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

By Meredith Addy
October 17, 2021

The Federal Circuit faces an old challenge under new Chief Judge Moore. It should assume the burden of its historical mandate.

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

Federal Citcuit - https://depositphotos.com/6496641/stock-photo-looking-at-the-opinion-section.htmlI 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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Copyright: stuartmiles 

The Author

Meredith Addy

Meredith Addy is a partner with AddyHart P.C., where she focuses her practice on a unique blend of business and legal strategy. Addy has over 25 years of litigation experience and has handled more than 30 cases before trial courts and argued more than 40 appeals to the Federal Circuit. Addy has held leadership positions at several AmLaw100 firms and is a recipient of many awards and honors. She has testified before Congress to address issues relating to the Federal Circuit and the state of patent law. Addy has been a member of the Federal Circuit’s Advisory Council and a member of the board of directors of the Federal Circuit Bar Association. She is also a founder of the Richard Linn American Inn of Court, which is directed to intellectual property, and she served as its first president. Addy has also been recognized as one of the Most Influential Women in IP Law by Law360. For more information, or to contact Meredith, please visit her profile page.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 16 Comments comments. Join the discussion.

  1. Pro Say October 17, 2021 5:19 pm

    “another of the thousand blows against U.S. inventors and our innovation ecosystem”

    Says. It. All.

    SCOTUS? SCOTUS?

    CAFC? CAFC?

    Congress? Congress?

    Bueller? Bueller?

    Anyone? Anyone? ANYONE?

  2. Anon October 17, 2021 8:40 pm

    Noble sentiments.

    Do not hold your breadth.

  3. Max Drei October 18, 2021 4:01 am

    A comforting experience, reading that piece from Meredith Addy. Mulling over what she wrote, and the thought that the new Chief Judge at the Federal Circuit is also not a timid male, I recall Lady Macbeth’s words of encouragement to her faltering partner in crime:

    “But screw your courage to the sticking place, and we’ll not fail.”

    Hesitant Macbeth’s resolve needed stiffening. So too does that of the courts, to resolve the current patentability mess. Lady Macbeth succeeded, all too well. May the ladies involved here also succeed in their endeavour. The Justices might well be understandably reluctant to expose themselves, in any case where the technology is so esoteric that few people understand it. But, heavens, everybody has experienced resonant vibration in their ordinary life can understand the technology in American Axle. When will there ever be a better vehicle for SCOTUS to use to clarify the jurisprudence of eligibility?.

  4. concerned October 18, 2021 11:14 am

    Our numerous briefs have steadfastly maintained that the evidence on the official record (55 documents) has never been acknowledged or addressed. Finally, the PTAB stated in response to our objections regarding the failure to address the evidence of record that the Berkheimer decision was misunderstood by us. No explanation was given.

    I hope the CAFC or SCOTUS will eventually enlighten me “Does direct evidence matter in a legal setting? Or should we just accept unfounded, contradictory statements that are clearly false on the surface and are not supported by one iota of evidence?”

    Of course, a Rule 36 on our appeal would certainly clarify what has never been clarified or addressed, but I guess that is the objective?

  5. B October 18, 2021 1:13 pm

    “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.)”

    I’m actually a big fan of the Teleflex majority decision. Further, the MAJORITY in Bilski (software “does not change the analysis”) is spot on with software even if the SCOTUS is too inept to understand that Bilski should have been addressed under s103 under Teleflex

  6. B October 18, 2021 1:21 pm

    @ concerned “Of course, a Rule 36 on our appeal would certainly clarify what has never been clarified or addressed, but I guess that is the objective?”

    How long before your CAFC panel argues among itself before they refuse to answer the question “What is an ‘inventive concept'” and ignore the issue totally?

    The answer depends on WHO is on your panel. Taranto, Hughes, Dyk, and a few others would rather cut their arms off than answer the question that cannot be answered. Stoll, Reyna and a few others would be too embarrassed to admit they have no idea of what they’ve been talking about for the last 10 years. You need two sane and honest judges in your panel

  7. B October 18, 2021 1:32 pm

    @ Max Drei “But screw your courage to the sticking place, and we’ll not fail.”

    MacBeth, like the whole Alice-Mayo doctrine, is fiction

    “But, heavens, everybody has experienced resonant vibration in their ordinary life can understand the technology in American Axle.”

    I assure you, Judges Taranto and Dyk do not understand the technology in American Axle. They’re so ignorant they believe it preempts Hooke’s law.

  8. concerned October 18, 2021 3:37 pm

    “You need two sane and honest judges in your panel.”

    I just so happened to watch Judge Jerry (Springer) for the first time today. He questioned the plaintiff for the lack of any evidence to support his financial harm/claim even though the plaintiff knew he was in court this date.

    Judge Judy asks for evidence also on her show. And so do fictional television courtroom settings.

    May I have these two judges on my CAFC appeal panel? Sure these two shows seem at the lower rung of jurisprudence or fictional, however, I seem to understand them (evidence mattering in a court of law.) I think the CAFC hearings should be televised.

    Assistant Solicitor General: “Object your honor, counsel for the applicant’s line of questioning acknowledges evidence submitted into the offical record!”

    CAFC panel: Sustained. Move on counselor.

  9. Optimistic October 19, 2021 11:43 am

    We are optimistic that Chief Judge Moore will clarify the law on § 101 just like she has done in the past with § 145. The USPTO tried again and again to restrict § 145, but Judge Moore was there to stop the USPTO’s attacks on § 145 at every turn. Her work at the Federal Circuit was instrumental in two unanimous wins at the U.S. Supreme Court against the USPTO and recently a win at the Federal Circuit against the USPTO’s attacks on § 145.

