By Kevin E. Noonan —

The parlous state of patent law as applied to biotechnology (and to a slightly lesser extent, pharmaceuticals) generally over the past several years has been thoroughly explicated here and elsewhere, and the recalcitrance engendered by stare decisis principles at numerous district courts and the Federal Circuit (and the Supreme Court’s unwillingness to grant certiorari and address the issues its patent eligibility jurisprudence has created) has made it evident that only a legislative remedy may be capable of correcting the state of the law on this issue.  There have been several proposals, by the Intellectual Property Owners (IPO), the American Intellectual Property Law Association (AIPLA), the Intellectual Property Law Section of the American Bar Association (ABA-IPL), and other bar groups, for changes in 35 U.S.C. § 101 that would address the problem.  Over the past months, Senators Tillis (R-NC), Chairman of the Intellectual Property Subcommittee of the Senate Judiciary Committee, and Senator Coons (D-DE), the Ranking Member of the Subcommittee, have had a series of Roundtables with various stakeholders and have announced general considerations („a framework”) for proposed legislation on revising Section 101.  Yesterday, these Senators, along with Rep. Johnson (D-GA 4th), Chairman of the House Judiciary Committee, Rep. Collins (R-GA 9th), Ranking Member of the House Judiciary Committee, and Rep. Stivers (R-OH 15th), released a „bipartisan, bicameral” draft of specific legislation based on these efforts.  Specifically, Sections 100, 101, and 112 would be changed under their proposal, as follows:

Section 100:

(k) The term „useful” means any invention or discovery that provides specific and practical utility in any field of technology through human intervention.

Section 101:

(a) Whoever invents or discovers any useful process, machine, manufacture, or composition of matter, or any useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

(b) Eligibility under this section shall be determined only while considering the claimed invention as a whole, without discounting or disregarding any claim limitation.

Section 112

(f) Functional Claim Elements—

An element in a claim expressed as a specified function without the recital of structure, material, or acts in support thereof shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.

In addition, the proposal is accompanied by „other legislative provisions” to the effect that:

• The provisions of section 101 shall be construed in favor of eligibility.

• No implicit or other judicially created exceptions to subject matter eligibility, including „abstract ideas,” „laws of nature,” or „natural phenomena,” shall be used to determine patent eligibility under section 101, and all cases establishing or interpreting those exceptions to eligibility are hereby abrogated.

• The eligibility of a claimed invention under section 101 shall be determined without regard to: the manner in which the claimed invention was made; whether individual limitations of a claim are well known, conventional or routine; the state of the art at the time of the invention; or any other considerations relating to sections 102, 103, or 112 of this title.

These Senators will be holding hearings on June 4, 5 and 11 on the proposal, which is why the language of the proposed bill is not final (particularly regarding the „other” provisions).

The question is whether such legislative corrections will provide a solution for claims to the two types of subject matter that have been most affected by the Supreme Court’s recent cases: diagnostic methods and natural products.  And an important subsidiary question is whether the Court will take its congressional medicine in stride or will find ways either to reject correction outright or parse the amended statutory language to reach the same murky results.

With those considerations in mind, the current proposed amendments to section 101 remove the temptation to mix novelty and patent eligibility concepts in that section by removing the word „new” from this part of the statute, which is unlikely by itself to effect a significant change in how the Court performs its eligibility analysis.  The other change is more promising, because it codifies the Court’s own holding in Diamond v. Diehr and provides a promise of a remedy for the parsing of claims encouraged by the „routine, well-understood, and conventional” language found in Mayo Collaborative Services v. Prometheus Laboratories, Inc. (and used with patent-invalidating effect in cases such as Ariosa v. Sequenom, by the district court and the Federal Circuit).  It remains to be seen whether stronger language prohibiting application of Justice Breyer’s language in Mayo is included in the final draft, but it is clear this course is contemplated by the bill’s sponsors as part of the „other legislative provisions” portion of the draft.

The proposed addition of section 100(k) can be understood to be an attempt to put a „technology” and „human intervention” requirement into the patent eligibility section through the definition of „useful,” rather than burdening section 101 with these concepts.

These proposed changes do not directly address the problems certain biotechnology inventions have faced, specifically diagnostic methods and products of nature (the former claims have been challenged more frequently and fared more poorly than natural product claims; the main impediment to eligibility of the latter is the Court-imposed proscription against patenting natural products that have „merely” been isolated from nature).  Prospects for addressing these issues can be found in the „other” provisions, but these are also the provisions most likely to provoke the most vociferous backlash, from the Court as well as those stakeholders who believe that the recent constrictions on subject matter eligibility are in their best interests.  As intimated by the draft, the bill may contain a provision expressly abrogating the judicial exceptions („abstract ideas,” „laws of nature,” or „natural phenomena”), that abrogation applying both prospectively and retrospectively (does Sequenom get its patents back?).  But this raises the issue of whether the Court can invalidate any such change as being outside the scope of the powers conferred upon Congress under Article I, Section 8, clause 8 of the Constitution.  It is good to recall that the judicial exceptions (occasional effects not to the contrary) are not judicial whims:  the Court firmly believes that they are necessary to prevent Congress from exceeding its Constitutional authority to grant patents only on inventions that „promote progress.”  This is consistent with the Court’s role in our system of government, and at best the consequence of any such abrogation will be that it is ignored in practice, and at worst it could motivate the Court to recite even more stringent and strictly applied limitations on Congress’s power to grant patents.  The Court’s forays into patent policy making have been unfortunate to say the least; anything that encourages these tendencies is unlikely to end well for U.S. innovation.

A more complete assessment of the prospects of proposed legislation to resolve the current morass of district court, Federal Circuit, and Supreme Court case law on subject matter eligibility under the Patent Act will depend, and will be performed, once a bill is introduced.  But that of course is just the opening salvo; it is certain that stakeholders who disagree than there is anything amiss under current circumstances will oppose and, at best, extract some concessions of their own before meaningful legislation will advance (and of course there is no telling what the Trump administration’s position will be on the issue).

There is one outside-the-box yet summary solution to the issue (advanced so often by a contributor to this blog under the nom-de-blog „Skeptical” that we investigated it).  Article III sets forth the jurisdiction of the Supreme Court very plainly:

The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;—to all Cases affecting Ambassadors, other public Ministers and Consuls;—to all Cases of admiralty and maritime Jurisdiction;—to Controversies to which the United States shall be a Party;—to Controversies between two or more States;–between a State and Citizens of another State;–between Citizens of different States;–between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.

In all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party, the supreme Court shall have original Jurisdiction.  In all the other Cases before mentioned, the supreme Court shall have appellate Jurisdiction, both as to Law and Fact, with such Exceptions, and under such Regulations as the Congress shall make.  Article III, Section 2 [emphasis added].

Taken at face value, this provision empowers Congress to withdraw the appellate jurisdiction of the Court over patents.  While there is academic disagreement with this interpretation (see Calabresi and Lawson, „The Unitary Executive, Jurisdiction Stripping, and the Hamdan Opinions: A Textualist Response to Justice Scalia), there is also support, for example in Ex Parte McCardle, 74 U.S. 506 (1869), The Francis Wright, 105 U.S. 381, 386 (1881), and National Insurance Co. v. Tidewater Co., 337 U.S. 582, 655 (1949).  Heretofore, it was unlikely that anything this radical could have any real chance of being enacted.  But in the current political climate, it would be foolhardy to summarily reject any outcome contemplated by the Constitution under the right circumstances.  The question is, have those circumstances yet arrived?