software-patents/ [https://perma.cc/F98Z-4QXG] (explaining that under the current law, inventions like algorithms, data processing methods, or systems that improve computing or computing problems are ineligible for patents).

[23] Joe Mullin, The PERA and PREVAIL Acts Would Make Bad Patents Easier to Get–and Harder to Fight, Elec. Frontier Found. (June 3, 2025), https://www.eff.org/deeplinks/2025/05/pera-and-prevail-acts-would-make-bad-patents-easier-get-and-harder-fight (on file with the American University Business Law Review).

[24] See Drayton & Milch, supra note 10 (“Prepare for increased patent litigation due to a broader range of enforceable patents and stronger IP positions.”).

[25] See id.

[26] McDermott, supra note 5.