The Software IP Report

No Stay for Supreme Court Petition in American Axle & Mfg. v. Neapco Holdings

In the latest episode of the closely watched case American Axle v. Neapco, the Federal Circuit denied American Axle’s motion to stay pending its petition for writ of certiorari to the Supreme Court. The case started as an infringement action for U.S. Patent No. 7,774,911, covering a method of manufacturing driveline propeller shafts. In a panel decision, the Federal Circuit invalidated one independent claim under § 101 as directed to a natural law and remanded another independent claim to the district court to determine whether the claim was invalid as directed to an abstract idea (previously covered here). The Federal Circuit also denied rehearing en banc in a contentious 6-6 decision (previously covered here).

The test for a stay pending a writ of certiorari requires (1) a “reasonable probability” that cert is granted, (2) a “fair prospect” of reversal by the Court, and (3) a likelihood of irreparable harm from denying the stay. The order by Judge Dyk set aside the first two prongs and denied the stay based on a lack of irreparable harm. American Axle pointed to the significant litigation expenses of continuing to litigate the case in the district court for the remanded independent claim, but precedent has found that litigation costs don’t constitute irreparable harm.

The decision included one concurrence by Judge Moore, the dissenter in the panel decision and the author of one of the dissents from the denial of rehearing en banc. In discussing the first two prongs of the test, the concurrence in effect laid out a case to the Supreme Court to grant cert. One factor for the Supreme Court to grant cert is a circuit split. “What we have here is worse than a circuit split—it is a court bitterly divided.” Despite that bitter divide, the Federal Circuit was “unanimous in our unprecedented plea for guidance” in Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 927 F.3d 1333 (Fed. Cir. 2019). In this case, according to Judge Moore, the situation worsened because the reach of § 101 expanded beyond business methods like in Alice and medical diagnostics like in Mayo to “a process for manufacturing car parts—the type of process which has been eligible since the invention of the car itself,” making guidance by the Court even more pressing.

Lessons for Practice

The Supreme Court may grant cert in this case. On the other hand, it may not. In the meantime, the lessons discussed in this blog’s previous posts, as well as in our recent webinar on American Axle, continue to apply.