Tillis and Coons Bill Would Eliminate all Judicial Exceptions to Patent Eligibility

“If this bill passes it will nullify all Supreme Court precedent relating to patent eligibility, and specifically overrule Mayo, Myriad and Alice. The Federal Circuit and Supreme Court would need to start from scratch, and that would be a very good thing….” – Gene Quinn

As predicted by retired United States Court of Appeals for the Federal Circuit Chief Judge Paul Michel last month, Senators Chris Coons (D-DE) and Thom Tillis (R-NC) have introduced the first of what Michel said will be multiple bills aimed at fixing the U.S. patent system. Today’s bill, the Patent Eligibility Restoration Act of 2023, would eliminate all judicially-created exceptions to U.S. patent eligibility law.

Tillis first introduced the bill last August, and Coons announced he would co-sponsor the legislation in September 2022 at a Council for Innovation Promotion (C4IP) event. As part of today’s announcement, C4IP Co-Chairs and former U.S. Patent and Trademark Office (USPTO) Directors David Kappos and Andrei Iancu applauded the bill, calling it “much needed legislation to foster the development of next-generation technologies across many innovative industries, including artificial intelligence, medical diagnostics, quantum computing, and telecommunications, to name a few.”

The bill’s text articulates the following statutory exceptions to eligibility:

(D) The following inventions shall not be eligible for patent protection:

(i) A mathematical formula that is not part of an invention that is in a category described in subparagraph (B).
(ii) A mental process performed solely in the mind of a human being
(iii) An unmodified human gene, as that gene exists in the human body.
(iv) An unmodified natural material, as that material exists in nature.
(v) A process that is substantially economic, financial, business, social, cultural, or artistic.

With respect to the exception in paragraph (v), the text explains that “process claims drawn solely to the steps undertaken by human beings in methods of doing business, performing dance moves, offering marriage proposals, and the like shall not be eligible for patent coverage, and adding a non-essential reference to a computer by merely stating, for example, ‘’do it on a computer’ shall not establish such eligibility.”

Further, any process that requires the use of a machine, including a computer, to be performed, shall be eligible for patent protection under the bill.

The bill also repeatedly takes pains to distinguish Section 101 from Sections 102, 103 and 112.

Tillis said in the press release sent out today that the text strikes a balance between clarifying that the eligibility standard should be broad while also addressing concerns “by enumerating a specific but extensive list of excluded subject matter. “Passing patent eligibility reform remains one of my top legislative priorities during my second term,” Tillis said.

Coons said he was proud to join as a sponsor of the bill and that patent eligibility confusion has compromised the United States’ “competitive edge.”

“Critical technologies like medical diagnostics and artificial intelligence can be protected with patents in Europe and China, but not in the United States,” Coons said.

While the likelihood of the bill being passed remains unclear, Michel said in May that the mere introduction of such legislation could speed change along. He explained:

“The three biggest problems are all about to be the subject of bipartisan bills in the Senate, and the House will follow suit. I think when the bills are introduced and get cosponsored by numerous people of both parties, and then they start holding hearings, that will create a huge amount of momentum, and when the courts see the momentum, they will start acting on their own – particularly the Federal Circuit.”

IPWatchdog Founder and CEO Gene Quinn said the bill would be a welcome reset of the patent community:

“This bill would once and for all reassert Congressional authority to decide what is and what is not patentable, taking the legislative prerogative away from the Supreme Court. We all know the Supreme Court is not supposed to legislate, but for years the judicial exceptions to patentability— which by their very nature are extra-statutory— have been used to prevent the patenting of innovations that the law enacted by Congress allowed to be patented. If this bill passes it will nullify all Supreme Court precedent relating to patent eligibility, and specifically overrule Mayo, Myriad and Alice. The Federal Circuit and Supreme Court would need to start from scratch, and that would be a very good thing because the Supreme Court has painted the entire industry into a corner and they refuse to modify, elaborate or clarify their nonsensical approach to patent eligibility. It is far past time for a reset.”

IPWatchdog will share more commentary on the bill as we gather it.

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Eileen McDermott Eileen McDermott is the Editor-in-Chief of IPWatchdog.com. Eileen is a veteran IP and legal journalist, and no stranger to the intellectual property world, having held editorial and managerial positions at [...see more]

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com.

