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Two Supreme Court IP Cases to Watch in 2022

“While the Court has not yet granted American Axle’s petition, there are clearly a number of stakeholders who believe it’s time for it to weigh in again on patent ineligibility.”

https://depositphotos.com/21904741/stock-photo-steps-and-pillars-of-the.htmlAs of the time of writing, the 2022 Supreme Court docket is light on intellectual property cases, with the Court having granted review of only one copyright case. However, one other major case lurks in the background on an issue—patent ineligibility—upon which the Supreme Court has already demonstrated its interest. These two cases are examined in greater detail below.

Unicolors v. H&M Hennes & Mauritz

The first case, Unicolors v. H&M, is a copyright case for which oral argument has already occurred. The case involves issues of substantive copyright law, as well as whether the petition warranted dismissal for a violation of Supreme Court procedural rules.

In Unicolors v. H&M, Unicolors sued H&M for copyright infringement, asserting fabric design copyrights from among 31 of such designs that were filed as part of a single application on January 15, 2011. Unicolors prevailed in proving infringement after a jury trial, but the Ninth Circuit remanded the case, instructing the district court to refer the matter to the Register of Copyrights pursuant to section 411(b) of the Copyright Act. Section 411(b) requires the Register to review allegations that a copyright applicant included “inaccurate information… on [an] application… with knowledge that the it was inaccurate.” The primary basis for referral here was that Unicolors inaccurately claimed that all of the 31 designs had been published by January 15, 2011 (which was required to file a single application for all of the designs), when it knew that some of those designs were not yet publicly available. Unicolors submitted a certiorari petition in response to that decision.

The argument as to whether the petition warranted dismissal stems from the disconnect between the question presented in the cert petition and the question that Unicolors ultimately briefed. In its cert petition, Unicolors had asked whether referral to the Register was appropriate without “indicia of fraud or material error.” However, in its briefing, Unicolors posed the question as whether the “knowledge” requirement of section 411(b) is satisfied where it is based on a “good-faith misunderstanding of a principle of copyright law.” H&M argued that this change was so material that it violated the Supreme Court’s rules and warranted dismissal of the petition.

With respect to the substantive copyright law questions presented in this case, Unicolors argued that a good-faith misunderstanding of copyright law does not satisfy the knowledge requirement of section 411(b). H&M, on the other hand, argued that unreasonable mistakes of law should result in referral, because such mistakes would amount to constructive knowledge sufficient to satisfy section 411(b).

Oral argument for this case occurred on November 8, 2021. The Justices’ questions focused primarily on the substantive legal issues—namely, what was sufficient to satisfy section 411(b)’s knowledge requirement. Given the complexity of the copyright laws on this issue and the goal of allowing non-lawyers to navigate the application process, several Justices appeared to favor Unicolors’ higher, good-faith misunderstanding of law standard. Unicolors’ counsel argued that H&M’s lower standard would result in “a sport for infringers to try to find legal errors or any other sorts of errors in copyright applications, especially willful infringers who, like H&M, actually have no other defense.” Justice Sotomayor vocalized a notable point of contrast to this line of questioning, questioning whether H&M’s more-stringent standard would be appropriate given the existence of copyright trolls who are able to employ legal counsel to catch unreasonable mistakes when filing applications.

Given the focus during oral argument on the substantive legal issues, this case could result in an opinion that interprets the knowledge requirement of section 411(b). The balance of the questioning during oral argument suggests that the Court may favor the more-stringent standard asserted by Unicolors.

American Axle & Manufacturing v. Neapco

The major patent case that appears primed for Supreme Court review is American Axle & Manufacturing v. Neapco, which could be used by the Justices to reshape Supreme Court jurisprudence on patent ineligibility under 35 U.S.C. § 101. The Court appears to be monitoring the issue closely: On May 2, 2021, it requested the solicitor general’s advice as to whether cert should be granted, marking the second time it has done so on a patent ineligibility case in the past three years.

