Following the six and one-half year effort leading up to the enactment of the America Invents Act in September 2011, Congress took a break from serious activity in patent law for almost two years. When it turned to patent law again in mid-2013, it did so with intensity: full scale war on patent trolls.

Two years into its legislative flagellation of trolls, Congress seems to be moving closer to completion of that effort. If that turns out to be the case, how long might it be before Capitol Hill is willing to take on another major effort in patent law reform?

Congressional Action to Overrule Supreme Court Decisions on Patent Eligible Subject Matter: Is It Needed?

There is growing support in the patent bar for another major initiative. That major initiative is revision and reform of patent eligibility by legislatively overruling the results in several recent Supreme Court decisions. Some proponents of a legislative fix may see that objective as not requiring major patent law reform effort but only a narrow surgical strike. However, such an initial incision seems likely to expose multiple treatment options and require decisions on issues with profound economic, political, and legal consequences. In short, achieving the objective would require major patent law reform.

Concern was raised in patent circles when business method patents barely survived categorical extinction in Bilski.¹ Hope, and perhaps prayer, that Mayo² was an aberrant judicial outlier greeted the decision in that case dictating that a wide range of patent claims be found to be patent-ineligible abstract ideas unless shown to add an ill-defined “substantially more” to the abstraction. Myriad³ signaled that a substantial body of patents previously granted in the life science field would now fail under the Court’s expanded “laws of nature” exclusion. Alice⁴ served further notice of the vulnerability of claims to business method patents, if not as an entire category then on claim-by-claim analysis under standards that will leave few of them standing.

Mayo, Myriad, and Alice were all unanimous decisions. Bilski was unanimous on the issue of the patent eligibility of the claims in question, with Justice Stevens and three others concurring in the decision, but urging that the Court go further and disqualify all business method patents.

With each of these decisions, any hope or expectation that the preceding case or cases in the series represented an aberrant departure from established judicial doctrine faded. It may still be argued that these cases do depart from established statutory law and judicial doctrine on patent eligibility. However, the scope, doctrinal consistency, and the Court’s unanimity in the decisions suggest that they now constitute established judicial doctrine.

It may be possible to accept the decisions and limit their undesirable consequences in further judicial development or by limited legislative changes. However, judging from the content of the many proposals for response that they have put forward, members of the patent bar by and large have concluded that there is no effective way to accept and accommodate these recent decisions, and that they must be repudiated. If that is the objective, congressional action is probably the best way to pursue it, since it seems totally unrealistic to expect or hope that the Court would provide such a fundamental repudiation of its own doctrine.

However, it is by no means certain that Congress would undertake such a project, or that it would be successful if it did.

Congressional Action to Overrule Supreme Court Decisions on Patent Eligible Subject Matter: Historical Precedent

It is not uncommon for Congress to enact legislation to overturn or alter the results of decisions of the U.S. Supreme Court, including on issues relating to intellectual property law.

Shortly after the enactment of the Federal Trademark Dilution Act of 1995 (FTDA), a major issue emerged concerning whether actual dilution or only a “likelihood” of dilution must be proven in a legal action under the Act. In its 2003 decision in Moseley v. V Secret Catalogue, the Supreme Court resolved a split among the appellate circuits on this question by ruling that the language of the statute—“causes dilution of the distinctive quality”—compelled a ruling that actual dilution must be shown. With the specific purpose of changing the result in Moseley, in 2006 Congress passed the Trademark Dilution Revision Act, which changed the operative language of the statute from “causes dilution” to “likely to cause dilution.”

In 1968 during the infancy of cable television, the Supreme Court held in Fortnightly Corp. v. United Artists Television Inc. that the community antenna television (CATV) system in dispute did not include a public performance of the copyrighted content being delivered and therefore was not infringing. The Court reasoned that the system of antennas and cables for delivering distant signals to communities that could not be served by conventional over-the-air delivery systems did no more than do collectively what each customer in the community could do individually, without infringing.

In its comprehensive 1976 revision of the copyright laws of the United States, Congress revised laws for determining when a copyrighted work is publicly performed. Congress indicated that it was acting to reverse the result in circumstances such as those in Fortnightly. Almost four decades later, in its 2014 decision in American Broadcasting Cos .v. Aereo, the Court was still struggling to determine the boundaries of a public performance as allegedly clarified in the 1976 Copyright Act. Perhaps the lesson here is that even when Congress agrees that a legislative fix to a judicial ruling is needed and a statute is enacted to provide that fix, the issue may still remain unresolved.

