Section §101: Abolish This Troubling Statute in Patent Law?

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.

35 U.S.C. 101 (Section §101)

As we’ve discussed before, Section 101 is one of the most basic and yet has become one of the most troubling statutes in patent law. While at first glance §101 appears broad, the “judicial exceptions” established in Bilski and expanded upon in Mayo, Myriad, and Alice have greatly limited what judges, (and as a result examiners) regard as patentable subject matter and not simply as “abstract ideas”. Determining what counts as “abstract ideas” has become so exceedingly difficult that some commentator have argued that the patent system is now broken.

Recognizing the predicament that many patent lawyers and patent owners now find themselves in, Dave Kappos, the former director of the USPTO, has proposed a rather eloquent solution to the §101 conundrum: simply drop §101 from the books. Speaking at a Federal Circuit Judicial Conference, Kappos called for Congress to “to abolish Section §101.” Kappos pointed out that many countries, including countries in Asia and Europe, do not have parallel provisions and yet “seem to be doing just fine in constraining patent-eligible subject matter”. To be fair, Kappos is not the first to suggest that §101 be abolished. Similar arguments were made by Eli Lily Co. in an Amicus brief for Ariosa v. Sequenom.

Supporters of abolishing §101 point out that it would help alleviate the mess the Supreme Court has made of software patents.  Furthermore, there is the argument that it makes economic sense. Much of the subject matter deemed unpatentable under Alice is still protected in many foreign countries, which may lead many companies to move their research and development departments out of the U.S. By removing §101 and allowing patent protection in the United States for inventions which are protected abroad, the U.S. would be signaling to companies that the country still values innovation.

However, the abolishment of §101 would not be without its own challenges. Foremost being what becomes of all the patents which were recently invalidated under §101. Would/could these patents be reinstated? If they are reinstated, what becomes of the businesses that moved forward believing the patents would remain invalid? Could owners of the now reinstated patents shut down these business or would the courts force compulsory licenses? As one can see, even fixing an arguably bad law is not without unforeseen consequences.

In summary, Kappos’ proposal is a possible, although unconventional, solution to the legal challenges now faced under §101. With many other statutory provisions acting as hurdles to obtaining a patent, perhaps §101 is causing more harm than good.  Nevertheless, lawmakers (and judges) need to tread lightly when making any modifications to the legal framework that governs patents.  Creating stability in patent law is often as important drafting good statutes.  Companies can and will adapt to consistent laws (even if the laws are consistently bad). What companies cannot prepare for, and what would cause them to abandon the patent system, is unpredictability.