American Axle v. Neapco: Some thoughts (2021)

I want to talk about American Axle v. Neapco.  This is a reasonably interesting case in its own right, since it applied section 101 to driveline propeller shaft manufacturing technology, which is obviously a bit different from the software and biotech inventions where section 101 is generally applied.  However, rather than talking about the case itself, I want to talk about what could happen if the Supreme Court grants cert, since they have asked for the solicitor’s views on the matter and that’s usually a sign that the case has a good chance of being heard.  I have seen articles out there saying that the Supreme Court should grant cert so they can fix the mess that is section 101.  What I want to do is explain why I think the Supreme Court granting cert would most likely make section 101 jurisprudence even more of a disaster than it already is.

Taking it doesn’t mean clarifying Alice/Mayo

I think part of the reasoning behind wanting the Supreme Court to take up American Axle is that the Supreme Court doesn’t take cases just to affirm, and so if they do take it they’re like to reverse the Federal Circuit which, by definition, would mean they would have to put some limits on the currently amorphous 101 analysis.  I think this is wrong.  Maybe the Supreme Court doesn’t take cases just to affirm them, but it did just that in Alice and Bilski.  You can say that those were special cases, since the PTO had basically teed up Bilski for Supreme Court review, and the Federal Circuit was so fractured on Alice that it basically amounted to a circuit split requiring review.  However, while the Federal Circuit might not be as fractured as it was for Alice, there are still significant differences between panels on how to apply section 101, and the fact that those differences persist even seven years after Alice may make the Court feel it needs to step in.  Additionally, while the patent bar, or at least the part of it that pays attention to these issues, is keenly aware of the drawbacks of section 101, the outside world is still focused on “patent quality” and the dangers of “Bad patents”.  Indeed, there was a hearing last month before the senate judiciary committee’s intellectual property subcommittee just last month that focused on exactly those issues, and I think the Supreme Court is much closer in outlook to the Senate’s intellectual property subcommittee than it is to the portion of the patent bar that is concerned about section 101.  Accordingly, my feeling is that if the Supreme Court does take up American Axle, it is likely to do so in order to emphasize that the Alice/Mayo analysis that has heretofore been mostly confined to software and biotech should be applied to other types of inventions as well, not to fundamentally clarify or make any changes to its application.

This isn’t a great case for clarifying anything

However, let’s say I’m wrong, and the Supreme Court does take up American Axle with the goal of significantly clarifying the analysis under section 101.  I think American Axle is a lousy case for the Supreme Court to take up if it wants to make things clearer.  First, the claims in American Axle were found ineligible because they were directed to a law of nature, so right off the bat this is a suboptimal vehicle for clarification because it doesn’t present the opportunity to define “abstract idea”, and I think the lack of a definition for an “abstract idea” is one of the biggest problems with 101 jurisprudence as it currently stands.  Also, because American Axle came through the courts rather than the PTO, it wasn’t analyzed using the patent office’s framework, which I think is the clearest framework anyone has come up with so far for applying section 101.  As a result, any significant change in the section 101 analysis is likely to be orthogonal to the patent office’s analysis, and so require major revisions to current PTO practice.  Does that necessarily mean it would be a step backward in terms of clarity?  Not necessarily, but after seeing what the Supreme Court has done in the past, I think the best we can reasonably hope for is that it leaves things largely intact so that we don’t all have to go back to the drawing board.

The only potential silver lining is that if the Supreme Court endorses broad application of section 101, we’ll finally see some meaningful limits 

So, is there any potential for a good outcome if the Supreme Court takes up American Axle?  There’s always the possibility that they’ll replace our current 101 mess with a meaningful, logical, predictable framework.  However, that’s so unlikely I think I can safely ignore it.  Are they likely to make things worse in the one context where section 101 is working at least relatively well?  Yes.  However, there is another possibility, which I alluded to earlier.  They could leave things essentially unchanged in terms of the substance of the 101 analysis, and instead take up the case to endorse applying 101 across the board, not just to software and biotech.  What happens then?  Well, obviously chaos for everyone, but maybe that chaos will lead to section 101 being applied a little more rationally in the long term.  In support of this optimistic outlook, I would like to draw an analogy to the broadest reasonable interpretation rule.  When it was only used during prosecution, the broadest reasonable interpretation rule could reasonably be criticized as essentially defaulting to the broadest possible interpretation, with reasonableness being an afterthought at best.  However, once it started being applied in inter partes review proceedings, the Federal Circuit started issuing opinions that found the broadest reasonable interpretation was a good deal narrower than I would have expected from the way it had traditionally been applied to patent prosecution.  That is, when an extremely broad broadest reasonable interpretation didn’t advance the policy goal of facilitating patent examination, it started narrowing in scope.  Similarly, if section 101 started being applied in areas where its aggressive use didn’t advance anti-software or anti-biotech policy preferences, it might happen that the Federal Circuit would find ways to make it easier to establish eligibility.  Just a thought, and something of a long shot.  However, given the Supreme Court’s track record I think it’s probably the best that could come from them hearing American Axle.

Anyway, I’d love to be proven wrong, and, right or wrong, I don’t think we’ll actually see any impact for at least another year.  In the meantime, I wish you good luck in dealing with section 101, and in your patent endeavors more generally.

Thanks a lot…bye bye.   

Disclaimer – “The statements and views expressed in this posting are my own and do not reflect those of my law firm, are intended for general informational purposes only, and do not constitute legal advice or a legal opinion.”