Patent eligibility under 35 U.S.C. § 101 has been one of the most unpredictable areas of U.S. patent law for over a decade. Patent Eligibility is the area of patent law which requires an invention to be a useful process, machine, manufacture, or a composition of matter in order to be eligible for patent protection. The claimed invention cannot be a law of nature, natural phenomenon, or abstract idea, per 35 U.S.C. § 101, to be protected. Those things are reserved for the public to use freely. Patent Eligibility is the “gatekeeper” of the patent system. Ever since the advent of software inventions, this topic has undergone an extensive amount of judicial analysis requiring attorneys with knowledge in these areas to navigate the issues. The Patent Eligibility Restoration Act (“PERA”) [S.1546 – Patent Eligibility Restoration Act of 2025; H.R.3152 – Patent Eligibility Restoration Act of 2025] aims to reset that gatekeeper framework and may significantly affect software, AI, diagnostics, and biotech patents. The PERA Act would effectively eliminate the judicially created exceptions to patent eligibility and replace them with statutory exclusions defined by the United States Congress.
If enacted, the PERA Act could substantially increase the patentability of AI, data analytics, and medical diagnostic inventions—technologies that have frequently faced eligibility rejections under 35 U.S.C. § 101. At Sherman IP, we’re tracking the PERA Act closely to guide clients through its potential impact on intellectual property (IP) strategies. Even before any legislation passes, Applicants can improve patent eligibility outcomes through careful claim drafting.
In particular, by emphasizing technical improvements, system integrations, and real-world applications, Applicants may help strengthen eligibility positions. Supporters argue that the current judicial framework has discouraged investment in software and diagnostic technologies by creating uncertainty over what inventions qualify as patent-eligible subject matter.
The Current Challenge: Uncertainty Under 35 U.S.C. § 101
United States Supreme Court rulings like Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014), Mayo Collaborative Services v. Prometheus Laboratories, 566 U.S. 66 (2012), and Association for Molecular Pathology v. Myriad Genetics, 569 U.S. 576 (2013) have provided direction regarding “abstract ideas,” “laws of nature,” and “natural phenomena”. The two-step Alice/Mayo test has led to inconsistent results, hindering predictability for inventors (especially in tech and biotech), which has sparked criticism for stifling R&D investment in emerging fields.
What The PERA Act Aims to Achieve
Sponsored by U.S. Senators Thom Tillis (R-NC) and Chris Coons (D-DE) in the Senate (S.1546) and U.S Representatives Kevin Kiley (R-CA) and Scott Peters (D-CA) in the House (H.R.3152), the PERA Act replaces judicial exceptions with statutory exclusions for “useful” inventions. Key subject matter which is excluded from patent protection includes mathematical formulas (unless practically applied), mental processes in the human mind, natural processes without human activity, unmodified genes or materials, and substantially economic or business processes (with machine safeguards).
The table below contrasts the current judicial eligibility framework with the statutory exclusions proposed under the PERA Act.
|
Current Judicial Exceptions (e.g., Alice/Mayo) |
Proposed PERA ACT Statutory Exclusions |
|
Abstract ideas (broad and unpredictable) |
Mathematical formulas (unless practically applied) |
|
Laws of nature |
Mental processes solely in the human mind |
|
Natural phenomena |
Processes occurring in nature without human activity |
|
N/A |
Unmodified human genes or natural materials |
| N/A |
Substantially economic/business processes (with machine safeguards) |
Proponents, including former U.S. Patent and Trademark Office (USPTO) Directors Andrei Iancu and David Kappos, argue that the PERA Act would boost predictability and innovation. However, critics like the Electronic Frontier Foundation (EFF) and the College of American Pathologists warn of low-quality patents, revived business-method issues, and gene-claim concerns.
Status Update as of Mid-April 2026
As of April 22, 2026, the PERA Act remains in the Senate and House Judiciary Committees with no markups or votes following the Senate hearing held on October 8, 2025. Senator Tillis has stated that he aims to advance it before his 2026 retirement, but bipartisan friction may require amendments. Advocates continue pushing amid debates.
Industry Impacts: Opportunities and Risks
The PERA Act could broaden eligibility for AI algorithms, data analytics methods, and personalized medicine technologies—potentially reducing USPTO eligibility rejections and strengthening patent portfolios. Yet, it might spur filings, litigation, and defensive costs if low-quality patents rise.
Practical Advice for Clients
Taking proactive steps to ready your IP assets:
- Portfolio Audits: Review pending applications for 35 U.S.C. § 101 issues; amend to highlight practical applications.
- Claim Drafting Strategies: Emphasize technological integrations in new claims to align with the PERA Act.
- Monitoring and Advocacy: Monitor legislative developments through Congress.gov or Sherman IP updates; our expert attorneys can assist with USPTO comments if the PERA Act progresses.
- Risk Management: Conduct freedom-to-operate analyses, especially in AI and biotech.
If your portfolio includes AI, software, or diagnostic technologies that may be affected by 35 U.S.C. § 101 eligibility, Sherman IP can assist with portfolio review, claim-drafting strategies, and legislative monitoring.
While the PERA Act’s passage is uncertain amid delays, its potential to revitalize tech and biotech patents makes preparation essential. Stay tuned for updates.
The Sherman IP LLP Team
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