PERA oriented reforms will get backlash for overturning precedent and enabling patent trolls

The U.S. Senate is moving forward with two bills that would enrich patent trolls, patent system insiders, and a few large companies that rely on flimsy patents, at the expense of everyone else. One bill, the Patent Eligibility Restoration Act (PERA) would bring back some of the worst software patents we’ve seen, and even re-introduce types of patents on human genes that were banned years ago. Meanwhile, a similar group of senators is trying to push forward the PREVAIL Act (S. 2220), which would shut out most of the public from even petitioning the government to reconsider wrongly granted patents. Patent trolls are companies that don’t focus on making products or selling services. Instead, they collect patents, then use them to threaten or sue other companies and individuals. They’re not a niche problem; patent trolls filed the majority of patent lawsuits last year and for all the years in which we have good data. In the tech sector, they file more than 80% of the lawsuits. These do-nothing companies continue to be vigorous users of the patent system, and they’ll be the big winners under the two bills the U.S. Senate is considering pushing forward. Don’t Bring Back “Do It On A Computer” Patents The Patent Eligibility Restoration Act, or PERA, would overturn key legal precedents that we all rely on to kick the worst-of-the-worst patents out of the system. PERA would throw out a landmark Supreme Court ruling called the Alice v. CLS Bank case, which made it clear that patents can’t just claim basic business or cultural processes by adding generic computer language. The Alice rules are what—finally—allowed courts to throw out the most ridiculous “do it on a computer” software patents at an early stage. Under the Alice test, courts threw out patents on “matchmaking”, online picture menus, scavenger hunts, and online photo contests. The rules under Alice are clear, fair, and they work. It hasn’t stopped patent trolling, because there are so many patent owners willing to ask for nuisance-value settlements that are far below the cost of legal defense. It’s not perfect, and it hasn’t ended patent trolling. But Alice has done a good job of saving everyday internet users from some of the worst patent claims. PERA would allow patents like the outrageous one brought forward in the Alice v. CLS Bank case, which claimed the idea of having a third party clear financial transactions—but on a computer. A patent on ordering restaurant food through a mobile phone, which was used to sue more than 100 restaurants, hotels, and fast-food chains before it was finally thrown out under the Alice rules, could survive if PERA becomes law. Don’t Bring Back Patents On Human Genes PERA goes further than software. It would also overturn a Supreme Court rule that prevents patents from being granted on naturally occurring human genes. For almost 30 years, some biotech and pharmaceutical companies used a cynical argument to patent genes and monopolize diagnostic tests that analyzed them. That let the patent owners run up the costs on tests like the BRCA genes, which are predictive of ovarian and breast cancers. When the Supreme Court disallowed patents on human genes found in nature, the prices of those tests plummeted. Patenting naturally occurring human genes is a horrific practice and the Supreme Court was right to ban it. The fact that PERA sponsors want to bring back these patents is unconscionable. Allowing extensive patenting of genetic information will also harm future health innovations, by blocking competition from those who may offer more affordable tests and treatments. It could affect our response to future pandemics. Imagine if the first lab to sequence the COVID-19 genome filed for patent protection, and went on to threaten other labs that seek to create tests with patent infringement. As an ACLU attorney who litigated against the BRCA gene patents has pointed out, this scenario is not fantastical if a bill like PERA were to advance. Don’t Shut Down The Public’s Right To Challenge Patents The PREVAIL Act would bar most people from petitioning the U.S. Patent and Trademark Office (USPTO) to revoke patents that never should have been granted in the first place. The U.S. Patent and Trademark Office (USPTO) issues hundreds of thousands of patents every year, with less than 20 hours, on average, being devoted to examining each patent. Mistakes happen. That’s why Congress created a process for the public to ask the USPTO to double-check certain patents, to make sure they were not wrongly granted. This process, called inter partes review or IPR, is still expensive and difficult, but faster and cheaper than federal courts, where litigating a patent through a jury trial can cost millions of dollars. IPR has allowed the cancellation of thousands of patent claims that never should have been issued in the first place. The PREVAIL Act will limit access to the IPR process to only people and companies that have been directly threatened or sued over a patent. No one else will have standing to even file a petition. That means that EFF, other non-profits, and membership-based patent defense companies won’t be able to access the IPR process to protect the public. EFF used the IPR process back in 2013, when thousands of our supporters chipped in to raise more than $80,000 to fight against a patent that claimed to cover all podcasts. We won’t be able to do that if PREVAIL passes. And EFF isn’t the only non-profit to use IPRs to protect users and developers. The Linux Foundation, for instance, funds an “open source zone” that uses IPR to knock out patents that may be used to sue open source projects. Dozens of lawsuits are filed each year against open source projects, the majority of them brought by patent trolls. IPR is already too expensive and limited; Congress should be eliminating barriers to challenging bad patents, not raising more.