Join the Discussion

21 comments so far.

jacek
June 26, 2023 03:34 pm
Tills and Coons? Just the names signal that we are dealing with crooked legislation.

The goal is not to pass any improvements but to kill discussion about reforms to the US patent system.
That is why they offer scraps.

Once something passes through Congress, there will be a wide assumption that all necessary reforms are done. Then we will wait the next ten years before Congress will eventually return to the subject.
Lab Jedor
June 24, 2023 03:18 pm
A programmable computer has several important and distinctive quantifiable properties:
-it has a capability for fast error-free storage and rapid retrieval of huge amounts of data including instructions;
– it has a capability of rapidly and selectively processing and displaying data from an enormous amount of data;
– it has a capability to process data at extremely high speeds, error free;
– it has a capability to process and produce data in electronic form , which allows it to transmit data in enormous amounts and/or very high speed that may be practically considered to be instantaneous;
– it has a capability to connect to conversion devices, which allows it to process signals from the outside physical world and provide signals in usable form to the outside physical world.

All (and more) provide a programmed computer with “super-human” capabilities that realistically cannot be matched ever by humans.

In that sense, a limitation requiring “the computer processing data in electronic form and outputting resulting data in electronic form on a physical transmission channel” would make it patent eligible under the new Bill, because the claim cannot be practically performed without a computer. Unless SCOTUS steps in and maintains that this is a “non-essential reference to a computer.”

Logically B(i) and B(ii) are a bit of a paradox. Basically its says: “it is not patent eligible merely when you do it on a computer, unless you demand you do it on a computer.”

To be on the safe side I would probably include some physical limitation, like identifying at least one electronic data record from at least 1000 stored electronic data records within a processing period not exceeding 1000 ms.

Reviewing the Alice decision, I am not sure that SCOTUS would not come up with the same or similar decision even within the context of this Bill. However, the Alice claims including some further physical conditions would most likely make the claims patent eligible under this Bill. But then again, perhaps not. Let’s ask the drafters of this Bill.

To me, as an engineer, I clearly see the distinction between a computer or a human doing the processing. I also understand that others may argue that the distinction is insignificant and may convince a Court that for instance a human doing a calculation with pencil and paper is equivalent to a computer doing a computation. I mean, they succeeded in convincing a Court that “a communication channel” is an abstract idea. We thus have to be prepared for almost anything.

I am hopeful about this Bill. I really am. And I am willing to give the Drafters the benefit of doubt as being well-intentioned. We all realize that the current situation on patent eligibility is a mess and articulated in un-scientific steam-punk reality, wherein any nonsense argument is considered to be a technical/scientific truth. Our adversaries are benefiting by us ourselves blocking inventors from entering our innovation economy.

We absolutely need clarification of weasel terms like “substantially”, “non-essential”, “cannot be practically performed”, “merely stating do it on a computer”, “drawn solely to the steps”, etc. These need to be discussed with examples in Congress, if only, to prevent introducing ,as Anon expresses, “a poison pill.”
Pro Se
June 23, 2023 01:57 pm
Wonder if there would be retro effect? A lot of valid engineering claims were destroyed due to legal effects of rulings based on preferred “language” rules rather than the actual working the claims to successfully build real products.

Do fallen claims/patents under Alice, Williamson, and the other “radical” infringer friendly case law allow revival of U.S. patents forced to be abandoned (due to the case law killing maintenance fee payment feasibility).

Or will we see another: “too bad for you, you should have keep giving us money on your case law uncertain patents”?

Such a devastating mess this has all become.
Josh Malone
June 23, 2023 01:35 pm
Lab, thanks for the effort to explain the computer/pencil distinction. Alas, it is still nonsense to me. The only material difference is speed.

It appears to me the issue we are trying to dodge is whether or not to allow patents on information processing. It should either be patentable or not, regardless of who or what is performing it.

I am in favor of it. Algorithms are a great area in which to promote progress by securing to inventors new discoveries therein.
Lab Jedor
June 23, 2023 01:09 pm
Again, this is what the Bill says:
‘(B)(i) Subject to clause (ii), a process that is substantially economic, financial, business, social, cultural, or artistic, even though not less than 1 step in the process refers to a machine or manufacture.
‘‘(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.

