The Federal Circuit recently modified and reissued its opinion on rehearing in American Axle Manufacturing, Inc. v. Neapco Holdings LLC holding that manufacturing methods that invoke natural laws, and nothing more, are not patentable subject matter under 35 U.S.C. § 101.1 The broad grant of § 101 covering “any new and useful process, machine, or composition of matter, or any new and useful improvement thereof” has long excluded natural laws, natural phenomena, and abstract ideas from patent protection.2 In the original opinion, the court had held that all asserted claims of U.S. Patent Number 7,774,911 (“the ’911 patent”) were not patentable subject matter,3 but on rehearing, the panel majority distinguished claim 1 as eligible while claim 22 was not because claim 1 is broader than the natural law to which claim 22 is directed.4
On the same day the reissued opinion was filed, an evenly split Federal Circuit denied en banc review, leaving uncertainty about the patent eligibility of manufacturing methods that require applying one or more unstated natural laws to achieve a desired result.
American Axle Manufacturing, Inc. (“AAM”) sued Neapco Holdings LLC and Neapco Drivelines LLC (“Neapco”) for allegedly infringing claims 1–6, 12, 13, 19–24, 26, 27, 31, and 34–36 of the ’911 patent, which relates to a method for manufacturing an automobile driveline shaft that consists of thin-walled metal tubing subject to three different modes of vibration: bending, torsion, and shell mode vibrations.5 According to the ’911 patent, the shaft can incorporate a liner to dampen vibrations by matching a frequency of the shaft (i.e., reactive attenuation of bending mode vibration), and absorbing a natural frequency of the shaft (i.e., resistive attenuation of shell mode vibration).6
The district court granted summary judgement for Neapco holding that representative claims 1 and 22 amounted to “well-understood, routine, conventional activity” directed to natural laws.7 On appeal, AAM contested the district court’s determination, pointing to the testimony of its expert who stated that a liner for dual-damping of bending and shell mode vibrations was new and unconventional,8 while Neapco argued that the claims were not patentable subject matter directed to both natural laws and an abstract idea.9
Majority Opinion by Judge Dyk
In the original opinion, the Federal Circuit had affirmed the district court holding that all asserted claims were ineligible for patenting.10 Writing for the majority, Judge Dyk had concluded that the “claims do not describe a specific method for applying Hooke’s law” (i.e., a natural law), but rather recite tuning a liner in a way that “simply state[s] a law of nature while adding the words ‘apply it.’”11
On rehearing, the Federal Circuit changed course holding that, unlike claims 22 and 36, claim 1 was not directed to a natural law.12 Writing again for the majority, Judge Dyk concluded that claim 22, requires “tuning a mass and a stiffness of at least one liner,” is directed to an application of Hooke’s law, which relates to mass and stiffness.13 By contrast, claim 1 is not merely directed to the application of Hooke’s law because it requires controlling characteristics of a liner, which is not limited to tuning mass and stiffness, and positioning the liner, which is a location limitation.14 To address the broad scope of claim 1, the Federal Circuit remanded the case for the district court to consider Neapco’s alternative theory, raised on appeal, that claim 1 is directed to an abstract idea.15
Dissenting Opinion by Judge Moore
Judge Moore dissented in both the original decision and on rehearing, asserting that the majority made three critical errors of law.16 First, the dissent did not view the claims as directed to a natural law.17 Unlike previous cases finding a claim directed to a natural law that was “expressly articulated in the claim,” claim 22 does not recite any particular natural law and the ’911 patent does not mention Hooke’s law by name or formula.18 The dissent criticized the majority for holding on rehearing that claim 22 is directed to only Hooke’s law despite acknowledging in the original opinion that the claimed invention is “more complex than just a bare application of Hooke’s Law, and that other natural laws may be relevant.”19 The dissent also criticized the majority as introducing a new “nothing more” test without soliciting supplemental briefing from the parties on its application.20 In the dissent’s view, whether claim 22 is directed to Hooke’s law and nothing more should be a question of fact that should have precluded summary judgment of ineligibility.21
Second, the dissent criticized the majority for refusing to consider unconventional claim elements, such as inserting a liner inside a shaft to attenuate bending mode vibrations.22 In the dissent’s view, AAM maintained and Neapco acknowledged that liners had not previously been used to attenuate bending mode vibrations.23 Unlike the majority that found claim 22 did not recite “physical structure or steps for achieving the claimed result,”24 the dissent emphasized that the ineligible claims provide “very physical, very concrete, very structural limitations.”25 In the dissent’s view, the majority avoided addressing these factual questions and instead focused on what patentable subject matter might have been invented by AAM, but was not claimed.26
Third, the dissent characterized the majority’s analysis as blending the requirements of patentable subject matter under § 101 and enablement under § 112.27 Although the majority explained that claims are ineligible even if they are enabled because they do not specify how to achieve the desired result 28, the dissent criticized the majority for identifying a tuned liner as the goal or result of the claimed invention despite the claims covering a drive shaft with reduced vibrations.29 In the dissent’s view, the claims cover a specific means of accomplishing the result with a liner positioned within the shaft.30
Denial of En Banc Review
In addition to filing the reissue opinion, the Federal Circuit denied en banc review with an even 6-6 split spanning five opinions.31 Judges Prost, Dyk, Wallach, Taranto, Chen, and Hughes concurred in denial with Judges Dyk and Chen writing separate concurring opinions, while Judges Newman, Lourie, Moore, O’Malley, Reyna, and Stoll dissented with Judges Newman, Stoll, and O’Malley writing separate dissenting opinions.
