The Patent Eligibility “Quagmire”

by | Apr 7, 2022 | Intellectual Property

If the United States is to retain our innovation edge, patent eligibility doctrine must be returned to the “anything under the sun that is made by man” standard.

A federal judge calls the status of patent-eligible subject matter “validity goulash.” A former chief judge of the Federal Circuit Court of Appeals calls it “a quagmire.”

Whatever side someone may be on regarding patent eligibility, everyone should agree that the current situation in courts and the Patent Trial & Appeal Board needs fixing.

Far from dry and arcane, it’s one of the most urgent crises in patent law and policy. How this problem is resolved holds critically important consequences.

The outcome directly affects America’s innovation leadership in cutting-edge technologies, our competitiveness with China and the prospects for garage inventors to keep on inventing.

If certainty and clarity of patent eligibility is restored, it means new competitors for Big Tech and Chinese-controlled firms, wealth creation, job creation and a rising U.S. standard of living.

If patent eligibility doctrine remains a mess or narrows eligibility, it protects entrenched incumbents and patent infringers, foregoes potential wealth and job creation, and diminishes innovation that would raise the standard of living for all Americans.

The U.S. Patent & Trademark Office recently requested input on the state of patent-eligible subject matter legal interpretation.

Conservatives for Property Rights commented: “It is important that patent eligibility jurisprudence accord with this statutory design [of broad eligibility, with novelty, usefulness and nonobviousness secondary] because protecting and securing exclusivity to new property someone has created is not merely important as a property rights matter. It is the gateway to progress in science and useful arts as well as to U.S. economic prosperity, national security and industrial competitiveness.”

Eagle Forum Education & Legal Defense Fund wrote: “[T]he combination of [Supreme Court rulings in] Bilski v. Kappos in 2010, Mayo Collaborative Services v. Prometheus Laboratories in 2012, Association for Molecular Pathology v. Myriad Genetics in 2013 and Alice Corp. v. CLS Bank in 2014, individually and through the ‘Mayo-Alice Framework,’ have judicially created exceptions to broad statutory language. Worse, courts have reached contradictory decisions applying complicated ‘tests’ without definitions for key terms and untethered from the statute. . . . Further, courts and PTAB have conflated substantive patent criteria with patent eligibility.”

EFELDF’s event on this topic featured a broad array of experts, including two former directors of the PTO, one Democrat and one Republican. In a bitterly divided Washington, these experts agreed: This is an urgent problem that demands a return to broad eligibility as a threshold question separate from substantive patentability criteria.

Some background illuminates the patent law and the previous judicial stance on what the law deems eligible for a patent.

In 1980, the Supreme Court handed down a landmark ruling in Diamond v. Chakrabarty. It ruled a man-made, living microorganism is patent-eligible subject matter. The microorganism would eat hydrocarbon compounds, cleaning up oil spills.

The court invoked a phrase connected with Congress’s 1952 revision of the patent statute. The court said section 101 of the patent law generally regards “anything under the sun that is made by man” as being patent-eligible.

Among other things, that decision sparked the biotech revolution. It made possible new sectors of our economy that benefit mankind in numerous ways.

But patent eligibility has gone from the heights of a broad reading of patent eligibility to the depths of confusion and conflicting rulings. You know it’s a royal mess when Chief Judge of the Federal Circuit Kimberly Moore calls it “validity goulash[,] . . . troubling and inconsistent with the patent statute and precedent.”

The consequences of this “goulash,” turning 101 into a minefield of uncertainty and unpredictability, are many and highly disruptive. The essence of invention and patents is fostering innovation. But an invention today may well be invalidated as ineligible for patenting, such as a medical diagnostic test, a computerized function or an auto axle (the invention in the case that prompted the “validity goulash” quip).

Along with squelching innovation, this mess diminishes patent rights and renders patents unreliable. Without secure patents on cutting-edge technologies, investors shy away from funding patent-centered projects and potential business partners decline to pursue commercialization arrangements.

How dire is this? Former Federal Circuit Chief Judge Paul Michel asks, “If I, as a judge with 22 years of experience deciding patent cases on the Federal Circuit’s bench, cannot predict outcomes based on case law, how can we expect patent examiners, trial judges, inventors and investors to do so?”

Former PTO director Andrei Iancu stresses how important it is to “finally resolve this issue that has plagued our system for the past decade.” He initiated PTO’s development of useful guidance making sense of the courts’ complicated Alice-Mayo Framework.

Former PTO director David Kappos says, “The Supreme Court, Federal Circuit, district courts and USPTO are all spinning their wheels on decisions that are irreconcilable, incoherent and against our national interest.”

If the United States is to retain our innovation edge, patent eligibility doctrine must be returned to the “anything under the sun that is made by man” standard.

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James Edwards, Ph.D., is executive director of Conservatives for Property Rights (@4PropertyRights) and patent policy advisor to Eagle Forum Education and Legal Defense Fund. The views expressed are his own.

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