By Michael Rosen

It may have taken three years, but at long last, patent
eligibility reform has returned.

Back in 2019, Congress appeared poised to advance significant legislation that would have changed the way innovation is recognized in response to Alice v. CLS Bank, a 2014 Supreme Court decision that limited the types of inventions deemed eligible for patenting under Section 101 of the Patent Act. In that ruling, Justice Clarence Thomas held that only those applications claiming something “significantly more” than an abstract idea, natural phenomenon, or law of nature could be patented.

This bombshell rattled the intellectual property world, dramatically
curbing the scope of eligible software and “business method” patents, significantly
increasing the number of applications rejected by the United States Patent and
Trademark Office, and raising the likelihood of courts striking down ineligible
patents asserted during litigation.

In response, in 2019, a bipartisan, bicameral group of members of Congress, including Sens. Thom Tillis (R-NC) and Chris Coons (D-DE) and Reps. Doug Collins (R-GA), Hank Johnson (D-GA), and Steve Stivers (R-OH)—who delivered a keynote address at AEI that year—released a draft outline of Section 101 reforms. Among other things, the draft legislation would have created a “closed list” of ineligible concepts, including “fundamental scientific principles; products that exist solely and exclusively in nature; pure mathematical formulas; economic or commercial principles; and mental activities,” while deeming eligible everything else, preventing courts from supplementing the list and promulgating a “practical application” test. As I testified before the Senate Judiciary Committee at the time, the measure would have provided the crucial benefits of “clarity and certainty, compartmentalization, and preemption.”

But the bipartisan legislation faced opposition from large software and hardware companies and never gained escape velocity in either chamber. The issue more or less lay dormant for three years until last week, when Tillis, the ranking member on the Senate Judiciary’s Subcommittee on Intellectual Property, introduced the Patent Eligibility Restoration Act of 2022. “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,” Tillis noted in a press release, asserting that his new measure “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.”

The legislation would specifically define the term “useful”
in the patent statute as having “a specific and practical utility from the
perspective of a person of ordinary skill in the art to which the invention or
discovery pertains.” It would specifically exclude from eligibility “a
mathematical formula, apart from a useful invention or discovery”; a process
that is a “non-technological economic, financial, business, social, cultural,
or artistic process,” is “a mental process performed solely in the human mind,”
or “occurs in nature wholly independent of, and prior to, any human activity”;
“an unmodified human gene, as that gene exists in the human body”; and “an
unmodified natural material, as that material exists in nature.”

The Innovation Alliance, a coalition of pro-patent companies that includes AbbVie, Dolby, and Qualcomm, said in a press release:

[The Alice decision] created chaos in the patent world and left inventors and lower court judges uncertain about what is patentable. Meanwhile, our foreign competitors, including China, are granting patents on many inventions that are now unpatentable here. As a result, innovation and venture capital have been driven overseas. . . . We deeply appreciate Senator Tillis’s dogged commitment to addressing this critical problem and providing more certainty and predictability to Section 101.

While the computer technology industry isn’t likely to adore the new legislation, the list of excluded categories is more extensive than the one enshrined in the 2019 legislation, and per Tillis, it “is the product of almost four years of consensus driven stakeholder conversations from all interested parties.” Yet like its predecessor, the measure would go a long way toward ending the unpredictability of the post-Alice regime and further the key goals of clarity and certainty, compartmentalization, and preemption. Here’s hoping it moves forward swiftly.

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