Revising Section 101 of the Patent Act: What’s at Stake?

Following several high-profile Supreme Court decisions about patent eligibility, the American Bar Association Section of Intellectual Property Law has recently proposed revised legislation to U.S. Patent and Trademark Office. Earlier this year, the Intellectual Property Owners Association drafted its own legislation regarding patent eligibility, which found support among several industries.

Section 101 of the Patent Act is currently at stake, which the ABA and IPO both argue has not been clearly interpreted. The ABA proposal seeks to outline those narrow conditions under which inventions are not eligible for patents. They contend that eligibility for patent should not be based on anticipation or obviousness, but rather whether rights would preempt others from using basic ideas or natural phenomenon.

Erick Palmer of Mayer Brown’s IP practice, sat down with IPWatchdog to discuss clarification on the more contested Supreme Court rulings and how patent litigation has been affected by these new and changing precedents. With support for some sort of revision to Section 101, he gave us insights on what is at stake for companies and reactions we might expect.

Since 2010, the Supreme Court has reshaped patent eligibility jurisprudence through four important cases including: Bilski v. Kappos (2010), Mayo v. Prometheus (2012), Association for Molecular Pathology (AMP) v. Myriad (2013), and Alice v. CLS Bank (2014). Prior to 2010, the Federal Circuit determined patent eligibility using the “machine-or-transformation” test. The Supreme Court rejected this test in Bilski and seemed to impose §§ 102 and 103 considerations on the patent eligibility analysis. In the subsequent Mayo, Myriad, and Alice cases, the Court developed a two-part test for determining patent eligibility that is now used today.

“First, are the claims directed to a patent-ineligible concept” Palmer said. “And, second, if so, do the claim’s other elements transform it into a patent-eligible application? Under the second step, routine or conventional steps are not sufficient to render the claim patent-eligible.”

The Court’s two-part test has significantly impacted patent practice, according to Palmer. In fact, under the “machine-or-transformation” test, a patent eligibility defense was rarely successful in district court litigation even in fields most prone to eligibility attacks, such as business methods and financial services – Bilski and its progeny changed that.

“Today, it is common to see a § 101 defense raised in an early motion to dismiss and succeed, oftentimes even before discovery,” he explained. “It has also become more difficult to obtain patents under the Court’s new standard, as applicants are now experiencing more eligibility rejections during prosecution requiring more creative claim drafting strategies.”

Some have voiced concern that the Court’s patent eligibility standard may be having a chilling effect of patent rights in the lower courts, risking the incentives for private companies to invest in research and development, per Palmer. For example, one case Ariosa v. Sequenom involved a patentee who discovered that fetal DNA is present in the mother’s blood and could be amplified using the father’s DNA. The claim was directed to a method of detecting paternally inherited nucleic acid comprising amplifying the paternal DNA and then detecting it.

“This discovery was a major advance because it provided a safe method for obtaining fetal DNA,” he explained. “Nonetheless, the district court found the claim patent ineligible under the Court’s two-part test. The fact that fetal DNA is present in the mother’s blood is a natural phenomenon and the additional steps of amplifying and detecting DNA were already routinely performed in the art.”

The Federal Circuit affirmed, confirming that “groundbreaking, innovative, or even brilliant discoveries” can be excluded from patent eligibility under the new test. The notion that groundbreaking discoveries otherwise patentable under §§ 102, 103, and 112 requirements may not be patent eligible has given a lot of patent practitioners pause.  Additionally, a concern is that the Court’s two-part test is often ambiguous and difficult to apply, according to Palmer. This creates uncertainty in decisions relating to the procurement and enforcement of patent rights and the value of patent assets being purchased and sold in mergers and acquisitions. Therefore, patent organizations are mobilizing to change the statutory language of § 101.

Although they are worded differently, the ABA and IPO’s proposed revisions seek to ultimately achieve the same primary goals.

“First, they would codify what has long been the law: that you cannot patent a law of nature or abstract idea—essentially adopting the first step of the Court’s patent eligibility standard,” he said. “Second, they would reject the Court’s use of §§ 102 and 103 considerations and save those for the question of patentability—essentially rejecting the Court’s second step. Third, they would require that patent eligibility be assessed by considering the invention as a whole, which is designed to eliminate the parsing of individual claim elements into either natural phenomena or conventional activity.”

The ABA believes that the Court’s two-part test goes too far and risks foreclosing patent protection for inventions encompassing practical applications employing laws of nature. It proposes to limit patent ineligibility only to those claims that would preempt others’ use of all practical applications of the law of nature or abstract idea. “This is significant because although the Court has held that total preemption is a factor that can render a claim patent-ineligible, it is not currently a requirement on which eligibility is based,” explained Palmer. “The ABA’s proposal is more exacting that the IPO’s in that sense.”

