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Q: What do you think are currently the most pressing challenges in agriculture?

FLC: Pest resistance continues to be a very serious concern in agriculture, so new and effective control measures need to be continually developed for all pests: weeds, insects, disease. There are two major pests of concern for my own farm in Western Canada. First, herbicide-resistant kochia weed, which has become a huge problem in the last five years all across the world. No one’s sure how exactly it spread so quickly. Second, flea beetles are decimating cruciferous crops. RNAi-based insecticides could be very effective here, if we can achieve sufficient persistence of the insecticide and avoid impacting non-target species.

2. Myriad Caused Multiple Genetic Diagnostics to Be Abandoned

Another major concern following Myriad was that it would stifle the development of medical diagnostics and treatments. Although some believed that Myriad would lead to decreased costs for consumers due to greater competition in the marketplace for gene-based medicines,205 others feared that the decision could lead to an overall decrease in the research that made these diagnostics and treatments possible.206

Genetic studies play a crucial role in the prevention, diagnosis, treatment, and monitoring of cancer, enabling a more precise and personalized approach for each patient. Genetic studies allow the identification of genetic predisposition, customization of treatments, more accurate prognoses, and the identification of genetic and molecular biomarkers that can serve as therapeutic targets or indicators of treatment response.

Existing scholarship from the biotechnology industry provides a useful model to describe how patents facilitate information exchange in the innovative process more broadly. Similar to inventions in the medical device industry, which will be discussed in Part III, biotechnology-related inventions must undergo an extensive regulatory process to bring an idea to market. Additionally, startups in both of these industries are far more likely to hold patents or patent applications than startups in other industries. Technology in the biotechnology industry often begins with universities that spin off new startups, investors then provide funding, and ultimately the startups exchange their intellectual property with established pharmaceutical companies to obtain further investment. Professor Gary Pisano describes the “fragmented nature” of the biotechnology industry as compromising a multitude of small startups in “islands of expertise.” He notes that the ways in which companies are funded sometimes “conflicts with the long R&D timetable need to create new drugs”. Developing new drugs comes with considerable risk. The process of evaluating drug candidates and engaging in discovery prior to clinical trials can take three to six years. After that point, if the U.S. Food and Drug Administration (FDA) permits the Investigational New Drug (IND) application to go into effect, clinical trials take place over the next six to seven years. If the clinical trials are successful, the FDA then reviews the New Drug Application (NDA), which adds another six months to two years. A recent estimate of the costs of new drug development, from research to FDA approval, is approximately $2.6 billion. For funding, biotech startups often rely on equity financing through venture capital when they are in the early stages of conducting research, given the challenges of measuring performance at that time. Later in the drug development process, however, obtaining financing through entering into a joint venture is more closely aligned with the technological landscape and organizational structure of the industry, given the large expense and extended timeframe associated with obtaining FDA approval. Commentators from the biotechnology industry have questioned whether alternative structures for mitigating expropriation risks, such as staging disclosure or relying on reputational or industry norms, are best-suited for addressing the disclosure paradox, at least when seeking early stage investment. The difficulty of obtaining patent protection and increasing reliance on trade secrets in some circumstances can be problematic in this industry, given the time constraints investors and companies operate under and the importance of information exchange for development. In particular, emerging companies “have limited financial resources, and investors aren’t willing to give them the time to perfect their craft.” So, the disclosure paradox at the early venture financing stage may remain a challenge where patent protection is difficult to obtain.

As an example, consider the experiences described by a founder of a medical device startup. The founder had discovered a pain-free way to measure glucose levels in blood, a vast improvement over existing medical devices. After obtaining an exclusive license of the patents, he built a simple prototype and sought investment funding. He knew that venture capital investors would expect reassurance about the viability of the technology and the startup’s ability to protect against competition—the consider the likelihood of commercialization even in the early stages, given the costly and extensive process required to obtain regulatory approval. Before meeting with investors, he had filed a dozen patent applications to provide a “defensible moat,” which would make it difficult for competitors to make “gainful progress”. Patents allowed the startup to “fence off a green pasture” that the company could highlight to prospective investors, enabling communication of information both about the invention and apart from it, while at the same time providing an objective assessment of the idea’s value by the U.S. Patent and Trademark Office (USPTO). Having patent protection not only makes it difficult for competitors to make “gainful progress,” it can also facilitate external communication about the invention to unrelated parties. For example, several companies in related markets have contacted the founder to express interest in licensing the technology. And later in the commercialization process, patents can enable greater flexibility in organizational structuring—they not only provide protection for the startup, but also provide “cover” to manufacturing partners against the risks of expropriation.

