What the Patent Eligibility Restoration Act Means for Artificial Intelligence Inventions

“PERA is not supposed to make AI patentable. PERA deals with Section 101 only, and the law surrounding patentability is governed by the combination of Sections 101, 102, 103 and 112. PERA cannot and should not make any type of technology per se patentable because 101 was never designed to do that.”

The Patent Eligibility Restoration Act (PERA) is no doubt an ambitious bill. In terms of its design, the proposed legislation attempts to deal with each of the Supreme Court’s decisions in Alice, Mayo and Myriad, plus all of their progeny applications thereafter engendered by the Federal Circuit, the Patent Trial and Appeal Board (PTAB), all the way down to the U.S. Patent and Trademark Office (USPTO) examining corp. In a nutshell, the bill, if passed, would return us to a time when Bilski was the law of the land, which will no doubt be welcomed by many innovators.

As is the case with many ambitious endeavors, there will be those who doubt its value. In this case, there are critics who are doubtful of the bill’s effectiveness when it comes to patenting artificial intelligence (AI). Since Alice v. CLS Bank, the high likelihood of an AI invention being found to be directed to an abstract idea has created the worrisome possibility of precluding an entire field capable of generating worlds of foundational technology from patentability. Indeed, it is hard to fathom a world where things like the Star Trek computer, with its endless knowledge base and control capabilities, could be patent ineligible, but that is where we are at present because the very thing that makes AI so useful is its abstract nature, which often defies concrete characterization. One of the most challenging aspects of claiming AI effectively in order to capture its commercial value requires a heavy reliance on functional computer language rather than traditional positive machine or apparatus claiming, as these components are vulnerable to very easy design arounds when it comes to practical AI deployment.

Because PERA would eliminate the foundations of the Alice 2A/2B abstract idea analysis that has proven to be a death knell to many AI claims, there is no doubt that PERA would make things better—perhaps too much, so that it is hard to envision it being enacted as written—especially when some on the pro-patent side want even more. Let us break down how PERA addresses Alice and Mayo and the bill’s impact on subject matter eligibility, particularly the eligibility of artificial intelligence.

Eliminating Step 2A – Judicial Exceptions

The first step of Alice’s subject matter eligibility test is determining “whether the claims at issue are directed to a patent-ineligible concept.” As adopted by the Federal Circuit, under the Mayo/Alice test, the court has assessed whether the claims are directed to a law of nature, natural phenomenon, or abstract idea.

It is under this prong that so much discretion resides on the part of the fact-finder, that is the judge, the PTAB panel or the examiner. Because Alice and Mayo courts failed to establish any test or guideline for how to determine “directed to”, a claim of any form can ultimately be determined to be directed to an abstract idea or law of nature. And that is precisely what has happened, with subjectivity reigning supreme.

Hard to believe that any claim can be found to be directed to one of the so-called judicial exceptions? Look no further than American Axle v. Neapco, where the Federal Circuit literally said the following words: “A claim to a method of manufacturing can be directed to a natural law.” While we have to live with this language, the reality—as if that matters—is the Federal Circuit is wrong. 2+2 does not equal 5 no matter how many times it is repeated, which is essentially the logic behind saying a method of manufacturing can be directed to a natural law.

Not that it matters, but the representative claim of American Axle recited:

“A method for manufacturing a shaft assembly of a driveline system, the driveline system further including a first driveline component and a second driveline component, the shaft assembly being adapted to transmit torque between the first driveline component and the second driveline component, the method comprising…”

Who cares, right? This practice of reformulating what a claim is directed to such that it is ultimately directed to judicially-created patent ineligible subject matter runs afoul of the literal language of the Section 101 statute, which states, “whoever invents or discovers any new and useful process… may obtain a patent therefor.” But we all know what happened after this point and American Axle is stunningly part of the landscape of the law governing subject matter eligibility. In the patent world, at least as it relates to eligibility, 2+2 does currently equal 5.

How has the PTAB proceeded with this “directed to” discretion?

