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IP Law Groups Ask Congress to Fix Patent Eligibility

July 26, 2018, 2:56 PM

Congress needs to step in and fix the law that determines what kinds of inventions are eligible for patent protection, the leaders of three intellectual property law associations said at a conference on innovation in financial services.

The American Bar Association’s IP law section, the IP Owner’s Association, and the American IP Law Association (AIPLA) in a joint position paper July 25 outlined ways they say Congress should improve Section 101 of the patent statute, which sets the benchmark for patent eligibility.

Right now, abstract ideas, laws of nature, and natural phenomena aren’t eligible for protection. But practitioners say these terms are poorly defined, making it hard for companies to predict whether they can get a patent for their inventions. Critics say the uncertainty undermines the U.S. patent system and discourages research and innovation.

The vague categories give courts too much discretion to knock out patents they don’t like, according to the groups. Judges shouldn’t be able to create exceptions to patentability “out of thin air,” IPO board member Manny Schecter said at the conference, which was hosted by World Congress.

Congress should amend Section 101 to explain these categories, and instruct the courts to interpret them narrowly, they said.

U.S. Supreme Court rulings on patentability have “injected significant ambiguity” by mixing eligibility analysis with other legal concepts, the groups said. The statute on patentability, 35 U.S.C. 101, refers to “new and useful” inventions. Congress should remove “new” to ensure courts don’t consider concepts such as novelty or obviousness when looking at eligibility, the groups said in their paper.

Examiners sometimes will focus on one small part of an invention, find that small part to be an abstract idea, and reject the application, while ignoring other patentable elements, Schecter said. The groups said examiners should analyze the eligibility of patent claims as a whole, not just the “gist” of the invention.

Any change to the law should be technology neutral to ensure that the patent laws are suited to protect future innovations, the bar groups’ position paper stated. Laws will fail if they single out certain types of inventions, such as software, because they aren’t adaptable to new and unforeseen technologies, the groups explained.

Differences Over ‘Abstract’

The groups agreed on guiding principles, but differed in some of their proposed revisions to Section 101, notably how to fix the concept of unpatentable abstract ideas.

The joint proposed legislation by AIPLA and IPO doesn’t use the phrase “abstract idea,” which AIPLA vice president Barbara Fiacco said is an undefined “buzz word.” Instead, it says inventions that exist “solely in the human mind” aren’t eligible for patent protection. Narrowly defining “abstract idea” should help prevent courts from finding too many patents ineligible, Fiacco said.

But the ABA’s proposed legislation does refer to abstract ideas. The problem with the AIPLA-IPO approach is that it might be difficult to abandon a long history of case law interpreting that phrase, Scott Partridge, chair of the ABA IP section said. A new term, such as “solely in the human mind,” will cause confusion, at least before the courts can clarify the meaning, he said.

The ABA’s approach is to ask whether a patent is an attempt to monopolize the abstract idea, a concept known as preemption. In cases going back to the 1950s, courts focused on preemption in its eligibility analysis, Partridge said.

Congress should change the statute so that a patent is ineligible only if all practical applications of the abstract idea or law of nature would be preempted by the patent, Partridge said.

To contact the reporter on this story: Peter Leung in Washington at pleung@bloomberglaw.com

To contact the editor responsible for this story: Rebecca Baker at rbaker@bloomberglaw.com