    To start with, Judge Moore took on two powerful Federal Circuit Judges with a very compelling dissenting opinion in Hyatt v. Doll. Judge Moore then wrote a decision for an en banc hearing in that case, which vacated the prior decision and was instrumental in a unanimous win regarding § 145 at the U.S. Supreme Court in Kappos v. Hyatt. Judge Moore’s research and understanding of the complex facts and issues is remarkable. And most of all, Judge Moore understood that § 145 is necessary to provide an important check on the USPTO to protect all patent applicants.

    The USPTO was driven to keep inventors from using § 145 after its loss at the U.S. Supreme Court in Kappos v. Hyatt. So it tried to impose its attorney fees on appellants in § 145, but Judge Moore and her colleagues stopped the USPTO at the Federal Circuit in an en banc hearing and the U.S. Supreme Court ruled unanimously against the USPTO in Peter v. NantKwest. Then recently the USPTO tried to impose its expert witness fees on appellants in § 145, but Judge Moore took the USPTO to task in an oral argument and, with her colleagues, they stopped the USPTO at the Federal Circuit in Hyatt v. Hirshfeld.

    Now, after establishing § 145 forever with two unanimous wins at the U.S. Supreme Court, how will Judge Moore and her colleagues clarify § 101? We are very optimistic.

  10. B October 19, 2021 12:38 pm

    “Now, after establishing § 145 forever with two unanimous wins at the U.S. Supreme Court, how will Judge Moore and her colleagues clarify § 101? We are very optimistic.”

    Just b/c Judge Moore has a history of sane and rational decisions does not mean the “I hate patents and worship government” judges will follow. Also, the SCOTUS isn’t taking Alice-Mayo cases. Maybe they’ll take American Axle given that the case represents a glaring view of the ride down the slippery slope of idiocracy.

  11. Curious October 19, 2021 3:14 pm

    Her work at the Federal Circuit was instrumental in two unanimous wins at the U.S. Supreme Court against the USPTO and recently a win at the Federal Circuit against the USPTO’s attacks on § 145.
    Based upon an article just published, there have been a grand total of (35) thirty-five § 145 actions taken from 2011-2020. I’m sorry, § 145 actions are so rare that — frankly — nobody cares about them except very well-heeled applicants that can afford to go that route. However, 101 issues reside in entirely different league. My guess is that a single art unit in Tech Center 3600 issues thirty-five 101 rejections over the course of 2 or 3 days. The impact of these issues is not even remotely close.

  12. Moderate Centrist Independent October 19, 2021 3:25 pm

    Technology needs bright line rules. SCOTUS hates bright line rules. Federal Circuit likes bright line rules. We have 101 issues because SCOTUS likes ‘flexibility’.

  13. Optimistic October 19, 2021 9:38 pm

    ‘Curious’ at comment 11 and ‘B’ at comment 10 completely miss the point. Comment ‘9’ is not about § 145, it is about the hope that Judge Moore and her colleagues will take responsibility for clarifying § 101. The § 145 comments are an indication that, optimistically, the past may be a precursor of the future. We are counting on you and your colleagues Judge Moore—do for § 101 what you did for § 145.

  14. Anon October 20, 2021 9:22 am

    MCI,

    Your statement is no longer true, as the Federal Circuit has suffered what I have described as the thought experiment of training simians in a cage with a firehose.

    The Federal Circuit needs a massive “reset” to return it to its original role of protecting strong patent rights.

    Optimistic, Sorry but I cannot reach your state on the action of one new Chief Judge. The CAFC simply remains fractured and untethered to any notion of judicial restraint (having learned its lesson through fire-hosing by the Supremes).

  15. B October 20, 2021 12:03 pm

    @ Anon and MCI

    A lot of times the CAFC’s “bright line rules” are derived from SCOTUS case law. The “machine or transformation” test comes directly from Benson. Ironic that the CAFC follows SCOTUS precedent where after the SCOTUS (in Bilski) scolds the CAFC for listening to what the SCOTUS said.

    BTW, can anyone here tell me why Enfish was held patent-eligible if Benson is good law?

    “The CAFC simply remains fractured and untethered to any notion of judicial restraint (having learned its lesson through fire-hosing by the Supremes).”

    Fractured – definitely

    Untethered? Most – not all, but I think the issue is that *ahem* certain judges are incapable of reading case law – even case law they supposedly wrote. That, and the SCOTUS writes the most b.s. self-serving dicta where they refuse to admit they screwed up even as they announce new law inconsistent with old law.

    Diehr and Bilski are perfect examples.

  16. Curious October 20, 2021 1:49 pm

    The § 145 comments are an indication that, optimistically, the past may be a precursor of the future.
    Fixing a few potholes in the street is not comparable to fixing the 10 mile stretch of highway that runs through your town that needs both new access roads and has to be widened.

    While I would love to have Judge Moore engage in a campaign that does fix 101, I am highly skeptical that it will happen. The Federal Circuit needs 9 judges willing to scrap much of what they’ve done the last 7 years, and I have doubts that they have the intestinal fortitude to do it.

    Moreover, we can only hope that the fix will be better (and not worse) than what we have now.

    The Federal Circuit has not been patent-friendly in well over a decade. I will need to see more from them to change my outlook from ‘wistfully hopeful’ to “very optimistic.”

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