The Federal Circuit recently reaffirmed its decision to invalidate method claims for being directed to ineligible subject matter under 35 U.S.C. § 101. American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, Appeal No. 2018-1763 (Fed. Cir. July 31, 2020) (American Axle). As discussed in greater detail below, the Federal Circuit found that the claims invoked a natural law without an inventive concept to transform the claims into patent eligible subject matter.
The Federal Circuit’s latest decision in this case, which slightly modifies the original decision from October 2019, comes after American Axle & Manufacturing, Inc. (AAM) sued Neapco Holdings LLC and Neapco Drivelines LLC (Neapco) alleging infringement of claims of U.S. Patent No. 7,774,911 (the ‘911 patent). The ’911 patent relates to a method for manufacturing driveline propeller shafts (propshafts) with liners that attenuate vibrations transmitted through the shaft assembly. Propshafts often vibrate in different modes: a bending mode, a torsion mode, and a shell mode, and the ‘911 patent sought to claim a way to minimize these vibrations.
The original appeal decision affirmed the District Court’s determination – on summary judgment – that the asserted claims were invalid under 35 U.S.C. § 101. AAM petitioned for an en banc rehearing, but the Federal Circuit’s decision on July 31, 2020, denied the petition by a vote of 6-6 and issued a modified opinion.
The Federal Circuit applied the well-known framework for evaluating subject matter eligibility stems from the Supreme Court’s decisions in Mayo (2012) and Alice (2014). The framework involves determining:
1. Whether the claim is to a process, machine, manufacture, or composition of matter.
2A. If yes in Step 1, the court determines whether the claim is directed to a law of nature, a natural phenomenon, or an abstract idea.
2B. If yes in Step 2a, the court evaluates whether the claim recites additional elements that amount to significantly more than the judicial exception.
Step 2b effectively determines whether the claim embodies an "inventive concept". Software and electrical practitioners are very familiar with Section 101 rejections, but they rarely arise in the mechanical space. Section 101 provides that “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof” may be eligible to obtain a patent. But the Supreme Court has long recognized that Section 101 precludes laws of nature, natural phenomena, and abstract ideas from being patented. And the two-step test developed under the Mayo and Alice decisions has become an effective tool for invalidating claims.
Claim 22 of the ‘911 patent, provided in full below, recites a method for manufacturing a shaft assembly of a driveline system.
22. A method for manufacturing a shaft assembly of a driveline system, the driveline system further including a first driveline component and a second driveline component, the shaft assembly being adapted to transmit torque between the first driveline component and the second driveline component, the method comprising:
providing a hollow shaft member;
tuning a mass and a stiffness of at least one liner; and
inserting the at least one liner into the shaft member;
wherein the at least one liner is a tuned resistive absorber for attenuating shell mode vibrations and wherein the at least one liner is a tuned reactive absorber for attenuating bending mode vibrations.”
The Federal Circuit held that claim 22 invokes a natural law, and nothing more, to achieve a claimed result. Under Step 2A, the Federal Circuit determined that claim 22 defined a goal – “tuning a liner” – to achieve certain types of vibration attenuation. The tuning step of claim 22 was construed to mean “controlling the mass and stiffness of at least one liner to configure the liner to match the relevant frequency or frequencies.” In the Federal Circuit’s view, the tuning step of claim 22 invoked Hooke’s Law, which is a well-known equation that describes the relationship between an object’s mass, its stiffness, and the frequency at which the object vibrates. It is worth noting that Hooke’s Law is not mentioned in the ‘911 patent.
Under Step 2B, the Federal Circuit determined that claim 22 merely describes a desired result because it confers patent coverage if the attenuation goal is achieved using any method. The Federal Circuit went on to conclude that what is missing is any sort of physical structure or steps for achieving the claimed result. As such, the Federal Circuit held that claim 22 was invalid.
The Federal Circuit explained that 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. Notably, AAM did not present any arguments for dependent claims at the District Court level or in its brief to the Federal Circuit. As a result, the Federal Circuit deemed that AAM’s arguments based on the dependent claims had been waived.
Judge Kimberly Moore, among others, dissented from the Majority opinion, and argued that the Majority opinion improperly collapsed the Mayo/Alice two-part test into a single issue – whether performance of a method involves application of a natural law. Judge Moore also took issue with the Majority opinion merging the requirements of enablement and eligibility such that failure to enable the invention was shoehorned into reasons for ineligibility. In other words, according to Judge Moore, the failure of a claim to teach “how” to achieve a desired result relates to enablement, and not to eligibility.
American Axle is a good reminder to avoid drafting claims that simply state the intended or desired result. This is especially true when the intended result is derived from or characterized by a law of nature. Instead, draft claims that include the factors or parameters that are applied to achieve the result (i.e. the “how”). These factors or parameters, which can include difficulties overcome during the inventive process, should be thoroughly explained in the Specification as well. And to the extent that the Majority is right in that AAM did waive its rights to argue dependent claims, American Axle cautions practitioners to preserve the ability to argue dependent claims from the start.