September Highlights: Advancing the Patent Eligibility Restoration Act
The Patent Eligibility Restoration Act (PERA) remains one of the most important innovation policy reforms on the legislative agenda. This bill would promote research and investment in high-tech sectors such as artificial intelligence and medical diagnostics by clarifying that these categories of inventions, which were previously denied patent eligibility by erroneous Supreme Court decisions, are, in fact, eligible for patent protection. PERA would provide much-needed incentives for inventors working in emerging technology fields, ensuring that the United States tech sector remains on the cutting edge.
Originally introduced in the Senate in June 2023 by Sens. Thom Tillis (R-NC) and Chris Coons (D-DE), this bill was introduced in the House of Representatives by Reps. Kevin Kiley (R-CA) and Scott Peters (D-CA) on September 6, 2024. C4IP remains invested in the passage of this vital reform and has continued to advocate for it over the past month:
- C4IP issued a statement celebrating the introduction of the Patent Eligibility Restoration Act in the House of Representatives and reiterating the importance of this critical bill.
- C4IP Co-Chairs Andrei Iancu and David Kappos’s support for the introduction of PERA was featured in an article in IPWatchdog.
- You can find additional resources on PERA here and below:
- Blog: Why C4IP Supports the Patent Eligibility Restoration Act (PERA)
- C4IP Letter to Senate Judiciary Committee on PERA, Judicial Support for Patent Eligibility Reform
- C4IP Letter to Senate Judiciary IP Subcommittee Applauding January 2024 PERA Hearing
- C4IP Letter to Sen. Thom Tillis in Support of PERA
- Myths vs. Facts: PERA – Diagnostics and Life Sciences
- Myths vs. Facts: PERA – Software and Technology
Additional Coalition Updates
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- On September 25, C4IP Executive Director Frank Cullen published an opinion essay in IPWatchdog highlighting the misleading nature of a recent article in Science, which used a deeply flawed methodology to claim that a large percentage of inventors fail to comply with legal requirements for disclosure of federal funding.
- On September 25, C4IP Executive Director Frank Cullen sent a letter to Senate Committee on Health, Education, Labor and Pensions leaders Bernie Sanders (I-VT) and Bill Cassidy (R-LA) expressing C4IP’s concerns regarding the Medication Affordability and Patent Integrity Act.
“This proposal is ultimately based on an unfounded premise. Existing law already provides serious and significant consequences for instances of fraud. Innovators can have their patents rendered unenforceable if found to have made false statements to the USPTO.”
- On September 24, C4IP Board Members and former Judges of the U.S. Court of Appeals for the Federal Circuit Paul Michel and Kathleen O’Malley sent a letter to Senate Judiciary Committee leaders Dick Durbin (D-IL) and Lindsey Graham (R-SC) underscoring sitting federal circuit court judges’ widespread calls for patent subject matter eligibility reform and highlighting how C4IP believes that the Patent Eligibility Restoration Act (PERA) would bolster U.S. economic competitiveness.
- On September 18, C4IP Executive Director Frank Cullen sent a letter to Senate Judiciary Committee leaders Dick Durbin (D-IL) and Lindsey Graham (R-SC) expressing C4IP’s strong support for the Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act, the Patent Eligibility Restoration Act (PERA), and the Inventor Diversity for Economic Advancement (IDEA) Act.
“These three bills are of vital importance to America’s continued economic prosperity and global competitiveness. We appreciate your work to place them on the Committee’s agenda in support of innovators across America, and we hope to see these bills reported favorably and become law this Congress.”
- On September 17, C4IP Executive Director Frank Cullen sent a letter to Senate Judiciary Committee leaders Dick Durbin (D-IL) and Lindsey Graham (R-SC) expressing C4IP’s strong support for the IDEA Act and emphasizing the importance of closing demographic gaps in the U.S. patent system to promote America’s economic vitality.
“Disparities in patenting mean that the United States is not harnessing its full innovation potential… It means that more must be done to ensure that every American having an innovator’s spirit has awareness of how to protect his or her inventions, which is often the first step in developing what could be a revolutionary and job-creating discovery.”
- On September 16, C4IP Executive Director Frank Cullen submitted a public comment to the USPTO expressing concerns about the agency’s July guidance update on patent subject matter eligibility and artificial intelligence and encouraging the USPTO to support more comprehensive legislative reform on patent subject matter eligibility.
- On September 13, C4IP Executive Director Frank Cullen issued a statement celebrating the introduction of the Inventor Diversity for Economic Advancement (IDEA) Act in both the Senate and House of Representatives.
- On September 13, C4IP Co-Chair Andrei Iancu was quoted in a Spectrum News 1 article explaining how the IDEA Act would benefit America’s international economic competitiveness.
