	Introduction

Recent congressional discussion of patent system reform has included consideration of provisions that would restrict the sorts of inventions for which patents may be obtained. Legislation introduced in previous sessions of Congress would have banned patents relating to genetic materials as well. None of this legislation has been enacted. The courts and the U.S. Patent and Trademark Office (USPTO) have understood this language to allow an expansive range of patentable subject matter. The current controversy concerning patents on genetic materials is then reviewed. The range of patentable subject matter under this statute has been characterized as "extremely broad." The courts and USPTO have nonetheless concluded that certain subject matter, including abstract ideas and laws of nature, is not patentable under section 101. The first of these, business method patents, have been defined to include "a method of administering, managing, or otherwise operating a business or organization, including a technique used in doing or conducting business." In the 111 th Congress, three bills have been introduced that would stipulate that patents may not be obtained on methods of tax planning. Bilski v. Kappos

Increasing public scrutiny of business and tax strategy patents in recent years has corresponded with heightened attention to patent eligibility issues by the USPTO and the courts. Justice Breyer identified four points on which all nine justices agreed: (1) the range of patentable subject matter is broad but not without limit; (2) the machine-or-transformation test has proven to be of use in determining whether a process is patentable or not; (3) the machine-or-transformation test is not the sole standard for assessing the patentability of processes; and (4) not everything that merely achieves a "useful, concrete, and tangible result" qualifies as patentable subject matter. Patents claiming the products of biotechnology, and in particular genetic materials, have also led to considerable debate. Other patents claim related technologies, including individual mutations known to cause disease, testing kits for detecting genetic mutations, amino acid sequences (proteins), and the use of these proteins as medicines. The availability of patents pertaining to genetic technologies may be traced to the well-known decision of the U.S. Supreme Court in Diamond v. Chakrabarty . The March 29, 2010, decision of the District Court for the Southern District of New York in Association for Molecular Pathology v. USPTO cast serious doubt upon this reasoning, however. Some observers have expressed concerns that these sorts of inventions should not be patented, no matter how innovative they might be. Others believe that these concerns are overstated. Proponents of a broad notion of patentable subject matter assert that the patent system has traditionally offered a powerful incentive for innovation across many industries. Some commentators believe that innovation in areas such as business methods, tax planning methods, and genetic materials has flourished even though the availability of patent rights has been uncertain. This extent of proprietary rights may limit the ability of others to design around the patented invention and ultimately discourage competition. Patents on genetic materials have also been said to lead to possible deleterious effects on healthcare and research related to healthcare. Congressional Issues and Options

If Congress decides that the current rules with respect to patent eligibility are satisfactory, then no action need be taken. If legislation is contemplated, one international agreement that deserves consideration is the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights, commonly known as the TRIPS Agreement.
Congressional interest in the patent system has grown in recent years, tracking increasing recognition of the importance of intellectual property to innovative U.S. industries. One of the areas of interest is the topic of patentable subject matter—that is, the sorts of inventions for which patents may be obtained. In particular, patents on business methods, tax planning methods, and genetic materials have proven controversial. Legislation introduced in recent sessions of Congress would restrict the availability of patents in these fields. None of these bills has been enacted.
The patent statute currently provides that patents may be obtained on any invention that is a process, machine, manufacture, or composition of matter. The range of patentable subject matter under this provision has been characterized as extremely broad. The courts have nonetheless concluded that certain subject matter, including abstract ideas, mathematical algorithms, laws of nature, and mental processes may not be patented no matter how innovative they might be. They have reasoned that these inventions comprise the fundamental tools of scientific research, and that allowing them to be privately appropriated might interfere with future advancement.
Business method patents relate to a method of administering, managing, or conducting a business or organization. Tax planning method patents concern a method of reducing or deferring taxes. The 2010 decision of the U.S. Supreme Court in Bilski v. Kappos addressed whether particular methods are patentable, although opinions vary as to the conclusiveness of the Courts' ruling.
Patents claiming the products of biotechnology, and in particular genetic materials, have also led to considerable debate. Genetic material patents cover such technologies as DNA sequences, amino acid sequences, individual mutations known to cause disease, and testing kits for detecting genetic mutations. Since the 1980 decision of the Supreme Court in Diamond v. Chakrabarty, the U.S. Patent and Trademark Office (USPTO) has viewed genetic materials and related technologies as patentable. However, the March 29, 2010, district court opinion in Association for Molecular Pathology v. USPTO cast doubt upon the patentability of isolated DNA. Proceedings in the so-called "Myriad" litigation were pending as of the date this report issued.
Numerous arguments have been advanced in opposition to patents on business methods, tax planning methods, and genetic materials. Some commentators believe that business method patents ultimately discourage competition, that tax strategy patents provide undesirable innovation incentives, and that patents on genetic materials lead to deleterious effects on healthcare and medical research. Other experts assert that these concerns are overstated, and further contend that the patent system provides a powerful incentive for innovation, investment, and public disclosure of technology across many fields of endeavor.
Several legislative options present themselves. If Congress decides the current rules with respect to patent eligibility are appropriate, then no action need be taken. Other possibilities include amendments to the Patent Act either to bar the issuance of patents in particular disciplines, or to limit the ability to enforce certain kinds of patents. The desire to comply with certain international agreements, in particular the WTO Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), may restrict certain legislative alternatives.