An Ax(le) Needs Grinding: Can the Federal Circuit Turn the Wheel?

The law of patentable subject matter is a mess – Prof. Mark A. Lemley, Stanford Law School (2019)

I recently opened a Bordeaux and re-read the petition for certiorari in American Axle v. Neapco. Not because I like watching horror films or black-and-white footage of a piano sliding downstairs, mind you. But well, you know.

The Petition is well written and the Bordeaux did its job; however, it was still painful to read the recounting of the successive bad decisions to invalidate American Axle’s patents in light of the arguments made by accused infringer Neapco. Yet, in context, it’s just another of the thousand blows against U.S. inventors and our innovation ecosystem.

It’s shameful that a company with a new and useful technology in the automotive industry was stymied in its appeal by our nation’s highest patent court.

Both the Highest Court and the Highest Patent Court Have Failed

I’m glad American Axle sought certiorari. As its Petition makes abundantly clear, six Federal Circuit judges leaned one way on whether to rehear the case en banc, and six leaned the other. Something, somehow, needs to get resolved. Yet, the highest patent court kicked the can down the street to the Supreme Court. Once again. I’m thinking, “Really? Come on, guys!”

Will patent eligibility get resolved at SCOTUS? No, it won’t. I don’t hold out hope that our highest court will magically now understand what they’ve consistently misunderstood in the last 15 or so years, in a series of cases that demonstrate their woeful shortfalls in comprehending what technologies are patent-eligible.

The Supreme Court doesn’t understand software, and software’s relationship to hardware. The Supreme Court doesn’t understand innovation. (Read J. Kennedy’s equivocations on obviousness in KSR v. Teleflex.) SCOTUS’ abstruse decisions have destabilized the U.S. patent system and have undercut, reversed, or further divided the judges on the Federal Circuit. It’s demoralizing.

The result? In its failure to parse and clarify SCOTUS’ flailings on subject-matter eligibility, the Federal Circuit has in this last decade failed its original mandate to unify and clarify patent law. The court is notably different than its predecessor courts under Chief Judges Markey, Michel, and Rader. Post-America Invents Act (AIA), it has become a rubber-stamp for the patent death-dealers on the Patent Trial and Appeal Board (PTAB) and purveyors of the dreaded Rule 36 decision on complex patent litigation issues.

A New Chance at Clarity

Yet, there is hope. The complexion of the Federal Circuit is evolving, with new Chief Judge Moore, the recent appointment of Judge Cunningham, and one future vacancy to be filled (because, sadly, Judge O’Malley is retiring next year). I hold out hope that as these changes to the court’s make up evolve, the Federal Circuit will return to issuing the well analyzed, thought-provoking precedent that, while I may not always have agreed with, I respected.

Chief Judge Moore has a tight window in which to lead her court toward setting things right. Six-and-six suggests a split down the middle, as if there are two teams lined up against each other; but it’s not that simple. The Federal Circuit’s jurisprudence has in recent years been all over the map, with little to no predictability for patent-holders and inventors. I don’t often agree with Mark Lemley, but it’s a hot mess.

As patent litigators, we have two alternatives with respect to American Axle. One is to write it off as one more sad episode of the ongoing saga in which the Federal Circuit punts on clarifying patent law, relying on its routine Rule 36 dismissals and demonstrating a notable lack of backbone in terms of resolving the post-Alice confusion. We can sigh heavily (yet again!), and go back to working as best we can for clients in this dreadful environment for protecting innovation.

The other is to hope and work for change. In each appellate brief we draft, we should strive to provide a roadmap of how our current case can be resolved under Berkheimer, etc., articulating how the nation’s highest patent court, speaking in unison, can resolve many of the issues plaguing patent eligibility.

Chief Judge Moore is an engineer. Her decisions demonstrate her nuanced understanding of underlying technologies, as well as the legal doctrines that correspond with those technologies. Other talented minds on the court surely can be persuaded to work together to hammer out a workable consensus. Such a consensus on patent-eligible subject matter would have a corollary benefit: it would simplify the court’s heavy workload by providing a clear set of principles by which to rule.

American Axle was a case to do it, but that opportunity has passed. There will be other opportunities, however. Our unstable patent law guarantees it. Chief Judge Moore and her fellow judges must find a way to work together, to grind out a workable resolution to its Section 101 jurisprudence, forge a working consensus, and thusly satisfy the Federal Circuit’s original mandate to unify and clarify patent law in the wake of the U.S. Supreme Court’s serial disasters, concluding with Mayo and Alice.

CAFC Consensus on Eligibility is Our Best Option

I hope Chief Judge Moore can take advantage of the opportunity to put the Federal Circuit back where it belongs—as a thoughtful, respected arbiter of the cases brought before it, stabilizing the environment for all who must navigate the turgid waters of today’s patent jurisprudence. For me at least, advocating for the Federal Circuit to once again have a leading role against the backdrop of the Supreme Court’s obtuse decisions provides a better option than wishing for clarity from SCOTUS or attempting to work with a disinterested Congress to reform our patent law.

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