Patent-Eligible Subject Matter Reform in the 116th Congress

Summary: The statutory definition of patent-eligible subject matter under Section 101 of the Patent Act has remained essentially unchanged for over two centuries. As a result, the scope of patentable subject matterâthat is, the types of inventions that may be patentedâhas largely been left to the federal courts to develop through "common law"-like adjudication. In the 20th century, the U.S. Supreme Court established that three main types of discoveries are categorically patent-ineligible: laws of nature, natural phenomena, and abstract ideas.

Summary: Recent Supreme Court decisions have broadened the scope of these three judicial exceptions to patent-eligible subject matter. Over a five-year period, the Supreme Court rejected, as ineligible, patents on a business method for hedging price-fluctuation risk; a method for calibrating the dosage of a particular drug; isolated human DNA segments; and a method of mitigating settlement risk in financial transactions using a computer. These cases established a new two-step test, known as the Alice / Mayo framework, for determining whether a patent claims ineligible subject matter.

Summary: The first step of the Alice / Mayo test addresses whether the patent claims are "directed to" a law of nature, natural phenomenon, or abstract idea. If not, the invention is patentable. If the claims are directed to one of the ineligible categories, then the second step of the analysis asks whether the patent claims have an "inventive concept." To have an inventive concept, the patent claim must contain elements that transform the nature of the claim into a patent-eligible application of the ineligible concept, so that the claim amounts, in practice, to something "significantly more" than a patent on the ineligible concept itself. If the invention fails the second step of Alice / Mayo , then it is patent-ineligible.

Summary: The Supreme Court's decisions have been widely recognized to effect a significant change in the scope of patentable subject matter, restricting the sorts of inventions that are patentable in the United States. The Alice / Mayo test has been the subject of criticism, with some stakeholders arguing that the Alice / Mayo framework is vague and unpredictable, unduly restricts the scope of patentable subject matter, reduces incentives to invest and innovate, and harms American industry's competitiveness. In particular, the Alice / Mayo test has created uncertainty in the computer technology and biotechnology industries as to whether innovations in medical diagnostics, personalized medicine, methods of treatment, computer software, and artificial intelligence are patent-eligible.

Summary: As a result, some patent law stakeholders, including academics, bar associations, industry representatives, judges, and former Patent and Trademark Office (PTO) officials, have called for the Supreme Court or Congress to act to change the law of patentable subject matter. However, other stakeholders defend the legal status quo, arguing that the Alice / Mayo framework provides an important tool for combating unmeritorious patent litigation, or that the revitalized limits on patentable subject matter have important benefits for innovation.

Summary: Recently, there have been several substantial administrative and legislative efforts to clarify or reform patent-eligible subject matter law. In January 2019, the PTO issued revised guidance to its patent examiners with the aim of clarifying and improving predictability in how PTO patent examiners make Section 101 determinations. In April and May of 2019, a bipartisan and bicameral group of Members released draft legislative proposals that would abrogate the Alice / Mayo framework and transform the law of Section 101 and related provisions of the Patent Act. Following a series of hearings in June 2019, many expect a bill to reform Section 101 to be introduced this fall.

Summary: These proposed changes could have significant effects as to the types of technologies that are patentable. The availability of patent rights, in turn, affects incentives to invest and innovate in particular fields, as well as consumer costs and public access to technological innovation. Understanding the legal background and context can aid Congress as it debates the legal and practical effects that legislative Section 101 reforms would have if enacted.

T he statutory language governing patent-eligible subject matterâthat is, the types of inventions that may be patentedâhas remained remarkably constant over the nearly 250-year history of U.S. patent law. Under the Patent Act of 1793, which Thomas Jefferson authored, "any new and useful art, mac hine, manufacture or composition of matter, or any new and useful improvement [of the same]" was patentable. Current lawâSection 101 the Patent Act of 1952âpermits the patenting of "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." Through these four expansive statutory categories, Congress sought to ensure that nearly "anything under the sun made by man" is patentable if it meets all the requirements for patentability, such as novelty, enablement, and nonobviousness.

Consistent with the broad statutory language, Section 101 permits patenting in fields of applied technology such as pharmaceuticals, biotechnology, chemistry, computer hardware and software, electrical engineering, agriculture, mechanical engineering, and manufacturing processes. However, the Supreme Court has long read Section 101 to categorically prohibit patents on three types of discoveries: "laws of nature, natural phenomena, and abstract ideas." Even if "not required by the statutory text" of Section 101, the Court has held that these three judicial exceptions "define[] the reach of the statute as a matter of statutory stare decisis going back 150 years."

In a recent series of decisions, the Supreme Court relied on Section 101 to reject patent claims on

a method for hedging price-fluctuation risks in commodity markets; a method for measuring metabolites in human blood for the purpose of calibrating the dosage of particular drug; isolated human DNA segments; and a method of mitigating settlement risk in financial transactions using a computer.

These decisions established a two-step test for patentable subject matter sometimes called the " Alice/Mayo test" or the " Alice / Mayo framework." These cases have been widely recognized to effect a significant change in the scope of patentable subject matter, restricting the sorts of inventions that are patentable in the United States. The Alice / Mayo framework has thus shifted, for better or worse, the balance between providing incentives to innovate and the social costs of exclusive rights that is at the heart of patent law. The effects of this change have been particularly pronounced in the fields of computer technology and biomedical technology.

As a result, there is a significant and ongoing debate about the effects of Alice / Mayo framework, with a number of patent law stakeholders raising concerns about recent patentable subject matter rulings. Critics argue that the Alice/Mayo framework is vague, unpredictable, and not administrable ; muddies patent law by confusing patent eligibility with distinct patent law concerns, such as nonobviousness ; reduces incentives to innovate and invest in particular industries, such as biotechnology; or puts the U.S. industry at a disadvantage with respect to international competitors. Other stakeholders defend the Alice / Mayo framework, arguing that the Court's recent decisions are a part of the ordinary common law development of Section 101; an important tool for combating unmeritorious litigation or preventing overbroad or otherwise harmful patents ; or beneficial to American consumers by lowering prices.

In response to the concerns of some stakeholders, there have been several significant recent administrative and legislative developments that aim to clarify and/or reform the law of Section 101. On January 7, 2019, the Patent and Trademark Office (PTO) issued Revised Patent Subject Matter Eligibility Guidance designed to assist PTO patent examiners in determining patent eligibility with greater clarity and predictability. On April 17, 2019, Senators Thom Tillis and Chris Coons, along with Representatives Doug Collins, Hank Johnson, and Steve Stivers, released a "bipartisan, bicameral framework" for legislative Section 101 reform. On May 22, 2019, following feedback on their first draft framework, the same group of Members released a "bipartisan, bicameral draft bill" to reform Section 101. After the release of the draft bill, the Senate Judiciary Committee's Intellectual Property Subcommittee held a series of three public hearings on Section 101 reform, soliciting the views of 45 patent law stakeholders. Senators Tillis and Coons continue to seek input from stakeholders following the hearings, and are expected to make further changes before introducing a formal bill.

This report provides the necessary background and context to understand the legal and practical effects that these legislative reforms would have if enacted. First, the report reviews the basic legal principles of the U.S. patent system. Second, it examines the historical development and current state of patentable subject matter law. Third, it reviews several articulated rationales for Section 101 and theoretical options for Section 101 reform. Finally, it examines the specifics of the PTO guidance and proposed legislative reforms to Section 101.

Congress's authority to grant patents derives from the Intellectual Property (IP) Clause of the U.S. Constitution, which grants Congress the power "[t]o promote the Progress of Science and useful Arts, by securing for limited Times to . . . Inventors the exclusive Right to their . . . Discoveries." Patents are generally available to any person who "invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof."

Patent rights do not arise automatically. Rather, to obtain patent protection under the Patent Act, an inventor must formally apply for a patent with the PTO, beginning a process called patent prosecution. During prosecution, a patent examiner at the PTO evaluates the patent application to ensure that it meets all the applicable legal requirements to merit the grant of a patent. To be patentable, an invention must be (1)Â directed at patent-eligible subject matter, (2)Â useful, (3) new, (4)Â nonobvious, and (5) adequately disclosed and claimed in the patent application. If the PTO finds these requirements met, it will issue (i.e., grant) the patent. Patents typically expire 20 years after the date of the initial patent application.

The current law of patent-eligible subject matter will be discussed separately in detail below. The remainder of this section briefly reviews the other requirements for patentability, the scope and effect of patent claims, and the legal rights granted to the holder of a valid patent.

In addition to subject matter requirements, Section 101 also contains a requirement that a patented invention must be "useful." In particular, courts have held that an invention must have both a specific and substantial utility to be patentable. The utility requirement derives from the Constitution's command that patent laws exist to "promote the Progress of . . . useful Arts." The constitutional purpose of patent law thus requires a "benefit derived by the public from an invention with substantial utility," where the "specific benefit exists in currently available form." This standard for utility is relatively low, however, requiring only that the claimed invention have some "significant and presently available benefit to the public" that "is not so vague as to be meaningless."

Perhaps the most fundamental requirement for patentability is that the claimed invention must be new . Specifically, the PTO will not issue a patent if "the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention." In other words, if every limitation of the claimed invention is already disclosed in the "prior art"âthe information available to the public at the time of the patent applicationâthen the alleged inventor "has added nothing to the total stock of knowledge," and no valid patent may issue to her.

