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Revisiting American Axle: District Court Application of the Controversial Case

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On July 31, 2020, the Federal Circuit in a 6-6 split denied en banc review in American Axle Manufacturing, Inc. v. Neapco Holdings LLC, instead withdrawing its previous opinion and issuing a modified opinion that drew a great deal of attention to 35 U.S.C. § 101 and its judicial exceptions.  1  Featuring a dissent by Judge Moore that warned of the “unfairness, confusion and uncertainty that will be caused by this opinion,” 2 the modified opinion sparked debate about § 101, with many suggesting that this case offered a great opportunity for the Supreme Court bring clarity to § 101 caselaw that is rife with seemingly contradictory decisions and imprecise rules.  

In December of that year, American Axle filed a petition for certiorari with the Supreme Court, calling for this clarity and noting the “[t]he Federal Circuit is ‘bitterly divided’ on Section 101, but unanimous in its cries for help.”3 In its recently-filed amicus brief, the Solicitor General echoed these sentiments, stating that the majority’s opinion in American Axle “reflects substantial uncertainty about the proper application of Section 101, and this case is a suitable vehicle for providing greater clarity.”4

As the patent world awaits the Supreme Court’s decision on American Axle’s petition, this article analyzes how district courts have been applying American Axle and how parties can prepare for these applications. 

Background

At issue in American Axle is U.S. Patent Number 7,774,911 (“the ’911 Patent”).  Generally, the ’911 Patent describes a method for manufacturing vehicular driveline shafts to include a liner that is tuned to reduce vibrations in the shaft.  In particular, the American Axle majority focused on Claim 22, which required “tuning a mass and a stiffness of at least one liner,” and held that that Claim 22 was ineligible because it was directed to Hooke’s law (F = kx), “a natural law, and nothing more.”5

Application #1: The “How” Requirement

The first way American Axle has made its way into district court litigation is through its requirement that the claim at issue “must go beyond stating a functional result; it must identify ‘how’ that functional result is achieved by limiting the claim scope to structures specified at some level of concreteness, in the case of a product claim, or to concrete action, in the case of a method claim.”

In the majority’s eyes, Claim 22 of the ’911 Patent “simply instructs the reader to tune the liner to achieve the claimed result” (i.e., tuning a liner) “without limitation to particular ways to do so.”7 Because such tuning requires the use of Hooke’s law, said the majority, the failure to limit the claims to a particular, concrete method of tuning a liner risked the preemption of Hooke’s law in all tuning implementations, making Claim 22 the type of overly-broad claim that the judicial exceptions to § 101 are meant to prevent.8  The majority noted that had American Axle claimed, for example, “novel computer modelling” or “experimental modal analysis,” to specify how a liner is tuned, the case “would be significantly different.”9

From the dissent’s perspective, the “claimed function” of Claim 22 is “dampening specific vibrations” in a driveshaft, not merely “tuning a liner.”10  Under that view, Judge Moore argued, the claims do "articulate the 'machinery' used to achieve" that function: the liner.11 Accordingly, Judge Moore asserted that American Axle had indeed avoided the issue of claiming all uses of Hooke’s law and narrowly claimed its application to tuning driveshaft liners. 12 

Found in eight of the eleven district court decisions that substantively apply American Axle, this requirement for claiming the “how” has thus far been the most cited rule from the modified opinion.  Of those eight cases, two applied American Axle at the summary judgment stage, while the other six applied it at the pleadings stage.  At the summary judgment stage, one of the three concepts facing American Axle’s “how” requirement was deemed patent ineligible.  In three of the six decisions at the pleadings stage, the claims at issue were found to be directed to an abstract idea under an American Axle analysis.   

Application #2: Minimizing the Specification’s Role in Alice Analysis

District courts have also followed American Axle’s lead in minimizing the specification’s role in Alice step one (is the claim directed to a patent-ineligible concept?) analysis.  In American Axle, the majority stated that “[t]he Supreme Court’s cases focus on the claims, not the specification, to determine section 101 eligibility,” and “features that are not claimed are irrelevant as to step 1 or step 2 of the Mayo/Alice analysis.”13  Of the five district court cases analyzing this point from American Axle, just one has strayed from American Axle’s guidance. 

