Imagine That IP Law Blog

The Patent Eligibility Restoration Act of 2025 (PERA 2025) is a proposed amendment to 35 U.S.C. § 101 that establishes clearly defined statutory exceptions to patent eligibility and eliminates all judicial exceptions. Support for PERA 2025 has been somewhat mixed: companies facing infringement lawsuits oppose its expansion of patentable subject matter, while firms in the life sciences sector, particularly in diagnostics and biotechnology, have tended to support it.

Section 101 Patent Subject Eligibility Unpredictability
Any discussion of PERA 2025 must begin with 35 U.S.C. § 101, which statutorily defines patent eligibility in the U.S. Under this section, patentable subject matter is defined as “any new or useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” Patent subject matter eligibility has been highly contested and unpredictable in recent years. The statute itself has not changed, but its application has become uncertain in recent years due to divergent judicial interpretations. 

The U.S. Supreme Court, in a series of landmark decisions, has established judicial exceptions to patent eligibility for abstract ideas, laws of nature, and natural phenomena. These exceptions ultimately led to a judicial framework for patent eligibility, which comprises a two-step test. The first step is to determine whether the claims are directed to patent-ineligible subject matter, and if so, the second step determines whether the claim contains an “inventive concept” that transforms the ineligible subject matter into a patent-eligible application. Although the Court established these exceptions to prevent overly broad, vague, or naturally occurring subject matter from being patented, their application has ultimately caused significant uncertainty and unpredictability in patent eligibility. This has had drastic effects in fields such as software applications, biotechnology, and medical diagnostics.

Interpreting and applying the Supreme Court’s framework has largely taken place in the U.S. Federal Circuit. However, the decisions have been heavily criticized for being inconsistent, particularly in the Court’s determination of what constitutes an “abstract idea,” making it difficult to predict which claims will satisfy the eligibility test and which will not. Additionally, there are concerns that the Court has been incorporating additional patentability requirements into its subject-matter eligibility analysis. Chief U.S. Circuit Judge Kimberly Moore, in her dissent in American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, 939 F.3d 1355 (Fed. Cir. 2019), called the majority's section 101 interpretation “enablement on steroids.” She claimed that the majority’s blended analysis under sections 102 and 112 would lead to significant confusion.

All Call for Patent Eligibility Reform
Members of the patent community including practitioners, U.S. Patent and Trademark Office (USPTO) leadership, U.S. Federal Circuit and District Court judges, and industry groups nationwide, have increasingly called for greater clarity and consistency in this area, advocating reform through both Supreme Court review and congressional legislation. Although the Supreme Court continues to deny certiorari in these patent eligibility cases, Congress has begun to act with the Patent Eligibility Restoration Act of 2025, introduced in the Senate and the House, which may be the answer to the call for clarity. PERA 2025 would maintain the current categories of eligible subject matter and establish specific statutory exceptions. The intent is to clarify which subject matter is patent-eligible to encourage greater investment in innovative technologies.

PERA 2025 first starts by eliminating all judicially created exceptions and then explicitly states that the only exceptions to eligible subject matter are:

(i) A mathematical formula that is not part of an invention that is in a category described in subparagraph (B).

(ii) A mental process performed solely in the mind of a human being.

(iii) An unmodified human gene, as that gene exists in the human body.

(iv) An unmodified natural material, as that material exists in nature.

(v) A process that is substantially economic, financial, business, social, cultural, or artistic.

It further explains some exceptions to the ineligible categories. For example, exceptions (i) and (v) will be eligible if the “invention cannot practically be performed without the use of a machine or manufacture.” Additionally, the bill defines what will not be considered “unpurified” for (iii) and (iv). It states that a human gene and a natural material will not be considered unpurified if it is “enriched, or otherwise altered by human activity” or “otherwise employed in a useful invention or discovery.” The bill clarifies that the evaluation of subject matter eligibility should be conducted independently, without reference to any other statutory requirements.

Passage of PERA 2025 remains uncertain, even with growing support. The U.S. administration’s emphasis on strengthening U.S. innovation may improve the bill’s prospects. Compared with the unsuccessful PERA 2023, the 2025 bill has more political and industry support which materially strengthens its position. While these developments do not make passage likely or assured, they reduce the chances that PERA 2025 will meet the same fate as its 2023 predecessor.