En Banc Activity / Opinions

As we previously reported, earlier today the Federal Circuit issued a modified opinion in American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, a case we have been tracking because American Axle & Manufacturing (AAM) petitioned for rehearing en banc. In the modified opinion, the court vacated a district court’s judgment that one independent patent claim and its dependent claims are ineligible under 35 U.S.C. § 101, but affirmed the district court’s judgment of invalidity for lack of eligibility with respect to other claims. In addition to the modified panel opinion, the court issued an order denying a petition for rehearing en banc. The petition failed narrowly—by a vote of 6-6. Judges Dyk and Chen filed opinions concurring in the denial of the petition for rehearing en banc, while Judges Newman, Stoll, and O’Malley filed dissenting opinions. Here is a summary of the opinions, orders, and dissents.

AAM originally filed this case for alleged infringement of U.S. Patent No. 7,774,911 (the ’911 patent). Both parties filed cross motions for summary judgment as to patent eligibility under § 101. The district court determined that the asserted claims of the ’911 patent were ineligible. Originally, a panel of Judges Dyk, Moore, and Taranto considered the appeal. Judges Dyk and Taranto affirmed that claims 1 and 22 of the ’911 patent along with all of their dependent claims were ineligible under § 101. Judge Moore dissented.

AAM petitioned for panel and en banc rehearing. The panel elected to modify its original opinion. Today, the court issued the panel’s modified opinion along with an order denying the petition for rehearing en banc.

Judge Dyk wrote the modified opinion for the panel, which as mentioned affirmed in part as to the ineligibility of claims 22 and 36 and vacated and remanded in part as to claim 1 and its dependent claims. The majority in its introduction summarized the relevant facts and analysis as the following:

Our analysis of § 101 follows the Supreme Court’s two-step test established in Mayo and Alice. . . . To determine what a claim is “directed to” at step one, we look to the “focus of the claimed advance.” . . . A claim to a method of manufacturing can be directed to a natural law. The ’911 patent claims a method of manufacturing a driveline propshaft containing a liner designed such that its frequencies attenuate two modes of vibration simultaneously and (according to the patentee on appeal) a manufacturing method to tuning liners to attenuate bending mode vibration. At step 1, the question is whether the claimed methods are directed to laws of nature. . . . As the Supreme Court said in Mayo: “We must determine whether the claimed processes have transformed these unpatentable natural laws into patent-eligible applications of those laws.”

The majority began with its analysis of claim 22. It argued that, “[i]n contrast to a number of other natural law cases, the patentee here does not even claim to have discovered a previously unknown natural law,” but instead “defines a goal.” Under the district court’s interpretation, the majority explained, claim 22 calls for “controlling the mass and stiffness of at least one liner to configure the liner to match the relevant frequency or frequencies,” which the majority said “requires use of a natural law of relating frequency to mass and stiffness— i.e., Hooke’s law.” The majority went on to say that, rather than claiming an established or improved process, claim 22 “merely describes a desired result.” The majority clarified that it “do[es] not suggest that such specific novel computer or experimental processes could not be claimed,” but indicated that what is missing is “any physical structure or steps for achieving the claimed result.” Thus, the majority rejected claim 22, saying: “Claiming a result that involves application of a natural law without limiting the claim to particular methods of achieving the result runs headlong into the very problem repeatedly identified by the Supreme Court in its cases shaping eligibility analysis.”

The majority then rejected AAM’s argument that claim 22 includes numerous inventive concepts that were neither previously known nor conventional or routine.  AAM asserted that, “prior to the ’911 patent, liners had never been tuned to damp propshaft vibrations or, at least, had not been used to damp two different vibration modes simultaneously.” The majority, however, asserted that “[t]he real inventive work lies in figuring out how to design a liner to damp two different vibration modes simultaneously, and no such inventive work is recited in claim 22.” Thus, the majority affirmed the district court’s conclusion that claim 22 is not patent eligible.

The majority then asserted that “[c]laim 36 is virtually indistinguishable from claim 22 and was not argued separately on appeal or in district court.” As a result, the majority concluded, it is “thus likewise not patent eligible.”

Having found claim 22 to not be patent eligible under § 101, the court proceeded to hold that it “need not separately determine eligibility of the asserted dependent claims.” As for why, the majority pointed out that “[t]he district court found independent claim 22 collectively representative of all claims dependent from this claim.”

Finally, the majority addressed claim 1. The majority determined that the patent specification “may suggest that the ‘characteristics’ that can be ‘tuned’ in claim 1 include variables other than mass and stiffness,” and that “claim 1, unlike claim 22 has an additional limitation of ‘positioning . . . at least one liner.’” The majority concluded that, “[i]n contrast with claim 22 . . . we cannot say claim 1 as construed is directed to a particular natural law and nothing more.” The majority, therefore, vacated the judgment as to claim 1 and remanded the case to the district court to address alternative eligibility theories.

In her original dissent, Judge Moore argued that “[t]he majority’s decision expands § 101 well beyond its statutory gate-keeping function and the role of this appellate court well beyond its authority.” Specificially, she argued that the majority “parrots the Alice/Mayo two-part test, but reduces it to a single inquiry: If the claims are directed to a law of nature (even if the court cannot articulate the precise law of nature) then the claims are ineligible and all evidence of nonconventionality will be disregarded.” Further, she claimed that “there is a clear and explicit statutory section for enablement, § 112,” and the court “cannot convert § 101 into a panacea for every concern we have over an invention’s patentability.”