The narrative drawn from existing empirical data and confirmed by interviews I conducted with professionals from small and mid-sized medical device companies, is consistent with the theoretical understanding of the importance of patents to information exchange throughout the innovative process. Truly groundbreaking medical devices often originate with small companies. These emerging companies frequently rely on investment funding as well as alliances with larger companies to manufacture and market their products, and their commercialization partners often rely on intellectual property to prevent expropriation by third parties and ensure exclusivity. Small medical device companies typically depend on patents to exchange information about their innovative devices in an industry with a small number of investors where a few dozen companies dominate.

Historically, disease events have been responsible for the greatest death tolls on humanity. The 1918 flu was responsible for more than 50 million deaths,1 while smallpox killed perhaps 10 times that many in the 20th century alone.2 The Black Death was responsible for killing over 25% of the European population,3 while other pandemics, such as the plague of Justinian, are thought to have killed 25 million in the 6th century—constituting over 10% of the world’s population at the time.4 It is an open question whether a future pandemic could result in outright human extinction or the irreversible collapse of civilization. A skeptic would have many good reasons to think that existential risk from disease is unlikely. Such a disease would need to spread worldwide to remote populations, overcome rare genetic resistances, and evade detection, cures, and countermeasures. Even evolution itself may work in humanity’s favor: Virulence and transmission is often a trade-off, and so evolutionary pressures could push against maximally lethal wild-type pathogens.5,6 While these arguments point to a very small risk of human extinction, they do not rule the possibility out entirely. Although rare, there are recorded instances of species going extinct due to disease—primarily in amphibians, but also in 1 mammalian species of rat on Christmas Island.7,8 There are also historical examples of large human populations being almost entirely wiped out by disease, especially when multiple diseases were simultaneously introduced into a population without immunity. The most striking examples of total population collapse include native American tribes exposed to European diseases, such as the Massachusett (86% loss of population), Quiripi-Unquachog (95% loss of population), and theWestern Abenaki (which suffered a staggering 98% loss of population). In the modern context, no single disease currently exists that combines the worst-case levels of transmissibility, lethality, resistance to countermeasures, and global reach. But many diseases are proof of principle that each worst-case attribute can be realized independently. For example, some diseases exhibit nearly a 100% case fatality ratio in the absence of treatment, such as rabies or septicemic plague. Other diseases have a track record of spreading to virtually every human community worldwide, such as the 1918 flu,10 and seroprevalence studies indicate that other pathogens, such as chickenpox and HSV-1, can successfully reach over 95% of a population.11,12 Under optimal virulence theory, natural evolution would be an unlikely source for pathogens with the highest possible levels of transmissibility, virulence, and global reach. But advances in biotechnology might allow the creation of diseases that combine such traits. Recent controversy has already emerged over a number of scientific experiments that resulted in viruses with enhanced transmissibility, lethality, and/or the ability to overcome therapeutics.13-17 Other experiments demonstrated that mousepox could be modified to have a 100% case fatality rate and render a vaccine ineffective.18 In addition to transmissibility and lethality, studies have shown that other disease traits, such as incubation time, environmental survival, and available vectors, could be modified as well.19-2

In the 2008 Berkeley Patent Survey, both biotechnology and medical device startups reported that patent protection was important for obtaining investment. From the investors’ perspective, the survey found patents are important in the decision about whether to invest in both biotechnology and medical device startups. Venture capitalists typically expect an emerging company to have filed for patent protection prior to providing investment funds. Consistent with the earlier work of Clarissa long on patent signaling, the survey confirmed that patents often provide a fairly inexpensive way of credibly conveying information about the firm that holds them that is otherwise difficult to obtain, reducing information asymmetries between patent holders and investors.

And third, a series of Supreme Court decisions between 2010 and 2014 greatly decreased the scope of patent-eligible subject matter. The decisions established a two-step test for determining patent-eligible inventions known as the Alice/Mayo test, which restricts patents related to laws of nature, natural phenomena, and abstract ideas. Under the restrictions of Alice/Mayo, many once-patentable inventions became patent ineligible, resulting in the nullification of hundreds of patents. Through 2020, 60 percent of patents challenged under the Alice/Mayo framework were invalidated.

Ultimately, the key issue with these three changes is the increased uncertainty they inject into the U.S. patent system. The increased risk of a successful retrospective patent eligibility challenge at the PTAB, for instance, introduces significant uncertainty for start-ups and other small actors who rely on IP to attract financing. Moreover, critics of Alice/Mayo assert that the test is vague and unpredictable, which hampers start-ups, reduces investment, and ultimately undermines innovation. Kimberly A. Moore, chief judge of the U.S. Court of Appeals for the Federal Circuit, expressed that Federal Circuit judges were “at a loss” in how to apply the current patent eligibility provisions, while some IP legal professionals claim that they are unable to provide clear guidance to businesses due to Alice/Mayo.

