On November 21, the Senate Judiciary Committee voted to advance the Promoting and Respecting Economically Vital American Innovation Leadership Act (PREVAIL Act), a legislative effort that, if passed into law, could effect significant changes to Patent Trial and Appeal Board (PTAB) proceedings.

Introduced in 2023 by Senator Christopher Coons (D-DE), and co-sponsored by Senators Thom Tillis (R-NC), Richard Durbin (D-IL), and Mazie Hirono (D-HI), the PREVAIL Act is being presented as a bi-partisan bill meant to “invest in” and “protect the property rights” of US inventors.

While the PREVAIL Act will likely be marked up and amended multiple times as it goes to the Senate floor and then into the House, a press release issued in August 2023 laid out the overarching changes the bill seeks to make:

–  Require standing for PTAB challengers and limit repeated petitions challenging the same patent;

–  Harmonize PTAB claim construction and burden of proof with federal district court;

–  End duplicative patent challenges by requiring a party to choose between making its validity challenges before the PTAB or in district court; and

–  Increase transparency by prohibiting the USPTO director from influencing PTAB panel decisions.

The vote held last week was tight (11-10) and took some by surprise, given that a week earlier, Senator Coons had signaled that consideration of the PREVAIL Act and also the Patent Eligibility Restoration Act (PERA) would be delayed in light of an expected amendment by Senator Ted Cruz (R-TX) and a manager’s amendment to address concerns from Senators Richard Blumenthal (D-CT), Amy Klobuchar (D-MN), and Peter Welch (D-VT).

During last week’s meeting, Senator Cruz argued, unsuccessfully, for an amendment to require the consent of small inventors—defined as an individual inventor or a company employing fewer than 500 employees and grossing less than $24M a year—to participate in PTAB proceedings. Citing “tech behemoths that dominate PTAB and send their employees to go become PTAB judges”, and claiming that those same companies are “crushing the little guy”, Cruz said that his proposed amendment would keep open the “innovation doorway” for small, independent inventors “while simultaneously keeping out patent trolls”.

Senator Coons—who stated that he was voting against Cruz’s proposed amendment, and encouraged his colleagues to do the same—took issue with that $24M threshold:

…this amendment defines an independent inventor to have sales or income up to $24 million dollars and to opt out of the PTAB. That is a high cap which sweeps in a fairly broad range of sophisticated and profitable inventors. It’s not quite the tinkering, under-resourced garage inventor that some of my colleagues on this side of the aisle have in mind. Senator, my challenge is, if I accept that I lose folks who are committed to voting for it today, I would love to work with you to find a way to hit the right point to protect genuinely independent small inventors because we share the goal of making it possible for the garage inventor to bring to scale a new technology without being killed in the PTAB.

A review of the transcript of last week’s hearing indicates that Senator Coons’ team has discussed threshold of around $6M (compared to Cruz’s recommended $24M).

Of 20 voting committee members, only six voted in support of Senator Cruz’s amendment.

On the other hand, the manager’s amendment—which in short, addressed concerns centered on the bill’s standing requirements, which the lawmakers had suggested “might prevent generic competitors and patient advocates from using the PTAB to challenge patents”—was adopted by the Committee.

The votes on final passage of the bill, with the manager’s amendment, were recorded as follows:

From here, the PREVAIL Act will be favorably reported to the Senate floor for a full vote.