Amicus Briefing May Help Get SCOTUS Attention on Growing 101 Morass

In one of the more closely-watched cases involving patent eligibility, American Axle v. Neapco, Judge Moore recently highlighted how “bitterly divided” the Federal Circuit is on patent eligibility, and predicted with a “reasonable probability” that the Supreme Court will step in and force the Federal Circuit to reverse course on issues of eligibility.

American Axle—involving driveline propeller shafts for automotive engines—highlights the sharp divide in how various Federal Circuit panels apply the Supreme Court’s eligibility guidelines and the resulting uncertainty that inventors, patent owners, and accused infringers face in determining whether inventions are eligible under § 101 as interpreted by the Supreme Court’s ruling in Alice v. CLS Bank. Indeed, in an earlier decision denying rehearing en banc, a sharply divided Court issued two concurrences justifying the panel’s application of § 101 law and three separate dissents urging the full court to take up the issue. Understanding the differences in opinion here may help patent practitioners navigate tumultuous § 101 issues until the Supreme Court weighs in again. American Axle petitioned the Supreme Court for a writ of certiorari on December 20, 2020. The petition calls for clarity on § 101 and may be taken up in conference shortly.

The Court has shown some interest in the case, soliciting views of the government. Amicus support has also followed, including a brief filed by Senators Tillis and Coons, and former PTO Director David Kappos. Consideration of American Axle is the quickest path to some form of clarity for patent subject matter eligibility disputes.

In American Axle, the Federal Circuit expanded Alice’s reach to invalidate claims directed to manufacturing driveline propeller shafts for automotive engines. There, the Court recognized, and the parties agreed, that Hooke’s Law—an equation describing the relationship between an objects’ mass, its stiffness, and the frequency at which it vibrates—undergirds the design of such a driveshaft liner. In its October 3, 2019 decision, the Federal Circuit (in a decision by Judge Dyk) affirmed the district court’s determination that claim 22 is ineligible under § 101, relying on the broad functional language of the claim, the absence of any element requiring a particular method or structure of carrying out the invention, and its understanding that the claimed function was merely the application of Hooke’s law. Specifically, the majority found claim 22—which required tuning a mass and a stiffness of a liner—broad enough to cover the defined goal (achieving certain types of attenuation) “using any method.”

In an animated dissent, Judge Moore accused the majority of expanding § 101 “well beyond its statutory gate-keeping function” and “collaps[ing] the Alice/Mayo two-part test to a single step—claims are now ineligible if their performance would involve application of a natural law.” Judge Moore argued the ’911 patent “is the type of traditional manufacturing patent of automotive parts which has been eligible for patent protection since the invention of the car itself.” According to Judge Moore, the majority’s holding has “sent shock waves through the patent community” and is a significant “departure from existing § 101 precedent.” In particular, Judge Moore is troubled by the majority’s finding that the claims are directed to a natural law despite the fact that the claims never mention nor recite the law itself.

The Federal Circuit’s subsequent denial of rehearing en banc—issued with 5 separate opinions—further illustrates the varied approaches to eligibility currently at play before the Federal Circuit:

Judge Dyk’s Concurrence. Judge Dyk, the author of the original panel decisions, argues his holding is “both consistent with precedent and narrow in its scope.” Judge Dyk focuses on the claimed result and reiterates that the claims “in no way ‘recite the process and machinery necessary to produce the desired effect…’.” Underlying Judge Dyk’s analysis is the acknowledgement that, although the inventors claimed to have solved the complex problem of applying Hooke’s law to reduce two modes of vibration, claim 22 fails to recite any specific means of accomplishing this result that would not also be considered a straightforward application of Hooke’s law.

Judge Chen’s Concurrence. Judge Chen rejects the contention that mechanical or industrial inventions should be categorically excluded from the ambit of § 101 concerns and, like Judge Dyk, looks to the language of the claims to determine eligibility: “as made clear by the lengthy list of both Supreme Court and Federal Circuit cases cited in Judge Dyk’s concurrence, result-oriented claim drafting raises concerns under section 101 independent from section 112. The lesson to patent drafters should now be clear: while not all functional claiming is the same, simply reciting a functional result at the point of novelty poses serious risks under section 101.”

Judge Newman’s Dissent. Judge Newman argues both that the panel’s decision is wrong under Supreme Court and Federal Circuit precedent, and that “en banc instruction is a necessity” for the full Federal Circuit to determine how to apply the natural law exception to eligibility. As to the merits of the holding, Judge Newman faults the majority for relying on the “breadth of a claim” in finding the claims patent-ineligible and argues that the other sections of the Patent Act are designed to address that problem. Judge Newman further worries that the “court’s rulings on patent eligibility have become so diverse and unpredictable as to have a serious effect on the innovation incentive in all fields of technology.” Judge Newman argues that the “need for judicial provision of stable and comprehensible patent law is of increasing urgency” as the court’s jurisprudence “has moved the system of patents from its once-reliable incentive to innovation and commerce, to a litigation gamble.”

Judge Stoll’s Dissent. Judge Stoll focuses on the distinction between mechanical inventions and claims directed to a scientific principle and suggests that mechanical inventions should always remain outside the purview of § 101. Specifically, Judge Stoll argues that “the result reached by the majority should also give us pause. The majority invokes § 101 to hold ineligible a method for manufacturing a drive shaft assembly for a car—a class of invention that has historically been patent eligible.” Likewise, Judge Stoll “remains concerned about the practical effect of the majority’s decision” noting that “the majority’s original approach would have placed the combustion engine at risk of ineligibility—a proposition that would have seemed absurd just a few years ago, but now seems eerily plausible.”

Judge O’Malley’s Dissent. Judge O’Malley “share[s] all the substantive and policy concerns” raised by the other dissents, but “write[s] separately to emphasize the procedural norms that the majority ignores.” Specifically, Judge O’Malley argues that the panel majority (1) improperly announced a new test for patent eligibility (dubbed by the dissents as the “nothing more” test); (2) applied the test itself without remand to the district court; and (3) construed previously undisputed terms to reach its desired result. In other words, Judge O’Malley argues that once the panel majority determined that the proper test for eligibility here was whether the claims were directed to Hooke’s law “and nothing more,” the panel should have then remanded back to the district court to further consider whether claims invoked more than just Hooke’s law.

With a rather substantial legislative effort that went nowhere, and so many conflicting viewpoints, SCOTUS review remains the only hope for 101 clarity in the short term.

Stay tuned.

Scott A. McKeown is an author of the Patents Post Grant