Legislators Propose “Section 101 Reform”

| Philip M. Nelson

Yesterday Democrat and Republican legislators from both the Senate and the House of Representatives released a one page outline of a proposal to change the law of patent eligibility. The legislators supporting this proposal include Senator Thom Tillis (R-NC); Senator Chris Coons (D-DE); Rep. Doug Collins (R-GA-9); Rep. Hank Johnson (D-GA-4); and Rep. Steve Stivers (R-OH-15).

Currently, it is judicial doctrines—not statutes—that create the greatest barrier to use of the patent system. The text of 35 U.S.C. §101 is relatively permissive, and it was initially interpreted to mean that patents could be filed for “everything under the sun made by man.” But since 1952 when that statute was initially enacted, courts have limited the topics eligible for patenting by creating “judicial exceptions” to the general rule. One controversial exception prohibits attempts to patent what the courts call “abstract ideas.” The Supreme Court’s 2011 Mayo and 2014 Alice cases greatly strengthened these barriers to use of the patent system by some inventors and industries.

Yesterday’s legislative proposal seeks to address these issues through statute instead of judge-made law, as follows:

• Keep existing statutory categories of process, machine, manufacture, or composition of matter, or any useful improvement thereof. (These are the categories in the existing 101 statute itself).

• Eliminate, within the eligibility requirement, that any invention or discovery be both “new and useful.” Instead, simply require that the invention meet existing statutory utility requirements. (The existing 101 statute uses the words “new and useful”).

• Define, in a closed list, exclusive categories of statutory subject matter which alone should not be eligible for patent protection. The sole list of exclusions might include the following categories, for example:

▪ Fundamental scientific principles;

▪ Products that exist solely and exclusively in nature;

▪ Pure mathematical formulas;

▪ Economic or commercial principles;

▪ Mental activities.

(This would codify several of the judicial exceptions. The last three categories correspond to those enumerated in the USPTO’s recent guidance).

• Create a “practical application” test to ensure that the statutorily ineligible subject matter is construed narrowly. (This would codify a concept already present in the case law as summarized in footnotes 16 and 17 of the USPTO’s guidance).

• Ensure that simply reciting generic technical language or generic functional language does not salvage an otherwise ineligible claim. (This will likely be difficult to implement in statutory language and may create more ambiguity).

• Statutorily abrogate judicially created exceptions to patent eligible subject matter in favor of exclusive statutory categories of ineligible subject matter.

• Make clear that eligibility is determined by considering each and every element of the claim as a whole and without regard to considerations properly addressed by 102, 103 and 112.

The new proposal for changing the law includes some aspects of the proposals from several patent specialty associations, including those from the AIPLA/IPO, IPLAC, and the ABA-IPL section. Those proposals are reflected in the linked documents, as well as this letter sent to the leaders of the Senate Judiciary Committee in May 2018.