American Axle involved allegations of infringement of a patent pertaining to a method for attenuating driveline vibrations in order to reduce vehicle noise. The district court applied the Supreme Court’s two-step framework for analyzing patent ineligibility and held that the asserted claims were patent ineligible. Specifically, the court found that the claims were “directed to” natural laws because they involved the “mere application” of Hooke’s Law and friction damping, and that any remaining elements of the claims consisted of “well-understood, routine, conventional activity already engaged in by the scientific community,” which “add[ed] nothing significant beyond the sum of their parts taken separately.”

A three-judge panel of the Federal Circuit affirmed that decision. After receiving petitions for panel and en banc rehearing, the original panel reaffirmed their decision, but the twelve judges who considered the en banc petition were evenly split on whether it should be granted. In a modified opinion issued in response to the rehearing petitions, the original panel held that the asserted claims were ineligible because they simply applied Hooke’s Law and “instruct[ed] the reader… to achieve a claimed result, without limitation to particular ways [of] do[ing] so,” and because any other steps involved “amount[ed] to no more than conventional pre- and post-solution activity.” Judge Moore, who dissented in the original panel, argued that the majority set forth a new test that would make courts significantly more likely to find patents directed to ineligible subject matter. This was in part because the majority required the patentee to demonstrate how it achieved the claimed result of attenuating driveline vibrations, which Judge Moore labeled “enablement on steroids,” and in part because the majority allowed for a finding of ineligibility when a patent does not actually claim the natural law that it is purportedly “directed to.”

In its Supreme Court briefing, American Axle stated that the patent system was “desperate for… guidance” that would clarify this area of law, pointing to the evenly-split Federal Circuit opinion and statements from USPTO directors, industry leaders, and the SG for support. It claimed that the invention at-issue “is the type of invention that has been eligible for patenting since the dawn of patent law in the United States,” and that the petition should be granted so that the majority’s approach does not prevent these types of inventions from being patent-eligible. In its briefing, Neapco downplayed American Axle’s concerns about the state of patent ineligibility law, noting that the Federal Circuit’s affirmance rate for patent ineligibility cases is higher than the average rate for all other issues it decides. It also noted the advantages of the current legal framework and the risks of upending settled law.

While the Court has not yet granted American Axle’s petition, there are clearly a number of stakeholders who believe it’s time for it to weigh in again on patent ineligibility. Perhaps an affirmative recommendation from the SG will provide the impetus needed for the Court to add a second IP case to its 2022 calendar to address this issue.


Image Source: Deposit Photos
Author: Willard
Image ID: 21904741

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18 comments so far. Add my comment.

  • [Avatar for Model 101]
    Model 101
    December 27, 2021 05:27 pm

    Their credibility is at stake.

  • [Avatar for B]
    B
    December 28, 2021 12:55 am

    I doubt the SCOTUS will take up American Axle mostly b/c they’ve painted themselves into a legal corner and are too arrogant to admit they have no idea of what they are doing.

    However, if they do take cert., the SCOTUS will screw up 101 even more.

  • [Avatar for MaxDrei]
    MaxDrei
    December 28, 2021 07:21 am

    B: I doubt it’s arrogance. More like humility. Up at the Supreme Ct, they know very well that, given their career qualifications and experience, it is intelectually way beyond their pay grade (as the saying goes) for them to lay down a road map for the adjudication of 35 USC 101 that will survive scrutiny by the specialist patent community, so they will pass the parcel (or poison pill) down to the Fed Ct without even trying to unpack it. In turn, the Fed Ct has no idea how to draw the map so, instead, it will tend to defer to the experts at the USPTO.

    Which leaves me optimistic. I suspect there is still room for the PTO to interpret the case law creatively, if it chooses to put in the hard yards, and from it derive a way (more hard yards) to administer 101 which, when tested on appeal from the PTO, will be found to pass uster, all the way up to the Fed Ct.

    So, it will not surprise me, and not disappoint me, if the Supreme Court declines the invitation to pronounce on the Axle case.

  • [Avatar for TFCFM]
    TFCFM
    December 28, 2021 10:50 am

    It seems to me that the Supremes are waiting for a “better” case in which to revisit 101 issues. In view of the maxim that “bad cases make bad law,” it seems unlikely that the Court could pronounce a New And Better Eligibility Test in a case that includes claims directed to “anything and everything that works” (here, to achieve “tuning” of a liner).