In its modified opinion, the majority took the opportunity to respond to concerns raised in the original dissent. First, the majority argued that it was not departing from existing § 101 precedent, “but rather faithfully following it in the narrow circumstances of this case.” Further, it said, “the longstanding rejection of eligibility for a claim to a ‘result’ or ‘effect’ . . . is not limited to claims that also state the natural law that produces the result or effect.”

The modified opinion also addressed criticism that its analysis “improperly merg[es] enablement and eligibility.” The majority claimed that the “criticism rests on a failure to distinguish two different ‘how’ requirements in patent law.” The first requirement, the majority said, is that a patent must “identify ‘how’ a functional result is achieved by limiting the claim scope to structures specified at some level of concreteness.” The second requirement, the majority said, “applies to the specification, not the claim.” The specification, the majority went on, “must set forth enough information for a relevant skilled artisan to be able to make and use the claimed structures or perform the claimed actions.” The majority argued this second “how” requirement is the enablement requirement. Section 101, it maintained, does not require showing “how” in the context of teaching, but does require showing “how” a claim is not directed to a natural law.

Judge Moore also took the opportunity to modify her dissent. Indeed, she issued a blistering dissent taking issue with the majority on the merits as well as the procedure the majority used to reach its result. On the merits, she described the new opinion as “imbu[ing] § 101 with a new superpower—enablement on steroids.” She pointed out that Federal Circuit precedent explains that “[t]he ‘directed to’ inquiry . . . cannot simply ask whether the claims involve a patent-ineligible concept, because essentially every routinely patent-eligible claim involving physical products and actions involves a law of nature and/or natural phenomenon— after all, they take place in the physical world.” She further argued that claim 22 does not recite Hooke’s law, and accused the majority of creating a “Nothing More test,” which she said applies to “a claim [that] on its face clearly invokes a natural law, and nothing more, to achieve the claimed result.” She criticized this test, explaining that “[e]very mechanical invention requires use and application of the laws of physics,” and saying “[i]t cannot suffice to hold a claim directed to a natural law simply because compliance with a natural law is required to practice the method.” She claimed this new test leaves the science to appellate judges to decide de novo, and that a “disturbing amount of confusion will surely be caused by this opinion.”

Following the modified opinion, the court issued an order denying the petition for rehearing en banc by an evenly-divided vote of 6-6. Multiple judges filed opinions concurring and dissenting in the denial.

Judge Dyk, joined by Judges Wallach and Taranto, wrote a concurring opinion. In it, he argued that his “panel opinion is both consistent with precedent and narrow in its scope.” He asserted that claim 22 and the related claims “instruct only the use of mass and stiffness to match relevant frequencies to tune a propshaft liner so that the liner, when used, will produce certain results (reducing two modes of vibration from the propshaft).” He criticized Judge Stoll’s dissent, claiming that “these claims in no way ‘recite the process and machinery necessary to produce the desired effect of reducing vibrations in a shaft assembly.’” He concluded that, “[b]ecause claim 22 contains no further identification of specific means for achieving those results . . . it is ineligible under a long line of cases.”

Judge Chen, joined by Judge Wallach, also wrote a concurring opinion. In it, Judge Chen argued that “the principles applied by the district court and panel majority in holding claim 22 invalid are consistent with long-standing precedent.” Further, he rejected the contention that the court invented a new test. Rather, he claimed that the rationale of the decision is a “straightforward application of the Supreme Court’s decision in O’Reilly v. Morse, 56 U.S. (15 How.) 62 (1853).”

Judge Newman, joined by Judges Moore, O’Malley, Reyna, and Stoll, wrote an opinion dissenting from denial of the petition for rehearing en banc. In it, she explained that “[t]he 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.” She said she wrote her own dissenting opinion “to emphasize the far-reaching consequences of the court’s flawed Section 101 jurisprudence.”

Judge Stoll, joined by Judges Newman, Moore, O’Malley, and Reyna, also wrote a dissenting opinion. In it, she indicated she shared Judge Moore’s concerns. While she admitted that “the majority’s ‘nothing more’ test and its application in this case, particularly on this procedural posture . . . has, to a limited extent, cabined the scope of its prior decision on panel rehearing.” But she expressed concern that this new decision served to “introduce additional questions—including how to apply the ‘nothing more’ test—that would benefit from further development and contemplation through en banc review.” She argued that this case presents “a question of exceptional importance,” and thus in her view en banc review should be granted.

Judge O’Malley, joined by Judges Newman, Moore, and Stoll, also filed a dissenting opinion. In it she pointed out the majority attempts to address the concerns  of a “half-dozen amici curiae who objected to the substance of the majority’s original opinion.” But, she said, the new opinion disregards proper process and attempts to “achiev[e] its chosen result by whatever means it could conjure.” She referenced a letter by the American Academy of Appellate Lawyers indicating a “growing belief among appellate lawyers that Courts of Appeals have shown an increasing tendency to decide questions on grounds that were neither argued before the district court nor briefed on appeal.” While she shared in the substantive and policy concerns with Judges Newman, Moore, and Stoll, she wrote separately “to emphasize the procedural norms that the majority ignores.”

Notably, Judge Lourie dissented from the denial of the petition for rehearing en banc, but without writing or joining any opinion.