In Ex parte PHILIP E. VASEY (Appeal 2022-001109), the panel stated the following:

“Claims 22, 46, and 52 are independent. Claim 22 recites an apparatus, claim 46 recites a method, and claim 52 recites a computer program stored on computer readable media. We analyze claim 46 as representative. . . The claimed steps of ‘evaluating the first rule based on first inputted information to generate a partially customized document comprising the compulsory content elements, the first symbol element, the second rule, and the second symbol element’ and ‘subsequently generating a fully customized document from the partially customized document, without reference to the document template, by evaluating the second rule based on second inputted information’ can be performed in the human mind.

So, here’s what happened in Vasey. While the applicant presented a combination of apparatus, computer program/computer media and method claims, the board took the method claim as representative, which was thereafter determined to be directed to a mental process. As a result, the claimed apparatus and the entire computer program/media ended up being directed to a mental process. That’s right. An apparatus is really directed to a mental process.

Ex parte appeal decisions like Ex parte PHILIP E. VASEY are rarely the focus of any press attention. But it is illustrative of the discretionary authority exercised at the PTAB with respect to the Alice 2A/2B analysis.

PERA deals with Alice Step 2A in Section 2.5:

“Under this Act, and the amendments made by this Act, the state of the law shall be as follows:

(A) All judicial exceptions to patent eligibility are eliminated.

(B) Any invention or discovery that can be claimed as a useful process, machine, manufacture, or composition of matter, or any useful improvement thereof, is eligible for patent protection, except as explicitly provided in section 101 of title 35, United States Code . . .”

That is, when judicial exceptions are eliminated, the practice of determining whether a claim is directed to a judicial exception is eliminated as well. The bill then goes further in Subparagraph (B) to reiterate the original intent of Section 101, which is that an invention or discovery that is claimed as a useful process, machine, manufacture or composition of matter is eligible for patent protection. The question of what a claim is directed to should always have remained in this scope – is it a process, machine, manufacture, or composition of matter? If yes, then it is patent eligible. Judicially created exceptions to this were always in violation of the original Section 101 law and PERA returns us to basics.

Eliminating Step 2B – No more Well-Understood, Routine and Conventional Analysis

The “something more” prong of Alice is simply out under the bill, as set forth in Section 3.C:

In determining whether, under this section, a claimed invention is eligible for a patent, eligibility shall be determined—

(A) by considering the claimed invention as a whole and without discounting or disregarding any claim element; and

(B) without regard to—

(i) the manner in which the claimed invention was made;

(ii) whether a claim element is known, conventional, routine, or naturally occurring;

(iii) the state of the applicable art, as of the date on which the claimed invention is invented; or

(iv) any other consideration in section 102, 103, or 112.

The fact that the bill bothers to mention that the factfinder is not to consider the state of the applicable art in subparagraph (iii) might not end up affecting matters much. The whole problem with implementing a well-understood, routine and conventional question in Section 101 is that Section 101 does not provide any basis for the establishment of an evidentiary standard using applicable art. What is the factfinder referencing when determining that the invention is well-understood, routine or conventional? Section 101 is silent with respect to an evidentiary basis for this assessment, which astonishingly leads to determinations about what was well-understood, routine and/or conventional being made without any reference to any prior art. It is antithetical to the patent laws to make a determination about what is known without the focus of the inquiry being on the prior art. But when 2+2=5 there is no need for logic, or reason. 2+2=5 because we are told it equals 5, not because it actually does.

And that is the essence of what PERA does – the bill moves these considerations clearly to Sections 102, 103 and 112, where the matter of what is conventional or routine can be fairly assessed using evidence in the form of cited art and references. PERA does what Diamond v. Diehr commanded, which was to allow the other parts of the statute to do the work for which they were designed and not to allow Section 101 to become a single patentability inquiry. So, in this regard, PERA returns us not just to Bilski, but to Diehr and Diamond v. Chakrabarty too.

