In an unusual bipartisan effort, Senator Thom Tillis (R-N.C.) and Senator Chris Coons (D-Del.) have introduced a pair of bills that seek to strengthen US patents by limiting permissible challenges. The bill led by Tillis, titled the Patent Eligibility Restoration Act of 2023 (PERA), seeks to clarify what technology is eligible for patent protection. The bill led by Coons, titled the Promoting and Respecting Economically Vital American Innovation Leadership Act (PREVAIL), seeks to increase the likelihood that patents survive challenges that may be brought through the Patent Office. The two bills show bipartisan support for substantial patent law reform.
PERA seeks to reform the current standards for determining eligibility for patent protection, which have caused uncertainty and the invalidation of countless patents. Over time, the Supreme Court established a number of exceptions to eligibility and decreed that patents encompassing any such exception are invalid. The Supreme Court decisions, however, created uncertainty as to what technology could be protected by a patent. Following the Supreme Court decisions, courts have invalidated countless patents. The situation caused judges, US solicitors general, and the Patent Office to join together in requesting that the Supreme Court clarify patent eligibility. Unfortunately, the Supreme Court has consistently declined to offer any such clarification.
PERA would effectively scrap most of the Supreme Court’s decisions on patent eligibility. First, PERA eliminates court-created exceptions to eligibility for patent protection. PERA nonetheless retains a few exceptions—including mathematical formulas, mental processes, and unmodified natural materials, which cannot be patented—by codifying them. Second, PERA reinforces the distinction of statutory patent requirements by barring consideration of other grounds for invalidity (namely, novelty, obviousness, and enablement) as part of an eligibility analysis. Third, PERA requires technology to be considered as a whole. In sum, PERA seeks to expand the technology that is eligible for patent protection and improve the certainty that the Patent Office’s determination that a technology is eligible for patent will hold up in litigation.
PREVAIL seeks to reform the processes for challenging patents brought through the Patent Office. In 2022, Patent Office review procedures, largely consisting of inter partes reviews, resulted in invalidation of 26 percent of the challenged claims. PREVAIL would strengthen the US economy by moving back toward the innovation environment that existed before those review procedures were created more than a decade ago.
PREVAIL includes various provisions that would make it more difficult for challengers to invalidate patents through any Patent Office review procedure. First, PREVAIL bars stock speculators from seeking review of patent validity by requiring any challenger to have been sued for patent infringement or at least threatened with an infringement lawsuit. Second, PREVAIL raises the standard a challenger must satisfy to invalidate a patent through a Patent Office review process to match the higher standard applied in federal courts. Third, PREVAIL requires challengers to choose one single forum in which to present a patent validity challenge. Fourth, PREVAIL allows challengers only one opportunity to present any patent validity challenge. On the whole, the provisions in PREVAIL would make the Patent Office a less attractive forum for challenging patents.
The bills are important for both patent owners and competitors because they will expand the technology that may be protected by patents and strengthen existing patents. While some litigation to resolve some ambiguous wording in the bills is likely, the overall result will be more and stronger patents. A stronger patent system is likely to increase investment in emerging technologies, such as artificial intelligence, because any resulting patents will be less vulnerable to challengers. For more information or to learn more about how these bills could affect your patents, please contact the authors or your lawyer at McCarter & English, LLP.