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

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)

[This post is an amended version of a piece I published on on 25 Oct. 2021.]

If you’re thinking you haven’t heard from me for a while, you’re right. I’ve been distracted for several reasons, chief of which is that my long-time colleague Robert Hart and I founded a new IP and general litigation firm in late 2018. We’ve been breathlessly busy in the three-plus years since.

Another is that in the current environment, it’s hard to get enthusiastic about entering political debate on anything. However, I can’t stay on the sidelines. I recently was asked at a conference about AIA’s impact at its ten-year anniversary, and about the future of the Federal Circuit’s patent jurisprudence in light of the last decade’s decisions at SCOTUS. I thought it time to pick up my pen again. There’s simply too much at stake.

*          *          *

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. But it was still painful to read the recounting of the successive bad decisions to invalidate American Axle’s patents in light of arguments made by accused infringer Neapco. 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. As American Axle’s 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 nation’s highest patent court kicked the can down the street to the Supreme Court. Again. I’m thinking, “Really? Come on, guys!”

Will patent eligibility get resolved at SCOTUS? No. I don’t hold out hope that our highest court will magically now understand what they’ve consistently misunderstood for the last fifteen 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. It 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 Federal Circuit is notably different than its predecessor courts under Chief Judges Markey, Michel, and Rader. Post-AIA, it has become a rubber-stamp for the patent death-dealers on the PTAB and a purveyor of the dreaded Rule 36 decision on complex patent litigation issues. 

Yet the complexion of the Federal Circuit is evolving, with Judge Moore as its new Chief Judge, with the recent appointment of Judge Cunningham, and the pending vacancy of Judge O’Malley, because sadly she is retiring next year. 

So the Federal Circuit will evolve, and I hope that as it does, the Court will return to issuing the well analyzed, thought-provoking precedents that, while I may not always have agreed with, I could respect.

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. Federal Circuit 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 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 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. I can hear my readers saying, “Yes, but we already do that.” However, only if we persevere and the Federal Circuit begins to hear us can we hope to effect positive change in jurisprudence.

Chief Judge Moore is an engineer. Her decisions demonstrate a 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. 

The Court cannot operate based on feelings and impressions of the technologies in each instant case. It needs to abide by a defensible philosophy about what constitutes innovation, obey the importance of protecting it, and uphold the primacy of invention and original insight—including with respect to existing technologies that can be improved, and without declining into thinking everything is obvious to a POSITA.

American Axle was a case to do this. That opportunity has passed. There will be others, 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, and 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. (Image? That piano starting to slide slowly downstairs. Blame the Bordeaux!)

I hope CJ 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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