PERA removes uncertainty over patent eligibility, increasing the viability for smaller companies to obtain patents.
Chris Borges & Alexander Kersten 23. Borges is a program manager and associate fellow with the Geoeconomics Center at the Center for Strategic and International Studies (CSIS). Kersten is deputy director and a fellow of the Renewing American Innovation Project at the Center for Strategic and International Studies (CSIS). “New Efforts to Promote U.S. Innovation: The PERA and PREVAIL Act in Context.” CSIS. 12-11-2023. https://www.csis.org/analysis/new-efforts-promote-us-innovation-pera-and-prevail-act-context. Accessed July 2, 2024.
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.
Finally, supporters of PERA claim that Alice/Mayo disproportionately impairs smaller economic actors. By creating confusion, Alice/Mayo may reward large companies with the resources for scores of lawyers over smaller companies. The added confusion and lack of predictability also make it more difficult for small companies to raise funds. Indeed, a 2020 study found that individual inventors and inventor-founded businesses lost their patent eligibility cases far more often than both practicing entities and other NPEs under the Alice/Mayo test. According to these findings, Alice/Mayo may be harming individual inventors and start-ups most of all, which may be detrimental to U.S. innovation.