Even if a claimed invention is novel in the narrow sense that it is not "identically disclosed" in a prior-art reference (such as an earlier patent or publication), the invention must further be nono bvious to be patentable. Specifically, an invention cannot be patented if "the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious . . . to a person having ordinary skill" in the relevant technology. When determining obviousness, courts may evaluate considerations such as "commercial success, long felt but unsolved needs, [or] failure of others . . . to give light to the circumstances surrounding the origin of the subject matter sought to be patented." By its nature, obviousness is an "expansive and flexible" inquiry that cannot be reduced to narrow, rigid tests. Nonetheless, if an invention merely combines "familiar elements according to known methods," yielding only "predictable results," it is likely to be obvious.

Section 112(a): Written Description, Enablement, Best Mode

Finally, the Patent Act imposes several requirements relating to the technical disclosures in the patent application. These provisions are intended to ensure that the patent adequately describes the invention such that the public can use the invention after the expiration of the patent term. Section 112(a) of the Patent Act requires that patents must contain a "specification" that includes

a written description of theÂ  invention , and of the manner and Â processÂ  of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to .Â .Â .Â make and use the same, and shall set forth the best mode contemplated by the Â inventorÂ  orÂ  joint inventor Â of carrying out the Â invention.

This statutory language yields three basic disclosure requirements for patentability. First, to satisfy the written description requirement , the specification must "reasonably convey[] to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date" of the patent application. Second, to satisfy the enablement requirement , the specification must contain enough information to teach a person skilled in the art how "to make and use the invention without undue experimentation." Finally, to satisfy the best mode requirement , if the inventor knew of a preferred way of practicing her invention at the time of the patent application, the specification must disclose that "preferred embodiment[]" of the invention.

If granted, the legal scope of the patent is defined by the patent claims , a sequence of statements that formally defines the legal scope of the patentee's asserted rights. In essence, while the specification explains the invention in a technical sense, the claims set forth the legal effect of the patent. Much as a deed may describe the boundaries of a tract of land, the claims define the "metes and bounds" of the patent right. Patent claims must be sufficiently definite to be validâthat is, they must "particularly point[] out and distinctly claim[] the subject matter which the inventor . . . regards as the invention." In other words, when the claims are read in context, they must "inform, with reasonable certainty, those skilled in the art about the scope of the invention."

For the most part, the current Patent Act uses a system of peripheral claiming , in which the patent claims formally set out the outer boundaries of the patentee's rights. However, the Patent Act still retains elements of its former system of central claiming , in which the patentee would describe the core principles or examples of what he had invented, but need not formally delineate the outer boundaries of his rights. For example, under the doctrine of equivalents, an accused infringer may be found liable even if his product does not literally meet every element of the patent claims, if the differences between a claim element and its alleged equivalent in the accused product are "insubstantial."

A potential danger of a peripheral claiming system is that patentees may seek to claim more than they invented by couching the patent claims in broad, functional languageâthat is, by claiming a result or goal without limitation to any specific structure or device that accomplishes the result. In Halliburton Oil Well Cementing Co. v. Walker , the Supreme Court limited this practice, invalidating as indefinite a "functional" patent claim, in which the inventionâan apparatus for determining the location of an obstruction in an oil wellâwas claimed not in terms of specific machinery, but instead as a "means for" performing various functions.

Functional claims (also known as "means-plus-function" claims) such as those in Halliburton may be convenient for the patentee, who can express a claim element in terms of a general end, as opposed to an "exhaustive list" of every possible apparatus that could be used to perform that goal. On the other hand, as Halliburton recognized, functional claims may be overbroad and ambiguous, or permit the patentee to claim more than he actually invented. In the Patent Act of 1952, Congress enacted current Section 112(f) as a compromise for functional claims, overruling Halliburton but providing a standard to make functional claims more definite.

Under Section 112(f), a patentee may opt to express a claim element as "a means or step for performing a specified function without the recital of structure, material, or acts in support thereof." If the patentee chooses to claim functionally, however, the claim is construed not to cover all possible means of performing the function, but only "the corresponding structure, material, or acts described in the specification and equivalents thereof." Courts have held that a patentee is presumed to invoke Section 112(f) when the term "means" is used in the claims. Conversely, there is a presumption that the patentee does not invoke Section 112(f) if she does not use the term "means," but that presumption may be overcome, such that Section 112(f) will apply to any claim that fails to recite a "sufficiently definite structure" for performing a function.

With some exceptions, a patent is generally granted "for a term beginning on the date on which the patent issues and ending 20 years from the date on which the application for the patent was filed." The Patent Act includes provisions that may modify the 20-year term, including to account for excessive delays in patent examination at the PTO, or delays associated with obtaining marketing approval from other federal agencies.

Once granted, the holder of a valid patent has the exclusive right to make, use, sell, or import the invention in the United States until the patent expires. Any other person who practices the invention (i.e., makes, uses, sells, offers to sell, or imports it) without permission from the patent holder infringes the patent and is potentially liable for monetary damages and injunctive relief if sued by the patentee. To obtain relief from infringement, the patentee must generally sue in court. Patent law is an area of exclusive federal jurisdiction, and the traditional forum for most patent disputes is federal district court. Although patent suits may be filed in any district court across the country with jurisdiction over the defendant and proper venue, a single specialized court, the U.S. Court of Appeals for the Federal Circuit (Federal Circuit), hears all appeals in patent cases.

Parties accused of patent infringement may defend on several grounds. First, although patents benefit from a presumption of validity, the accused infringer may assert that the patent is invalid . To prove invalidity, the accused infringer must show, by clear and convincing evidence, that the PTO should never have granted the patent because it failed to meet the requirements for patentability. Thus, for example, the accused infringer may argue that the invention lacks novelty, is obvious, or claims nonpatentable subject matter; that the patent fails to enable the invention; or that the patent claims are indefinite. Second, the accused infringer may claim an "absence of liability" because of noninfringement . In other words, even presuming the patent is valid, the patentee may fail to prove that the activities of the accused infringer fall within the scope of the patent claimsâthat is, the accused infringer is not making, using, selling, or importing the patented invention. Finally, the accused infringer may argue that the patent is unenforceable based on the inequitable or illegal activities of the patent holder, such as obtaining the patent through fraud on the PTO.

Following the passage of the 2011 Leahy-Smith America Invents Act (AIA), the Patent Trial and Appeal Board (PTAB) has become an increasingly important forum for patent disputes. The AIA created several new administrative procedures for challenging patent validity, including (1) post-grant revie w (PGR), which allows any person to challenge patent validity based on any of the requirements of patentability if the PGR petition is filed within nine months of the patent's issuance; (2) inter partes review (IPR), which allows any person other than the patentee to challenge patent validity on limited grounds (novelty or obviousness based on prior patents or printed publications) at any time after nine months following the patent's issuance; and (3) a transitional program for covered business method patents (CBM), a PGR-like process limited to certain patents claiming "business methods" that will be available only through September 2020. Of these procedures, IPR is by far the most widely used.

At the most general level, there are two basic requirements for an invention to claim patent-eligible subject matter. First, the invention must fit into one or more of the four statutory categories in Section 101âthe claimed invention must be a (1) process, (2) machine, (3)Â manufacture, or (4) composition of matter. Given the (intentionally) expansive nature of these terms, nearly all claimed inventions will satisfy this requirement. Nonetheless, exceptions to this rule do exist. For example, in In re Nuijt en , the Federal Circuit held that a transitory electromagnetic signal was neither a process, manufacture, machine, or composition of matter, and was therefore not patent-eligible subject matter.

Because most claimed inventions fit into one of the four statutory categories, the second requirement tends to be more practically important, and receives most of the attention. The second patentable subject matter requirement is that the invention cannot claim one of the judicially created categories of ineligible subject matterâthe claimed invention must not be a (1)Â law of nature; (2) natural phenomenon; or (3) abstract idea. As explained below, the modern Supreme Court has articulated a two-step test for this second requirement, known as the Alice / Mayo framework.

The Supreme Court has justified the three ineligible categories as necessary to prevent patent monopolies on the "'basic tools of scientific and technological work,'" which "might tend to impede innovation more than it would tend to promote it." Thus, the Court has explained that "a new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter. Likewise, Einstein could not patent his celebrated law that E=mc 2 ; nor could Newton have patented the law of gravity." At the same time, the Court has said that even if a mathematical formula or law of nature is not patentable "in the abstract," a practical application of such a principle or law "to a new and useful end" is patent-eligible.

Beyond such broad illustrations, it is not easy to precisely define what an "abstract idea," "law of nature," or "natural phenomenon" is. Because these exceptions to patent-eligible subject matter are judicially created, they have no formal statutory definition; their meaning has instead been developed through two centuries of "common law" case-by-case adjudication in the federal courts. As such, the scope of patentable subject matter has waxed and waned over time, depending on the trends of recent judicial decisions.

This section overviews the leading Supreme Court cases addressing patent-eligible subject matter, beginning with formative cases from the 19th century and culminating in the series of recent Supreme Court decisions that have led some to call for legislative reform of Section 101. Table 1 summarizes the facts and holdings of the major cases.

