In July, the Senate Judiciary Committee considered a bill that would allow pharmaceutical companies to patent human genes and other naturally occurring subject matter. It’s called the Patent Eligibility Restoration Act (PERA). Here’s what you need to know.
From 2010 to 2014, the Supreme Court heard four cases to reestablish the boundary between what subject matter can be patented and what belongs in the public commons. Two of those cases, Alice and Mayo, now form a key pillar of how patent eligibility is determined. Their unanimous 9-0 rulings established the Alice/Mayo framework, a test that courts apply to bar patents on abstract ideas, laws of nature, and natural phenomena absent an “inventive concept amount[ing] to significantly more than a patent upon the [ineligible concept] itself.” A third case, Myriad, established that no one can patent human genes. For more than a decade, these decisions have been instrumental in preventing the pharmaceutical industry from patenting large swathes of public knowledge.
PERA, a bill first introduced by pharma-backed Senators Thom Tillis (R-NC) and Chris Coons (D-DE) in 2023 and re-introduced last year, is attempting to abolish these judicial exceptions and replace them with its own set of rules that dramatically expands what can be patented. Under the current version of the PERA bill, pharma can patent human genes.
Tillis and Coons argue that the Alice/Mayo framework has created such a morass that no one can say what’s patentable anymore. “Jurisprudence is all over the place,” Tillis bemoaned in his opening statement. “If the court won’t clean up this mess, Congress needs to act,” Coons followed. While by no means perfect, the Alice/Mayo framework has produced remarkably predictable and consistent outcomes. One witness, J. John Lee, Senior Director & Head of Intellectual Property Policy at CCIA and a former Lead Administrative Patent Judge at the USPTO, pointed to a recent study in the Iowa Law Review that examined every patent eligibility case at the Federal Circuit from 2012 to 2023. It found 85% of district court decisions applying the law were affirmed. The study also found that Federal Circuit judges dissent less frequently in patent eligibility cases than they do in other types of patent cases. In other words, judges across the country, applying the Alice/Mayo framework independently, are reaching the same conclusions. If the framework were creating the “mess” Tillis and Coons describe, we’d see courts constantly reversing each other. But we don’t.
Tillis and Coons push a narrative the evidence contradicts because their ultimate goal is to pass policies that let pharma privatize public knowledge and extract profits from American patients. In their latest effort to revive PERA, the duo removed the term “isolated” from the provision on human gene patentability — a change meant to create the illusion that the bill would no longer allow patents on human genes. The amendment is a cosmetic sleight of hand. As Dr. Debra Leonard, Professor Emerita, Department of Pathology and Laboratory Medicine at the University of Vermont told Senator Adam Schiff (D-CA), under PERA a gene “becomes patent eligible as soon as you take it out of the human body.”
Dr. Leonard went further, describing how devastating it would be for doctors and patients if human genes were patentable: “Imagine, 20,000 to 25,000 genes in the human genome, if even a tenth of those are patented, then I have to go get licenses or royalty fees or rights to use that genetic information for my patient.” In an exchange with Senator Peter Welch (D-VT), she explained how PERA would impede her ability to conduct time-sensitive genetic tests on newborn infants: “I might be able to [perform the tests],” she said, “after obtaining 100 or 200 licenses.” She then recalled how costly it was when she had to navigate a sea of licenses before Alice, Mayo, and Myriad: “The license fees we were charged were $25,000 by one company. We had to pay $120,000 for another.”
Policymakers and industries from pharma to big tech have a long history, dating back to the late 1970s, of pushing economic and intellectual property policies that expand what corporations are allowed to own. These policies create immense wealth for the corporations they serve while leaving the public to deal with the consequences. In healthcare, the consequence is a nationwide drug pricing crisis where nearly 1 in 3 Americans taking medications struggle to afford them. PERA would make this crisis, and many others, worse. It would let the pharmaceutical industry patent knowledge that belongs to everyone — laws of nature, discoveries that no one invented, human genes — and charge rent to anyone who wants to use it. To Andrei Iancu — a former USPTO Director who now leads Sullivan & Cromwell’s IP and Technology Litigation Group and co-chairs the lobbying group C4IP, both of which thrive on patent-maximalist policies — PERA “would help enable the United States innovation system to maximize its potential.” But as Senator Josh Hawley (R-MO) stated, “The American innovation system isn’t going to do patients much good if they can’t afford their prescription drugs.”
Congress should reject any version of this bill.
Onwards,
Tahir