New Enablement-Like Requirements for 101 Eligibility: AAM v. Neapco Takes the Case Law Out of Context, and Too Far – Part I

With its recent opinion in AAM, Inc. v. Neapco Holdings, LLC, No. 18-1763 (Fed. Cir. July 31, 2020), and a 6-6 stalemate by the court’s active judges on whether to take the case en banc, the Federal Circuit has now adopted—under the rubric of 35 U.S.C. §101—a formalized set of enablement-like requirements for patent claims. For a simple “threshold” eligibility test, section 101 has grown remarkably complex. Indeed, since the Supreme Court’s 2012 Mayo and 2014 Alice decisions re-cast patent eligibility into a “two-step framework,” the Section 101 test adjudges not just subject-matter eligibility and the three “limited” exceptions thereto, but also patentability or “inventive-concept” challenges predicated on comparisons to the prior art, see 35 U.S.C. §§ 102-103. And now the enablement-type requirements imposed by AAM v. Neapco.

The majority in AAM v. Neapco would surely describe these Section101 developments differently. The panel, after all, emphasized that its holding as to these requirements merely follows Supreme Court precedent, including the Court’s modern Section 101 jurisprudence and decisions in Flook (1978), Diehr (1981), and Mayo-Alice. As addressed below, we believe AAM’s cited Supreme Court cases do not support the opinion’s analysis. The same goes with AAM’s assertion that Federal Circuit case law since 2015 has also incorporated these Section 101-enablement or “how to” and “specificity” requirements for patent claims. As detailed below, the majority reads these Federal Circuit cases out of context; the quotes pulled therefrom reflect dicta or verbiage that one would expect from the scores of Section 101 decisions that otherwise merely apply Section101 legal requirements or address various Section 101-eligiblity arguments.

What they do not reflect are legal requirements that the Supreme Court or these Federal Circuit decisions appear to have consciously considered or imposed. AAM alone does that.

Another Look at the Supreme Court Precedent

To be clear, the enablement-like requirements AAM now imposes for section 101 eligibility are that (1) the claim-at-issue alone (2) must demonstrate “how to” practice, “achieve” or “accomplish” the claimed invention, and (3) the claim must make this showing with “specificity.” AAM v. Neapco, Maj. Op. at 10-11, 15, 16 & n.7, 16-17, 19, 20-21, 27-29 (all emphasis added unless otherwise noted). The AAM majority claims Supreme Court precedent has long imposed these requirements. E.g., id. at 10-11, 15-17, 19-21. An analysis of those precedents shows otherwise.

Parker v. Flook (1978). Starting “[m]ore recently” with Parker v. Flook, 437 U.S. 584 (1978), the AAM majority stated that this case indeed “exemplified this [“how to”] principle” for Section 101-eligibility and what the claim-at-issue must “disclos[e].” See id. at 19. Specifically, AAM said Flook and the claims therein were ineligible not because those claims “in practical effect” recited an ineligible calculation for “updating alarm limits” (as the PTO examiner there had indisputably found—and the Supreme Court duly held, see 437 U.S. at 587-88, 594-95). Rather, said the AAM majority, those Flook claims were ineligible because of what the “claimed method” “was missing” or failed to disclose: “What was missing from the claimed method reflected what was missing from the patent application as a whole, which “d[id] not purport to explain how to select . . . any of the . . . variables” involved, or “purport to contain any disclosure relating to the chemical process at work, the monitoring of process variables, or the means of setting off an alarm or adjusting an alarm system.” AAM Maj. Op. at 19 (citing Flook, 437 U.S. at 586). Citing these allegedly deficient disclosures in Flook, supra, the AAM majority then immediately concluded as follows:

The Court in Flook held that the claimed method contained no patent-eligible invention.” 437 U.S. at 594. Though the Court recognized that the use of a mathematical formula or law of nature did not alone make a claim patent ineligible, it explained that what was required was “an inventive application of the principle.” Id. at 593–94. Such an inventive application, the Court concluded, was not present in the claimed method. Id. at 594.

AAM Maj. Op. at 19.