Historical Development of the Judicial Exceptions to Patent-Eligible Subject Matter

The 1853 case of Le Roy v. Tatham , the "fountainhead" of American patentable subject matter jurisprudence, concerned a patent on machinery to manufacture metal pipes that exploited a newly developed property of lead. Although the Court ultimately did not decide the case on subject matter grounds, Le Roy relied on influential English patent cases to set forth a basic distinction between abstract "principles" and natural laws (which may not be patented) and practical applications of those principles (which may be patented). The Court stated that "[a] principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right." On the other hand, a "new property discovered in matter, when practically applied, in the construction of a useful article of commerce or manufacture, is patentable," for the "invention is not in discovering [the natural principles], but in applying them to useful objects."

In its next term, the Court applied this rule in the famous case of O'Reilly v. Morse , concerning Samuel Morse's patent on the telegraph. Although the Court found that Morse was the first inventor of the telegraph and sustained much of his patent, the Court rejected Morse's eighth claim to any "use of the motive power of the electric or galvanic current . . . however developed for marking or printing intelligible characters, signs, or letters, at any distances, being a new application of that power of which I claim to be the first inventor or discoverer." Observing that "the discovery of a principle in natural philosophy or physical science, is not patentable," Chief Justice Taney's majority opinion held that Morse's eighth claim was "too broad" because he had not discovered "that the electric or galvanic current will always print at a distance, no matter what may be the form of the machinery" used, but only that the specific "complicated and delicate machinery" disclosed in the patent specification would do so.

In the second half of the nineteenth century, the Court issued a series of important decisions on the patentability of processes. The end result of these cases was a move away from an earlier rule that prohibited "pure" method patents as ineligible (i.e., a process claimed independently of the specific machinery used to accomplish the method) either by construing nominal process patents as claiming a machine or limiting the process patents to the machinery disclosed and its equivalents. In Cochrane v. Deener , which involved a patent on an improved manufacturing process for flour, the Court defined a patentable process as "a mode of treatment of certain materials to produce a given result. It is an act, or a series of acts, performed upon the subject-matter to be transformed and reduced to a different state or thing." Cochrane held that such methods are patentable "irrespective of the particular form of the instrumentalities used." Similarly, in Tilghman v. Proctor , the Court held that a method for separating fat into glycerin and fatty acids using water, pressure, and heat was patentable.

In The Telephone Cases , the Court distinguished Morse to allow Alexander Graham Bell's patent claim on a "method of and apparatus for transmitting vocal or other sounds telegraphically, as herein described, by causing electrical undulations, similar in form to the vibrations of the air accompanying the said vocal or other sounds, substantially as set forth." Chief Justice White interpreted Morse as holding that "the use of magnetism as a motive power, without regard to the particular process with which it was connected in the patent, could not be claimed, but that its use in that connection could." The Court found that Bell's claim, in contrast to Morse's, did not reach uses of electricity to transmit speech that are "distinct from the particular process with which it is connected in [Bell's] patent," and upheld the claim, so construed.

In the first half of the 20th century, the Court decided two major cases on the patentability of natural phenomena. In American Fruit Growers v. Brogdex Co. , the Court rejected patent claims on citrus fruit treated with a solution of borax to render it resistant to mold. The Court held that treated fruit was not a "manufacture" under Section 101, but a patent-ineligible "natural article"; treatment with borax did not "change in the name, appearance, or general character of the fruit" or imbue it with a "new or distinctive form, quality, or property." In Funk Brothers Seed Co. v. Kalo Inoculant Co. , the Court rejected patent claims on an inoculant for leguminous plants consisting of multiple species of bacteria, where the particular bacterial strains were selected so as not to inhibit each other (as prior multispecies combinations had). Because the patentee's combination "produces no new bacteria [and] no change in the six species of bacteria," Justice Douglas's majority opinion held that it was only "the discovery of some of the handiwork of nature and hence is not patentable."

From 1972 to 1981, the Supreme Court decided four patentable subject matter cases. In Gottschalk v. Benson , the Court held that an algorithm for converting binary-coded decimal numerals into pure binary numerals (either by hand, or, more practically, on a computer) was patent-ineligible. Justice Douglas reasoned that "one may not patent an idea" and that upholding this patent would "wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself." Second, in Parker v. Flook , the Court rejected a patent on a method for updating alarm limits during catalytic conversion of hydrocarbons (such as petroleum), which relied in part on a mathematical formula, because the only novel feature of the method was the mathematical formula. Third, in Diamond v. Chakrabarty , the Court upheld a patent on a genetically engineered bacterium useful in breaking down oil (e.g., in cleaning up oil spills). Chief Justice Burger distinguished American Fruit Growers and Funk Brothers because this bacterium, although a living organism, was human-made and possessed "markedly different characteristics from any [bacteria] found in nature." Finally, in Diamond v. Diehr , the Court distinguished Flook to uphold a patent on a process for molding synthetic rubber that relied on a mathematical formula (the Arrhenius equation). Justice Rehnquist's majority opinion reached back to Cochrane v. Deener , holding that the process at issue was patentable because it transformed an article (uncured rubber) into a different state or thing. Even though the method used a mathematical formula, the patent in Diehr did not claim the formula itself and would not "pre-empt the use of that equation" in other fields.

After Diehr , the Court did not decide a major patentable subject matter case for nearly 30 years. Development of the patent-eligible subject matter law was primarily left to the Federal Circuit, whose decisions generally expanded patentable-eligible subject matter, such that by the late 1990s Section 101 became perceived as "a dead letter."

In 2010, the Supreme Court reentered the field of patent-eligible subject matter, deciding four cases on the issue within five years. These cases established the two-step Alice / Mayo test for patentable subject matter.

The first step of the Alice / Mayo test addresses whether the patent claims are "directed to" an ineligible concept: a law of nature, a natural phenomenon, or an abstract idea. The inquiry at step one focuses on the "claim as whole." To be "directed to" an eligible concept at step one of Alice / Mayo , the claims must not simply inv olve a patent-ineligible concept. Rather, the "focus on the claims" must be a patent-ineligible concept, as opposed to the improvement of a technological process. If the patent claims are not directed to an ineligible concept, then the subject matter is patent-eligible.

If the claims are directed to an ineligible category, then the invention is not patentable unless the patent claims have an "inventive concept" under the second step of the Alice / Mayo test. Step two of Alice / Mayo considers the elements of each patent claim both individually and as an ordered combination in the search for an "inventive concept"âadditional elements that "transform the nature of the claim" into a patent-eligible application of an ineligible concept. To have an "inventive concept," the patent claims must contain elements "sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself." Claim limitations that are "conventional, routine and well understood," such as generic computer implementation, cannot supply an inventive concept.

Bilski v. Kappos , the Supreme Court's first modern foray into patentable subject matter doctrine, concerned a patent on a business method for hedging against price-fluctuation risks in energy and commodity markets. The Federal Circuit had held that this method was not patentable as a "process" under Section 101 because it failed the "machine-or-transformation test"âthat is, it was neither "tied to a particular machine or apparatus" nor "transform[ed] a particular article into a different state or thing." All nine members of the Supreme Court agreed with that resultâthat the business method at issue was not patent-eligibleâbut differed significantly as to their reasoning. Writing for five Justices, Justice Kennedy held that the machine-or-transformation test was not the "sole test" for determining whether a process is patent-eligible but nonetheless "a useful and important clue." While the majority rejected the "atextual" notion that business methods were categorically unpatentable under Section 101, it relied on Benson and Flook to conclude that this particular patent attempted to claim an unpatentable abstract idea: the "concept of hedging risk." Concurring only in the judgment, Justice Stevens wrote for four Justices who would have held, based on the history of the Patent Act and its constitutional purpose, that business methods were categorically patent-ineligible.

In Mayo Collaborative Services v. Prometheus Laboratories , the Court addressed the scope of the "law of nature" exception. The patent in Mayo claimed a method for measuring metabolites in human blood in order to calibrate the dosage of thiopurine drugs in the treatment of autoimmune disorders. Writing for a unanimous Court, Justice Breyer's opinion held that the patent claims were addressed to a law of nature: "namely, relationships between concentrations of certain metabolites in the blood and the likelihood that a dosage of a thiopurine drug will prove ineffective or cause harm." Because the claims were little "more than an instruction to doctors to apply the applicable laws when treating their patients," the patent lacked any inventive concept and was held to be patent-ineligible.

The next case, Association for Molecular Pathology v. Myriad Genetics, Inc. , concerned the applicability of the "natural phenomena" exception to the patentability of human DNA. The inventor in Myriad had discovered the precise location and genetic sequence of two human genes associated with an increased risk of breast cancer. Based on this discovery, the patentee claimed two molecules associated with the genes: (1) an isolated DNA segment and (2)Â a complementary DNA (cDNA) segment, in which the nucleotide sequences that do not code for amino acids were removed in the laboratory. Justice Thomas's unanimous opinion in Myriad held that isolated DNA segments were nonpatentable products of nature because the patent claimed naturally occurring genetic information. The Court concluded, however, that cDNA, as a synthetic molecule distinct from naturally occurring DNA, was patentable even though the underlying nucleotide sequence was dictated by nature.

Most recently, Alice Corp. v. CLS Bank International examined the scope of the "abstract idea" category of nonpatentable subject matter. Alice concerned a patent on a system for mitigating "settlement risk"âthe risk that only one party to a financial transaction will pay what it owesâusing a computer as an intermediary. The Court first held, relying on Bilski , that the invention was directed at "the abstract idea of intermediated settlement." Although this idea was implemented on a computer (which is, of course, a physical machine), the patent lacked an inventive concept because the claims merely "implement[ed] the abstract idea of intermediated settlement on a generic computer."