Largely following his opinion for the panel majority, Judge Dyk’s concurrence expanded on why AAM’s claims follow longstanding precedent providing that patent claims embodying an abstract idea or an application of a natural law to achieve a desired result are not patent eligible.32 Similarly, Judge Chen’s concurrence explained why the case involves “a straightforward application” of Supreme Court precedent. For example, in O’Reilly v. Morse33 the Court held that claim 8 of Samuel Morse’s patent was ineligible for covering the use of electromagnetism without any particular process, whereas other claims of the same patent were eligible because, in Judge Chen’s view, they incorporated structures and processes from the specification.34 Accordingly, claim 22 of the ’911 patent, which requires applying Hooke’s law without any specific means for achieving the intended result of a tuned liner, is no different than Samuel Morse’s claim 8.35 By contrast, claim 1 does not mention mass and stiffness, and thus does not “expressly invoke the Hooke’s law relationship between mass, stiffness, and frequency.”36 In Judge Chen’s view, “simply reciting a functional result at the point of novelty poses series risks under section 101.”37
Writing in dissent from denial of en banc review, Judge Newman criticized the panel majority for stating “it is irrelevant” whether a claim covers an application of a natural law that is “new, non-obvious, and enabled.”38 Also dissenting from denial of en banc review, Judge Stoll argued that the panel majority’s “nothing more” test was new and distinguishable from O’Reilly.39 In Judge Stoll’s view, rather than expressly relying on incorporation by reference, O’Reilly distinguished ineligible claim 8, which was directed to “an effect” by the use of electromagnetism, from the eligible claims, which were directed to the use of magnetism in connection to a particular process.40 Applying this understanding, Judge Stoll viewed AAM’s claims as reciting the process and machinery necessary for the desired effect of reducing vibrations in a shaft assembly.41 Finally, Judge O’Malley dissented because the panel majority introduced a new test without providing the parties an opportunity to brief the issue, and based on constructions of previously undisputed terms, the majority applied the test itself without first remanding the case to the district court.42
With an evenly divided court denying en banc review, future Federal Circuit decisions may well flush out the contours of the patent eligibility for manufacturing methods. For example, when does a claim invoke a natural law without an explicit reference within the patent to that law? Can a claim that invokes a new and useful application of multiple natural laws be ineligible? How should a desired result of applying a natural law be distinguished from a restriction on how the result is accomplished? And, are any of these inquiries factual questions, entitled to deference, or simply legal determinations?
Irrespective of these future developments, the Federal Circuit’s decision in American Axle Manufacturing, Inc. v. Neapco Holdings LLC provides several lessons for patent owners and challengers alike. Patent owners should avoid claiming a desired result at the point of novelty and consider whether to draft claims with elements broader than a related natural law. As demonstrated by claim 1 of AAM’s patent, which did not invoke Hooke’s law, broad elements that do not require the application of a natural law may avoid scrutiny under § 101. However, patent challengers may choose to attack the eligibility of broad claims as being directed to both an abstract idea and natural law. Finally, patent owners and challengers appealing § 101 determinations should consider addressing dependent claims and any claim constructions that relate to an alleged abstract idea, natural phenomena, or inventive concept as those claims and constructions may ultimately impact patent eligibility.
1 Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, 967 F.3d 1285 (Fed. Cir. 2020).
2 See Alice Corp Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 217–18 (2014); Ass'n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013); Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72–73, 77 (2012); Parker v. Flook, 437 U.S. 584, 589 (1978); Gottschalk v. Benson, 409 U.S. 63, 67 (1972).
