In our previous post, we promised to revisit the American Axle and Ariosa petitions for certiorari in February 2021 once responses had been filed. However, the U.S. Supreme Court granted extensions in both cases; the first opposition has now come in from respondent Neapco in American Axle, and the response of Illumina in the Ariosa case is due later this month.
So here’s a quick recap of Neapco’s arguments. In short, Neapco argues that corner cases are inevitable in patent eligibility analysis under Alice, and that fact doesn’t warrant the Supreme Court taking up such corner cases when they arise. Along the way, however, Neapco frames a completely different way of looking at the claims in question than American Axle presented in its petition, emphasizing the words “recite” or “refer” in various forms in a manner nearly synonymous with the contested phrase “directed to” that we have discussed before. Throughout this post, we’ll highlight such uses in boldface; they are evident right from the outset in the question presented:
Claim 22 of the ‘911 patent recites “tuning a mass and stiffness of a liner” to adjust its natural frequency. But American Axle did not discover the centuries-old law of physics, known as Hooke’s law, relating an object’s mass, stiffness and frequency. Rather, American Axle seeks to preempt its use in the design of automotive propshafts.
Just as Hooke’s law is not patentable, “neither is a process reciting” it without “additional features that provide practical assurance that the process is more than a drafting effort designed to monopolize the law of nature itself. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 77 (2012). Claim 22 has no such additional features. As the lower courts correctly held, (i) the remaining method steps are conventional, and (ii) reciting a “desired result without the means of achieving it does not recite an invention.
Introduction and Statement of the Case
Neapco takes issue with American Axle’s assertion that the result of the two-part Alice test has been “chaos.” In support, Neapco explains that “the Federal Circuit has affirmed Section 101 decisions at a 91% clip since Alice,” and concludes that “Alice is working exactly as intended.” Notwithstanding American Axle’s quest for “a universal, easy-to-apply decisional mechanism,” Neapco argues that such rigid rules would not provide clarification but instead would discard Alice and its “flexible, context-driven approach” that warrants continued development in the common-law tradition.
There will be, by definition, hard cases, but because of the common-law approach, difficult cases are necessarily narrow in scope and limited to their specific facts. Disagreement over a difficult boundary case overlooks that the system now works well and predictably in run-of-the-mill cases. And as to the edge cases, Judge Chen was right to quote Judge Learned Hand: “Nobody has ever been able to fix that boundary, and nobody ever can.”
Neapco emphasizes that while American Axle seeks for the Court to provide clarity, it has not made a proposal for doing so. In detailing its argument, Neapco’s description of the facts is markedly different than American Axle’s. Whereas American Axle focused on how Neapco’s engineering team apparently was stuck until it reviewed the description in American Axle’s patent, Neapco goes into great detail about how American Axle’s solution was entirely conventional. Both Neapco’s and American Axle’s filings at some point read as if they are addressing anticipation or obviousness rather than eligibility.
Next, Neapco applauds the courts below, praising Judge Stark as having “had more patent cases over the past five years than perhaps any other judge in the country” and noting that the Federal Circuit’s careful analysis and modified opinion after rehearing resulted in only some of the claims being determined as ineligible with a remand instruction on the others. Neapco summarizes the Federal Circuit analysis under the two-part Alice test as follows:
At step one, the court looked to the “focus of the claimed advance” and found claims 22-36 “directed to” a law of nature: Hooke’s law.
…. The claims thus “simply instruct the reader to tune the liner to achieve a claimed result,” by reference to a natural law, “without limitation to particular ways to do so.”
At step two, the court found nothing in claims 22-36 “qualifies as an ‘inventive concept’ to transform [them] into patent eligible matter.”
This Is Not the Case You’re Looking For
Neapco’s primary reason to deny the petition is headed, “This Case Does Not Present Any Important Issue Under Section 101 That Requires Clarification.” Neapco presents five arguments under this heading.
The first argument is that the ruling below is “fact-bound and narrow.” Here, Neapco characterizes the claims at issue as “incredibly broad,” observing that American Axle could have narrower claims. “Instead, American Axle’s claim 22 recites a process for achieving a desired result by reference solely to the natural law that governs tuning an object by adjusting its mass and stiffness.” Neapco argues that in the eight months since the modified panel decision, only three cases cited it—“hardly a sea change.” To be fair, the modified decision addressed only certain distinctions between some of the American Axle claims and others; Neapco does not provide similar statistics regarding either the original panel decision or the various opinions regarding the request for a rehearing en banc—all of which have received a great deal of attention by other courts, Congress and commentators.
The second argument is that the second step of the Alice test naturally “cabins the analysis” to specific claims at issue. Neapco takes issue with American Axle for “divorcing step one from step two” to suggest further-reaching consequences.
Much of the disagreement at step one is whether the claims need to recite the natural law by name or by formula, and whether the natural law needs to be the only thing recited in the claims. But even if the lower courts liberally apply step one, step two prevents Section 101 from standing in the way of claims that recite a true application of a natural law.
This is an important assertion by Neapco, as it allows that courts may, in certain cases, safely be “liberal” in applying (pro-challenger) step one (i.e., assert that a claim “recites” a natural law even if it is a stretch). On the other hand, the second sentence quoted above—both in the inclusion of “true” and the emphasis given to “application”—suggests that a narrow view of “recite” be used in (pro-patentee) step two. There is nothing wrong with such a policy argument, but it bears noting that this different use of the same word is result-oriented rather than neutral.