These revisions favor patent owners, according to Palmer, but not everyone is supportive. For instance, BilskiMayoMyriad, and Alice have given several accused infringers an additional tool for fighting non-practicing entities. So. the level of support for these revisions will depend where you fall on this spectrum. That being said, Palmer does not think the Court will change its eligibility analysis in the foreseeable future, and Congress is not likely to take up these anytime soon.

He added, “Patent owners will need to learn to live with the Court’s two-part eligibility test and develop and implement prosecution strategies designed to maximize patent protection. I do not believe the PTO will take a position on these proposed revisions absent action from Congress.”

The Author

Amanda G. Ciccatelli

Amanda G. Ciccatelli is a Freelance Journalist for IPWatchdog, where she covers intellectual property. She earned a B.A. in Communications and Journalism from Central Connecticut State University in 2010. Amanda is also currently the Lead Strategist of Content Marketing, Social Media & Digital Products at Informa, a leading global business intelligence, academic publishing, knowledge and events business. She also works as a Freelance Journalist for Inside Counsel. Amanda was formerly a Web Editor at Technology Marketing Corporation. Follow her at @AmandaCicc.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 23 Comments comments.

  1. Night Writer July 26, 2017 10:30 am

    Patent reform will never get out of committee. They all take large sums from Google and the like. Never. Happen.

    I think that people are in denial about just how bad the situation is. My prediction: within 5 years USA original patent applications will be down 25% from where they are now.

  2. Night Writer July 26, 2017 10:31 am

    You have to remember that Lemley and the like are advocating the complete abolishment of the patent system. They will never let up. And the reality is that the large corporations will continue on without patents.

    People don’t understand patents. Jimmy Carter did. He understood that what patents did to corporations is forced them to spend on innovation and forced them to work hard to keep their market position. Without patents, it is likely that companies like Google will go on and on and on….

  3. John Edward Roethel July 26, 2017 11:06 am

    Art. I, Section 8, clause 8 empowers Congress to write patent statutes. Congress has done so — 35 USC §§ 101 et seq.
    35 USC §112 (b) states that the claims define the inventions in a patent.

    Each claim as a whole defines an invention. The patent statutes make no references to a “patent eligible concept”, the “essence” of the invention or the “gist” of the invention. Perhaps the Supreme Court could hire at least one clerk who has taken Patent Law 101.

  4. Paul Cole July 26, 2017 2:38 pm

    I have been teaching patent law at Bournemouth University in the UK for some 20 years.

    In my view any law student in any discipline who in answering an examination question considered only the exceptions to a section of a statute without first considering compliance with its positive provisions should not only receive a failing grade, but also counselling as to whether the law is the best discipline for that individual to pursue.

    The present obsession with statutory exceptions to the exclusion of the positive provisions of Section 101 in my opinion falls precisely in that category. For those who have forgotten basic patent law, substantive compliance with the provisions of Section 101 and in particular with one of the four eligible categories is by no means a push-over. If legislation comes in on the lines proposed, it is foreseeable that the present debate will continue, but focusing on eligible category compliance. It would be unwise to think that it would then become any easier – just slightly different.

  5. Paul Johnson July 26, 2017 3:25 pm

    Paul, well said. However, in the U.S., there is that tension between the left-wing justices who believe that the law should adapt to the people and the right-wing justices who believe that the people should adapt to the law. In essence, the left-wing justices believe that Congress is too slow to change the law to reflect a quickly advancing society (as far as technology or culture goes). In contrast, the right-wing justices believe that it is up to Congress to change the laws in response to advances in society. This tension has resulted in strange outcomes where the U.S. Supreme Court legislates from the bench, but tries to do so without the appearance of usurping the role of Congress. Just look at Alice.

  6. Paul Cole July 26, 2017 5:26 pm

    @ Paul Johnson

    I have Antonin Scalia’s book written with Bryan Garner on “Reading Law” so can appreciate your point completely. On the whole, I think I would personally side with Scalia.

    But what I find shocking is not the Supreme Court opinions, even Alice of which the European counterparts failed to get past the EPO, but the over-interpretation of these decisions within the Federal Circuit. You can download my amicus brief in Recognicorp from http://patentdocs.typepad.com/files/amicus-brief.pdf. Some respect in the Federal Circuit for the “all elements” rule would definitely help. Come to think of it, if Judge Scalia represents the left wing and Justice Scalia represented the right wing, there can be no doubt where my preferences lie.

