On October 23, 2020, a Federal Circuit panel issued a unanimous decision in American Axle & Manufacturing v. Neapco Holdings—a case we’ve discussed on this blog several times before—in which the panel denied American Axle’s motion to stay issuance of the mandate pending filing of a petition for writ of certiorari. This decision on procedural matters was only somewhat notable in that it was the first time the Federal Circuit applied the three-prong standard established by the in-chambers opinion of Chief Justice Roberts in Teva Pharmaceuticals v. Sandoz for stays in such situations. Nothing too significant about that.
At the time of my last update in February on the state of patent eligibility law, the Supreme Court had recently declined to grant cert on Athena, Vanda, Berkheimer, Cellspin, Power Analytics, ChargePoint and Trading Technologies. The Court has now additionally denied petitions to address patent eligibility questions in The Chamberlain Group v. Techtronic Industries (the well-known “wireless garage door opener” litigation), as well as in three ex parte appeals of Christopher Primbas et al., Steve Morsa, and C. Douglass Thomas. And given that the congressional legislation sponsored by Senators Tillis and Coons has “stalled because stakeholders refused to compromise” (in the words of Senator Tillis), legislative change still appears to be far away, even in the event of a transition in Congress and/or the presidency.
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.
In my post back in March 2018, I analyzed an upward change in allowance rates in the 36XX art units based on my practitioner’s observation that inventions were finally beginning to be more frequently found eligible for patenting following a string of pro-eligibility Federal Circuit decisions.
It has now been 1.5 years since the USPTO issued its 2019 Revised Patent Subject Matter Eligibility Guidance in January 2019, specifying that patent prosecution henceforth should cite to the Guidance rather than directly to caselaw, and over half a year since the USPTO’s follow-on October 2019 Patent Eligibility Guidance Update. Since the 2019 Guidance represents one of the most significant changes in patent eligibility analysis since the Supreme Court’s 2014 Alice decision, I thought it was high time for another inquiry into the state of eligibility findings in the USPTO.
On April 30, the Federal Circuit issued a precedential opinion in Uniloc v. LG Electronics, concerning claims to a software invention for a local communication system that reduced latency for parked secondary systems, e.g., when connecting a local wireless peripheral device to a computer.
Although the court’s reasoning itself is not of particular note, in concluding that the claims were in fact patent-eligible, the court stated that “[t]o the extent [defendant] LG argues that the claims themselves must expressly mention the reduced latency achieved by the claimed system, LG is in error. Claims need not articulate the advantages of the claimed combinations to be eligible” (emphasis added). Given that some patent examiners require applicants to recite the advantage expressly within the claim, the court’s opinion provides applicants with a succinct, unambiguous, authoritative quotation to use in rebuttal.
On Thursday, April 23, the USPTO released a new study entitled “Adjusting to Alice: USPTO patent examination outcomes after Alice Corp v. CLS Bank International.” The report illustrates the dramatic impact of two developments in the application of § 101 law: first, the Supreme Court’s Alice decision in June 2014, and—second and more recently—promulgation to patent examiners of the USPTO’s internal documents providing more specific guidance for how to apply the doctrine of Alice.
Although the illustrated results are hardly unexpected to anyone following the developments of § 101 law over the years, the study provides intuitive graphical summaries of the trends over time, specifically with respect to the metrics of (a) percentage of first actions with a § 101 rejection, and (b) variability of the issuance of § 101 rejections by examiners. (Metric (b) is of note, since it tracks the level of uncertainty, which—as the USPTO mentions in the introduction—tends to reduce investment as it rises.) Specifically, Figures 1 and 2 (reproduced below) illustrate how Alice led directly to dramatically elevated levels for both metrics; similarly, Figures 3 and 4 illustrate how the USPTO’s January 2019 Patent Subject Matter Eligibility Guidance (PEG)—and to a lesser extent its earlier Berkheimer memorandum—led directly to equally dramatic reductions in the metric levels.
Under the America Invents Act, the USPTO is to stop accepting petitions for review of covered business method patents after September 16, 2020. Given the various other priorities Congress will be dealing with between now and then, it appears virtually certain that Congress will not do anything to prevent the scheduled sunset of this transitional proceeding.
Two years ago, the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property and the Internet held hearings on the upcoming sunset of the CBM program, and even back then the statistics did not bode well for its continuance. Now, the writing on the wall is even clearer. According the USPTO statistics, 589 CBM petitions have been filed since inception of the program in 2012, but in only three of the last twelve months have any CBM petitions been filed at all. In the 2018 hearings, both subcommittee members and witnesses espoused a wide range of views, but with relatively little vehemence. Other than a few blog post/law review commentaries, virtually nothing happened in the wake of the hearings. Continue Reading Whither (more likely wither) CBMs
Recent comments from Representative Hank Johnson of Georgia offer a counterpoint to my last post on the state of patent eligibility reform, in which I noted that Senator Tillis had recently expressed that modifications to the existing legal framework were unlikely to take place in the near future.
Speaking to Law360, Rep. Johnson, who chairs the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet, stated that although reform is “very complicated,” “we’re working our way through that process and hopefully before the end of this session of Congress we’ll have something that stakeholders can all come together and agree on.”
To paraphrase Mark Twain, then, perhaps rumors of the death of legislative change have been greatly exaggerated.
Since I last wrote on the Coons-Tillis patent eligibility reform in Congress, the Federal Circuit declined to take up an en banc rehearing of Athena v. Mayo. The court was deeply divided in the 7-5 decision, with all 12 judges believing that the diagnostic claims at issue should be patentable despite their holding, and with 7 judges writing separately to express their concerns, many of them expressly entreating the Supreme Court and/or Congress to reconsider and revamp the law of patent eligibility. (E.g., Judge Moore’s closing comment to the plaintiff: “Your only hope lies with the Supreme Court or Congress. I hope that they recognize the importance of these technologies, the benefits to society, and the market incentives for American business. And, oh yes, that the statute clearly permits the eligibility of such inventions and that no judicially-created exception should have such a vast embrace. It is neither a good idea, nor warranted by the statute.”)
More recently, the Court declined to grant cert on Athena, Vanda, Berkheimer, Cellspin or Power Analytics, and on January 27 further declined three petitions related to ChargePoint and Trading Technologies. The refusal to consider Athena was not only despite the opinions expressed by all 12 Federal Circuit judges writing en banc, but also contrary to the U.S. Solicitor General’s express recommendation that the Court opine on the case. In view of this pointed refusal, it seems entirely safe to conclude that the Court has no interest in reconsidering patent eligibility law.
In a recent Q&A session, Senator Tillis— one of the two senators who introduced the proposed legislation—stated that “I don’t see a path forward for producing a bill—much less steering it to passage—in this Congress. … If we’re going to get anything done on this issue, everyone will have to compromise. Anything less than that is dead on arrival.”
Given the Court’s disinclination—and Congress’s present inability—to effect change, significant modification of the existing legal framework seems unlikely to take place any time soon.
Sharply differing majority and dissenting opinions in the Federal Circuit’s recent American Axle & Manufacturing v. Neapco Holdings decision present yet another case where the Federal Circuit appears to be in need of further patent eligibility guidance from the Supreme Court. The American Axle case centers on the patent-eligibility of a method for dampening vibrations in vehicle driveshafts. In its recent decision, the Federal Circuit upheld the district court’s grant of summary judgment in that dispute, holding that under controlling precedent the asserted claims are ineligible under § 101 as preempting a natural law.