The biotechnology industry specifically argues that in their industry, the risks of their products and innovation require a patent system that will adequately protect their interests.10 1 The primary asset of these biotechnology companies are their patents. 102 Obviously protecting these patents is important to earning a payback for the high-cost of research and development aimed at the high rewards of promoting health, longevity and well-being.103 Without an ability to place injunctions on infringers as a general rule, the right to exclude will become meaningless. 10 4 Therefore, many of these biotechnology firms will not be able to attract the capital necessary to fund the research and development required for new medicines and treatments.105 The two examples below demonstrate the importance of investment in the biotechnology industry: (1) Nektar Therapeutics. The company's reliance on a single patent raised $1.2 billion in financing from outside investors. 106 (2) AlphaVax. AlphaVax patented a technology that is not anticipated to be approved for use until 2011.107 The company must attract investors who will risk millions of dollars on the chance this therapy will reach the marketplace.108 The company, as well as the investors, must have confidence in their patent's ability to provide a predictable right to exclude.

a. Mayo and Alice: The Court Takes a Hard Stance on Laws of Nature and Abstract Ideas

The Court reassessed its position on patent subject matter exclusions in Mayo. 144 In that case, Prometheus Laboratories devised and patented a method for calibrating drug dosage in patients being treated for autoimmune diseases, such as Crohn’s disease.145 Typical treatment of these diseases includes administration of thiopurine, an immunosuppressant.146 However, as different individuals metabolize thiopurine at different rates, finding an effective dosage of the drug can prove tricky.147 Prometheus developed a method for administering thiopurine to patients and then measuring thiopurine metabolites in a patient’s blood to see how they metabolized the drug.148 Thiopurine dosage could then be adjusted in a patient-specific manner based on an individual’s metabolism.149 The Supreme Court found that Prometheus’s patent attempted to claim an underlying law of nature and was thus outside the realm of patentable subject matter.150 Specifically, the Court found that Prometheus’s patent effectively restated a natural law—that the level of metabolites in a person’s blood reflect the rate at which they metabolize something—and then said to “apply it.”151 Absent some additional inventive step that transforms the “laws of nature, natural phenomena, [or] abstract ideas” into something more concrete, the Court held that such applications were not patentable.152

On the other side, proponents of PERA argue that it addresses three key problems with Alice/Mayo. First, they assert that the Alice/Mayo test is vague and unpredictable, which hampers start-ups, reduces investment, and ultimately undermines innovation. Kimberly A. Moore, chief judge of the U.S. Court of Appeals for the Federal Circuit, expressed that Federal Circuit judges were “at a loss” in how to apply the current patent eligibility provisions. Some IP legal professionals claim that they are unable to provide clear guidance to businesses due to Alice/Mayo. Legal uncertainty ultimately hampers economic activity, and uncertainty in patent eligibility may lead investors to avoid companies with patents in fields strongly impacted by Alice/Mayo such as life sciences and information technology.

Second, proponents of PERA argue that Alice/Mayo unduly restricts what is patent-eligible. In the biotechnology industry for instance, stakeholders contend that Alice/Mayo constrains their capacity to secure patents for diagnostic methods and personalized medicine, ultimately reducing the economic viability of developing these new technologies. Further, some of the subject matter rendered unpatentable by Alice/Mayo is patent-eligible in Europe, China, and other jurisdictions, potentially diverting R&D investment away from the United States and undermining the competitiveness of U.S. businesses.

These high rates of rejections of patent applications are not merely a departure from historical U.S. practices. They signal that the U.S. has closed its patent system to innovators, especially compared to China and Europe.

A recent study of patent applications between August 2014 and September 2017 found that well over 1,000 patent applications were abandoned after receiving initial or final rejections by an examiner at the USPTO who found the claimed inventions or discoveries to be unpatentable under the Alice-Mayo framework. What makes these rejected patent applications important is that, in contrast to the U.S., the patent applications for the same inventions and discoveries were granted by China, the European Patent Office, or both.26

With this massive increase in court decisions applying patent eligibility doctrine, there are extremely high rates of invalidations of patents under the Alice-Mayo framework. As of June 2019, the overall invalidation rate in court decisions is 62 percent.22 In the appeals courts, the invalidation rate is even higher. The Court of Appeals for the Federal Circuit, the federal appeals court created in 1982 that hears all appeals of trial court decisions in patent cases, is invalidating patents under the Alice-Mayo framework in 86 percent of its decisions. At the PTAB, where administrative patent judges review business process inventions (known in patent parlance as business method patents), they have applied the Alice-Mayo framework in invalidating patents an astounding 97.8 percent in its final decisions.23