    If the Court is looking to change eligibility law to declare claims to “anything and everything that works to achieve a recited purpose” eligible, then this is the case for them. However, if the Court is looking to develop a more subtle or workable test for eligibility, then this is likely not the case in which to accept cert (for the simple reason that any such test would be effectively dicta: “… here’s a new test, but it’s not satisfied by the anything-and-everything-that-works claims in this patent”).

  • [Avatar for Greg DeLassus]
    Greg DeLassus
    December 28, 2021 11:04 am

    @2: Agreed on both points.

  • [Avatar for Anon]
    Anon
    December 28, 2021 11:36 am

    TFCFM,

    I “get” your desired narrative with the view of purely-results claiming, but I cannot discern what point you are trying to make with the facts of THIS case.

    You seem to be (again) speaking of cases and aspects of patent law that you do NOT firmly grasp.

    How in the world do you arrive at your statement of “would be dicta?”

  • [Avatar for B]
    B
    December 28, 2021 12:00 pm

    @ TFCFM “It seems to me that the Supremes are waiting for a “better” case in which to revisit 101 issues.”

    Have you even read the AA opinion? How about section 112(a)?

  • [Avatar for B]
    B
    December 28, 2021 11:27 pm

    @ MaxDrei ” I doubt it’s arrogance. More like humility. Up at the Supreme Ct, they know very well that, given their career qualifications and experience, it is intelectually way beyond their pay grade (as the saying goes) for them to lay down a road map for the adjudication of 35 USC 101 that will survive scrutiny by the specialist patent community, so they will pass the parcel (or poison pill) down to the Fed Ct without even trying to unpack it.”

    MD, my friend, I’m going to respond by respectfully stating, “there’s nothing approaching humility.”

    Humility would be following the statutory language of 101, rather than try to re-write it every 10-20 years.

  • [Avatar for MaxDrei]
    MaxDrei
    December 29, 2021 06:30 am

    B: as you say, humility would lie in stepping back and leaving eligibility to the language of the statute. But to me that seems to be no solution. Under the statute, any “process” that is “useful” is eligible for patent protection. Zealous advocacy, and crafty claim drafting to take full advantage of the permissivity of the statutory language, not only puts undue burden on the patentability filters in the statute but also brings ridicule on the patent system.

    Currently, our precious system of patents is vulnerable to ignorant criticism of it, so we would all do well to take all practicable measures to minimise any such ridicule.

    PS: How about the new blog format. Good, isn’t it?

  • [Avatar for B]
    B
    December 29, 2021 10:10 am

    @ Max DRei “as you say, humility would lie in stepping back and leaving eligibility to the language of the statute. But to me that seems to be no solution. Under the statute, any “process” that is “useful” is eligible for patent protection.”

    Respectfully, this is not a problem. Plus, a fair reading of s 101 is far more sane than the SCOTUS’s “zealous advocacy” from the bench and idiotic statutory construction that not only puts undue burden on the patentability filters in the statute but also brings ridicule on the patent system.

    If you don’t agree I invite you to read American Axle v. Neapco.

  • [Avatar for Greg DeLassus]
    Greg DeLassus
    December 29, 2021 10:56 am

    I have to agree with B here, as against Max. The idea that the SCOTUS is saving the patent system from ridicule is hard to sustain in the face of the actual decisions handed down since 2010.

  • [Avatar for Anon]
    Anon
    December 30, 2021 07:22 am

    Shockers – Greg and I are in agreement (leastwise on the destruction — and the blame — that MUST inure to the Supreme Court.

    MaxDrei seems to insist on pushing his opinion of the law of the US Sovereign, but still cannot take it upon himself to be informed OF the structure of US Law, our three branches of government and the fact that Patent Law — as expressly put in our Constitution — is NOT the domain of legislating from the Bench.

    As to MaxDrei’s liking of the new blog format, well, again, an opinion without substance, as he does not indicate (at all) what he may find more favorable (and after myself and at least tow others have provided express points as to why the new format is LESS “good.”