Neapco’s third argument is that this case does not present a nicely focused, or “isolated” legal question that the Court could resolve in a manner that would help in other cases. Here, Neapco points to several other recent cases for which the Court has denied certiorari, arguing that those presented “more compelling” 101 issues than the one presented here, i.e., “that American Axle sought to obtain the broadest claims possible by reciting the use of known propshaft liners with reference to the known natural law an engineer must consider when trying to dampen vibration.”
Fourth, Neapco argues that the “real concern” with 101 is in the fields of software and life sciences, which it asserts constitute 99% of the post-Alice decisions.
And finally, Neapco urges that this case is ill-suited to be addressed by the Supreme Court because “there is no serious dispute among the lower court judges (or even many of the amici) that the claims are invalid under some statutory provision.”
Lack of Any Section 101 “Emergency”
Neapco’s next major heading takes a broader view and refutes American Axle’s argument about the “inconsistent and chaotic” state of Section 101 jurisprudence. Notably, in this section, Neapco’s argument is primarily focused on the arguments of American Axle itself, amici and commentators. For example, after including some notable quotes about how the Federal Circuit has “struggled to consistently apply” Section 101 and how it has become a “litigation gamble,” Neapco counters with statistics (including from this blog’s co-founder, Robert Sachs) about how often the Federal Circuit has affirmed patent eligibility standards. By one measure, 91% of its 162 decisions in this area have been affirmances, many without opinion under Federal Circuit Rule 36; by another study, it measured around 89%. Neapco notes that this affirmance rate is higher than the Federal Circuit’s average.
That said, Neapco barely mentions the pleas from the Federal Circuit judges themselves, saying merely:
That difficult cases sometimes arise at the margins and sometimes raise strong passions for certain judges leading to separate opinions does not mean that the entire system is broken or in need of judicial reform.
Neapco argues that the flexibility of the Alice standard is a benefit rather than indicating chaos. Quoting the Amdocs case, “The ‘directed to’ inquiry thus requires detailed, individual analysis on a patent-by-patent and claim-by-claim basis,” and Neapco states that this is appropriate because no “rigid bright-line standard” exists. Instead, the “classic common law methodology for creating law when a single governing definitional context is not available” can mature toward equilibrium and thereby provide “reliable guidance for future cases.” Underscoring the point, Neapco notes:
To be sure, there will always be difficult cases at the margins, and there may well be disagreement over the individual results in individual cases. But that is not chaos. It is exactly the common law approach that this Court prescribed in Alice and Mayo.
For context, Neapco notes that the Court has “repeatedly eschewed the Federal Circuit’s attempts to impose bright-line rules,” citing KSR for obviousness and eBay for permanent injunctions.
Neapco concludes this section by explaining that change now would upend the law and create more uncertainty, arguing that “the Alice framework is working and improving with age.” Should any change be warranted, Neapco urges that such change is up to Congress.
The Lower Courts Got It Right
Neapco returns to the specifics of this case by detailing the claims at issue, characterizing portions of them as nothing more than conventional known activity and use of a natural law—and not including the details of “finite element analysis” tuning that American Axle argued below.
Here again, Neapco’s choice of language is notable, as a few examples illustrate.
“Other than reciting a natural relationship, the claims contain no ‘physical structure or steps for achieving that claimed result.’”
“As the Federal Circuit observed, ‘[b]oth claim 8 in O’Reilly [held patent-ineligible] and claim 22 here recite a natural law (electromagnetism in O’Reilly and Hooke’s law here) and a result to be achieved (printing characters at a distance in O’Reilly and producing a liner to dampen specific vibrations).’
“Perhaps Mayo captured it best: ‘to transform an unpatentable law of nature into a patent-eligible application of such a law, one must do more than simply state the law of nature while adding the words “apply it.”’”
It is here that discussion of claims that “state” or “recite” a law warrants a deeper dive. Take, O’Reilly, for instance. The claim at issue there read as follows:
I do not propose to limit myself to the specific machinery or parts of machinery described in the foregoing specification and claims; the essence of my invention being the use of the motive power of the electric or galvanic current, which I call electromagnetism, however developed, for making or printing intelligible characters, signs or letters at any distances, being a new application of that power, of which I claim to be the first inventor or discoverer.
This claim expressly asserted dominion over “electromagnetism” for communication, “however developed.” It seems fair to say that this claim stated or recited a natural law. Some dictionaries indicate that “state” and “recite” are synonyms, and without going into a full etymological analysis it seems fair that most people would consider “recite” to be a full statement of something, rather than merely being “directed to” or paraphrasing, invoking, evoking or paying homage to the thing at issue. Even the term “make reference to” suggests a fairly express statement of the thing at issue.
There is a wide gap between actually reciting “electromagnetism” and saying that “tuning a mass and a stiffness of at least one liner” recites Hooke’s law. Whether that distinction makes a legal difference is yet to be determined of course, but it seems appropriate to recognize the distinction nonetheless, particularly in a discussion of the “nothing more” remark by the Federal Circuit here.
This issue likewise has importance in Neapco’s argument distinguishing the patent-eligible claim in Diehr, which Neapco characterizes as including “numerous transformative steps,” such as “installing rubber in a press, closing the mold, …” Is a step of placing rubber in a press something more transformative than a step of tuning a liner? Perhaps, but “something more” than conclusory statements in that regard are needed to compel such a distinction.