Greasing the Wheels of Patent Law: Clarifying the Judicial Exceptions via American Axle & Manufacturing, Inc. v. Neapco Holdings Llc

• Publication year: 2022

Greasing the Wheels of Patent Law: Clarifying the Judicial Exceptions via American Axle & Manufacturing, Inc. v. Neapco Holdings LLC

Michael Oliver
University of Georgia School of Law

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GREASING THE WHEELS OF PATENT LAW: CLARIFYING THE JUDICIAL EXCEPTIONS VIA AMERICAN AXLE & MANUFACTURING, INC. V. NEAPCO HOLDINGS LLC

Michael Oliver^*

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TABLE OF CONTENTS

I. Introduction...........................................................................................372

II. Background.............................................................................................373

A. A Brief History of Patent Law................................................374
B. The Judicial Exceptions.............................................................374
C. Hook(e's Law), Line(r), and Sinker: American Axle v. Neapco................................................................................................377

1. The Patent.....................................................................................377
2. The Case........................................................................................379

III. Analysis......................................................................................................380

A. Down the Rabbit Hole: Walking through the Alice Test ...............................................................................................................381
B. Alice and Mayo Need to Catch-up........................................385

1. The Alice Test's Shortcomings...................................................385

a. Vagueness..............................................................................385
b. Unrepeatable.........................................................................387

2. Greasing the Axle: How to Fix Alice.........................................388

a. Develop a New Test............................................................389

i. What Should the Test Accomplish?..........................390
ii. How Should the Test be Structured?........................390
iii. The Axle Test................................................................392

b. Difference between the Alice and Axle Test....................393
c. Applying the Axle test to American Axle v. Neapco...........394

IV. Conclusion................................................................................................394

V. Appendix.....................................................................................................396

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I. INTRODUCTION

What can be patented? A simple question with a very complicated answer. "[A]ny new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof" may be patented.¹ Inventions may not be patented if they "are laws of nature, natural phenomena, [or] abstract ideas."² These laws of nature, natural phenomena, and abstract ideas make up the judicial exceptions.³ 35 USC § 101 does not restrict patenting fundamental principles but the courts have always recognized an exception.⁴ What qualifies as a judicial exception is where things get tricky.⁵ When a claim is submitted, it must first fall into one of the categories outlined in 35 U.S.C. § 101.⁶ After that, it must pass the Alice test.⁷ The Alice test is a two-step test to determine whether or not a judicial exception applies.⁸ That is where the problem lies. Simply put, the Alice test is inadequate.⁹

The Alice test (also referred to as the Mayo test) is as follows: Step 1: Is the claim directed towards a law of nature, natural phenomena, or abstract idea?¹⁰ If no, the patent can be granted subject to the rest of 35 U.S.C. §100 et seq. If yes,

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then the claim moves on to the next step of the Alice test.¹¹ Step 2: Looking at the claim, does everything else involved, raise the claim to a level of patent eligibility?¹² If this sounds vague and arbitrary to you, you would be right. Outside of the Supreme Court, the United States Court of Appeals for the Federal Circuit is the lone appellate level court that can hear patent appeals.¹³ There are twelve judges on the Federal Circuit, and almost all of them apply the test differently.¹⁴ This Note argues for an overhaul of the Alice test. Part I is a brief introduction into patent law and the Alice test. Part II will provide the requisite background to help illustrate the issues at hand. Part III will discuss the Alice test's shortcomings, the Supreme Court's opportunity to remedy the situation, and what that remedy should be all through the lens of American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, a case currently seeking a writ of certiorari with the Supreme Court.¹⁵ Part IV will conclude.

American Axle v. Neapco is a case that deals directly with laws of nature.¹⁶ The patent at issue is U.S. Patent No. 7,774,911B2.¹⁷ The Supreme Court would have an opportunity to resolve two questions upon hearing this case. First, when should a patent be directed to a patent-ineligible concept under Step 1 of the Alice test? Second, is an item's patentability a question of law for the court to decide or a question of fact for a jury to decide? This Note will focus on the former.

II. BACKGROUND

To demonstrate the ineptness of the Alice test it is important to understand the backdrop of patent law and American Axle v. Neapco. This section will provide a brief history of patent law, a primer on the judicial exceptions and how they have been applied, and relevant background on American Axle v. Neapco.

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A. A BRIEF HISTORY OF PATENT LAW

Before diving into the short comings of the Alice test, it is important to examine how patent law developed. American patent law originated in 1787 with the U.S. Constitution.¹⁸ "To promote the Progress of Science and useful Arts, by securing for a limited Times to Authors and Investors the exclusive Right to their respective Writing and Discoveries."¹⁹ The next, development was the Patent Act of 1790.²⁰ The Patent Act of 1790 paved the way for how people view modern patents. It made patents the inventor's right and created an examination system.²¹

Patent law remained largely unchanged until the Patent Act of 1952,²² which introduced 35 U.S.C. § 1 et seq.²³ The three sections that are most relevant are, § 101, which defines what can be patented: "process, machine, manufacture, or composition of matter," § 102, which clarifies that inventions must be novel, and § 103, which dictates that the invention must be non-obvious.²⁴ Since the introduction of this new legislation, Congress has taken a hands-off approach regarding patentability, and the judiciary has taken the main stage.²⁵

B. THE JUDICIAL EXCEPTIONS

Even before there was a statute, the judicial exceptions existed.²⁶ "A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right."²⁷ This was an early judicial exception to what fell under the protection of patent law.²⁸ While courts universally agreed that these exceptions existed, there was no

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standard way to apply them.²⁹ In a blend of different Supreme Court decisions, the first attempt to create a common standard came in 2008, when the Federal Circuit stated that "[a] claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing."³⁰ This test came to be known as the machine-or-transformation test.³¹

When the Supreme Court had the opportunity to adopt this test as the standard in 2010, the Court declined, finding that it was merely helpful when analyzing a claim and was not binding.³² Though the Supreme Court did not adopt a standard at that time, the wait was not long before they did. In 2012, the Supreme Court adopted what has become known as the Alice test, then known as the Mayo test.³³

In [Mayo], we set forth a framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts. First, we determine whether the claims at issue are directed to one of those patent-ineligible concepts. If so, we then ask, "[w]hat else is there in the claims before us?" . . . To answer

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that question, we consider the elements of each claim both individually and "as an ordered combination" to determine whether the additional elements "transform the nature of the claim" into a patent-eligible application.³⁴

While not a complete departure from the machine-or-transformation test, the Alice test provided some clarity to the topic.³⁵ With that said, the effect of a decision is twofold - the language of the decision and how the decision should be applied - and the Alice test is lacking guidance.³⁶ Limited practical guidance has been given regarding how to apply the test.³⁷

There are three criticisms that the Alice test frequently faces.³⁸ First, the two-step test may only be a purely subjective one-step test.³⁹ Second, the test relies too much on the characterization of the patent that the court agrees with.⁴⁰

In Alice, the court recognized that every new invention relies on laws of nature, natural phenomena, or abstract ideas at a fundamental level.⁴¹ It follows that "any claim, described at a certain level of generality, can be challenged as directed to an abstract idea."⁴² When a patent is challenged on the ground that it covers ineligible material, two descriptions will be proposed: a narrow description by the patentee and a very broad one by the challenger.⁴³ Whichever description the court relies on dictates the outcome of the test.⁴⁴

Third, the Alice test has had an adverse effect on patentability.⁴⁵ The purpose of the judicial exceptions, and therefore the Alice test, is to prevent preemption⁴⁶ ,

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and therefore, keep the door open for more patents.⁴⁷ However, in...