Is it time to reform 35 USC Section 101?

Article 1, Section 8 of the Constitution specifies that the powers of Congress include the power to "promote the Progress of Science and useful Arts, by securing for a limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." The American Intellectual Property Law Association (AIPLA) and the Intellectual Property Owners (IPO) Association recently proposed changes to the legal framework governing the analysis of what constitutes patent-eligible subject matter in an effort to curtail the current confusion resulting from recent Supreme Court rulings. Addressing such confusion would be prudent, as it would allow for subject matter eligibility to be more of a bright line rule, in turn providing consistency in the patenting process and the better allocation of research and development resources.

The government first began to describe what constitutes patentable subject matter in 1790 as "any useful art, manufacture, engine, machine, or device, or any improvement therein not before known or used" (Patent Act 1790, Chapter 7(1)), which was later clarified to include "any new and useful art, machine, manufacture or composition of matter, or any new and useful improvement [therein], not known or used before the application” (Patent Act 1793, Chapter 11(1)).

Similar language remains the rule of the law today. Title 35 USC Section 101, which governs the US patent system, states:

“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.”

Although seemingly broad, so-called ‘judicial exceptions’ created by Supreme Court rulings have since chiseled away at what constitutes patent-eligible subject matter, troubling business executives, patent owners and patent practitioners alike, particularly in the life sciences and software sectors.

Issued on May 12 2017, the AIPLA’s Legislative Proposal and Report on Patent Eligible Subject Matter states that "the judicially-created exceptions have put a limiting gloss on Section 101's patent-eligibility standard which provides little guidance to the lower courts or the Patent Office, or to industry on how and where to allocate research and development investment dollars" (page 7), highlighting a number of landmark cases that have "distorted the Patent Eligibility Determination".

In response to this state of uncertainty, the AIPLA and the IPO have released proposed amendments to 35 USC Section 101 with the goal of clarifying patent-eligible subject matter. For example, the AIPLA's legislative proposal "is intended to provide a clear test that will result in appropriately broad eligibility and that will minimize the uncertainty and unpredictably discouraging investment in research and development" (page 11). Earlier this year, the IPO announced the adoption of a resolution supporting legislation to amend 35 USC Section 101 and released its Proposed Amendments to Patent Eligible Subject Matter on February 7 2017.

Both proposals retain most of the basic existing language of 35 USC Section 101 and focus their amendments on the phrases “any new… process” and “may obtain a patent therefor”. The AIPLA and the IPO have proposed removing the ‘any new’ requirement from 35 USC Section 101, maintaining that "novelty is not defined by Section 101 but instead by Section 102" (AIPLA proposal, page 12) and "[n]ovelty is left to §102" (IPO proposal).

Further, both the AIPLA and the IPO propose amending “may obtain” to “shall be entitled to” in order to replace such discretionary language with respect to granting patents on patent applications that meet the requirements of the patent statute with language that clearly states that "[p]atent applications are entitled to patents when they file patent applications that meet those requirements and conditions" (AIPLA proposal, page 13).

Both proposals amend the existing phrase “subject to the conditions and requirements of this title” to read “subject only to the conditions and requirements of this title” in an effort to prohibit the courts or the US Patent and Trademark Office (USPTO) from creating so-called ‘judicial exceptions’. The AIPLA proposal states as follows:

"Congress… has not granted the USPTO or courts the ability to create conditions and requirements of patentability that are not set forth in the patent statute… [and that] this language expressly states that Congress has expressly set forth the only available exceptions to patent eligibility." (Page 13.)

Similarly, the IPO asserts that such an amendment:

"[S]ets forth that the only exceptions to the entitlement to a patent generally, and to eligibility in particular, are those defined in the statue… [and that the] intent is to foreclose the development of any future 'judicial exceptions' to section 101."

The most notable change includes the incorporation of two new subsections – “Sole Exceptions to Subject Matter Eligibility” and “Sole Eligibility Standard” – to replace the current ineligibility standards and to clarify that the eligibility standard of 35 USC Section 101 should not be confused with other standards (ie, Sections 102, 103 and 112) under the Patent Act.

In both proposals, “Sole Exceptions to Subject Matter Eligibility” states that a claimed invention is invalid for patent protection “if the claimed invention as a whole… exists in nature independently of and prior to any human activity”. The proposals also exclude claimed inventions that "[exist] solely" (IPO proposal) or "can be performed solely" (AIPLA proposal) in the human mind.

In both proposals, “Sole Eligibility Standard” requires that eligibility of a claim invention must be:

"determined without regard as to the requirements or conditions of section 102, 103, and 112... the manner in which the claimed invention was made or discovered, or the claimed invention's inventive concept."

The decision whether to adopt such proposed legislation, so as to address the current confusion associated with the analysis of patent-eligible subject matter, ultimately lies with Congress. Addressing such confusion would be prudent as it would allow for subject matter eligibility to be more of a bright line rule, in turn providing consistency in the patenting process and the better allocation of research and development resources.