In June 2023, the US Senate proposed changes to US patent law to address patent subject matter eligibility, inter partes reviews and post grant review before the US Patent Trial and Appeal Board, with the aim of supporting and improving US innovation.
Patent Eligibility Restoration Act of 2023
The Patent Eligibility Restoration Act of 2023 proposes changes to patent eligibility in view of findings that “Efforts by judges of district courts and courts of appeals of the United States to apply the [eligibility] exceptions … to specific circumstances have led to extensive confusion and a lack of consistency”.
In particular, there is a general consensus that patent eligibility decisions by the US Supreme Court over recent years have lacked consistency and created uncertainty for those with US patent portfolios and their related businesses/investments.
The aim of the proposed changes is to provide clarity around patent eligibility in the US and should enable patenting of more software-related and biological inventions (e.g., artificial intelligence, 5G, blockchain, quantum computing, medical diagnostics and biotechnology) which can struggle for US patent protection, but which can be protected in other parts of the world, such as China and Europe.
The Patent Eligibility Restoration Act proposes to delete the current judicial exceptions to patent eligibility (i.e., that laws of nature, natural phenomena, and abstract ideas are not patentable) and creates three new subsections providing a specific list of the excluded subject matter –
Patent eligibility would be defined as:
“IN GENERAL. — Whoever invents or discovers any useful process, machine, manufacture, or composition of matter, or any useful improvement thereof, may obtain a patent therefor, subject only to the exclusions in sub-section (b) and to the further conditions and requirements of this title.”
Five eligibility exclusions would be defined as:
“(A) A mathematical formula that is not part of a claimed invention in a category described in subsection (a).
(B)(i) Subject to clause (ii), a process that is substantially economic, financial, business, social, cultural, or artistic, even though not less than 1 step in the process refers to a machine or manufacture.
(B)(ii) The process described in clause (i) shall not be excluded from eligibility for a patent if the process cannot practically be performed without the use of a machine or manufacture.
(C) A process that—
(i) is a mental process performed solely in the human mind; or
(ii) occurs in nature wholly independent of, and prior to, any human activity.
(D) An unmodified human gene, as that gene exists in the human body.
(E) An unmodified natural material, as that material exists in nature”.
Of particular interest is proposed subsection (B)(ii) that suggests processes that can only be performed on a machine may be considered patent eligible, allowing the possibility for AI-based inventions and business methods performed on a computer to be patented.
A further proposed subsection clarifies that:
“a human gene or natural material shall not be considered to be unmodified” if it’s “(A) isolated, purified, enriched, or otherwise altered by human activity,” or “(B) otherwise employed in a useful invention or discovery”.
As such, for inventions including genetic material (but where the invention is not patent eligible itself), the wording “useful invention or discovery” may be of help.
When determining whether a claimed invention is eligible for a patent, it is proposed that eligibility shall be determined—
‘‘(A) by considering the claimed invention as a whole and without discounting or disregarding any claim element; and
(B) without regard to—
(i) the manner in which the claimed invention was made;
(ii) whether a claim element is known, conventional, routine, or naturally occurring;
(iii) the state of the applicable art, as of the date on which the claimed invention is invented; or
(iv) any other consideration in section 102, 103, or 112”.
For those with a US patent portfolio, or thinking of filing US patent applications, it is worth considering the effects the Patent Eligibility Restoration Act may have, particularly when it comes to topical subject matter, like AI and biological inventions.
The PREVAIL Act (Promoting and Respecting Economically Vital American Innovation Leadership Act) proposes changes to inter partes review and post grant review proceedings, aiming to provide fairness at the US Patent Trial and Appeal Board by limiting infringer’s ability to repetitively challenge inventions. It also aims to harmonize standards between the Patent Trial and Appeal Board and district courts.
Standing requirement and real parties in interest
A new subsection is proposed that states:
“A person may not file with the Office a petition to institute an inter partes review of a patent unless the person, or a real party in interest or a privy of the person, has been—
(A) sued for infringement of the patent; or
(B) charged with infringement of the patent.”
Where ‘charged with infringement’ means “a real and substantial controversy regarding infringement of a patent exists such that the person would have standing to bring a declaratory judgment action in Federal court”, and ‘a real party of interest’ is “a person that, directly or through an affiliate, subsidiary, or proxy, makes a financial contribution to the preparation for, or conduct during, an inter partes review on behalf of a petitioner”.
As such, a petitioner will be required have a business/financial reason to raise a validity challenge. As inter partes reviews are often associated with a co-pending litigation, this change should lead to reduction in filings. Also, entities financially contributing to the validity challenge must be a ‘real party in interest’. This aims to prevent an entity making multiple validity challenges as a silent financial contributor.
Eliminating repetitive proceedings
Single Forum – Petitioners would have to choose between the Patent Trial and Appeal Board and other forums. They would not be able to pursue invalidity actions in both. If an inter partes review or post grant review is instituted, the petitioner cannot then raise/maintain validity arguments in other forums.
USPTO Proceedings – Parties would have to notify the United States Patent and Trademark Office (USPTO) of other proceedings involving a challenged patent. The USPTO would have to reject petitions raising the same (or substantially the same) prior art or arguments that were previously presented to the USPTO (except in some exceptional circumstances).
Estoppel – Estoppel is to be applied at the time the petition is filed (rather that after a final written decision) to limit serial inter partes review and post grant review petitions. As such, a petitioner will be restricted to one petition (although exceptions apply, for example, where the petitioner is later charged with infringement of additional claims of the patent).
Validity Determinations – A petitioner’s inter partes review or post grant review would not be instituted/maintained if a final validity judgement has been issued by another forum before the Patent Trial and Appeal Board completes its review of the petitioner’s challenge.
Burden of proof
It is proposed to raise the unpatentability burden of proof from preponderance of the evidence to ‘by clear and convincing evidence’.