Contrary to what some may believe, PERA is not supposed to make AI patentable. PERA deals with Section 101 only, and the law surrounding patentability is governed by the combination of Sections 101, 102, 103 and 112. PERA cannot and should not make any type of technology per se patentable because 101 was never designed to do that. What PERA does is compel a fair assessment of AI and other technologies under the rightful statutes where the citation of evidence and articulated reasons are used for the assessment of patentability.

Essentially, AI and many other innovations would have a fighting chance, with patentability governed by whether the innovation is unique when compared with the prior art. That is a win for innovators, as well as a win for fact-based fairness.

Wen Xie Wen Xie is a U.S. Patent Attorney and Partner at Global IP Counselors. She is a prosecutor with a comprehensive understanding of the patent process in the United States, Europe, [...see more]

Gene Quinn Gene Quinn is a patent attorney and a leading commentator on patent law and innovation policy. Mr. Quinn has twice been named one of the top 50 most influential people [...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

13 comments so far.

Curious
October 3, 2023 11:48 am
I am proposing that the Supreme Court could interpret Article I, Section 8 so that it does not grant power to Congress to give exclusive rights for natural laws, physical phenomena, and abstract ideas under the theory that those things are not the inventor’s discoveries.
The Supreme Court could also interpret the First Amendment to say that Space Aliens are considered dogs under the US Constitution. In other words — yes, the Supreme Court could make findings that are completely divorced from reality. It is not like they haven’t done it before. However, if we are going to respect the law, then the Supreme Court does not get to rewrite what Congress wrote as it pertains to patent law.

The Court has fervently protected the doctrine of judicial exceptions for decades. And I think that, if faced with legislation completely removing judicial exceptions, the Court will find them again in the Constitution.
Again, this is why you are plainly not an attorney or trained as one. First, to think the SCOTUS really cares about patent law is to over-exaggerate their interest level in the topic. Second, you really don’t appreciate what the Supreme Court has written. In Bilski, they wrote:
The Court’s precedents provide three specific exceptions to §101’s broad patent-eligibility principles: “laws of nature, physical phenomena, and abstract ideas.” Chakrabarty, supra, at 309. While these exceptions are not required by the statutory text, they are consistent with the notion that a patentable process must be “new and useful.” And, in any case, these exceptions have defined the reach of the statute as a matter of statutory stare decisis going back 150 years.

Breaking this down, they first admit that the exceptions are based upon the “Court’s precedents.” They also admit that “these exceptions are not required by the statutory text.” In other words, the Court made them up. However, they attempted to put a fig leaf over their judicial intrusion into patent law by saying the “[exceptions] are consistent with the notion that a patentable process must be ‘new and useful’.” In other words, they aren’t tying their exceptions to the Constitution. Rather, they are attempting to tie their exceptions to the language of 35 USC 101. I’m going to skip over the factual error in this statement for now.

Finally, they say that “these exceptions have defined the reach of the statute as a matter of statutory stare decisis going back 150 years.” The language of “statutory stare decisis” is very important here and is why B and I are discussing the issue.

Hopefully my link won’t get this post kicked. Here is a description and criticism of statutory stare decisis:

https://www.nationalreview.com/bench-memos/the-three-constitutional-wrongs-of-statutory-stare-decisis/

The three criticisms leveled in this article are the following:
1: The first constitutional wrong is the original usurpation of legislative power by the Supreme Court. The Constitution provides only one way that a statute can be altered — through bicameralism and presentment. The Court plays no role in that.
2: The second constitutional wrong is required by the doctrine of statutory stare decisis. That doctrine looks to congressional inaction as a sign of acquiescence to the Court’s alteration of the original statutory meaning. And that is seen as a reason for keeping that otherwise erroneous interpretation. But this logic is at odds with normal nondelegation doctrine.
3: The third constitutional wrong is related to the second. By upholding the erroneous interpretation, the Court is acquiescing in the original unconstitutional usurpation. But that cannot rectify the original constitutional transgression any more than congressional inaction does so.

