SCOTUS Weakened America's Patent System. Luckily, Congress can Fix It
By Frank Cullen
Americans have come to take innovation for granted. Of course, the United States was going to be the leader in developing Covid vaccines and treatments -- just as we have led the world in the development of semiconductors, internet-based platforms, and so much more.
But ask yourself this: why didn't the United States lead in developing Covid tests? On the answer to this question hangs an important lesson -- and one Congress may be about to embrace by passing the bipartisan Patent Eligibility Restoration Act.
The answer to the question above is that the United States has strong intellectual property protections for those who develop new vaccines and medicines -- but very poor IP protections for medical diagnostic tools. In the United States, that means promising new diagnostics gather dust.
At the heart of this problem are four misguided U.S. Supreme Court decisions from around a decade ago. They put patent protections in several areas, including diagnostics, on very shaky ground.
In Mayo v. Prometheus, for example, the Court found that a series of tests to help physicians determine the correct dosages of certain Crohn's disease medicines weren't eligible for patent protection. It thus chilled further advances in tests to help doctors titer treatment dosage – and slowed the march toward personalized medicine.
Investors heard a clear message: stay away. In the wake of Mayo, they sure did. One study found that in the four years after the ruling, venture capital firms invested $9.3 billion less in diagnostic technologies than they would have otherwise. Some biotechnology firms, particularly smaller start-ups, reconsidered their investment in new diagnostics. Some went out of business altogether.
Meanwhile, the human cost of Mayo can only be imagined -- in diagnostic tools undiscovered, disease undetected until too late, suffering unrelieved and lives lost.
The Supreme Court undermined patent protections in other areas as well. In Bilski v Kappos (2010), the court found that a method for hedging risk in commodities markets couldn't be patented. In doing so, the justices created uncertainty about what processes are patent-eligible.
After Mayo came another biotech case, Association for Molecular Pathology v. Myriad Genetics (2013). In this instance, the Court invalidated a patent for a diagnostic tool that helps predict breast cancer.
Next up was Alice Corp. v. CLS Bank International (2014), which involved software used to trade securities. In this case, the Court found certain "abstract ideas" ineligible for patent protection. But it failed to define what qualifies as an abstract idea, leaving those seeking patent protection in such areas as artificial intelligence, cryptography, and other emerging technologies in limbo.
The lost potential from the disarray these cases created adds up. One study identified 1,310 U.S. patent applications that were abandoned after these cases were decided, and found that almost half were for ways to diagnose or treat such diseases as diabetes, heart failure, cancer, and Alzheimer's. And hundreds of these same inventions were nevertheless approved by patent offices in China or Europe.
Fortunately, Congress has the power to fix the damage caused by these Supreme Court decisions. The Patent Eligibility Restoration Act would do just that. It would clarify that vital inventions, like groundbreaking medical diagnostic techniques, are indeed patent-eligible, dispelling uncertainty, attracting much-needed investment, and bringing U.S. patent protection back into alignment with that of other top innovators nations.
Let's put American competitiveness back to work and save lives by supporting the Patent Eligibility Restoration Act.
Frank Cullen is executive director of the Council for Innovation Promotion.
