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The May 1 reintroduction of two bills designed to strengthen the certainty of U.S. patents earned praise from the Biotechnology Innovation Organization (BIO).
The Patent Eligibility Restoration Act (PERA Act) would address confusing court decisions by increasing clarity on the type of inventions that can be patented. The Promoting and Respecting Economically Vital American Innovation Leadership Act (PREVAIL Act) would seek to limit abuses by patent challengers.
Both would be welcome improvements to the U.S. system of IP protections that is essential to biotech innovation, according to BIO.
“The Biotechnology Innovation Organization commends Senators Thom Tillis (R-NC) and Chris Coons (D-DE) and Representatives Kevin Kiley (R-CA) and Scott Peters (D-CA) for spearheading the Patent Eligibility Restoration Act (PERA Act),” BIO said in a statement. “It likewise applauds Senators Coons and Tillis and Representatives Nathaniel Moran (R-TX) and Deborah Ross (D-NC) for their Promoting and Respecting Economically Vital American Innovation Leadership Act (PREVAIL Act).”
The bills were introduced with bipartisan backing in the last Congress. The further bipartisan support the bills built up over the past year, and their simultaneous reintroduction in the House and Senate, bodes well for efforts at passage in this Congress.
Why the PERA Act matters
A series of highly criticized Supreme Court decisions, in particular Mayo vs. Prometheus In 2012, built on the idea that “laws of nature, natural phenomena, and abstract ideas are not patentable,” adding new restrictions on what could be patented.
Subsequent decisions by the court broadened the types of inventions that could be exempt from patenting, making IP protections more difficult to obtain even for technologies that have historically been uncontroversial. The Supreme Court’s decisions also created a disadvantage for U.S. inventors compared to the patent protections that continue to be available in foreign countries.
“Thanks to the Supreme Court the most exciting scientific discoveries, technological advances and innovations of the twenty-first century are no longer patent eligible in America,” an expert lamented in IP Watchdog. “Things like personalized medicine, artificial organs, artificial intelligence, and medical diagnostics are not patent eligible.”
Having no choice but to uphold the Supreme Court’s decisions, concerned federal judges urged Congress to address the resulting uncertainty through clarifying legislation, according to a study by the Congressional Research Service (CRS).
PERA seeks to provide that clarification. It would spell out what types of ideas are simply inadmissible for patenting—a short list that includes an unmodified gene as it exists in the human body or an unmodified natural material as it exists in nature. Other biological materials and processes would be patentable if they otherwise meet the normal requirements for a patent.
“PERA will finally clarify which inventions are eligible for patent protection. The existing uncertainty—created by a series of Supreme Court decisions—undermines researchers’ cutting-edge work and makes it harder for American innovators to invest in R&D,” BIO said. “At a time when the American people are demanding that critical industries be brought home, we cannot afford to place our innovators at a disadvantage with overseas competitors.”
North Carolina, home to leading researchers and gene-therapy manufacturers, stands to benefit from this legislation, according to NC Life Sciences, an organization affiliated with BIO.
“For too long, fields like diagnostics, precision medicine, cell and gene therapy, RNA medicine, and digital health have been threatened by unclear and uncertain patent-eligibility standards that put America’s innovators at a disadvantage, and that discourage local investment,” NC Life said. The organization added that PERA means NC Life members “will be able to continue to take the bold risks and make the high levels of investment necessary to take fields like these to their next level.”
Why the PREVAIL Act matters
The America Invents Act of 2011 brought in several changes, including the creation of the Patent Trial and Appeals Board, (PTAB) a tribunal within the U.S. Patent and Trademark Office (USPTO) that can handle challenges to patents, and Inter Partes Review (IPR), a special type of proceeding for deciding patent challenges.
The goal of these changes was to make the resolution of patent disputes more efficient, so patent holders and their competitors could quickly get clarity about important patents. But according to research by the CRS, that did not happen.
“Critics of PTAB argue that it is biased against patent holders, creates uncertainty in patent rights, and discourages investment in innovation. PTAB critics further maintain that IPR is unfair to patent holders, who have successfully obtained a patent before USPTO but must now again defend their patent’s validity before the same agency,” CRS said.
The PREVAIL act proposes several measures to reform the system, including:
- Requiring that patent challengers in the PTAB show that they have something at stake, and are in a real commercial dispute with the owner of the patent that they want to invalidate (so-called “legal standing”).
- Harmonizing the way patent claims are interpreted, and the level of proof required to invalidate a patent in the PTAB, with the standards that are being used in federal district court.
- Ending duplicative patent challenges by requiring a party to choose between making its validity challenges before either the PTAB or in district court
- Increasing transparency and predictability by limiting the ability of politically-appointed USPTO leaders from influencing PTAB panel decisions.
“The PREVAIL Act will empower startups and small businesses by realigning the Patent Trial and Appeals Board with Congress’s original intent,” according to BIO’s statement. “Lawmakers had hoped the PTAB would provide a faster and cheaper alternative to costly federal court litigation. But over the past decade and a half, entrenched corporations have abused PTAB proceedings, using them to harass innovators with expensive, duplicative patent challenges in two forums at once.”
BIO expressed gratitude for both bills. “The Biotechnology Innovation Organization praised lawmakers for introducing two bipartisan, bicameral bills that would strengthen America’s patent system and accelerate medical progress,” the statement said.
Pictured above at a May 1 announcement of the new bills outside the U.S. Capitol, from left: Rep. Scott Peters (D-CA), Rep. Kevin Kiley (R-CA), Rep. Deborah Ross (D-NC), Andrei Iancu (former Director of the USPTO), Sen. Chris Coons (D-DE), and Sen. Thom Tills (R-NC). Not shown: Rep. Nathaniel Moran (R-TX).