Importantly, by stating that the exceptions are allowed by “statutory stare decisis,” the Court implicitly admits that they can be taken away by Congress (i.e., non-acquiescence to the exceptions). Consequently, action by Congress that eliminates these exceptions should be accepted by the Supreme Court as a reasonable exercise of Congress’s authority to make patent law.

Getting back to my point about factual error, there is no evidence that so-called “abstract ideas,” as they are claimed, cannot be “new and useful.” Moreover, no one ever patents “laws of nature.” At best, one can patent using a law of nature, and even then approximations of nature (e.g., Hooke’s law) are not necessarily an actual law of nature.

Although it is a bit too late for this, if B wants to take on SCOTUS, a better (although still likely to fail approach) would be to attack its reliance upon statutory stare decisis using the arguments presented in the linked-to article. These are the kind of arguments that are more likely to resonate with a textualist/originalist majority. The elephant in the room (pun sort of intended) is that eliminating statutory stare decisis would also reduce the power of the Supreme Court, which I don’t think they really want to do. However, if textualists/originalists want to “walk the walk” then they should be agreeable to hold that statutory stare decisis is inconsistent with the US Constitution, and if statutory stare decisis falls then so does the exceptions to 35 USC 101.
S
October 3, 2023 09:10 am
@B, unfortunately in your hasty disagreement you seem to have written your comment before reading mine.

I say that these exceptions “go back as far as Diamond v. Chakrabarty and potentially further depending on how one reads and understands the judicial exceptions.” You cite Gottschalk v. Benson (1972). Which does not undermine my point that that the exceptions go potentially further back. I’ll direct you to Funk Brothers v Kalo Inoculant (1948) which again is further back STILL. All of this is to say that removal of the judicial exceptions is not a move to Bilski. It winds the clock back much further.

You take issue with my statement that “Also, it is unclear to me how an act of congress could completely remove these exceptions” and respond “It’s called ‘The Constitution.'” But you understand that the very next sentence points to Article I, Section 8.

Your last point where you could provide any substantive response is not a response in the slightest.

@Curious

I suppose it must be true that I am non-initiated because I have not received any training that tells me that Congress is permitted to write laws which go beyond the scope of its Constitutional authority. I am proposing that the Supreme Court could interpret Article I, Section 8 so that it does not grant power to Congress to give exclusive rights for natural laws, physical phenomena, and abstract ideas under the theory that those things are not the inventor’s discoveries.

I agree that in common parlance “discovery” means to find something. But, of course, land which is “discovered” is not patentable under anyone’s definition of patent law, so “discoveries” means something else than a common definition.

The Court has fervently protected the doctrine of judicial exceptions for decades. And I think that, if faced with legislation completely removing judicial exceptions, the Court will find them again in the Constitution.
Curious
October 3, 2023 12:20 am
FYI, while this goes against your “statutory stare decisis” theory of patent eligibility, I’ll take this as an admission that s101 really doesn’t have language the S.Ct. could hang its Alice/Mayo abuse upon.
I never said that 101 supported that language. Been saying that on this blog long before you ever showed up. However and this is the point that you don’t seem to appreciate, which is that once the Supreme Court said it did and Congress didn’t push back, then that qualifies as statutory stare decisis and that’s what’s SCOTUS will hang their hat on for as long as Congress doesn’t act.

Had Congress said “hey Supreme Court, you got it wrong,” then the Supreme Court would have had nothing to rely upon. However, once Congress just sat on their thumbs, the Supreme Court took that as Congress blessing these exceptions. In essence, SCOTUS treated Congress’s inaction/silence as acquiescing.