    As to (my emphasis added): “our precious system of patents is vulnerable to ignorant criticism of it,…

    First, MaxDrei’s repeating-on-the-verge-of-rudeness LACK of understanding that different Sovereigns have chosen their patent systems differently and that patent law is — and must be — a Sovereign-centric law makes his cavalier pronouncements especially disdainful.

    Second, it is the posts LIKE MaxDrei’s that do damage to the US patent system. You want to take “practicable measure to minimise”…? Then wake the F up and heed my posts to you.

  • [Avatar for MaxDrei]
    MaxDrei
    December 30, 2021 07:35 am

    Frankly, being in Europe, I ought not to comment here, but I do because I find some answers to my comments interesting and informative. I agree, that so far the Supreme Court on eligibility has delivered more obfuscation than clarity. But with this Axle case the Justices have an opportunity to redeem themselves and, in so doing, help to reduce the opportunities currently available, to heap opprobrium on the patent system. Are they up to the job? Surely yes, if they take the trouble properly to inform themselves.

  • [Avatar for Greg DeLassus]
    Greg DeLassus
    December 30, 2021 09:38 am

    [B]eing in Europe, I ought not to comment here…

    Nonsense. This blog is not exclusively focused on US IP. One of the things that I like about this place is that Mr Quinn and his team regularly organize webinars not only about US IP, but also about CN, DE, and GB IP.

    If anything, this forum needs more voices like yours. Your contributions are at least as worthwhile as most of the other regulars.

  • [Avatar for B]
    B
    December 30, 2021 12:09 pm

    @ MaxDrei “But with this Axle case the Justices have an opportunity to redeem themselves”

    The SCOTUS had an opportunity to redeem themselves a large number of times over the last 40 years on 101 and failed miserably every time they touched the statute.

    FWIW, as best as I can tell, the SCOTUS read whatever Judge Rader wrote at the CAFC, and then did the opposite.

  • [Avatar for Greg DeLassus]
    Greg DeLassus
    December 30, 2021 02:45 pm

    The SCOTUS had an opportunity to redeem themselves a large number of times over the last 40 years on 101 and failed miserably every time…

    Really, you think that the last 40 years of §101 jurisprudence has been that bad? I agree that the last 11 years has been rotten, but most of the last 40 years comprises a period in which Diehr and Chakrabarty were the last word on §101. That world in which Diehr and Chakrabarty were the controlling precedent seemed to me to work pretty well.

  • [Avatar for B]
    B
    December 30, 2021 03:12 pm

    Okay, who thinks that the following claim is LIKELY to be rejected by the PTAB under Alice-Mayo?

    1. A computer-implemented method, comprising:

    [a] for each of a plurality of images uploaded to a social stream of an electronic social network via a first user interface by a user of a predetermined group of users sharing a common connection in the social network, automatically analyzing, by one or more computing devices, image data embedded within the uploaded image to identify a predetermined object displayed in the uploaded
    image in response to the image being uploaded to the social stream;

    [b] determining, based on identifying the predetermined object, a popularity of the predetermined object in the plurality of images uploaded to the social stream for the predetermined group of users;

    [c] identifying, for the predetermined group of users, a current trend based on the popularity and a relevant time period for the images;

    [d] determining, for each user of the predetermined group of users, a level of relevancy of the identified predetermined object based on information associated with the user; and

    [e(1)] providing, by the one or more computing devices, an electronic notification to a second user interface, the electronic notification indicating that the current trend applies to one or more users of the predetermined group of users whose level of relevancy satisfies a pre-determined threshold,

    [e(2)] wherein the second user interface is different than the first user interface associated with uploading the plurality of images to the social stream and is accessed by an entity different from the group of users.

  • [Avatar for B]
    B
    December 30, 2021 03:21 pm

    @ Greg

    I agree Diehr and Chakrabarty were BIG steps in the right direction (but also older than 40 years). However, the SCOTUS didn’t exactly repudiate Benson, which is why the brain-dead crowd in the CAFC has gone hog-wild with their mental steps stupidity.

    A bit of clarification: I have no problem with a true “mental steps” exception consistent with Judges Newman’s and O’Malley’s Berkheimer en banc decision. Patents shouldn’t cover a way a person thinks.

    It took In re Allapat to restore some semblance of sanity to the patent world.

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