- On September 12, C4IP Co-Chairs Andrei Iancu and David Kappos were quoted expressing support for the IDEA Act in Senator Mazie Hirono (D-HI)’s statement announcing the bill’s introduction.
- On September 12, C4IP Executive Director Frank Cullen issued a statement applauding the introduction of the bipartisan NO FAKES Act in the House of Representatives and elaborating on how it would strike a productive balance between promoting innovation and protecting creators’ rights to their own likenesses.
- On September 10 and 11, C4IP Co-Chairs Andrei Iancu and David Kappos’s insights on the need for the RESTORE Patent Rights Act were included in blog posts from A&O Shearman, JD Supra, and Mondaq.
- On September 9, C4IP hosted a congressional briefing on the USPTO’s recent Drug Patent and Exclusivity Study, including a guest panel with C4IP Executive Director Frank Cullen, C4IP Chief Policy Officer and Counsel Jamie Simpson, University of Akron Law Professor Emily Michiko Morris, and Novartis Vice President and Global Head of IP Affairs Corey Salsberg.
Government Rundown
Senate Committee on the Judiciary, Subcommittee on Privacy, Technology, and the Law Hearing: Oversight of AI: Insiders’ Perspectives:
On September 17, the Senate Judiciary Subcommittee on Privacy, Technology, and the Law held a hearing to discuss government regulation of artificial intelligence (AI) technology. Witnesses included Center for Security and Emerging Technology Director of Strategy and Foundational Research Grants Helen Toner, California Initiative for Technology and Democracy Policy Advisor David Evan Harris, former Google Staff Research Scientist Margaret Mitchell, and former OpenAI Technical Staff Member William Saunders. (Senate Judiciary Committee, 9/17)
USPTO Event: Public Engagement Partnership Meeting: Discussing the Patent Challenge Process Before the Patent Trial and Appeal Board:
On September 4, the USPTO held a Public Engagement Partnership Meeting, open to members of the public, to educate attendees about the patent challenge process at the PTAB. The event also examined specific case studies and data about PTAB challenges involving pharmaceutical patents. (USPTO, 9/4)
Fact Check
The RESTORE Patent Rights Act, introduced in July by a bipartisan group of senators and representatives, would be a pivotal legislative milestone for promoting innovation, if enacted into law. This bill would reestablish injunctive relief as the default legal remedy for patent infringement, preventing patent infringers from using others’ IP and ultimately facing little more than the consequence of having to pay the royalty they should have paid anyway, enabling those with the financial might to steal technology from smaller competitors. In doing so, it would empower America’s small innovators to continue developing innovative products and bolster our nation’s economic competitiveness.
On September 10, former Congressman Trey Gowdy (R-SC) published an op-ed in the Washington Examiner opposing this bill on the basis that it would harm American manufacturers and benefit foreign adversaries. However, his argument relies on several factually inaccurate claims:
| Claim: “The RESTORE [Patent Rights] Act… tries to solve a problem that does not exist.” |
| In reality: The inaccessibility of injunctions to victims of patent infringement has become a substantial problem since the Supreme Court’s 2006 decision in eBay v. MercExchange. Following the eBay decision, grants of permanent injunctions in patent infringement cases have fallen by more than 66% for operating companies and by over 91% for non-practicing entities. The increased difficulty of obtaining injunctions has created substantial opportunity for large companies to copy other companies’ patented technology instead of paying for a license. Then, when caught, these infringers use their significant financial resources to wage drawn-out legal battles against their victims. This situation is untenable for our innovation ecosystem. In order to thrive, small, innovative companies need full ownership of their intellectual property, which entails the right to stop others from illegally making use of it. The RESTORE Patent Rights Act would solve exactly this problem by ensuring that companies that have their patents infringed are able to obtain injunctive relief. |
| Claim: The RESTORE Patent Rights Act would grant an “automatic injunction” to petitioners. |
| In reality: The RESTORE Patent Rights Act would not grant an “automatic injunction,” but simply reestablish the presumption that patent infringement constitutes a type of irreparable harm that should be rectified with an injunction. This presumption was the established precedent prior to the Supreme Court’s decision in eBay. However, under the RESTORE Patent Rights Act, companies accused of patent infringement would still have the opportunity to raise claims against this presumption in court, while companies seeking an injunction would still have to prove infringement and the validity of their patent, if challenged. Therefore, in the words of legal scholar and patent law professor Kristen J. Osenga, “the presumption of an injunction [in cases of patent infringement] is not automatic, because it is rebuttable by the defendant.” Claims that the RESTORE Patent Rights Act would grant injunctions automatically fail to recognize that the behavior of the infringer is ultimately what determines whether an injunction is granted. |
| Claim: The RESTORE Patent Rights Act would empower bad actors “to abuse our courtrooms with impunity.” |
| In reality: The post-eBay status quo already allows significant potential for abuse by bad actors, which would be reduced by the RESTORE Patent Rights Act. Under the status quo, as described previously, deep-pocketed companies and those backed by wealthy interests are able to engage in expensive litigation and can readily afford to pay monetary damages if caught infringing patents. On the other hand, under the RESTORE Patent Rights Act, these companies would have less of an incentive to infringe patents because if an injunction is granted, they will lose access to the patented technology instead of simply losing money. If the RESTORE Patent Rights Act becomes law, it will help to nullify the current advantages that wealthy businesses currently enjoy in patent litigation — ensuring that the companies that produce innovative and original products are able to succeed in the marketplace and making it more difficult for predatory and ill-intentioned competitors to “game” the legal system. |
Celebrating American Innovation
Inventor Spotlight
This month, C4IP is recognizing Shuji Nakamura, who enabled modern-day electronics with his invention of the blue LED.