Table 1 summarizes the facts and holding of the Supreme Court's major patentable subject matter cases, in reverse chronological order.

The Debate Over Alice/Mayo and Section 101 Reform

A substantial group of patent law stakeholders, including inventors, academics, industry representatives, patent attorneys, current and former Federal Circuit judges, and former PTO officials, has criticized the Alice / Mayo framework on various grounds. However, other patent law stakeholders defend the Supreme Court's recent Section 101 decisions.

Generally, critics of the Court's recent patentable subject matter jurisprudence raise four principal concerns. First, the Alice / Mayo framework is criticized as excessively vague, subjective, and/or unpredictable in application. For example, the Federal Circuit has indicated that when determining whether a patent claim is "directed to" an ineligible concept at step one, the court must determine whether the "focus" of the claims is on that concept. At the same time, the Federal Circuit has cautioned that this "focus" must be articulated "with enough specificity to ensure the step one inquiry is meaningful." But the appropriate level of specificity can vary from patent to patent and from judge to judge.

Thus, in the view of many stakeholders, the Supreme Court's patentable subject matter case law and the Federal Circuit's implementation of the Alice / Mayo framework fail to articulate "objective, predictable criteria" for making patent-eligibility determinations. Key terms, such as what an "abstract idea" is, or precisely how claim elements can make an invention "significantly more" than an ineligible category (the "inventive concept"), are largely left undefined, making it difficult for patent applicants and litigants to know whether their patent claims will survive judicial scrutiny. Moreover, the Federal Circuit has explicitly recognized that the two steps of the analysis are not clearly defined and may overlap. As a result, many observers characterize the court's Section 101 jurisprudence as a "highly subjective," "I know it when I see it" approach. This subjectivity, in the view of critics, injects unpredictability and uncertainty into whether an invention is of a type that is patentable.

Second, the Alice / Mayo framework is criticized as legally flawed on various grounds. Some stakeholders argue that the Alice / Mayo framework misinterprets Section 101, imposing "extra-statutory" requirements for patent eligibility, contrary to congressional intent or the constitutional purpose of patent law. Others argue that Mayo 's requirement of an "inventive concept" rests on a historically inaccurate understanding of 19th century English patent law, first imported into American jurisprudence in cases such as Le Roy and Morse . Finally, many commentators and stakeholders argue that the Alice / Mayo framework confuses patent law by conflating eligibility under Section 101 with policy concernsâsuch as the obviousness of the invention and claim breadthâthat are better addressed by other provisions in the Patent Act, such as Sections 102, 103, and 112. For example, patent claims have been found to lack an inventive concept at Alice / Mayo step two where they implement an abstract idea on conventional computer hardware. Issues about what was "conventional" or "well-understood" at the time of the invention, however, are questions usually reserved for novelty or nonobviousness analysis.

Third, the Alice / Mayo framework is alleged to have detrimental effects on incentives to innovate, especially in the biotechnology and computer software industries. Given the patent claims at issue in Alice (a computer-implemented business method), Myriad (an isolated human DNA segment), and Mayo (a drug dose optimization method), most observers agree that these two industries have been the most affected by the Supreme Court's recent Section 101 rulings. In the biotechnology industry, stakeholders argue that the Alice / Mayo framework has limited their ability to obtain patents on diagnostic methods and kits, personalized medicine, and isolated natural substances. Views in the computer industry are "sharply divided," but at least some stakeholders argue that Alice has devalued their patents and/or created uncertainty for their business. In both fields, some stakeholders argue that the law of Section 101 is reducing incentives to innovate in these areas and driving investment elsewhere.

Finally, the uncertainty and unpredictability caused by Alice/Mayo is alleged to put the United States at a disadvantage relative to international competitors. Some stakeholders argue that U.S. competitiveness may be harmed because a lack of patent availability will drive investment in certain industries to other countries where such inventions are more clearly patent-eligible. Others argue that one effect of Alice / Mayo is a loss of any patent protection for certain inventions, which will enable competitors to "free ride" off of American innovation.

Defenders of the current law of Section 101 respond that these criticisms of Alice / Mayo are overstated, and/or that the Supreme Court's reinvigoration of Section 101 has important benefits for the patent system. As to the subjective or unpredictable nature of Section 101 doctrine, there is some indication that the Alice / Mayo framework is not quite as unpredictable as is sometimes claimed. Some commentators also observe uncertainty in patentable subject matter law is hardly a new phenomenon, and may even be "inevitable." A subjective or "amorphous" approach to patentable subject matter, on this view, may have certain benefits, including flexibility and adaptability to new technologies. Moreover, even if one views the current state of the law as unacceptably vague, courts may eventually clarify or change Section 101 doctrine in line with the long history of common law development in this area.

As to legal correctness of Alice / Mayo , defenders of the framework note that while the judicially created categories are not directly grounded in the text of Section 101, they have been treated as part of the law "as a matter of statutory stare decisis going back 150 years." As to Mayo 's reliance on 19th century English patent law, some commentators defend the Supreme Court's "inventive application" requirement as a faithful reading of this precedent. Finally, although the Alice / Mayo framework may overlap with other patent law doctrines, several commentators and judges of the Federal Circuit argue that Section 101 serves purposes that are distinct from Sections 102, 103, and 112. For example, even if the invention in Myriad âan isolated human DNA sequence discovered to be associated with increased breast cancer riskâwas novel, nonobvious, and sufficiently disclosed, some commentators would still argue that the invention should not be patented based on detrimental effects for future innovation or moral concerns about patenting human DNA.

As to the alleged detrimental effects of the Court's recent Section 101 law on innovation, some stakeholders point to countervailing benefits in either certain industries or more generally. In particular, some stakeholders in industries (such as computer software) affected by litigation by patent assertion entities argue that Section 101 is a useful and important tool for weeding out overly broad or vague patents at the outset of litigation. Other commentators point to general utilitarian or moral benefits of robust exclusions for patents on basic discoveries in science and nature.

As to concerns about the Alice / Mayo framework's effect on international competitiveness, some commentators view these changes as good for the United States as a geopolitical matter. In particular, restricted patent-eligibility standards may benefit U.S. consumers if a lack of patent protection leads to increased competition and lower prices for certain products without harming innovation.

More broadly, there is a long-running and thoughtful debate over the functions and purposes that Section 101 serves in the patent system. For its part, the modern Supreme Court has largely settled on the "preemption rationale" for the judicially created subject matter exclusions. Recent decisions assert that abstract ideas, laws of nature, and natural phenomena should not be patentable because permitting a monopoly on the "'basic tools of scientific and technological work' .Â . . might tend to impede innovation more than it would tend to promote it," in that such patents would "significantly impede future innovation." The gist of the preemption rationale is that Section 101 functions to prevent patents that reach so broadly that they "threaten downstream innovation" by preempting all uses of a natural law, abstract idea, or fundamental research tools.

The preemption rationale is not the only potential justification for Section 101, however. Although a complete survey of the various rationales proffered for Section 101 is beyond the scope of this report, at least four broad categories of rationales for Section 101 have been proposed.

First, some commentators argue that Section 101's purpose is to identify certain patents or categories of patents that should not be granted because their economic harms exceed their benefitsâthat is, their net social costs are negative with respect to innovation, or more generally. Preemption theory, which claims that certain overbroad patents should be denied patent protection under Section 101 because of their negative effects on downstream innovation, is an example from this group.

Secondâin what is in some sense a special case of the first rationaleâother commentators assert that Section 101's purpose is to identify and deny patents to categories of inventions that would have been developed even without a patent incentive. For example, several commentators have argued the patents on business methods should be excluded under Section 101 either because they affirmatively harm innovation and the economy, or because they are simply unnecessary because sufficient incentives to create business methods would exist even if patents are unavailable.

Third, some commentators assert that Section 101 (or elements of Section 101 doctrine) are based not on economic considerations but on moral or ethical concerns. For example, the judicial prohibition on patenting products of natureâsuch as human DNA sequencesâmay be motivated by noneconomic, deontological notions of human dignity, or the inviolability of natural creation.

Finally, some commentators believe that Section 101 serves no independent purpose in patent law not already better served by other patentability requirements. On this view, Section 101's judicially created exceptions to patentable subject matter should simply be eliminated as an independent requirement for patentability, in favor of a rigorous application of the other patentability requirements in Sections 102, 103, and 112 of the Patent Act.

Before examining the particular approaches introduced by the PTO and in the 116th Congress, this section will review some of the general ways in which Section 101 may or may not be reformed. These different paths are introduced to contextualize the current Section 101 reform proposals within the universe of possible reforms. This list is not exhaustive, nor are each of these options necessarily mutually exclusive.

At a general level, most of the proposed paths forward for Section 101 fall into one of four categories. First, some oppose any legislative intervention, proposing instead to allow the courts to continue to develop and refine the standards for patent eligibility. Second, some propose replacing the Alice / Mayo framework with an explicit list of subject matter that is patent-eligible or -ineligible, perhaps along the lines of an approach that is used for European patents. Third, some propose replacing the Alice / Mayo framework with a different, usually lower, standard for patent eligibility, such as a requirement that the invention result from human effort, exist outside the human mind, or contribute to the technological arts. Fourth, some propose to do away with any limitations on patentable subject matter, beyond the four statutory categories and other existing statutory patentability requirements.