State sovereign immunity is another area of the law where Congress has legislated to overturn a Supreme Court decision—in this instances actually decisions—with results that illustrate how and why such efforts frequently fail.

In its 1985 decision in Atascadero State Hosp. v. Scanlon, 473 U. S. 234, the U.S. Supreme Court held that this California state hospital was entitled to state sovereign immunity and could not be held liable for violation of federal employment discrimination laws. However, the Court opined that Congress could abrogate such immunity by “making its intention unmistakably clear in the language of the statute.” Concerned that the Atascadero decision could leave intellectual property owners without remedy for infringement, Congress in 1990 passed the Copyright Remedy Clarification Act⁵ to abrogate litigation sovereign immunity from suit in federal courts for copyright infringement. Two years later, Congress followed with the Patent and Plant Variety Protection Remedy Clarification Act⁶ and the Trademark Remedy Clarification Act.⁷

In Seminole Tribe of Florida v. Florida the Court in 1996 again visited the issue of state sovereign immunity. Like the IP statutes, the statute involved in Seminole was enacted to abrogate state sovereign immunity following the Atascadero decision. The Court acknowledged that Congress had made clear its intent to abrogate the immunity, but the decision seemingly upped the ante by also requiring a demonstration that Congress possessed the power to abrogate. In Seminole the Court ruled that it did not, a ruling that was repeated in two companion cases decided in 1999 which concerned patent infringement by a Florida state entity.⁸ Florida Prepaid and College Savings ruled that as a predicate to abrogation, Congress must establish not just that states are infringing patent rights, but that the infringement is “widespread and persisting,” justifying congressional action under section 5 of the 14th Amendment to provide a remedy for deprivation of a constitutionally protected right. Congress of course had no idea when it enacted the IP Remedy Clarification Acts in 1990 and 1992 that such a burden of proof, seemingly more appropriate for judicial proceedings, would be imposed on a legislative enactment. Subsequent congressional efforts to enact IP abrogation legislation that could survive Supreme Court review failed after a two-year effort and were abandoned.

Congressional Action to Overrule Supreme Court Decisions on Patent Eligible Subject Matter: Emerging Proposals

Any meaningful analysis of the possible outcome of such a legislative effort necessarily requires knowledge of the statutory changes proposed to reject recent the Supreme Court decisions and to prevent reassertion of the doctrine of those cases in future court decisions.

Inasmuch as no bill has been introduced in Congress, and, to the best of our knowledge, no such proposal has been handed to Congress, we do not know what legislative changes Congress might be asked to make. However, we do know that a number of bar organizations and other patent-oriented stakeholders are reviewing developments and drafting proposals, as have countless individual patent lawyers. The proposals in progress that are emerging from these efforts suggest something approaching a consensus view that the patent eligibility requirements of section 101 of title 35 United States Code must be substantially revised. In some proposals, section 101 would be effectively repealed.

The analysis and line of reasoning that leads to such conclusions seem to proceed as follows:

The faulty jurisprudence of Mayo, Myriad, and Alice grows out of the Court’s application of the rule that laws of nature, physical phenomena, and abstract ideas (“LPA” hereafter ) are not eligible for patenting.

The rule prohibiting patenting of LPA is a judge-made rule. However, while not expressly statutory, the rule arises from the Court’s interpretation of section 101, which determines subject matter patent eligibility.

It therefore follows that to modify or nullify the LPA rule, amendment of section 101 is called for.

While this analysis and conclusion seem sound, the formulation of an effective response and remedy is not readily apparent. What language in section 101 must be changed, since the Court has not tied LPA to any specific language in the section?

Some believe that the solution is to amend or repeal section 101 to eliminate any patent eligibility requirements in the section, and by doing so to eliminate any basis for finding exceptions to subject matter eligibility in the section. This may not be as radical a solution as it seems on the surface. There has long been serious argument that 101 was never meant to serve a robust gatekeeper role in screening patent eligibility, arguably a role more properly performed by other sections of the Patent Act that set out substantive requirements for patenting. Those arguments were made, and rejected, in the very decisions that the proposed legislation seeks to repudiate, and an effort to obtain in Congress what could not be achieved in the courts seems inviting if not compelling.