- Nakamura was born in 1954 in Ehime, Japan, and was working as a scientist for Japanese company Nichia Chemical when he became intrigued by light-emitting diodes (LEDs), which at the time could only emit red or green light and had limited practical use.
- He pioneered two major breakthroughs, the first in 1992, when he discovered and patented a method to produce blue LED crystals, and the second in 1997, when he built upon his prior research to patent the first white-emitting LEDs.
- Nakamura’s game-changing work won him the Nobel Prize in Physics in 2014.
- Nakamura’s discoveries completed the LED color spectrum and have since become essential components in numerous technologies, including lightbulbs, display screens, smartphones, traffic lights, and laser disc readers.
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- As of 2023, the global market for LED lighting was estimated to be worth nearly $87 billion, while the market for LED displays was estimated at over $15 billion.
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- The full impact of Nakamura’s work has yet to be felt: the prevalence of LEDs continues to grow rapidly, with nearly 90% of all light sources expected to be LEDs by 2030, and experts expect them to save billions of dollars in global energy costs due to their efficiency.
(Photo credit: National Academy of Engineering)
What’s Happening in Congress
As Democratic and Republican members of Congress continue to weigh legislative priorities during the 118th Congress, top of mind for those who follow intellectual property policy are:
The Inventor Diversity for Economic Advancement (IDEA) Act of 2024: In September 2024, Senators Mazie Hirono (D-HI) and Thom Tillis (R-NC), alongside Representatives Nydia Velázquez (D-NY) and Young Kim (R-CA), reintroduced legislation that would direct the U.S. Patent and Trademark Office to collect demographic information from patent applicants on a voluntary basis. This data would provide clarity on current demographic gaps in patenting and could inform future reforms intended to help currently underrepresented communities, such as women and racial minorities, participate fully in the patent system. By helping ensure equitable access to intellectual property protections, the IDEA Act would help America harness the innovative talents of all its citizens, spurring economic growth and technological advancement.
The Patent Eligibility Restoration Act of 2023: In June 2023, Senators Thom Tillis (R-NC) and Chris Coons (D-DE) reintroduced legislation aimed at restoring patent eligibility for important categories of inventions – including life sciences diagnostics, gene therapies, and computer-implemented inventions – as well as resolving questions regarding the scope of patent eligibility. In so doing, the Patent Eligibility Restoration Act will foster the development of next-generation technologies across innovative industries. Representatives Kevin Kiley (R-CA) and Scott Peters (D-CA) introduced the House companion to this bill in September 2024.
The Realizing Engineering, Science, and Technology Opportunities by Restoring Exclusive (RESTORE) Patent Rights Act: In July 2024, Senators Chris Coons (D-DE) and Tom Cotton (R-AR), and Representatives Nathaniel Moran (R-TX), Madeleine Dean (D-PA), and Hank Johnson (D-GA) introduced legislation that aims to realign patent law with the U.S. Constitution and the Patent Act’s promise of “exclusive rights” to inventors. This bipartisan bill seeks to restore injunctive relief – court orders that stop infringers from utilizing patented technology – in response to the Supreme Court’s 2006 eBay v. MercExchange. That ruling substantially curtailed the granting of such injunctions, undermining the exclusive rights set forth in the U.S. Constitution to many inventors. C4IP strongly supports this legislation, viewing it as a pivotal moment for American innovation.
The Nurture Originals, Foster Art, and Keep Entertainment Safe (NO FAKES) Act of 2024: In August 2024, Senators Chris Coons (D-DE) and Thom Tillis (R-NC), along with Senators Amy Klobuchar (D-MN) and Marsha Blackburn (R-TN), introduced bipartisan legislation intended to protect all individuals from having their voice and visual likeness copied by generative AI without consent. The bill would ensure that entities that produce or share a non-consensual digital replica of another person’s image or voice, such as an AI-generated “deepfake,” can be held liable for damages. It also provides a mechanism to hold platforms hosting user-generated content liable for the same, if they do not remove such unauthorized material after receiving notice. By safeguarding all individuals from exploitation, this legislation would ensure that music, videos, and other forms of content feature only individuals who agree to it, strengthening the rights of artists and actors, and preventing the exploitation of them and everyone else.