That lone case is Fortinet, Inc. v. Forescout Techs., Inc., 543 F. Supp. 3d 814 (N.D. Cal. 2021), in which Judge Edward Chen explained that other Federal Circuit decisions “seem to stand for the proposition that a patent’s specification may play an ‘important’ role in the step-one, or ‘directed to,’ inquiry” and that the specification should be considered “when deciding whether the patent is focused more on an abstract idea or a technical solution to a technical problem.”14 In denying Forescout Technologies’ motion to dismiss, Judge Chen construed “the focus of the [patent-at-issue] ‘in light of the specification’”15 and “credit[ed] the specification’s account of whether and how ‘the claimed invention achieves multiple technological improvements’ over the prior art”16 given “the Federal Circuit’s ambiguous caselaw on the question of the specification’s precise role at step one of the Alice test.”17

Takeaways

While American Axle’s petition for cert sits in limbo, there are a number of lessons the patent world can glean from the district court applications of American Axle discussed above.

For patent owners, American Axle’s emphasis on “how” a claimed function is achieved is an important guidepost that must understood and addressed as patent applications are drafted and prosecuted.  Indeed, attempting to frame the proper scope of the “claimed functions” of a  patent, as Judge Moore attempted in her dissent, is likely to prove exceedingly more challenging than implementing in the claims more specific structures or actions for achieving that function from the get-go.18  For district court defendants, American Axle’s “how” requirement is a powerful tool to attack claims that appear to be claiming a result or function, and being able to anchor the claim at issue to one of the judicial exceptions (like the American Axle majority did with Hooke’s law) only bolsters such an attack.   

Additionally, while Judge Chen’s analysis and order denying Forescout’s motion to dismiss may prove useful for patent owners facing an uphill battle against Alice, it is not likely to be a reliable lifeline in many circumstances.  First, Judge Chen qualified his decision on the litigation being in its early stages (his analysis came in an order on Forescout’s motion to dismiss on the pleadings), so this line of argument is likely limited to the pleadings stage.  Further, Judge Chen appears to be the only judge raising this potential conflict between American Axle and other Federal Circuit precedent.  For example, Judge Alsup in the Northern District of California has not given such credit at the pleadings stage, instead following American Axle’s guidance in focusing solely on the claim language during Alice analysis.19


[1] See Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, 967 F.3d 1285, 1295 (Fed. Cir. 2020). For more information, please see this previous version of the IP Report.

[2] Id. at 1319 (Moore, J., dissenting).

[3] See Petition for Writ of Certiorari at v, 3, Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, No. 20-891 (Dec. 28, 2020).  For more information on the petition for certiorari, please see this previous version of the IP Report.

[4] Brief for the United States as Amicus Curiae at 9, Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, No. 20-891 (May 24, 2022).

[5] Am. Axle, 967 F.3d at 1297.

[6] Id. at 1302.

[7] Id. at 1298.

[8] Id. at 1294.

[9] Id. at 1295.

[10] Id. at 1308-1309 (Moore, J., dissenting)

[11] Id.

[12] Id.

[13] Id. at 1293 (emphasis added).

[14] Fortinet, 543 F. Supp. 3d at 830 (referencing CardioNet, LLC v. InfoBionic, Inc., 955 F.3d 1358 (Fed. Cir. 2020) and Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253 (Fed. Cir. 2017)).

[15] Id. (quoting Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016)).

[16] Id. (quoting CardioNet, 955 F.3d at 1368-1369). 

[17] Id.

[18] See, e.g., SmileDirectClub, LLC v. Candid Care Co., 505 F. Supp. 3d 340, 350 (D. Del. 2020), aff'd, 856 F. App'x 893 (Fed. Cir. 2021) (“[Plaintiff] asserts that the claims of the #522 Patent are directed to “producing aligners” and improving aligner manufacturing methods.  But the claims do not disclose a method of manufacturing dental aligners. Rather, they describe methods for streamlining business operations in order to take advantage of improvements in communication technology.” (citation omitted)).

[19] See People.ai, Inc. v. SetSail Techs., Inc., No. C 20-09148 WHA, 2021 WL 5882069, at *6 (N.D. Cal. Dec. 13, 2021) (refusing to credit specification disclosures not found in the claims in its Alice analysis). 

 

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