The AAM opinion misreads Flook’s holding and rationale. Foremost, and for all its discussion on certain “inventive” principles, Flook ultimately held that the claims were ineligible for the simple reason that they were “in practical effect” a claim on the idea or mathematical formula “itself,” i.e., on one of the three implied exceptions to Section 101. 437 U.S. at 587-88, 594-95. The Flook holding did not turn on whether the claim sufficiently recited an “inventive” concept, as the AAM majority described it (or at least strongly suggested in saying Flook “required … ‘an inventive application of the principle,’” see AAM Maj. Op. at 19 (quoting Flook, 437 U.S. at 593-94.)).

Critically, nor did the Flook rationale delve into what “disclosure” was “missing from the claimed method” or “the patent application as a whole” as the basis for its section-101 ineligibility holding. See 437 U.S. at 587-88, 594-95. Instead, AAM’s quotes about the Flook patent’s “missing” “variables” and “disclosures” are merely part of Flook’s background discussion of facts and procedural history—all of which took place eight pages before the Flook opinion’s discussion of its holding and rationale. See AAM, Maj. Op. at 19 (describing Flook background, including the patent application, its “disclosure” in the “claimed method” and what was purportedly “missing” therefrom, 437 U.S. at 586, as part of Flook’s holding and analysis, 437 U.S. at 594-95).

Flook also rejected the applicant’s main argument that the claims could meet section 101 with any “post-solution activity” recited in the claim text—“no matter how obvious or conventional” those added claim elements were. Id. at 585, 590, 595. But nothing in that analysis suggested an affirmative “how to” enablement-like requirement, applicable only to the claims. See, e.g., id. Indeed, Flook reiterated this was simply a matter of the claim reciting ineligible subject matter, “comparable to a claim that the formula 2?r can be usefully applied in determining the circumference of a wheel.” Id. at 595. In Flook’s words, “[I]f a claim is directed essentially to a method of calculating, using a mathematical formula, even if the solution is for a specific purpose, the claimed method is non-statutory.” Id. (applying In re Richman, 563 F.2d 1026, 1030 (CCPA 1977)). In our view, AAM cannot plausibly stretch Flook to support its new Section 101 requirements.

Diamond. v. Diehr (1981). While recognizing that Diamond v. Diehr, 450 U.S. 175 (1981) doesn’t support patent ineligibility generally, the AAM Majority nonetheless misdescribes Diehr’s core holdings, emphasis, and analysis. According to AAM, the Diehr stands for the premise that its claims recited a “specific and detailed series of steps” for “a new and specific process of molding rubber products,”—and that those added steps thus demonstrated, “apparently,” a “significant” and “inventive application of the [Arhennius] formula” as used in those Diehr claims. AAM, Maj. Op. at 19-20 (quoting Supreme Court’s 2012 Mayo decision and its description of Diehr, supra); Mayo, 566 U.S. at 81 (discussing Diehr, 450 U.S. at 187)). For that “inventive” reason, suggested the AAM Majority, the Diehr claims became patent-eligible. Id.

Not exactly. Diehr upheld the patent-eligibility of a claimed multi-step process for making rubber products, including steps that used a natural law or equation (the Arrhenius equation) “in conjunction with” multiple other steps that merely recited use of “conventional” equipment and a standard “digital computer.” 450 U.S. at 177-78, 181, 184, 187, 193. As to the AAM opinion, then, three points merit attention.

First, contrary to AAM’s “inventive-concept” emphasis, the Diehr claim was Section 101-eligible precisely (and perhaps only) because it involved such a multi-step manufacturing process, “considered as a whole.” Id. at 188, 192. Eligibility thus turned on the analysis that this was not a claim on, in “practical effect” for, or “directed essentially to” an ineligible concept or “idea of itself,” such as “an attempt to patent a mathematical formula”; it was instead a multi-step claim for molding rubber products, i.e., eligible subject matter. Id. at 185-87, 191. Accordingly, Diehr didn’t address whether those steps or the formula there demonstrated, “apparently” or otherwise, an inventive concept or “transformative” use, contrary to the AAM opinion. Id.