The Stopping Harmful Offers on Platforms by Screening Against Fakes in E-Commerce (SHOP SAFE) Act: In September 2023, Senators Chris Coons (D-DE) and Thom Tillis (R-NC) introduced legislation designed to protect online consumers from harmful counterfeit products. By establishing trademark infringement liability for e-commerce platforms that allow the sale of dangerous counterfeit items, requiring brand owners to notify platforms of their mark(s) in advance, and providing safety from liability to platforms that appropriately vet and remove counterfeit sellers, the SHOP SAFE Act will protect American families as well as businesses and IP holders. Representatives Darrell Issa (R-CA), Jerry Nadler (D-NY), Ben Cline (R-VA), and Hank Johnson (D-GA) introduced the House companion to this bill in June 2024.
The Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act: In July 2023, Senators Chris Coons (D-DE), Thom Tillis (R-NC), Dick Durbin (D-IL), and Mazie Hirono (D-HI) – joined by Deborah Ross (D-NC), and later cosponsored by Nathaniel Moran (R-TX), on the House side – introduced legislation that will eliminate redundant patent invalidity challenges and safeguard Americans’ right to participate in a fair and accessible patent system. The PREVAIL Act contains important reforms to the Patent Trial and Appeal Board, which will return the body to its original purpose of providing an efficient alternative to district court litigation, and will curtail the practice by patent infringers of forcing inventors to defend their patents repeatedly and in multiple fora.
The Medication Affordability and Patent Integrity Act: In September 2023, Senators Maggie Hassan (D-NH) and Mike Braun (R-IN) introduced legislation that would require life sciences innovators to disclose vast amounts of confidential data to the USPTO. In addition, firms would also have to provide lengthy certifications stating that all information submitted to the FDA and USPTO is consistent. Proponents of the bill argue that such disclosures would help prevent drug companies from manipulating the patent system, keep weak patents from being issued, and lower drug costs for patients. However, there is no evidence that these problems exist. Rather than benefit patients, the requirements imposed by this bill would likely compromise the confidentiality of trade secrets and make it easier for companies to have their competitors’ patents invalidated. It would also drain USPTO resources and make the drug approval process even more burdensome for innovative companies. Due to these problems, as well as the lack of empirical support for the bill, C4IP opposes this legislation.
The Prohibiting Adversarial Patents (PAPA) Act: In September 2023, Representatives Scott Fitzgerald (R-WI), Mike Gallagher (R-WI), Darrell Issa (R-CA), and Blaine Luetkemeyer (R-MO) introduced legislation that raises a number of concerns. With the well-intended goal of protecting U.S. national security, the PAPA Act has the potential to trigger significant unintended consequences. These include potential retaliatory moves by China and other nations to suspend or render unenforceable patents owned by American companies, further enabling the theft of American IP overseas. The actions called for by the bill may well violate U.S. treaty obligations, which would, in turn, embolden other nations to violate IP-related treaties in various ways. In addition, confiscating patents, or rendering them unenforceable, violates basic principles of property and, therefore, could weaken the concept of patents as property rights. These and other considerations are of the utmost importance as U.S. lawmakers study the full scope of the PAPA Act. C4IP stands ready to work with Members of Congress to address the threat posed by foreign entities while maintaining the integrity of the U.S. patent system.
The Improving Efficiency to Increase Competition Act: In January 2024, Senators Thom Tillis (R-NC) and Chris Coons (D-DE) introduced legislation intended to reduce the administrative burden on universities and other institutions that receive federal research grants so that they can focus more intently on producing new innovations. Specifically, the legislation would direct the Government Accountability Office (GAO) to conduct a study on intellectual property reporting requirements under the Bayh-Dole Act, which vary between federal agencies. Such a study will offer important insights into how the government can make the reporting process more efficient and remove barriers that may have inhibited the development of new inventions.
The Interagency Patent Coordination and Improvement Act of 2023: In January 2023, Senators Dick Durbin (D-IL), Chris Coons (D-DE), Thom Tillis (R-NC), and Chuck Grassley (R-IA) introduced the Interagency Patent Coordination and Improvement Act of 2023. The bill would create an interagency task force to share patent filing information and technical assistance between USPTO and FDA officials. IP experts warn that interagency entanglement could weaken the patent system by inserting officials from multiple federal agencies – without patent law expertise – into the examination process. They submit that it is premature to implement such substantial changes without conducting a thorough evidence-based study.