That said, I’ve directly challenged the S.Ct. to address this issue of constitutional authority, and they’ve refused to address it.
Marbury v. Madison — they get to interpret the law. That’s how our legal system has worked for a very long time. You are not going to get them to give that up. Congress had/has a chance to push back — they have yet to. You aren’t going to get any satisfaction from the Supreme Court — you need to look to Congress to fix things.

but the duplicity of the conservatives is galling
And this surprises you? How and why? Have you not noticed the anti-patent bent — regardless of ideology — at the Supreme Court for as long as I can remember? Who wrote Festo? That would be Kennedy. Who wrote EBay? That would be Thomas. Who wrote KSR? That would be Kennedy. Who wrote Bilski? That would be Kennedy. Who wrote Myriad? That would be Thomas. Who wrote Alice? That would be Thomas. Who wrote Oil States? That would be Thomas.

The conservative wing has had control of the Supreme Court for how long now? It was June of 1969 when Nixon appointed Warren Burger. This means every bad decision from Gottschalk v. Benson through the very latest ones have been when conservatives had control.

I know you like to blame liberals but you need to look your fellow conservatives in the eye and ask “What’s up with this?”
B
October 2, 2023 09:12 pm
@ Curious ” . . . . it means that Congress gets to write the patent laws — not the Supreme Court.”

FYI, while this goes against your “statutory stare decisis” theory of patent eligibility, I’ll take this as an admission that s101 really doesn’t have language the S.Ct. could hang its Alice/Mayo abuse upon. Yes, Breyer claimed it in Bilski, Kagan repeated this b.s. several times, and I addressed the issue in my briefing (mostly due to your assertions), but at the end of the day, we appear to agree on this fundamental idea.

That said, I’ve directly challenged the S.Ct. to address this issue of constitutional authority, and they’ve refused to address it. The whole stare decisis spheel by the conservatives on the S.Ct. on bad and unworkable past decisions is just so much garbage that they use for political issues BUT LACK THE INTEGRETY to clean up the messes they made. Yeah – I see the three liberals as third rate intellects and the Chief Justice as a waste of a black robe, but the duplicity of the conservatives is galling.
Curious
October 2, 2023 06:45 pm
Also, it is unclear to me how an act of congress could completely remove these exceptions.
You aren’t a lawyer are you? I suggest you read the US Constitution. Start with Article I, Section 8. It begins with the phrase “The Congress shall have the Power To …”. Note — it does not begin with the phrase “The Supreme Court shall have the Power To …”. Next, Clause 8 of the same section goes on to read “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” For the non-initiated (a group you obviously belong to), it means that Congress gets to write the patent laws — not the Supreme Court.

Although the Supreme Court pays lip service to this (in other words, while they say they follow this, they really don’t), “: Courts “ ‘should not read into the patent laws limitations and conditions which the legislature has not expressed.'” In other words, the Supreme Court should not be butting into what Congress writes.

Laws of nature, physical phenomenon, and abstract ideas are not the product of an inventor, they exist well before and separate from their quantification by an inventor into a patent claim.
Do you not know what the term “discovery” means? To discover something means that you’ve found it, and if you found it, it means that it existed prior to you finding it. Moreover, abstract ideas do NOT “exist well before and separate from their quantification by an inventor.”

we open the door to their codification in the Constitution by the Supreme Court
The Supreme Court cannot codify anything in the Constitution. Again, clearly you are neither a lawyer nor studied the US Constitution. Frankly, I would expect most 6th graders to have learned enough about the Constitution to know that the Supreme Court cannot rewrite the Constitution.
B
October 2, 2023 06:34 pm
@ S “The judicial exceptions go back as far as Diamond v. Chakrabarty”

Gottschalk v. Benson (1972)

“Also, it is unclear to me how an act of congress could completely remove these exceptions.”

It’s called “The Constitution”

“Laws of nature, physical phenomenon, and abstract ideas are not the product of an inventor, they exist well before and separate from their quantification by an inventor into a patent claim.”

See, 102, 103, 112 (sheez)

@ Curious “BTW, the same problem exists with the PERA — there is too much undefined terminology that is ripe for abuse by the courts.”

Hahahaha, it’ll be Alice Corp on steroids – except that the courts will have authority to “interpret” exceptions, rather than merely violate the Constitution as they usually do.

Who in God’s name puts in language such as “and the like” into statutory language?