  7. Paul Cole July 26, 2017 5:28 pm

    I should have said if Judge Reyna represents the left wing…

  8. Night Writer July 26, 2017 6:03 pm

    @4 Paul Cole.

    I think 101 will not be solved by these proposals. Alice is based on finding that the claims were unconstitutionally granted because they might tend not to promote.

    No legislation fixes that holding short of a Constitutional amendment.

  9. Anon July 26, 2017 10:40 pm

    Might not…
    Tend…

    That is not a Constitutionally sound legal argument.

    Why insist on pretending otherwise?

  10. Edward Heller July 27, 2017 6:04 am

    As others have so cogently noted before, the use of a requirement that claim subject matter not be claimed at the level of an abstraction or an idea imports into section 101 a conversation that should take place only under section 112 as delineated in O’Reilly v. Morse.

    What one is trying to determine in section 101 is whether the claimed subject matter is directed to a “new manufacture” in the words of the Statute of Monopolies. (Of course new manufacture can include machines, compositions and processes).

    The Supreme Court has been presented with the issues of whether a computer programmed to implement a novel mathematical algorithm (Benson, Flook) or business method (Bilski, Alice) and never has directly addressed the issue of whether these claims fall within the four classes or not. Instead, they have relied on almost sui generis exception law that has come to be utter gobbledygook. The line of cases is an embarrassment.

  11. Peter Kramer July 27, 2017 6:45 am

    @ Paul Cole
    While it may seem that the Fed. Cir. over-interprets USSC decisions, I’m afraid they don’t successfully interpret the USSC, or their own opinions, in the first place. When CAFC came up with its KSR ruling I was aghast. They couldn’t even figure out how to apply their own rules concerning analogous art (and then the USSC, rather than correcting CAFC error, compounded it with their KSR monstrosity decision). Its been downhill ever since.

  12. Anon July 27, 2017 8:11 am

    Mr. Heller,

    Why is it that you continue to try to twist the Act of 1952, and purposefully misstate what Congress has to say about the statutory categories?

    In particular, you continue to attempt to try to make the Process category into a mere handmaiden of the other hard goods categories with statements such as:

    What one is trying to determine in section 101 is whether the claimed subject matter is directed to a “new manufacture” in the words of the Statute of Monopolies. (Of course new manufacture can include machines, compositions and processes).

    Bluntly, as you have been brought to task so many times now, you must account for 35 USC 100(b):

    The term “process” means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.

    As has been explained to you, this definition is not circular as it may appear (with “process” being both in quotes and in the body of the definition). Rather, the term “process” not in quotes references the more archaic use of the term as your Justice-Story anti-method view may reflect, and clearly evinces a much broader meaning of that term in the following section of law (35 USC 101).

    The Supreme Court is not the only entity that is relying on an “almost sui generis” construct.

    Further, the Supreme Court HAS directly addressed whether or not their exception basis deals with “the issue of whether these claims fall within the four classes or not.” The nominative “Two-Step” includes in the “directly addressing” first step of an evaluation as to whether an item falls within the four classes or not.

    What the Supreme Court has unleashed though with its “Gist/Abstract” sword (and in direct thumbing of their collective noses at the Legislative branch), is a reversion to pre-1952 patent law when they still possessed a power of common law evolution for the meaning of the term “invention” (or spirit of the invention, gist of the invention, or any of the nearly dozen terms that showed to Congress that the common law power was NOT working as originally intended).

    Congress stepped in and removed that common law power when it set up – and carved out of the single pre-1952 paragraph – the section of 103.

    Mr. Cole,

    I recognize that your post does contain sage advice, but it also contains the very same error that (also) has been pointed out to you many times now. The “Gist/Abstract” sword itself is the problem – and your attempted move to focus on how the lower courts use that weapon misses the larger point, and to the degree to which you wish to move the focus away from the Supreme Court, you are in plain error.

    You as well need to recognize that the Court is attempting to use authority that was stripped of it in 1952.

    Pretending otherwise is very much part of the problem.

  13. Edward Heller July 27, 2017 8:23 am

    Anon, what is down right “weird” is your assumption and insistence that Congress intended to change the law regarding process patents when it swapped “process” for “Art” in the ’52 Act. Legislative history provides no support for the conclusion that any change in the law was intended. The statute, therefore remained unchanged regarding Art from 1790. It had the meaning in 1952 Congress intended it to mean in 1790. And because “useful Arts” is in the Constitution, one can safely conclude, that Congress intended Art to have the same meaning.

    Therefore to ascertain that meaning, all one has to do is look to the state of the law in England at the time of the Constitution. Of course, at that time, the English statute in question was Statute of Monopolies that provided that “new manufactures” were patentable subject matter. But the case law had extended that subject matter beyond simple manufactures, to machines, compositions and methods of making new or improved things.

