Alice Meets Automotive: Damping Propshaft Latest Automotive Innovation Deemed Ineligible by Federal Circuit

With its latest application of Alice precedent, the Federal Circuit affirmed the invalidation of claims covering methods for manufacturing propshafts in American Axle & Manufacturing, Inc. v. Neapco Holdings LLC. The Court’s ruling is the latest in a line of recent cases upholding judicial exceptions to subject matter eligibility in the face of patent claims involving specific technical applications or industries.

Earlier this year, in ChargePoint, Inc. v. SemaConnect, Inc., 920 F. 3d 759 (Fed. Cir. 2019), the Federal Circuit affirmed the invalidity under 35 U.S.C. § 101 of four patents covering electric vehicle charging technology. In ChargePoint, the Court held that the claims at issue were directed to the abstract idea of “communication over a network,” and would improperly preclude the use of any network-connected electric vehicle charging station.

In American Axle, the asserted patent claimed methods for manufacturing propshafts that involve tuning at least one liner to simultaneously dampen two different types of vibrations—shell mode vibration and bending mode vibration. The district court held such methods to be directed to laws of nature, namely “Hooke’s law and friction damping.” Asserting that the claims did not provide “particular means of how to craft the liner and propshaft” to achieve the required damping, the court concluded the claims lacked subject matter eligibility.

The Federal Circuit remarked at the outset of its analysis that the asserted patent’s specification made clear that “most aspects of the [asserted] patent were well known in the art.” With respect the claims themselves, the Federal Circuit agreed with the district court that the claimed tuning of liners for propshafts “at least in part involves an application of Hooke’s law.” Anticipating this, American Axle argued that the claimed tuning to simultaneously dampen two different vibration modes involved significantly more complexity than the basic application of the known law of nature.

The Court was not persuaded, finding that the added complexity was absent from the claims. Accepting the argument of American Axle that achieving the claimed damping would require extensive analysis and experimentation with different variables, the Court responded by asserting that “the claims do not instruct how the variables would need to be changed to produce the multiple frequencies required to achieve a dual-damping result, or to tune a liner to dampen bending mode vibrations.” The Court found that “these unclaimed features cannot function to remove [the claims at issue] from the realm of ineligible subject matter.” Citing ChargePoint, 920 F.3d at 766.

The Court compared the case before it with a pair of older Supreme Court decisions applying 35 U.S.C. § 101. Looking to Parker v. Flook, the Federal Circuit noted the Supreme Court’s guidance that “if a claim is directed essentially to a method of calculating, using a mathematical formula, even if the solution is for a specific purpose, the claimed method is nonstatutory.” Quoting Flook, 437 U.S. at 595. By contrast, the Federal Circuit acknowledged that the manufacturing method in Diamond v. Diehr included “a specific and detailed series of steps…that limited the possibility of preempting the natural law itself.” Citing Diehr, 450 U.S. at 187-88 and 191-92. Despite the similarity between the manufacturing methods in American Axle’s patent and those of Diehr, the Court found that claims at issue were more akin to the ineligible claims of Flook.

Notably, the Court admitted that it may have reached a “significantly different” conclusion had specific computer modelling or analytical steps been recited in the claims. Lacking such specifics, the Court deemed the claims to be no more than a “general instruction to tune a liner” according to well-known natural laws. The Court recognized that its analysis in this respect could be construed as more relevant to the issue of enablement than subject matter eligibility. Indeed, the majority opinion concluded its analysis under the first step of the Alice framework by addressing the argument, raised in a dissent by Judge Moore, that its focus on whether the claims explain how to achieve the desired damping should be “exclusively an issue of enablement.” Disagreeing, the majority distinguished the two concepts by asserting that “Section 101 is concerned with whether the claims at issue recite a natural law, not whether the specification has adequately described how to make and use the concretely claimed structures and steps.”

The Court completed its Alice analysis by concluding that nothing in the claims transformed the relevant law of nature to an inventive concept. It found the claimed steps relating to the manufacture of the propshaft with the properly tuned liner to “amount to no more than conventional pre- and post-solution activity.”

In her lengthy dissent, Judge Moore took issue with a number of aspects of the majority opinion, accusing the Court of “convert[ing] § 101 into a panacea for every concern we have over an invention’s patentability….” In Judge Moore’s view, the majority did not clearly identify the natural law at issue, and did not properly consider inventive concepts in the claims that in her view were neither conventional nor routine. Referring to the majority’s admission of the potential for a different conclusion had the claims recited specific computer modelling steps, Judge Moore quipped “[s]urely, this is the first time adding software to a claim would make it eligible.” She concluded her dissent with the warning that the Court’s application of § 101 “should not subsume § 112.”

Judge Moore’s dissent is merely the latest sign of a Federal Circuit that is sharply divided on the state of § 101 jurisprudence. The Court’s recent denial of a request for rehearing en banc in Athena Diagnostics v. Mayo Collaborative Services spawned eight concurring and dissenting opinions, highlighting widespread disagreement among the judges on various aspects of the Supreme Court’s subject matter eligibility framework. Nor is such uncertainty limited to the judicial bench. Despite many recent decisions upholding invalidity under § 101, the United States Patent and Trademark Office has relaxed its examination guidelines for subject matter eligibility, resulting in a substantial drop of § 101 rejections in pending applications.

There can be no questioning that the demand for clarity on subject matter eligibility is increasing at every level of U.S. intellectual property practice, from patent applicants to Federal Circuit judges. It remains still to be seen whether Congress or the Supreme Court will act first to provide guidance. Until then, challenges to subject matter eligibility should be expected in countless industries and across wide ranges of technology.