David Kappos, now a partner at Cravath Swaine & Moore LLP, said at the Federal Circuit Judicial Conference in Washington that the U.S. Supreme Court's high-profile Section 101 decisions in Mayo, Myriad and Alice, and the way lower courts have interpreted them, have made it too difficult to secure patents on biotechnology and software inventions.
The high court's decisions were aimed at barring patents on abstract ideas, natural phenomena and laws of nature, but they have been interpreted so broadly that important inventions may no longer be patent-eligible, Kappos said. Parts of patent law besides Section 101 can be used to limit what is patent-eligible without hindering patents on legitimate innovations, he said.
"It's time to abolish Section 101, and the reason I say that is that Europe doesn't have 101 and Asia doesn't have 101 and they seem to be doing just fine in constraining patent-eligible subject matter," he said.
Kappos, who led the patent office from 2009 to 2013, said he has begun telling clients that patent protection for biotechnology and software inventions is more robust in other countries like China and Europe and they are better off seeking patents in those places, because of the way U.S. courts have interpreted Section 101.
"It's a disturbing trend for the U.S. to take those two areas, which are the crown jewel of the innovation economy, and provide less protection for them than other countries," he said.
Kappos said that patent officials in other nations have reacted with "bemusement" as the U.S. invalidates patents on Section 101 grounds, while foreign companies that compete with American businesses see a golden opportunity in the reduced patent protection for software and biotechnology.
"Imagine the glee of international competitors who no longer have to steal U.S. technology in those critical areas, since they can now take it for free," he said.
Section 101 states only that "whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title."
The statute does not identify special areas that are not patent-eligible, but the courts have developed case law that abstract ideas and laws of nature can't be patented. Those exceptions to patent-eligibility have gained new force after the high court invoked them to invalidate patents on human genes in Myriad and a computerized method of hedging risk in Alice.
Since those decisions, courts have cited them to invalidate numerous software and biotech patents that they have said claim simply abstract ideas or natural phenomena, although some judges have said they find it difficult to apply the high court’s reasoning to other patents.
The recent decisions mean that the law on patent-eligibility is now "a real mess, and you could actually use much stronger language than that," Kappos said.
"We're dealing with a litmus test, an 'I know it when it see it' test," he said. Thousands of USPTO examiners and hundreds of judges have to make that call, and "we're now seeing real chaos," Kappos said.
Courts can ensure that patents are not allowed on basic concepts while protecting true innovations by faithfully applying other areas of patent law to ensure that patents are not obvious or anticipated or lacking in written description, he said.
At the time Section 101 was written, those areas of the law were less well-developed, and the patent-eligibility requirement was designed to serve as a "backstop" to prevent patents on basic concepts, Kappos said. Now that those areas are far better developed, Section 101 is no longer needed, he said.
At the same time U.S. courts have been frequently invalidating patents under Section 101, courts in other countries like Germany have been moving in the opposite direction, issuing decisions that favor patent owners and "putting their foot down in favor of innovation," Kappos said.
The argument that Section 101 is no longer needed was recently made to the Supreme Court by Eli Lilly & Co. and other companies in an amicus brief urging the justices to review a Federal Circuit decision that invalidated Sequenom Inc.'s genetic testing patent for claiming only a natural phenomenon.
--Editing by Brian Baresch.