Article I, section 8 of the U.S. Constitution says that “The Congress shall have Power . . . To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

With this Constitutional authority, Title 35 U.S.C. defines the statutory rights of inventors, with sections 102, 103, and 112 relating to the core elements of inventiveness: novelty, non-obviousness, and adequate disclosure.

§101, by contrast, relates to the broad subject matter of invention, and was historically little considered when determining patentability. The language of §101 is straightforward:

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

Within the past decades, court-developed “judicial exceptions” to this straightforward language have impeded whole fields of human invention, including biotechnology, medical diagnostics, computer technology and artificial intelligence. According to judge-made law, such “judicial exceptions” include (1) abstract ideas, (2) laws of nature and (3) natural phenomena (including products of nature).

Setting aside whether these “judicial exceptions” are indeed implicit in the §101 statute, interpretations of these exceptions have been muddled and highly subjective, thereby leading to substantial uncertainty in litigation outcomes—and a bonanza for litigation attorneys. This muddle is well-illustrated by the 2019 Federal Circuit Court of Appeals decision and aftermath in American Axle & Manufacturing, Inc. v. Neapco Holdings, LLC (invalidating a method of making a drive shaft as being directed to a natural law, discussed in a previous article here). In a 6:6 split the Federal Circuit refused to rehear the case en banc, and despite an opinion by the Solicitor General that the patent claim in question was patent eligible, the Supreme Court denied review of the case (which we discuss here).

Recognizing the role of court-created judicial exceptions in “rendering an increasing number of inventions ineligible for patent protection,” Senators Tillis and Coons introduced Senate Bill S. 2140, the Patent Eligibility Restoration Act of 2023 (PERA).

PERA would first eliminate all judicial exceptions to patent eligibility, thereby cleaning the slate of judicial interpretations that, according to the findings of the bill, are “considered by both judges and patent owners to be “extremely confusing and difficult to discern and apply with any confidence.” These judicial exceptions would be replaced by roughly corresponding but more narrowly defined statutory exceptions, including bare mathematical formulas, purely mental processes, unmodified human genes, unmodified natural materials, and processes that are “substantially economic, financial, business, social, cultural, or artistic.”

The bill is a compromise that has attracted ire from multiple sides. According to the ACLU, PERA, if passed:

would allow corporations and other entities to patent laws of nature and products of nature, including naturally occurring genes, giving them exclusive domain over research, development, and analysis. Such monopolies would result in higher health care costs, deny patients access to their health information, and create new hurdles for developing technologies to fight cancer, pandemics, and much more.

This misguided view fails to recognize that it is the judicial exceptions that have empowered large corporations and shifted the balance away from small inventors. Specifically, the ACLU position ignores that a) patenting novel methods of isolating genes does not amount to patenting the genes themselves, b) patented methods are protected by research exemptions, and c) individual doctors are protected by medical exemptions.

At the other end of the spectrum, US Inventor (USI), representing small inventors, opposes PERA for not going far enough to eliminate exceptions to the explicit statutory language of § 101. According to its position statement, even though the bill purports to eliminate all judge-made exceptions, it reintroduces new exceptions “disqualifying entire swaths of technology as ineligible for patent protection.” In particular, according to USI, nearly all inventions implemented in software would be ineligible by statute under PERA.

USI also points to the lack of definitions of the statute’s “most crucial terms,” such as “substantially”, “business” or “cultural.” According to USI, such language will surely open the door for new rounds of judicial interpretation, leading again to uncertainty while providing new statutory authority for preserving “the same eligibility morass under new language, potentially making it even worse.”

The USI has a solid point that the ambiguous language of the statute opens the door for judicial interpretation and preserving some power for the courts. It is not an ideal statute. And yet, given the strong opposition from groups like the ACLU, it is a political compromise that needs to be made now in order to assert congressional power and return a modicum of reason to the analysis of patent eligibility.

Exactly that point was made by former Federal Circuit Chief Judge Paul R. Michel at a recent US Inventor panel discussion on PERA and its sister legislation PREVAIL. Likening the judicial process to “sausage making,” where “compromise is essential,” Judge Michel argued that the new law, by eliminating years of muddled precedent, would be a vast improvement over existing law, and that without unity among supporters of patent reform, the proposed legislation would not likely survive a unified and well-funded attack by those large corporations and special interests opposed to such reform.

Speaking from the same panel, Wolf Greenfield shareholder Scott McKeown was even more emphatic, describing the bill as “manna from heaven” for the small inventor community.

Others have also recognized PERA as a potentially attainable compromise which, while not perfect, does represent “a welcome reset of the patent community.” According to IPWatchdog Founder and CEO Gene Quinn:

If this bill passes it will nullify all Supreme Court precedent relating to patent eligibility . . . and that would be a very good thing because the Supreme Court has painted the entire industry into a corner and they refuse to modify, elaborate or clarify their nonsensical approach to patent eligibility. It is far past time for a reset.

Viewed rationally, “judicial exceptions” are unnecessary because existing § 102, § 103, and § 112 statutes should, as Bruce Sunstein has written, prevent any tying up the “building blocks of human ingenuity.” From a public policy perspective, simply eliminating such exceptions would strengthen our patent system by helping to defend small companies from hostile litigation by more powerful corporate entities, thereby better fulfilling the constitutional mandate to “promote the progress of science and the useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

But politics, it has been said, is the art of the possible. And the possible is not always the most rational. PERA deserves our support.