Supreme Court Punts on Patent EligibilityJuly 12, 2022

Despite having the ball and everyone cheering for them, the U.S. Supreme Court decided not to go for a win, and denied a grant certiorari in American Axle & Manufacturing v. Neapco Holdings, LLC. Despite overwhelming support for the Court to take up this case to provide clarity to the ongoing uncertainty of patent eligibility, on June 30 the Court took their ball and went home, without any explanation. 

Following American Axle’s petition for certiorari, 11 parties filed amicus briefs, all in support, and no amicus briefs were filed in opposition. The supporting briefs were filed by a U.S. senator, the retired Chief Justice of the Federal Circuit Court of Appeals, and former Commissioner of the Patent and Trademark Office; the New York Intellectual Property Bar Association; The Chicago Patent Attorneys Association; The New York Bar Association; the Houston Intellectual Property Law Association; the Biotechnology Innovation Organization and Association of University Technology Managers (AUTM); the Alliance for US Startups and Inventors for Jobs; two law professors; a private company; and an individual. At the request of the Supreme Court, the U.S. Solicitor General also filed an amicus brief recommending that the Court grant certiorari. Though the Supreme Court usually follows the Solicitor’s suggestion, for some unknown reason, the Court decided otherwise.

Patent eligibility under 35 U.S.C. 101 has been in a state of turmoil for a number of years since a series of Supreme Court decisions, culminating in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014).  Since the Alice case 8 years ago, there have been more than 50 requests by various parties for the Supreme Court to grant cert to clarify patent eligibility. 

The Solicitor General admitted that the Alice two-part test for patent eligibility has produced confusion in lower courts, has fractured the Federal Circuit, and is difficult to apply for the U.S. Patent and Trademark Office (USPTO), inventors, businesses, and other patent stakeholders.

Following the denial of the requested review, retired Federal Circuit Chief Judge Paul Michel stated, “The Supreme Court’s decisions in the last decade have confused and distorted the law of eligibility. . .it is a mess: illogical, unpredictable, chaotic.”

The  US Patent and Trademark Office, following a request from Congress in March 2021, conducted a study on the current state of patent eligibility jurisprudence in the United States (see Conflicting Precedent for the Supreme Court in American Axle). After receiving public comments from 141 entities, the Patent and Trademark Office issued a report on June 24 (only 6 days before cert was denied by the Supreme Court), acknowledging that, “current eligibility jurisprudence has a direct impact on investment, research, and innovation. Getting back to first principles, we need clear intellectual property laws that incentivize innovation, especially in key and emerging technology areas and from small to medium-sized enterprises, protect that innovation, and bring that innovation to impact including by incentivizing and protecting investment. This is critical for job creation, opportunity, economic prosperity and U.S. competitiveness. It is also necessary to incentivize our brightest minds and greatest companies to solve world problems.”

The Federal Circuit Court of Appeals has begged for help and guidance, because of confusion, inconsistency, and difficulties in applying the nebulous test for eligibility set forth by the Supreme Court in Alice and it’s predecessor decisions. Three years ago, on July 3, 2019, the U.S. Court of Appeals for the Federal Circuit issued an interesting, though not surprising, opinion discussing patent eligibility for inventions and discoveries. In Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC, all 12 judges of the Court considered whether the full court should rehear an appeal of a patent regarding a medical diagnostic invention, with which a 3-judge panel earlier held to be ineligible for patent protection pursuant to the precedent of the U.S. Supreme Court. The decision included the majority opinion, three concurring opinions, and four dissenting opinions. 

While the Court denied the en banc rehearing of the Athena appeal, each of the 8 opinions requested that the Supreme Court or Congress do something to clarify the confusion about patent eligibility. The majority opinion (Judges Lourie, Rayna and Chen) noted that prior opinions of the court expressed concern over the patent eligibility issue. The first concurring opinion (Judges Hughes, Prost, and Taranto) acknowledged that the multiple opinions of the case “are illustrative of how fraught the issue of 101 eligibility, especially as applied to medical diagnostics patents, is.” In the third concurring opinion, Judge Chen cited additional Supreme Court precedent, Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980), the Supreme Court explained that “Congress plainly contemplated that the patent laws would be given wide scope.” Judge Chen believes that it would be beneficial from additional Supreme Court guidance regarding patent eligibility under the various Supreme Court decisions, which take different analytical approaches which are often difficult to reconcile. Judge Chen acknowledged that there is a serious question in patent law regarding competing Supreme Court precedent for patent eligibility. In the first dissent, Judge Moore concluded, that it is “important for the judiciary to first recognize that there is a problem that needs to be addressed … 101 remains the most important substantive patent law issue in the United States today.” The second dissent Judge Newman noted the legislative history of the 1952 Patent Act, which confirmed that Congress intended patentable subject matter to include “anything under the sun that is made by man.” Judge Newman further stated that the legislative intent of the patent system is to provide an incentive to advance useful technologies by enabling inventors to benefit economically, but that the current law is a disincentive to the development of new diagnostic methods. “When an entire industry and various scholars criticize this situation, judicial attention is warranted.”

As happens in football, the patent eligibility ball has taken an unexpected bounce in this patent game, when the Supreme Court had control and could have provided clarity that is sought by many to whom the game is so important.

Kirk Hartung is a member of the Mechanical Patent Practice Group at McKee, Voorhees & Sease, PLC. For additional information please visit  www.ipmvs.com or contact Kirk directly via email at kirk.hartung@ipmvs.com.