Federal Circuit Still Spinning Its Wheels on American Axle

Last week, the U.S. Court of Appeals for the Federal Circuit issued its second and third decisions in American Axle & Manufacturing v. Neapco Holdings and Neapco Drivelines, the case we’ve previously discussed in which the following claim (claim 22) was held to be unpatentable because it “merely describes a desired result”:

22. A method for manufacturing a shaft assembly of a driveline system, the driveline system further including a first driveline component and a second driveline component, the shaft assembly being adapted to transmit torque between the first driveline component and the second driveline component, the method comprising:

Providing a hollow shaft member;

Tuning a mass and a stiffness of at least one liner, and

Inserting the at least one liner into the shaft member;

Wherein the at least one liner is a tuned resistive absorber for attenuating shell mode vibrations and wherein the at least one liner is a tuned reactive absorber for attenuating bending mode vibrations.

The original split panel produced a majority opinion from Judge Dyk supported by Judge Taranto, and a dissent by Judge Moore, affirming the district court’s ineligibility ruling. On July 31, 2020, the 12 judges of the court evenly split on whether a rehearing en banc was appropriate, resulting in the petition for rehearing en banc being denied. In addition to two concurrences, there were four separate dissents on the en banc petition decision.

On the same day, Judge Dyk modified and reissued the original panel majority opinion, now drawing a distinction between claim 22 recited above and the other representative claim at issue, claim 1. That claim is now determined to deserve consideration on remand because it includes an additional “positioning” limitation and may be interpreted to include “tuning” of “characteristics” that are not driven by the natural law—Hooke’s law—that doomed claim 22.

In all, the two July 31 decisions, with various concurrences and dissents, total more than 100 pages; the original panel decision, issued on October 3, 2019, ran 37 pages including the majority and dissenting opinions. I will make no attempt here to summarize all of the perspectives that the judges and the amici have presented since our last observations on this case. Rather, it seems sensible to step back and look at the bigger picture.

Much like Calculus 101 is in college, Section 101 of the Patent Act deals with the fundamentals of the subject, in this instance: “What sorts of things can be patented?” This fundamental question has resulted in a dramatically fractured Federal Circuit and even caused the original panel to change its mind regarding one of the two claims that were at issue in this case.

Those asserting that the subject matter is not patent-eligible say they’re merely applying the same rule the Supreme Court used since the famous Samuel Morse case, O’Reilly v. Morse, in 1853 (precluding patentability for a claims to “‘printing intelligible characters . . . at any distances’ by the use of ‘electro-magnetism’”).

The dissenters say that the Federal Circuit, by failing to hear this case en banc, is shirking its responsibility “based on the serious substantive concerns the new majority opinion raises” and has introduced a new “Nothing More” test that will cause Section 101 to thwart the patent system and “have a serious effect on the innovation incentive in all fields of technology.” As Judge Stoll’s dissent concludes, “In the face of our unwillingness to consider patent eligibility as a full court, I grow more concerned with each passing decision that we are, piece by piece, allowing the judicial exception to patent eligibility to ‘swallow all of patent law.’”

The challenge confronting the Federal Circuit is not unique to patent law. Judge Chen’s concurrence on the en banc rehearing petition notes, “As Judge Learned Hand famously remarked about the similarly difficult problem in copyright law of distinguishing between idea and expression: ‘Nobody has ever been able to fix that boundary, and nobody ever can.’”

Perhaps that is the way that we need to look at this issue. As fundamental as patent-eligible subject matter may be to the law of patents, the boundaries have clearly proven themselves to be elusive.

Understandably, individuals and organizations have widely varying interests in expanded or contracted patent protection in various areas of technology and life sciences, and the positions of the Federal Circuit judges have something for everyone in that regard. A silver lining to the apparent inability to settle this basic question is that any future policy balance that Congress may at some point strike will have benefited from an extremely well-developed body of thought from various sources.

In some sense it’s comforting to hear Judge Hand’s observation, which reminds us that certain issues are just intrinsically difficult, and working with that understanding may be preferable to any attempt to reconcile the innumerable twists and turns of what each individual or organization may think is the perfect approach.

That said, American Axle is now on remand with regard to claim 1, so it’s likely we’ll keep going around in circles on this case for a while longer.

*The perspectives expressed in the Bilski Blog, as well as in various sources cited therein from time to time, are those of the respective authors and do not necessarily represent the views of Fenwick & West LLP or its clients.