Key Takeaways from Senate Judiciary Hearing on Patent Eligibility

The Senate Judiciary Committee’s Intellectual Property Subcommittee convened a pivotal hearing to examine the Patent Eligibility Restoration Act of 2025 (PERA), a bipartisan legislative proposal aimed at resolving longstanding confusion surrounding Section 101 of the Patent Act. The hearing featured testimony from former United States Patent and Trademark Office (USPTO) directors, legal experts, industry stakeholders and patient advocates, highlighting the growing urgency for reform.

We wrote about the specific implications for the biotech industry last week. This alert focuses on potential impacts to businesses more generally, including portfolio strategy, litigation risks and return on investment.

Key Takeaways for Businesses

1. PERA Seeks to Restore Clarity and Predictability to Patent Eligibility Law

The bill aims to codify a clearer framework for determining patent eligibility, replacing vague judicial exceptions with five defined statutory exclusions. This aims to reduce litigation uncertainty and promote investment in emerging technologies.

2. Support from Former USPTO Directors and Industry Leaders

Two former USPTO directors strongly endorsed PERA, citing the current system’s unpredictability as a deterrent to innovation and investment. They emphasized that PERA would not lower patent quality standards but would restore coherence to Section 101.

3. Impact on Innovation and Investment

Witnesses warned that the current eligibility framework has led to reduced venture capital investment in diagnostics and artificial intelligence (AI)-related technologies. PERA is positioned as a remedy to unlock capital and accelerate commercialization of frontier innovations.

4. Retail Industry Concerns over Patent Trolls and Litigation Abuse

Retail industry leaders expressed opposition, arguing that PERA could revive vague business method patents and increase litigation risk for businesses. They urged caution and proposed alternative reforms, including addressing third-party litigation funding.

5. Biotech and Diagnostics Sector Strongly Supports Reform

Stakeholders from the biotech industry and patient advocacy groups stressed that the current law stifles development of life-saving diagnostics and gene therapies. PERA is seen as essential to maintaining U.S. leadership in biomedical innovation.

6. Geopolitical and Competitive Implications

Experts highlighted China’s strategic use of patent law to foster domestic innovation and attract investment. PERA is framed as a necessary step to preserve U.S. competitiveness in global Intellectual Property (IP) leadership and to ensure that innovators do not flock to countries that offer broader patent protection for their inventions.

Next Steps

The next likely step for this bill would be for the Judiciary Committee to “markup” the bill where the full committee reviews the bill, considers amendments and votes on whether or not to send the bill to the floor for the whole Senate to consider. In the meantime, stakeholders may wish to do the following:

• Meet with bill sponsors to offer feedback and establish monitoring for legislative developments
• Review your IP portfolio for inventions previously deemed ineligible
• Engage with legal counsel to prepare for potential eligibility expansion
• Evaluate investment strategies

Brownstein Insight: Businesses operating in technology, life sciences and retail should closely evaluate PERA’s implications for patent strategy, litigation exposure and research and development (R&D) investment. While the bill aims to streamline eligibility standards, its passage could reshape the IP landscape across sectors. Stakeholders are encouraged to engage with policymakers and legal counsel to ensure their interests are represented as the bill advances.

This document is intended to provide you with general information regarding Patent Eligibility Restoration Act of 2025. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.