3 Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, 939 F.3d 1355 (Fed. Cir. 2019) (2-1 decision), opinion modified and superseded on reh’g, 966 F.3d 1294 (Fed. Cir. 2020), and reh’g granted, opinion withdrawn, 967 F.3d 1285 (Fed. Cir. 2020); see also Manufacturing Methods Directed to Natural Laws Are Not Patentable Subject Matter, Baker Botts Intellectual Property Report (Dec. 2019), https://www.bakerbotts.com/thought-leadership/publications/2019/december/manufacturing-methods-directed-to-natural-laws.
4 Am. Axle & Mfg., 967 F.3d at 1292.
5 See Am. Axle & Mfg., 939 F.3d at 1358–59 (citing ’911 patent, 1:6–7, 1:38–52, 1:53–2:38).
6 See id. (citing ’911 patent, 1:61–65).
7 Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, 309 F. Supp. 3d 218, 227 (D. Del. 2018), aff'd, 939 F.3d 1355 (Fed. Cir. 2019), reh’g granted, opinion withdrawn, 966 F.3d 1294 (Fed. Cir. 2020), and opinion modified and superseded on reh’g, 967 F.3d 1285 (Fed. Cir. 2020), and aff’d in part, vacated in part, remanded, 967 F.3d 1285 (Fed. Cir. 2020) (citing Mayo, 566 U.S. at 82).
8 Am. Axle & Mfg., 939 F.3d at 1362, 1368 n.8.
9 Am. Axle & Mfg., 967 F.3d at 1300–01.
10 Am. Axle & Mfg., 939 F.3d at 1368; see also Am. Axle & Mfg., 309 F. Supp. 3d at 221–22 (treating claims 1 and 22 as representative of the asserted claims)
11 Mayo, 566 U.S. at 72, quoted by Am. Axle & Mfg., 939 F.3d at 1362.
12 Am. Axle & Mfg., 967 F.3d at 1300–01.
13 Id. at 1290; see also id. at 1303–04.
16 See Am. Axle & Mfg., 939 F.3d at 1368–75 (Moore, J., dissenting); Am. Axle & Mfg., 967 F.3d at 1304–19 (Moore, J., dissenting).
17 Am. Axle & Mfg., 967 F.3d at 1304–12 (Moore, J., dissenting).
18 Id. at 1306–09 (Moore, J., dissenting).
19 Id. at 1306–07 (Moore, J., dissenting).
20 Id. at 1304–05, 1309–12 (Moore, J., dissenting).
21 Id. at 1311–12 (Moore, J., dissenting).
22 Id. at 1305, 1313–16 (Moore, J., dissenting).
23 Id. at 1313–14 (Moore, J., dissenting).
24 Am. Axle & Mfg., 967 F.3d at 1295 (majority).
25 Am. Axle & Mfg., 967 F.3d at 1315 (Moore, J., dissenting).
26 Id. at 1315 (Moore, J., dissenting); see also id. at 1299 (majority) (“The 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.”)
27 Am. Axle & Mfg., 967 F.3d at 1305, 1316-17 (Moore, J., dissenting).
28 Am. Axle & Mfg., 967 F.3d at 1302–03 (majority).
29 Am. Axle & Mfg., 967 F.3d at 1317 (Moore, J., dissenting).
31 Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, 966 F.3d 1347 (Fed. Cir. 2020).
32 Id. at 1348–52 (Dyk, J., concurring).
34 Id. at 1352-54 (Chen, J., concurring) (citing O’Reilly, 56 U.S. at 112–13); see also id. at 1348 (Dyk, J., concurring); Dolbear v. Am. Bell Tel. Co., 126 U.S. 1, 534 (1888) (“The effect of [O’Reilly] was, therefore, that the use of magnetism as a motive power, without regard to the particular process with which it was connected in the patent, could not be claimed, but that its use in that connection could.”).
35 Am. Axle & Mfg., 966 F.3d at 1353, 1355 (Chen, J., concurring) (stressing the district court rejected AAM’s arguments that claim 22 did not refer to Hooke’s law, and provided a claim construction for “tuning a mass and a stiffness” that was consistent with Hooke’s law and undisputed on appeal).
36 Id. at 1355 (Chen, J., concurring).
37 Id. at 1356–57 (Chen, J., concurring).
38 Id. at 1359 (Newman, J., dissenting).
39 Id. at 1361–62 (Stoll, J., dissenting).
40 Id. at 1362 (Stoll, J., dissenting) (citing O’Reilly, 56 U.S. at 120; Dolbear, 126 U.S. at 534).
42 Am. Axle & Mfg., 966 F.3d at 1365–67 (O’Malley, J., dissenting).