Subject matter eligibility for obtaining patent protection
The U.S. Supreme Court has strongly indicated that it intends to grant a writ of certiorari to review a ruling by the Federal Circuit court of appeal, dealing with subject matter eligibility for obtaining patent protection.
Patent subject matter eligibility is covered under 35 U.S.C. § 101, which provides that “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor…” The U.S. Supreme Court has further limited Section §101 to exclude “laws of nature, natural phenomenon and abstract ideas” from the realm of patent protectable subject matter. Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012).
In Mayo, the Supreme Court held that the claims covering “processes that help doctors who use thiopurine drugs to treat patients with autoimmune diseases determine whether a given dosage level is too low or too high,” were patent-ineligible, because the claims merely dealt with application of a scientific principle. The decision in Mayo was consistent with an earlier decision of the Court, which held that a method of hedging financial risk in energy markets was not a patentable process because it attempted to patent the use of an abstract idea. Bilski v. Kappos, 561 U.S. 593, 6110612 (2010).
Two years after Mayo, the Supreme Court in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 217 (2014), tried to articulate a standard for determining subject matter eligibility under Section 101. Under the two step process, a court determines, 1) whether the claims at issue are directed to one of the patent-ineligible concepts. 2) If so, what else are there in the claims to determine whether additional elements transform the nature of the claims into a patent-eligible application. See id. at 212, 217-227.
Since 2014, the three judge panels of the Federal Circuit Court of Appeal, which has exclusive jurisdiction over all patent appeals, have been inconsistent in applying Alice’s two step test – leading to inconsistency in the results. The division within the full 12-member Federal Circuit court came to fore in American Axle & Mfg., Inc. v. Neapco Holdings LLC, 309 F. Supp. 3d 218, 223 (D. Del. 2018). The patent at issue in that case, U.S. Patent No. 7,774,911, was directed to a “method for manufacturing a shaft assembly of a driveline system” that included a step of “tuning a mass and a stiffness of at least one liner,” and “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.” See, ‘911 Patent.
When plaintiff American Axle sued defendant Neapco Holdings, LLC for patent infringement, Neapco responded by filing a motion for summary judgment, in which it argued that the ‘911 patent was subject matter ineligible under §101. The District Court judge granted Neapco’s motion. On appeal, a split panel of the Federal Circuit affirmed. The appeal panel reasoned that the ‘911 patent claim was “directed to a natural law because it clearly invokes a natural law, and nothing more, to accomplish a desired result.” The dissent, branding the majority reasoning as the “nothing more” standard, argued that the decision had improperly expanded the reach of Section 101 beyond its statutory gate-keeping function, which is to examine the claim for being abstract or a natural phenomenon or a law of nature, and not to test whether a claim was too broad in scope or not enabled, which are addressed under 35 USC §112. Section 112 requires “the specification of a patent shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same.”
The sharp division among the full, 12-member, Federal Circuit judges over application of Alice’s §101 subject matter eligibility test became apparent when it split 6-6 on its ruling on American Axle’s petition for a re-hearing of the appeal decision. Writing as part of the 6 judges who voted against an en-banc hearing, Judge Timothy B. Dyk, argued that the original panel decision was consistent with precedent because the claims of the ‘911 patent did not recite the process and machinery necessary to produce the desired effect. On the other side, Judge Pauline Newman, writing as part of the 6 judges who urged grant of en-banc hearing, argued that en banc instruction is a necessity” for the full Federal Circuit to determine how to apply the natural law exception to patent subject matter eligibility, noting 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.
American Axle next petitioned the Supreme Court for a writ of certiorari in December 2020. Ten amicus briefs were filed in support of the petition, and the Supreme Court requested and received a brief from the U.S. Solicitor General. The Solicitor’s brief concluded that the Federal Circuit’s ruling had been incorrect and recommended the Supreme Court to grant certiorari.
Author agrees with the appeal dissent that the majority decision in American Axle did not apply the proper test of subject matter eligibility as it conflated the Section 101 for subject matter eligibility with Section 112’s enablement requirement. According to the appeal decision, the ’911 patent did not “identify the particular tuned liners or the improved method of tuning the liners.” However, this inquiry falls under Section 112. As noted by the Solicitor’s amicus brief, the panel majority “demand[s] that the claims provide a degree of detail more appropriate to the enablement inquiry.”
As a threshold test, subject matter eligibility is key to obtaining patent protection. As such, the test for determining that eligibility needs to be clear and its application consistent. American Axle affords an opportunity for the Supreme Court to clarify and refine that test.