A Court may in a decision stop at (B)(i) and refuse or fail to consider (B)(ii). In that case it doesn’t follow the law. I for now believe that we should view B(i) and(ii) in combination. Nobody in the Comments of this post seems to do that and is getting stuck on B(i) by itself. If B(i) was not accompanied by B(ii) I fully agree with the comments. However B(ii) is included as the drafters probably realized that without it the Bill would not fly at all.

As to Anon’s remark. Doing it with pencil and paper is seen as an extension of doing something mentally. Multiplying two 100 digit numbers is considered to be a mental process. The pencil and paper do not perform any of the operations. They are merely “memory” devices, so to speak. Doing the multiplication within a second cannot be done without a computer. Using pencil and paper would not contribute substantially to performing the multiplication within 1 second.

A computer enables to executing steps within a reasonable time, something that was previously not possible. As such the computer is a tool, like an engine or a motor. It enables operations that otherwise would be impossible or at least unpractical.

In my field of machine cryptography, even though manual encryption is well known, computers form an essential tool. Without these, current operational practical cryptography would be impossible. The same applies to operations that have to be performed in, or at least close to real-time. That is the fundamental difference that computers make vis a vis pencil and paper. A fact that has been broadly ignored and finally finds some recognition in this Bill.

PS I apologize for the mistake in my previous comment. RSA relates of course to ((m^e)^d) mod-k=m.
Model 101
June 23, 2023 12:23 pm
May I say –

First off – Eileen you are my dream….but I think you missed an important word …”NON-TECHNOLOGICAL”…in the actual bill language.

Computers/Software are considered “technical” by definition in the USA.

https://www.bing.com/search?q=technological+definition&form=ANSPH1&refig=b1085b27bf70421d867424077c34a07b&pc=U531&sp=1&lq=0&qs=EP&pq=technological+definition&sc=10-24&cvid=b1085b27bf70421d867424077c34a07b

From Tillis:
‘‘(B) A process that—
‘(i) is a non-technological economic, financial, business, social, cultural, or artistic process;”

From Microsoft Bing:

Technology is the application of knowledge for achieving practical goals in a reproducible way. [1] The word technology can also mean the products resulting from such efforts, [2] : 117 [3] including both tangible tools such as utensils or machines, and intangible ones such as software.
Anonymous
June 23, 2023 11:10 am
Mike has it right. This text is problematic:
(D) The following inventions shall not be eligible for patent protection: …
(v) A process that is substantially economic, financial, business, social, cultural, or artistic.

Every process can be characterized as “substantially economic, financial, business, social, cultural, or artistic.” Every process claimed is done to exclude others from the market, and is as a result either “substantially economic” or “substantially financial” or “substantially business.” Every infringement of a process claim compensable by money damages is “substantially economic.” That a patentee seeks money damages, and not only injunction, is further evidence of the process being “substantially economic,” and therefore ineligible.

And the bill invites a motion to dismiss, with limited discovery, due to the process being “substantially economic” and therefore ineligible. In the bill’s amended 101, under 2(A), it says, “the court, at any time, may determine whether an invention or discovery that is a subject of the action is eligible for a patent under this section . . .” Cue a motion to dismiss on the pleadings and certainty of summary judgment motions.

Section 2(B) allows discovery “relevant only to eligibility,” so the effect is that the burden shifts to a patent owner to prove eligibility at the pleading stage. So much for presumption of validity. There will always be a mini-trial regarding eligibility, and this only increases costs and uncertainty.

Congress is opening Pandora’s box, yet again, so the courts can conjure their own meanings for terms like “substantially economic.” This section (v) is a non-starter and only invites continued uncertainty. Section 101 is not “fixed”, but the court’s inevitable continued legislation from the bench is guaranteed since no one knows what “substantially economic” means.
concerned
June 23, 2023 08:28 am
My attorney (B) is asking the SCOTUS to throw out all judicial exceptions in our petition. Congress doing the same carries a better shot of happening, I understand.

My claims would be eligible under this proposal it appears. My process is an economic process that gets real results with a method never used before per the documents submitted for every Medicaid authority in the country.

My process uses a computer, which is not the underlying reason it solves the oversight problem.

PTAB wrote that my process has an invented concept, just not their case law invented concept. If all the so-called “judical concepts” are tossed, it seems to help my patent grant as judical exceptions are their only argument.
Anon
June 23, 2023 07:49 am
Lab,

The very point that you “don’t want to do” is the very point in the crux of the matter.

The ubiquitous nature of computers (which will only be accelerated with AI), ever more blurs the distinction between “pen and paper” and “do it on a computer.”

