A Senate Judiciary Committee hearing on the Patent Eligibility Restoration Act exposed a fundamental divide over who benefits from today's Section 101 doctrine: inventors and startups, or the large companies most capable of operating without dependable patent rights.

For patent owners, independent inventors and technology startups, the most important message from Tuesday's Senate Judiciary Committee hearing was not hidden in a technical discussion of statutory language. It was this: Congress is again seriously confronting whether American patents will protect emerging inventions, or whether courts will continue deciding, under an increasingly controversial eligibility doctrine, that even concrete technological breakthroughs are too “abstract” or too closely connected to nature to receive protection.

The hearing, “From Genes to Machines: the Patent Eligibility Debate,” placed the Patent Eligibility Restoration Act, or PERA, before the full Judiciary Committee. The witnesses sharply disagreed over whether current law is functioning properly, but the hearing ended with lawmakers and stakeholders appearing willing to negotiate language that could move the legislation forward. The most difficult obstacle was not artificial intelligence, software or even patent litigation abuse. It was the fear that reform could reopen the door to patents covering human genes.

For inventors, however, the debate reaches far beyond genetics. It concerns whether a patent can still serve as a reliable property right, and whether a small company can attract investment, disclose its technology and compete against an incumbent that can rely on market power, trade secrets and enormous litigation budgets.

Former U.S. Patent and Trademark Office Director Andrei Iancu framed the issue as a national innovation crisis. Congress, he said, has not meaningfully revised the statutory categories of patent-eligible inventions since 1793. Courts have instead added exceptions for abstract ideas, laws of nature and natural phenomena, producing rules that were never written into the Patent Act and that have become especially consequential for software, diagnostics, biotechnology and advanced computing.

Iancu's most effective argument was also his simplest: Section 101 is supposed to ask only whether a claimed invention is the type of subject matter the patent system can consider. It is not supposed to decide every question of patent quality.

Novelty belongs under Section 102. Obviousness belongs under Section 103. Whether the patent adequately teaches and claims the invention belongs under Section 112. Passing the eligibility threshold does not guarantee a patent, much less a finding of infringement. It merely permits the invention to be evaluated under the Patent Act's remaining requirements.

That distinction matters because modern eligibility cases often allow courts to invalidate patents at the beginning of litigation, before factual questions concerning the invention, prior art and technological improvement are fully developed. For accused infringers, that can provide a relatively inexpensive exit. For patent owners, it can mean that years of research and prosecution disappear through a threshold doctrine whose terminology, including what it means for a claim to be “directed to” an abstract idea, remains difficult to define.

Iancu supplied examples designed to make the doctrine appear almost detached from common sense: a physical digital camera characterized as an abstract idea; a manufacturing method for reducing driveshaft vibration treated as a law of nature; medical diagnostics rejected because they employ biological relationships; and information-processing technologies dismissed as little more than collecting, analyzing and presenting data.

His broader point was not that every one of those patents necessarily should have survived. It was that novelty, obviousness, claim scope and disclosure should have determined their validity, not a threshold label that can prevent the ordinary patentability analysis from occurring.

For small inventors, Iancu's economic argument may prove even more significant. A large corporation can protect an innovation through scale, rapid commercialization, closed systems, contractual restrictions and trade secrecy. A startup often has only its patents. Those patents may be the assets that persuade investors to fund development before a product generates revenue.

Iancu cited research indicating that the weakening of eligibility protection after Alice produced uneven effects: larger firms gained in profitability and sales growth, while smaller firms experienced increased competitive pressure and reduced valuations. In his telling, current Section 101 law has not weakened everyone equally. It has shifted leverage toward established companies that are better equipped to survive without enforceable patents.

He also warned that uncertain patents encourage secrecy. The traditional patent bargain requires an inventor to disclose the invention publicly in exchange for a limited period of exclusivity. When exclusivity becomes unreliable, companies that can protect their technology as a trade secret have reason to stop disclosing it.

That response particularly disadvantages individual inventors and smaller businesses. A large incumbent may be able to secure laboratories, restrict employee access, impose nondisclosure agreements and police confidential information. A small inventor attempting to license technology may have to reveal enough information to attract a manufacturer or investor, often before possessing the resources necessary to defend against copying. Iancu's testimony cited evidence that smaller firms increased their use of nondisclosure agreements by roughly one-third after losing patent protection.

Sue Peschin, president and CEO of the Alliance for Aging Research, gave the patent-owner case a human face. Her testimony focused on diagnostics that may never reach patients because investors cannot confidently protect them.

She pointed to Ariosa Diagnostics v. Sequenom, involving a noninvasive prenatal test that detected fetal abnormalities from maternal blood. The Federal Circuit invalidated the patent despite Judge Richard Linn's conclusion that the invention represented precisely the kind of breakthrough the patent system should encourage. Linn wrote that the breadth of the Supreme Court's Mayo analysis made it difficult to imagine any diagnostic claim surviving and expressly called upon Congress to act.

