section 101 Archives

Senate Holds Hearing on Legislative Initiative to Address Patent Eligibility

by Christopher M. Bruno and Kavya Rallabhandi | Feb 1, 2024 | Patents

Seeking to undo the current jurisprudence “mess” on the issue of patent eligibility, the Senate Judiciary Committee’s Subcommittee on Intellectual Property heard testimony on January 23, 2024, on the Patent Eligibility Restoration Act (PERA) (text here). PERA seeks to address the uncertainty and unpredictable outcomes created by the 2014 Supreme Court of the United States decision in Alice Corp. Pty. v. CLS Bank Int’l.

PERA is the latest iteration of 35 USC § 101 patent eligibility reform that Senators Thom Tillis (R-NC) and Chris Coons (D-DE) have been introducing for years. Although the language has been tweaked over time, the bill’s purpose is to eliminate “[a]ll judicial exceptions to patent eligibility” and in their place codify several categories of inventions as unpatentable, such as mathematical formulas; processes that are substantially economic, financial, business, social, cultural or artistic; processes that are mental or purely natural; unmodified human genes; and unmodified natural materials.

The January 23 hearing featured eight witnesses, divided into two panels. The first panel included:

Andrei Iancu, former US Patent & Trademark Office (PTO) director
Richard Blaylock, testifying on behalf of Invitae Corporation
Courtenay Brinckerhoff, partner at Foley & Lardner
Phil Johnson, steering committee chair at the Coalition for 21st Century Patent Reform.

The second panel included:

The Honorable David Kappos, former PTO director
Adam Mossoff, professor at the Antonin Scalia Law School
Mark Deem, operating partner of Lightstone Ventures
David Jones, executive director of the High-Tech Inventors Alliance.

Harkening back to prior panels, the testimony was largely in favor of reform considering what many characterized as inaction by all other stakeholders. Senators and witnesses alike recognized that legislative reform is likely the only way to gain clarity on § 101 considering the Supreme Court’s failure to take up more than 100 certiorari petitions seeking review, many with the Solicitor General’s endorsement.

During the first panel, Blaylock testified that PERA would improperly provide patent eligibility to new uses of natural phenomena, such as genetic material, and therefore “would stifle innovation and harm patient care in the fields of diagnostic genetic testing and precision medicine.” Iancu testified in response that “all human invention is the manipulation of nature towards practical uses by humans on this planet . . . and it should be eligible for a patent.” Brinckerhoff’s testimony also opposed Blaylock’s view; she explained that considerable research and development is needed to develop new uses for isolated natural products and would be disincentivized without patent eligibility. Brinckerhoff highlighted an important theme at the hearing: “PERA would bring eligibility back in line with other countries” by permitting patents on methods of detecting new diagnostic markers, thus maintaining international competitiveness. Lastly, Johnson testified that “[j]ust because something is eligible doesn’t mean it’s patentable” and stressed the importance of using §§ 102, 203 and 112 as additional filters to determine patentability.

During the second panel, venture capitalist Deem testified that “the United States is failing many of our most innovative startups” because [...]

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Coons and Tillis Introduce Two Bills Intended to Change Patent Landscape

by Christopher M. Bruno | Jul 13, 2023 | Patents

In late June 2023, Senators Chris Coons (D-DE) and Thom Tillis (R-NC) introduced two bills in Congress that, if enacted, would change the patent adjudication landscape:

The Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act is the latest iteration of a multiyear effort to reform patent law to address perceived problems with the Patent Trial & Appeal Board’s inter partes review (IPR) and post-grant review (PGR) processes.
The Patent Eligibility Restoration Act of 2023 seeks to bring certainty to subject matter eligibility Section 101 jurisprudence.

The PREVAIL Act is essentially a reintroduction of the previously unsuccessful STRONGER Patents Act of 2019 bill and would change fundamental aspects of how the Board operates. Under current practice, the Board judges who rules on institution and also decides the outcome of an instituted proceeding. Under the PREVAIL Act, institution decisions would be made by a separate set of judges from those that render a decision on a petition’s merits. Through proposed changes to the initiation and estoppel provisions, a patent challenger could bring its attack on patent validity in either the district court or the Board, but not both. And as part of the harmonization of district court and Board proceedings, the PREVAIL Act would adopt the “clear and convincing” standard for Board review and codify existing Board practice of applying the same claim construction standard as district courts apply.