Quite in fact, it has been two years now that I was discussing a case with an Examiner who was quite proud of his role in moving the goalposts along this dimension in that ANY notion of machine learning could not provide “something more” because that had become the equivalent of “do it on a computer” which is — in essence — the very same mentality of “pen and paper” as an assist to the human mind.

Let me remind you (the Royal You), that “pen and paper” are articles of manufacture, and thus, the Bill as written remains fundamentally flawed (even as it appears to be a magnanimous signal of virtue.

The poison pill provision is profound — and entirely unnecessary.
Lab Jedor
June 23, 2023 12:10 am
Josh: MPEP says:
“The use of a physical aid (e.g., pencil and paper or a slide rule) to help perform a mental step (e.g., a mathematical calculation) does not negate the mental nature of the limitation, but simply accounts for variations in memory capacity from one person to another. ”

I do not want to have yet another discussion about if performing a mathematical operation with pencil and paper is different from doing it entirely mentally.

The original RSA cryptography patent was deemed patent eligible in the eligibility example Memo by Director Iancu, because it was “practical” as being performed on a message. The courts ultimately may not accept that reasoning, because the claim limitation is mainly math.

We still rely heavily on the RSA encryption for generating secure Internet passwords.
If you want, you can perform the RSA algorithm with pencil and paper and write the result down on a paper that you exchange with another party.

In essence RSA says that (m^e)^d mod-k=1. This is mathematics. The practical aspect comes in if you have a k formed from two very large prime numbers, so that k cannot easily be formed nor factored without a computer. That is a practical aspect of it related to computers.

I believe in most computer related cases it is possible to quantify why a computer is required to make the claimed invention practical.

Most people seem to accept that pure mathematics should not be patent eligible. I don’t, but I am not hung up about it. The main issue being that practically you could not enforce a “pencil and paper” patent. Most people also appear to accept that “doing math with pencil and paper” is like doing it mentally. A computer execution of math, by its speed, capacity and electronic format brings a whole new dimension to “doing it with a computer.” The Bill before us finally, finally accepts that aspect.

After all the chaos we have gone through, and with favorable comments by people who are known to be pro-patent, I believe this may be the right time to support this Bill. I personally as an inventor want this issue behind me and I (as I currently understand it) support this bill.

The feared/despised 112 requirements are not included in the text and overall it makes an impression of a best effort to move the stuck system forward. I see this as a win for all of us who have written, fought, commented, appealed, argued, litigated on patent eligibility.

It may yet blow up and the current discussions may help to flush things out. But, the eligibility issue seems finally to be moving on being resolved to the benefit of inventors.
Josh Malone
June 22, 2023 10:20 pm
Lab, I don’t understand the effort to distinguish between computers and pen/paper. Why should a method that uses a computer be eligible, but not a method that uses pen/paper?
Mort
June 22, 2023 08:36 pm
Hey Josh there’s that exact word that got your patent cancelled…”Substantially”. This plan doesn’t do anything until the real protection for small patent owners starts. We already know that the Successful patents get watered down once they see commercial success since the Politics of patents sets the game clock, and having the old players and coaches on the bench it’s more likely to be the same in the end. It used to be said the more things change the more they stay the same. Let’s see how this one plays out.
mike
June 22, 2023 07:22 pm
The text reads:

(D) The following inventions shall not be eligible for patent protection: …
(v) A process that is substantially economic, financial, business, social, cultural, or artistic.

Who decides what “substantially” means? Who decides that a process is “financial, business, social, cultural, or artistic”?

A judge? Don’t all inventions involve a matter of business or affect society or contribute to the arts? Thus, I’m having a hard time seeing how this won’t put us back in the same predicament. I’m not necessarily saying this is bad on first glance, but getting back in the same situation by judges who want to kill patents and/or legislate from the bench still seems to be present.

The text also reads:

(E) Under the exception described in sub-paragraph (D)(v)—
(i) process claims drawn solely to the steps undertaken by human beings in methods of doing business, performing dance moves, offering marriage proposals, and the like shall not be eligible for patent coverage, and adding a non-essential reference to a computer by merely stating, for example, ‘‘do it on a computer’’ shall not establish such eligibility; and
(ii) any process that cannot be practically performed without the use of a machine (including a computer) or manufacture shall be eligible for patent coverage.

