Welcome
IP Law News

Congress in Hot Seat to Fix Patent Law After High Court Denials

Jan. 14, 2020, 4:24 PM

The U.S. Supreme Court’s latest refusal to revisit patent eligibility puts further pressure on Congress to write a set of clearer rules.

Attorneys say the high court sent a signal, by declining to hear several patent eligibility cases Monday, that any significant changes to the law will likely have to come from Capitol Hill. Discussions on a bill to rewrite Section 101 of the Patent Act, which sets the benchmark for patent eligibility, broke down last year amid disagreements among stakeholders.

The denials “will most certainly amp up pressure on Congress to act,” Jonathan Stroud, the chief intellectual property counsel at Unified Patents Inc., said in an email. Stroud said the latest round of patent-related high court petitions “was seen by many as the best and last great chance for the Supreme Court to revisit 101.”

Confusion about what inventions are eligible for patents stems from a line of Supreme Court rulings that date to 2010, including decisions in Alice Corp. v. CLS Bank and Mayo Collaborative Services v. Prometheus Laboratories Inc., in which the justices established a two-part test to determine patent eligibility. Alice, the most recent case, came in 2014.

Lawmakers last year unveiled the text of a draft bill that would have rolled back certain Supreme Court decisions, including Alice. But efforts to introduce a legislative proposal stalled amid disagreement among industry representatives about the scope of the problem and potential solutions.

Paul Michel, a former U.S. Court of Appeals for the Federal Circuit chief judge who has participated in the legislative efforts, said he’s “hopeful they will resume the effort with all the more energy now that the Supreme Court has taken itself out of the mix.”

Sens. Thom Tillis (R-N.C.), the chairman of the Senate Judiciary IP subcommittee, and Chris Coons (D-Del.) the subcommittee’s ranking member, have spearheaded efforts to revamp Section 101. Neither immediately responded to requests for comment.

Proponents of a legislative fix say the current uncertainty is undermining U.S. innovation. Pressure may fall on the relevant industries, including technology and pharmaceutical companies, to reach a consensus on legislation that’s workable for Congress to pass, Steven Auvil, an attorney at Squire Patton Boggs who focuses on IP litigation, said.

“To me, that’s the path forward for a solution to this systemic problem that exists today,” Auvil said.

Major patent legislation would be a heavy lift in Congress in a presidential election year. But lawmakers may be motivated, given the Supreme Court has made it “crystal clear” they’re not going to touch eligibility, Michel said.

Q. Todd Dickinson, an attorney at Polsinelli PC and former director of the U.S. Patent and Trademark Office, said “eligibility is much clearer” in places like Europe and China.

The uncertainty over medical diagnostic patents in particular may prod Congress to act, Eliot Williams, an attorney at Baker Botts LLP whose practice includes IP litigation and management, said.

“Everyone understands the importance of being able to diagnose diseases, and I think everyone can have some sort of opinion about what the right place to set the standard would be for those kinds of inventions,” Williams said.

‘Substantial Uncertainty’

The Trump administration told the Supreme Court in December that its earlier rulings have “introduced substantial uncertainty.” Solicitor General Noel Francisco suggested the justices clarify the standards in an “appropriate case,” identifying a dispute over an Athena Diagnostics Inc. patent for a test to diagnose neurological disorders as a viable option.

Adam Mossoff, an intellectual property law professor at George Mason University, said that was the first time the solicitor general has indicated to the Supreme Court a belief that there is a substantive problem with the test for patent eligibility.

Two other cases gained the support of various trade groups, law professors, and certain companies. One case involved HP Inc. and a computer software patent, the other a dispute over a Vanda Pharmaceuticals Inc. patent related to a schizophrenia drug.

“In the past year or two, many people have woken up, including important members of Congress, to the fact that there is a problem here,” Mossoff said.

The Supreme Court has shown little appetite for patent eligibility cases since Alice, rejecting around 50 petitions that have raised the subject, according to practitioners. Some said the justices may be looking for the Federal Circuit to figure out how to implement the existing framework.

“Hopefully the Federal Circuit will now go en banc to resolve some of their own splits,” Joshua Sarnoff, a patent law professor at DePaul University, said.

To contact the reporter son this story: Matthew Bultman in New York at mbultman@correspondent.bloomberglaw.com
Ian Lopez in Washington at ilopez@bloomberglaw.com

To contact the editors responsible for this story: Rebecca Baker at rbaker@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com

To read more articles log in. To learn more about a subscription click here.