PERA is such an idiotic bill that it both assures Killian is both patent ineligible and eligible.
Anon
October 2, 2023 05:38 pm
S,

Respectfully, you are not an attorney, are you?

Your phrasing of the delegation of powers under the Constitution is woefully inept.
Anon
October 2, 2023 05:35 pm
I take issue with the characterization of, “especially when some on the pro-patent side want even more.”

As has been duly noted (at least MY), the pushback is NOT about “wanting more,” as it is merely noting that the language STILL comprises a very large wooden horse that need be wheeled behind the city walls.

It is also eminently EASY to remove the offending language.
Without “wanting more.
S
October 2, 2023 01:29 pm
There is some confusion here. The judicial exceptions go back as far as Diamond v. Chakrabarty and potentially further depending on how one reads and understands the judicial exceptions. So we are talking pre-Bilski.

Also, it is unclear to me how an act of congress could completely remove these exceptions. The Constitution grants Congress the power to grant exclusive rights to inventors for their discoveries. Laws of nature, physical phenomenon, and abstract ideas are not the product of an inventor, they exist well before and separate from their quantification by an inventor into a patent claim. I would not be surprised if, in attempting to completely remove judicial exceptions, we open the door to their codification in the Constitution by the Supreme Court.
B
October 2, 2023 12:57 pm
@ Curious “In other words, the court is seeking a SINGLE REVERSIBLE issue. A brief or argument that contains dozens of alleged errors or mistakes almost admits that it does not have a single REVERSIBLE issue.”

The S.Ct. has been hit with seventy-something petitions and endless stream of amici asking for clarity on Alice/Mayo. The attorneys representing CareRx, who are as competent as they are expensive (which is very), addressed a very narrow single issue with a focus on preemption. However, the preemption argument has failed for the over 50 times it’s been presented to the S.Ct.
B
October 2, 2023 12:46 pm
The S.Ct. Denied cert. on two Alice/Mayo cases today: Killian v. Vidal (22-1220) and CareRx v. Natera (22-1066). Killian was condemned for a lack of a relationship to the laws of physics; CareRx was condemned exactly for a relationship to the laws of physics.

The Supreme Court has now been asked by the better part of a hundred aggrieved parties to provide clarity to the Alice/Mayo doctrine. This is and always will be a futile exercise so long as Alice/Mayo remains an evidence-free endeavor requiring an “inventive concept” – a term that in its various forms defied definition for the past 172 years. The Supreme Court built failure into Alice/Mayo from day one.

Killian goes further than any other Alice/Mayo petition in that it correctly describes the futility of Alice/Mayo and directly challenges the Supreme Court’s blatantly unconstitutional rewrite of the statutory framework congress established. If the Supreme Court actually believes they have this authority, let them show where the terms “abstract idea” and “inventive concept” may be found in Section 101. If the Supreme Court believe “inventive concept” has some meaning, the Supreme Court must define the term.

Until the Supreme Court addresses the problems they created, the USPTO and lower courts are given complete freedom to assert a capricious veto over any patent for any reason.

Petitioner Killian intends to file for rehearing.
Curious
October 2, 2023 11:39 am
Three words are needed to 101 at most: “No Judicial exception.”
You see. We can agree on certain things.

For future reference, let me remind you of what Judge Radar stated in an article just released in which judges provided advice:
In other words, the court is seeking a SINGLE REVERSIBLE issue. A brief or argument that contains dozens of alleged errors or mistakes almost admits that it does not have a single REVERSIBLE issue.
I never had a problem with Killian’s ultimate goal. My problem was with all of the oddball arguments being presented as they distracted from some of the more important arguments — e.g., how many of the terms bandied about by the Courts are essentially undefined.

BTW, the same problem exists with the PERA — there is too much undefined terminology that is ripe for abuse by the courts.
B
October 1, 2023 08:39 pm
The PERA will be a flaming disaster.

Three words are needed to 101 at most: “No Judicial exception.”