Second, in focusing on “inventive concepts” in Flook and Diehr, supra, the AAM opinion and its holding as to Hooke’s law appear to pay little heed to the principle that those precedents (among others) have emphasized. That is, that a claim doesn’t become ineligible “simply because it uses a mathematical formula, computer program, or digital computer,” Diehr, 450 U.S. at 187, or “because it contains a law of nature or a mathematical algorithm,” Flook, 437 U.S. at 590. That is the case even when the claim recites, for example, a process with “several … steps” on an ineligible concept. E.g., Diehr, 450 U.S. at 177, 185.

Third, Diehr repeatedly held that “novelty” (Section 102), “obviousness” (Section 103) and other “specific conditions of patentability” are “of no relevance” and “wholly apart from whether the invention falls into a [section 101] category of statutory [eligible] subject matter.” Id. at 189-90; accord id. at 191-92 (further explaining why Sections 102-103 concerns are irrelevant to Section 101). The Court’s 2012 Mayo decision, moreover, emphasized that it was upholding Diehr, one of the cases “most directly on point.” Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289, 1298, 1302 (2012). Accordingly, Diehr’s emphatic ruling that “conditions of patentability” (e.g., Sections 102-103, and 112) are not relevant to the threshold eligibility issue further undermines AAM’s effort to impose Section 112 enablement-like requirements.

Mayo–Alice. The AAM opinion further enlists the Court’s most-recent pronouncements on section 101, the well-known Mayo-Alice tandem that established the two-step ineligibility “framework” (namely, the “directed-to” step for recognizing ineligible subject matter and the “inventive-concept” step). More pertinent, however, we do not read either case as imposing section-101 legal requirements that the claim text alone must demonstrate, with specificity, “how to” practice the claimed invention. E.g., AAM, Majority Op. at 11-12, 16-17, 19-21, 27-29.

To the contrary, Mayo itself doesn’t squarely address any principle that the claim alone must demonstrate “how to” implement the invention. In fact, Mayo doesn’t ever use the phrase “how to.” It oft-uses the phrase that a patent applicant cannot simply recite the abstract idea or natural law at issue and say, “Apply it.” E.g., Mayo, 132 S.Ct. at 1294, 1297, 1300. But that is quite a different injunction than the “how to” demands required by AAM. Mayo otherwise merely held that “appending conventional steps, specified at a high level of generality,” was not “enough” to supply an “inventive concept” there and to overcome the ineligible “natural” law claimed by the Mayo patents. See 132 S.Ct. at 1297-98, 1300.

The same holds true for Alice. At most, it merely assumes in passing that a claim alone must demonstrate “how to” practice the claimed invention, let alone that a claim do so with “specificity.” See, e.g., Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S.Ct. 2347, 2354-55 (2014). Indeed, Alice uses the word “how” only insofar as it refers to the claims and “how,” as in Bilski, they are “directed to” an abstract idea for “hedging risk” or for an “intermediated settlement.” Id. \at 2356. Alice otherwise stands for the premises that the two-step Mayo framework is generally applicable and that merely reciting a “generic computer” is not enough to “transform a patent ineligible abstract idea into a patent-eligible invention.” Id. at 2356-58.

The Other Extreme

We pause briefly here to state the obvious: That the eligibility issue and how much a claim must state is a question of degree. After all, no one to our knowledge disputes that a claim that merely recites a result (e.g., an improved process for curing rubber products), without any structure or steps whatsoever, is patent-ineligible. That is, after all, no different than impermissibly claiming an idea. See, e.g., Diehr, 132 S.Ct. at 185 (“An idea of itself is not patentable.”) (quoting Rubber-Tip Pencil Co. v. Howard, 20 Wall. 498, 507 (1874)) (internal quotes omitted). The issue now imposed by AAM is its enablement-like requirement that the claim text alone must go to seemingly the other extreme and demonstrate “how to” practice or “achieve” the claimed invention, and that it do so with “specificity.”

In Part II of this analysis, we will examine how the AAM opinion also misreads Federal Circuit precedent.

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