Peschin described other diagnostic programs involving Alzheimer's disease, melanoma and major depressive disorder that allegedly lost commercial support or patent protection after the Supreme Court's eligibility decisions. Her argument was not merely that inventors deserve compensation. It was that discoveries do not move from university laboratories to patients automatically. Validation, clinical development, regulatory work, manufacturing and distribution require capital. Without an enforceable asset, a promising discovery may remain an academic publication instead of becoming a clinical product.

Her closing appeal was directed at both lawmakers and patients: when patent law functions, she said, society gains earlier diagnoses, improved treatments and more personalized care. When it fails, “we lose time,” “tools” and “lives.”

But the hearing also demonstrated why PERA has not yet become law.

Dr. Debra Leonard, a molecular pathologist and former president of the Association for Molecular Pathology, offered firsthand evidence of what aggressive gene-patent enforcement once looked like inside clinical laboratories. Before the Supreme Court's 2013 Myriad decision, Leonard said her laboratory received licensing demands and infringement threats concerning tests used in patient care.

Her examples were concrete. One patent holder demanded licensing fees and imposed volume limitations on Canavan disease testing. An exclusive license covering an Alzheimer's-related gene allegedly allowed a single provider to charge $195 for a test Leonard's laboratory had offered for $100.50. Another company demanded a $25,000 upfront payment, plus per-test fees, in connection with testing for hereditary hemochromatosis.

Leonard's most powerful moment came when senators suggested that a research exception might protect physicians. Her answer was that research was not the problem. She had been prevented from performing clinical tests for patients. If thousands of genes became subject to licensing demands, she said, pathologists would have to spend their time obtaining legal rights to use genetic information rather than practicing medicine.

That testimony exposed the central drafting challenge. PERA's supporters insist the bill is intended to preserve Myriad's rule that an unmodified human gene, including one merely isolated from the body, is not patentable. They argue that protection should remain available for engineered genetic material, therapies, laboratory techniques and useful applications created through human intervention.

Leonard and J. John Lee of the Computer & Communications Industry Association questioned whether the current language accomplishes that goal. They focused on language addressing genes or natural materials that are purified, enriched, isolated or otherwise altered through human activity. Leonard argued that purification may be functionally indistinguishable from isolation and warned that the provision could recreate the very uncertainty its sponsors say they want to eliminate.

Lee presented the broader defense of the status quo. He rejected the characterization of eligibility law as chaotic, citing a study reporting that district courts were affirmed in 85.3% of Section 101 cases and the USPTO in 95.5%. He also noted that nearly 50,000 U.S. patents involving AI were issued in 2023, arguing that current law has not prevented protection of genuine technological innovation.

His position will resonate with technology companies frequently targeted in patent litigation. Section 101, Lee argued, allows businesses to dispose of vague claims that take ordinary economic or information-processing practices and add generic computers. He warned that broad reform could revive abusive suits asserting low-quality patents against companies that may settle simply because litigation costs exceed the demanded payment.

The hearing therefore presented two radically different accounts of the same doctrine. To patent owners, high affirmance rates may show that an excessively restrictive rule is being consistently enforced. Senator Chris Coons captured that response when he said the decisions may be “consistently bad.” To large technology interests, the same numbers demonstrate predictability and an effective defense against overbroad claims.

PERA attempts to resolve the conflict by replacing the judicial exceptions with express statutory exclusions. It would keep mathematical formulas standing alone, substantially economic or business processes, purely mental processes, unmodified human genes and unmodified natural materials outside the patent system. It would also prevent applicants from creating eligibility merely by attaching an unnecessary computer to an otherwise excluded process. At the same time, it would return novelty, obviousness and disclosure questions to Sections 102, 103 and 112.

The bill's future may now depend on whether its supporters can make the gene language unmistakable without weakening protection for diagnostics, gene therapies and engineered biotechnology.

Senator Thom Tillis asked Leonard to propose language that would address her concerns and urged stakeholders to continue negotiating. His closing message suggested that the hearing was not a ceremonial repetition of positions. He acknowledged that change is threatening to industries comfortable with current law but warned that important innovations may never emerge in the United States unless modern eligibility problems are addressed.

“I believe in my heart of hearts we're moving in the right direction,” Tillis said. “Let's be innovative ourselves and try to get the language right.”

For patent owners and inventors, that is both encouraging and cautionary. PERA remains alive, but its passage is not inevitable. The hearing showed meaningful bipartisan interest in restoring certainty, while also demonstrating that concerns over gene patents can derail a broader reform affecting software, AI, manufacturing, diagnostics and nearly every emerging technology.

The next stage will be fought word by word. And for inventors whose ability to secure funding, disclose technology and challenge entrenched competitors depends upon the value of a patent, few legislative debates will carry greater practical consequences.

Ramey LLP is a Texas-based intellectual property law firm dedicated to representing small patent owners, startups, and independent inventors in disputes against larger corporations.