Lawmakers need to make changes to a draft proposal to rewrite patent eligibility law or else spark more legal fights in which courts have to determine which inventions qualify, patent attorneys and legal analysts say.

A new patent eligibility law could undo U.S. Supreme Court decisions that attorneys say has left the law poorly defined, making it easier for companies to patent inventions. Such rulings have made it harder for companies to raise venture capital, and protect their inventions in legal disputes, some trade groups say.

But companies and IP attorneys are waiting to see how lawmakers craft the legislation...