  14. Bob Hodges July 27, 2017 9:31 am

    Let’s be clear. The purpose of patent eligibility requirements under section 101 is to exclude from patent protection inventions that are deemed to be contrary to (1) the Constitution, (2) the law as passed by Congress, or (3) patent policy as determined by the courts (I don’t agree with the validity of the last one, but it seems to be a fact of our jurisprudence). In any case, it is not, and should not be, the purpose of patent eligibility under section 101 to “make it easier” for accused infringers to avoid infringement. I guess that I understand that this last does appear to be a main purpose of patent eligibility jurisprudence. As a well-known man once (or twice) said: SAD.

  15. Anon July 27, 2017 9:41 am

    Mr. Heller,

    One does not need to regress to ANY such “intention of Congress” as the plain words themselves inform.

    Is this the reason why you always disengage with dialogues when confronted with 35 USC 100(b)?

    Perhaps this time will be different and you will actually discuss the actual words of Congress.

    Sadly, I hold forth little hope for such (much like how your desire for eliminating all business methods never carries past the discussion point that Justice Stevens would have written out a section of law in Bilski had he not lost his majority position).

  16. Curious July 27, 2017 10:07 am

    Let me repeat the quote from Diamond v. Chakrabarty, 447 U.S. 303 (1980), that I referenced earlier:
    The Patent Act of 1793, authored by Thomas Jefferson, defined statutory subject matter as “any new and useful art, machine, manufacture, or composition of matter, or any new or useful improvement [thereof].” Act of Feb. 21, 1793, § 1, 1 Stat. 319. The Act embodied Jefferson’s philosophy that “ingenuity should receive a liberal encouragement.” 5 Writings of Thomas Jefferson 75-76 (Washington ed. 1871). See Graham v. John Deere Co., 383 U. S. 1, 383 U. S. 7-10 (1966). Subsequent patent statutes in 1836, 1870, and 1874 employed this same broad language. In 1052, when the patent laws were recodified, Congress replaced the word “art” with “process,” but otherwise left Jefferson’s language intact. The Committee Reports accompanying the 1952 Act inform us that Congress intended statutory subject matter to “include anything under the sun that is made by man.” S Rep. No 1979, 82d Cong., 2d Sess., 5 (1952); H.R.Rep. No. 1979, 82d Cong., 2d Sess., 6 (1952).

    The Court later went on to say that a naturally-occurring mineral or Einstein’s E=MC^2 wouldn’t be patentable because they are “manifestations of . . . nature, free to all men and reserved exclusively to none.”

    By quibbling over the meaning of “art” versus “process,” we are forgetting Jefferson’s philosophy that innovation receive a “liberal” encouragement. If, when faced with a tough question as to subject matter patent eligibility, the Courts should err on the side of the patent eligibility — this is liberal encouragement. However, today we have both the Courts and the USPTO bending over backwards to do the opposite. They literally concoct ways to force-fit a finding of patent ineligibility onto just about anything.

    As for the term “process,” if it is something invented by man, then it should be patent eligible unless it is a natural process — hence, not invented by man. The only issue becomes mental processes — processes (as defined by the claim) that can cover human thought alone. I have no problems defining those as an exception to patentable subject matter.

    As a matter of good public policy, I don’t want anyone to assert that the patent system can be used to prevent someone from “thinking” about anything. Along the same lines, to the extent that a patent could include, as one limitation, the mental thoughts of a person then that person should not be subject to a claim of patent infringement if the basis for finding infringement included that person engaging in certain mental thoughts. Similarly, I would state that “speaking” (or other forms of purely-human communication) cannot be used to establish that someone infringed a patent.

    I think one faction of the anti-patent crowd primarily worries that patents can be used to control speech and/or human thought, and I think it has been a coup of the anti-patent crowd to frame their arguments (against patents) at least partially on this basis. As such, to allay their concerns (and dull their arguments), we need to clearly and unambiguously spell out that neither speech nor human thought is to be covered by patents.

  17. Anon July 27, 2017 10:55 am

    Curious,

    I hear what you are saying and elsewhere I have labeled this as the Zombification of the Mental Steps doctrine.**

    I have even invited certain “America’s Leading Patent Law Source” controllers to provide an in-depth historical expose on the rise – and fall – of the Mental Steps doctrine.

    Rather than doing so, we instead are greeted with the (at least perception of) a welcoming of the utter nonsense of the Mental Steps Zombie.