Continued Common Law Judicial Development

One option is for Congress to leave Section 101 as it is, and allow the courts (and/or the PTO) to continue developing the law of patent-eligible subject matter. Stakeholders and commentators may support this option for several different reasons. Some may disagree that the Alice / Mayo framework is as indeterminate or as harmful to innovation as the critics claim. Other commentators, even if they accept the criticisms directed at Alice / Mayo , may nonetheless believe that the courts will eventually refine, clarify, or otherwise improve the law of patentable subject matter given more time for judicial development. Still other commentators support the current law of Section 101 as affirmatively good for innovation and society because it precludes property rights in fundamental aspects of science, nature, and ideas, or serves as an important mechanism to weed out overly broad patents or obtain early dismissal of unmeritorious patent litigation.

Supporters of continued judicial development may point to the recent administrative guidance put forth by the PTO and significant Section 101 decisions of the Federal Circuit over the past five years as promising steps in the administrative and common law development of Section 101 after the Alice , Mayo , and Myriad decisions. Opponents of maintaining the legal status quo, for their part, observe that the Supreme Court has not shown much interest in revisiting its Section 101 jurisprudence despite many opportunities, and that several current and former Federal Circuit judges have called for legislative amendment of Section 101.

Specific Statutory List of Included or Excluded Subject Matter Categories

Another potential route for reform would be to amend Section 101 to replace the Alice / Mayo framework with a more specific list of subject matter that is patent-eligible and/or patent-ineligible. Currently, Section 101 contains a broad list of included subject matter categories (processes, machines, manufactures, and compositions of matter), but most of the doctrine focuses on the three judicially created ineligible categories: laws of nature, natural phenomena, and abstract ideas. The "laundry list" approach would seek to make Section 101 clearer and more predictable by specifically defining categories of eligible and/or ineligible subject matter. Depending on how this sort of proposal is structured, it would retain the notion of ineligible classes of subject matter, but define such categories differently, more precisely, and perhaps more narrowly than the common law exceptions under the Alice / Mayo framework.

The European Patent Convention's (EPC's) approach to patent eligibility offers a potential model for this type of approach. Under EPC article 52(1), patent-eligible subject matter reaches "all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application." However, EPC article 52(2) defines specific subject matter that is not patentable when claimed "as such":

(a) discoveries, scientific theories and mathematical methods;

(c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;

EPC article 53 further denies patents on inventions that are "contrary to [public order] or morality," or that claim "plant and animal varieties," or "methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practised on the human or animal body."

Assuming that the new statutory categories are more clearly delineated than existing judicial categories like the "abstract idea" exception, a potential virtue of the laundry-list approach is greater clarity and predictability in the sort of inventions that are patentable. This approach would also more firmly ground subject matter determinations in explicit statutory language. On the other hand, the list-of-specific-exclusions approach would potentially be less flexible and less able to adapt to unforeseen new technologies than other reform options. It might also, to some degree, replace case-by-case judicial judgments of eligibility with more categorical legislative ones, which may be a virtue or a vice depending upon one's perspective.

Replace Judicial Exceptions with a Different Standard

A third group of proposed Section 101 reforms seeks to replace the Alice / Mayo framework with a new statutory standard for assessing patent eligibility. Proposals in this category are fairly diverse, but common elements in proposed new standards would limit patent eligibility to inventions that

result from human effort; contribute to the technological arts; have practical utility or application; cannot be solely performed in the human mind; do not preempt all practical uses of a law of nature, abstract idea, or natural phenomenon.

Usually, the proposed new patentability standard would supersede the three judicially created subject matter exclusions and the two-step Alice / Mayo test.

Several proposed new standards blend more than one of these elements. For example, the American Intellectual Property Law Association has submitted a Section 101 reform proposal that replaces the Alice/Mayo framework with a single exception to patent eligibility if an invention "exists in nature independently of and prior to any human activity" or "is performed solely in the human mind." A 2017 proposal by the American Bar Association would explicitly allow patenting "practical applications" of laws of nature, natural phenomena, and abstract ideas, so long as the patent claim does not "preempt the use by others of all practical applications of the law of nature, natural phenomenon, or abstract idea."

It is difficult to generalize given the significant differences among the various proposals in this category, but commentators may debate whether proposed new standards would provide greater clarity and predictability in patent-eligibility law, while still being flexible enough to adapt to new technologies.

Eliminate Implied Patentable Subject Matter Limits

A final option is to eliminate the Alice / Mayo framework and judicially created exceptions to patent eligibility altogether, without replacing them with a new standard. Several commentators have argued that patent-eligibility doctrine serves no purpose that is not already served by the existing statutory patentability requirements of utility, novelty, obviousness, written description, definiteness, and enablement. On this view, the appropriate course would be for Congress to simply eliminate the nonstatutory eligibility requirements (i.e., the judicial prohibitions on patenting laws of nature, natural phenomena, and abstract ideas) in favor of "rigorous" application of the patentability requirements of Sections 102, 103, and 112 of the Patent Act.

Supporters of this approach argue that it advances the underlying policy concerns motivating Section 101 law, but does so in a "more consistent and more rigorous" manner. Opponents argue that Section 101 serves important purposes that are distinct from the other patentability requirements, which would be lost if the judicial exceptions were entirely eliminated.

The Supreme Court's recent patentable subject matter jurisprudence has inspired a number of proposed Section 101 reforms from academics, practitioners, and other stakeholders. The specifics of many of these proposals have been reviewed elsewhere. This section examines two major developments in this area in 2019. First, it reviews the PTO's Revised Subject Matter Eligibility Guidance, which seeks to offer clearer guidelines to PTO patent examiners in making Section 101 determinations. Second, this section examines a series of draft legislative proposals put forth by a bipartisan and bicameral group of legislators, which have been the subject of a series of roundtables and congressional hearings on patentable subject matter reform.

PTO's 2019 Patent Subject Matter Eligibility Guidance

On January 7, 2019, the PTO issued Revised Patent Subject Matter Eligibility Guidance (the PTO's Revised Guidance) to assist PTO patent examiners in determining subject matter eligibility for patent applications. The PTO noted that the "legal uncertainty" surrounding the Alice / Mayo framework "poses unique challenges" for the agency, which has thousands of patent examiners who must make patent-eligibility determinations on hundreds of thousands of applications each year. Accordingly, the PTO issued revised guidance to its patent examiners to provide "more clarity and predictability" in their Section 101 determinations.

The PTO's Revised Guidance made two major changes to how patent examiners evaluate whether a patent application claims patent-ineligible subject matter. First, the guidance attempts to provide a clearer definition of what constitutes an ineligible "abstract idea." Previously, examiners would make that determination by comparing the patent claim at issue to those found to be ineligible "abstract ideas" in previous judicial cases. The PTO found that this approach had become "impractical" because of an expanding volume of sometimes contradictory Section 101 case law. The PTO's Revised Guidance "synthesizes" the case law into three categories that examiners will treat as "abstract ideas":

(a) Mathematical conceptsâmathematical relationships, mathematical formulas or equations, mathematical calculations;

(b) Certain methods of organizing human activityâfundamental economic principles or practices (including hedging, insurance, mitigating risk); commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations); managing personal behavior or relationships or interactions between people (including social activities, teaching, and following rules or instructions); and

(c) Mental processesâconcepts performed in the human mind (including an observation, evaluation, judgment, opinion).

Under the Revised Guidance, patent claims that do not recite matter that falls into one of these three groupings should not be treated as an "abstract idea" except in "rare circumstance[s]."

Second, the PTO's Revised Guidance clarifies when examiners will treat a patent claim as "directed to" an ineligible category (abstract ideas, laws of nature, or natural phenomena) under step one of the Alice / Mayo test. In particular, the PTO will not treat a claim as "directed to" an ineligible concept if "the claim as a whole integrates the recited judicial exception into a practical application of the exception ." If the claim does integrate such a practical applicationâsuch as improving the functioning of a computer, effecting a particular treatment for a disease, or implementing the exception into a particular machine or manufactureâthen the PTO will treat the claim as patent-eligible, without having to examine the patent application for an "inventive concept" under step two of the Alice / Mayo framework.

PTO's Revised Guidance was generally perceived as lowering Section 101 barriers to patentability, especially with respect to computer-related inventions. Some commentators praised the Revised Guidance for providing greater clarity to patent examiners, while other stakeholders criticized the guidance as inconsistent with the Supreme Court's Section 101 decisions.

Although the PTO's Revised Guidance changes how PTO examiners review new patent applications, it is important to note that the guidance, unlike judicial decisions or statutory reforms, lacks formal legal forceâthat is, the guidance is not binding on the courts when patents are challenged in litigation. The PTO lacks general substantive rulemaking authority, and Revised Guidance itself states that it is only a "tool for internal [PTO] management" that lacks "the force and effect of law." Although the Federal Circuit has issued somewhat contradictory signals on this point, the Guidance would receive, at the most, "some deference" if a court found its reasoning to be persuasive.

Legislative Efforts in the 116th Congress: The Tillis-Coons Proposals

On April 17, 2019, Senators Tillis and Coons, along with Representatives Collins, Johnson, and Stivers, released a "bipartisan, bicameral framework" for legislative Section 101 reform (the First Tillis-Coons Proposal). The framework's release followed multiple roundtables with patent law stakeholders on Section 101 and the impact of the Alice/Mayo framework on, for example, innovation in artificial intelligence, medical diagnostics, and personalized medicine.