Efforts to fashion a legislative response are still in an exploratory stage, and therefore proponents are engaging in robust brainstorming and testing of numerous and varied alternatives. While some of the proposals being vetted call for writing all eligibility requirements out of section 101, others call for writing everything in. One such proposal would amend 101 to direct that a claim directed to any of the recognized categories of eligible subject matter “shall be eligible.” Others would amend section 101 to establish statutory eligibility for subject matter that the Court has ruled to be ineligible, such as the Benson claim to an algorithm.

Enactment of a specific list of excluded subject matter is another route that has been suggested. The list would be exclusive, so presumably courts could not add to it, and the decision to place individual items of subject matter on the list need not be a binary go/no-go decision, but could be fine-tuned and calibrated. One suggested approach would exclude subject matter consisting of a law of nature or a physical phenomenon, but only when the law of nature or physical phenomenon is claimed “as such.” A variation of this approach cuts the exclusion for abstract ideas down to size by providing an exclusion from exclusion for any process performed by a computer program. The premise here seems to be if Alice teaches that the Court would never swallow the bitter pill of complete elimination of the abstract idea exclusion, then take a lesson from Alice in Wonderland and adjust the dosage, as Alice was able to do by choosing the appropriate side of the size-adjusting magic mushroom.

Congressional Action to Overrule Supreme Court Decisions on Patent Eligible Subject Matter: Would Congress Go There?

Congress acts when it perceives a need to act, or more precisely, when it perceives that there is sufficient support in the Congress and in the affected communities for it to act on the perceived need and in the manner requested.

Congress will want to know where the vast array of stakeholders will line up. In its broadest context, the issue might be framed as “do we need more or fewer patents?” As is almost always the case, where one stands may depend on where one sits.

Because intellectual property plays such an important and positive role in the U.S. economic, political, and social affairs, Congress is generally inclined to favor more rather than less protection. Most likely, these reforms would be scored on the “more” side.

However, it is by no means a slam dunk that Congress will come out on the “more protection” side on these issues, particularly in view of the increasing participation of those who see their interests as better represented by “less protection.” Public opinion is also a factor, and we cannot be sure how much public opinion is being influenced by developing events, such as the increasing criticism and attacks being directed at individual patents and the patent system in the blogosphere and in academic circles.

The Supreme Court decided Myriad in June 2013. While most of the attention and criticism generated by that decision is directed at its rejection of the DNA sequencing patents, the decision also upheld cDNA patents. Those looking for support for congressional repudiation of the decision as it related to DNA can hardly find comfort in the reaction of one key senator. Less than a month after that decision, Senator Patrick Leahy, then Chairman of the Senate Judiciary Committee, wrote the Director of the National Institutes of Health expressing concern that as a result of the Court’s decision upholding cDNA claims, “Myriad may continue to be the only company able to provide women with the genetic testing they need to make important health care decisions.” Noting that the research leading to the patents was funded in part by federal funds, Leahy urged NIH exercise so-called “march in rights” under the Bayh-Dole Act to force licensing of the Myriad patents to others.

Congressional inaction following these decisions by the Court is also noteworthy. Beginning four years ago in 2010 with Bilski, in each succeeding term the Court produced another decision that could strengthen the case for statutory intervention. Despite the fact that comprehensive patent reforms bills were under consideration and could serve as a vehicle for proposals to overrule the decisions, none have been offered.

Similarly, other recent incidents of congressional inaction in circumstances where legislative intervention seemed needed may be instructive.

Congress was unwilling or unable to take legislative action to shut down piratical file-sharing systems that generated consternation in copyright circles, and left it to the Court to do so in its MGM v. Grokster decision.

The Supreme Court decision in Kirtsaeng v. John Wiley that seems to mandate international exhaustion of copyright plays havoc with the system of national exhaustion favored in the United States. To date, Congress has not moved to intervene.

The stinging rebuke of its efforts to legislate an attack upon off shore piracy left Congress gun–shy about taking on issues that might lead it into new and unknown territory. Perhaps with the on-line piracy debacle in mind, when the Register of Copyright called for comprehensive reform of U.S. copyright law, the House Judiciary Committee quickly made clear that there would be no fundamental reform and that business as usual incremental amendment is the best that can be expected.

Congressional Action to Overrule Supreme Court Decisions on Patent Eligible Subject Matter: Would the Supreme Court Overrule the Overrule?

Amendment of title 35 for the express purpose of overruling the Supreme Court decisions in question would most likely find its way back to the Supreme Court.