    When even the “Leading Patent Law Source” refuses to dissipate purposeful obfuscations, we are left as we are – quibblings and all (I will note that the quibblings still have purpose, if not for any other reason than to show that certain so-called “champions” of strong patents and patents-as-property are not FULLY on board with what those concepts entail).

    **among other colorful explications 😉

    And one more not-so-minor correction for Mr. Heller @ 13:

    It is NOT: “ But the case law had extended that subject matter beyond simple manufactures, to machines, compositions and methods of making new or improved things.

    But rather, it IS:” But the case law had extended that subject matter beyond simple manufactures, to machines, compositions and methods of new or improvedmaking of things.” – the things themselves DO NOT need to be new or improved in and of themselves.

    Mind you, this being only a part of what 35 USC 100(b) entails: …includes a new use of a known process, machine, manufacture, composition of matter, or material…

  18. Curious July 27, 2017 11:18 am

    Anon — speaking of forgotten portions of statutes — I think many forget that 35 USC 101 includes the phrase “or any new and useful improvement thereof.” There is a lot that is encompassed by this phrase.

    As for “America’s Leading Patent Law Source,” I noticed that the latest article (7 days old) involves PTO submissions waiving privilege to future communication (gawd — how ^%$ boring). As I’ve already admitted, DC banned my IP address some time ago. Even then, I rarely commented due to his lack of policing the toxic culture permeated by he who shall not be named (i.e., the ultimate patent blog troll) and it was me calling DC out on this failure to do so which is what probably got me banned. Regardless, while his website had its heyday, it is certainly not what it used to be. Gene has a greater variety of writers on this website (and more prolific).

    I know I posted this at least once before, I wish Gene had access to better commenting technology. It would nice to have nested comments and the ability to preview what you have posted as well as other tools that I have seen on other sites.

  19. Anon July 27, 2017 1:29 pm

    post 17 could have been more clear:

    But rather, it IS:” But the case law had extended that subject matter beyond simple manufactures, to machines, compositions and new or improved methods of making of things.” – the things themselves DO NOT need to be new or improved in and of themselves.

    (for example, “perfectly cured rubber” was not a new thing prior to the Diehr case)

  20. Edward Heller July 27, 2017 3:48 pm

    Curious, good post there quoting from the Supreme Court.

    Bob Hodges, 101 is not about “(1) the Constitution, (2) the law as passed by Congress, or (3) patent policy as determined by the courts.” It is about compliance with 101, a statute.

    It is Congress that determines policy.

    As to the exceptions, they are common law, and the Supreme Court interprets all statutes to be consistent with the common law unless Congress indicates otherwise.

    It is just that “abstract” and “idea” are not 101 matters. They are 112 matters. They are about claiming more than one had a right to claim, a common law doctrine.

    As to products of nature, etc., these things are not even new. One can discovery them, but that does not make them new. That is why the courts limit claims to processes, etc., that use these discoveries to fashion practical applications.

    In my personal opinion, while the Supreme Court may be coming out with the right answer in most of the cases they decide, there reasoning is beyond the pale.

  21. Night Writer July 27, 2017 4:51 pm

    @18 Curious

    That is about what happened to me as soon as I started criticizing DC, I was banned and the blog itself. (I still have access to other IP addresses, so I can still post and in general DC does not delete my posts. Although, a lot of my Lemley posts are deleted.)

    I note that I have been saying for years that Google’s influence went beyond Congress. Now we see that probably most anti-patent law journal articles are paid for by Google.

  22. Night Writer July 27, 2017 5:50 pm

    One thing to note about the Google influence is that it is really not hard to figure these things out. When you see people misrepresenting the facts and becoming angry when questioned, then you likely are dealing with corruption or a person on a mission like Lemley. I was pretty sure that the professors I was interacting with at the other blog were on the take.

    It really isn’t hard to spot people that are on the take if you just focus on the facts and fairly presenting them.

  23. Anon July 28, 2017 2:56 pm

    When you see people misrepresenting the facts and becoming angry when questioned, then you likely are dealing with corruption or a person on a mission

    This also goes for those who abandon conversations or those who refuse to acknowledge counter points raised, yet will engage repeatedly with their initial views (which invite the posting of the selfsame counter points repeatedly).

    This tactic is not exclusive to monied interests, such as Google, but it is a “tell” that the person you are dealing with does have some vested interest that is preventing a full dialogue on the merits.

    I have seen this labeled as the Internet version of “shouting down.” This tactic aligns with the propaganda notion of “repeat a lie often enough and people will not recognize it as a lie.”

    One of the aspects of this blog is that the overt mistreatment of law and facts gets a (deservedly) short leash. This eliminates much of the propaganda and noise of dealing with propaganda that is a blight elsewhere.