The First Tillis-Coons Proposal would have retained the four statutory categories of patentable inventions, but removed the requirement that the invention or discovery be "new and useful" from Section 101. Patent eligibility would have instead been determined "by considering each and every element of the claim as a whole and without regard for considerations properly addressed by [Sections] 102, 103 and 112 [of the Patent Act]."

In place of the judicially created exceptions to patent eligibility, which the First Tillis-Coons Proposal would have abrogated by statute, the proposal would have defined, "in a closed list," five "exclusive" categories of patent-ineligible subject matter: (1) fundamental scientific principles; (2) products that exist solely and exclusively in nature; (3) pure mathematical formulas; (4) economic or commercial principles; and (5) mental activities. Effectively, this would have codified the judicial exceptions in a narrower form, with the first two ineligible categories roughly corresponding to the "law of nature" and "natural product" judicial exceptions, and the final three to the types of "abstract ideas" identified by the PTO in its 2019 Guidance. The Proposal would have narrowed the construction of these ineligible categories by creating a "practical application" test, presumably along the lines of the ABA proposal to expressly permit patenting of a practical application of ineligible subject matter. However, "simply reciting generic technical language or generic functional language" would have been insufficient to "salvage an otherwise ineligible claim."

The First Tillis-Coons Proposal thus blended elements of the PTO's 2019 Revised Guidance with a "laundry list" approach of specific ineligible categories, plus new statutory standards for how to apply the list of exceptions to patentable subject matter. The overall effect would be to lower Section 101 barriers to patentability, while still retaining more narrowly defined classes of ineligible subject matter.

Reactions to the First Tillis-Coons Proposal were mixed. Some argued that the draft proposal was a promising start for much-needed congressional intervention. On the pro- Alice side of the debate, the Electronic Frontier Foundation, for example, criticized the First Tillis-Coons Proposal as a "disaster" for innovation because it would eliminate a powerful tool to combat bad patents and patent troll litigation. On the other side of the debate, critics of the Alice/ Mayo framework argued that the First Tillis-Coons Proposal did not go far enough, and urged elimination of any ineligible categories of patentable subject matter.

On May 22, 2019, following feedback on their first draft framework, the same group of Members released a "draft bill" to reform Section 101 (the Second Tillis-Coons Proposal). The Second Tillis-Coons Proposal was released in advance of a series of three hearings held in June before the Senate Judiciary Committee's Subcommittee on Intellectual Property, which were designed to solicit feedback on the draft legislative language. In the subsequent hearings, 45 witnesses testified over three days, with representatives from industry, academia, bar associations, and trade groups; former Federal Circuit Judges and PTO officers; and other patent law stakeholders expressing various views on Section 101 reform.

As compared to the first proposal, the Second Tillis-Coons Proposal, generally speaking, would make more sweeping changes to Section 101 to expand patent eligibility. Like the First Tillis-Coons Proposal, the draft bill has several provisions that would attempt to separate the Section 101 inquiry from other patentability requirements. Specifically, the draft bill would strike the word "new" from Section 101 and establish that patent subject matter eligibility must be determined "considering the claimed invention as a whole" and without regard to "considerations relating to section 102, 103, or 112 of [the Patent Act]." The Second Tillis-Coons Proposal would further provide that eligibility determinations shall not depend on the "manner in which the claimed invention was made; whether individual limitations of a claim are well known, conventional or routine; the state of the art at the time of the invention." The draft bill also explicitly provides that Section 101 "shall be construed in favor of eligibility."

Instead of codifying and narrowing the judicial exceptions to patentability, the Second Tillis-Coons Proposal would eliminate them altogether. The draft bill provides that

No implicit or other judicially created exceptions to subject matter eligibility, including "abstract ideas," "laws of nature," or "natural phenomena," shall be used to determine patent eligibility under section 101, and all cases establishing or interpreting those exceptions to eligibility are hereby abrogated.

This language would appear to overturn by statute not only the Alice / Mayo framework, but over two centuries of judicial decisions interpreting the "common law" exceptions to Section 101.

The Second Tillis-Coons Proposal would replace the judicial exceptions with a new statutory definition of utility that incorporates elements of various prior proposals for a new Section 101 standard. To be patent-eligible subject matter under the Second Tillis-Coons Proposal, the invention would need to fit into one of the four statutory categories of eligible subject matter (which remain unchanged) and be "useful." To be "useful," an invention or discovery would need to provide "specific and practical utility in any field of technology through human intervention."

Finally, to combat overbroad patent claims, the Second Tillis-Coons Proposal would alter the functional claiming rules under Section 112(f), which permits patentees to claim their invention in functional terms as opposed to reciting specific physical structures. In particular, the draft bill provides that if any patent claim element is "expressed as a specified function without the recital of structure, material, or acts in support thereof," then that claim element will be limited to the "corresponding structure, material, or acts described in the specification" and their equivalents. Consistent with a recent decision of the Federal Circuit, this language would clarify that Section 112(f) applies to any claim element that fails to sufficiently recite a structure for performing a function. This change would arguably make it more difficult for a patentee to avoid the limiting effects of Section 112(f), even if the words "means for" are not used in the claim language.

As with the first proposal, reactions to the Second Tillis-Coons Proposal from patent law stakeholders were mixed. Critics of the Alice/Mayo framework generally applauded the draft bill as bringing much needed clarity and certainty to the law of patent eligibility, particularly with respect to biotechnology innovation. Opponents of the draft bill expressed concern that changes to the Alice / Mayo framework would eliminate an important tool against unmeritorious patent litigation. Critics also questioned the necessity and advisability of such a sweeping change to Section 101 law. Both supporters and opponents raised concerns about potential ambiguities in the proposed definition of "useful," particularly the terms "human intervention," "practical utility," and "field of technology."

Stakeholders also debated the specific practical effects of the legislative changes at the hearings, such as the effect of elimination of the judicial exceptions on basic scientific research. One notable concern, raised by the American Civil Liberties Union in opposition to the draft bill, was that the Second Tillis-Coons Proposal, by abrogating the Myriad decision, would permit the patenting of human genes. Several witnesses denied that the draft bill would lead to that result because of the bill's "human intervention" requirement or other patent law principles. For their part, Senators Tillis and Coons made clear that they have "no intention" of overruling the holding of Myriad that no one may patent "genes as they exist in the human body."

Following the hearings, Senators Tillis and Coons indicated that what they heard reinforced their view that "patent eligibility is broken and desperately needs to be repaired," and that there is a "necessity for Congress to intervene" to bring greater clarity to Section 101. Moving forward, they indicated they were "considering a provision that would exempt research and experimentation from infringement liability" in response to concerns about inhibiting scientific research. The Senators also indicated that they would continue to welcome input from all stakeholders and would seek to "clarify" the proposal regarding the eligibility of gene patents, and potentially "sharpen the 'field of technology' requirement to ensure that critical advances like artificial intelligence and medical diagnostics qualify [as patent-eligible]." At the same time, the Senators expressed their view that certain concepts should remain patent-ineligible under a revised Section 101, such as "economic transactions or social interactions." Observers expect a revised formal bill reflecting these provisions this fall.


Arms Sales: Congressional Review Process

Summary: This report reviews the process and procedures that currently apply to congressional consideration of foreign arms sales proposed by the President. This includes consideration of proposals to sell major defense equipment, defense articles and services, or the retransfer to third-party states of such military items. Under Section 36(b) of the Arms Export Control Act (AECA), Congress must be formally notified 30 calendar days before the Administration can take the final steps to conclude a government-to-government foreign military sale of major defense equipment valued at $14 million or more, defense articles or services valued at $50 million or more, or design and construction services valued at $200 million or more. In the case of such sales to NATO member states, NATO, Japan, Australia, South Korea, Israel, or New Zealand, Congress must be formally notified 15 calendar days before the Administration can proceed with the sale. However, the prior notice threshold values are higher for sales to NATO members, Japan, Australia, South Korea, Israel, or New Zealand. Commercially licensed arms sales also must be formally notified to Congress 30 calendar days before the export license is issued if they involve the sale of major defense equipment valued at $14 million or more, or defense articles or services valued at $50 million or more (Section 36(c) AECA). In the case of such sales to NATO member states, NATO, Japan, Australia, South Korea, Israel, or New Zealand, Congress must be formally notified 15 calendar days before the Administration is authorized to proceed with a given sale. As with government-to-government sales, the prior notice threshold values are higher for sales to NATO members, Japan, Australia, South Korea, Israel, or New Zealand.

Summary: Furthermore, commercially licensed arms sales cases involving defense articles that are firearms-controlled under category I of the United States Munitions List and valued at $1 million or more must also be formally notified to Congress for review 30 days prior to the license for export being approved. In the case of proposed licenses for such sales to NATO members, Japan, Australia, South Korea, Israel, or New Zealand, 15 days prior notification is required.

Summary: In general, the executive branch, after complying with the terms of applicable U.S. law, principally contained in the AECA, is free to proceed with an arms sales proposal unless Congress passes legislation prohibiting or modifying the proposed sale. Under current law Congress faces two fundamental obstacles to block or modify a presidential sale of military equipment: it must pass legislation expressing its will on the sale, and it must be capable of overriding a presumptive presidential veto of such legislation. Congress, however, is free to pass legislation to block or modify an arms sale at any time up to the point of delivery of the items involved. This report will be updated, if notable changes in these review procedures or applicable law occur.

