Congress needs to clean up the Supreme Court's mess on patents

By Judge Paul Michel (ret.) 
and Judge Kathleen O'Malley (ret.)

The Supreme Court is unwisely undermining America's global economic leadership.

For over a decade, the nation's highest court has sowed doubt about whether inventions in certain high-tech industries – ranging from medical diagnostics to finance – are eligible for patent protections. Without that certainty, investors naturally assume the worst and avoid those sectors.

As recently retired federal judges who regularly presided over patent disputes, we witnessed the mounting confusion firsthand. Lower courts have tried, and often failed, to make sense of the confused case law. 

Fortunately, there is an easy solution. Congress could pass a bipartisan bill, the Patent Eligibility Restoration Act, to restore predictability and thereby spur investment and job creation.  

The root cause of today's troubles is a pair of Supreme Court decisions, Mayo v. Prometheus in 2012 and Alice v. CLS in 2014. In Mayo, the Court ruled that a diagnostic test was ineligible for patent protection because it relied on measuring unpatentable "laws of nature."  In Alice, the justices held that a particular strategy used by a bank for automatically mitigating risk was an "abstract idea" ineligible for patenting.  

The core defect in these rulings is the justices' reliance on subjective concepts like "abstractness" and "laws of nature" to determine patent eligibility. This injects tremendous ambiguity into the eligibility analysis, and makes it hard to predict which inventions will be deemed eligible and thus patentable if meeting other requirements of the Patent Act. 

In the aftermath of these rulings, patent eligibility challenges have skyrocketed. In the year following the Alice decision, the Federal Circuit invalidated patents in 21 of the 22 cases it heard. Yet when issued, these patents were valid.

Startup companies, and their investors, are making decisions based on the reliability of intellectual property protections for inventions that are so early-stage, they often exist only on paper. If there is any doubt about whether those inventions can be protected, entrepreneurs and investors will inevitably err on the side of caution – and direct their resources to other sectors. 

Fortunately, a ready solution exists. The bipartisan Patent Eligibility Restoration Act (PERA) would effectively overturn Mayo and Alice, restoring Congress’ patent statute. Under PERA, pure mathematical formulas, natural phenomena and basic mental processes would remain ineligible for patent protection because they fell outside the four categories Congress enacted.

But novel, useful inventions derived from these building blocks would become eligible again. For instance, metabolic processes would remain unpatentable -- but a diagnostic testing company that found a novel way to detect a metabolic disorder could patent its test, assuming the invention met all other requirements of patentability.

This would give investors the certainty and objectivity needed to continue funding cutting-edge research with the potential to change, or even save, lives. 

Judges try their best to apply the Supreme Court's precedents in good faith. But the inherent ambiguity of decisions like Alice and Mayo put lower courts into an impossible position -- and the costs to innovation and the economy continue to mount. Congress can end the damage by passing PERA without delay. 

Paul Michel served on the United States Court of Appeals for the Federal Circuit from 1988 to 2010. Kathleen O'Malley served on the United States Court of Appeals for the Federal Circuit from 2010 to 2022 and the U.S. District Court for the Northern District of Ohio from 1994 to 2010. Both are board members of the Council for Innovation Promotion. This piece originally ran in The Hill.

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