<p> The purpose of this Paper is twofold: First, to explore the somewhat contradictory, and perhaps convoluted approaches by the Supreme Court and Federal Circuit to patentable subject matter since the early 1970&rsquo;s to the present; and Second, to investigate two theories of how to fix&mdash;if it can be considered to be broken&mdash;the current state of the law regarding patent eligibility. In regard to the second aspect, it is the Thesis of this Paper that the only practicable solution to the current quagmire is a legislative approach that will correct the legal definition of patentable subject matter under 35 U.S.C. &sect; 101. </p><p> In addition, it has become common, since the decision of <i>Alice </i> and others to state &ldquo;software patents are dead.&rdquo; This is not even remotely true. What has happened, as will be discussed, is that because of the expansion of the definition of the abstract idea exemption of patentable subject matter, it has become increasingly difficult&mdash;sometimes impossible&mdash;to get patents awarded for certain technology areas. One reason for this is because so-called abstract idea innovations can be best expressed in terms of algorithms and in software. Consequently, software patents have achieved a negative reputation&mdash;sort of a &ldquo;guilt by association&rdquo; narrative. The truly unfortunate result&mdash;the unintended consequence - is that perhaps many applications for innovations have either not been filed, or have been unfairly rejected and abandoned.</p><p>

<p> This Dissertation investigates the relationship between patent quality and company performance for a sample from the US Biotechnology and Pharmaceutical Industry. The methodology devised comprehensively examines patent worth (patent&rsquo;s references), patent protection (claims and family patents) and patent quality (references, claims and family patents) to determine their implications on firm leverage (SE, TA), profits (ROE, ROA), and market value (B/M, MCap). The selected sample comprises 1,536 companies, and 285,000 patents from 1999 to 2009. The results show that total revenue just responds to changes in R&D; intensity, and patenting intensity. A 10 percent increase in patent value results in a corresponding increase rate on the market capitalization index for the full sample and a 14 percent increase for the chemicals and allied products group (SIC 28). Increases (10%) in patent protection and quality present average increases of 15 percent on market capitalization for the full sample and 8 percent for the chemicals and allied products group (SIC 28). The medical devices group (SIC 38) results suggest that Mcap increases 10 percent by the same increase in patent value index. Patent protection and quality increases (10%) suggest an average 8 percent increase in Mcap. Results suggest that profits, leverage and market indices respond differently to 10 percent increases in patent value, patent protections and patent quality. The aforementioned effects suggest that the qualitative indexes follow company related market activities and business valuations for the chemical and allied products, and medical devices industrial sectors.</p>