As of the end of 2023, one bill focusing on patent-eligible subject matter has been introduced during the 118th Congress: S. 2140, the Patent Eligibility Restoration Act of 2023 (PERA 2023). Like PERA 2022, the introduced version of PERA 2023 would replace the Alice/Mayo framework with an exclusive statutory list of narrower ineligible categories: mathematical formulas, purely mental processes, purely natural processes, unmodified human genes, and unmodified natural material. PERA 2023 would also exclude from patentability any “substantially economic, financial, business, social, cultural, or artistic” process, even if it involves a machine or manufacture. However, if the process “cannot practically be performed” without the machine or manufacture, then it would be patent-eligible.

PERA 2023 also contains provisions on how to read the exclusions for unmodified human genes or other unmodified natural material. Specifically, PERA 2023 explains that natural material would be considered modified (and thus patentable) if it is “isolated, purified, enriched, or otherwise altered by human activity” or “otherwise employed in a useful invention or discovery.” This provision would appear to abrogate the Supreme Court’s Myriad decision to allow patenting of isolated DNA segments, although unmodified human genes (i.e., genes as they exist in the human body) would remain unpatentable.

b. Congressional Legislation: The Patent Eligibility Restoration Act of 2023

Many have implored Congress to fix American patent law.246 Senators Thom Tillis and Chris Coons have taken up this call to arms, proposing a legislative amendment to the Patent Act.247 Their bill, known as the Patent Eligibility Restoration Act of 2023, would amend 35 U.S.C. § 101 to overrule several of the Court’s recent holdings.248 As it specifically pertains to gene patents, the bill would prohibit the patenting of unmodified human genes but then clarify that the process of isolating a human gene from an individual’s body counts as modifying it.249 The bill further maintains exceptions to patent eligibility, including restricting the patenting of mathematical formulas, mental processes, and natural materials.250 Thus, in the context of human genes, the bill would essentially overrule Myriad and restore gene patents to their pre-2013 status as potentially valid so long as an isolated gene is claimed.

D. Applying this Article's Proposal to Recent Supreme Court Cases to Demonstrate Its Practicality

One of the goals of this Article's proposal is to shift the work currently being done by the subject matter doctrine to the other doctrines of patentability. This shift requires that the other doctrines can perform that exclusionary work. In Mayo, the Supreme Court said:

VI. The Enactment of § 103 in the 1952 Patent Act Is a Guide for Reform of § 101 Today

Congress should reform § 101 today to correct the misinterpretation of this statute by the Supreme Court in its Alice-Mayo framework. This would return U.S. innovation policy back to its original path, which has been a wellspring for two centuries of growth in the U.S. innovation economy. The problems faced by innovators today under the Alice-Mayo framework are entirely doctrinal—they are the result of a judicial doctrine representing an expansive, non-textual “interpretation” of a statute enacted by Congress.39 This calls for legislative reform.

This invalidation contagion is spreading, too, and is not limited to cutting-edge inventions in the 21st-century innovation economy. Patents covering classic technologies from the Industrial Revolution are now being invalidated as ineligible subject matter under the Alice-Mayo framework. One recent example was a patent on operating an oil drilling rig that was invalidated by a court under the Alice-Mayo framework for allegedly claiming an abstract idea.28 In another case, the Court of Appeals for the Federal Circuit affirmed a district court’s invalidation of a patent on a method of building an axle in an automobile engine because the judges deemed it an unpatentable application of the laws of thermodynamics.29

As every engineer knows, all machines are applications of the laws of thermodynamics. What this means is that patent owners are now left to the vagaries of whether a judge chooses to disintegrate their patented innovations down to unpatentable laws of nature—or not. In her stinging dissent, Judge Kimberly Moore complained that the “majority’s validity goulash is troubling and inconsistent with the patent statute and precedent. The majority worries about results-oriented [patent] claiming; I am worried about results-oriented judicial action.”30

V. Regulatory Reforms in Examination Guidelines at the USPTO Are Not Enough

In early January 2019, USPTO Director Andrei Iancu, who was confirmed by the Senate in early 2018, issued new examination guidelines under the Alice-Mayo framework. Director Iancu announced the reforms with the intent to “improve certainty and reliability” in how examiners would use § 101 in reviewing patent applications.32 The USPTO further modified these new examination guidelines in October 2019.33 Anecdotal reports suggest that patent applications may now be faring a bit better under the Alice-Mayo framework than they were in the years between 2014 and 2018.