This report reviews the process and procedures that currently apply to congressional consideration of foreign arms sales proposed by the President. This includes consideration of proposals to sell major defense equipment, defense articles and services, or the retransfer to other states of such military items. In general, the executive branch, after complying with the terms of applicable U.S. law, principally contained in the Arms Export Control Act (AECA) (P.L. 90-629, 82 Stat. 1320), is free to proceed with an arms sales proposal unless Congress passes legislation prohibiting or modifying the proposed sale. The President has the obligation under the law to submit the arms sale proposal to Congress, but only after he has determined that he is prepared to proceed with any such notifiable arms sales transaction.

The Department of State (on behalf of the President) submits a preliminary or informal notification of a prospective major arms sale 20 calendar days before the executive branch takes further formal action. This informal notification is provided to the committees of primary jurisdiction for arms sales issues. In the Senate, this is the Senate Foreign Relations Committee; in the House, it is the Foreign Affairs Committee. It has been the practice for such informal notifications to be made for arms sales cases that would have to be formally notified to Congress under the provisions of Section 36(b) of the AECA. The informal notification practice stemmed from a February 18, 1976, letter from the Department of Defense making a nonstatutory commitment to give Congress these preliminary classified notifications. Beginning in 2012, the State Department implemented a new informal notification process, which the department calls a "tiered review," in which the relevant committees are notified between 20 and 40 calendar days before receiving formal notification, depending on the system and destination in question.

During June 2017 testimony, Acting Assistant Secretary of State Tina Kaidanow described this process as

Congressional review period during which the Committees can ask questions or raise concerns prior to the Department of State initiating formal notification. The purpose is to provide Congress the opportunity to raise concerns, and have these concerns addressed, in a confidential process with the Administration, so that our bilateral relationship with the country in question is protected during this process.

If a committee "raises significant concerns about a sale or [export] license," the State Department "will typically extend the review period until we can resolve those concerns," Kaidanow explained.

Under Section 36(b) of the AECA, Congress must be formally notified 30 calendar days before the Administration can take the final steps to conclude a government-to-government foreign military sale of major defense equipment valued at $14 million or more, defense articles or services valued at $50 million or more, or design and construction services valued at $200 million or more. In the case of such sales to NATO member states, NATO, Japan, Australia, South Korea, Israel, or New Zealand, Congress must be formally notified 15 calendar days before the Administration can proceed with the sale. However, the prior notice threshold values are higher for NATO members, Japan, Australia, South Korea, Israel, or New Zealand. These higher thresholds are $25 million for the sale, enhancement, or upgrading of major defense equipment; $100 million for the sale, enhancement, or upgrading of defense articles and defense services; and $300 million for the sale, enhancement, or upgrading of design and construction services, so long as such sales to these countries do not include or involve sales to a country outside of this group of states. Section 36(i) requires the President to notify both the Senate Foreign Relations Committee and House Foreign Affairs Committee at least 30 days in advance of a pending shipment of defense articles subject to the 36(b) requirements if the chairman and ranking member of either committee request such notification. Certain articles or services listed on the Missile Technology Control Regime are subject to a variety of additional reporting requirements.

Commercially licensed arms sales also must be formally notified to Congress 30 calendar days before the export license is issued if they involve the sale of major defense equipment valued at $14 million or more, or defense articles or services valued at $50 million or more (Section 36(c) AECA). In the case of such sales to NATO member states, NATO, Japan, Australia, South Korea, Israel, or New Zealand, Congress must be formally notified 15 calendar days before the Administration can proceed with such a sale. However, the prior notice threshold values are higher for sales to NATO members, Japan, Australia, South Korea, Israel, or New Zealand, specifically: $25 million for the sale, enhancement, or upgrading of major defense equipment; $100 million for the sale, enhancement, or upgrading of defense articles and defense services; and $300 million for the sale, enhancement, or upgrading of design and construction services, so long as such sales to these countries do not include or involve sales to a country outside of this group of states. Furthermore, commercially licensed arms sales of firearms (which are on category I of the United States Munitions List) valued at $1 million or more must also be formally notified to Congress for review 30 days prior to the license for export being approved (15 days prior notice is required for proposed licenses for sales to NATO members, Japan, Australia, South Korea, Israel, or New Zealand).

Section 36(b)(5)(A) contains a reporting requirement for defense articles or equipment items whose technology or capability has, prior to delivery, been "enhanced or upgraded from the level of sensitivity or capability described" in the original congressional notification. For such exports, the President must submit a report to the relevant committees at least 45 days before the exports' delivery that describes the enhancement or upgrade and provides "a detailed justification for such enhancement or upgrade." This requirement applies for 10 years after the Administration has notified Congress of the export. According to Section 36(b)(5)(C), the Administration must, in the case of upgrades or enhancements meeting certain value thresholds, submit a new notification to Congress and the export will be considered "as if it were a separate letter of offer ... subject to all of the requirements, restrictions, and conditions set forth in this subsection." The threshold values are higher for sales to NATO members, Japan, Australia, South Korea, Israel, or New Zealand.

A congressional recess or adjournment does not stop the 30 calendar-day statutory review period. It should be emphasized that after Congress receives a statutory notification required under Sections 36(b) or 36(c) of the AECA, for example, and 30 calendar days elapse without Congress having blocked the sale, the executive branch is free to proceed with the sales process. This fact does not mean necessarily that the executive branch and the prospective arms purchaser will sign a sales contract and that the items will be transferred on the 31 st day after the statutory notification of the proposal has been made. It would, however, be legal to do so at that time.

Congressional Disapproval by Joint Resolution

Although Congress has more than one legislative option it can use to block or modify an arms sale, one option explicitly set out in law for blocking a proposed arms sale is the use of a joint resolution of disapproval as provided for in Section 36(b) of the AECA. Under that law, the formal notification is legally required to be submitted to the chairman of the Senate Foreign Relations Committee and the Speaker of the House. The Speaker has routinely referred these notifications to the House Foreign Affairs Committee as the committee of jurisdiction. As a courtesy, the Defense Department has submitted a copy of the statutory notification to the House Foreign Affairs Committee when that notification is submitted to the Speaker of the House. Under this option, after receiving a statutory Section 36(b) notification from the executive branch, opponents of the arms sale would introduce joint resolutions in the House and Senate drafted so as to forbid by law the sale of the items specified in the formal sale notification(s) submitted to Congress. If no Member introduces such a measure, the AECA's provisions expediting congressional action, discussed below, do not take effect.

The next step would be committee hearings in both houses on the arms sale proposal. If a majority of either the House or the Senate committee supported the joint resolution of disapproval, they would report it to their respective chamber in accordance with its rules. Following this, efforts would be made to seek floor consideration of the resolution.

At this point, it is important to take note of procedures crafted to expedite the consideration of arms sales resolutions of disapproval. Since 1976, Section 36(b)(2) of the AECA has stipulated that consideration of any resolution of disapproval in the Senate under Section 36(b)(1) of the AECA shall be "in accordance with the provisions of Section 601(b) of the International Security Assistance and Arms Export Control Act of 1976" ( P.L. 94-329 , 90 Stat. 729). Since 1980, this stipulation has also applied to resolutions of disapproval in the Senate relating to commercially licensed arms sales under Section 36(c)(1) of the AECA. The purpose of Section 601(b) was to establish rules to facilitate timely consideration of any resolution of disapproval in the Senate. The rules set forth in Section 601(b) supersede the standing rules of the Senate and include the following:

Give the committee with jurisdiction [the Senate Foreign Relations Committee] 10 calendar days from the date a resolution of disapproval is referred to it to report back to the Senate its recommendation on any such resolution (certain adjournment periods are excluded from computation of the 10 days); Make it in order for a Senator favoring a disapproval resolution to move to discharge the committee from further consideration of the matter if the committee fails to report back to the Senate by the end of the 10 calendar days it is entitled to review the resolution (the AECA expressly permits a discharge motion after 5 calendar days for sales to NATO, NATO countries, Japan, Australia, South Korea, Israel, and New Zealand); Make the discharge motion privileged, limit floor debate on the motion to one hour, and preclude efforts to amend or to reconsider the vote on such a motion; Make the motion to proceed to consider a resolution of disapproval privileged and preclude efforts to amend or to reconsider the vote on such motion; Limit the overall time for debate on the resolution of disapproval to 10 hours and preclude efforts to amend or recommit the resolution of disapproval; Limit the time (one hour) to be used in connection with any debatable motion or appeal; provide that a motion to further limit debate on a resolution of disapproval, debatable motion, or appeal is not debatable.

The Senate is constitutionally empowered to amend its rules or to effect a rule change at any time. The fact that an existing rule is in Section 601 of the International Security Assistance and Arms Export Control Act of 1976 is not an obstacle to changing it by Senate action alone should the Senate seek to do so.

The House of Representatives is directed by Sections 36(b)(3) and 36(c)(3)(B) of the AECA to consider a motion to proceed to the consideration of a joint resolution disapproving an arms sale reported to it by the appropriate House committee as "highly privileged." Generally, this means that the resolution will be given precedence over most other legislative business of the House, and may be called up on the floor without a special rule reported by the Rules Committee. Unlike for the Senate, however, the AECA contains no provision for discharge of the House committee if it does not report on the joint resolution. If reported and called up, the measure will be considered in the Committee of the Whole, meaning that amendments can be offered under the "five-minute rule." Nevertheless, amendments to joint resolutions disapproving arms sales have apparently never been offered in the House.

