Several members of the U.S. Senate and the House of Representatives have drafted a discussion paper on patent reform that would take up the subject matter eligibility question that has dogged diagnostic patents recently. The draft would eliminate the requirement that a patent application describe an invention that is both new and useful and would make use of a "practical application" test that would allow state-of-the-art diagnostics to move to market without forgoing intellectual property protection.

The question of subject matter eligibility under Section 101 of the patent statutes has plagued makers of diagnostics since at least the 2012 Supreme Court case of Mayo v. Prometheus, although other entries into case law have further complicated matters, including the 2014 Supreme Court case of Alice Corp. v. CLS Bank. The U.S. Patent and Trademark Office has attempted to administratively ease the problem, but the U.S. Court of Appeals for the Federal Circuit recently decided a case in which the majority opinion declared that the court was not bound by PTO policies and guidance.

More than just Section 101 under scrutiny

Sens. Thom Tillis (R-N.C.) and Chris Coons (D-Del.) posted a statement on Tillis' Senate website stating that the Senate legislation will be accompanied by a similar bill in the House, which is sponsored by Reps. Doug Collins (R-Ga.) and Hank Johnson (D-Ga.). Tillis, who noted that he and Coons only recently joined the Senate Judiciary Committee, said they see a fix for the Section 101 problem as only the first in a series of steps designed to "reform our nation's complicated patent process." The discussion draft is in part the product of a series of round tables held with stakeholders, citing artificial intelligence, personalized medicine and diagnostics as sectors of the economy that are suffering under the statute as currently written.

The draft outline indicates that the existing statutory categories of process, machine and composition of matter would be retained, but says that the eligibility requirements for patent protection would exclude the "new and useful" mandate, opting instead for a simpler test to determine whether the invention meets statutory requirements for utility.

The draft offers a list of categories of subject matter that would not be automatically eligible, including those that rely principally or entirely on "fundamental scientific principles" or on "pure mathematical formulas," but the "practical application" test would be construed narrowly so as to ensure that otherwise statutorily ineligible subject matter would not foreclose other pursuits. The draft states further that the intent is in part to "make clear that eligibility is determined by considering each and every element of the claim as a whole and without regard to considerations properly addressed" by other sections of patent law, including Section 112, which has also been the subject of reform talks. Section 112 generally spells out the requirements for describing a patent, including the description of dependent claims.

Thomas Hedemann, a patent attorney in the Hartford, Conn.-based office of Axinn Veltrop & Harkrider LLP, told BioWorld that because the draft is little more than an outline at this point, it is difficult to forecast what any final legislation will encode. He said one example is the absence of a definition of a fundamental scientific principle, adding that this might be a feature that would ultimately be tested in the courts.

"On the face of this, there is no distinguishing between newly discovered and old scientific principles," Hedemann said, but he said that phrase seems to be a substitute for the natural law provision in current case law. There are a few important differences, however, Hedemann said, including that the concept of a fundamental scientific principle "seems to be there to distinguish between a principle that is wide-reaching and cuts across a broad swath of nature" vs. the limited correlation with natural phenomena seen in some claims found in diagnostic patents.

"One concrete thing this would do is make the diagnostic patents that have recently been held ineligible" much more defensible patents, Hedemann said. However, he noted that unless any such legislation is written so as to make the provisions retroactive, "the patents that have been held ineligible would remain ineligible."

"It's unclear to me whether this is intended to replicate that two-step process" for determining whether a patent application is written to provide subject matter eligibility, Hedemann said. The two-step test determines first whether the application is directed toward one or more of the categories of judicial exceptions, which include an abstract idea, a natural law, and a physical phenomenon.

If so, then one must ask whether the patent or the claims in the patent describe an inventive concept that transforms the abstract idea into something useful without monopolizing the abstract idea. The question regarding that draft is whether the question of a practical application should be asked only if the application has faltered on both ends of the two-step test, Hedemann said, "or is the practical application test something you apply to the categories themselves?" He noted that the more plausible read of that part of the legislative outline suggests the practical application test would follow the two-step test under Mayo, but said "that looks very much like what we have today."

The second-to-last item in the outline states that the judicially created exceptions would be dumped in favor of "exclusive categories of ineligible subject matter." Hedemann said, "You could see that as a virtue if you have a fundamental technological shift in the future." Ergo, should Congress decide it wants to promote or retard a particular type of economic activity, it could do so by tweaking the statute to add to or subtract from the categories of ineligible subject matter.

The categories for statutory subject matter that could not alone serve to make a patent eligible include mental activities and pure mathematical formulas, and Hedemann noted that the statement by Coons and Tillis made clear the sponsors are concerned that the statute as it stands suppresses innovation. Hedemann noted, however, that abstract ideas and mental processes enjoy no standing where subject matter eligibility is concerned, and that software patents have become exceedingly difficult to obtain after Alice. Nonetheless, he said, a lot of patents related to artificial intelligence have been granted under the current framework, so "it's unclear what it is this is seeking to protect that is not already patentable."

"The one specific consequence I can see is that diagnostic patents that are currently held as unpatentable would be patentable under this outline," Hedemann summarized, adding, however, that the outline is written "at a sufficiently high level that it's hard to say for certain how the world would be different" in terms of subject matter eligibility.

The American Intellectual Property Association and the Intellectual Property Owners Association were unable to provide a spokesperson for comment.