So, this means:

Eligible: If a process includes use of a computer such that the underlying step(s) of that process cannot be performed if the computer’s utility is stripped away, i.e., the computer reference is essential to performing the step(s) of the process.

Not Eligible: If, after stripping the computer’s utility away, the claims won’t function.

I’m honestly having a hard time seeing this as something different than we already have. And wise applicants having inventions in the software arts in today’s post-Alice era should already be claiming limitations in that manner.

Perhaps at least this helps remove the “significantly more” analysis, which has incorrectly become synonymous with a jurist detemining whether something feels “inventive enough”.

But what does “practically performed” mean? Who decides if a claimed process’s performance is “practical”? Must there be a working prototype here? Because patent claims are not products. They are words. Would an expert’s testimony suffice? How is “practically performed” determined, and how will this not bleed over into enablement?
Pro Say
June 22, 2023 04:35 pm
Thoughts:

1. If substantially = something more, nothing will change. American innovation is still in trouble. Big trouble.

And is “any process that requires the use of a machine, including a computer, to be performed, shall be eligible for patent protection under the bill.” in tension / conflict with (v)?

The only way to insure neither causes problems is to remove the unnecessary, extraneous “(v).”

2. Hearings?! To h.e.l.l. with hearings. We already had hearings. All we’re going to get is the same folks saying the same things over again. Blah. Blah. Blah. All the stakeholders have already let their views be known. Nothing’s changed. Their viewpoints haven’t changed.

It’s past time for corrective action. Long past time.

Anyone wanting hearings can just watch the previous hearings and re-read the written submissions over again.

There. Now wasn’t that easy? Look how much time, effort, and money was saved. Including giving Congress more time to tackle the other big problems facing America.

3. While the elimination of Section 101 is the only certain way to guarantee that SCOTUS and the CAFC never again stick their noses where the Constitution says they must not, since the state of patent protection only seems to get worse by the year, what have we got to lose by giving this bill a shot?
Lab Jedor
June 22, 2023 03:34 pm
I share the concerns expressed by Josh and Curious.
But the text of the Bill provides:
(ii) any process that cannot be practically performed without the use of a machine (including a computer) or manufacture shall be eligible for patent coverage.

It should be stipulated that “doing it with paper and pencil” is not “practically performed” and is not a practical alternative to a computer. Neither is exchanging written notes.

On that note, it seems that this Bill will finally move our patent system on eligibility into the modern age.

It is clear that lawmakers want to make patent eligibility as broad as possible and recognizes the computer as a valid tool. This will (hopefully) for SCOTUS be a strong indication on Congress’ Intent.
Breeze
June 22, 2023 02:54 pm
“It has no utility when done by a human in their mind.”

Huh?
Anon
June 22, 2023 02:40 pm
“(v)’s” flaw does not even rise to the level of being a Trojan Horse.

It is a direct poison pill.

Further, we — and using this in the largest sense of the word — should ALL want innovation protection for economic, financial and business processes.
Model 101
June 22, 2023 02:36 pm
As crooked as it gets.
Josh Malone
June 22, 2023 02:19 pm
Is a novel and non-obvious method for trading currencies eligible? It has no utility when done by a human in their mind. It has a little utility when performed with a manufacture (pencil and paper). It has great utility when done with a machine (like a smartphone).
Breeze
June 22, 2023 01:51 pm
What a waste of time. SCOTUS not gonna care one bit what they amend 101 to say.
Curious
June 22, 2023 01:50 pm
(v) A process that is substantially economic, financial, business, social, cultural, or artistic.
Enter the gigantic loophole by which the Courts will reintroduce all of their old exceptions.

By one definition, all processes are substantially economic and business. Nearly every patented process is part of doing business. If I’m in the business of refining oil to create petroleum products, than any improvements to the that process could fall within the label of a substantially business process. Moreover, nearly every patented process is economic (in the sense they are intended to make money).

What, for example, is a substantially social process? Is an improvement to an email client a substantially social process? Is an improvement to one of the underlying computer processes that supports Facebook’s systems (i.e., social media) a substantially social process?

I will be told I’m reading too much into this. However, without any guidance as to what is meant by “substantially economic” or “substantially … business,” this proposal is little more than rearranging deckchairs on the Titanic as its potential for abuse by the Courts is unlimited.

Introducing undefined terms into 35 USC 101 does not help.