The Rules Committee usually sets the framework for floor consideration of major legislation in the House of Representatives, however, and could do so for a joint resolution of disapproval. Upon receiving a request for a rule to govern consideration of such a resolution, the House Rules Committee could set a time limit for debate, exclude any amendments to, and waive any points of order against the resolution. If the House adopted the rule reported by the committee, it would govern the manner in which the legislation would be considered, superseding the statutory provision.

After a joint resolution is passed by both the House and the Senate, the measure would next be sent to the President. Once this legislation reaches the President, presumably he would veto it in a timely manner. Congress would then face the task of obtaining a two-thirds majority in both houses to override the veto and impose its position on the President.

Congress can also block or modify a proposed sale of major defense equipment, or defense articles and services, if it uses the regular legislative process to pass legislation prohibiting or modifying the sale or prohibiting delivery of the equipment to the recipient country. While it is generally presumed that Congress will await formal notification under Section 36(b) or 36(c) of the AECA before acting in opposition to a prospective arms sale, it is clear that a properly drafted law could block or modify an arms sale transaction at any timeâincluding before a formal AECA notification was submitted or after the 30-day AECA statutory notification period had expiredâso long as the items have not been delivered to the recipient country.

Congressional use of its lawmaking power regarding arms sales is not constrained by the AECA reporting requirements. In order to prevail, however, Congress must be capable of overriding a presidential veto of this legislation, for the President would presumably veto a bill that blocked his wish to make the arms sale in question. This means, in practical terms, that to impose its view on the President, Congress must be capable of securing a two-thirds majority of those present and voting in both houses.

There are potentially important practical advantages, however, to prohibiting or modifying a sale, if Congress seeks to do so, prior to the date when the formal contract with the foreign government is signedâwhich could occur at any time after the statutory 30-day period. These likely advantages include (1) limiting political damage to bilateral relations that could result from signing a sales contract and later nullifying it with a new law; and (2) avoiding financial liabilities which the U.S. Government might face for breaking a valid sales contract. The legislative vehicle designed to prohibit or modify a specific arms sale can take a variety of forms, ranging from a rider to any appropriation or authorization bill to a freestanding bill or joint resolution. The only essential features that the vehicle must have are (1) that it is legislation passed by both houses of Congress and presented to the President for his signature or veto and, (2) that it contains an express restriction on the sale and/or the delivery of military equipment (whether it applies to specific items or general categories) to a specific country or countries.

Presidential Waiver of Congressional Review

It is important to note that the President also has the legal authority to waive the AECA statutory review periods. For example, if the President states in the formal notification to Congress under AECA Sections 36(b)(1), 36(c)(2), 36(d)(2) that "an emergency exists" which requires the sale (or export license approval) to be made immediately "in the national security interests of the United States," the President is free to proceed with the sale without further delay. The President must provide Congress at the time of this notification a "detailed justification for his determination, including a description of the emergency circumstances" which necessitated his action and a "discussion of the national security interests involved." AECA Section 3(d) (2)(A) provides similar emergency authority with respect to retransfers of U.S.-origin major defense equipment, defense articles, or defense services.

Section 614(a) of the Foreign Assistance Act of 1961 (FAA), as amended, also allows the President, among other things, to waive provisions of the AECA, the FAA, and any act authorizing or appropriating funds for use under either the AECA or FAA in order to make available, during each fiscal year, up to $750 million in cash arms sales and up to $250 million in funds. Not more than $50 million of the $250 million limitation on funds use may be made available to any single country in any fiscal year through this waiver authority unless the country is a "victim of active aggression." Not more than $500 million of cash sales (or cash sales and funds made available combined) may be provided under this waiver authority to any one country in any fiscal year. To waive the provisions of these acts related to arms sales, the President must determine and notify Congress in writing that it is "vital" to the "national security interests" of the United States to do so. Before exercising the authority granted in Section 614(a), the President must "consult with" and "provide a written policy justification to" the House Foreign Affairs and the Senate Foreign Relations Committees and House and Senate Appropriations Committees.

In summary, in the absence of a strong majority in both houses of Congress supporting legislation to block or modify a prospective arms sale, the practical and procedural obstacles to passing such a lawâwhether a freestanding measure or one within the AECA frameworkâare great. Even if Congress can pass the requisite legislation to work its will on an arms sale, the President need only veto it and secure the support of one-third plus one of the Members of either the Senate or the House to have the veto sustained and permit the sale.

It should be noted that Congress has never successfully blocked a proposed arms sale by use of a joint resolution of disapproval, although it has come close to doing so (see section below for selected examples). Nevertheless, Congress hasâby expressing strong opposition to prospective arms sales, during consultations with the executive branchâaffected the timing and the composition of some arms sales, and may have dissuaded the President from formally proposing certain arms sales.

2019 Sales to Jordan, Saudi Arabia, and the United Arab Emirates

On May 24, 2019, Secretary of State Michael Pompeo stated that he had directed the State Department "to complete immediately the formal notification of 22 pending arms transfers" to Jordan, Saudi Arabia, and the United Arab Emirates. In a determination to Congress, Pompeo invoked the AECA Section 36 emergency provisions described above. The transfers included a variety of defense articles and services, as well as an agreement to coproduce and manufacture components of Paveway precision-guided munitions in Saudi Arabia. On June 20, 2019, the Senate passed S.J.Res. 36 , which prohibited both the Paveway coproduction agreement described above and the transfer of additional such munitions, and S.J.Res. 38 , which prohibited transfers of "defense articles, defense services, and technical data to support the manufacture of the Aurora Fuzing System for the Paveway IV Precision Guided Bomb Program." The same day, the Senate passed en bloc another 20 resolutions of disapproval prohibiting the remaining notified transfers.

The House passed S.J.Res. 36 and S.J.Res. 38 on July 17, 2019. The same day, the House also passed S.J.Res. 37 , which prohibited the transfer to the UAE of "defense articles, defense services, and technical data to support the integration, operation, training, testing, repair, and operational level maintenance" of the Maverick AGM-65 air-to-surface guided missile and several Paveway systems for use on a number of Emirati-operated aircraft. The resolution also prohibited the transfer of a number of Paveway munitions to the UAE. President Donald Trump vetoed the three bills on July 24. A July 29 Senate vote failed to override these vetoes.

Examples of AECA Resolutions of Disapproval

On October 14, 1981, the House adopted a resolution ( H.Con.Res. 194 ) objecting to President Reagan's proposed sale to Saudi Arabia of E-3A airborne warning and control system (AWACS) aircraft, Sidewinder missiles, Boeing 707 refueling aircraft, and defense articles and services related to F-15 aircraft. An October 28, 1981, Senate vote on identical legislation failed, however, after President Reagan made a series of written commitments to Congress regarding the proposed sale. Congress later enacted legislation requiring the President to certify that the commitments made in 1981 regarding the proposed sale had been met prior to the delivery of the AWACS planes (Section 127 of the International Security and Development Cooperation Act of 1985; P.L. 99-83 ).

On April 8, 1986, President Ronald Reagan formally proposed the sale to Saudi Arabia of 1,700 Sidewinder missiles, 100 Harpoon missiles, 200 Stinger missile launchers, and 600 Stinger missile reloads. On May 6, 1986, the Senate passed legislation to block these sales ( S.J.Res. 316 ) by a vote of 73-22. The House concurred with the Senate action on May 7, 1986, by passing H.J.Res. 589 by a vote of 356-62. The House then passed S.J.Res. 316 by a voice vote and (in lieu of H.J.Res. 589 ) sent it to the President. On May 21, 1986, President Reagan vetoed S.J.Res. 316 . But, in a letter that day to then-Senate Majority Leader Robert Dole, President Reagan said he would not include the controversial Stinger missiles and launchers in the sales proposal. On June 5, 1986, the Senate, by a 66-34 vote, sustained the President's veto of S.J.Res. 316 , and the sale of the Sidewinder and Harpoon missiles to Saudi Arabia proceeded.

More recently, on March 10, 2016, the Senate Foreign Relations Committee rejected a motion to discharge a joint resolution ( S.J.Res. 31 ) prohibiting the sale of several defense articles, particularly eight F-16 Block 52 aircraft. H.J.Res. 82 was the House companion bill. On May 5, 2016, a State Department spokesperson, noting congressional objections to using Foreign Military Financing funds for the aircraft, told reporters that the United States had "told the Pakistanis that they should put forward national funds for the purchase." In late May, the U.S. offer expired after Islamabad failed to submit a letter of acceptance by the required deadline.

On June 13, 2017, the Senate voted to reject a motion to discharge from the Senate Foreign Relations Committee a joint resolution ( S.J.Res. 42 ) prohibiting certain proposed defense exports to Saudi Arabia, such as "technical data, hardware, and defense services" to support the Royal Saudi Air Force's deployment of the Joint Direct Attack Munition and integration of the FMU-152A/B JPB Fuze System into several warhead types. The bill also would have prohibited the transfer of "defense articles, defense services, and technical data to support the assembly, modification, testing, training, operation, maintenance, and integration" of certain precision guided munitions for the certain Royal Saudi Air Force planes. H.J.Res 102 was the House companion bill.