A bipartisan group of senators introduced two new bills this year to address prevailing issues with the U.S. patent system. This article summarizes the key aspects of each bill and analyzes the potential consequences.

PREVAIL Act

The PREVAIL Act seeks to overhaul certain procedures at the Patent Trial and Appeal Board (“PTAB”).[1] The PTAB was established with the 2011 America Invents Act and has been the subject of much controversy. Former Federal Circuit Chief Judge Randall Rader notably described PTAB as “death squads killing property rights,”[2] while others have lauded the PTAB for providing a “faster and cheaper” method for the public to challenge patents.[3]

In key parts, the PREVAIL Act would:[4]

• Restrict who can challenge a patent by requiring “challengers to have been sued or threatened with a patent infringement lawsuit before filing a PTAB challenge” and “prohibiting any entity financially contributing to a PTAB challenge from bringing its own challenge;”
• Prevent multiple challenges to the same patent by requiring “a party to raise all arguments in one challenge” and applying “estoppel at the time the challenge is filed, rather than after a PTAB final written decision;”
• Harmonize PTAB procedures with federal district court procedures by requiring “the PTAB to find a patent invalid by ‘clear and convincing’ evidence” and “interpret claims using the same ‘plain and ordinary meaning’ standard used in federal district court;” and
• Prevent “duplicative patent challenges” by requiring “a party to choose between making its validity challenges before the PTAB or in another forum, such as federal court.”

Overall, the changes proposed in the PREVAIL Act would likely make it harder for petitioners to successfully challenge patents through the PTAB. However, these changes would also likely reduce costs and uncertainties inherent in the current system.

Patent Eligibility and Restoration Act

The Patent Eligibility and Restoration Act of 2023 is the latest version of a bill to clear up uncertainty with patent subject matter eligibility under § 101 of the Patent Act.[5] The bill claims to eliminate judicial exceptions to patent eligibility.[6] These judicial exceptions have been recognized in the current legal framework to exclude from eligibility abstract ideas, laws of nature, and natural phenomena.[7] As I previously wrote about, the version of the bill from last year was unlikely to solve the confusion with patent eligibility, despite the good intentions behind the bill. The new version attempts to fix at least a few of these issues.

One significant change is with the word “non-technological.” The 2023 version amends the language in clause (b)(1)(B) from the 2022 version that excluded from eligibility any “process that . . . (i) is a non-technological economic, financial, business, social, cultural, or artistic process.” The 2023 version replaces the term “non-technological” with the term “substantially.” Although “substantially” is somewhat ambiguous, the 2023 version provides a rather bright-line clarification that “(ii) The process described in clause (i) shall not be excluded from eligibility for a patent if the process cannot practically be performed without the use of a machine or manufacture.”[8]

In other words, for inventions that are considered a “substantially economic, financial, business, social, cultural, or artistic process,” if a person is unable to practically perform the invention without a “machine or manufacture,” that invention would be patent eligible. Critics say the new bill perpetuates uncertainty with terms like “substantially” and “practically,” and simply codifies the main principles of the judge-made exceptions.[9]

Another significant change is with the “storing and executing” provision from the 2022 version. The 2022 version provided that “a person may obtain a patent for a claimed invention . . . if that process is embodied in a machine or manufacture, unless that machine or manufacture is recited in a patent claim without integrating, beyond merely storing and executing, the steps of the process that the machine or manufacture perform. It was unclear what qualified as “beyond merely storing and executing” meant, an issue that could have had an enormous impact on the eligibility of software patents. The 2023 version eliminates this provision entirely.

Thus, the Patent Eligibility and Restoration Act is intended to significantly expand the types of inventions that are eligible to be protected by patents, but face legislative headwinds for the perception that it does not deliver on its promise.

Concluding Thoughts

Staying ahead of significant legislative reforms is critical. The team at Dunlap Bennett & Ludwig can help ensure that your intellectual property rights stay well protected.

[1] https://www.coons.senate.gov/imo/media/doc/prevail_act_bill_text.pdf

[2] https://ipwatchdog.com/2014/03/24/ptab-death-squads-are-all-commercially-viable-patents-invalid/id=48642/

[3] https://www.eff.org/deeplinks/2023/06/our-right-challenge-junk-patents-under-threat

[4] https://www.coons.senate.gov/imo/media/doc/prevail_act_fact_sheet.pdf

[5] https://www.tillis.senate.gov/2023/6/tillis-coons-introduce-landmark-legislation-to-restore-american-innovation

[6] https://www.tillis.senate.gov/services/files/4B41CBF2-57AB-4E8E-9E93-7D714A7AAB40

[7] E.g., Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014).

[8] https://www.tillis.senate.gov/services/files/4B41CBF2-57AB-4E8E-9E93-7D714A7AAB40; https://www.congress.gov/117/bills/s4734/BILLS-117s4734is.pdf

[9] https://ipwatchdog.com/2023/07/02/patent-eligibility-restoration-act-2023-can-still-improved/id=162923/

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