US: legislative steps to reverse AIA and Alice

21.08.2018

Republican members of congress recently introduced a new bill (H.R 6264, also referred to as the “Restoring America’s Leadership in Innovation Act”). The bill will potentially change the scope of protection granted by patents in the US, and will undo many of the changes made by the Leahy-Smith America Invents Act of 2012 and recent US Supreme Court decisions.

The new bill (introduced on June 28, 2018), asserts that its main purpose is to “promote the leadership of the United States in global innovation by establishing a robust patent system that restores and protects the right of inventors to own and enforce private property rights in inventions and discoveries, and for other purposes.” The bill further asserts that the Leahy-Smith America Invents Act of 2012 and several Supreme Court decisions have “harmed the progress of Science and the useful Arts by eroding the strength and value of the patent system” (sec. 2(2)) and that the US patent “secures a private property right to an inventor” (sec. 2(4)).

One of the most notable changes the bill will present is a new threshold of patentability for certain inventions, pursuant to recent U.S. Supreme Court decisions such as Alice Corp. v. CLS Bank International and Mayo Collaborative Services v. Prometheus Laboratories, Inc. The bill would amend 35 U.S.C. § 101, governing the threshold for patentability, to add — any invention that “exists in nature independently of and prior to any human activity, or exists solely in the human mind.”

Adding the term “human activity” to the clause is aimed to address medical methods as subject matter for patent protection following US Supreme Court’s Mayo decision. According to Mayo, a diagnostic method for measuring drug metabolites for drug dosage adjustment is patent ineligible. The phrase “solely in the human mind” is clearly a legislative reaction to Alice, where the US Supreme Court held that a computer system for financial transactions with the use of a third party intermediary was patent ineligible. According to the ruling, claims about a computer implemented facilitating financial transactions are abstract ideas ineligible for patent protection. This amendment will basically overturn the Supreme Court by potentially restoring patentability in medical methods and software related inventions.

The bill also aims to restore the first-to-invent system, making the US the only jurisdiction in the world to use this priority system. This is following the changes made by AIA is 2013, switching the US from first-to-invent system to a first-to-file system. Another major change is that the bill calls for abolishing the Patent Trial and Appeal Board (PTAB), the body established by the AIA to review new kinds of patent challenges, as well as elimination of both inter partes review (IPR) and post-grant review (PGR) proceedings currently conducted by the PTAB.

If passed, the bill is a major game changer. It directly addresses issues regarding recent changes in patentability in the US, and specifically with regards to software inventions. Software and computer-implemented business method patents have been the main focus in the patent field worldwide for many years now, especially after Alice. Many Israeli software companies will be influenced by these changes and will need to reconsider their IP strategy with regards to patent prosecution in the US. Rethinking IP strategy in the US and staying regularly updated on patent legislation is crucial, not just with regards to the expected expansion of patent subject matter to include software inventions, but also following the prospected changes to the protection priority system, taking US back to first-to-invent.

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