The Supreme Court Broke Patent Eligibility: Congress Can Fix It

When the Senate Judiciary Committee examines the Patent Eligibility Restoration Act (PERA) this week, lawmakers won’t simply be debating patent law. They’ll be deciding whether America remains the best place in the world to invent tomorrow’s technologies.

That question has taken on new urgency following a series of Supreme Court decisions. In the wake of those rulings, inventors, investors, and even judges have struggled to determine whether many groundbreaking discoveries qualify for patent protection.

The result has been a legal environment that discourages investment in precisely the kinds of innovations America needs most.

Congress has an opportunity to fix what the courts have broken by passing PERA. The bipartisan legislation would replace today’s confusing judicial patent eligibility framework with clear statutory rules, helping restore the confidence inventors and investors need to pursue the next generation of breakthrough technologies.

Uncertainty is Hurting U.S. Innovation Progress

Predictable patent protections are essential to innovation. Developing a new technology often requires years of research and enormous financial commitments. When inventors cannot reliably secure patent protection, investors become far less willing to finance those risky ventures.

In a survey of 475 venture capital and private equity investors, respondents overwhelmingly said patent eligibility is an important consideration when deciding whether to invest in companies developing new technologies.

An investment slowdown is already evident in the field of medical diagnostics. A 2022 empirical study in the Washington and Lee Law Review found that venture capital investment in disease diagnostics was nearly $9.3 billion lower in the four years following Mayo Collaborative Services v. Prometheus Laboratories, Inc. than it would have been otherwise.

But the problem isn’t confined to a single industry. University researchers and startup companies developing software, artificial intelligence, pharmaceuticals, and other emerging technologies now face many of the same challenges as a result of the recent Court rulings.

Meanwhile, countries such as Europe and China have adopted clearer patent eligibility rules, putting the United States at an unnecessary disadvantage in the race to develop next-generation technologies.

The Road to Eligibility Chaos

This wasn’t always the case. For decades, patent eligibility was governed by a relatively clear legal standard allowing “any new and useful process, machine, manufacture, or composition of matter” to obtain patent protection.

Beginning in 2010, however, a series of Supreme Court decisions—including Bilski v. Kappos, Mayo Collaborative Services v. Prometheus Laboratories, Association for Molecular Pathology v. Myriad Genetics, and Alice Corp. v. CLS Bank International, among others—added new limits to that framework. The Court held that abstract ideas, laws of nature, and natural phenomena are not themselves patentable.

The problem wasn’t simply that the Court recognized those exceptions. It’s that it provided little guidance about where they begin and end.

Since then, lower courts have struggled to apply the decisions consistently. Patent examiners confront the same difficulties when reviewing applications. And inventors often cannot predict whether new discoveries will qualify for patent protection.

How PERA Will Help

These are precisely the problems PERA is designed to address. It would do this by largely restoring the patent eligibility framework Congress originally created, while replacing today’s open-ended judicial tests with a clearly defined statutory standard.

The reform would also specify which categories should remain ineligible for patent protection. These include stand-alone mathematical formulas, purely mental processes, unmodified genes, and naturally occurring materials.

Just as important, the legislation would preserve the longstanding requirements every invention must satisfy before receiving patent protection—including novelty, non-obviousness, and adequate disclosure.

America’s leadership in the invention of medical diagnostics, life-saving treatments, artificial intelligence, and countless other technologies did not happen by accident. It grew out of a legal system that rewarded innovation through reliable patent protections — and gave investors the confidence they needed to take big risks on ambitious new ideas.

Congress has an opportunity to restore that confidence by passing PERA.