The PREVAIL Act would also change who can bring issues to the Board by imposing standing and revised real-party-in-interest requirements. An IPR petitioner would have to establish standing equivalent to that required for a district court declaratory judgment action. Moreover, anyone who financially contributes to an IPR would be deemed a real party in interest to avoid multiple petitions backed by the same entity. To reduce the multiplicity of proceedings, the PREVAIL Act would establish a presumption against a joinder for time-barred petitions. The PREVAIL Act also includes several provisions directed to the independence and transparency of the Board’s decision-making, including establishing a code of conduct and requiring recordation of the Director’s actions that affect Board proceedings.

Turning to subject matter eligibility, the Patent Eligibility Restoration Act would overrule Supreme Court decisions importing a judicial exception to Section 101 and would codify many of the existing categories of ineligible subject matter, including mathematical formulae; substantially economic, financial, social, cultural and artistic practices (in other words, fundamental human activity); natural processes and products made independent of human activity; and mental processes. The Patent Eligibility Restoration Act specifically would authorize early resolution and limited discovery on Section 101 ineligibility.

Practice Note: Although both acts have been introduced before without much success, Congress’s present focus on technology (such as artificial intelligence) may serve to propel one or both bills forward. Of course, it remains to be seen whether Congress has an appetite for modifying patent law, particularly in the lead-up to an election year.

New or Not, Object-Oriented Simulation Patent Ineligible Under § 101

by Paul Devinsky | Jan 14, 2021 | Patents

The US Court of Appeals for the Federal Circuit affirmed a district court’s pleadings-stage determination that patent claims directed to an object-oriented simulation were subject matter ineligible under 35 USC § 101. Simio, LLC v. FlexSim Software Prod., Inc., Case No. 20-1171 (Fed. Cir. Dec 29, 2020) (Prost, C.J.).

Simio filed suit against FlexSim for infringement of patent claims directed to object-oriented simulations in which one instance of an object may have behaviors assigned to it without changing the generic object’s definition. FlexSim moved to dismiss the complaint under Fed. R. of Civ. P.12(b)(6), arguing that the patent was invalid under 35 USC § 101. The district court granted FlexSim’s motion to dismiss, finding that the asserted claims were directed to the ineligible abstract idea of substituting text-based coding with graphical processing and that FlexSim properly showed there was no inventive concept or alteration sufficient to make the system patent-eligible. Simio appealed.

The Federal Circuit reviewed the dismissal order and its underlying patent eligibility conclusions de novo. Under the two-step Alice/Mayo framework, the Court affirmed. Considering the first step of the Alice/Mayo framework, the Court agreed that the asserted claims were “directed to the abstract idea of using graphics instead of programming to create object-oriented simulations.” The Court rejected Simio’s argument that the “executable process to add a new behavior to an object instance” improved the functionality of the computer on which it ran, concluding that no improvement was made to the computer and that the claim limitation did not change the claim’s “character as a whole.” As to step two of the Alice/Mayo framework, whether the claim limited the abstract idea to an inventive concept, the Federal Circuit concluded that, while the claim may be directed to a new idea, it is still an abstract one lacking any inventive concept or application of the idea. The Court affirmed the district court’s dismissal.

The Federal Circuit next addressed whether the district court erred in denying Simio’s motion for leave to amend its complaint. The Court concluded that, after disregarding conclusory statements, Simio’s amended complaint just repackaged the same assertions of non-abstractness as the original complaint. Citing its holding in ShoppersChoice.com (IP Update, May 2020), the Court also rejected Simio’s argument that the district court should have conducted claim construction before determining eligibility. In ShoppersChoice.com, the Court held that pleadings-stage patent eligibility decisions may be proper when the patentee does not explain how a term’s construction could affect the analysis.

Finally, the Federal Circuit raised its own independent reasoning for denying Simio’s motion for leave to amend, explaining that it “may affirm on any grounds for which there is a record sufficient to permit conclusions of law, even grounds not relied upon by the district court.” The Court found that Simio failed to show good cause for seeking leave to amend after the scheduling order’s deadline. Namely, Simio’s amended complaint contained no facts that could not have been alleged before the deadline. Nor did Simio demonstrate any relevant [...]

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