PERA and PREVAIL: Bipartisan Bills Aimed at Supporting Inventors and Innovation

Patent law has undergone drastic changes in recent years. From the Supreme Court’s landmark Alice ruling to the Patent Trial and Appeal Board’s establishment, inventors and judges alike are struggling to navigate this rapid evolution. But Congress is responding to the widespread uncertainty. In the past month, Senators Chris Coons (D-DE) and Thom Tillis (R-NC) have introduced two bills—the Patent Eligibility Restoration Act (PERA) and Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act—to address issues of modern patent law. 

PERA responds to the ripple effects of the Alice ruling. Decided in 2014, Alice restricted patent-eligible subject matter to only those abstract concepts significantly altered by human innovation. This ruling complicated the patent acquisition process because the Court concluded that having a computer enact code did not significantly transform an abstract concept. As a result, many United States tech companies and inventors do not receive software patents for ideas that would be protected in other countries. Nor is the tech industry alone in feeling the adverse effects of Alice. Many judges have trouble determining what constitutes a significant transformation under Alice, with some even expressing their frustration on record.

Hopefully, PERA will provide some clarity to those frustrated judges. Where Alice required judges to perform a confusing two-step test for eligibility, PERA lays out five categories of patent-ineligible subject matter:

Compared to Alice, this list offers judges a clearer and more objective roadmap to ascertaining patent eligibility. It sets statutory boundaries on eligibility rather than leaving the matter up to judicial interpretation. Furthermore, the bill reads that “any process that cannot be practically performed without the use of a machine (including a computer) or manufacture shall be eligible for patent coverage” § 2(5)(E)(ii); § 101(b)(1)(b)(ii). Courts would likely interpret this language as permitting the types of software patents deemed ineligible under Alice, which would both encourage technological innovation in the United States and provide protection for more code-based inventions.

Of course, PERA has its critics. Some express concern that the bill might help big pharma take advantage of the seriously ill. For example, critics point to a pre-Alice case where Myriad Genetics patented isolated genes correlated with cancer and then increased costs for medical tests of those genes. They worry that under PERA, pharmaceutical companies would revert to similar practices. 

While PERA addresses issues with eligibility in the wake of Alice, the PREVAIL Act would reform another pivotal aspect of the modern patent landscape: the Patent Trial and Appeal Board (PTAB). Established in 2012, the PTAB is often dubbed a “death squad” because it invalidates approximately 83% of the patents it reviews. To reduce this high invalidation rate, PREVAIL proposes raising the board’s burden of proof for invalidating patents from a preponderance of the evidence to clear and convincing evidence. Furthermore, PREVAIL would require a party to raise all its arguments for invalidating a patent in a single challenge, preventing one party from increasing the attorneys’ fees of its opposition by bringing multiple petitions against the same patent. Overall, PREVAIL would greatly help patent owners, from small businesses to large companies, as they seek to defend their patents before the PTAB.

According to Senator Coons, PERA and PREVAIL aim to “promote fair treatment for inventors” and “ensure the United States maintains its competitive edge [in producing intellectual property].” While these are admirable goals, it remains unclear if the bills will become laws. Critics raise valid points about PERA’s implications for the pharmaceutical industry and suggest that the bills might strengthen the power of patent trolls. Inevitably, intellectual property issues will arise whether these bills pass or stall out. Still, it’s nice to know that legislators are considering the problems of the patent world and working across the aisle to address them.

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