Should this occur, it should go without saying that the outcome of the Court’s review will depend largely on the input provided by Congress’s amendments. Though many and varied, most of the proposals share a common theme or objective, which is to eliminate the ability of courts to continue to apply the rule that claims to laws of nature, natural phenomena, are not patent eligible. Some of the proposals purport to allow the continued application of the rule, but only when the LPA is claimed “as such” or with similar limitations that seem to occur rarely, if ever.

A couple of serious potential obstacles may stand in the way of achieving this objective. The Court may find that the fundamental principles undergirding the 150 year-old rule against patenting LPA are organic features of patent law, for which a new home elsewhere must be found if evicted from section 101. In Alice the Court made abundantly clear that ineligible subject matter cannot be rendered eligible by clever claims drafting. It might very well rule that the ineligibility is so fundamental that even clever legislative drafting cannot escape the rule. If section 101 is stripped of any textual peg on which to hang the subject matter ineligibility rule, the Court could find that it has migrated elsewhere, and for example, that the claimed subject matter is not an “invention” under section 102, 103, or 112. It could even rule the subject matter cannot constitute a “discovery’ within the meaning of Article I, Section 1, clause 8 of the Constitution.

As described above, a Supreme Court overruling of a statutory overrule could be based on a doctrine that treats the rule against patent eligibility for LPA as “almost constitutional.”

Some proponents of a legislative overrule have expressed concern that the Court might go a step further and decide that the rule is in fact a constitutional requirement, particularly if the legislative override purports to virtually wipe out the rule and statutorily establish eligibility of specific subject matter.

The Court’s decisions and reasoning suggest that these concerns may be well founded, as suggested in the opinion in Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966):

The Congress in the exercise of the patent power may not overreach the restraints imposed by the stated constitutional purpose. Nor may it enlarge the patent monopoly without regard to the innovation, advancement or social benefit gained thereby. Moreover, Congress may not authorize the issuance of patents whose effects are to remove existent knowledge from the public domain, or to restrict free access to materials already available. Innovation, advancement, and things which add to the sum of useful knowledge are inherent requisites in a patent system which by constitutional command must “promote the Progress of . . . useful Arts.”

The 1966 decision in Graham has come to be recognized as a foundational statement in the Court’s patent law jurisdiction. In his 2010 concurring opinion in Bilski, Justice Stevens relied heavily on Graham in explaining Thomas Jefferson’s philosophy and importance in shaping doctrinal principles for determining subject matter patent eligibility:

Thomas Jefferson was the “first administrator of our patent system” and “the author of the 1793 Patent Act.” Graham, 383 U. S., at 7. We have said that his “conclusions as to conditions of patentability . . . are worthy of note.” During his time administering the system, Jefferson “saw clearly the difficulty” of deciding what should be patentable. He drafted the 1793 Act, and, years later, explained that in that Act “the whole was turned over to the judiciary, to be matured into a system, under which every one might know when his actions were safe and lawful.” As the Court has explained, “Congress agreed with Jefferson . . . that the courts should develop additional conditions for patentability.” Graham, 383 U. S., at 10. Thus “[a]lthough the Patent Act was amended, revised or codified some 50 times between 1790 and 1950, Congress steered clear” of adding statutory requirements of patentability. For nearly 160 years, Congress retained the term “useful arts,” see, e.g., Act of July 4, 1836, ch. 357, 5 Stat. 117, leaving “wide latitude for judicial construction . . . to keep pace with industrial development.”⁹

As noted in Graham and Bilski, Congress historically has “steered clear of adding statutory requirements for patentability.” Should Congress decide to depart from that tradition and no longer leave “wide latitude for judicial construction,” the Court’s precedents allow it wide latitude for decision, ranging from confirmation as an exercise of Congress’s legislative authority to rejection as an act in excess of its constitutional power.

Endnotes

1. Bilski v. Kappos, 561 U. S. 593 (2010).

2. Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U. S. ___, (2012).

3. Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U. S.____ (2013).

4. Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014).

5. P.L. 101-553, 104 Stat. 2749.

6. P.L. 102-560, 106 Stat. 4230.

7. P.L. 102-542, 106 Stat. 3567.

8. Florida Prepaid Postsecondary Expense Board v. College Savings Bank, 527 U.S. 627; College Savings Bank v. Florida Prepaid, 527 U.S. 666 (1999).

9. Supra note 1. (Slip Opinion, p. 25).