The Software IP Report

Mechanical Inventions Still Potentially Ineligible: American Axle & Mfg. v. Neapco Holdings (Part 2 of 2)

By Bryan Hart

Categories: 35 U.S.C. § 101, Patent Eligibility, The Software IP Report

The Federal Circuit recently denied a rehearing en banc in American Axle & Manufacturing v. Neapco Holdings, letting stand a panel decision invalidating a method of manufacturing driveline propeller shafts as ineligible subject matter under § 101. This post covers the multiple concurrences and dissents accompanying the rehearing denial, which reveal a splintered court.

Part 1 covered the background and the modified panel decision, in which the court invalidated this claim as ineligible subject matter:

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 court split 6-6 on whether to grant a rehearing, with the tie vote leading to a denial. There were two concurrences:

    • Judge Dyk, joined by Judges Wallach and Taranto; and
    • Judge Chen, joined by Judge Wallach.

Judge Dyk had authored the panel decision. Judges Prost and Hughes voted against rehearing but did not file or join any concurrence. There were three dissents:

    • Judge Newman, joined by Judges Moore, O’Malley, Reyna, and Stoll;
    • Judge Stoll, joined by Judges Newman, Moore, O’Malley, and Reyna; and
    • Judge O’Malley, joined by Judges Newman, Moore, and Stoll.

Finally, Judge Lourie dissented without opinion.

The dissents were animated by the scope of possible harm from the panel decision. According to Judge Stoll, “the majority’s decision extends § 101 to place in doubt the patent eligibility of historically eligible mechanical inventions.” If a mechanical invention can be ineligible, then inventions in any field can be ineligible. Combined with the uncertainty generated by the court’s § 101 jurisprudence, the decision’s scope creates widespread disincentives to innovation. “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,” according to Judge Newman. She went on to cite several amicus briefs asserting that investment in technological development will decrease because of the panel decision. “It is essential to restore the incentive role of the system of patents, for technology is the foundation of the nation’s economy, trade, and strength.”

The concurrences disputed that the panel decision constituted a radical departure for the court. Rather, the decision was limited and grounded in precedent. Judge Dyk provided two string citations of Supreme Court and Federal Circuit decisions supporting the outcome, which together spanned three full pages. Judge Chen concluded that “the majority’s opinion in this case does not, and should not be read to, announce a new test for patent eligibility.” Judge Chen also disputed that § 101 was uniquely uncertain:

[T]he application of law to fact in the section 101 context has always been a case by case judgment. Such context-driven analysis is made in many areas of patent law, for example in determining whether a claim is invalid for obviousness or construing a claim limitation in light of the specification. The same is true for the judicial exceptions to section 101 and the legal assessment as to whether a claim is directed to a patent-ineligible concept or a patent-eligible application of that concept.

At the beginning of the concurrences’ long line of cases is the 1853 Supreme Court case of O’Reilly v. Morse, which the opinions dissected. Samuel Morse was the inventor of the telegraph, covered by Patent Reissue No. 117. In O’Reilly, the Supreme Court invalidated claim 8 of that patent while leaving the remaining claims intact. The concurrences found that the ineligible claim 22 in the current case resembles claim 8 from Morse:

8. 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 electro-magnetism, however developed for marking 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.

By contrast, the remaining claims were limited in how electromagnetism printed characters at a distance because those claims had language incorporating the specification:

1. Making use of the motive power of magnetism when developed by the action of such current or currents, substantially as set forth in the foregoing description of the first principal part of my invention, as means of operating or giving motion to machinery which may be used to imprint signals upon paper or other suitable material, or to produce sounds in any desired manner for the purpose of telegraphic communication at any distances.

Judge Stoll in dissent replied that “O’Reilly does not expressly rely on any such incorporation by reference.” Moreover, claim 22 of the current patent could be differentiated from Morse’s claim 8 because claim 22 does not explicitly recite the natural law—in other words, doesn’t say “Hooke’s Law” the way claim 8 says “electro-magnetism”—and because claim 22 contains enough limitations that it does not broadly preempt a field of endeavor.

Lessons for Practice

How much time the opinions spend on a case more than 150 years old shows the importance of analogizing to cases when arguing § 101. The two-step Alice/Mayo test involves a fair amount of subjectivity, and using that test to argue from first principles for a result simply isn’t as compelling as pointing to a similar case. Despite the mechanical nature of the invention in this case, and despite the “parade of horribles” presented by the amicus briefs and the dissents, enough of the judges on the court were convinced of the similarity to Morse’s claim 8 to tip the outcome against eligibility.