Empirics prove – PERA and PREVAIL both failed to gain political support.

Six months ago, your humble correspondent predicted a “Hot Patent Summer” filled with racy legislative action on sizzling intellectual property issues. That heat never quite boiled over, but as temperatures cool and December turns to January, what progress has been made on these measures? Recall that, over the summer, the Senate’s leading avatars of legislative patent reform, Sens. Chris Coons (D-DE) and Thom Tillis (R-NC), introduced two signature bills seeking to level the playing field for inventors and to juice American innovation as the economy continues to struggle to recover from its COVID-19 doldrums. The first measure, entitled the Patent Eligibility Restoration Act of 2023 (PERA), aims to restore common sense to the controversial question of what subject matter should receive patent protection. A nearly ten-year-old Supreme Court decision muddied the waters of patent eligibility and led to the elimination of hundreds of patents. A recent Washington and Lee University law review article revealed that this decision and its progeny has, among other things, reduced investment in the medical diagnostics industry by some $9.3 billion. Noting the “extensive confusion and a lack of consistency” prevailing in the field, Tillis and Coons pledged to reform patent eligibility law to bring vital clarity for inventors and innovators and ensure the United States maintains its competitive edge.” In addition to bolstering the diagnostics field, the greater clarity PERA aims to deliver would spark more innovation in artificial intelligence, telecommunications, and other critical industries. At the same time, Coons and Tillis, joined by Sens. Mazie Hirono (D-HI) and Richard Durbin (D-IL), also introduced the Promoting and Respecting Economically Vital American Innovation Leadership Act (PREVAIL) Act of 2023. A month later, Reps. Ken Buck (R-CO) and Deborah Ross (D-NC) introduced the same bill in the House. As Buck and Ross wrote in a press release, the PREVAIL Act seeks to reform the Patent Trial and Appeals Board (PTAB)—the tribunal first convened in 2013 to more easily and swiftly dispose of unworthy patents but has, in the eyes of many, done so overzealously. PREVAIL would require standing for PTAB challengers, harmonizing the interpretation of claims and the burden of proof between the PTAB and district courts, impeding duplicative patent challenges by requiring a party to choose between challenge a patent in district court or before the PTAB, and prohibiting the director of the US Patent and Trademark Office (USPTO) from influencing PTAB rulings. As Ross said recently at a panel at the Center for Strategic and International Studies moderated by my former colleague Andrei Iancu, who previously served as the USPTO director, the PTAB and the district court currently provide “two different venues . . . two standards of proof, that creates a quagmire for the small inventor.” At that panel, Henry Hadad, a senior vice president and deputy general counsel at Bristol-Myers Squibb observed that, unfortunately, the PTAB has recently been marred by embracing “the primary basis for invalidating patents based on a limited record, limited witnesses, an inability to test the veracity of witnesses on cross examination.” But as meritorious as both measures seem, neither has advanced particularly far since their introductions in June. And with an election year ahead, their prospects of making significant progress in Congress traditionally would not be especially high. However, given the sluggish economy, the need for members of Congress facing reelection to demonstrate accomplishments, and the paramount importance of innovation to the economy, further action on these bills may prove irresistible—even in the cold months ahead.